EXHIBIT 10.5
LEASE
THIS LEASE is made as of the date set forth in the Basic Lease Information
(attached hereto and made a part hereof) by and between Britphil & Co. (US)
Ltd., a California corporation (hereinafter called "Landlord") and Panttaja
Consulting Group, Inc. (hereinafter called "Tenant").
1. Demise of Premises. Landlord leases to Tenant and Tenant leases from
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Landlord, upon the terms and conditions hereinafter set forth, those premises
(the "Premises") as described in the Basic Lease Information. The Premises are
a part of the building (the "Building") commonly known as 000 Xxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx.
2. A. Intentionally deleted.
B. Construction of Improvements. Landlord shall provide a turnkey
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buildout based upon the detailed plans and specifications prepared by Xxxxx
Xxxxxxx Architects dated October 16, 1995, including the "Add Alternate Plan",
referenced therein ("Tenant Improvements"). Landlord further agrees to provide
Tenant with space planning services through the Building's space planner. The
term commencement date ("Term Commencement Date") shall be the date on which the
Tenant Improvements have been substantially completed in accordance with the
plans and specifications, but in no case earlier than January 1, 1996. If, for
any reason, Landlord cannot deliver possession of the Premises to Tenant on the
Estimated Term Commencement Date, Landlord shall not be subject to any liability
therefor, nor shall Landlord be in default hereunder. In the event of any
dispute as to substantial completion of work performed or required to be
performed by Landlord, the certificate of Landlord's architect or general
contractor shall be conclusive, and Tenant shall commence to pay Base Rent as of
the term Commencement Date specified by Landlord. Substantial completion shall
have occurred notwithstanding Tenant submission of a punchlist to Landlord,
which Tenant shall submit, if at all, within thirty (30) days after the Term
Commencement Date. Tenant shall upon demand, execute and deliver to Landlord a
letter of acceptance of delivery of the Premises in the form attached hereto as
Exhibit A.
3. A. Term Commencement. The Term of the lease shall commence on the
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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. A Memorandum of Term
Commencement Date in the form set forth in Exhibit A hereto shall be executed by
both parties as soon as practicable after the Term Commencement Date.
B. Nonoccurrence. If the Term Commencement Date has not occurred for
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any reason except for delays resulting from the actions or inaction of Tenant,
on or before March 1, 1996, then, as Tenant's sole and exclusive remedy for such
failure. Tenant may terminate the Lease by giving written notice to Landlord on
or before February 20, 1996,
whereupon the Lease will terminate immediately. Landlord shall then return any
security deposit or prepaid rent it has received from Tenant.
4. Use of Premises.
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A. General. Tenant shall use the Premises for the Permitted Use and
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for no other use or purpose. Tenant and Tenant's employees, agents, customers,
visitors, invitees, licensees, contractors, assignees and subtenants
(collectively, "Tenant's Parties") shall have the nonexclusive right to use, in
common with other parties occupying the Building, the common corridors and
hallways, stairwells, elevators, restrooms and other public or common areas;
provided, however, that the manner in which the public and common areas are
maintained and operated shall be at the sole discretion of Landlord and the use
thereof shall be subject to such rules, regulations and restrictions as Landlord
may make from time to time. Landlord reserves the right to make alterations or
additions to or to change the location of elements of the Building and the
common areas thereof in Landlord's sole discretion, provided, however, that
Tenant's use and occupancy of the Premises shall not unreasonably be disturbed.
B. Limitations. Tenant shall not use the Premises, or permit the
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Premises to be used, in any manner which: (a) causes or is likely to cause
damage to the Building or Premises; (b) violates a requirement or condition of
any fire and extended insurance policy covering the Building and/or Premises, or
increases the cost of such policy; (c) violates any Regulation (as defined in
Section 4.c. below); (d) constitutes or is reasonably likely to constitute a
nuisance, annoyance or inconvenience to other tenants or occupants of the
Building or its equipment, facilities or systems; (e) interferes with, or is
reasonably likely to interfere with, the transmission or reception of microwave,
television, radio, telephone or other communication signals by antennae or other
facilities located in the Building; or (f) violates the Rules and Regulations
described in Exhibit B attached hereto. Storage outside the Premises of
materials, vehicles or any other items without the express, written approval of
Landlord is prohibited. Tenant shall not use or allow the Premises to be used
for any improper, immoral, unlawful or objectionable 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 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 endanger the structure,
or place any harmful liquids in the drainage system of the Building. No waste,
materials or refuse shall be dumped upon or permitted to remain outside the
Premises. Landlord shall not be responsible to Tenant for the non-compliance by
any other tenant or occupant of the Building with any of the above-referenced
rules or any other terms or provisions of such tenant's or occupant's lease or
other contract, provided Landlord shall use reasonable efforts to enforce the
rules, as applicable against other tenants.
C. Compliance with Regulations. By entering the Premises, Tenant
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accepts the Premises in the condition existing as of the date of such entry,
subject to the punchlist and all existing or future applicable municipal, state
and federal and other governmental statutes, regulations, laws and ordinances,
including zoning ordinances and regulations governing and
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relating to the use, occupancy and possession of the Premises and the use,
storage, generation and disposal of Hazardous Materials (hereinafter defined)
in, on and under the Premises (collectively "Regulations"). Tenant shall, at
Tenant's sole expense, strictly comply with all Regulations now in force or
which may hereafter be in force relating to the Premises and the use of the
Premises and/or the use, storage, generation of Hazardous Materials in, on and
under the Premises. Tenant shall at its sole cost and expense obtain any and all
licenses or permits necessary for Tenant's use of the Premises. Tenant shall
indemnify, defend, protect and hold Landlord harmless from and against any loss,
cost, expense, damage, attorneys' fees or liability arising out of the failure
of Tenant to comply with any applicable Regulation or comply with the
requirements as set forth herein. The judgment of any court of competent
jurisdiction or the admission of Tenant in any judicial action, regardless of
whether Landlord is a party thereto, that Tenant has violated any of the
Regulations shall be conclusive of that fact as between Landlord and Tenant.
D. Hazardous Wastes. Tenant shall not cause, or allow any of
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Tenant's Parties to cause any Hazardous Materials to be used, generated, stored
or disposed of on or about the Premises or the Building. [Notwithstanding the
foregoing, normal quantities of those Hazardous Materials customarily used in
the conduct of general administrative and executive office activities (e.g.,
copier fluids and cleaning supplies) may be used and stored at the Premises
without Landlord's prior written consent, but only in compliance with all
applicable Regulations.] Notwithstanding the obligation of Tenant to indemnify
Landlord pursuant to this Lease, Tenant shall, at its sole cost and expense,
promptly take all actions required by any federal state or local government or
political subdivision, or necessary for Landlord to make full economic use of
the Premises or any portion of the Building, which requirements or necessity
arises from Tenant's use or handling of Hazardous Materials upon, about, above
or beneath the Premises or any portion of the Building. Such actions shall
include, but shall not be limited to, the investigation of the environmental
condition of the Premises or any portion of the Building, the preparation of any
feasibility studies or reports and the performance of any cleanup, remedial
removal or restoration work. Tenant shall take all actions necessary to restore
the Premises or any portion of the Building to the condition existing prior to
the introduction of Tenant's Hazardous Materials, notwithstanding any less
stringent standards or remediation allowable under applicable Regulations.
Tenant shall nevertheless obtain Landlord's written approval prior to
undertaking any actions required by this Section, which approval shall not be
unreasonably withheld so long as such actions would not potentially have a
material adverse long-term or short-term effect on the Premises or any portion
of the Building. As used in this Lease, "Hazardous Materials" shall include,
but not be limited to, hazardous, toxic and radioactive materials and substances
defined as "hazardous substances," "hazardous materials," "hazardous wastes"
"toxic substances," or other similar designations in any federal state, or local
law, regulation, or ordinance. Landlord shall have the right upon no less than
twenty-four (24) hours' notice to Tenant (except in case of emergency) to
inspect the Premises and to conduct tests and investigations as reasonably
necessary 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, provided, however, that such inspections, tests or
investigations shall not unreasonably interfere with Tenant's use and occupancy
of the Premises. Tenant shall indemnify, defend,
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protect and hold Landlord harmless from and against all liabilities, losses,
cost and expenses, demands, causes of action, claims or judgments directly or
indirectly arising out of the use, generation, storage or disposal of Hazardous
Materials by Tenant or any of Tenant's Parties, which indemnity shall include,
without limitation, the cost of any required or necessary repair, cleanup or
detoxification, and the preparation of any closure or other required plans,
whether such action is required or necessary prior to or following the
termination of this Lease. Neither the written consent by Landlord to the use,
generation, storage 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 or indemnification to this Paragraph 4.D.
Tenant's obligations pursuant to the foregoing indemnity shall survive the
termination of this Lease.
Landlord shall indemnify, defend, protect and hold Tenant harmless
from and against any costs incurred by Tenant resulting from claims brought
against Tenant by a governmental authority attributable solely to Hazardous
Materials deposited onto the Premises by Landlord (but specifically excluding
Landlord's agents, contractors, invitees, employees and tenants).
5. Rules and Regulations. Tenant shall faithfully observe and comply with
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the rules and regulations set forth in Exhibit B (attached hereto and made a
part hereof), as modified by Landlord from time to time in writing, for the
purpose of maintaining the proper care, cleanliness, safety, traffic flow and
general order of the Premises or Building. Tenant shall cause Tenant's Parties
to comply with such rules and regulations. Landlord shall not be responsible to
Tenant for the noncompliance by any other tenant or occupant of the Building
with any of the rules and regulations or any other terms or provisions of such
tenant's or occupant's lease or other contract.
6. Rent.
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A. Base Rent. Beginning on the Term Commencement Date, Tenant shall
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pay to Landlord, without 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, abatement or setoff whatsoever, except as otherwise
expressly provided herein, at the address specified in the Basic Lease
information or to such other place as Landlord may from time to time designate
in writing. Notwithstanding anything to the contrary contained herein, Tenant
shall be entitled to free rent for the first month of the Term. If the
obligation for payment of Base Rent commences on a day other than the first day
of a month, then Base Rent for the first and last partial months shall be
prorated, based on a thirty (30)-day month.
B. Additional Rent. All monies other than Base Rent required to be
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paid by Tenant hereunder, including, but not limited to, the interest and late
charge described in Paragraph 25.D., any monies spent by Landlord pursuant to
Paragraph 10, and Tenant's Proportionate Share of Basic Operating Cost as
specified in Paragraph 7 of this Lease, shall be
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considered additional rent ("Additional Rent"). "Rent" shall mean Base Rent and
Additional Rent.
7. Operating Expenses.
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A. Basic Operating Cost. In addition to the Base Rent required to be
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paid hereunder, commencing with the first day of the first month following
expiration of the Base Year, Tenant shall pay as Additional Rent, Tenant's
Proportionate Share, as defined in the Basic Lease Information, of the excess,
if any, of Basic Operating Cost for each Expense Year, as hereinafter defined,
over the Basic Operating Cost for the Base Year, in the manner set forth below
(such amount hereinafter referred to as "Tenant's Proportionate Share of Basic
Operating Cost"). Basic Operating Cost shall mean all expenses and costs which
Landlord shall pay or become obligated to pay, because of or in connection with
the management, maintenance, preservation and operation of the Building and its
supporting facilities (determined in accordance with generally accepted
accounting principles, consistently applied) including, but not limited to, the
following:
(1) Taxes. All real property taxes, possessory interest taxes,
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business or license taxes or fees, service payments in lieu of such taxes or
fees, annual or periodic license or use fees, excises, transit charges, housing
fund assessments, sewer rents, open space charges, assessments, levies, fees or
charges, 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 assessed, levied, charged, confirmed, or imposed by any public
authority upon the Building, its operations or the Rent (or any portion or
component thereof) (all of the foregoing being hereinafter collectively referred
to as "Real Property Taxes"), or any tax imposed in substitution, partially or
totally, of any tax previously included within the definition of Real Property
Taxes, or any additional tax the nature of which was previously included within
the definition of Real Property Taxes, except (a) gift, inheritance or estate
taxes imposed upon or assessed against the Building, or any part thereof or
interest therein, and (b) taxes computed upon the basis of net income of
Landlord or the owner of any interest therein except as otherwise provided in
the following sentence. Basic Operating Cost shall also include any taxes,
assessments, or any other fees imposed by any public authority upon or measured
by the monthly rental or other charges payable hereunder, including, without
limitation, any gross income or receipt tax or excise tax levied by the local
governmental authority in which the Building is located, the federal government
or any other governmental body with respect to receipt of such rental or upon,
with respect to, or by reason of the development, possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises or any portion thereof or upon this transaction or any
document to which Tenant is a party creating or transferring an interest or an
estate in the Premises. Real Property Taxes shall include all fees and costs,
including attorneys' fees, appraisals and consultants' fees, incurred by
Landlord in seeking to obtain a reduction of, or a limit on the increase in, any
Real Property Taxes, regardless of whether any reduction or limitation is
obtained. In the event that it shall not be lawful for Tenant to reimburse
Landlord for all or any part of any increase in any items specified in this
Paragraph 7.A.(1), the monthly rental payable to Landlord under this Lease shall
be revised to
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net to Landlord the same net rental after imposition of any such increased taxes
as would have been payable to Landlord prior to the payment of any such taxes.
(2) Insurance. All insurance premiums and costs, including but not
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limited to, any deductible costs, premiums and costs of insurance incurred by
Landlord, as more fully set forth in Paragraph 8 herein; provided, however, that
such costs shall not include increases in insurance costs caused by the
activities of another occupant of the Building.
(3) Other Operating Expenses. Any and all costs and expenses paid or
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incurred by Landlord in connection with the operation, maintenance, management
and repair of the Building. By way of illustration, but not limitation, such
expenses shall include the following: (i) the cost of air conditioning,
electricity, steam, heating, water, mechanical, ventilating, sanitary and storm
drainage, the cost of environmental surcharges imposed by any governmental
entity, escalator and elevator systems and all other utilities and the cost of
supplies and equipment and maintenance and service contracts in connection
therewith; (ii) the cost of repairs, general maintenance and replacing
components of equipment or machinery (subject to Section vii below), including,
without limitation, heating, refrigeration, ventilation, electrical, plumbing,
mechanical, elevator, escalator, sprinklers, fire/life safety, security and
energy management systems, including service contracts, maintenance contracts,
supplies and parts; (iii) wages, salaries and other labor costs, including
uniforms, taxes, insurance, retirement, medical and other employee benefits;
(iv) fees, charges and other costs including management fees, consulting fees,
legal fees and accounting fees paid in connection with the Building and the
costs of supplying, replacing and cleaning employee uniforms; (v) the cost of
licenses, permits and inspections and the cost of contesting the validity or
applicability of any governmental enactments which may affect any expenses set
forth herein; (vi) the fair market rental value of the property manager's office
in the Building; (vii) the cost of any capital improvements made to the Building
after completion of its construction intended as a labor-saving device or to
effect other economies in the operation or maintenance of the Building, or made
to the Building after the date of this Lease that are required under any
governmental law or regulation that was not applicable to the Building at the
time that permits for the construction thereof were obtained, such costs to be
amortized over their useful life in accordance with generally accepted
accounting principles, consistently applied, together with interest on the
unamortized balance at the "prime rate" charged at the time such improvements or
capital assets are constructed or acquired by Xxxxx Fargo Bank, NA. (San
Francisco), plus two (2) percentage points, but in no event more than the
maximum rate permitted by law; (viii) cleaning expenses, including, without
limitation, janitorial services, window cleaning and garbage and refuse removal;
(ix) the costs of policing, security and supervision of the Building; (x) the
cost of the rental of any machinery or equipment and the cost of supplies used
in the maintenance and operation of the Building; (xi) audit fees and the cost
of accounting services incurred in the preparation of statements referred to in
this Lease and financial statements used in the computation of the rents and
charges payable by tenants of the Building, (xii) legal fees and expenses
including, but not limited to, such expenses that relate to seeking or obtaining
reductions in or refunds of Real Property Taxes, or components thereof; and
(xiii) a fee for the administration and management of the Building appropriate
to the first-class nature of the Building as reasonably determined by the
Landlord
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from time to time. The foregoing notwithstanding, for purposes of this Lease,
such expenses shall not include interest expense (except as provided in clause
(vii) above), leasing commissions, depreciation on the improvements contained in
the Building or the cost of capital expenditures not included within clause
(vii) above. The computation of such expenses shall be made in accordance with
generally accepted accounting principles.
In the event that the Building is not fully occupied during any fiscal
year of the Term as reasonably determined by Landlord, an adjustment shall be
made in computing the Basic Operating Cost for such year so that Tenant pays an
equitable portion of all variable items of Basic Operating Costs as reasonably
determined by Landlord so that the total Basic Operating Costs equals the total
amount which would have been paid or incurred by Landlord had the Building been
one hundred percent (100%) occupied for the entire calendar year; provided,
however, that in no event shall Landlord be entitled to costs in excess of one
hundred percent (100%) of the total Basic Operating Cost from all of the tenants
in the Building including Tenant.
Basic Operating Cost shall not include specific costs incurred for the
account of; separately billed to and paid by, specific tenants. Notwithstanding
anything herein to the contrary, in any instance wherein Landlord, in Landlord's
sole discretion, deems Tenant to be responsible for any amounts greater than
Tenant's Proportionate Share, Landlord shall have the right to allocate costs in
any manner Landlord deems appropriate.
B. Payment of Estimated Basic Operating Cost. "Estimated Basic Operating
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Cost" for any particular Expense Year shall mean Landlord's estimate of the
amount of the Basic Operating Cost for such Expense Year, made prior to
commencement of such Expense Year as hereinafter provided. "Expense Year" shall
be each twelve (12) consecutive month period commencing January 1st of each year
during the Term, provided that Landlord, upon notice to Tenant, may change the
Expense Year from time to time to any other twelve (12) consecutive month
period, and, in the event of any such change, Tenant's Proportionate Share of
Basic Operating Cost shall be equitably adjusted for the Expense Year involved
in any such change. During the last month of each Expense Year during the Term,
or as soon thereafter as practicable, Landlord shall give Tenant written notice
of Estimated Basic Operating Cost for the ensuing Expense Year. Tenant shall pay
Tenant's Proportionate Share of Estimated Basic Operating Cost (computed in the
same manner as Tenant's Proportionate Share of Basic Operating Cost) with
installments of Base Rent for the Expense Year to which the Estimated Basic
Operating Cost applies in monthly installments on the first day of each calendar
month during such year, in advance. If, at any time during the course of any
Expense Year, Landlord determines that Basic Operating Cost is projected to vary
from the then-Estimated Basic Operating Cost by more than five percent (5%),
Landlord may, by written notice to Tenant, revise the Estimated Basic Operating
Cost 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 Expense
Year Tenant has paid to Landlord Tenant's Proportionate Share of the revised
Estimated Basic Operating Cost for such year.
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C. Computation of Basic Operating Cost. "Basic Operating Cost
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Adjustment" shall mean the difference between (i) Estimated Basic Operating Cost
and (ii) Basic Operating Cost for any Expense Year, determined as hereinafter
provided. Within one hundred twenty (120) days after the end of each Expense
Year or as soon thereafter as practicable, Landlord shall deliver to Tenant a
statement of Basic Operating Cost for the Expense Year just ended, accompanied
by a computation of Basic Operating Cost. If such statement shows that Tenant's
payments based upon Estimated Basic Operating Cost is less than Tenant's
Proportionate Share of Basic Operating Cost, then Tenant shall pay to Landlord
the difference within twenty (20) days after receipt of such statement. If such
statement shows that Tenant's payments of Estimated Basic Operating Cost exceed
Tenant's Proportionate Share of Basic Operating Cost then (provided that Tenant
is not in default under this Lease), such excess shall be credited against
Tenant's monthly installment of Tenant's Proportionate share of Estimated Basic
Operating Cost next coming due hereunder. If this Lease has been terminated or
the Term hereof has expired prior to the date of such statement, then the Basic
Operating Cost 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 Basic Operating Cost Adjustment shall be
prorated by reference to the exact number of calendar days during such Expense
Year that this Lease is in effect.
D. Tenant Audit. In the event that Tenant shall dispute the amount
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set forth in any statement provided by Landlord under Paragraph 7.B or 7.C.
above, and provided that Tenant is not then in default hereunder, Tenant shall
have the right, not later than thirty (30) days following the receipt of such
statement and upon the condition that Tenant shall first deposit with Landlord
the full amount in dispute, to cause Landlords books and records with respect to
Basic Operating Cost for such fiscal year to be audited by certified public
accountants selected by Tenant and subject to Landlord's reasonable right of
approval. The Basic Operating Cost 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 Basic Operating
Cost 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.D. within
thirty (30) 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. The right of Tenant under this Paragraph 7.D. may only be
exercised once for any Landlord statement, and if Tenant fails to meet any of
the above conditions as a prerequisite to the exercise of such right, the right
of Tenant under this Paragraph 7.D. for a particular Landlord's statement shall
be deemed waived.
8. Insurance and Indemnity
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A. Landlord's Insurance. Landlord agrees to maintain insurance
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insuring the Building against fire, lightning, vandalism and malicious mischief
(including, if Landlord elects, "All Risk" coverage, boiler, sprinkler,
earthquake, and/or flood insurance), in an amount not less than eighty percent
(80%) of the replacement cost thereof; with deductibles and the form and
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endorsements of such coverage as selected by Landlord. Such insurance may also
include, at Landlord's option, insurance against loss of Base Rent and
Additional Rent in an amount equal to the amount of Base Rent and Additional
Rent payable by Tenant for a period of at least twelve (12) months commencing on
the date of loss. Such insurance shall be for the sole benefit of Landlord and
under Landlord's sole control. Landlord shall not be obligated to insure any
furniture, equipment, machinery, goods or supplies which Tenant may keep or
maintain in the Premises, or any leasehold improvements, additions or
alterations within the Premises. Landlord may also carry such other insurance
as Landlord reasonably deems prudent or advisable, including, without
limitation, liability insurance in such amounts and on such terms as Landlord
shall reasonably determine. Tenant shall neither use the Premises nor permit
the Premises to be used in any way which will (a) increase the premium of any
insurance described above; (b) cause a cancellation of or be in conflict with
any such insurance policies; (c) result in a refusal by insurance companies of
good standing to insure the Building in amounts reasonably satisfactory to
Landlord; (d) subject Landlord to any liability unsatisfactory to Landlord; or
(e) subject Landlord to any liability or responsibility for injury to any person
or property by reason of any operation being conducted in the Premises. Tenant
shall at Tenant's expense, comply as to the Premises with all insurance company
requirements pertaining to the use of the Premises. If Tenant's conduct or use
of the Premises causes any increase in the premium for such insurance policies,
and such conduct is otherwise permitted by Landlord, then Tenant shall reimburse
Landlord for any such increase. Tenant, at Tenant's expense, shall comply with
all rules, orders, regulations or requirements of the American Insurance
Association (formerly the National Board of Fire Underwriters) and with any
similar body.
B. Tenant's Insurance.
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(1) Property Insurance. Tenant shall procure at Tenant's sole cost
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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, furniture and
fixtures of Tenant and all improvements made by or for Tenant to the Premises,
insuring such property for the full replacement value of such property. The
proceeds of such insurance shall be used for the repair or replacement of the
property so insured, except that if not so applied or if this Lease is
terminated following a casualty, the proceeds applicable to the leasehold
improvements shall be paid to Landlord and the proceeds applicable to Tenant's
personal property shall be paid to Tenant.
(2) Liability Insurance. Tenant shall procure at Tenant's sole cost
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and expense and keep in effect from the date of this Lease and at all times
until the end of the Term, either Comprehensive General Liability insurance or
Commercial General Liability insurance applying to the use and occupancy of the
Premises and the Building, and any part of either, and any areas adjacent
thereto, and the business operated by Tenant, or by any other occupant on the
Premises. Such insurance shall include Broad Form 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 general aggregate limit of
Two Million Dollars ($2,000,000.00). All such policies shall be written to
apply to all bodily injury, property damage, personal injury and other covered
loss,
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however occasioned, occurring during the policy term, shall be endorsed to
add Landlord and its agents, beneficiaries, partners, employees, and any deed of
trust holder or mortgagee of Landlord or any ground lessor as an additional
insured, and to provide that such coverage shall be primary and that any
insurance maintained by Landlord shall be excess insurance only. Such coverage
shall also contain endorsements: (i) deleting any employee exclusion on personal
injury coverage; (ii) including employees as additional insureds; (iii) deleting
any liquor liability exclusion; and (iv) providing for coverage of employer's
automobile non-ownership liability. All such insurance shall provide for
severability of interests; shall provide that an act or omission of one of the
named insureds shall not reduce or avoid coverage to the other named insureds;
and shall afford coverage for all claims based on acts, omissions, injury and
damage, which claims occurred or arose (or the onset of which occurred or arose)
in whole or in part during the policy period and shall be written as primary
policies, not excess or contributing with or secondary to any other insurance as
may be available to the additional insureds. Said coverage shall be written on
an "occurrence" basis, if available. If an "occurrence" basis form is not
available, Tenant must purchase "tail" coverage for the most number of years
available if for any reason this Lease is terminated or if the policy is
canceled or if the retroactive date is changed which might leave a gap in
coverage for occurrences that might have occurred in prior years. If a "claims
made" policy is ever used, the policy must be endorsed so that Landlord is given
the right to purchase "tail" coverage should Tenant for any reason not do so or
the policy is to be canceled for nonpayment of premium.
(3) General Insurance Requirements. All coverages described in this
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Paragraph 8.B, shall be endorsed to provide Landlord with thirty (30) day's
notice of cancellation or change in terms. 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, 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 under this Lease shall be written by companies rated A+
XII or better in "Best's Insurance Guide" and authorized to do business in
California. Any deductible amounts under any insurance policies required
hereunder shall be subject to Landlord's prior written approval. In any event,
deductible amounts shall not exceed One Thousand Dollars ($1,000.00). Tenant
shall deliver to Landlord before the Term Commencement Date, and thereafter at
least thirty (30) days before the expiration dates of the expiring policies,
certified copies of Tenant's insurance policies, or a certificate evidencing the
same, issued by the insurer thereunder, showing that all premiums have been paid
for the full policy period; and, in the event Tenant shall fail to procure such
insurance, or to deliver such policies or certificates, Landlord may, at
Landlord's option 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. Landlord shall not be liable to Tenant for any
---------------
loss or damage to person or property caused by a fire, acts of God, acts of a
public enemy, riot,
-10-
strike, insurrection, war, court order, requisition or order of governmental
body or authority or for any damage or inconvenience which may arise through
repair or alteration of any part of the Building or failure to make any such
repair, except as expressly otherwise provided in Paragraph 10 and except to the
extent caused by the gross negligence or willful misconduct of Landlord, its
agents or contractors. Tenant shall indemnify, defend by counsel acceptable to
Landlord, protect and hold Landlord 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: (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, or from
activities of Tenant, Tenant's Parties or anyone in or about the Premises or
Building, or from any cause whatsoever; (2) claims for work or labor performed,
or for materials or supplies furnished to or at the request of Tenant in
connection with the performance of any work done for the account of Tenant
within the Premises or Building; and (3) claims arising from any breach or
default on the part of Tenant in the performance of any covenant contained in
this Lease. The foregoing indemnity shall not be applicable to claims arising
from the active negligence or willful misconduct of Landlord. The provisions of
this paragraph shall survive the expiration or termination of this Lease with
respect to any claims or liability occurring prior to such expiration or
termination. Landlord shall indemnify, defend by counsel acceptable to Tenant,
protect and hold Tenant harmless from and against liabilities, losses, costs,
damages, injuries or expenses, consequential damages excluded, caused solely by
the gross negligence or willful misconduct of Landlord.
9. Subrogation. To the extent permitted by law and without affecting the
-----------
coverage provided by insurance to be maintained hereunder, Landlord and Tenant
each waive any right to recover against the other for: (a) damages for injury to
or death of persons; (b) damages to 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 to the extent of proceeds recovered therefrom. This
provision is 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 in favor of
any insurance carrier. The coverage obtained by each party pursuant to this
Lease shall include, without limitation, a waiver of subrogation by the carrier
which conforms to the provisions of this paragraph.
10. Landlord Repairs. Subject to reimbursement pursuant to Paragraph 7 of
----------------
the Lease, Landlord shall repair and maintain the structural portions of the
Building, including the exterior walls, underflooring, the roof; plumbing work
and plumbing fixtures, heating, air conditioning, electrical systems, lighting
systems, and fire sprinklers installed or furnished by Landlord and the
Building's life safety systems. If any maintenance or repair becomes necessary
in whole or in part due to the act, neglect, fault or omission of any duty by
Tenant, its employees, agents, customers or invitees, or due to damage caused by
a breaking and entering, Tenant shall pay to Landlord the entire cost of such
maintenance or repair. Landlord shall not be liable for, and Tenant shall not
be entitled to any reduction of the Base Rent or Additional Rent by reason of
Landlord's failure to make any repair or to perform any maintenance required on
the part of Landlord hereunder. Furthermore, Landlord shall not be liable under
any circumstances for a loss of or injury to property, loss of profits, or for
injury to or interference with Tenant's business arising from or in connection
with the making of or Landlord's failure to make any repairs,
-11-
maintenance, alterations or improvements in or to any portion of the Building or
in or to fixtures, appurtenances and equipment therein. Tenant shall immediately
give Landlord written notice of any defect or need or repairs for which Landlord
is responsible for under this Paragraph 10, after which notice Landlord shall
have a reasonable opportunity to repair same. Tenant hereby waives and releases
its right to make repairs at Landlord's expense under Sections 1941 and 1942 of
the California Civil Code or under any similar law, statute, or ordinance now or
hereafter in effect.
Notwithstanding anything to the contrary contained herein, Tenant shall be
entitled to a proportionate abatement of rent if Tenant provided written notice
to Landlord of a repair that is the Landlord's obligation and that is necessary
to end a material interference with the operation of Tenant's business in the
Premises and Landlord does not complete such repair within sixty (60) days of
receipt of such notice; provided however, that Tenant shall not be entitled to
such abatement if the repairs are such that they cannot reasonably be completed
within sixty (60) days.
11. Tenant Repairs. Except as provided in Paragraph 10 above, Tenant
--------------
shall, at Tenant's expense, maintain all parts of the Premises in a good, clean
and secure condition and repair. Tenant shall promptly notify Landlord of all
necessary repairs and replacements. Tenant agrees to surrender the Premises
upon the expiration or sooner termination of this Lease in the same condition as
when received, reasonable wear and tear and damage by fire, earthquake, acts of
God, and the elements excepted. Landlord has no obligation to alter, add to,
improve, repair, remodel or paint the Premises, except as specified herein.
Nothing herein shall be construed to require Tenant to perform or construct any
repair, maintenance or improvements necessitated solely by the acts of Landlord,
or any other occupants of the Building.
12. Alterations. Tenant shall not make, or allow to be made, any
-----------
alterations, improvements or physical additions (collectively "Alterations") in,
about or to the Premises without obtaining the prior written consent of
Landlord, which consent shall not be unreasonably withheld with respect to
proposed Alterations which: (a) do not affect the Building's structure and
comply with all applicable laws, ordinances, rules and regulations; (b) are, in
Landlord's opinion, compatible with the Building and its mechanical, plumbing,
electrical, heating/ventilation/air conditioning systems, and life safety
Systems; and (c) will not interfere with the use and occupancy of any other
portion of the Building 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. 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. Landlord's consent shall be conditioned upon receipt of performance
bonds or other bonds from contractors or subcontractors performing Alterations,
if Landlord so requires. Tenant shall reimburse Landlord for all costs which
Landlord may incur in connection with granting approval to Tenant for any such
Alterations, including any costs or expenses which Landlord may reasonably incur
in electing to have outside architects and engineers review said plans and
specifications; provided, however, that such Landlord costs with respect to
approving those non-
-12-
structural Alterations shall not exceed Five Hundred Dollars ($500.00). All
Alterations shall be performed at Tenant's sole cost and expense (including
reasonable costs for Landlord's supervision). All Alterations shall remain the
property of Tenant until termination of this Lease, at which time they shall be
and become the property of Landlord if Landlord so elects; provided, however,
that Landlord may, at Landlord's option, elect by notice to Tenant at the time
of approval, that Tenant, at Tenant's expense, remove any or all Alterations
made by Tenant and restore the Premises by the termination of this Lease,
whether by lapse of time, or otherwise, to their condition existing prior to the
construction of any such Alterations, reasonable wear and tear, and acts of God,
condemnation or casualty (unless Tenant is responsible) excepted. All such
removals and restoration shall be accomplished in a good and workmanlike manner
so as not to cause any damage to the Premises whatsoever. If Tenant fails to so
remove such Alterations (if it is required to do so) or Tenant's trade fixtures
or furniture, 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 Basic Operating Cost, 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 personal property, on the value of the Alterations, and on
Tenant's interest pursuant to this Lease, to the extent that such taxes are not
included in Basic Operating Costs. 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.
13. Signs. All signs, notices and graphics of every kind or character,
-----
visible in or from public view or corridors, the common areas or the exterior of
the Premises, shall be subject to Landlord's prior written approval. Tenant
shall not place or maintain any banners whatsoever or any window decor in or on
any exterior window or window fronting upon any common areas or service areas
without Landlord's prior written approval. If Tenant leases an entire floor of
the Building, Building standard identification signage may be installed in the
elevator lobby of the floor on which the Premises are located, subject to
Landlord's prior written approval. Any signs, notices, logos, pictures, names
or advertisements which are installed that have not been individually approved
by Landlord may be removed without notice by Landlord at the sole expense of
Tenant. Any installation of signs or graphics on or about the Premises shall be
subject to any applicable governmental laws, ordinances, regulations and to any
other requirements imposed by Landlord. Tenant shall remove all signs and
graphics prior to the termination of this Lease (including without limitations,
the "Identification Sign"). Such installations and removals shall be made in
such manner as to avoid injury or defacement of the Premises, or Building and
any other improvements contained therein, and Tenant shall repair any injury or
defacement, including without limitation, discoloration caused by such
installation or removal. Notwithstanding anything to the contrary contained
herein, Landlord shall provide Tenant with a Building standard signage on or
adjacent to the front door of the Premises ("Identification Sign"), and building
directory signage pursuant to Subparagraph 38.P.
14. Landlord Entry. Upon twenty-four hours' advance notice to Tenant,
--------------
except in emergencies where no such notice shall be required, Landlord, and
Landlord's agents and
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representatives, shall have the right to enter the Premises, and Tenant may
elect to have a representative accompany Landlord, to inspect the same, to
clean, to perform such work as may be permitted or required hereunder, to make
repairs or alterations to the Premises or Building 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 Building or to Exhibit the Premises to prospective tenants, purchasers,
encumbrancers or 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. At any time within six (6) months prior to the end of the Term, Landlord
shall have the right to erect on the Premises and/or Building a suitable sign
indicating that the Premises are available for lease. 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. 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.
15. Utilities and Services. Landlord agrees to furnish to the Premises
----------------------
during reasonable hours of generally recognized business days, and as is
customary and usual for general office usages in like and comparable building in
the Financial District in San Francisco, as determined by Landlord, electricity
for building-standard lighting and for normal fractional horsepower office
machines, including personal computers and printers, fax machines and office
copiers, heating, air conditioning and ventilation required in Landlord's
judgment for the comfortable use and occupation of the Premises, elevator and
janitorial service, and water for lavatory and drinking purposes. Landlord
shall also maintain and keep lighted the common stairs, common entries and
toilet rooms in the common areas of the Building. Landlord's operation and
delivery of services to the Building and the Premises shall be in a manner
reasonably consistent with other comparable office buildings located in the City
and County of San Francisco. Except as otherwise expressly set forth herein,
Landlord shall not be liable for, and Tenant shall not be entitled to any
abatement of Rent by reason of, Landlord's failure to furnish any of the
services or utilities described above when such failure is caused by acts of
God, accident, breakage, repairs, strikes, lockouts or other labor disturbances
or disputes of any character, unavailability of materials or labor, or by any
other cause similar or dissimilar, beyond the reasonable control of Landlord, or
by rationing or restrictions on the use of said services and utilities due to
energy shortages or other causes, or the making of repairs, alterations or
improvements to the Premises or Building whether or not any of the above result
from acts or omissions of Landlord. Furthermore, Landlord shall not be liable
under any circumstances for a loss of or injury to property or for injury to or
interference with Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to
failure to furnish any of the foregoing services or utilities, except to the
extent such loss, injury, or interference is caused by the gross negligence or
willful misconduct of Landlord. Landlord shall be entitled to cooperate
voluntarily in a reasonable manner with the efforts of national, state or local
governmental bodies or of suppliers of utilities in reducing energy or other
resources consumption, and Tenant shall not be relieved of its obligation to pay
the full Rent by
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reason thereof. Landlord shall also have the exclusive right, but not the
obligation, to provide any additional services which may be required by Tenant,
including, without limitation, locksmithing, lamp replacement, additional
janitorial service, delivery services, additional repair and maintenance,
provided that Tenant shall pay to Landlord upon billing the sum of all costs to
Landlord of such additional services, plus a ten percent (10%) administration
fee. Tenant shall not, without Landlord's prior written consent, use heat-
generating machines other than normal fractional horsepower office machines, or
equipment or lighting other than building-standard lights in the Premises which
may affect the temperature otherwise maintained by the air conditioning system
or increase the water normally furnished for the Premises. If such consent is
given, Landlord shall have the right to install supplementary air conditioning
units or other facilities in the Premises, and the reasonable cost thereof,
including the cost of installation, operation and maintenance, increased wear
and tear on existing equipment and other similar charges, shall be paid by
Tenant to Landlord within ten (10) business days of billing by Landlord. Such
cost shall include the cost of electrical metering or surveying necessary to
determine the additional charges by reason of Tenant's off-hours or additional
use of utilities or services, for the use of non-standard machines, equipment or
lighting, and because of the carelessness of Tenant or the nature of Tenant's
business. Tenant shall not, without Landlord's prior written consent, install
lighting or equipment which would cause the electric current requirements of the
Premises to exceed at any time three and one-half (3.5) xxxxx per square foot of
net rentable area of the Premises. If such consent is given, Tenant shall pay to
Landlord upon billing for the cost of such excess consumption. In the event any
governmental entity promulgates or revises any statute, ordinance or building,
fire or other code or imposes mandatory controls or guidelines on Landlord or
the Building or any part thereof, relating to the use or conservation of energy,
water, gas, light or electricity or other emissions or the provision of any
other utility or service provided with respect to this Lease, or in the event
Landlord is required or elects to make alterations to the Building in order to
comply with such mandatory controls or guidelines, Landlord may, in its sole
discretion, comply with such mandatory controls or guidelines or make such
alterations to the Building related thereto. Such compliance and the making of
such alterations shall in no event entitle Tenant to any damages, relieve Tenant
of the obligation to pay the full Annual Rent and additional rent reserved
hereunder or constitute or be constituted as a constructive or other eviction of
Tenant, provided, however, that Tenant shall be entitled to an abatement of rent
should such compliance and such alterations prevent Tenant's use and occupancy
of the Premises for any period of time exceeding ten (10) days continuously.
16. A. Subordination. Without the necessity of any additional document
-------------
being executed by Tenant for the purpose of effecting a subordination, the Lease
shall 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 Building are situated, or
both; and (b) any mortgage or deed of trust which may now exist or be placed
upon the Building, land, 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. In the event that any ground lease or underlying lease
terminates for any reason or any mortgage or deed of trust is foreclosed or a
-15-
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 at the option of such successor in interest.
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. Such
instruments may contain, among other things, provisions to the effect that such
lessor, mortgagee or beneficiary (hereafter, for the purposes of this Section
16.A, a "Successor Landlord") shall (i) not be liable for any act or omission of
Landlord or its predecessors, if any, prior to the date of such Successor
Landlord's succession to Landlord's interest under this Lease; (ii) not be
subject to any offsets or defenses which Tenant may have been able to assert
against Landlord or its predecessors, if any, prior to the date of such
Successor Landlord's succession to Landlord's interest under this Lease; (iii)
not be liable for the return of any security deposit under the Lease unless the
same shall have actually been deposited with such Successor Landlord; and (iv)
be entitled to receive notice of any Landlord default under this Lease plus a
reasonable opportunity to cure such default prior to Tenant having any right or
ability to terminate this Lease as a result of such Landlord default.
B. Attornment. If requested to do so, Tenant shall attorn to and
----------
recognize as Tenant's Landlord under this lease any superior lessor, superior
mortgagee or other purchaser or person taking title to the Building by reason of
the termination of any superior lease or the foreclosure of any superior
mortgage or deed of trust, and Tenant shall, upon demand, execute any documents
reasonably requested by any such person to evidence the attornment described in
this Section 16.B.
C. Mortgage Protection. Tenant agrees to give any holder of any
-------------------
mortgage and any ground lessor, by registered or certified mail, a copy of any
notice of default served upon the Landlord by Tenant, provided that prior to
such notice Tenant has been notified in writing of the address of such mortgage
holder or ground lessor (hereafter the "Notified Party"). Tenant further agrees
that if Landlord shall have failed to cure such default within twenty (20) days
after such notice to Landlord (or if such default cannot be cured or corrected
within that time, then such additional time as may be necessary if Landlord has
commenced within such twenty (20) days and is diligently pursuing the remedies
or steps necessary to cure or correct such default), then the Notified Party
shall have an additional thirty (30) days within which to cure or correct such
default (or if such default cannot be cured or corrected within that time, then
such additional time as may be necessary if the Notified Party has commenced
within such thirty (30) days and is diligently pursuing the remedies or steps
necessary to cure or correct such default). Until the time allowed, as
aforesaid, for the Notified Party to cure such default has expired without cure,
Tenant shall have no right to, and shall not, terminate this Lease on account of
Landlord's default.
17. Financial Statements. Execution of the Lease is strictly conditioned
--------------------
upon, among other things, Landlord's review and approval of Tenants financial
statements and credit references. Tenant shall provide to Landlord Tenant's
current financial statement or other
-16-
information discussing financial worth of Tenant, which Landlord shall use
solely for purposes of this Lease and in connection with the ownership,
management and disposition of the Building, and which shall be kept confidential
by Landlord, except to the extent such information is required to be disclosed
by law and provided Landlord shall have the right to disclose such information
to its advisors, including, without limitation, its accountants and attorneys,
and to potential lenders or purchasers.
18. Estoppel Certificates. Tenant agrees from time to time, within ten
---------------------
(10) days after request of Landlord, to deliver to Landlord, or Landlord's
designee, an estoppel certificate stating whether this Lease is in full force
and effect, the date to which Rent has been paid, the unexpired portion of this
Lease, and such other matters pertaining to this Lease as may be reasonably
requested by Landlord. 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.
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 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 if Tenant fails to fully comply. Within fifteen
(15) days after request by Tenant, Landlord shall execute a similar estoppel
certificate in favor of Tenant.
19. Security Deposit. Tenant agrees to deposit with Landlord upon
----------------
execution of this Lease a Security Deposit as stated in the Basic Lease
Information, which sum shall be held by Landlord, without obligation for
interest, as security for the performance of Tenant's covenants and obligations
under this Lease. The Security Deposit is not an advance rental deposit or a
measure of damages incurred by Landlord in case of Tenant's default. Upon the
occurrence of any event of default by Tenant, Landlord may, from time to time,
without prejudice to any other remedy provided herein or provided by law, use
such fund to the extent necessary to make good any arrears of Rent or other
payments due to Landlord hereunder, and any other damage, injury, expense or
liability caused by such event of default, and Tenant shall pay to Landlord, on
demand, the amount so applied in order to restore the Security Deposit to its
original amount. Although the Security Deposit shall be deemed the property of
Landlord, any remaining balance of such deposit shall be returned by Landlord to
Tenant at such time after termination of this Lease that all of Tenant's
obligations under this Lease have been fulfilled. Landlord may use and
commingle the Security Deposit with other funds of Landlord.
20. Landlord Liability. The 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, directors, officers and shareholders of
Landlord, and Tenant agrees to look solely to Landlord's interest in the
Building 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, directors, officers and shareholders of Landlord. 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 Building.
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21. Assignment/Sublet.
-----------------
A. General. Tenant shall not assign or sublet the Premises or any
-------
part thereof without Landlord's prior written approval except as provided
herein. If Tenant desires to assign this Lease or sublet any or all of the
Premises, Tenant shall give Landlord written notice thirty (30) days prior to
the anticipated effective date of the assignment or sublease. Landlord shall
then have a period of twenty (20) days following receipt of such notice to
notify Tenant in writing that Landlord elects either: (1) to terminate this
Lease as to the space so affected as of the date so requested by Tenant; or (2)
to permit Tenant to assign this Lease or sublet such space, subject, however, to
Landlord's prior written approval of the proposed assignee or subtenant and of
any related documents or agreements associated with the assignment or sublease.
If Landlord should fail to notify Tenant in writing of such election within said
period, Landlord shall be deemed to have waived option (1) above, but written
approval by Landlord of the proposed assignee or subtenant shall be required.
If Landlord does not exercise the option provided in subitem (1) above,
Landlord's consent to a proposed assignment or sublet shall not be unreasonably
withheld, conditioned or delayed. 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: The use of the Premises by such proposed assignee or subtenant would
not be a Permitted Use; the proposed assignee or subtenant is not of sound
financial condition; 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, the proposed assignee or subtenant is a person with whom
Landlord is negotiating to lease space in the Building, the assignment or
subletting would entail any alterations which would lessen the value of the
leasehold improvements in the Premises; or if Tenant is in default of any
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. Tenant shall pay promptly upon billing any
and all reasonable attorneys' fees and other costs reasonably incurred by
Landlord for the review or preparation of any documents in connection with a
proposed assignment or sublease. Failure by Landlord to approve a proposed
assignee or subtenant shall not cause a termination of this Lease. Upon
termination under this Paragraph 21.A., 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.
B. Bonus Rent. Any Rent or other consideration realized by Tenant
----------
under any such sublease or assignment in excess of the Rent payable hereunder,
or in the event such sublease is for a portion of the Premises, in excess of the
Rent that is fairly allocable to such portion, as determined by Landlord, less
any expenses reasonably incurred by Tenant in connection therewith, including,
any improvements for any subtenant to the Premises paid by Tenant, and the costs
of leasing, shall be divided and paid, fifty percent (50%) to Tenant, fifty
percent (50%) 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 such subletting or assignment.
-18-
C. 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), so as to result 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.
D. Partnership. If Tenant is a partnership, joint venture or other
-----------
incorporated 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 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.
E. Liability. No assignment or subletting by Tenant shall relieve
---------
Tenant of any obligation under this Lease. Any assignment or subletting which
conflicts with the provisions hereof shall be void.
F. Permitted Transfers. Notwithstanding anything to the contrary
-------------------
contained herein, Tenant may, without Landlord's prior written consent but upon
prompt written notice to Landlord, assign this lease to (i) a subsidiary,
affiliate, division or corporation controlling, controlled by or under common
control with Tenant, (ii) a successor corporation related to Tenant by merger or
consolidation, or (iii) a purchaser of substantially all of Tenant's assets.
Notwithstanding the foregoing, Tenant shall nevertheless remain liable for all
its obligations hereunder after such assignment. For the purposes of this
Lease, a sale of Tenant's capital stock through any public exchange shall not be
deemed an assignment, sublet or other transfer.
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. Tenant represents and warrants that it has full right
and authority to enter into this Lease and to perform all of Tenant's
obligations hereunder.
23. Eminent Domain.
--------------
A. Condemnation Resulting in Termination. If the whole or any
-------------------------------------
substantial part of the Building should be taken or condemned for any public use
under governmental law, ordinance or 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, this Lease shall
terminate and 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
-----------------------------------------
Building should be taken or condemned for any public use underlying governmental
law, ordinance, or regulation, of by right of eminent domain, or by private
purchase in lieu thereof, and this Lease is not terminated as provided in
Paragraph 23.A. above, this Lease shall not terminate, but the Rent
-19-
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.
C. Award. Landlord shall be entitled to any and all payment,
-----
income, rent, award, or any interest therein whatsoever which may be paid or
made in connection with such taking or conveyance, and Tenant shall have no
claim against Landlord or otherwise for the value of any unexpired portion of
this Lease. Notwithstanding the foregoing, any compensation specifically awarded
Tenant for loss of business, Tenant's personal property, moving costs and loss
of goodwill, shall be and remain the property of Tenant.
24. Damage or Destruction.
---------------------
A. General. If the Premises or Building should be damaged or
-------
destroyed by fire or other casualty, Tenant shall give immediate written notice
thereof to Landlord. Within thirty (30) days after Landlord's receipt of such
notice, Landlord shall notify Tenant whether in Landlord's opinion such repairs
can reasonably be made either: (1) within ninety (90) days; (2) in more than
ninety (90) days but in less than one hundred eighty (180) days; or (3) in more
than one hundred eighty (180) days from the date of such notice. Landlord's
determination shall be binding on Tenant.
B. Less Than 90 Days. If the Premises or Building should be damaged
-----------------
by fire or other casualty but only to such extent that rebuilding or repairs
can, in Landlord's reasonable estimation, be reasonably completed within ninety
(90) days after the date of such damage, this Lease shall not terminate, and
provided that insurance proceeds are available to fully repair the damage,
Landlord shall proceed to rebuild and repair the Premises in the manner
determined by Landlord, except that Landlord shall not be required to rebuild,
repair or replace any part of the partitions, fixtures, additions and other
leasehold improvements which may have been placed in, on or about the Premises
after the Term Commencement Date. 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, but only to the
extent of rental abatement insurance proceeds received by Landlord during the
time and to the extent the Premises are unfit for the conduct of Tenant's
business.
C. Greater Than 90 Days. If the Premises or Building should be
--------------------
damaged by fire or other casualty, but only to such extent that rebuilding or
repairs can, in Landlord's reasonable estimation, be reasonably completed in
more than ninety (90) days but in less than one hundred eighty (180) days, then
Landlord shall have the option of either: (1) terminating the Lease effective
upon the date of the occurrence of such damage, in which event the Rent shall be
abated during the unexpired portion of the Lease; or (2) electing to rebuild or
repair the Premises to substantially the condition in which they existed prior
to such damage, provided that insurance proceeds are available to fully repair
the damage, except that Landlord shall not be required to rebuild, repair or
replace any part of the partitions, fixtures, additions and other improvements
which may have been placed in, on or about the Premises after the Term
Commencement Date.
-20-
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, but only to the extent of rental abatement insurance
proceeds received by Landlord during the time and to the extent the Premises are
unfit for the conduct of Tenant's business. In the event that Landlord should
fail to complete such repairs and rebuilding within one hundred eighty (180)
days after the date upon which Landlord is notified by Tenant of such damage,
such period of time to be extended for delays caused by the fault or neglect of
Tenant or because of acts of God, acts of public agencies, labor disputes,
strikes, fires, freight embargoes, rainy or stormy weather, inability to obtain
materials, supplies or fuels, or delays of the contractors or subcontractors or
any other causes or contingencies beyond the reasonable control of Landlord,
Tenant may at Tenant's option within ten (10) days after the expiration of such
one hundred eighty (180) day period (as such may be extended), terminate this
Lease by delivering written notice of termination to Landlord as Tenant's
exclusive remedy, whereupon all rights hereunder shall cease and terminate
thirty (30) days after Landlord's receipt of such termination notice.
D. Greater Than 180 Days. If the Premises or Building should be so
---------------------
damaged by fire or other casualty that rebuilding or repairs cannot, in
Landlord's reasonable estimation, be completed within one hundred eighty (180)
days after such damage, this Lease shall terminate and the Rent shall be abated
during the unexpired portion of this Lease, effective upon the occurrence of
such damage.
E. Tenant's Fault. If the Premises or any other portion of the
--------------
Building are damaged by fire or other 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 dismissed 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.
F. Uninsured Casualty. Notwithstanding anything herein to the
------------------
contrary, in the event that the Premises or Building are damaged or destroyed
and are not fully covered by the insurance proceeds received by Landlord, or in
the event that 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 all rights and obligations hereunder
shall cease and terminate.
G. Waiver. Except as otherwise provided in this Paragraph 24,
------
Tenant hereby waives the provisions of Sections 1932, 1933(4), 1941 and 1942 of
the Civil Code of California.
25. Holding Over. If Tenant shall retain the possession of the Premises
------------
or any portion thereof without Landlord's consent following the expiration of
the Lease or sooner termination for any reason, then Tenant shall pay to
Landlord for each day of such retention one hundred
-21-
fifty percent (150%) the amount of the daily Rent as of the last month prior to
the date of expiration or termination. Tenant shall also indemnify, defend,
protect and hold Landlord harmless from any loss, liability or cost, including
reasonable attorneys' fees, resulting from delay by Tenant in surrendering the
Premises, including, without limitation, any claims made by any succeeding
tenant founded on such delay. Acceptance of Rent by Landlord following
expiration or termination 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. Unless Landlord consents in writing to Tenant's holding
over, Tenant shall be only a Tenant at sufferance, whether or not Landlord
accepts, any Rent from Tenant while Tenant is holding over without Landlord's
written consent. Additionally, in the event that upon termination of the Lease,
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 reasonably
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.
26. Default.
-------
A. Events of Default. The occurrence of any of the following shall
-----------------
constitute an event of default on the part of Tenant:
(1) Abandonment. Abandonment 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 within three (3) days after Landlord
gives written notice of such delinquency.
(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 (or such longer time as may reasonably be required to cure the
default, provided Tenant promptly begins curing and continues diligently to
proceed with such curing) after written notice of 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. In the event that under applicable law the trustee in
bankruptcy or Tenant has the right to affirm this Lease and continue to perform
the obligations of Tenant hereunder, such trustee or Tenant shall, in such time
period as may be permitted by the bankruptcy court having jurisdiction, cure all
defaults of Tenant hereunder
-22-
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 the Premises, if such
appointment remains undismissed or undercharged for a period of ten (10) days
after the order therefor.
(7) Attachment. The attachment, execution or other judicial
----------
seizure of all or substantially all of Tenant's assets or the Premises, if such
attachment or other seizure remains undismissed or undischarged for a period of
ten (10) days after the levy thereof.
B. Remedies Upon Default.
---------------------
(1) Termination. In the event of the occurrence of any event of
-----------
default, and subject to applicable law, Landlord shall have the right to give a
written termination notice to Tenant. 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 arrears of rental and all other sums payable
by Tenant under this Lease 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, by any
lawful means, and again repossess and enjoy the Premises without prejudice to
any of the remedies that Landlord may have under this Lease, or at law or equity
by reason of Tenant's default or of such termination.
(2) 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.(l) hereof and Landlord may enforce all of Landlord's rights and remedies
under this Lease 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
upon application of Landlord to protect Landlord's interest under this Lease
shall not constitute an election to terminate Tenant's right to possession.
C. Damages After Default. Should Landlord terminate this Lease
---------------------
pursuant to the provisions of Paragraph 26.B.(l) 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 successor code sections. Upon such termination,
in addition to any other rights and remedies to which Landlord may be entitled
under applicable law, Landlord shall be entitled to recover from Tenant: (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 which would have been earned after termination
until the time of award exceeds the
-23-
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 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 necessary to compensate Landlord for all the 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" of the amounts referred to in (1) and (2) above,
shall be computed at the lesser of the "prime rate," as announced from time to
time by Xxxxx Fargo Bank, NA. (San Francisco), plus three (3) percentage points,
or the maximum interest rate allowed by law ("Applicable Interest Rate"). The
"worth at the time of award" of the amount referred to 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 the award. 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. If any installment of Rent is not paid promptly
-----------
when due, such amount shall bear interest at the Applicable Interest Rate from
the date on which said payment shall be due until the date on which Landlord
shall receive said payment, and Tenant shall pay Landlord a late charge equal to
five percent (5%) of the delinquency 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 difficult to compute and the amount stated herein
represents a reasonable estimate thereof. This provision shall not relieve
Tenant of Tenant's obligation to pay Rent at the time and in the manner herein
specified.
INITIALS: Landlord ________ Tenant _________
E. 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. Mechanic's Liens. Tenant shall keep the Premises free from liens
-----------------
arising out of or related to work performed, materials or supplies furnished or
obligations incurred by Tenant or in connection with work made, suffered or done
by or on behalf of Tenant in or on the Premises or Building. In the event that
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.
Landlord
-24-
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 Building 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 Building which would lawfully
give rise to a claim for mechanics' or materialmen's liens.
28. Intentionally deleted.
29. Sale of Building. 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,
provided that, in the event of a sale, the purchaser assumes the obligations of
Landlord in writing. 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 all 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. Tenant Covenants. Except as otherwise expressly provided herein, 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 and Basic Operating Cost, required to be paid by Tenant
hereunder or shall fail to perform any other act on Tenant's part to be
performed hereunder, and such failure shall continue for five (5) days after
notice thereof by Landlord (or, with respect to non-financial failures of
performance, such later time as may reasonably be necessary to cure such
failure, provided Tenant promptly begins curing such failure and continues to
diligently proceed with such curing), Landlord may, but shall not be obligated
to do so, and without waiving or releasing Tenant from any obligations of
Tenant, make any such payment or perform any such act on Tenant's part to be
made or performed. All sums, so paid by Landlord, and all necessary incidental
costs together with interest thereon at the Applicable Interest Rate from the
date such payment by Landlord, shall be payable to Landlord on demand, and
Tenant covenants to pay such sums, and Landlord shall have, in addition to any
other right or remedy of Landlord, the same right and remedies in the event of
the nonpayment thereof by Tenant as in the case of default by Tenant in the
payment of Base Rent and Basic Operating Cost.
31. Waiver of Covenants. If either Landlord or Tenant waives the
-------------------
performance of any term, covenant or condition contained in this Lease, such
waiver shall not be deemed a waiver of any subsequent breach of the same or any
other term, covenant or condition contained herein.
-25-
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 to decrease the right of Landlord to insist thereafter upon strict
performance by Tenant. Waiver by either party of any term, covenant or condition
contained in this Lease may only be made by a written document signed by such
party.
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 the 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.
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,
or mailed, certified or registered, postage prepaid, and addressed to the party
to be notified at the 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) day's 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.
33. Attorneys' Fees. In the event that 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. 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, subject to Paragraph
21, shall be binding upon and inure to the benefit of Tenant, its successors,
and to the extent an assignment is approved by Landlord hereunder, Tenant's
assigns.
-26-
35. Force Majeure. Whenever a period of time is herein prescribed for
-------------
action to be taken by either party, such party shall not be liable or
responsible for, and there shall be excluded from the computation for any such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations or restrictions or any
other causes of any kind whatsoever which are beyond the control of such party
(except for financial inability).
36. Brokers. Landlord shall pay a brokerage commission to its Broker
-------
pursuant to a separate agreement between Landlord and Landlord's Broker.
Landlord shall pay a brokerage commission of $35,210 to Tenant's Broker as
follows, fifty percent (50%) upon lease execution by Tenant and Landlord and
fifty percent (50%) upon Lease commencement. Each party warrants to the other
that it has engaged no broker in connection with this transaction other than the
foregoing brokers. Tenant warrants to Landlord that Tenant's sole contact with
Landlord or with the Premises in connection with this transaction has been
directly with Landlord and the Brokers specified in the Basic Lease Information,
and that no other broker or finder can properly claim a right to a commission or
a finder's fee based upon contacts between the claimant and Tenant with respect
to Landlord or the Premises. Each party shall indemnify, defend by counsel
acceptable to the other party, protect and hold the other party harmless from
and against any loss, cost or expense, including, but not limited to, attorneys'
fees and costs, resulting from any claim for a fee or commission by any broker
or finder in connection with the Premises and this Lease other than the Brokers
specified in the Basic Lease Information.
37. Intentionally deleted.
38. 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,
----------------
contains all the agreements of the parties hereto and supersedes any previous
negotiations. There have been no representations made by either party hereto or
understandings made between the parties other than those set forth in this Lease
and its exhibits.
E. Notification. This Lease may not be modified except by a written
------------
instrument signed by the parties hereto.
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.
-27-
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. Neither payment by Tenant of a lesser
-----------------------
amount than the Rent 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.
J. Easements. Landlord may grant easements on the Building and
---------
dedicate for public use portions of the Building without Tenant's consent;
provided that no such grant or dedication shall substantially interfere with
Tenant's use or occupancy of the Premises. Upon Landlord's demand, 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 in
this Lease or requested of Landlord, Landlord's consent, determination or
estimation shall not be unreasonably withheld, denied or delayed.
L. Exhibits. Exhibits A and B attached hereto are hereby
--------
incorporated herein by this reference.
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. Building. Landlord shall have the right at any time to change
--------
the name of the Building, to increase the size of the real property upon which
the Building is located by adding additional real property thereto, to construct
other buildings or improvements on any portion of such real property, to change
the location and/or character of or to make alterations or additions to such
real property, provided, however, that such actions shall not unreasonably
disturb Tenant's use or occupancy of the Premises. Tenant shall not use the
Building's name for any purpose other than as part of its business address. Any
use of such name in the designation of Tenant's business shall constitute a
default under this Lease.
-28-
P. Directory. Landlord shall provide a directory in a conspicuous
---------
place, with names of tenants. Tenant shall be entitled to one (1) directory
strip (one line) for the placement of names in such directory for each one
thousand (1,000) rentable square feet of space in the Premises. Any revision in
such directory shall be made by Landlord at Tenant's expense within a reasonable
time after notice from Tenant of Tenant's request for such revision. If Tenant
desires additional names to be listed on such directory, to the extent space is
available thereon after consideration of other tenants' desires, Landlord agrees
Tenant may list such names at Tenant's sole cost and expense.
Q. Survival of Obligations. Any obligations of Tenant arising prior
-----------------------
to the expiration of the Lease shall survive the termination of the Lease, and
Tenant shall promptly perform all such obligations whether or not this Lease has
expired.
R. Independent Covenants. Each covenant, agreement, obligation or
---------------------
other provision of this Lease to be performed by Tenant are separate and
independent covenants of Tenant, and not dependent on any other provision of the
Lease.
S. Joint and Several Liability. If Tenant comprises more than one
---------------------------
entity or person, or if this Lease is guaranteed by any party, all such persons
shall be jointly and severally liable for payment of rents and for performance
of Tenant's obligations hereunder.
T. Offer to Lease. The submission of this Lease to Tenant or its
--------------
broker or other agent does not constitute an offer to Tenant to lease the
Premises. This Lease shall have no force and effect until (a) it is executed
and delivered by Tenant to Landlord and (b) it is fully reviewed and executed by
Landlord; provided, however, that upon execution of this Lease by Tenant and
delivery to Landlord, such execution and delivery by Tenant shall, in
consideration of the time and expense incurred by Landlord in reviewing the
Lease and Tenant's credit, constitute an offer by Tenant to lease the Premises
upon the terms and conditions set forth herein (which offer to lease shall be
irrevocable for twenty (20) business days following the date of delivery).
39. Right of First Offer. During the term of the Lease, Tenant shall have
--------------------
the following right of first offer to lease any space ("Takedown Space") on the
third (3rd) floor contiguous to the Premises if and when such Takedown Space
becomes available for lease, on the following terms and conditions:
A. Provided that an event of default has not occurred nor has any
event occurred which with the passing of time or the giving of notice, or both,
would constitute an event of default under any of the terms, conditions,
covenants or provisions of this Lease, either as of the date Tenant exercises
its Takedown Right (as defined below) or the date of execution of the Takedown
Amendment (as defined below), Tenant shall have the right (the "Takedown
Right"), but not the obligation, to lease Takedown Space. During the term of
the Lease, Landlord shall give Tenant written notice (the "Takedown Notice") if
any Takedown Space becomes available and, in such event, Tenant shall have three
(3) business days after its receipt of the Takedown Notice to exercise its
Takedown Right by delivering written notice of such exercise to Landlord. If
Landlord fails to receive such notice from Tenant on or before 5:00 p.m.
-29-
on the third (3rd) business day after Landlord delivers the Takedown Notice to
Tenant, Tenant shall conclusively be deemed to have elected not to lease the
Takedown Space, and neither party shall have any further obligations or rights
hereunder with respect to such Takedown Space.
B. If Tenant timely exercises the Takedown Right regarding Takedown
Space pursuant to this Xxxxxxxxx 00, Xxxxxxxx and Tenant shall execute an
------------
amendment (the "Takedown Amendment") adding the Takedown Space to the Premises
for the remaining term of the Lease as the same may be extended. In such event,
the commencement date of the term of the Takedown Amendment (the "Takedown Space
Commencement Date") shall be the date Tenant receives possession of the Takedown
Space from Landlord. For purposes of this Paragraph 39, Tenant's possession of
------------
the Takedown Space shall be deemed to have occurred when the Takedown Space has
been vacated by the Future Occupant, if any, and the Takedown Space is delivered
to Tenant. Landlord shall lease Takedown Space to Tenant subject to the terms
and conditions of this Lease, except that (i) the Base Rent shall be equal to
one hundred percent (100%) of the then Prevailing Market Rent for Comparable
Buildings (as such terms are defined in Paragraph 40 below), and (ii) from and
after the Takedown Space Commencement Date, Tenant's Proportionate Share as set
forth in the Basic Lease Information shall be adjusted to reflect the increase
in the size of the Premises.
C. Landlord shall deliver the Takedown Space to Tenant in an "as is"
condition. Any alterations or special finish work required by Tenant shall be
made at Tenant's sole cost and expense upon the prior written approval of
Landlord in accordance with this Lease.
40. Renewal Option. Tenant shall have one (1) option (the "Renewal
--------------
Option") to extend the Term for an additional three (3) years beyond the
Expiration Date (the "Renewal Term"). The Renewal Option shall be effective
only if an event of default is not occurring, nor has any event occurred which,
with the giving of notice or the passage of time, or both, would constitute an
event of default under this Lease, either at the time of exercise of the Renewal
Option or the time of commencement of the Renewal Term. The Renewal Option must
be exercised, if at all, by written notice from Tenant to Landlord given not
more than nine (9) months nor less than six (6) months prior to the expiration
of the initial Term. Any such notice given by Tenant to Landlord shall be
irrevocable. If Tenant fails to exercise the Renewal Option in a timely manner
as provided for above, the Renewal Option shall be void. The Renewal Term shall
be upon the same terms and conditions as the initial Term, except that the
annual Base Rent during the Renewal Term shall be equal to ninety-five percent
(95%) of the Prevailing Market Rate (as such term is defined below) for space of
comparable size and location to the Premises being offered for rent in
comparable office buildings in the San Francisco Financial District
(collectively "Comparable Buildings") at the commencement of the Renewal Term;
provided, however, that in no event shall the Base Rent for the Renewal Term be
less than the Base Rent for the last year of the initial Term. As used herein,
the term "Prevailing Market Rate" shall mean the base annual rental for such
comparable space, taking into account any additional rental and all other
payments and escalations payable hereunder and by tenants under leases of such
comparable space, and any refurbishment allowances or tenant improvement
allowances, if any, that are prevalent in lease renewals in the market as such
times. If Tenant disputes Landlord's
-30-
determination of the Prevailing Market Rate, Tenant shall so notify Landlord
within ten (10) days following Landlord's notice to Tenant of the Prevailing
Market Rate and such dispute shall be resolved as follows:
A. Within thirty (30) calendar days following Landlord's notice to
Tenant of the Prevailing Market Rate, Landlord and Tenant shall meet no less
than two (2) times, at a mutually agreeable time and place, to attempt to
resolve any such disagreement.
B. If within this thirty (30) day period Landlord and Tenant cannot
reach agreement as to the Prevailing Market Rate, they shall each select one
appraiser to determine the Prevailing Market Rate. Each such appraiser shall
arrive at a determination of the Prevailing Market Rate and submit his
conclusions to Landlord and Tenant within thirty (30) days of the expiration of
the expiration of the thirty (30) day consultation period described in paragraph
(a) above.
C. If only one appraisal is submitted within the requisite time
period, it shall be deemed to be the Prevailing Market Rate. If both appraisals
are submitted within such time period, and if the two appraisals so submitted
differ by less than ten (10) percent of the higher of the two, the average of
the two shall be the Prevailing Market Rate. If the two appraisals differ by
more than ten (10) percent of the higher of the two, then the two appraisers
shall immediately select a third appraiser. Such Third appraiser shall, within
thirty (30) days of his selection, make a determination of the Prevailing Market
Rate and submit such determination to the Landlord and Tenant. This third
appraisal will then be averaged with the closer of the two previous appraisals,
and the result shall be the Prevailing Market Rate.
D. All appraisers specified pursuant hereto shall be licensed real
estate brokers in the State of California with not less than five (5) years'
experience appraising commercial properties in the San Francisco Financial
District. Each party shall pay the cost of the appraiser selected by such party
and one-half (l/2) of the cost of the third appraiser plus, if required, one-
half (1/2) of any other costs incurred in the arbitration.
41. Right to Terminate. Tenant shall have the right to terminate the
------------------
Lease ("Termination Right"), effective as of the thirty-sixth (36th) month of
the Term, subject to the following terms and conditions. Provided that an event
of default is not occurring, nor is an event occurring which, with the passing
of time or the giving of notice, or both, would constitute an event of default
under the terms and conditions of this Lease at the time of exercise of the
Termination Right, Tenant may exercise the Termination Right by delivery to
Landlord of written notice ("Termination Notice") no later than the end of the
thirtieth (30th) month of the Term of the Lease. Within thirty (30) days
following receipt of Tenant's Termination Notice, Landlord shall deliver written
notice to Tenant of the amount of the cash payment due from Tenant which shall
be equal to the unamortized portion of Tenant Improvements and brokerage
commissions payable to the Brokers specified in the Basic Lease Information as
of the date of termination ("Termination Payment"). The Termination Payment
shall be due and payable within thirty (30) days after Tenant's receipt of such
notice from Landlord. For purposes of
-31-
calculating the Termination Payment, Tenant Improvements and brokerage
commissions shall be deemed to be amortized, together with interest thereon, at
the rate of ten percent (10%) per annum, on a straight-line basis monthly over
the initial Term of the Lease, not including any renewal option period.
-32-
IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to be
executed and delivered as of this 13 day of November, 1995.
TENANT: PANTTAJA CONSULTING GROUP, INC.,
A California Corporation
By: /s/ Xxxx Xxxxxxxx
--------------------
Its: President
----------
LANDLORD:BRITPHIL & CO. (US) LTD.,
a California corporation
By: /s/ Xxxxxx Xxxxxx
-----------------
Its: President
---------
-33-
Exhibit A
MEMORANDUM OF TERM COMMENCEMENT DATE
------------------------------------
Landlord: Britphil & Co. (US) Ltd., a California corporation
TENANT:
PREMISES:
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Pursuant to Paragraph 3 of the above-referenced Lease, the Commencement Date is
hereby established as ______________________.
Dated:
Landlord Tenant
-------- ------
Britphil & Co. (US) Ltd. Panttaja Consulting Group, Inc.
By:___________________________ By:_____________________________
Its:__________________________ Its:____________________________
Exhibit B
RULES AND REGULATIONS
---------------------
Tenant shall faithfully observe and comply with the Rules and Regulations set
forth in this Exhibit D, as reasonably modified by Landlord from time to time in
writing. Landlord shall not be responsible to Tenant for the nonperformance of
any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Building.
1. Signage. No sign, placard, picture, advertisement, name or notice
-------
shall be installed or displayed on any part of the outside or inside of the
building without the prior written consent of the Landlord. Landlord shall have
the right to remove, at Tenant's expense and without written notice, any sign
installed or displayed in violation of this rule. All approved signs or
lettering on doors and walls shall be printed, painted, affixed or inscribed at
the expense of Tenant by a person chosen by Landlord.
2. Window Coverings. If Landlord objects in writing to any curtains,
----------------
blinds, shades or screens attached to or hung in or used in connection with any
window or door of the Premise, Tenant shall immediately discontinue such use. No
awning shall be permitted on any part of the Premises. Tenant shall not place
anything against glass partitions or doors or windows which may appear unsightly
from the outside Premises.
3. Access. Tenant shall have access to its Premises twenty-four (24)
------
hours a day, three hundred sixty-five days a year. Tenant shall not loiter in or
obstruct any sidewalks, halls, passages, exits, entrances, elevators, escalators
or stairways of the Building. The halls, passages, exits, entrances, shopping
malls, elevators, escalators and stairways shall be used only as a means of
ingress and egress for the leased Premises, and Landlord shall in all cases
retain the right to control and prevent access thereto to all persons whose
presence in the judgment of Landlord would be prejudicial to the safety,
character, reputation and interests of the Building 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 its
business, unless such persons are engaged in illegal activities. No tenant and
no employee or invitee of any tenant shall go upon the roof of the Building, or
in other restricted access areas within the Building. Landlord reserves the
right to close and keep locked all entrance and exit doors of the Building
during such hours as are customary for comparable buildings in the City of San
Francisco. Tenant, its employees or agents must be sure that the doors to the
Building are securely closed and locked when leaving the Premises after the
normal hours of business for the Building. Any tenant, its employees or agents
or any other persons entering or leaving the Building at any time when it is so
locked, or any time when it is considered to be after normal business hours for
the Building, may be required to sign the Building Register when so doing.
Access to the Building may be refused unless the person seeking access has the
proper identification or has previously arranged a pass for access to the
Building. Landlord and its agents shall in no case be liable for damages for any
error with regard to the admission to or exclusion from the Building of any
person. In case of invasion, mob riot, public excitement, or other commotion.
Landlord reserves
the right to prevent access to the Building during the continuance of same by
any means it deems appropriate for the safety and protection of life and
property.
4. Building Directory. 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 exclude any other names therefrom.
5. Janitorial Services. All cleaning and janitorial services for the
-------------------
Building and the Premises shall be provided exclusively through Landlord, and
except with the written consent of Landlord, no person or persons other than
those approved by Landlord shall be employed by Tenant or permitted to enter the
Building for the purpose of cleaning the same. Tenant shall not cause any
unnecessary labor by carelessness or indifference to the good order and
cleanliness of the Premises. Landlord shall not in any way be responsible to any
tenant for any loss of property on the Premises, however occurring, or for any
damage to any Tenants property by the janitor or any other employee or any other
person.
6. Keys. Landlord will furnish to Tenant free of charge with two keys to
----
each door lock in the Premises. Landlord may make a reasonable charge for any
additional keys. Tenant shall not make or have made additional keys, and Tenant
shall not alter any lock or install a new or additional lock or bolt on any door
of its Premises. Tenant, upon the termination of its tenancy, shall deliver to
Landlord the keys of all doors which have been furnished to Tenant, and in the
event of loss of any keys so furnished, shall pay Landlord therefor.
7. Fixtures. Landlord reserves the right to approve both where and how
--------
telephonic wires, security alarms and similar equipment are to be introduced to
the Premises. No boring or cutting for wires shall be allowed without the
consent of Landlord. The location of telephone, call boxes and other office
equipment affixed to the Premises shall be subject to the approval of Landlord.
8. Freight Elevator. The freight elevator shall be available for use by
----------------
all tenants in the Building, subject to such reasonable scheduling as Landlord
in its discretion shall deem appropriate, and no equipment, materials,
furniture, packages, supplies, merchandise or other property will be received in
the Building or carried in the elevators except between such hours and in such
elevators as may be designated and approved by Landlord.
9. Loads. Tenant shall not place a load upon any floor of the Premises
-----
which exceeds the load per square foot which such floor was designed to carry
and which is allowed by law. Landlord shall have the right to prescribe the
weight, height and position of all equipment materials, furniture or other
property brought into the Building. Heavy objects shall, if considered necessary
by Tenant, stand on such platforms as are determined necessary by Landlord to
properly distribute the weight. 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
-36-
employed to move such equipment in or out of the Building must be acceptable to
Landlord. Landlord will not be responsible for loss of, or damage to, any such
equipment or other property from any cause, and all damage done to the Building
by maintaining or moving such equipment or other property shall be repaired at
the expense of the Tenant.
10. Toxics. Tenant shall not use or keep in the Premises any kerosene,
------
gasoline or flammable or combustible fluid or material other than limited
quantities necessary for the operation or maintenance of office equipment.
Tenant shall not use or permit to be used in the Premises any foul or noxious
gas or substance, or permit or 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, odors or vibrations. Tenant shall not bring into or keep
within the Building or the Premises any animals, birds, bicycles or other
vehicles.
11. Heating/Air. Tenant shall not use any method of heating or air
-----------
conditioning other than that supplied by Landlord, unless Tenant has Landlord's
written approval for said alteration. Heating or air conditioning alterations
shall be governed by guidelines established in Paragraph 12 of the Lease.
Landlord shall furnish heating and air conditioning during the hours of 7:00
a.m. to 6:00 p.m., Monday through Friday. In the event Tenant requires heating
and air conditioning during off hours, Saturdays, Sundays, or holidays, Landlord
on forty-eight (48) hours' prior written notice from Tenant may provide such
services at an hourly rate to be established by Landlord, from time to time.
12. Natural Resource Use. 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. Tenant shall keep corridor doors closed.
13. Building Name/Address. Landlord reserves the right, exercisable
---------------------
without notice and without liability to Tenant, to change the name and street
address of the Building.
14. Secure Premises. Tenant shall close and lock the doors of its
---------------
Premises and entirely shut off all water faucets or other water apparatus and
electricity, gas or air outlets, and all electric machines (coffee pots) before
Tenant and its employees leave the Premises. Tenant shall be responsible for any
damage or injuries sustained by other tenants or occupants of the Building or by
Landlord for noncompliance with this rule.
15. Vendors. Tenant shall not obtain for use on the Premises ice, food,
-------
beverage, towel or other similar services or accept barbering or bootblacking
services upon the Premises, except at such hours and under such regulations as
may be fixed by Landlord. Tenant may obtain bottled water service provided by an
independent vendor.
16. Restrooms. The toilet rooms, toilets, urinals, wash bowls and other
---------
apparatus shall not be used for any purpose other than that for which they were
constructed. No foreign substance of any kind whatsoever shall be thrown
therein, and the expense of any breakage,
-37-
stoppage or damage resulting from the violation of this rule shall be borne by
the Tenant who, or whose employees or invitees, shall have caused it.
17. Retail Sales. Tenant shall not sell, or permit the sale at retail, of
------------
newspapers, magazines, periodicals, theater tickets or any other goods or
merchandise to the general public in or on the Premises. Tenant shall not make
any room-to-room solicitation of business from other tenants in the Building.
Tenant shall not use the Premises for any business or activity other than that
specifically provided for in such Tenants lease. Canvassing, soliciting and
distribution of handbills or any other written material, and peddling in the
Building are prohibited and each tenant shall cooperate to prevent same.
18. Building Exterior. Tenant shall not install any radio or television
-----------------
antenna, loudspeaker or other device on the roof or exterior walls of the
Building without Landlord's prior written approval. Tenant shall not interfere
with radio or television broadcasting or reception from or in tile Building or
elsewhere.
19. Maintenance of Walls/Carpet. Tenant shall not xxxx, drive nails,
---------------------------
screw or drill into the partitions, woodwork or plaster or in any way deface the
Premises or any part thereof except for nails and screws used for normal
decorating purposes. Landlord reserves the right to direct electricians as to
where and how telephone and telegraph wires are to be introduced to the
Premises. Tenant shall not cut or bore holes for wires. Tenant shall not affix
any floor covering to the floor of the Premises in any manner except as approved
by Landlord. Tenant shall repair any damage resulting from noncompliance with
this rule. In all carpeted areas where desks and chairs are utilized, Landlord
shall require Tenant, at Tenant's sole cost, to place mats under each and every
chair in order to protect said carpeting from unnecessary wear and tear.
20. Vending Machines. Tenant shall not install, maintain or operate upon
----------------
the Premises any vending machines without the written consent of Landlord.
21. Trash Storage. Tenant shall store all its trash and garbage within
-------------
its Premises. Tenant shall not place in any trash box or receptacle any material
which cannot be disposed of in the ordinary and customary manner of trash and
garbage disposal. All garbage and refuse disposal shall be made in accordance
with directions issued from time to time by Landlord.
21. Cooking. The Premises shall not be used for the storage of
-------
merchandise held for sale to the general public, or for lodging or for
manufacturing of any kind without prior written approval of Landlord, nor shall
Premises be used for any improper, immoral or objectionable purpose. No cooking
shall be done or permitted by any tenant on the Premises, except that use by the
tenant of Underwriters' Laboratory approved equipment inclusive of a microwave
oven for heating food and equipment for brewing coffee, tea, hot chocolate and
similar beverages shall be permitted, provided that such equipment and use is in
accordance with all applicable federal, state and city laws, codes, ordinances,
rules and regulations.
22. Hand Trucks. Tenant shall not use in any space or in the public halls
-----------
of the Building any hand trucks except those equipped with rubber tires and side
guards or such other
-38-
material-handling equipment as Landlord may approve. Tenant shall not bring any
other vehicles of any kind into the Building. Tenant shall obey all Building
rules and regulations covering the timing, procedures and restrictions for
moving objects in and out of the Premises (i.e., masonite over tile).
23. Tenant Use of Building Name. Without the written consent of Landlord,
---------------------------
Tenant shall not use the name of the Building in connection with or in promoting
or advertising the business of Tenant except as Tenant's address.
24. Life Safety. Tenant shall comply with all safety, fire protection
-----------
and evacuation procedures and regulations established by Landlord or any
governmental agency, including the attendance of required safety seminars and
demonstrations.
25. Theft. Tenant assumes any and all responsibility for protecting its
-----
Premises from theft, robbery and pilferage. All doors opening to public
corridors shall be kept closed at all times.
26. Notification. The requirements of Tenant will be attended to only
------------
upon appropriate application to 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 employee of Landlord will admit any person (Tenant or otherwise) to any
office without specific instructions from Landlord.
27. Landlord Control. Landlord reserves the right to exclude or expel
----------------
from the Building any person who, in Landlord's judgment, is intoxicated or
under the influence of liquor or drugs or who is in violation of any rules and
regulations of the Building. Landlord shall have the right to control and
operate the public portions of the Building, the public facilities, the heating
and air conditioning, and any other facilities furnished for the common use of
Tenants, in such manner as is customary for comparable buildings in the City of
San Francisco. 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 for the
preservation of good order therein. Tenant agrees to abide by all such rules and
regulations hereinabove stated and any additional rules and regulations which
are adopted.
28. Lease Agreement. These Rules and Regulations are in addition to,
---------------
and shall not be construed to in any way modify or amend, in whole or in part,
the terms, covenants, agreements and conditions of any lease of premises in the
Building.
29 Building. The word "Building" as used herein means the Building of
--------
which the Premises are a part.
30. Tenant Responsibility. Tenant shall be responsible for the observance
---------------------
of all of the foregoing rules by Tenant's employees, agents, clients, customers,
invitees and guests.
31. Elevator Use. See Exhibit D- 1.
------------
-39-
EXHIBIT D-1
ELEVATOR USE
[Note: For Presentation Purposes Only. Needs to be modified where necessary.]
CONDITIONS
----------
1. Elevator use is subject to availability, scheduling and approval of Building
Staff.
2. Elevator(s) provided only in Dedicated Run (Independent Run/Move mode) as
follows:
Weeknights: 6:00 p.m. to 5:30 a.m.
Weekdays: 5:30 a.m. to 6:30 a.m. (small move slot)
Weekends: 6:00 a.m. on Friday through 5:30 a.m. on Monday
Holidays: Contact Building Staff for use times
3. Dedicated Run Elevator USC limited 10 Freight Elevator, unless otherwise
arranged, scheduled, and approved by Building Staff.
4. Elevators only provided in Dedicated Run to Movers and Contractors (with
valid Certificate of Insurance) and Building Staff.
5. Masonite protection required on elevator floor (Contractors: also around
interior walls) during moves. Contact Building Management for details prior
to each move.
6. Applying to involved Elevator(s): Cardboard protection folded and MASKING
taped (only) around edges of elevator entrance frames on move floor(s)
involved. Cardboard (to span height of no less than 6 feet.
7. Elevator use may be cancelled at any time, without notice or reason, by the
Building Staff.
8. Dedicated Run Elevator Use way be provided to only one entity (Mover or
Contractor) at a time, regardless of circumstances.
FRIGHT ELEVATOR DIMENSIONS:
--------------------------
Interior Width (left to right when facing rear wall of (elevator): ________
--------------
inches wide.
Interior Death Excluding Elevator Door Indentation (front right or left
--------------------------------------------------
corner of rear or left corner): 64 inches deep.
Width of Elevator Entrance/Doors: _____ inches tall.
--------------------------------
Height of Elevator Interior: _____ inches tall.
---------------------------
HEIGHT OF ELEVATOR ENTRANCE (from Outside Facing Entrance):
---------------------------
______ feet _____ inches or ______ inches tall.
PROHIBITED:
----------
1. Loading/stacking materials/articles into elevator while elevator is in Normal
Mode.
2. Use of STOP Emergency alarm button in non-emergencies.
3. Holding, jamming, propping, blocking, obstructing or impeding of elevator
entrances and doors.
4. Use/providing of keys for operation of elevator(s).
5. Tampering with elevator controls, locks, etc.
