EXHIBIT 10.19
SUBLEASE AGREEMENT
THIS AGREEMENT is made effective as of May 1, 1999, by and between IMAGINE
MEDIA, INC., a California corporation ("Imagine"), and AFFILIATION NETWORKS,
INC., a Delaware corporation ("Affiliation").
RECITALS
A. Imagine is lessor of certain premises located at 000 Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxxxxx, XX 00000, consisting of approximately 16,063 square
feet (the "Premises"), pursuant to (1) that certain Sublease Agreement between
Imagine and MedPartners, Inc., dated June 30, 1998 (the "Sublease") and (2) that
certain Lease Agreement with Sunpark Properties, Inc. (the "Lease," and
collectively with the Sublease, the "Leases"). Copies of the Leases are attached
hereto and incorporated herein as if set forth in full.
B. Affiliation desires to sublet the Premises, and Imagine is willing to
sublease the Premises to Affiliation, on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises, and the covenants and
conditions contained below, the parties agree as follows:
AGREEMENT
1. Lease. Imagine hereby leases the Premises to Affiliation, and
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Affiliation hires the Premises from Imagine for the purpose of conducting
general business operations therein.
2. Term. The term of this Sublease shall begin May 1, 1999, and shall
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continue on a month-to-month basis until either party notifies the other, at
least thirty (30) days in advance, of its intention to terminate it.
3. Rent. The rent shall be payable in monthly installments of Thirty One
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Thousand Seven Hundred Eighty Dollars ($31,780.) each on the first day of each
month, plus any CPI adjustment as provided in the Lease.
4. No Sublease. Affiliation may not assign this Sublease or sublease the
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Premises without the express written consent of Imagine; provided, however, that
Affiliation may sublet a portion of the Premises under the Lease Agreement to
Xxxxxx.xxx (f/k/a/ October Media, Inc.).
5. Other Terms. Affiliation shall comply with all other applicable terms
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and conditions of the Leases as if it were the Tenant or Subtenant thereunder,
including without limitation all obligations to maintain insurance.
IN WITNESS WHEREOF, the parties have executed this Sublease Agreement as of
the day and year first set forth above.
IMAGINE MEDIA, INC. AFFILIATION NETWORKS, INC.
By /s/ Xxxxxx X. Xxxxxxxxx By /s/ Xxxx Xxxx
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Xxxxxx X. Xxxxxxxxx, CFO Xxxx Xxxx, President CEO
EXECUTED SUBLEASE
THIS SUBLEASE is made and entered into as of June 30, 1998 by and between
MedPartners, Inc., a Delaware corporation, Federal Tax I.D. Number 00-0000000
("Sublessor") and Imagine Media, Inc., a California corporation, Federal Tax
I.D. Number 00-0000000 ("Sublessee").
Sublessor is the tenant of approximately twelve thousand, five hundred sixty-six
(12,566) square feet of fourth floor space (the "Premises") under that certain
Lease dated December 2, 1996 (the "Master Lease"), by and between Tuntex
Executive Park, Inc. ("Landlord"), landlord of the property commonly known as
000 Xxxxxxxxx Xxxx Xxxxxxxxx, Xxx Xxxxxxxxx, XX 00000 (the "Building"), and
Sublessor.
Sublessee desires to sublease one hundred percent (100%) or approximately 12,566
square feet of the Premises (the "Sublet Premises"), as shown as Exhibit B
hereto.
NOW THEREFORE, in consideration of the foregoing premises and the mutual
promises contained in this Sublease, the parties hereby agree as follows:
1. Sublease of Sublet Premises. Sublessor hereby subleases to Sublessee and
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Sublessee hereby hires from Sublessor the Sublet Premises for the rent
hereinafter provided and subject to the terms and conditions of this
Sublease.
2. Provisions Constituting Sublease. This Sublease is subject to and
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subordinate to all the terms and conditions of the Master Lease (a copy of
which is attached hereto as Exhibit A) and the matters to which the Master
Lease is subordinate, to the extent not inconsistent with the provisions of
this Sublease. The provisions of the Master Lease are incorporated herein
by reference with the same force and effect as if they were fully set forth
herein, but specifically excluding Sections 1.1, 1.2, 1.3, 1.4, 1.9, 1.10,
1.11, 1.12, 1.14, 1.15, 1.17, 1.19, and Exhibit F. Sublessee shall assume
and perform the obligations of the Sublessor under the Master Lease. Each
reference in the Master Lease to "Landlord" and "Tenant" shall be read as
referring to "Sublessor" and "Sublessee", respectively, where appropriate.
Sublessor and Sublessee agree that the reference to "Landlord" in the last
sentence of Section 23 of the Master Lease shall not apply to Sublessor.
Notwithstanding the foregoing, Sublessee and Sublessor hereby agree that
Sublessee is relying directly on Landlord's rights and obligations under
the Master Lease with respect to Sections 3.2, 6.8, 13.3, 16, 18, 20, 21,
22, 23, and 34 of the Master Lease and Sublessor will not take any actions
with respect to such provisions of the Master Lease that are contrary to
Landlord's actions with respect thereto. If 1) Landlord shall default in
any of its obligations to Sublessor under the Master Lease, which default
materially and adversely impacts Sublessee's rights hereunder, 2) Sublessee
reasonably determines that legal action against Landlord is required in
order to enforce its rights under the Sublease, and 3) Sublessee is
prevented from pursuing such legal action due to the fact that Sublessee
does not have a direct contractual relationship with Landlord, then
Sublessor shall, upon request by Sublessee and at Sublessee's sole cost and
expense, take such legal action against Landlord. In the event of the
termination of Sublessor's interest as tenant under the Master Lease, then
this Sublease shall terminate without liability of Sublessor to Sublessee
except for any damages resulting from Sublessor's willful misconduct or
gross negligence.
3. Term. The term of this Sublease shall commence, at Sublessor's option,
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between September 1 and October 31, 1998 (the "Sublease Commencement
Date"), and shall expire on May 31, 2002 (the "Sublease Expiration Date").
Sublessor shall provide Sublessee with no less than sixty (60) days prior
notice of the Sublease Commencement Date.
4. Base Rent. Sublessee shall pay Sublessor in consideration of the Sublease
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at the address set forth below a monthly base rent of twenty-three
thousand, thirty-seven dollars and sixty-seven cents ($23,037.67) during
the term hereof, payable in advance on the first day of each month
beginning with the Sublease Commencement Date and continuing through the
Sublease Expiration Date. In addition, Sublessee shall pay Sublessor all
Additional Rent due under the Master Lease. For the purpose of computing
Sublessee's share of Operating Expenses and Real Property Taxes, the Base
Year shall be calendar year 1999.
5. Security Deposit and Advance Rent. Upon execution of this Sublease, the
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Sublessee shall deliver to Sublessor a cashier's check in the amount of
forty-six thousand, seventy-five dollars and thirty-four cents
($46,075.34), which represents the first month's rent and twenty-three
thousand, thirty-seven dollars and sixty-seven cents ($23,037.67) as a
security deposit.
6. Insurance. Sublessee shall throughout the term maintain in force a policy
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of insurance in the form and amounts as set forth in the Master Lease,
covering its personal property and shall indemnify Sublessor and Lessor
from liabilities to third parties for personal injury, death and
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damage to tangible property resulting from Sublessee's negligence or
willful conduct. Sublessee shall be responsible for any increase to
Sublessor's and Lessor's insurance premiums due to Sublessee's use.
7. Use. Sublessee shall use the Sublet Premises in accordance with the Master
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Lease.
8. Inspection of Premises. Prior to the Sublease Commencement Date, Sublessor
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shall, at its sole cost and expense, repaint the Sublet Premises and clean
all carpets in the Sublet Premises. Sublessee warrants that it has
inspected and agrees to accept the Sublet Premises (including all
improvements and systems thereon) on an "as is" basis, with the exception
of the work described in the first sentence of this Section 8. Sublessor
has not warranted to any other condition of the Sublet Premises. Sublessor
and Landlord shall not be liable for damage to property or injury to
persons, sustained by Sublessee or others, caused by conditions or
activities on the Sublet Premises.
9. Repairs by Landlord. Sublessee shall look only to Sublessor for any
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services to be furnished to Sublessee in accordance with this Sublease.
Sublessor shall use its reasonable efforts to obtain for Sublessee any
services, which are the obligation of the Landlord. If Sublessor does not
use reasonable efforts, then Sublessee can contact Landlord directly.
10. Access. At all reasonable hours, with prior notice, the Sublet Premises
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shall be open to Lessor and or Sublessor, their agents and representatives,
for inspecting or for repairs, additions or alterations. With respect to
access by Sublessor only, Sublessor shall provide 24-hour advance notice to
Sublessee except in case of emergency.
11. Broker. Sublessee warrants and represents that it has dealt with no broker
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or any other person who would legally claim to be entitled to receive a
brokerage commission or finder's or consultant's fee with respect to this
transaction, except for BT Commercial and Xxxxxx X. Xxxxxxx, Inc. Sublessee
shall indemnify Sublessor and Landlord against the claim of any person,
firm or corporation arising out of any inaccuracy or alleged inaccuracy of
the above representation.
12. Default by Sublessor under Master Lease. In the event of a default by
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Sublessor under the Master Lease which results in termination of the Master
Lease, this Sublease shall, at the option of the Landlord, remain in full
force and effect and the Sublessee shall attorn to and recognize Landlord
as Landlord hereunder and shall promptly upon such Landlord's request,
execute and deliver all instruments necessary or appropriate to conform
such attornment and recognition.
13. Notices. All notices or demands of any kind required or desired to be
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given to Sublessor or Sublessee to the other hereunder shall be in writing
and shall be deemed delivered four (4) days after depositing the notice of
demand in the United States mail, certified or registered, postage prepaid,
addressed to the Sublessor or Sublessee, respectively, with a copy to the
Landlord, at the addresses set forth below:
Landlord Tuntex Executive Park, Inc.,
000 Xxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Sublessor: MedPartners, Inc.
0000 Xxxxxx Xxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Real Estate Department
Tel. (000) 000-0000
Fax (000) 000-0000
Sublessee:
IMAGINE MEDIA
000 Xxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
14. Assignment and Subletting. In the event Sublessee elects to effect a
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further Transfer pursuant to the provisions of Article 16 of the Master
Lease, then in such event Sublessor shall not disclose any confidential
information contained in any financial statements received from any
prospective assignee, sublessee or other transferee except to Landlord and
to Sublessor's financial, accounting, real estate, and legal advisors.
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IN WITNESS WHEREOF, this Sublease was executed on the date first above written.
SUBLESSOR:
MedPartners, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: Exec. V.P. & Corporate Secretary
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SUBLESSEE:
IMAGINE MEDIA
By: /s/ Xxx Xxxxxxxxx
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Name: Xxx Xxxxxxxxx
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Title: CFO
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Agreed and Approved
LANDLORD:
Sunpark Properties, Inc.
By: /s/ Chi-Xxxx Xxxx
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Name:_______________________________________
Title: GM
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OFFICE LEASE
This LEASE is made as of the ____________ day of December of 1996, by and
between Landlord and Tenant:
W I T N E S S E T H:
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1. Terms and Conditions. For the purposes of this Lease, the following terms
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shall have the following definitions and meanings:
1.1 Landlord: Tuntex Executive Park, Inc.
a Delaware Corporation
1.2 Landlord's Address: 000 Xxxxxxxxx Xxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
1.3 Tenant: MedPartners/Xxxxxxxx, Inc.
a Delaware Corporation
1.4 Tenant's Address: 000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
1.5 Site: The parcel(s) of real property located at the corner of
Executive Park Blvd. and Xxxxxx Xxxxxx in the City of San Francisco, County of
San Francisco, State of California, as shown on the site plan attached hereto as
Exhibit "A".
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1.6 Building: A Four (4) story office building located on the Site,
containing proximately 107,831 Rentable Square Feet (subject to adjustment as
set forth in Exhibit "C"), whose address is 000 Xxxxxxxxx Xxxx Xxxx., Xxx
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Xxxxxxxxx, XX 00000.
1.7 Premises: Those certain premises known as the first floor, as
generally shown on the floor plan(s) attached hereto as Exhibit "C", "located on
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the first floor(s) of the building, and containing approximately 12,566 Rentable
Square Feet (subject to adjustment as set forth in Exhibit "C" and Subparagraph
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1.19).
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1.8 Rentable Square Feet: See Exhibit "C".
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1.9 Commencement Date: See Exhibit "D".
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1.10 Estimated Commencement Date: Upon Completion of Tenant Improvements.
1.11 Term: Five (5) years, with an option to renew for another five (5)
years at 95% of the then market rent.
1.12 Annual Basic Rent: $218,652.00, calculated based upon $17.40 per
Rentable Square Foot within the Premises per year. Annual Basic Rent is payable
in monthly installments "Monthly Basic Rent") of $18,221.00, calculated based
upon $1.45 per Rentable Square Foot
within the Premises per month. The Annual Basic Rent is subject to adjustment at
$.05 per square foot, annually.
1.13 Tenant's Percentage: 11.65% (See Exhibit "C")
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1.14 Landlord's Contribution to Operating Expenses: Tenant's Percentage of
Operating Expenses incurred by Landlord for the building during the calendar
year in which the Commencement Date occurs, adjusted to reflect an assumption
that the Building is fully assessed real property tax purposes as a completed
Building ready for occupancy and that the Building is ninety-five percent (95%)
occupied during such year.
1.15 Security Deposit: None.
1.16 Permitted Use: Office.
1.17 Brokers: BT Commercial.
1.18 Interest Rate: The lesser of: (a) the rate announced from time to
time by Bank of America or if Bank of America ceases to exist or ceases to
publish such rate, by the largest (as measured by deposits) chartered bank
operating in the state in which the Building is located as its "prime rate" or
"reference rate," plus five percent (5%); or (b) the maximum rate permitted by
law.
1.19 Leasehold Improvements: The tenant improvements installed or to be
installed [for] Premises as described in the Work Letter Agreement attached
hereto as Exhibit "F". The square footage in Subparagraph 1.7 will be confirmed
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by building's architect and may be adjusted prior to commencement of lease if
architect's measurements differ.
1.20 Parking: A total of fifty four (54) parking privileges, subject to
the parking provisions set forth in Paragraph 34.
1.21 Guarantor(s): N/A
2. Lease of Premises. Landlord hereby leases to Tenant, and Tenant hereby
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leases from Landlord, the Premises described in Subparagraph 1.7 above, improved
or to be improved with Leasehold Improvements. Such lease is upon, and subject
to, the terms, covenants and conditions herein set forth and each party
covenants, as a material part of the consideration for this Lease, to keep and
perform their respective obligations under this Lease.
3. Common Areas.
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3.1 Definitions; Tenant's Rights. During the Term of this Lease, Tenant
shall have the exclusive right to use, in common with Landlord and other tenants
in the Building, and subject to the Rules and Regulations referred to in
Paragraph 8 below, the following common as of the Building and/or Site ("Common
Areas"):
(a) the common entrances, lobbies, restrooms on multi-tenant floors,
elevators, stairways and access ways, loading docks, ramps, drive, and platforms
and any
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passageways and serviceways thereto, and the common pipes, conduits, wires and
appurtenant equipment serving the Premises; and
(b) the parking structure and parking areas (subject to Paragraph 34
below), loading and unloading areas, trash areas, roadways sidewalks, walkways,
parkways, driveways and landscaped areas and plaza area appurtenant to the
Building.
3.2 Landlord's Reserved Rights. Landlord reserves the right from time to
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time to use any of the Common Areas and to do any of the following, as long as
such acts do not unreasonably interfere with Tenant's use of or access to the
Premises or parking:
(a) expand the building and construct or alter other buildings or
improvements on the Site;
(b) make any changes, additions, improvements, repairs or
replacements in or to the Site, the Common Areas and/or the Building (including
the Premises if required to do so by any law or regulation) and the fixtures and
equipment thereof, including, without limitation, (i) maintenance, replacement
and relocation of pipes, ducts, conduits, wires and meters, and (ii) changes in
the location, size, shape and number of driveways, entrances, stairways,
elevators, loading and unloading areas, ingress, egress, direction of traffic,
landscaped areas and walkways, and subject to Paragraph 34 below, parking spaces
and parking area;
(c) close temporarily any of the Common Areas while engaged in making
repairs, improvements or alterations to the Building or the Site; and
(d) perform such other acts and make such other changes with respect
to the Site, Common Areas and Building as Landlord may, in the exercise of sound
business judgment, deem to be appropriate.
4. Term.
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4.1 Term; Notice of Lease Dates. The Term of this Lease shall be for the
period designated in Subparagraph 1.11 commencing on the Commencement Date (as
determined pursuant to Exhibit "D"), and ending on the expiration of such
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period, unless the Term is sooner terminated as provided in this Lease. Within
ten (10) days after Landlord's written request, Tenant shall execute a written
confirmation of the Commencement Date and expiration date of the Term in the
form of the Notice of Lease Term Dates attached hereto as Exhibit "D". The
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Notice of Lease Term Dates shall be binding upon Tenant unless Tenant objects
thereto in writing within such ten (10) day period.
4.2 Estimated Commencement Date. It is estimated by the parties that the
Term of this Lease will commence on the Estimated Commencement Date set forth in
Subparagraph 1.10. The Estimated Commencement Date is merely an estimate of the
Commencement Date and, consequently, Tenant agrees that Landlord shall have no
liability to Tenant for any loss or damage, nor shall Tenant be entitled to
terminate or cancel this Lease if the Term of this Lease does not commence by
the Estimated Commencement Date for any reason whatsoever, including any delays
in substantial completion of the Leasehold Improvements.
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5. Rent.
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5.1 Basic Rent. Tenant agrees to pay Landlord, as basic rent for the
Premises, the Annual Basic Rent designated in Subparagraph 1.12. The Annual
Basic Rent shall be paid by Tenant in twelve (12) equal monthly installments of
Monthly Basic Rent designated in Subparagraph 1.12 in advance on the first day
of each and every calendar month during the Term, except that the first full
month's Monthly Basic Rent shall be paid upon the execution of this Lease.
Monthly Basic Rent for any partial month shall be prorated in the proportion
that the number of days this Lease is in effect during such month bears to the
actual number of days in such month.
5.2 Additional Rent. All amounts and charges payable by Tenant under this
Lease in addition to the Annual Basic Rent described in Subparagraph 5.1 above
(including, without limitation, payments for insurance, repairs and parking, and
Tenant's Percentage of Operating Expenses in excess of Landlord's Contribution
to Operating Expenses as provided in Paragraph 6) shall be considered additional
rent for the purposes of this Lease, and the word "rent" in this Lease shall
include such additional rent unless the context specifically or clearly implies
that only the Annual Basic Rent is referenced. The Annual Basic Rent and
additional rent shall be paid to Landlord as provided in Paragraph 9, without
any prior demand therefor and without any deduction or offset whatever, in
lawful money of the United States of America.
6. Operating Expenses.
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6.1 Excess Expenses. During each calendar year during the Term of this
Lease (after the calendar year noted in Subparagraph 1.14), Tenant shall pay to
Landlord the amount by which Tenant's Percentage of Operating Expenses exceeds
Landlord's Contribution to Operating Expenses for such calendar year (such
amount shall be referred to in this Paragraph 6 as the "Excess Expenses"), in
the manner and at the times set forth in the following provisions of this
Paragraph 6.
6.2 Definition of Operating Expenses. As used in this Lease, the term
"Operating Expenses" shall mean all direct costs and expenses of operation and
maintenance of the building, the Common Areas and the Site, as determined by
standard accounting practices, calculated assuming the Building is ninety-five
percent (95%) occupied, including the following costs, by way of illustration
but not limitation (but excluding those items specifically set forth in
Subparagraph 6.3 below): (a) Real Property Taxes and Assessments (as defined in
Subparagraph 6.4 below) and any taxes or assessments imposed in lieu thereof;
(b) any and all assessments imposed with respect to the Building, Common Areas,
and/or Site pursuant to any covenants, conditions and restrictions affecting the
Site, Common Areas or Building; (c) water and sewer charges and the costs of
electricity, heating, ventilating, air conditioning and other utilities; (d)
utilities surcharges and any other costs, levies or assessments resulting from
statutes or regulations promulgated by any governmental authority in connection
with the use or occupancy of the Building or the Premises or the parking
facilities serving the Building or the Premises; (e) costs of insurance obtained
by Landlord pursuant to Paragraph 23 of this Lease; (f) waste disposal and
janitorial services; (g) security; (h) labor; (i) costs incurred in the
management of the Building, including, without limitation: (1) supplies, (2)
wages and salaries (and payroll taxes and similar governmental charges related
thereto) of employees used in the
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management, operation and maintenance of the Building, (3) Building management
office rental (if such management office is located in the Building), and (4) a
management/administrative fee not to exceed four percent (4%) of the annual
gross revenues of the Building exclusive of the proceeds of financing or a sale
of the Building; (j) supplies, materials, equipment and tools; (k) repair and
maintenance of the elevators and the structural portions of the Building,
including the plumbing, heating, ventilating, air-conditioning and electrical
systems installed or furnished by Landlord; (1) maintenance, costs and upkeep of
all parking and Common Areas; (m) depreciation on a straight-line basis and
rental of personal property used in maintenance; (n) amortization on a straight-
line basis over the useful life [together with interest at the Interest Rate (as
defined in Subparagraph 1.18 of this Lease) on the unamortized balance] of all
costs of a capital nature (including, without limitation, capital improvements,
capital replacements, capital repairs, capital equipment and capital tools): (1)
reasonably intended to produce a reduction in operating charges or energy
consumption; or (2) required after the date of the Lease under any governmental
law or regulation that was not applicable to the Building at the time it was
originally constructed; or (3) for repair or replacement of any Building
equipment needed to operate the Building at the same quality levels as prior to
the replacement; (o) costs and expenses of gardening and landscaping; (p)
maintenance of signs (other than signs of tenants of the Building); (q) personal
property taxes levied on or attributable to personal property used in connection
with the Building, the Common Areas and/or the Site; (r) reasonable accounting,
audit, verification, legal and other consulting fees; and (s) costs and expenses
of repairs, resurfacing, repairing, maintenance, painting, lighting, cleaning,
refuse removal, security and similar items, including appropriate reserves.
6.3 Exclusions from Operating Expenses. Notwithstanding the provisions of
Subparagraph 6.2 above to the contrary, "Operating Expenses" shall not include:
(a) any ground lease rental;
(b) costs incurred by Landlord for the repair of damage to the
Building to the extent that Landlord is reimbursed by insurance or condemnation
proceeds or by tenants, warrantors or other third persons;
(c) costs, including permit, license and inspection costs, incurred
with respect to the installation of tenant improvements for tenants in the
Building (including the original Leasehold Improvements for the Premises), or
incurred in renovating or otherwise improving, decorating, painting or
redecorating space for tenants or other occupants of the Building, including
space planning and interior design costs and fees;
(d) depreciation, amortization and interest payments, except as
specifically provided herein, and except on materials, tools, supplies and
vendor-type equipment purchased by Landlord to enable Landlord to supply
services Landlord might otherwise contract for with a third party, where such
depreciation, amortization and interest payments would otherwise have been
included in the charge for such third party's services, all as determined in
accordance with standard accounting practices;
(e) brokerage commissions, finders' fees, attorneys' fees, space
planning costs and other costs incurred by Landlord in leasing or attempting to
lease space in the Building;
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(f) attorneys' fees and other costs and expenses incurred in
connection with negotiations or disputes with present or prospective tenants or
other occupants of the Building; provided, however, that Operating Expenses
shall include those attorneys' fees and other costs and expenses incurred in
connection with negotiations, disputes or claims relating to items of Operating
Expenses, enforcement of rules and regulations of the Building, and such other
matters relating to the maintenance of standards required of Landlord under the
Lease; and
(g) interest, principal, points and fees on debt or amortization on
any mortgage, deed of trust or other debt encumbering the Building or Site.
(h) any expenses resulting from environmental damage, not caused by
this tenant, but caused by another tenant or negligence of Landlord.
(i) 000 Xxxxxxxxx Xxxx Xxxx. is in compliance with all applicable
building codes and regulations. Tenant's share of Operating Expenses during the
term of this lease shall not exceed 10% of the prior years expenses paid by
Tenant.
6.4 Definition of Real Property Taxes and Assessments. All Real Property
Taxes and Assessments shall be adjusted to reflect an assumption that the
Building is fully assessed for real property tax purposes as a completed
building ready for occupancy. As used in this Lease, the term "Real Property
Taxes and Assessments" shall mean: any form of assessment, license fee, license
tax, business license fee, commercial rental tax, levy, charge, improvement
bond, tax or similar imposition imposed by any authority having the direct power
to tax, including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement or special assessment
district thereof, as against any legal or equitable interest of Landlord in the
Premises, Building, Common Areas or Site, including the following by way of
illustration but not limitation:
(a) any tax on Landlord's "right" to rent or "right" to other income
from the Premises or as against Landlord's business of leasing the Premises;
(b) any assessment, tax, fee, levy or charge in substitution,
partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax, it being acknowledged by
Tenant and Landlord that Proposition 13 was adopted by the terms of the State of
California in the June, 1978 election and that assessments, taxes, fees, levies
and charges may be imposed by governmental agencies for such services as fire
protection, street, sidewalk and road maintenance, refuse removal and for other
governmental services formerly provided without charge to property owners or
occupants. It is the intention of Tenant and Landlord that all such new and
increased assessments, taxes, fees, levies and charges be included within the
definition of "real property taxes" for the purposes of this Lease;
(c) any assessment, tax, fee, levy or charge allocable to or measured
by the area of Premises or other premises in the Building or the rent payable by
Tenant hereunder or other Tenants of the Building, including, without
limitation, any gross receipts tax or excise tax levied by state, city or
federal government, or any political subdivision thereof, with respect to the
receipt of such rent, or upon or with respect to the possession, leasing,
operation,
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management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises, or any portion thereof, but not on Landlord's other operations;
(d) any assessment, tax, fee, levy or charge upon this transaction or
any document which Tenant is a party, creating or transferring an interest or an
estate in the Premises; and/or
(e) any assessment, tax, fee, levy or charge by any governmental
agency related to any transportation plan, fund or system (including assessment
districts) instituted within the geographic area of which the Building is a
part.
Notwithstanding the foregoing provisions of this Subparagraph 6.4 above to the
contrary, "Real Property Taxes and Assessments" shall not include Landlord's
federal or state income, franchise, inheritance or estate taxes.
6.5 Estimate Statement. By the first day of April of each calendar year
during the Term of this Lease (after the calendar year noted in Subparagraph
1.14), Landlord shall endeavor to deliver to Tenant a statement ("Estimate
Statement") estimating the Operating Expenses for the current calendar year and
the estimated amount of Excess Expenses payable by Tenant. Landlord shall have
the right no more than three (3) times in any calendar year to deliver a revised
Estimate Statement showing the Excess Expenses for such calendar year if
Landlord determines that the Excess Expenses are greater than those set forth in
the original Estimate Statement (or previously delivered revised Estimate
Statement) for such calendar year. The Excess Expenses shown on the Estimate
Statement (or revised Estimate Statement, as applicable) shall be divided into
twelve (12) equal monthly installments, and Tenant shall pay to Landlord,
concurrently with the regular monthly rent payment next due following the
receipt of Estimate Statement (or revised Estimate Statement, as applicable), an
amount equal to one (1) monthly installment of such Excess Expenses multiplied
by the number of months from January in the calendar year in which such
statement is submitted to the month of such payment, both months inclusive (less
any amounts previously paid by Tenant with respect to any previously delivered
Estimate Statement or revised Estimate Statement for such calendar year).
Subsequent installments shall be paid concurrently with the regular monthly rent
payments for the balance of the calendar year and shall continue until the next
calendar year's Estimate Statement (or current calendar year's revised Estimate
Statement) is received.
6.6 Actual Statement. By the first day of April of each succeeding
calendar year during the Term of this Lease, Landlord shall endeavor to deliver
to Tenant a statement ("Actual Statement") of the actual Operating Expenses and
Excess Expenses for the immediately preceding calendar year. If the Actual
Statement reveals that Excess Expenses were overstated or understated in any
Estimate Statement (or revised Estimate Statement) previously delivered by
Landlord pursuant to Subparagraph 6.5 above, then within thirty (30) days after
delivery of the Actual Statement, Tenant shall pay to Landlord the amount of any
such underpayment, or, Landlord shall pay to Tenant (or credit against the next
monthly rent falling due), the amount of such overpayment, as the case may be.
6.7 No Release. Any delay or failure by Landlord in delivering any
Estimate or Actual Statement pursuant to this Paragraph 6 shall not constitute a
waiver of its right to receive Tenant's payment of Excess
7
Expenses, nor shall it relieve Tenant of its obligations to pay Excess Expenses
pursuant to this Paragraph 6, except that Tenant shall not be obligated to make
any payments based on such Estimate or Actual Statement until ten (10) business
days after receipt of such statement.
6.8 Tenant's Audit Rights. If Tenant disputes the amount of Operating
Expenses set forth in any Actual Statement delivered by Landlord, Tenant shall
have the right, to be exercised, if at all, not later than six (6) months
following receipt of such Actual Statement, to cause Landlord's books and
records with respect to the preceding calendar year to be audited, at Tenant's
expense, by a certified public accountant mutually acceptable to Landlord and
Tenant. The amounts payable under Subparagraph 6.6 by Landlord to Tenant or by
Tenant to Landlord as the case may be shall be appropriately adjusted on the
basis of such audit. If Tenant fails to request an audit within the 6-month
period, such Actual Statement shall be conclusively binding upon Landlord and
Tenant.
7. Security Deposit. Concurrently with the execution of this Lease, Tenant
----------------
shall deposit with Landlord the Security Deposit designated in Subparagraph
1.15. The Security Deposit shall be held by Landlord as security for the
faithful performance by Tenant of all of the terms, covenants and conditions of
this Lease to be performed by Tenant during the Term. If Tenant defaults with
respect to any of its obligations under this Lease, Landlord may (but shall not
be required to) use, apply or retain all or any part of the Security Deposit for
the payment of any rent or any other sum in default, or for the payment of any
other amount, loss or damage which Landlord may spend, incur or suffer by reason
of Tenant's default. If any portion of the Security Deposit is so used or
applied, Tenant shall, within ten (10) days after demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to its
original amount. Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on
the Security Deposit. If Tenant shall fully and faithfully perform every
provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned to Tenant within two (2) weeks following the
expiration of the Term, provided that Landlord may retain the Security Deposit
until such time as any amount due from Tenant in accordance with Paragraph 6
hereof has been determined and paid in full. If Landlord sells its interest in
the Building during the Term and if Landlord deposits with the purchaser the
Security Deposit (or balance thereof), and such purchaser acknowledges receipt
thereof, then, on such sale, Landlord shall be discharged from any further
liability with respect to the Security Deposit.
8. Use.
---
8.1 General. Tenant shall use the Premises solely for the Permitted Use
specified in Subparagraph 1.16, and shall not use or permit the Premises to be
used for any other use or purpose whatsoever. Tenant shall observe and comply
with the "Rules and Regulations" attached hereto as Exhibit "E", and all
-----------
reasonable non-discriminatory modifications thereof and additions thereto from
time to time put into effect and furnished to Tenant by Landlord. Landlord shall
not be responsible to Tenant for the violation or non-performance by any other
tenant or occupant of the Building of any such Rules and Regulations. Tenant
shall also observe and comply with all requirements of any board of fire
underwriters or similar body relating to the Premises, and all laws, rules and
regulations of all governmental agencies having jurisdiction. Tenant shall not
use or allow the Premises to be used (a) in violation of any recorded covenants,
8
conditions and restrictions affecting the Site or of any law or governmental
rule or regulation, or any certificate of occupancy issued for the Premises or
Building, or (b) for any improper, immoral, unlawful or reasonably objectionable
purpose. Tenant shall not do or permit to be done anything which will obstruct
or interfere with the rights of other tenants or occupants of the building, or
injure or annoy them. Tenant shall not cause, maintain or permit any nuisance
in, on or about the Premises, the Building or the Site, nor commit or suffer to
be committed any waste in, on or about the Premises.
8.2 Effect on Insurance. Tenant shall not do or permit to be done anything
which will (a) violate or invalidate any insurance policy maintained by Landlord
or Tenant hereunder, or (b) increase the costs of any insurance policy
maintained by Landlord pursuant to Paragraph 23 or otherwise with respect to the
Building or Site. If Tenant's occupancy or conduct of its business in or on the
Premises results in any increase in premiums for any insurance carried by
Landlord with respect to the Building or Site, Tenant shall pay such increase as
additional rent within ten (10) days after being billed therefor by Landlord. If
any insurance coverage carried by Landlord pursuant to Paragraph 23 or otherwise
with respect to the Building or Site shall be canceled or reduced (or
cancellation or reduction thereof shall be threatened) by reason of the use or
occupancy of the Premises by Tenant or by anyone permitted by Tenant to be upon
the Premises, and if Tenant fails to remedy such condition within five (5) days
after notice thereof, Tenant shall be deemed to be in default under this Lease,
without the benefit of any additional notice or cure period specified in
Subparagraph 25.1 below, and Landlord shall have all remedies provided in this
Lease, at law or in equity, including, without limitation, the right (but not
the obligation) to enter upon the Premises and attempt to remedy such condition
at Tenant's cost.
9. Payment and Notices. All rent and other sums payable by Tenant to Landlord
-------------------
hereunder shall be paid to Landlord at the first address designated in
Subparagraph 1.2, or to such other persons and/or at such other places as
Landlord may hereafter designate in writing. Any notice required or permitted to
be given hereunder must be in writing and may be given by personal delivery
(including delivery by nationally recognized overnight courier or express
mailing service), facsimile transmission, or by registered or certified mail,
postage prepaid, return receipt requested, addressed to Tenant at the
address(es) designated in Subparagraph 1.4, or to Landlord at the address(es)
designated in Subparagraph 1.2. Either party may, by written notice to the
other, specify a different address for notice purposes.
10. Brokers. The parties recognize that the broker(s) who negotiated this
-------
Lease are stated in Subparagraph 1.17, and agree that Landlord shall be solely
responsible for the payment of brokerage commissions to said broker(s), and that
Tenant shall have no responsibility therefor unless written provision to the
contrary has been made. Each party represents and warrants to the other, that,
to its knowledge, no other broker, agent or finder (a) negotiated or was
instrumental in negotiating or consummating this Lease on its behalf, and (b) is
or might be entitled to a commission or compensation in connection with this
Lease. Any broker, agent or finder of Tenant whom Tenant has failed to disclose
herein shall be paid by Tenant. Tenant shall indemnify, defend (by counsel
reasonably approved in writing by Landlord) and hold Landlord harmless from and
against any and all claims, judgments, suits, causes of action, damages, losses,
liabilities and expenses (including attorneys' fees and court costs) resulting
from any breach by Tenant of the foregoing representation, including, without
limitation, any claims that may be asserted against Landlord by any broker,
agent or finder undisclosed by Tenant herein.
9
Landlord shall indemnify, defend (by counsel reasonably approved in writing by
Tenant) and hold Tenant harmless from and against any and all claims, judgments,
suits, causes of action, damages, losses, liabilities and expenses (including
attorneys' fees and court costs) resulting from any breach by Landlord of the
foregoing representation, including, without limitation, any claims that may be
asserted against Tenant by any broker, agent or finder undisclosed by Landlord
herein. The foregoing indemnities shall survive the expiration or earlier
termination of this Lease.
11. Surrenders: Holding Over.
------------------------
11.1 Surrender of Premises. Upon the expiration or sooner termination of
this Lease, Tenant shall surrender all keys for the Premises to Landlord, and
exclusive possession of the premises to Landlord broom clean and in first-class
condition and repair, reasonable wear and tear excepted (and casualty damage
excepted if this Lease is terminated as a result thereof pursuant to Paragraph
20), with all of Tenant's personal property (and those items, if any, of
Leasehold Improvements and Tenant Changes identified by Landlord pursuant to
Subparagraph 14.2 below) removed therefrom and all damage caused by such removal
repaired, as required pursuant to Subparagraphs 14.2 and 14.3 below. If, for any
reason, Tenant fails to surrender the Premises on the expiration or earlier
termination of this Lease (including upon the expiration of any subsequent
month-to-month tenancy consented to by Landlord pursuant to Subparagraph 11.2
below). With such removal and repair obligations completed, then, in addition to
the provisions of Subparagraph 11.3 below and Landlord's rights and remedies
under Subparagraph 14.4 and the other provisions of this Lease, Tenant shall
indemnify, defend (by counsel reasonably approved in writing by Landlord) and
hold Landlord harmless from and against any and all claims, judgments, suits,
causes of action, damages, losses, liabilities and expenses (including
attorneys' fees and court costs) resulting from such failure to surrender,
including, without limitation, any claim made by any succeeding tenant based
thereon. The foregoing indemnity shall survive the expiration or earlier
termination of this Lease.
11.2 Hold Over With Landlord's Consent. If, with Landlord's express
written consent, Tenant remains in possession of the Premises after the
expiration or earlier termination of the Lease Term, Tenant shall become a
tenant from month-to-month upon the terms and conditions set forth in this Lease
(including Tenant's obligation to pay all Excess Expenses and any other
additional rent under this Lease), but at a Monthly Basic Rent equal to the
greater of: (a) one hundred twenty-five percent (125%) of the Monthly Basic Rent
applicable to the Premises immediately prior to the date of such expiration or
earlier termination; or (b) one hundred twenty-five percent (125%) of the
prevailing market rate excluding any rental or other concessions (as reasonably
determined by Landlord) for the Premises in effect on the date of such
expiration or earlier termination. Tenant shall pay an entire month's Monthly
Basic Rent calculated in accordance with this Subparagraph 11.2 for any portion
of a month it holds over and remains in possession of the Premises pursuant to
this Paragraph 11.2.
11.3 Hold Over Without Landlord's Consent. If Tenant holds over after the
expiration or earlier termination of the Lease Term without the express written
consent of Landlord, Tenant shall become a tenant at sufferance only, upon the
terms and conditions set forth in this Lease so far as applicable (including
Tenant's obligation to pay all Excess Expenses and other additional rent under
this Lease), but at a Monthly Basic Rent equal to the greater of: (a) two
hundred
10
percent (200%) of the Monthly Basic Rent applicable to the Premises immediately
prior to the date of such expiration or earlier termination; or (b) two hundred
percent (200%) of the prevailing market rate excluding any rental or other
concessions (as reasonably determined by Landlord) for the premises in effect on
the date of such expiration or earlier termination. Acceptance by Landlord of
rent after such expiration or earlier termination shall not constitute a consent
to a hold over hereunder or result in an extension of this Lease. Tenant shall
pay an entire month's Monthly Basic Rent calculated in accordance with this
Subparagraph 11.3 for any portion of a month it holds over and remains in
possession of the Premises pursuant to this Paragraph 11.3.
11.4 No Effect on Landlord's Rights. The foregoing provisions of this
Paragraph 11 are in addition to, and do not affect, Landlord's right of re-entry
or any other rights of Landlord hereunder or otherwise provided by law or
equity.
12. Taxes on Tenant's Property. Tenant shall be liable for, and shall pay
--------------------------
before delinquency, all taxes and assessments (real and personal) levied against
(a) any personal property or trade fixtures placed by Tenant in or about the
Premises (including any increase in the assessed value of the Premises based
upon the value of any such personal property or trade fixtures); and (b) any
Leasehold Improvements or alterations in the Premises (whether installed and/or
paid for by Landlord or Tenant) to the extent such items are assessed at a
valuation higher than the valuation at which tenant improvements conforming to
the Building's standard tenant improvements set forth in Schedule "1" to Exhibit
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"Fl" are assessed. If any such taxes or assessments are levied against Landlord
----
or Landlord's property, Landlord may, after written notice to Tenant (and under
proper protest if requested by Tenant) pay such taxes and assessments, and
Tenant shall reimburse Landlord therefor within ten (10) business days after
demand by Landlord; provided, however, Tenant, at its sole cost and expense,
shall have the right, with Landlord's cooperation, to bring suit in any court of
competent jurisdiction to recover the amount of any such taxes and assessments
so paid under protest.
13. Condition of Premises; Repairs.
------------------------------
13.1 Condition of Premises. Tenant acknowledges that, except as otherwise
expressly set forth in this Lease, neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises, the
Building or the Site or their condition, or with respect to the suitability
thereof for the conduct of Tenant's business. The taking of possession of the
Premises by Tenant shall conclusively establish that the Site, the Premises, the
Leasehold Improvements therein, the Building and the Common Areas are at such
time complete and in good, sanitary and satisfactory condition and repair with
all work required to be performed by Landlord, if any, pursuant to Exhibit "F1"
------------
completed and without any obligation on Landlord's part to make any alterations,
upgrades or improvements thereto, except for the repair of any latent defects in
the Building or Premises (excluding any portion of the Premises constructed by
Tenant) disclosed by Tenant and specified in writing to Landlord during the term
of the lease. Landlord shall cause all latent defects so specified in Tenant's
notice to be completed and/or repaired as soon as reasonably possible after
Landlord's receipt thereof. Tenant further acknowledges and agrees to accept
the various start-up inconveniences that may be associated with the use of the
Common Areas and other typical conditions incident to recently constructed
office buildings, such as construction obstacles including scaffolding, delays
in the use of freight
11
elevator service, certain elevators not being available to Tenant, the passage
of work crews using elevators, and uneven air conditioning service.
13.2 Tenant's Repair Obligations. Except for Landlord's obligations
specifically set forth in Subparagraphs 13.1, 13.3, 20.1 and 21.2 hereof, Tenant
shall at all times and at Tenant's sole cost and expense, keep, maintain, repair
and preserve the Premises and all Leasehold Improvements, Tenant Changes, and
any alterations, additions and property therein in first-class condition and
repair, reasonable wear and tear excepted. Such maintenance and repairs shall
be performed with due diligence, lien-free and in a first-class workmanlike
manner, by such contractor(s) selected by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld or delayed. Except as otherwise
expressly provided in this Lease, Landlord shall have no obligation to alter,
remodel, improve, repair, renovate, redecorate or paint or any part of the
Premises.
13.3 Landlord's Repair Obligations. Notwithstanding the provisions of
Subparagraph 13.2 above to the contrary, Landlord shall, as part of the
Operating Expenses, repair and maintain (a) the Building shell and other
structural portions of the Building (including the roof and foundations), (b)
the basic plumbing, heating, ventilating, air conditioning, sprinkler and
electrical systems within the Building core (but not any conduits or connections
thereto or distribution systems thereof within the Premises or any other
tenant's premises), and (c) the Common Areas of the Building and Site; provided,
however, to the extent such maintenance or repairs are required as a result of
any act, neglect, fault or omission of Tenant or any of Tenant's agents,
employees, contractors, licensees or invitees, Tenant shall pay to Landlord, as
additional rent, the costs of such maintenance and repairs. Subject to Tenant's
right to self-help and abatement of rent pursuant to Subparagraphs 13.4 and
20.3, respectively, and except as otherwise included in Landlord's indemnity in
Subparagraph 19.3, Landlord shall not be liable to Tenant for, and Tenant hereby
expressly waives all rights to recover, any losses and damages (including
interference with or injury to Tenant's business) resulting from Landlord's
performing or failure to perform any such repairs or maintenance, it being
expressly understood and agreed by Tenant that Tenant shall be solely
responsible for and look solely to its insurance for any such damages and
losses.
13.4 Tenant's Waiver; Self-Help. Tenant waives the right to make repairs
at Landlord's expense under any law, statute or ordinance now or hereafter in
effect (including the provisions of California Civil Code Section 1942 and any
successive sections or statutes of a similar nature); provided, however, subject
to the termination rights set forth in Paragraphs 20 and 21, if Landlord fails
to perform any maintenance or repair work required pursuant to Subparagraph 13.3
within thirty (30) days after Landlord receives Tenant's written notice of the
need for such repairs (or such period of time in excess of thirty (30) days as
is reasonably necessary based upon the nature of such work), and if such failure
to repair unreasonably interferes with Tenant's use of or access to the
Premises, then Tenant shall be permitted to make such repairs, using the
Building's contractors or such other contractors reasonably approved by
Landlord, upon delivery of an additional two (2) business days' prior written
notice to Landlord indicating that Tenant will be undertaking such repairs, and
Tenant shall be entitled to recover from Landlord the reasonable costs of such
repairs made by Tenant, but without any offset rights against the rental or
other amounts payable by Tenant under this Lease.
12
14. Alterations.
-----------
14.1 Tenant Changes; Conditions. After installation of the initial
Leasehold Improvements for the Premises pursuant to Exhibit "F1", Tenant may, at
------------
its sole cost and expense, make alterations, additions, improvements and
decorations to the Premises (collectively, "Tenant Changes") subject to and upon
the following terms and conditions:
(a) Notwithstanding any provision in this Paragraph 14 to the
contrary, Tenant is absolutely prohibited from making any alterations,
additions, improvements or decorations which: (i) affect any area outside the
Premises; (ii) affect the Building's structure, equipment, services or systems,
or the proper functioning thereof, or Landlord's access thereto; (iii) affect
the outside appearance, character or use of the Building or the Common Areas;
(iv) weaken or impair the structural strength of the Building; (v) in the
reasonable opinion of Landlord, lessen the value of the Building; (vi) will
violate or require a change in any occupancy certificate applicable to the
Premises; or (vii) increase the cost of Landlord's insurance, unless Tenant pays
such increased costs within ten (10) days after written demand therefor by
Landlord.
(b) Before proceeding with any Tenant Change which is not
otherwise prohibited in Subparagraph 14.1(a) above, Tenant must first obtain
Landlord's written approval thereof (including approval of all plans,
specifications and working drawings for such Tenant Change), which approval
shall not be unreasonably withheld or delayed. However, Landlord's prior
approval shall not be required for any Tenant Change which satisfies the
following conditions (hereinafter a "Pre-Approved Change"): (i) the costs of
such Tenant Change does not exceed Five Hundred Dollars ($500.00) individually;
(ii) the costs of such Tenant Change when aggregated with the costs of all other
Tenant Changes made by Tenant during the Term of this Lease do not exceed
Fifteen Hundred Dollars ($1,500.00); (iii) Tenant delivers to Landlord final
plans, specifications and working drawings for such Tenant Change at least ten
(10) days prior to commencement of the work therefor; and (iv) Tenant and such
Tenant Change otherwise satisfy all other conditions set forth in this
Subparagraph 14.1.
(c) After Landlord has approved the Tenant Changes and the plans,
specifications and working drawings therefor (or is deemed to have approved the
Pre-Approved Changes as set forth in Subparagraph 14.1(b) above), Tenant shall:
(i) enter into an agreement for the performance of such Tenant Changes with such
contractors and subcontractors selected by Tenant and approved by Landlord,
which approval shall not be unreasonably withheld or delayed. Before proceeding
with any Tenant Change (including any Pre-Approved Change) Tenant shall (i)
provide Landlord with ten (10) days' prior written notice thereof; and (ii) pay
to Landlord, within ten (10) days after written demand, the costs of any
increased insurance premiums incurred by Landlord to include such Tenant Changes
in the fire and extended coverage insurance obtained by Landlord pursuant to
Paragraph 23 below (however, Landlord shall be required to include the Tenant
Changes under such insurance only to the extent such insurance is actually
obtained by Landlord and such Tenant Changes are insurable under such insurance;
if such Tenant Changes are not or cannot be included in Landlord's insurance,
Tenant shall insure the Tenant Changes under its casualty insurance pursuant to
Subparagraph 22.1(a) below. In addition, before proceeding with any Tenant
Change, Tenant's contractors shall obtain, on behalf of Tenant and at Tenant's
sole cost and expense: (A) all necessary governmental permits and approvals for
the commencement and completion of such Tenant
13
Change; and (B) a completion and lien indemnity bond, or other surety,
satisfactory to Landlord for such Tenant Change.
(d) Tenant shall pay to Landlord, as additional rent, the
reasonable costs of Landlord's engineers and other consultants (but not
Landlord's on-site management personnel) for review of all plans, specifications
and working drawings for the Tenant Changes, within ten (10) business days after
Tenant's receipt of invoices either from Landlord or such consultants. In
addition to such costs, Tenant shall pay to Landlord, within ten (10) business
days after completion of any Tenant Change, the actual, reasonable costs
incurred by Landlord for services rendered by Landlord's management personnel
and engineers to coordinate and/or supervise any of the Tenant Changes to the
extent such services are provided in excess of or after the normal on-site hours
of such engineers and management personnel.
(e) All Tenant Changes shall be performed: (i) in accordance with
the approved plans, specifications and working drawings; (ii) lien-free and in a
first-class and workmanlike manner; (iii) in compliance with all laws, rules,
and regulations of all governmental agencies and authorities; (iv) in such a
manner so as not to interfere with the occupancy of any other tenant in the
Building, nor impose any additional expense upon nor delay Landlord in the
maintenance and operation of the Building; and (v) at such times, in such manner
and subject to such rules and regulations as Landlord may from time to time
reasonably designate.
(f) Throughout the performance of the Tenant Changes, Tenant shall
obtain, or cause its contractors to obtain, workers compensation insurance and
general liability insurance in compliance with the provisions of Paragraph 22 of
this Lease.
14.2 Removal of Tenant Changes and Leasehold Improvements. All Tenant
Changes and the initial Leasehold Improvements in the Premises (whether
installed or paid for by Landlord or Tenant), shall become the property of
Landlord and shall remain upon and be surrendered with the Premises at the end
of the Term of this Lease; provided, however Landlord may, by written notice
delivered to Tenant at any time prior to the date which is fifteen (15) days
before the expiration of the Lease Term (or immediately upon any sooner
termination of this Lease) identify those items of the Leasehold Improvements
and Tenant Changes which Landlord shall require Tenant to remove at the end of
the Term of this Lease. If Landlord requires Tenant to remove any such items as
described above, Tenant shall, at its sole cost, remove the identified items on
or before the expiration or sooner termination of this Lease and repair any
damage to the Premises caused by such removal (or, at Landlord's option, shall
pay to Landlord all of Landlord's costs of such removal and repair).
14.3 Removal of Personal Property. All articles of personal property
owned by Tenant or installed by Tenant at its expense in the Premises (including
business and trade fixtures, furniture and moveable partitions), except those
installed by Landlord or approved in writing by Landlord, shall be, and remain,
the property of Tenant, and shall be removed by Tenant from the premises, at
Tenant's sole cost and expense, on or before the expiration or sooner
termination of this Lease. Tenant shall repair any damage caused by such
removal.
14.4 Tenant's Failure to Remove. If Tenant fails to remove by the
expiration or sooner termination of this Lease all of its personal property, or
any items of Leasehold Improvements or
14
Tenant Changes identified by Landlord for removal pursuant to Subparagraph 14.2
above, Landlord may, at its option, treat such failure as a hold over pursuant
to Subparagraph 11.3 above, and/or may (without liability to Tenant for loss
thereof), at Tenant's sole cost and in addition to Landlord's other rights and
remedies under this Lease, at law or in equity: (a) remove and store such items;
and/or (b) upon ten (10) days' prior notice to Tenant, sell all or any such
items at private or public sale for such price as Landlord may obtain. Landlord
shall apply the proceeds of any such sale to any amounts due to Landlord under
this Lease from Tenant (including Landlord's attorneys' fees and other costs
incurred in the removal, storage and/or sale such items), with any remainder to
be paid to Tenant.
15. Liens. Tenant shall not permit any mechanic's, materialmen's or other
-----
liens to be filed against all or any part of the Site, the Building or the
Premises, nor against Tenant's leasehold interest in the Premises, by reason of
or in connection with any repairs, alterations, improvements or other work
contracted for or undertaken by Tenant or any other act or omission of Tenant or
Tenant's agents, employees, contractors, licensees or invitees. Tenant shall,
at Landlord's request, provide Landlord with enforceable, conditional and final
lien releases (and other evidence reasonably requested by Landlord to
demonstrate protection from liens) from all persons furnishing labor and/or
materials with respect to the Premises. Landlord shall have the right at all
reasonable times to post on the Premises and record any notices of non-
responsibility which it deems necessary for protection from such liens. If any
such liens are filed, Tenant shall, at its sole cost, immediately cause such
lien to be released of record or bonded so that it no longer affects title to
the Site, the Building or the Premises. If Tenant fails to cause such lien to
be so released or bonded within ten (10) days after filing thereof, such failure
shall be deemed a material breach by Tenant under this Lease without the benefit
of any additional notice or cure period described in Subparagraph 25.1 below,
and Landlord may, without waiving its rights and remedies based on such breach,
and without releasing Tenant from any of its obligations, cause such lien to be
released by any means it shall deem proper, including payment in satisfaction of
the claim giving rise to such lien. Tenant shall pay to Landlord within five
(5) days after receipt of an invoice from Landlord, any sum paid by Landlord to
remove such liens, together with interest at the Interest Rate from the date of
such payment by Landlord.
16. Assignment and Subletting.
-------------------------
16.1 General. No assignment or encumbrance of all or any part of this
Lease, and no sublease of all or any part of the Premises, shall be permitted,
except as otherwise expressly provided in this Paragraph 16.
16.2 Restriction on Transfer. Subject to the provisions of Subparagraphs
16.3, 16.4, 16.5 and 16.6, Tenant shall not, without the prior written consent
of Landlord, which consent shall not be unreasonably withheld, assign or
encumber this Lease or any interest herein or sublet the Premises or any part
thereof, or permit the use or occupancy of the Premises by any party other than
Tenant (any such assignment, encumbrance, sublease or the like shall sometimes
be referred to as a "Transfer"). Any Transfer without Landlord's consent (except
for a Transfer pursuant to Subparagraph 16.6 below) shall constitute a default
by Tenant under this Lease, and in addition to all of Landlord's other remedies
at law, in equity or under this Lease, such Transfer shall be voidable at
Landlord's election. In addition, this Lease shall not, nor shall any interest
of Tenant herein, be assignable by operation of law without the written consent
of
15
Landlord. For purposes of this Paragraph 16, if Tenant is a corporation,
partnership or other entity, any transfer, assignment, encumbrance or
hypothecation of twenty-five percent (25%) or more (individually or in the
aggregate) of any stock or other ownership interest in such entity, and/or any
transfer, assignment, hypothecation or encumbrance of any controlling ownership
or voting interest in such entity, shall be deemed an assignment of this Lease
and shall be subject to all of the restrictions and provisions contained in this
Paragraph 16. Notwithstanding the foregoing, the immediately preceding sentence
shall not apply to any transfers of stock of Tenant if Tenant is a publicly-held
corporation and such stock is transferred publicly over a recognized security
exchange or over-the-counter market.
16.3 Landlord's Options. If at any time or from time to time during the
Term Tenant desires to effect a Transfer, Tenant shall deliver to Landlord
written notice ("Transfer Notice") setting forth the terms and provisions of the
proposed Transfer and the identity of the proposed assignee, sublessee or other
transferee (sometimes referred to hereinafter as a "Transferee"). Tenant shall
also deliver to Landlord with the Transfer Notice; a current financial statement
and financial statements for the preceding two (2) years of the Transferee, and
such other information concerning the business background and financial
condition of the proposed Transferee as Landlord may reasonably request.
Landlord shall have the option, exercisable by written notice delivered to
Tenant within twenty (20) days after Landlord's receipt of the Transfer Notice,
such financial statements and other information, either to:
(a) approve or disapprove such Transfer, which approval shall not
be unreasonably withheld; or
(b) sublet from Tenant that portion of the Premises which Tenant
has requested to sublease at the rental and on the other terms set forth in this
Lease for the term set forth in Tenant's Notice, or, in the case of an
assignment or encumbrance, terminate this Lease with respect to the entire
Premises, which termination shall be effective thirty (30) days after Tenant's
receipt of Landlord's notice.
If Landlord exercises its option to sublease any such space from Tenant
following Tenant's request for Landlord's approval of the proposed sublease of
such space, (i) Landlord shall be responsible for the construction of any
partitions which Landlord reasonably deems necessary to separate such space from
the remainder of the Premises, and (ii) Landlord and any sub-subtenant assignee
of Landlord with respect to such subleased space shall have the right to use in
common with Tenant all lavatories, corridors and lobbies which are within the
Premises and which are reasonably required for the use of such space.
16.4 Additional Conditions; Excess Rent. If Landlord does not exercise
its sublease or termination option and instead approves of the proposed Transfer
pursuant to Subparagraph 16.3(a) above, Tenant may enter into the proposed
Transfer with such proposed Transferee subject to the following further
conditions:
(a) the Transfer shall be on the same terms set forth in the
Transfer Notice delivered to Landlord (if the terms have changed, Tenant must
submit a revised Transfer Notice to Landlord and Landlord shall have another
twenty (20) days after receipt thereof to make the election in Subparagraphs
16.3(a) or 16.3(b) above);
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(b) no Transfer shall be valid and no Transferee shall take
possession of the Premises until an executed counterpart of the assignment,
sublease or other instrument affecting the Transfer has been delivered to
Landlord pursuant to which the Transferee shall expressly assume all of Tenant's
obligations under this Lease (or with respect to a sublease of a portion of the
Premises or for a portion of the Term, all of Tenant's obligations applicable to
such portion);
(c) no Transferee shall have a further right to assign, encumber
or sublet, except on the terms herein contained; and
(d) any rent or other economic consideration received by Tenant as
a result of such Transfer which exceeds, in the aggregate, (i) the total rent
which Tenant is obligated to pay Landlord under this Lease (prorated to reflect
obligations allocable to any portion of the Premises subleased), plus (ii) any
reasonable brokerage commissions, attorneys' fees and moving costs actually paid
by Tenant in connection with such Transfer, shall be paid to Landlord within ten
(10) days after receipt thereof as additional rental under this Lease, without
affecting or reducing any other obligations of Tenant hereunder.
16.5 Reasonable Disapproval. Landlord and Tenant hereby acknowledge that
Landlord's disapproval of any proposed Transfer pursuant to Subparagraph 16.3(a)
shall be deemed reasonably withheld if based upon any reasonable factor,
including, without limitation, any or all of the following factors: (a) the
proposed Transfer would result in more than two subleases of portions of the
Premises being in effect at any one time during the Term; (b) the net effective
rent payable by the Transferee (adjusted on a rentable square foot basis) is
less than the net effective rent then being quoted by Landlord for new leases in
the Building for comparable size space for a comparable period of time; (c) the
proposed Transferee is an existing tenant of the Building or is negotiating with
Landlord (or has negotiated with Landlord in the last six (6) months) for space
in the Building; (d) the proposed Transferee is a governmental entity; (e) the
portion of the Premises to be sublet or assigned is irregular in shape with
inadequate means of ingress and egress; (f) the use of the Premises by the
Transferee (i) is not permitted by the use provisions in Paragraph 8 hereof, or
(ii) violates any exclusive use granted by Landlord to another tenant in the
Building; (g) the Transfer would likely result in significant increase in the
use of the parking areas or Common Areas by the Transferee's employees or
visitors, and/or significant increase in the demand upon utilities and services
to be provided by Landlord to the Premises; (h) the Transferee does not have the
financial capability to fulfill the obligations imposed by the Transfer; (i) the
Transferee is not in Landlord's reasonable opinion of reputable or good
character or consistent with Landlord's desired tenant mix; or (j) the
Transferee is a real estate developer or landlord or is acting directly or
indirectly on behalf of a real estate developer or landlord.
16.6 Permitted Controlled Transfers. Notwithstanding the provisions of
Subparagraphs 16.1, 16.2 and 16.3 above to the contrary, Tenant may assign this
Lease or sublet the Premises or any portion thereof, without Landlord's consent
and without extending any sublease or termination option to Landlord, to any
corporation which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from a merger or consolidation with
Tenant, or to any person or entity which acquires all of the assets of Tenant's
business as a going concern, provided that: (a) at least twenty (20) days prior
to such assignment or sublease, Tenant delivers to Landlord the financial
statements and other financial and
17
background information of the assignee or sublessee described in Subparagraph
16.3 above; (b) if an assignment, the assignee assumes, in full, the obligations
of Tenant under this Lease (or if a sublease, the sublessee of a portion of the
Premises or Term assumes, in full, the obligations of Tenant with respect to
such portion); (c) the financial net worth of the assignee or sublessee equals
or exceeds that of Tenant as of the date of execution of this Lease; (d) Tenant
remains fully liable under this Lease; (e) the use of the Premises under Article
8 remains unchanged; and (f) such transaction is not entered into as a
subterfuge to avoid the restrictions and provisions of this Paragraph 16.
16.7 No Release. No Transfer shall release Tenant of Tenant's
obligations under this Lease or alter the primary liability of Tenant to pay the
rent and to perform all other obligations to be performed by Tenant hereunder.
Landlord may require that any Transferee remit directly to Landlord on a monthly
basis, all monies due Tenant by said Transferee. However, the acceptance of rent
by Landlord from any other person shall not be deemed to be a waiver by Landlord
of any provision hereof. Consent by Landlord to one Transfer shall not be deemed
consent to any subsequent Transfer. In the event of default by any Transferee of
Tenant or any successor of Tenant in the performance of any of the terms hereof,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against such Transferee or successor. Landlord may consent to
subsequent assignments of the Lease or sublettings or amendments or
modifications to the Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and any such actions shall not relieve Tenant of liability under this Lease.
16.8 Administrative and Attorneys' Fees. If Tenant effects a Transfer or
requests the consent of Landlord to any Transfer, then Tenant shall, upon
demand, pay Landlord a non-refundable administrative fee of Two Hundred Fifty
Dollars ($250.00), plus any reasonable attorneys' and paralegal fees incurred by
Landlord in connection with such Transfer or request for consent (whether
attributable to Landlord's in-house attorneys or paralegals or otherwise).
Acceptance of the $250.00 administrative fee and/or reimbursement of Landlord's
attorneys' and paralegal fees shall in no event obligate Landlord to consent to
any proposed Transfer.
16.9 Material Inducement. Tenant understands, acknowledges and agrees
that (a) Landlord's option to sublease from Tenant any space which Tenant
proposes to sublease or terminate this Lease upon any proposed assignment or
encumbrance of this Lease by Tenant as provided in Subparagraph 16.3(b) above
rather than approve the proposed sublease, assignment or encumbrance, and (b)
landlord's right to receive any excess consideration paid by a Transferee in
connection with an approved Transfer as provided in Subparagraph 16.4(d) above,
are a material inducement for Landlord's agreement to lease the Premises to
Tenant upon the terms and conditions herein set forth.
17. Entry by Landlord. Landlord and its employees and agents shall at all
-----------------
times have the right to enter the Premises to inspect the same, to supply
janitorial service and any other service required to be provided by Landlord to
Tenant under this Lease, to exhibit the Premises to prospective lenders or
purchasers (or during the last year of the Term, to prospective tenants), to
post notices of non-responsibility, and/or to alter, improve or repair the
Premises or any other portion of the Building, all without being deemed guilty
of or liable for any breach of Landlord's covenant of quiet enjoyment or any
eviction of Tenant, and without abatement of rent. In
18
exercising such entry rights, Landlord shall endeavor to minimize, as reasonably
practicable, the interference with Tenant's business, and shall provide Tenant
with reasonable advance written notice of such entry (except in emergency
situations). For each of the foregoing purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in, upon and about
the Premises, excluding Tenant's vaults and safes, and Landlord shall have the
means which Landlord may deem proper to open said doors in an emergency in order
to obtain entry to the Premises. Any entry to the Premises obtained by Landlord
by any of said means or otherwise shall not under any circumstances be construed
or deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction of Tenant from the Premises or any portion thereof, or
grounds for any abatement or reduction of rent. Any damages or losses on account
of any such entry by Landlord shall be Tenant's sole responsibility except as
otherwise expressly provided in Subparagraph 19.3. Nothing in this Paragraph 17
shall be construed as obligating Landlord to perform any repairs, alterations or
decorations, except as otherwise expressly required in this Lease to be
performed by Landlord.
18. Utilities and Services.
----------------------
18.1 Standard Utilities and Services. As long as Tenant has not
committed an uncured default under any of the provisions of this Lease, and
subject to the terms and conditions of this Lease and the obligations of Tenant
as set forth hereinbelow, Landlord shall furnish or cause to be furnished to the
Premises the following utilities and services, the costs of which shall be
included in Operating Expenses, unless otherwise specified below (Landlord
reserves the right to adopt non-discriminatory modifications and additions to
the following provisions from time to time):
(a) Landlord shall make available for Tenant's non-exclusive use,
the non-attended passenger elevator facilities of the Building, Monday through
Friday, except holidays, from 8:00 a.m. to 6:00 p.m., with one (1) elevator
available at all other times.
(b) Landlord shall furnish during "Business Hours" heating,
ventilation and air conditioning ("HVAC") for the Premises as required in
Landlord's judgment for the comfortable and normal occupancy of the Premises.
For purposes of this Subparagraph 18.1, the "Business Hours" shall mean 6:00
a.m. to 6:00 p.m. on Monday through Friday (except holidays). The cost of
maintenance and service calls to adjust and regulate the HVAC system shall be
charged to Tenant if the need for maintenance work results from either Tenant's
adjustment of room thermostats or Tenant's failure to comply with its
obligations under this Paragraph 18, including keeping window coverings closed
as needed. Such work shall be charged at hourly rates equal to then-current
journeyman's wages for HVAC mechanics. If Tenant desires HVAC at any time other
than during Business Hours, Landlord shall provide such "after-hours" usage
after advance reasonable request by Tenant, and Tenant shall pay to Landlord, as
additional rent (and not as part of the Operating Expenses) the cost, as fairly
determined by Landlord, of such after-hours usage (as well as the cost of any
HVAC used by Tenant in excess of what Landlord considers reasonable or normal),
including any minimum hour charges for after-hours requests and any special
start-up costs for after-hours services which require a special start-up (such
as late evenings, weekends and holidays).
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(c) Landlord shall furnish to the Premises twenty-four (24) hours
per day, reasonable quantities of electric current as required in Landlord's
judgment for normal lighting and fractional horsepower office business machines.
In no event shall Tenant's use of electric current ever exceed the capacity of
the feeders to the Building or the risers or wiring installation of the
Building. Landlord shall also furnish water to the Premises twenty-four (24)
hours per day for drinking and lavatory purposes, in such quantities as required
in Landlord's judgment for the comfortable and normal use of the Premises. If
Tenant requires or consumes water or electrical power in excess of what is
considered reasonable or normal by Landlord, Landlord may require Tenant to pay
to Landlord, as additional rent, the cost, as fairly determined by Landlord,
incurred for such excess usage.
(d) Landlord shall furnish janitorial services to the Premises five
(5) days per week pursuant to janitorial and cleaning specifications as may be
adopted by Landlord from time to time. No person(s) other than those persons
approved by Landlord shall be permitted to enter the Premises for such purposes.
Janitor service shall include ordinary dusting and cleaning by the janitor
assigned to do such work and shall not include cleaning of carpets or rugs,
except normal vacuuming, or moving of furniture, interior window cleaning,
coffee or eating area cleaning and other special services. Such additional
services may be rendered by Landlord pursuant to written agreement with Tenant
as to the extent of such services and the payment of the cost thereof. Janitor
service will not be furnished on nights when rooms are occupied after 10:00 p.m.
or to rooms which are locked unless a key is furnished to the Landlord for use
by the janitorial contractor. Window cleaning shall be done only by Landlord, at
such time and frequency as determined by Landlord at Landlord's sole discretion.
Tenant shall pay to Landlord the cost of removal of any of Tenant's refuse and
rubbish to the extent that the same exceeds the refuse and rubbish usually
attendant upon the use of the Premises as offices.
(e) At Landlord's option, Landlord may install water, electricity
and/or HVAC meters in the Premises to measure Tenant's consumption of such
utilities, including any after-hours and extraordinary usage described above.
Tenant shall pay to Landlord, within ten (10) days after demand, the cost of the
installation, maintenance and repair of such meter(s).
18.2 Tenant's Obligations. Tenant shall cooperate fully at all times
with Landlord, and abide by all reasonable regulations and requirements which
Landlord may prescribe for the proper functioning and protection of the
Building's services and systems. Tenant shall not use any apparatus or device
in, upon or about the Premises which may in any way increase the amount of
services or utilities usually furnished or supplied to the Premises or other
premises in the Building. In addition, Tenant shall not connect any conduit,
pipe, apparatus or other device to the Building's water, waste or other supply
lines or systems for any purpose. Neither Tenant nor its employees, agents,
contractors, licensees or invitees shall at any time enter, adjust, tamper with,
touch or otherwise in any manner affect the mechanical installations or
facilities of the Building.
18.3 Failure to Provide Utilities. Landlord's failure to furnish any of
the utilities and services described in Subparagraph 18.1 above when such
failure is caused by all or any of the following shall not result in any
liability of Landlord: (a) accident, breakage or repairs; (b) strikes, lockouts
or other labor disturbances or labor disputes of any such character; (c)
governmental regulation, moratorium or other governmental action; (d) inability,
despite the
20
exercise of reasonable diligence, to obtain electricity, water or fuel; or (e)
any other cause beyond Landlord's reasonable control. In addition, in the event
of the failure of any said utilities or services, Tenant shall not be entitled
to any abatement or reduction of rent (except as expressly provided in
Subparagraphs 20.3 and 21.2 if such failure is a result of a damage or taking
described therein), no eviction of Tenant shall result, and Tenant shall not be
relieved from the performance of any covenant or agreement in this Lease. In the
event of any stoppage or interruption of services or utilities, Landlord shall
diligently attempt to resume such services or utilities as promptly as is
practicable.
19. Indemnification and Exculpation.
-------------------------------
19.1 Tenant's Indemnification of Landlord. Tenant shall be liable for, and
shall indemnify, defend and hold Landlord and Landlord's partners, officers,
directors, employees, agents, successors and assigns (collectively, "Landlord
Indemnified Parties") harmless from and against any and all claims, damages,
judgments, suits, causes of action, losses, liabilities and expenses, including
attorneys' fees and court costs (collectively, "Indemnified Claims"), arising or
resulting from (a) any act or omission of Tenant or any of Tenant's agents,
employees, contractors, subtenants, assignees, licensees or invitees
(collectively, "Tenant Parties"); (b) the use of the Premises and Common Areas
and conduct of Tenant's business by Tenant or any Tenant Parties, or any other
activity, work or thing done, permitted or suffered by Tenant or any Tenant
Parties, in or about the Premises, the Building or elsewhere on the Site; and/or
(c) any default by Tenant of any obligations on Tenant's part to be performed
under the terms of this Lease. In case any action or proceeding is brought
against Landlord or any Landlord Indemnified parties by reason of any such
Indemnified Claims, Tenant, upon notice from Landlord, shall defend the same at
Tenant's expense by counsel approved in writing by Landlord, which approval
shall not be unreasonably withheld.
19.2 Tenant's Assumption of Risk and Waiver. Except to the extent
specifically included in Landlord's indemnification obligations set forth in
Subparagraph 19.3 below, Tenant, as a material part of the consideration to
Landlord, hereby agrees that neither Landlord nor any Landlord Indemnified
Parties shall be liable to Tenant for, and Tenant expressly assumes the risk of
and waives any and all claims it may have against Landlord or any Landlord
Indemnified Parties with respect to, any and all damage to property or injury to
persons in, upon or about the Premises, the Building or Site resulting from any
act or omission of Landlord or of any Landlord Indemnified Party (whether or not
negligent) or from any other cause whatsoever, including, without limitation,
(a) any damage to property entrusted to employees of the Building, (b) any loss
of or damage to property by theft or otherwise, and (c) any injury or damage to
persons or property resulting from any casualty, explosion, falling plaster or
other masonry or glass, steam, gas, electricity, water or rain which may leak
from any part of the Building or from the pipes, appliances or plumbing works
therein or from the roof, street or subsurface or from any other place, or
resulting from dampness, or any other cause whatsoever. Landlord or its agents
shall not be liable for interference with the light or other intangible rights.
19.3 Landlord's Indemnification. Notwithstanding the provisions of
Subparagraph 19.2 to the contrary, but subject to the limitation on Landlord's
liability set forth in Paragraph 35 below, Landlord shall be liable for, and
shall indemnify, defend and hold Tenant and Tenant's partners, officers,
directors, employees, agents, successors and assigns
21
(collectively, "Tenant Indemnified Parties") harmless from and against, any
injury to persons or damage to property located on the Premises or Site (but not
for injury to, or interference with, Tenant's or any Tenant Indemnified Parties'
business or for consequential damages), to the extent such damage or injury
arises or results from (a) the negligence or willful misconduct of Landlord, its
agents or employees and/or (b) the default by Landlord of any obligations on
Landlord's part to be performed under the terms of this Lease; provided,
however, that Landlord's indemnity shall not apply or extend to any such damage
or injury which is covered by any insurance maintained by Tenant or any Tenant
Indemnified Parties (or would have been covered had Tenant obtained the
insurance as required under this Lease). In case any action or proceeding is
brought against Tenant or any Tenant Indemnified Parties by reason of any such
injury or damage indemnified by Landlord as set forth hereinabove, Landlord,
upon notice from Tenant, shall defend the same at Landlord's expense by counsel
approved in writing by Tenant, which approval shall not be unreasonably
withheld.
19.4 Survival; No Release of Insurers. Tenant's and Landlord's
indemnification obligations under Subparagraphs 19.1 and 19.3, respectively,
shall survive the expiration or earlier termination of this Lease. Tenant's
covenants, agreements and indemnification in Subparagraphs 19.1 and 19.2 above,
and Landlord's indemnification in Subparagraph 19.3 above, are not intended to
and shall not relieve any insurance carrier of its obligations under policies
required to be carried by Landlord or Tenant, respectively, pursuant to the
provisions of this Lease.
20. Damage or Destruction.
---------------------
20.1 Landlords Rights and Obligations. In the event the Premises or any
part of the Building is damaged by fire or other casualty to an extent not
exceeding twenty-five percent (25%) of the fire replacement cost thereof, and
Landlord's contractor estimates in a writing delivered to the parties that the
damage thereto is such that the Building and/or Premises may be repaired,
reconstructed or restored to substantially its condition immediately prior to
such damage within one hundred twenty (120) days from the date of such casualty,
and Landlord will receive insurance proceeds sufficient to cover the costs of
such repairs, reconstruction and restoration (including proceeds from Tenant
and/or Tenant's insurance which Tenant is required to deliver to Landlord
pursuant to Subparagraph 20.2 below), then Landlord shall commence and proceed
diligently with the work of repair, reconstruction and restoration and this
Lease shall continue in full force and effect. If, however, the Premises or any
other part of the Building is damaged to an extent exceeding twenty-five percent
(25%) of the full replacement cost thereof, or Landlord's contractor estimates
that such work of repair, reconstruction and restoration will require longer
than one hundred twenty (120) days to complete, or Landlord will not receive
insurance proceeds (and/or proceeds from Tenant, as applicable) sufficient to
cover the costs of such repairs, reconstruction and restoration, then Landlord
may elect to either:
(a) repair, reconstruct and restore the portion of the Building and
Premises damaged by such casualty (including the Leasehold Improvements and
Tenant Changes), in which case this Lease shall continue in full force and
effect; or
(b) terminate this Lease effective as of the date which is thirty
(30) days after Tenant's receipt of Landlord's election to so terminate.
22
Under any of the conditions of this Subparagraph 20.1, Landlord shall give
written notice to Tenant of its intention to repair or terminate within the
later of ninety (90) days after the occurrence of such casualty, or fifteen (15)
days after Landlord's receipt of the estimate from Landlord's contractor.
20.2 Tenant's Costs and Insurance Proceeds. In the event of any damage or
destruction of all or any part of the Premises, Tenant shall immediately: (a)
notify Landlord thereof; and (b) deliver to Landlord all insurance proceeds
received by Tenant with respect to the Leasehold Improvements and Tenant Changes
in the Premises to the extent such items are not covered by Landlord's casualty
insurance obtained by Landlord pursuant to Paragraph 23 below (excluding
proceeds for Tenant's furniture and other personal property), whether or not
this Lease is terminated as permitted in this Paragraph 20, and Tenant hereby
assigns to Landlord all rights to receive such insurance proceeds. If, for any
reason (including Tenant's failure to obtain insurance for the full replacement
cost of any Tenant Changes which Tenant is required to insure pursuant to
Subparagraphs; 14.1(c) and/or 22.1(a) hereof), Tenant fails to receive insurance
proceeds covering the full replacement cost of such Tenant Changes which are
damaged, Tenant shall be deemed to have self-insured the replacement cost of
such Tenant Changes, and upon any damage or destruction thereof, Tenant shall
immediately pay to Landlord the full replacement cost of such items, less any
insurance proceeds actually received by Landlord from Landlord's or Tenant's
insurance with respect to such items.
20.3 Abatement of Rent. In the event that as a result of any such damage,
repair, construction and/or restoration of the Premises or the Building, Tenant
is prevented from using, and does not use, the Premises or any portion thereof
for five (5) consecutive business days (the "Eligibility Period" then the rent
shall be abated or reduced, as the case may be, during the period after the
expiration of the Eligibility Period that Tenant continues to be so prevented
from using and does not use the Premises or portion thereof, in the proportion
that the Rentable Square Feet of the portion of the Premises that Tenant is
prevented from using, and does not use, bears to the total Rentable Square Feet
of the Premises. Notwithstanding the foregoing to the contrary, if the damage is
due to the negligence or willful misconduct of Tenant or any Tenant Parties,
there shall be no abatement of rent. Except for abatement of rent as provided
hereinabove, Tenant shall not be entitled to any compensation or damages for
loss of, or interference with, Tenant's business or use or access of all or any
part of the Premises resulting from any such damage, repair, reconstruction or
restoration.
20.4 Inability to Complete. Notwithstanding anything to the contrary
contained in this Paragraph 20, in the event Landlord is obligated or elects to
repair, reconstruct and/or restore the damaged portion of the Building or
Premises pursuant to Subparagraph 20.1 above, but is delayed from completing
such repair, reconstruction and/or restoration beyond the date which is six (6)
months after the date estimated by Landlord's contractor for completion thereof
pursuant to Subparagraph 20.1, by reason of any causes beyond the reasonable
control of Landlord (including, without limitation, any acts of God, war,
governmental restrictions, and delays caused by Tenant or Tenant Parties), then
Landlord may elect to terminate this Lease upon thirty (30) days' prior any
written notice to Tenant.
20.5 Damage Near End of Term. In addition to its termination rights in
Subparagraphs 20.1 and 20.4 above, Landlord shall have the right to terminate
this Lease if any damage to the
23
Building or Premises occurs during the last twelve (12) months of the Term of
this Lease and Landlord's contractor estimates in a writing delivered to the
parties that the repair, reconstruction or restoration of such damage cannot be
completed within the earlier of (a) the scheduled expiration date of the Lease
Term, or (b) sixty (60) days after the date of such casualty.
20.6 Waiver of Termination Right. The provisions of California Civil Code
Section 1932, Subsection 2, and Section 1933, Subsection 4 (and any successor
statutes thereof permitting Tenant to terminate this Lease as a result of any
damage or destruction) are hereby expressly waived by Tenant.
21. Eminent Domain.
--------------
21.1 Substantial Taking. Subject to the provisions of Subparagraph 21.4
below, in case the [while] of the premises, or such part thereof as shall
substantially interfere with Tenant's use and occupancy of the Premises as
reasonably determined by Landlord, shall be taken for any public or quasi-public
purpose by any lawful power or authority by exercise of the right of
appropriation, condemnation or eminent domain, or sold to prevent such taking,
either party shall have the right to terminate this Lease effective as of the
date possession is required to be surrendered to said authority.
21.2 Partial Taking; Abatement of Rent. In the event of a taking of a
portion of the Premises which does not substantially interfere with the conduct
of Tenant's business, then, except as otherwise provided in the immediately
following sentence, neither party shall have the right to terminate this Lease
and Landlord shall thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Landlord receives proceeds
therefor from the condemning authority), and rent shall be abated with respect
to the part of the Premises which Tenant shall be so deprived on account of such
taking. Notwithstanding the immediately preceding sentence to the contrary, if
any part of the Building or the Site shall be taken (whether or not such taking
substantially interferes with Tenant's use of the Premises), Landlord may
terminate this Lease upon thirty (30) days' prior written notice to Tenant as
long as Landlord also terminates leases of other tenants leasing comparably
sized space within the Building for comparable lease terms.
21.3 Condemnation Award. Subject to the provisions of Subparagraph 21.4
below, in connection with any taking of the Premises or Building, Landlord shall
be entitled to receive the entire amount of any award which may be made or given
in such taking or condemnation, without deduction or apportionment for any
estate or interest of Tenant, it being expressly understood and agreed by Tenant
that no portion of any such award shall be allowed or paid to Tenant for any so-
called bonus or excess value of this Lease, and such bonus or excess value shall
be the sole property of Landlord. Tenant shall not assert any claim against
Landlord or the taking authority for any compensation because of such taking
(including any claim for bonus or excess value of this Lease); provided,
however, if any portion of the Premises is taken, Tenant shall be granted the
right to recover from the condemning authority (but not from Landlord) any
compensation as may be separately awarded or recoverable by Tenant for the
taking of Tenant's furniture, fixtures, equipment and other personal property
within the Premises, for Tenant's relocation expenses, and for any loss of
goodwill or other damage to Tenant's business by reason of such taking.
24
21.4 Temporary Taking. In the event of a taking of the Premises or any
part thereof for temporary use, (a) this Lease shall be and remain unaffected
thereby and rent shall not xxxxx, and (b) Tenant shall be entitled to receive
for itself such portion or portions of any award made for such use with respect
to the period of the taking which is within the Term, provided that if such
taking shall remain in force at the expiration or earlier termination of this
Lease, Tenant shall then pay to Landlord a sum equal to the reasonable cost of
performing Tenant's obligations under Paragraph 11 with respect to surrender of
the Premises and upon such payment shall be excused from such obligations. For
purpose of this Subparagraph 21.4, a temporary taking shall be defined as a
taking for a period of two hundred seventy (270) days or less.
22. Tenant's Insurance.
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22.1 Types of Insurance. On or before the earlier of the Commencement Date
or the date Tenant commences or causes to be commenced any work of any type in
or on the Premises pursuant to this Lease, and continuing during the entire
Term, Tenant shall obtain and keep in full force and effect, the following
insurance:
(a) All Risk insurance, including fire and extended coverage,
sprinkler leakage (including earthquake sprinkler leakage), vandalism, malicious
mischief and earthquake coverage on property of every description and kind owned
by Tenant and located in the Premises or Building, or for which Tenant is
legally liable or installed by or on behalf of Tenant including, without
limitation, furniture, equipment and any other personal property, and the Tenant
Changes the extent required under Subparagraph 14.1(c) above, (but excluding the
initial Leasehold Improvements previously existing or installed in the
Premises), in an amount not less then the full replacement cost thereof. In the
event that there shall be a dispute as to the amount which comprises full
replacement cost, the decision of Landlord or the mortgagees of Landlord shall
control.
(b) Comprehensive general liability insurance coverage, including
personal injury, bodily injury (including wrongful death), broad form property
damage, operations hazard, owner's protective coverage, contractual liability
(including Tenant's indemnification obligations under this Lease, including
Paragraph 19 hereof), liquor liability (if Tenant serves alcohol on the
Premises), products and completed operations liability, and owned/non-owned auto
liability, with initial combined single limit of liability of not less than Two
Million Dollars ($2,000,000.00). The limits of liability of such comprehensive
general liability insurance shall be increased every five (5) years during the
Term of this Lease to an amount reasonably required by Landlord.
(c) Workers compensation and employees liability insurance, in
statutory amounts and limits.
(d) Loss of income, extra expense and business interruption
insurance in such amounts as will reimburse Tenant for direct or indirect loss
of earnings attributable to all perils commonly insured against by prudent
tenants or attributable to prevention of access to the Premises, Tenant's
parking areas or to the Building as a result of such perils.
25
(e) Any other form or forms of insurance as Tenant or Landlord or
the mortgagees of Landlord may reasonably require from time to time, in form,
amounts and for insurance risks against which a prudent tenant would protect
itself, but only to the extent such risks and amounts are available in the
insurance market at commercially reasonable costs.
22.2 Requirements. Each policy required to be obtained by Tenant hereunder
shall: (a) be issued by insurers authorized to do business in the state in which
the Building is located and rated not less than financial class X, and not less
than policyholder rating A in the most recent version of Best's Key Rating Guide
(provided that, in any event, the same insurance company shall provide the
coverages described in Subparagraphs 22.1(a) and 22.1(d) above); (b) be in form
reasonably satisfactory from time to time to Landlord; (c) name Tenant as named
insured thereunder and shall name Landlord and, at Landlord's request,
Landlord's mortgagees and ground lessors of which Tenant has been informed in
writing, as additional insured thereunder, all as their respective interests may
appear; (d) shall not have a deductible amount exceeding Five Thousand Dollars
($5,000.00); (e) specifically provide that the insurance afforded by such policy
for the benefit of Landlord and Landlord's mortgagees and ground lessors shall
be primary, and any insurance carried by Landlord or Landlord's mortgagees and
ground lessors shall be excess and non-contributing; (f) except for worker's
compensation insurance, contain an endorsement that the insurer waives its right
to subrogation as described in Paragraph 24 below; and (9) contain an
undertaking by the insurer to notify Landlord (and the mortgagees and ground
lessors of Landlord who are named as additional insured) in writing not less
than thirty (30) days prior to any material change, reduction in coverage,
cancellation or other termination thereof. In the alternative, Tenant may self-
insure as to the types of insurance identified in Paragraph 22.1. Tenant agrees
to deliver to Landlord, as soon as practicable after the placing of the required
insurance, but in no event later than ten (10) days after the date Tenant takes
possession of all or any part of the Premises, certified copies of each such
insurance policy (or certificates from the insurance company evidencing the
existence of such insurance and Tenant's compliance with the foregoing
provisions of this Paragraph 22). Tenant shall cause replacement policies or
certificates be delivered to Landlord not less than thirty (30) days prior to
the expiration of any such policy or policies. If any such initial or
replacement policies or certificates are not furnished within the time(s)
specified herein, Tenant shall be deemed to be in material default under this
Lease without the benefit of any additional notice or cure period provided in
Subparagraph 25.1 below, and Landlord shall have the right, but not the
obligation, to procure such policies, and certificates at Tenant's expense.
23. Landlord's Insurance. During the Term, Landlord shall be required to
--------------------
insure the Building, the Premises, the Leasehold Improvements initially
installed in the Premises pursuant to Exhibit "F" and certain Tenant Changes to
-----------
the extent described in Subparagraph 14.1(c) above (excluding, however, Tenant's
furniture, equipment and other personal property and those Tenant Changes which
Tenant is obligated to insure pursuant to the provisions of Subparagraphs
14.1(c) and 22.1(a) above) against damage b fire and standard extended coverage
perils and general liability insurance, in such reasonable amounts and with such
reasonable deductibles as would be carried by a prudent owner of a similar
building in San Francisco, California. At Landlord's option, such insurance may
be carried under any blanket or umbrella policies which Landlord has in force
for other buildings and projects. In addition, at Landlord's option, Landlord
may elect to self-insure all or any part of such required insurance coverage.
Landlord may, but shall not be obligated to, carry any other form or forms of
insurance as Landlord or the
26
mortgagees or ground lessors of Landlord may reasonably determine is advisable.
The cost of insurance obtained by Landlord pursuant to this Paragraph 23 shall
be included in Operating Expenses.
24. Waivers of Subrogation.
----------------------
24.1 Mutual Waiver of Parties. Landlord and Tenant hereby waive their
rights against each other as well as the officers, partners, directors,
employees, agents and authorized representatives of Landlord and Tenant with
respect to any claims or damages or losses (including any claims for bodily
injury to persons and/or damage to property) which are caused or result from (a)
risks insured against under any insurance policy carried by Landlord or Tenant
(as the case may be) pursuant to the provisions of this Lease and enforceable at
the time of such damage, loss and/or injury, or (b) risks which would have been
covered under any insurance required to be obtained and maintained by Landlord
or Tenant (as the case may be) under Paragraphs 22 and 23 of this Lease (as
applicable) had such insurance been obtained and maintained as required therein.
Foregoing waivers shall be in addition to, and not a limitation of, any other
waivers or releases contained in this Lease.
24.2 Waiver of Insurer. Each party shall cause each insurance policy
required to be obtained by it pursuant to Paragraphs 22 and 23 (excluding
Tenant's worker's compensation insurance) to provide that the insurer waives all
rights of recovery by way of subrogation against either Landlord or Tenant, as
the case may be, and against the officers, employees, agents, partners and
authorized representatives of Landlord and Tenant in connection with any claims,
losses and damages covered by such policy. If either party fails to maintain
insurance required hereunder, such insurance shall be deemed to be self-insured
with a deemed full waiver of subrogation set forth in the immediately preceding
sentence.
25. Tenant's Default and Landlord's Remedies.
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25.1 Tenant's Default. The occurrence of any one or more of the following
events shall constitute a default under this Lease by Tenant:
(a) the vacation or abandonment of the Premises by Tenant.
"Abandonment" is herein defined to include, but is not limited to, any absence
by Tenant from the Premises for five (5) business days or longer while in
default of any other provision of this Lease;
(b) the failure by Tenant to make any payment of rent or additional
rent or any other payment required to be made by Tenant hereunder, as and when
due;
(c) the failure by Tenant to timely perform any of those covenants
described in Paragraphs 8.2, 15, 22.2 and 27.1 of this Lease, which Paragraphs
expressly provide that such failure shall be deemed a default by Tenant under
this Lease without any additional notice or cure periods;
(d) the failure by Tenant to observe or perform any of the express
or implied covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in Subparagraphs 25.1(a), (b) or (c) above,
where such failure shall continue for a period of ten (10) days after written
notice thereof from Landlord to Tenant; provided, however,
27
that any such notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure, Section 1161 and provided
further that if the nature of Tenant's default is such that more than ten (10)
days are reasonably required for its cure, then Tenant shall not be deemed to be
in default if Tenant shall commence such cure within said ten (10) day period
and thereafter diligently prosecute such cure to completion, which completion
shall occur not later than sixty (60) days from the date of such notice from
Landlord; and
(e) (i) the making by Tenant of any general assignment for the
benefit of creditors, the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or a petition for reorganization or arrangement under
any law relating to bankruptcy (unless, in the case of a petition filed against
the Tenant, the same is dismissed within sixty (60) days), (iii) the appointment
of a trustee or receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease, where
possession is not restored to Tenant within sixty (60) days, or (iv) the
attachment, execution or other judicial seizure of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease where such
seizure is not discharged within sixty (60) days.
25.2 Landlord's Remedies; Termination. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall have the immediate option to
terminate this Lease and all rights of Tenant hereunder. In the event that
Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:
(a) the worth at the time of award of any unpaid rent which had
been earned at the time of such termination; plus
(b) the worth at the time of the award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(c) the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; plus
(d) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which, in the ordinary course of things, would be likely to
result therefrom including, but not limited to: "Unreimbursed Leasehold
Improvement Costs" (as defined below); attorneys' fees; brokers' commissions;
the costs of refurbishment, alterations, renovation and repair of the Premises;
and removal (including the repair of any damage caused by such removal) and
storage (or disposal) of Tenant's personal property, equipment, fixtures, Tenant
Changes, Leasehold Improvements and any other items which Tenant is required
under this Lease to remove but does not remove. As used herein, the term
"Unreimbursed Leasehold Improvement Costs" shall mean the product when
multiplying (i) the sum of any Leasehold Improvement allowance plus any other
costs provided, paid or incurred by Landlord in connection with the design and
construction of the initial Leasehold Improvements installed in the Premises
prior to the Commencement Date pursuant to Exhibit "D", by (ii) the fraction,
-----------
the numerator of which is the number of months of
28
the Term of this Lease not yet elapsed as of the date on which this Lease is
terminated (excluding my unexercised renewal options), and the denominator of
which is the total number of months of the Term of this Lease (excluding any
unexercised renewal options). For example, if the total costs paid or incurred
by Landlord with respect to the initial Leasehold Improvements was $100,000.00,
the Lease Term was sixty (60) months, and the Lease was terminated by reason of
Tenant's default at the end of twelve (12) months, the Unreimbursed Leasehold
Improvement costs would be equal to $80,000.00 (i.e., $80,000.00 equals
$100,000.00 x 48/60).
As used in Subparagraphs 25.2(a) and 25.2(b) above, the "worth at the time of
award" is computed by allowing interest at the Interest Rate set forth in
Subparagraph 1.18. As used in Subparagraph 25.2(c) above, the "worth at the time
of award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
25.3 Landlord's Remedies; Re-Entry Rights. In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord shall also have the right, with or
without terminating this Lease, to re-enter the Premises and remove all persons
and property from the Premises; such property may be removed, stored and/or
disposed of pursuant to Subparagraph 14.4 of this Lease or any other procedures
permitted by applicable law. No re-entry or taking possession of the Premises by
Landlord pursuant to this Subparagraph 25.3, and no acceptance of surrender of
the Premises or other action on Landlord's part, shall be construed as an
election to terminate this Lease unless a written notice of such intention be
given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction.
25.4 Landlord's Remedies; Continuation of Lease. In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord shall have the right to continue this
Lease in full force and effect, whether or not Tenant shall have abandoned the
Premises. The foregoing remedy shall also be available to Landlord pursuant to
California Civil Code Section 1951.4 and any successor statute thereof in the
event Tenant has abandoned the Premises. In the event Landlord elects to
continue this Lease in full force and effect pursuant to this Subparagraph 25.4,
then Landlord shall be entitled to enforce all of its rights and remedies under
this Lease, including the right to recover rent as it becomes due. Landlord's
election not to terminate this Lease pursuant to this Subparagraph 25.4 or
pursuant to any other provision of this Lease, at law or in equity, shall not
preclude Landlord from subsequently electing to terminate this Lease or pursuing
any of its other remedies.
25.5 Rights and Remedies Cumulative. All rights, options and remedies of
Landlord contained in this Paragraph 25 and elsewhere in this Lease (including
Paragraph 30 below) shall be construed and held to be cumulative, and no one of
them shall be exclusive of the other, and Landlord shall have the right to
pursue any one or all of such remedies or any other remedy or relief which may
be provided by law or in equity, whether or not stated in this Lease. Nothing in
this Paragraph 25 shall be deemed to limit or otherwise affect Tenant's
indemnification of Landlord pursuant to any provision of this Lease.
26. Landlord's Default. Landlord shall not be in default in the performance of
------------------
any obligation required to be performed by Landlord under this Lease unless
Landlord has failed to perform such obligation within thirty (30) days, or as
reasonable per occurrence, after the receipt of
29
written notice from Tenant specifying in detail Landlord's failure to perform;
provided however, that if the nature of Landlord's obligation is such that more
than thirty (30) days are required for its performance, then Landlord shall not
be deemed in default if it commences such performance within such thirty (30)
day period and thereafter diligently pursues the same to completion. Upon any
such uncured default by Landlord, Tenant may exercise any of its rights provided
in law or at equity; provided, however: (a) Tenant shall have no right to offset
or xxxxx rent in the event of any default by Landlord under this Lease, except
to the extent offset rights are specifically provided to Tenant in this Lease;
and (b) Tenant's rights and remedies hereunder shall be limited to the extent
(i) Tenant has expressly waived in this Lease any of such rights or remedies
and/or (ii) this Lease otherwise expressly limits Tenant's rights or remedies,
including the limitation on Landlord's liability contained in Paragraph 35
hereof.
27. Subordination. Without the necessity of any additional document being
-------------
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee of a mortgage or a beneficiary of a deed
of trust now or hereafter encumbering all or any portion of the Building or
Site, or any lessor of any ground or master lease now or hereafter affecting all
or any portion of the Building or Site, this Lease shall be subject and
subordinate at all times to such ground or master leases (and such extensions
and modifications thereof), and to the lien of such mortgages and deeds of trust
(as well as to any advances made thereunder and to all renewals, replacements,
modifications and extensions thereof). As a condition precedent to the
effectiveness of any such subordination of this Lease to any future ground or
master leases or the lien of any future mortgages or deeds of trust, Landlord
shall provide to Tenant a commercially reasonable non-disturbance and attornment
agreement in favor of Tenant executed by such future ground lessor, master
lessor, mortgagee or deed of trust beneficiary, as the case may be, which shall
provide that Tenant's quiet possession of the Premises shall not be disturbed on
account of such subordination to such future lease or lien so long as Tenant is
not in default under any provisions of this Lease. Notwithstanding the
foregoing, Landlord shall have the right to subordinate or cause to be
subordinated any or all ground or master leases or the lien of any or all
mortgages or deeds of trust to this Lease. In the event that any ground or
master lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason, at the
election of Landlord's successor in interest, Tenant shall attorn to and become
the tenant of such successor. Tenant hereby waives its rights under any current
or future law which gives or purports to give Tenant any right to terminate or
otherwise adversely affect this Lease and the obligations of Tenant hereunder in
the event of any such foreclosure proceeding or sale. Tenant covenants and
agrees to execute and deliver to Landlord within ten (10) days after receipt of
written demand by Landlord and in the form reasonably required by Landlord, any
additional documents evidencing the priority or subordination of this Lease with
respect to any such ground or master lease or the lien of any such mortgage or
deed of trust. Should Tenant fail to sign and return any such documents within
said 10-day period, Tenant shall be in default hereunder without the benefit of
any additional notice or cure periods specified in Subparagraph 25.1 above.
28. Estoppel Certificate.
--------------------
28.1 Tenant's Obligations. Within ten (10) business days following
Landlord's written request, Tenant shall execute and deliver to Landlord an
estoppel certificate, in a form substantially similar to the form of Exhibit "G"
----------
attached hereto, certifying: (a) the
30
commencement Date of this Lease; (b) that this Lease is unmodified and in full
force and effect (or, if modified, that this Lease is in full force and effect
as modified, and stating the date and nature of such modifications); (c) the
date to which the rent and other sums payable under this Lease have been paid;
(d) that there are not, to the best of Tenant's knowledge, any defaults under
this Lease by either Landlord or Tenant, except as specified in such
certificate; and (e) such other matters as are reasonably requested by Landlord.
Any such estoppel certificate delivered pursuant to this Subparagraph 28.1 may
be relied upon by any mortgagee, beneficiary, purchaser or prospective purchaser
of any portion of the Site, as well as their assignees.
28.2 Tenant's Failure to Deliver. Tenant's failure to deliver such
estoppel certificate within such time shall be conclusive upon Tenant that: (a)
this Lease is in full force and effect without modification, except as may be
represented by Landlord; (b) there are no uncured defaults in Landlord's or
Tenant's performance; and (c) not more than one (1) month's rental has been paid
in advance. Tenant shall indemnify, defend (with counsel reasonably approved by
Landlord in writing) and hold Landlord harmless from and against any and all
claims, judgments, suits, causes of action, damages, losses, liabilities and
expenses (including attorneys' fees and court costs) attributable to any failure
by Tenant to timely deliver any such estoppel certificate to Landlord pursuant
to Subparagraph 28.1 above.
29. Building Planning. If Landlord requires the Premises for use by another
-----------------
tenant or for other reasons connected with the Building planning program, then
Landlord shall have the right, upon sixty (60) days' prior written notice to
Tenant, to relocate the Premises to other space in the Building of substantially
similar size as the Premises, and with tenant improvements of substantially
similar age, quality and layout as then existing in the Premises. In the event
of any such relocation, Landlord shall pay for the cost of providing such
substantially similar tenant improvements (but not any furniture or personal
property), and Landlord shall reimburse Tenant, within thirty (30) days after
Landlord's receipt of invoices and paid receipts, for the reasonable moving,
telephone installation and stationery reprinting costs actually paid for by
Tenant in connection with such relocation. If Landlord so relocates Tenant, the
terms and conditions of this Lease shall remain in full force and effect and
apply to the new space, except that (a) a revised Exhibit "B" shall become part
-----------
of this Lease and shall reflect the location of the new space, (b) Paragraph 1
of this Lease shall be amended to include and state all correct data as to the
new space, and (c) such new space shall thereafter be deemed to be the
"Premises". Notwithstanding the foregoing provisions of this Paragraph 29 to
the contrary, if the new space contains more Rentable Square Feet than the
original Premises, Tenant shall not be obligated to pay any more Annual Basic
Rent or Excess Expenses than otherwise applicable to the original Premises.
Landlord and Tenant agree to cooperate fully in order to minimize the
inconvenience of Tenant resulting from such relocation.
30. Performance by Tenant: Interest and Late Charges.
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30.1 Landlord's Right to Perform. Except as specifically provided
otherwise in this Lease, all covenants and agreements by Tenant under this Lease
shall be performed by Tenant at Tenant's sole cost and expense and without any
abatement or offset of rent. If Tenant shall fail to pay any sum of money (other
than Annual Basic Rent) or perform any other act on its part to be paid or
performed hereunder and such failure shall continue for three (3) days with
respect to monetary obligations (or ten (10) days with respect to non-monetary
obligations) after Tenant's
31
receipt of written notice thereof from Landlord, Landlord may, without waiving
or releasing Tenant from any of Tenant's obligations, make such payment or
perform such other act on behalf of Tenant. All sums so paid by Landlord and all
necessary incidental costs incurred by Landlord performing such other acts shall
be payable by Tenant to Landlord within five (5) days after demand therefor as
additional rent. The foregoing rights are in addition to any and all remedies
available to Landlord upon Tenant's default as described in Paragraph 25.
30.2 Interest. If any monthly installment of Annual Basic Rent or Excess
Expenses, or other amount payable by Tenant hereunder is not received by
Landlord by the date when due, it shall bear interest at the Interest Rate set
forth in Subparagraph 1.18 from the date due until paid. All interest, and any
late charges imposed pursuant to Subparagraph 30.3 below shall be considered
additional rent due from Tenant to Landlord under the terms of this Lease.
30.3 Late Charges. Tenant acknowledges that, in addition to interest
costs, the late payments by Tenant to Landlord of any Annual Basic Rent or other
sums due under this Lease will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of such costs being extremely difficult and
impractical to fix. Such other costs include, without limitation, processing,
administrative and accounting charges and late charges that may be imposed on
Landlord by the terms of any mortgage, deed of trust or related loan documents
encumbering the Premises, the Building or the Site. Accordingly, if any monthly
installment of Annual Basic Rent or Excess Expenses or any other amount payable
by Tenant hereunder is not received by Landlord by the due date thereof, Tenant
shall pay to Landlord an additional sum of ten percent (10%) of the overdue
amount as a late charge, but in no event more than the maximum late charge
allowed by law. The parties agree that such late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of any late
payment as hereinabove referred to by Tenant, and the payment of late charges
and interest are distinct and separate in that the payment of interest is to
compensate Landlord for the use of Landlord's money by Tenant, while the payment
of late charges is to compensate Landlord for Landlord's processing,
administrative and other costs incurred by Landlord as a result of Tenant's
delinquent payments. Acceptance of a late charge or interest shall not
constitute a waiver of Tenant's default with respect to the overdue amount or
prevent Landlord from exercising any of the other rights and remedies available
to Landlord under this Lease or at law or in equity now or hereafter in effect.
31. Indemnification and Cure Rights of Landlord's Mortgagees and Lessors.
31.1 Modifications. If, in connection with Landlord's obtaining or
entering into any financing or ground lease for any portion of the Building or
Site, the lender or ground lessor shall request modifications to this Lease,
Tenant shall, within ten (10) days after request therefor, execute an amendment
to this Lease including such modifications, provided such modifications are
reasonable, do not increase the obligations of Tenant hereunder, or adversely
affect the leasehold estate created hereby or Tenant's rights hereunder.
31.2 Cure Rights. In the event of any default on the part of Landlord,
Tenant will give notice by registered or certified mail to any beneficiary of a
deed of trust or mortgagee covering the Premises or ground lessor of Landlord
whose address shall have been furnished to Tenant, and shall offer such
beneficiary, mortgagee or ground lessor a reasonable opportunity to cure the
default (including with respect to any such beneficiary or mortgagee, time to
obtain possession
32
of the Premises, subject to this Lease and Tenant's rights hereunder, by power
of sale or a judicial foreclosure, if such should prove necessary to effect a
cure).
32. Transfer of Owner's Interest. The term "Landlord" as used in this Lease,
----------------------------
so far as covenants or obligations on the part of the Landlord are concerned,
shall be limited to mean and include only the owner or owners, at the time in
question, of the fee title to, or a lessee's interest in a ground lease of, the
Site. In the event of any transfer or conveyance of any such title or interest
(other than a transfer for security purposes only), the transferor shall be
automatically relieved of all covenants and obligations on the part of Landlord
contained in this Lease accruing after the date of such transfer or conveyance.
Landlord and Landlord's transferees and assignees shall have the absolute right
to transfer all or any portion of their respective title and interest in the
Site, the Building, the Premises and/or this Lease without the consent of
Tenant, and such transfer or subsequent transfer shall not be deemed a violation
on Landlord's part of any of the terms and conditions of this Lease.
33. Quiet Enjoyment. Landlord covenants and agrees with Tenant that, upon
---------------
Tenant performing all of the covenants and provisions on Tenant's part to be
observed and performed under this Lease (including payment of rent hereunder),
Tenant shall and may peaceably and quietly have, hold and enjoy the Premises in
accordance with and subject to the terms and conditions of this Lease.
34. Parking.
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34.1 Tenant's Parking Privileges. During the Term of this Lease, Landlord
shall lease to Tenant, and Tenant shall lease from Landlord, the number of
parking privileges specified in Subparagraph 1.20 hereof for use by Tenant's
employees in the common parking areas of the Building, as designated by Landlord
from time to time. Landlord shall at all times have the right to establish and
modify the nature and extent of the parking areas for the Building (including
whether such areas shall be surface, underground and/or other structures) as
long as Tenant is provided the number of parking privileges designated in
Subparagraph 1.20. In addition, Landlord may, in its sole discretion, assign any
unreserved and unassigned parking privileges, and/or make all or a portion of
such privileges reserved/unreserved.
34.2 Parking Rules. The use of the parking areas shall be subject to the
Parking Rules and Regulations attached hereto as Exhibit "E" and any other
-----------
reasonable, non-discriminatory rules and regulations adopted by Landlord and/or
Landlord's parking operators from time to time, including any system for
controlled ingress and egress and charging visitors and invitees, with
appropriate provision for validation of such charges. Tenant shall not use more
parking privileges than its allotment and shall not use any parking spaces
specifically assigned by Landlord to other tenants or for such other uses as
visitor parking. Tenant's parking privileges shall be used only for parking by
vehicles no larger than normally sized passenger automobiles or pick-up trucks.
Tenant shall not permit or allow any vehicles that belong to or are controlled
by Tenant or Tenant's employees, suppliers, shippers, customers or invitees to
be loaded, unloaded, or parked in areas other than those designated by Landlord
for such activities. If Tenant permits or allows any of the prohibited
activities described herein, then Landlord shall have the right, without notice,
in addition to such other rights and remedies that it may have, to
33
remove or tow away the vehicle involved and charge the cost thereof to Tenant,
which cost shall be immediately payable by Tenant upon demand by Landlord.
35. Limitation on Landlord's Liability. Notwithstanding anything contained in
----------------------------------
this Lease to the contrary, the obligations of Landlord under this Lease
(including any actual or alleged breach or default by Landlord) do not
constitute personal obligations of the individual partners, directors, officers
or shareholders of Landlord or Landlord's partners, and Tenant shall not seek
recourse against the individual partners, directors, officers or shareholders of
Landlord or Landlord's partners, or any of their personal assets for
satisfaction of any liability with respect to this Lease. In addition, in
consideration of the benefits accruing hereunder to Tenant and notwithstanding
anything contained in this Lease to the contrary, Tenant hereby covenants and
agrees for itself and all of its successors and assigns that the liability of
Landlord for its obligations under this Lease (including any liability as a
result of any actual or alleged failure, breach or default hereunder by
Landlord), shall be limited solely to, and Tenant's and its successors' and
assigns' sole and exclusive remedy shall be against, Landlord's interest in the
Site and proceeds therefrom, and no other assets of Landlord.
36. Hazardous Materials.
-------------------
36.1 Tenant's Covenants. In addition to its other obligations under
this Lease (including Paragraph 8 hereof), Tenant covenants to comply with all
laws relating to Hazardous Materials with respect to the Premises and the
Building. Except for general office supplies typically used in office area in
the ordinary course of business (such as copier toner, liquid paper, glue, ink,
and cleaning solvents), for use in the manner for which they were designed and
only in accordance with all Hazardous Materials laws and the highest standards
prevailing in the industry for such use, and then only in such amounts as may be
normal for the office business operations conducted by Tenant on the Premises,
neither Tenant nor any Tenant Parties (as defined in Subparagraph 19.1) shall
use, handle, store or dispose of any Hazardous Materials in, on, under or about
the Premises, the Building or the Site. Tenant shall promptly take all actions,
at its sole cost and expense, as are necessary to return the Premises, Building
and Site to the condition existing prior to the introduction of any such
Hazardous Materials by Tenant or any Tenant parties, provided Landlord's
approval of such actions shall first be obtained. Furthermore, Tenant shall
immediately notify Landlord of any inquiry, test, investigation or enforcement
proceeding or against Tenant or the Premises concerning the presence of any
Hazardous Material.
36.2 Tenant's Indemnity. Tenant shall be solely responsible for and shall
indemnify, defend (with counsel reasonably approved by Landlord) and hold
Landlord harmless from and against any and all claims, judgments, suits, causes
of action, damages, penalties, fines, liabilities, losses and expenses
(including, without limitation, investigation and clean-up costs, attorneys'
fees, consultant fees and court costs) which arise during or after the Term of
this Lease as a result of the breach of any of the obligations and covenants set
forth in Subparagraph 36.1 above, and/or any contamination of the Premises,
Building or Site directly or indirectly arising from the activities of Tenant or
any Tenant Parties.
36.3 Definition of Hazardous Materials. For purposes of this Lease, the
term "Hazardous Materials" shall mean, collectively, asbestos, any petroleum
fuel, and any hazardous
34
or toxic substance, material or waste which is or becomes regulated by any local
governmental authority, the State of California or the United States Government,
including, but not limited to, material or substance defined as a "hazardous
waste," "extremely hazardous waste," restricted hazardous waste," "hazardous
substance," "hazardous material" or "toxic pollutant" under the California
Health and Safety Code and/or under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq.
-- ---
36.4 Survival. The foregoing covenants and indemnities of Tenant shall
survive the expiration or earlier termination of the Lease.
37. Miscellaneous.
-------------
37.1 Governing Law. This Lease shall be governed by, and construed
pursuant to, the laws of the state in which the Building is located.
37.2 Successors and Assigns. Subject to the provisions of Paragraph 32
above, and except as otherwise provided in this Lease, all of the covenants,
conditions and provisions of this Lease shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective heirs, personal
representatives and permitted successors and assigns; provided, however, no
rights shall inure to the benefit of any Transferee of Tenant unless the
Transfer to such Transferee is made in compliance with the provisions of
Paragraph 16, and no options or other rights which are expressly made
personal to the original Tenant hereunder or in any rider attached hereto shall
be assignable to or exercisable by anyone other than the original Tenant under
this Lease.
37.3 No Merger. The voluntary or other surrender of this Lease by Tenant
or a mutual termination thereof shall not work as a merger and shall, at the
option of Landlord, either (a) terminate all or any existing subleases, or (b)
operate as an assignment to Landlord of Tenant's interest under any or all such
subleases.
37.4 Professional Fees. If either Landlord or Tenant should bring a suit
against the other with respect to this Lease, including for unlawful detainer or
any other relief against the other hereunder, then all costs and expenses
incurred by the prevailing party therein (including, without limitation, its
actual appraisers', accountants', attorneys' and other professional fees and
court costs), shall be paid by the other party.
37.5 Waiver. The waiver by either party of any breach by the other party
of any term, covenant or condition herein contained shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant and
condition herein contained, nor shall any custom or practice which may become
established between the parties in the administration of the terms hereof be
deemed a waiver of, or in any way affect, the right of any party to insist upon
the performance by the other in strict accordance with said terms. No waiver of
any default of either party hereunder shall be implied from any acceptance by
Landlord or delivery by Tenant (as the case may be) of any rent or other
payments due hereunder or any omission by the non-defaulting party to take any
action on account of such default if such default persists or is repeated, and
no express waiver shall affect defaults other than as specified in said waiver.
The subsequent acceptance of rent hereunder by Landlord shall not be deemed to
be a waiver of any
35
preceding breach by Tenant of any term, covenant or condition of this Lease
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
37.6 Joint and Several Liability. If more than one person or entity
executes this Lease as Tenant: (a) each of them is and shall be jointly and
severally liable for the covenants, conditions, provisions and agreements of
this Lease to be kept, observed and performed by Tenant; and (b) the act or
signature of, or notice from or to, any one or more of them with respect this
Lease shall be binding upon each and all of the persons and entities executing
this Lease Tenant with the same force and effect as if each and all of them had
so acted or signed, or given or received such notice.
37.7 Terms and Headings. The words "Landlord" and "Tenant" as used herein
shall include the plural as well as the singular. Words used in any gender
include other genders. The paragraph headings of this Lease are not a part of
this Lease and shall have no effect upon the instruction or interpretation of
any part hereof.
37.8 Time. Time is of the essence with respect to performance of every
provision of this Lease in which time or performance is a factor. All
references in this Lease to "days" shall mean calendar days unless specifically
modified herein to be "business" days.
37.9 Prior Agreements; Amendments. This Lease (and the Exhibits and
Riders attached hereto) contain all of the covenants, provisions, agreements,
conditions and understandings between Landlord and Tenant concerning the
Premises and any other matter covered or mentioned in this Lease, and no prior
agreement or understanding, oral or written, express or implied, pertaining to
the Premises or any such other matter shall be effective for any purpose. No
provision of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.
The parties acknowledge at all prior agreements, representations and
negotiations are deemed superseded by the execution of this Lease to the extent
they are not expressly incorporated herein.
37.10 Severability. The invalidity or unenforceability of any provision of
this Lease except for Tenant's obligation to pay Annual Basic Rent and Excess
Expenses under Paragraphs 5 and 6 hereof) shall in no way affect, impair or
invalidate any other provision hereof, and such other provisions shall remain
valid and in full force and effect to the fullest extent permitted by law.
37.11 Recording. Neither Landlord nor Tenant shall record this Lease. In
addition, either party shall record a short form memorandum of this Lease
without the prior written consent (and signature on the memorandum) of the
other, and provided that prior to recordation Tenant executes and delivers to
Landlord, in recordable form, a properly acknowledged quitclaim deed or other
instrument distinguishing all of the Tenant's rights and interest in and to the
Site, Building and Premises, and designating Landlord as the transferee, which
deed or other instrument shall be held by Landlord and may be recorded by
Landlord once the Lease terminates or expires (but not prior thereto). If such
short form memorandum is recorded in accordance with the foregoing, the party
requesting the recording shall pay for all costs of or
36
related to such recording, including, but not limited to, recording charges and
documentary transfer taxes.
37.12 Exhibits and Riders. All Exhibits and Riders attached to this Lease
are hereby incorporated in this Lease as though set forth at length herein.
37.13 Signs and Auctions. Except for Tenant's identity sign on the entry
doors of the premises and Tenant's elevator lobby identity sign on any full
floor of the Building leased by Tenant (which signs shall be consistent with the
Building's signage program and otherwise subject to Landlord's prior written
approval), Tenant shall have no right to place any sign upon the Premises, the
Building or Site or which can be seen from outside the Premises. In addition,
Tenant shall have no right to conduct any auction in, on or about the Premises,
the Building or Site.
37.14 Accord and Satisfaction. No payment by Tenant or receipt by Landlord
of a lesser amount than the rent payment herein stipulated shall be deemed to be
other than on account of the rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such rent or pursue any
other remedy provided in this Lease. Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by any statute or at common law.
37.15 Financial Statements. Upon ten (10) days prior written request from
Landlord (which Landlord may make at any time during the Term but no more often
that two (2) times in any calendar year), Tenant shall deliver to Landlord (a) a
current financial statement of Tenant and any guarantor of this Lease, and (b)
financial statements of Tenant and such guarantor for the two (2) years prior to
the current financial statement year. Such statements shall be prepared in
accordance with generally acceptable accounting principles and certified as true
in all material respects by Tenant (if Tenant is an individual) or by an
authorized officer or general partner of Tenant (if Tenant is a corporation or
partnership, respectively).
37.16 Tenant's Authority. If Tenant executes this Lease as a partnership
or corporation, then Tenant and the persons and/or entities executing this Lease
on behalf of Tenant represent and warrant that: (a) Tenant is a duly authorized
and existing partnership or corporation, as the case may be, and is qualified to
do business in the state in which the Building is located; (b) such persons
and/or entities executing this Lease are duly authorized to execute and deliver
this Lease on Tenant's behalf in accordance with the Tenant's partnership
agreement (if Tenant is a partnership), or a duly adopted resolution of Tenant's
board of directors and the Tenant's by-laws (if Tenant is a corporation); and
(c) this Lease is binding upon Tenant in accordance with its terms.
37.17 Guaranty. This Lease is not subject to and conditional upon Tenant's
delivery to Landlord, concurrently with Tenant's execution and delivery of this
Lease, of a Guaranty.
37
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38
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.
"TENANT" ________________________________
a Delaware Corporation
By:_____________________________
Its:____________________________
Date:___________________________
"LANDLORD" ________________________________
a Delaware Corporation
By:_____________________________
Its:____________________________
Date:___________________________
39
OFFICE LEASE
This LEASE is made as of the 19th day of June of 1998, by and between landlord
and Tenant:
WITNESSETH:
----------
1. Terms and Conditions. For the purposes of this Lease, the following terms
shall have the following definitions and meanings:
1.1 Landlord: Sunpark Properties, Inc.
1.2 Landlord's Address: 000 Xxxxxxxxx Xxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxxxx, Xx. 94134
1.3 Tenant: Imagine Media, Inc.
1.4 Tenant's Address: 000 Xxxxx Xxxx
Xxxxxxxx, Xx 00000
1.5 Site: The parcel(s) of real property located at the corner of
Executive Park Blvd. and Xxxxxx Xxxxxx in the City of San Francisco, County of
San Francisco, State of California, as shown on the site plan attached here to
as Exhibit "A".
-----------
1.6 Building: A four (4) story office building located on the Site,
containing, approximately 107,831 Rentable Square Feet (subject to adjustment as
set forth in Exhibit "C"), whose address is 000 Xxxxxxxxx Xxxx Xxxx., Xxx
-----------
Xxxxxxxxx, Xxxxxxxxxx.
1.7 Premises: Those certain premises known as Suite(s) 4200 as generally
shown on the floor plan(s) attached hereto as Exhibit "B", located on the fourth
-----------
floor(s) of the building, and containing approximately 3,497 Rentable Square
Feet (subject to adjustment as set forth in Architect Drawings).
1.8 Rentable Square Feet: See Exhibit "C".
-----------
1.9 Commencement Date: See Exhibit "D".
-----------
1.10 Estimated Commencement Date: September 1, 1998.
1.11 Term: Approximately Two (2) years and six (6) months, commencing upon
completion of tenant improvements or move-in of date of sublease space (Suite
4000 at 250 Executive Park Blvd., whichever comes later, and ending on February
28, 2001.
1.12 Annual Basic Rent: $104,910.00, calculated based upon $30.00 per
Rentable Square Foot within the Premises per year. Annual Basic Rent is payable
in monthly installments ("Monthly Basic Rent") of $8,742.50, calculated based
upon $2.50 per Rentable Square Foot
within the Premises per month. The Annual Basic Rent is subject to a CPI
adjustment as provided in Rider No. 1.
1.13 Tenant's Percentage: 3.24% (See Exhibit "C")
-----------
1.14 Landlord's Contribution to Operating Expenses: Tenant's Percentage of
Operating Expenses incurred by Landlord for the building during the calendar
year in which the Commencement Date occurs, adjusted to reflect an assumption
that the Building is fully assessed for real property tax purposes as a
completed Building ready for occupancy and that the Building is ninety-five
percent (95%) occupied during such year.
1.15 Security Deposit: Waived.
1.16 Permitted Use: Office
1.17 Brokers: BT Commercial.
1.18 Interest Rate: The lesser of: (a) the rate announced from time to
time by Bank of America or if Bank of America ceases to exist or ceases to
publish such rate, by the largest (as measured by deposits) chartered bank
operating in the state in which the Building is located as its "prime rate" or
"reference rate", plus five percent (5%); or (b) the maximum rate permitted by
law.
1.19 Leasehold Improvements: The tenant improvements installed to be
installed for the Premises as described in the Work Letter Agreement attached
hereto as Exhibit "F".
-----------
1.20 Parking: A ratio of 3 per 1000 rentable square feet, consisting of
unreserved parking spaces, subject to the parking rates and provisions set forth
in Paragraph 34.
1.21 Guarantor(s): None.
2. Lease of Premises. Landlord hereby leases to Tenant, and Tenant hereby
-----------------
leases from Landlord, the Premises described in Subparagraph 1.7 above, improved
or to be improved with the Leasehold Improvements. Such lease is upon, and
subject to, the terms, covenants and conditions herein set forth and each party
covenants, as a material part of the consideration for, this Lease, to keep and
perform their respective obligations under this Lease.
3. Common Areas.
------------
3.1 Definitions; Tenant's Rights. During the Term of this Lease, Tenant
shall have the nonexclusive right to use, in common with Landlord and other
tenants in the Building, and subject to the Rules and Regulations referred
to in Paragraph 8 below, the following common areas of the Building and/or
Site ("Common Areas"):
(a) the common entrances, lobbies, restrooms on multi-tenant floors,
elevators, stairways and access ways, loading docks, ramps, drives and platforms
and any passageways and serviceways thereto, and the common pipes, conduits,
wires and appurtenant equipment serving the Premises; and
2
(b) the parking structure and parking areas (subject to a Paragraph 34
below), loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways and landscaped areas and plaza area appurtenant to the
Building.
3.2 Landlord's Reserved Rights. Landlord reserves the right from time to
--------------------------
time to use any of the Common Areas and to do any of the following, as long as
such acts do not unreasonably interfere with Tenant's use of or access to the
Premises or parking:
(a) expand the building and construct or alter other buildings or
improvements on the Site; (b) make any changes, additions, improvements, repairs
or replacements in or to the Site, the Common Areas and/or the Building
(including the Premises if required to do so by any law or regulation) and the
fixtures and equipment thereof, including, without limitation, (i) maintenance,
replacement and relocation of pipes, ducts, conduits, wires and meters, and (ii)
changes in the location, size, shape and number of driveways, entrances,
stairways, elevators, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas and walkways, and subject to Paragraph 34 below,
parking spaces and parking area;
(c) close temporarily any of the Common Areas while engaged in making
repairs, improvements or alterations to the Building or the Site; and\
(d) perform such other acts and make such other changes with respect
to the Site, Common Areas and Building as Landlord may, in the exercise of sound
business judgment, deem to be appropriate.
4. Term.
----
4.1 Term; Notice of Lease Dates. The Term of this Lease shall be for the
period designated in Subparagraph 1.11 commencing on the Commencement Date (as
determined pursuant to Exhibit "D"), and ending on the expiration of such
-----------
period, unless the Term is sooner terminated as provided in this Lease. Within
ten (10) days after Landlord's written request, Tenant shall execute a written
confirmation of the Commencement Date and expiration date of the Term in the
form of the Notice of Lease Term Dates attached hereto as Exhibit "D". The
-----------
Notice of Lease Term Dates shall be binding upon Tenant unless Tenant objects
thereto in writing within such ten (10) day period.
4.2 Estimated Commencement Date. It is estimated by the parties that the
Term of this Lease will commence on the Estimated Commencement Date set forth in
Subparagraph 1.10. The Estimated Commencement Date is merely an estimate of the
Commencement Date and, consequently, Tenant agrees that Landlord shall have no
liability to Tenant for any loss or damage, nor shall Tenant be entitled to
terminate or cancel this Lease if the Term of this Lease does not commence by
the Estimated Commencement Date for any reason whatsoever, including any delays
in substantial completion of the Leasehold Improvements.
5. Rent.
----
5.1 Basic Rent. Tenant agrees to pay Landlord, as basic rent for the
Premises, the Annual Basic Rent designated in Subparagraph 1.12. The Annual
Basic Rent shall be paid by Tenant in twelve (12) equal monthly installments of
Monthly Basic Rent designated in
3
Subparagraph 1.12 in advance on the first day of each and every calendar month
during the Term, except that the first full month's Monthly Basic Rent shall be
paid upon the execution of this Lease. Monthly Basic Rent for any partial month
shall be prorated in the proportion that the number of days this Lease is in
effect during such month bears to the actual number of days in such month.
5.2 Additional Rent. All amounts and charges payable by Tenant under this
Lease in addition to the Annual Basic Rent described in Subparagraph 5.1 above
(including, without limitation, payments for insurance, repairs and parking, and
Tenant's Percentage of Operating Expenses in excess of Landlord's Contribution
to Operating Expenses as provided in Paragraph 6) shall be considered additional
rent for the purposes of this Lease, and the word "rent" in this Lease shall
include such additional rent unless the context specifically or clearly implies
that only the Annual Basic Rent is referenced. The Annual Basic Rent and
additional rent shall be paid to Landlord as provided in Paragraph 9, without
any prior demand therefor and without any deduction or offset whatever, in
lawful money of the United State of America.
6. Operating Expenses.
------------------
6.1 Excess Expenses. During each calendar year during the Term of this
Lease (after the calendar year noted in Subparagraph 1.14), Tenant shall pay to
Landlord the amount by which Tenant's Percentage of Operating Expenses exceeds
Landlord's Contribution to Operating Expenses for such calendar year (such
amount shall be referred to in this Paragraph 6 as the "Excess Expenses"), in
the manner and at the times set forth in the following provisions of this
Paragraph 6.
6.2 Definition of Operating Expenses. As used in this Lease, the term
"Operating Expenses" shall mean all direct costs and expenses of operation and
maintenance of the building, the Common Areas and the Site, as determined by
standard accounting practices, calculated assuming the Building is ninety-five
percent (95%) occupied, including the following costs by way of illustration but
not limitation (but excluding those items specifically set forth in Subparagraph
6.3 below): (a) Real Property Taxes and Assessments (as defined in Subparagraph
6.9 below) and any taxes or assessments imposed in lieu thereof; (b) any and all
assessments imposed with respect to the Building, Common Areas, and/or Site
pursuant to any covenants, conditions and restrictions affecting the Site,
Common Areas or Building; (c) water and sewer charges and the costs of
electricity, heating, ventilating, air conditioning and other utilities; (d)
utilities surcharges and any other costs, levies or assessments resulting from
statutes or regulations promulgated by any governmental authority in connection
with the use or occupancy of the Building or the Premises or the parking
facilities serving the Building or the premises; (e) costs of insurance obtained
by Landlord pursuant to paragraph 23 of this Lease; (f) waste disposal and
janitorial services; (g) security; (h) labor; (i) costs incurred in the
management of the Building, including, without limitation: (1) supplies, (2)
wages and salaries (and payroll taxes and similar governmental charges related
thereto) of employees used in the management, operation and maintenance of the
Building, (3) Building management office rental (if such management office is
located in the Building), and (4) a management/administrative fee not to exceed
four percent (4%) of the annual gross revenues of the Building exclusive of the
proceeds of financing or a sale of the Building; (j) supplies, materials,
equipment and tools; (k) repair and
4
maintenance of the elevators and the structural portions of the Building,
including the plumbing, heating, ventilating, air-conditioning and electrical
systems installed or furnished by Landlord; (1) maintenance, costs and upkeep of
all parking and Common Areas; (m) depreciation on a straight line basis and
rental of personal property used in maintenance; (n) amortization on a straight-
line basis over the useful life [together with interest at the Interest Rate (as
defined in Subparagraph 1.18 of this Lease) on the unamortized balance] of all
costs of a capital nature (including, without limitation, capital improvements,
capital replacements, capital repairs, capital equipment and capital tools): (1)
reasonably intended to produce a reduction in operating charges or energy
consumption; or (2) required after the date of the Lease under any governmental
law or regulation that was not applicable to the Building at the time it was
originally constructed; or (3) for repair or replacement of any Building
equipment needed to operate the Building at the same quality levels as prior to
the replacement; (o) costs and expenses of gardening and landscaping; (p)
maintenance of signs (other than signs of tenants of the Building); (q) personal
property taxes levied on or attributable to personal property used in connection
with the Building, the Common Areas and/or the Site; (r) reasonable accounting,
audit, verification, legal and other consulting fees; and (s) costs and expenses
of repairs, resurfacing, repairing, maintenance, painting, lighting, cleaning,
refuse removal, security and similar items, including appropriate reserves.
6.3 Exclusions from Operating Expenses. Notwithstanding the provisions of
Subparagraph 6.2 above to the contrary, "Operating Expenses" shall not include:
(a) any ground lease rental;
(b) costs incurred by Landlord for the repair of damage to the
Building to the extent that Landlord is reimbursed by insurance or condemnation
proceeds or by tenants, warrantors or other third persons;
(c) costs, including permit, license and inspection costs, incurred
with respect to the installation of tenant improvements for tenants in the
Building (including the original Leasehold Improvement for the Premises), or
incurred in renovating or otherwise improving, decorating, painting or
redecorating space for tenants or other occupants of the Building, including
space planning and interior design posts and fees;
(d) depreciation, amortization and interest payments, except as
specifically provided herein, and except on materials, tools, supplies and
vendor-type equipment purchased by Landlord to enable Landlord to supply
services Landlord might otherwise contract for with a third party, where such
depreciation, amortization and interest payments would otherwise have been
included in the charge for such third party's services, all as determined in
accordance with standard accounting practices;
(e) brokerage commissions, finders' fees, attorneys' fees, space
planning costs and other costs incurred by Landlord in leasing or attempting to
lease space in the Building;
5
(f) attorneys' fees and other costs and expenses incurred in
connection with negotiations or disputes with present or prospective tenants or
other occupants of the Building; provided, however, that Operating Expenses
shall include those attorneys' fees and other cost and expenses incurred in
connection with negotiations, disputes or claims relating to items of Operating
Expenses, enforcement of rules and regulations of the Building, and such other
matters relating to the maintenance of standards required of Landlord under the
Lease; and
(g) interest, principal, points and fees on debt or amortization on
any mortgage, deed of trust or other debt encumbering the Building or Site.
6.4 Definition of Real Property Taxes and Assessments. All Real Property
Taxes and Assessments shall be adjusted to reflect an assumption that the
Building is fully assessed for real property tax purposes as a completed
building ready for occupancy. As used in this case, the term "Real Property
Taxes and Assessments" shall mean: any form of assessment, license fee, license
tax, business license fee, commercial rental tax, levy, charge, improvement
bond, tax or similar imposition imposed by any authority having the direct power
to tax, including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement or special assessment
district thereof, as against any legal or equitable interest of Landlord in the
Premises, Building, Common Areas or Site including the following by way of
illustration but not limitation:
(a) any tax on Landlord's "right" to rent or "right" to other income
from the Premises or as against Landlord's business of leasing the Premises;
(b) any assessment, tax, fee, levy or charge in substitution,
partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax, it being acknowledged by
Tenant and Landlord that Proposition 13 was adopted by the voters of the State
of California in the June, 1978 election and that assessments, taxes, fees,
levies and charges may be imposed by governmental agencies for such services as
fire protection, street, sidewalk and road maintenance, refuse removal and for
other governmental services formerly provided without charge to property owners
or occupants. It is the intention of Tenant and Landlord that all such new and
increased assessments, taxes, fees, levies and charges be included within the
definition of "real property taxes" for the purposes of this Lease;
(c) any assessment, tax, fee, levy or charge allocable to or measured
by the area of the Premises or other premises in the Building or the rent
payable by Tenant hereunder or other tenants of the Building, including, without
limitation, any gross receipts tax or excise tax levied by state, city or
federal government, or any political subdivision thereof, with respect to the
receipt of such rent, or upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof, but not on Landlord's other
operations;
(d) any assessment, tax, fee, levy or charge upon this transaction or
any document to which Tenant is a party, creating or transferring an interest or
an estate in the Premises; and/or
6
(e) any assessment, tax, fee, levy or charge by any governmental
agency related to any transportation plan, fund or system (including assessment
districts) instituted within the geographic area of which the Building is a
part.
Notwithstanding the foregoing provisions of this Subparagraph 6.4 above to the
contrary, "Real Property Taxes and Assessments" shall not include Landlord's
federal or state income, franchise, inheritance or estate taxes.
6.5 Estimate Statement. By the first day of April of each calendar year
during the Term of this Lease (after the calendar year voted in Subparagraph
1.14), Landlord shall endeavor to deliver to Tenant a statement ("Estimate
Statement") estimating the Operating expenses for the current calendar year and
the estimated amount of excess Expenses payable by Tenant. Landlord shall have
the right no more than three (3) times in any calendar year to deliver a revised
Estimate Statement showing the Excess Expenses for such calendar year if
Landlord determines that the Excess Expenses are greater than those set forth in
the original Estimate Statement (or previously delivered revised Estimate
Statement) for such calendar year. The Excess expenses shown on the Estimate
Statement (or revised Estimate Statement, as applicable) shall be divided into
twelve (12) equal monthly installments, and Tenant shall pay to Landlord,
concurrently with the regular monthly rent payment next due following the
receipt of the Estimate Statement (or revised Estimate Statement, as
applicable), an amount equal to one (1) monthly installment of such excess
Expenses multiplied by the number of months from January in the calendar year in
which such statement is submitted to the month of such payment, both months
inclusive (less any amounts previously paid by Tenant with respect to any
previously delivered Estimate Statement for revised Estimate Statement for such
calendar year). Subsequent installments shall be paid concurrently with the
regular monthly rent payments for the balance of the calendar year and shall
continue until the next calendar year's Estimate Statement (or current calendar
year's revised Estimate Statement) is received.
6.6 Actual Statement. By the first day of April of each succeeding
calendar year during the Term of this Lease, Landlord shall endeavor to deliver
to Tenant a statement ("Actual Statement") of the actual Operating Expenses and
Excess Expenses for the immediately preceding calendar year. If the Actual
Statement reveals that Excess expenses were overstated or understated in any
Estimate Statement (or revised Estimate Statement) previously delivered by
Landlord pursuant to Subparagraph 6.5 above, then within thirty (30) days after
delivery of the Actual Statement, Tenant shall pay to Landlord the amount of any
such underpayment, or Landlord shall pay to tenant (or credit against the next
monthly rent falling due, the amount of such overpayment, as the case may be.
6.7 No Release. Any delay or failure by Landlord in delivering any
Estimate or Actual Statement pursuant to this Paragraph 6 shall not constitute a
waiver of its right to receive Tenant's payment of excess Expenses, nor shall it
relieve Tenant of its obligations to pay excess Expenses pursuant to this
Paragraph 6, except that Tenant shall not be obligated to make any payments
based on such Estimate or Actual Statement until ten (10) business days after
receipt of such statement.
7
6.8 Tenant's Audit Rights. If Tenant disputes the amount of Operating
Expenses set forth in any Actual Statement delivered by Landlord, Tenant shall
have the right, to be exercised, if at all, no later than six (6) months
following receipt of such Actual Statement to cause Landlord's books and records
with respect to the preceding calendar year to be audited, at Tenant's expense,
by a certified public accountant mutually acceptable to Landlord and Tenant.
The amounts payable under Subparagraph 6.6 by Landlord to Tenant or by Tenant to
Landlord as the case may be shall be appropriately adjusted on the basis of such
audit. If Tenant fails to request an audit with the 67 month period, such
Actual Statement shall be conclusively binding upon Landlord and Tenant.
7. Security Deposit. Concurrently with the execution of this Lease, Tenant
----------------
shall deposit with Landlord the Security Deposit designated in Subparagraph
1.15. The Security Deposit shall be held by Landlord as security for the
faithful performance by Tenant of all of the terms, covenants and conditions of
this Lease to be performed by Tenant during the Term. If Tenant defaults with
respect to any of its obligations under this Lease, Landlord may (but shall not
be require to) use, apply or retain all or any part of the Security Deposit for
the payment of any rent or any other sum in default, or for the payment of any
other amount, loss or damage which Landlord may spend incur or suffer by reason
of Tenant's default. If any portion of the Security Deposit is so used or
applied, Tenant shall, within ten (10 days after demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to its
original amount. Landlord shall not be required to keep the security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on
the Security Deposit. If Tenant shall fully and faithfully perform every
provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned to Tenant within the (2) weeks following the
expiration of the Term, provided that Landlord may retain the Security Deposit
until such time as any amount due from Tenant in accordance with Paragraph 6
hereof has been determined and paid in full. If Landlord sells its interest in
the Building during the Term and if Landlord deposits with the purchaser the
Security Deposit (or balance thereof), and such purchaser acknowledges receipt
thereof, then, upon such sale, Landlord shall be discharged from any further
liability with respect to the Security Deposit.
8. Use.
---
8.1 General. Tenant shall use the Premises solely for the Permitted Use
specified in Subparagraph 1.16, and shall not use or permit the Premises to be
used for any other use or purpose whatsoever. Tenant shall observe and comply
with the "Rules and Regulations" attached hereto as Exhibit and all reasonable
non-discriminatory modifications thereof and additions thereto from time to time
put into effect and furnished to Tenant by Landlord. Landlord shall not be
responsible to Tenant for the violation or non-performance by any other tenant
or occupant of the Building of such Rules and Regulations. Tenant shall also
observe and comply with all requirements of any board of fire underwriters or
similar body relating to the Premises, and all laws, rules and regulations of
all governmental agencies having jurisdiction. Tenant shall not use or allow
the Premises to be used (a) in violation of any recorded covenants, conditions
and restrictions affecting the Site or of any law or governmental rule or
regulation, or of any certificate of occupancy issued for the Premises or
Building, or (b) for any improper, immoral, unlawful or reasonably objectionable
purpose. Tenant shall not do or permit to be done
8
anything which will obstruct or interfere with the rights of other tenants or
occupants of the Building, or injure or annoy them. Tenant shall not cause,
maintain permit any nuisance in, on or about the Premises, the Building or the
Site, nor commit or suffer to be committed any waste in, on or about the
Premises.
8.2 Effect on Insurance. Tenant shall not do or permit to be done
anything which will (a) violate or invalidate any insurance policy maintained by
Landlord or Tenant hereunder, or (b) increase the cost of any insurance policy
maintained by Landlord pursuant to Paragraph 23 or otherwise with respect to the
Building or Site. If Tenant's occupancy or conduct of its business in or on the
Premises results any increase in premiums for any insurance carried by Landlord
with respect to the Building or Site, Tenant shall pay such increase as
additional rent within ten (10) days after being billed therefor by Landlord.
If any insurance coverage carried by Landlord pursuant to Paragraph 23 or
otherwise with respect to the Building or site shall be canceled or reduced (or
cancellation or reduction thereof shall threatened) by reason of the use or
occupancy of the Premises by Tenant or by anyone permitted by Tenant to be upon
the Premises, and if Tenant fails to remedy such condition within five (5) days
after notice thereof, Tenant shall be deemed to be in default under this Lease,
without the benefit of any additional notice or cure period specified in
Subparagraph 25.1 below, and Landlord shall have all remedies provided in this
Lease, at law or in equity, including, without limitation, the right (but not
the obligation) to enter upon the Premises and attempt to remedy such condition
at Tenant's cost.
9. Payment and Notices. All rent and other sums payable by Tenant to Landlord
-------------------
hereunder shall be paid to Landlord at the first address. Designated in
Subparagraph 1.2, or to such other persons and/or at such other places as
Landlord may hereafter designate in writing. Any notice required or permitted
to be given hereunder must be in writing and may be given by personal delivery
(including delivery by nationally recognized overnight courier or express
mailing service), facsimile transmission, or by registered or certified mail,
postage repaid, return receipt requested, addressed to Tenant at the address(es)
designated in Subparagraph 1.4, or to Landlord at the address(es) designated in
Subparagraph 1.2. Either party may, by written notice to the other, specify a
different address for notice purposes.
10. Brokers. The parties recognize that the broker(s) who negotiated his Lease
-------
are stated in Subparagraph 1.17, and agree that Landlord shall be solely
responsible for the payment of brokerage commissions to said broker(s), and that
Tenant shall have no responsibility therefor unless written provision to the
contrary has been made. Each party represents and warrants to the other, that,
to its knowledge, no other broker, agent or finder (a) negotiated or was
instrumental in negotiating or consummating this Lease on its behalf, and (b) is
or might be entitled to a commission or compensation in connection with his
Lease. Any broker, agent or finder of Tenant whom Tenant has failed to disclose
herein shall be paid by Tenant. Tenant shall indemnify, defend (by counsel
reasonably approved in writing by Landlord) and hold Landlord harmless from and
against any and all claims, judgments, suits, causes of action,
9
damages, losses, liabilities and expenses (including attorneys' fees and court
costs) resulting from any breach by Tenant of the foregoing representation,
including, without limitation, any claims that may be asserted against Landlord
by any broker, agent or finder undisclosed by Tenant herein. Landlord shall
indemnify, defend (by counsel reasonably approved in writing by Tenant) and hold
Tenant harmless from and against any and all claims, judgments, suits, causes of
action, damages, losses, liabilities and expenses (including attorneys' fees and
court costs) resulting from any breach by Landlord of the foregoing
representation, including, without limitation, any claims that may be asserted
against tenant, by any broker, agent or finder undisclosed by Landlord herein.
11. Surrender: Holding Over.
------------------------
11.1 Surrender of Premises. Upon the expiration or sooner termination of
this Lease, Tenant shall surrender all keys for the Premises to Landlord, and
exclusive possession of the Premises to Landlord broom clean and in first-class
condition and repair, reasonable wear and tear excepted (and casualty damage
excepted if Lease is terminated as a result thereof pursuant to Paragraph 20)
with all of Tenant's personal property (and those items, if any, of Leasehold
Improvements and Tenant Changes identified by Landlord pursuant to Subparagraph
14.2 below) removed therefrom and all damage caused by such removal repaired, as
required pursuant to Subparagraphs 14.2 and 14.3 below. If, for any reason,
Tenant fails to surrender the Premises on the expiration or earlier termination
of this Lease including upon the expiration of any subsequent month-to-month
tenancy consented to by Landlord pursuant to Subparagraph 11.2 below), with such
removal and repair obligations completed, then, in addition to the provisions of
Subparagraph 11.3 below and Landlord's rights and dies under Subparagraph 14.4
and the other provisions of this Lease, Tenant shall indemnify, defend (by
counsel reasonably approved in writing by Landlord) and hold Landlord harmless
from and against and all claims, judgments, suits, causes of action, damages,
losses, liabilities and expenses (including attorneys' fees and costs) resulting
from such failure to surrender, including, without limitation, any claim made by
any succeeding tenant based thereon. The going indemnity shall survive the
expiration or earlier termination of this Lease.
11.2 Hold Over With Landlord's Consent. If, with Landlord's express
written consent, Tenant remains in possession of the Premises after the
expiration or earlier termination of the Lease Term, Tenant shal1 become a
tenant from month-to-month upon the terms and conditions set forth in this Lease
(including Tenant's obligation to pay all Excess Expenses and any other
additional rent under this Lease), but at a Monthly Basic Rent equal to the
greater of: (a) one hundred twenty-five percent (125%) of the Monthly Basic Rent
applicable to the Premises immediately prior to the date of such expiration or
earlier termination; or (b) one hundred twenty-five percent (125%) of the
prevailing market rate excluding any rental or other concessions (as reasonably
determined by Landlord) for the Premises in effect on the date of such
expiration or earlier termination. Tenant shall pay an entire month's Monthly
Basic Rent calculated in accordance with this Subparagraph 11.2 for any portion
of a month it holds over and remains in possession of the Premises pursuant to
this Paragraph 11.2.
11.3 Hold Over Without Landlord's Consent. If Tenant holds over after the
expiration or earlier termination of the Lease Term without the express written
consent of Landlord, Tenant shall become a tenant at sufferance only, upon the
terms and conditions set forth in this Lease so far as applicable (including
Tenant's obligation to pay all Excess Expenses. and other additional rent under
this Lease), but at a Monthly Basic Rent equal to the greater of: (a) two
hundred percent (100%) of the Monthly Basic Rent applicable to the Premises
immediately prior to the date of such expiration or earlier termination; or (b)
two hundred
10
percent (200%) of the prevailing market rate excluding any rental or other
concessions (as reasonably determined by Landlord) for the premises in effect on
the date of such expiration or earlier termination. Acceptance by Landlord of
rent after such expiration or earlier termination shall not constitute a consent
to a hold over hereunder or result in an extension of this Lease. Tenant shall
pay an entire month's Monthly Basic Rent calculated in accordance with this
Subparagraph 11.3 for any portion a month it holds over and remains in
possession of the Premises pursuant to this Paragraph 11.3.
11.4 No Effect on Landlord's Rights. The foregoing provisions of this
Paragraph 11 are in addition to, and do not affect, Landlord's right of re-entry
or any other rights of Landlord hereunder or otherwise provided by law or
equity.
12. Taxes on Tenant's Property. Tenant shall be liable for, and shall pay
--------------------------
before delinquency, all taxes and assessments (real and personal) levied against
(a) any personal property or trade fixtures placed by Tenant in or about the
Premises (including any increase in the assessed value of the Premises based
upon the value of any such personal property or trade fixtures); and (b) any
Leasehold Improvements or alterations in the Premises (whether installed and/or
paid for by Landlord or Tenant) to the extent such items are assessed a
valuation higher than the valuation at which tenant improvements conforming to
the Building's standard tenant improvements set forth in Schedule "1" to Exhibit
-------
"F" are assessed. If any such taxes or assessments are levied against Landlord
--
or Landlord's property, Landlord may, after written notice to Tenant (and under
proper protest if requested by Tenant) pay such taxes and assessments, and
Tenant shall reimburse Landlord therefor within ten (10) business days after
demand by Landlord; provided, however, Tenant, at its sole cost and expense,
shall have the right, with Landlord's cooperation, to bring it in any court of
competent jurisdiction to recover the amount of any such taxes and assessments
so paid under protest.
13. Condition of Premises: Repairs.
------------------------------
13.1 Condition of Premises. Tenant acknowledges that, except as otherwise
expressly set forth in this Lease, neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises, the
Building or the Site or their condition, or with respect to the suitability
thereof for the conduct of Tenant's business. The taking of possession of the
Premises by Tenant shall conclusively establish that the Site, the Premises, the
Leasehold Improvements therein, the Building and the Common Areas are at such
time complete and in good, sanitary and satisfactory condition and repair with
all work required to be performed by Landlord, if any, pursuant to Exhibit "F"
----------
completed and without any obligation on Landlord's part to make any alterations,
upgrades or improvements hereto, except for the repair of any latent defects in
the Building or Premises (excluding any portion of the Premises constructed by
Tenant) disclosed by Tenant and specified in written notice to Landlord no later
than one (1) year after the Commencement Date. Landlord shall cause all latent
defects so specified in Tenant's notice to be completed and/or repaired as soon
as reasonably possible after Landlord's receipt thereof. Tenant further
acknowledges and agrees to accept the various start-up inconveniences that may
be associated with the use of the Common Areas and other typical conditions
incident to recently constructed office buildings, such as construction
obstacles including scaffolding,
11
delays in the use of freight elevator service, certain elevators not being
available to Tenant, the passage of work crews using elevators, and uneven air
conditioning service.
13.2 Tenant's Repair Obligations. Except for Landlord's obligations
specifically set forth in Subparagraphs 13.1, 13.3, 20.1 and 21.2 hereof, Tenant
shall at all times and at Tenant's sole cost and expense, keep, maintain, repair
and preserve the Premises and all Leasehold Improvements, Tenant Changes, and
any alterations, additions and property therein in first-class condition and
repair, reasonable wear and tear excepted. Such maintenance and repairs shall be
performed with due diligence, lien-free and in a first-class workmanlike manner,
by such contractor(s) selected by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld or delayed. Except as otherwise
expressly provided in this Lease, Landlord shall have no obligation to alter,
remodel, improve, repair, renovate, redecorate or paint all or any part of the
Premises.
13.3 Landlord's Repair Obligations. Notwithstanding the provisions of
Subparagraph 13.2 above to the contrary, Landlord shall, as part of the
Operating Expenses, repair and maintain (a) the Building shell and other
structural portions of the Building including the roof and foundations), (b) the
basic plumbing, heating, ventilating, air conditioning, sprinkler and electrical
systems within the Building core (but not any conduits or connections thereto or
distribution systems thereof within the Premises or any other tenant's
premises), and (c) the Common Areas of the Building and Site; provided, however,
to the extent such maintenance or repairs are required as a result of any act,
neglect, fault or omission of Tenant or any of Tenant's agents, employees,
contractors, licensees or invitees, Tenant shall pay to Landlord, as additional
rent, the costs of such maintenance and repairs. Subject to Tenant's right to
self-help and abatement of rent pursuant to Subparagraphs 13.4 and 20.3,
respectively, and except as otherwise included in Landlord's indemnity in
Subparagraph 19.3, Landlord shall not be liable to Tenant for, and Tenant hereby
expressly waives all rights to recover, any losses and damages (including
interference with or injury to Tenant's business) resulting from Landlord's
performing or failure to perform any such repairs or maintenance, it being
expressly understood and agreed by Tenant that Tenant shall be solely
responsible for and look solely to its insurance for any such damages and
losses.
13.4 Tenant's Waiver; Self-Help. Tenant waives the right to make repairs
at Landlord's expense under any law, statute or ordinance now or hereafter in
effect (including the provisions of California Civil Code Section 1942 and any
successive sections or statutes of a similar nature); provided, however, subject
to the termination rights set forth in Paragraphs 20 and 21, if Landlord fails
to perform any maintenance or repair work required pursuant to Subparagraph 13.3
within thirty (30) days after Landlord receives Tenant's written notice of the
need for such repairs (or such period of time in excess of thirty (30) days as
is reasonably necessary based upon the nature of such work), and if such failure
to repair unreasonably interferes with Tenant's use of or access to the
Premises, then Tenant shall be permitted to make such repairs, using the
Building's contractors or such other contractors reasonably approved by
Landlord, upon delivery of an additional two (2) business days, prior written
notice to Landlord indicating that Tenant will be undertaking such repairs, and
Tenant shall be entitled to recover from Landlord the reasonable cost of such
repairs made by Tenant, but without any offset rights against he rental or other
amounts payable by Tenant under this Lease.
12
4. Alterations.
-----------
14.1 Tenant Changes; Conditions. After installation of the Initial
Leasehold Improvements for the Premises pursuant to Exhibit "F", Tenant may, at
----------
its sole cost and expense, make alterations, additions, improvements and
decorations to the Premises (collectively "Tenant Changes") subject to and upon
the following terms and conditions:
(a) Notwithstanding any provision in this Paragraph 14 to the
contrary, Tenant is absolutely prohibited from making any alterations,
additions, improvements or decorations which: (a) affect any area outside the
Premises; (ii) affect the Building's structure, equipment, services or systems,
or the proper functioning thereof, or Landlord's access thereto; (iii) affect
the outside appearance, character or use of the Building or the Common Areas;
(iv) weaken or impair the structural strength of the Building; (v) in the
reasonable opinion of Landlord, lessen the value of the Building; (vi) will
violate or require a change in any occupancy certificate applicable to the
Premises; or (vii) increase the cost of Landlord's insurance, unless Tenant pays
such increased costs within ten (10) days after written demand therefor by
Landlord.
(b) Before proceeding with any Tenant Change which is not otherwise
prohibited in Subparagraph 14.1(a) above, Tenant must first obtain Landlord's
written approval thereof (including approval of all plans, specifications and
working drawings for such Tenant Change), which approval shall not be
unreasonably withheld or delayed. However Landlord's prior approval shall not be
required for any Tenant Change which satisfies the following conditions
(hereinafter a "Pre-Approved Change"): (i) the costs of such Tenant Change does
not exceed Five Hundred Dollars ($500.00) individually; (ii) the costs of such
Tenant Change when aggregated with the costs of all other Tenant Changes made by
Tenant during the Term of this Lease do not exceed Fifteen Hundred Dollars
($1,500.00); (iii) Tenant delivers to Landlord final plans, specifications and
working drawings for such Tenant Change at least en (10) days prior to
commencement of the work therefor, and (iv) Tenant and such Tenant Change
otherwise satisfy all other conditions set forth in this Subparagraph 14.1.
(c) After Landlord has approved the Tenant Changes and the plans,
specifications and working drawings therefor (or is deemed to have approved the
Pre-Approved Changes as set forth in Subparagraph 4.1(b) above), Tenant shall:
(a) enter into an agreement for the performance of such Tenant Changes with such
contractors and subcontractors selected by Tenant and approved by Landlord,
which approval shall not be unreasonably withheld or delayed. Before proceeding
with any Tenant Change (including any Pre-Approved Change) Tenant shall (i)
provide Landlord with ten (10) days' prior written notice thereof; and (ii) pay
to Landlord, within ten (10) days after written demand, the costs of any
increased insurance premiums incurred by Landlord to include such Tenant Changes
in the fire and extended coverage insurance obtained by Landlord pursuant to
Paragraph 23 below (however, Landlord shall be required to include the Tenant
Changes under such insurance only to the extent such insurance is actually
obtained by Landlord and such Tenant Changes are insurable under such insurance;
if such Tenant Changes are not or cannot be included in Landlord's insurance,
Tenant shall insure the Tenant Changes under its casualty insurance pursuant to
Subparagraph 22.1(a) below. In addition, before proceeding with any Tenant
Change, Tenant's contractors shall obtain on behalf of Tenant and at Tenant's
sole cost and expense: (A) all necessary governmental
13
permits and approvals for the commencement and completion of such Tenant Change;
and (B) a completion and lien indemnity bond, or other surety, satisfactory to
Landlord for such Tenant Change.
(d) Tenant shall pay to Landlord, as additional rent, the reasonable
costs of Landlord's engineers and other consultants (but not Landlord's on-site
management personnel) for review of all plans, specifications and working
drawings for the Tenant Changes, within ten (10) business days after Tenant's
receipt of invoices either from Landlord or such consultants. In addition to
such costs, Tenant shall pay to Landlord, within ten (10) business days after
completion of any Tenant Change, the actual, reasonable costs incurred by
Landlord for services rendered by Landlord's management personnel and engineers
to coordinate and/or supervise any of the Tenant Changes to the extent such
services are provided in excess of or after the normal on-site hours of such
engineers and management personnel.
(e) All Tenant Changes shall be performed: (i) in accordance the
approved plans, specifications and working drawings; (ii) lien-free and in a
first-class and workmanlike manner; (iii) in compliance with all laws, rules,
and regulations of all governmental agencies and authorities; (iv) in such a
manner so as not to interfere with, the occupancy of any other tenant in the
Building, nor impose any additional expense upon nor delay Landlord in the
maintenance and operation of the Building; and (v) at such times, in such manner
and subject to such rules and regulations as Landlord may from time to me
reasonably designate.
(f) Throughout the performance of the Tenant Changes, Tenant shall
obtain, or cause its contractors to obtain, workers compensation insurance and
general liability insurance in compliance with the provisions of Paragraph 22 of
this Lease.
14.2 Removal of Tenant Changes and Leasehold Improvements. All Tenant
Changes and the initial Leasehold Improvements in the Premises (whether
installed or paid for by Landlord or Tenant), shall become the property of
Landlord and shall remain upon and be surrendered with the Premises at the end
of the Term of this Lease; provided, however, Landlord may, by written notice
delivered to Tenant any time prior to the date which is fifteen (15) days before
the expiration of the Lease Term (or immediately upon any sooner termination of
this Lease) identify those items of the Leasehold Improvements and Tenant
Changes which Landlord shall require Tenant to remove at the end of the Term of
this Lease. If Landlord requires Tenant to remove any such items as described
above, Tenant shall, at its sole cost, remove the identified items on or before
the expiration or sooner termination of this Lease and repair any damage to the
Premises caused by such removal (or, at Landlord's option, shall pay to Landlord
all of Landlord's costs of such removal and repair).
14.3 Removal of Personal Property. All articles of personal property owned
by Tenant or installed by Tenant at its expense in the Premises (including
business and trade fixtures, furniture and moveable partitions) shall be, and
remain, the property of Tenant, and shall be removed by Tenant from the
Premises, at Tenant's sole cost and expense, on or before the expiration or
sooner termination of this Lease. Tenant shall repair any damage caused by such
removal.
14
14.4 Tenant's Failure to Remove. If Tenant fails to remove by the
expiration or sooner termination of this Lease all of its personal property, or
any items of Leasehold Improvements or Tenant Changes identified by Landlord for
removal pursuant to Subparagraph 14.2 above, Landlord may, at its option, treat
such failure as a hold over pursuant to Subparagraph 11.3 above, and/or may
(without liability to Tenant for loss thereof), at Tenant's sole cost and in
addition to Landlord's other rights and remedies under this Lease, at law or in
equity: (a) remove and store such items; and/or (b) upon ten (10) days' prior
notice to Tenant, sell all or any such items at private or public sale for such
price as Landlord may obtain. Landlord shall apply the proceeds of any such sale
to any amounts due to Landlord under this Lease from Tenant (including
Landlord's attorneys' fees and other costs incurred in the removal, storage
and/or sale of such items), with any remainder to be paid to Tenant.
15. Liens. Tenant shall not permit any mechanic's, materialmen's or other liens
-----
to be filed against all or any part of the Site, the Building or the Premises,
nor against Tenant's leasehold interest in the Premises, by reason of or in
connection with any repairs, alterations, improvements or other work contracted
for or undertaken by Tenant or any other act or omission of Tenant or Tenant's
agents, employees, contractors, licensees or invitees. Tenant shall, at
Landlord's request, provide Landlord with enforceable, conditional and final
lien releases, (and other evidence reasonably requested by Landlord to
demonstrate protection from liens) from all person's furnishing labor and/or
materials with respect to the Premises. Landlord shall have the right at all
reasonable times to post on the Premises and record any notices of non-
responsibility which it deems necessary for protection from such liens. If any
such liens are filed Tenant shall, at its sole cost, immediately cause such lien
to be released of record or bonded so that it no longer affects title to the
Site, the Building or the Premises. If Tenant fails to cause such lien to be so
released or bonded within ten (10) days after filing thereof, such failure shall
be deemed a material breach by Tenant under this Lease without the benefit of
any additional notice or cure period described in Subparagraph 25.1 below, and
Landlord may, without waiving its rights and remedies based on such breach, and
without releasing Tenant from any of its obligations, cause such lien to be
released by any means it shall deem proper, including payment in satisfaction of
the claim giving rise to such lien. Tenant shall pay to Landlord within five (5)
days after receipt of an invoice from Landlord, any sum paid by Landlord to
remove such liens, together with interest at the Interest Rate from the date of
such payment by Landlord.
16. Assignment and Subletting.
--------------------------
16.1 General. No assignment or encumbrance of all or any part of his
Lease, and no sublease of all or any part of the Premises, shall be permitted,
except as otherwise expressly provided in this Paragraph 16.
16.2 Restriction on Transfer. Subject to the provisions of Subparagraphs
16.3, 16.4, 16.5 and 16.6, Tenant shall not, without the prior written consent
of Landlord, which consent shall not be unreasonably withheld, assign or
encumber this Lease or any interest herein or sublet the Premises or any part
thereof, or permit the use or occupancy of the Premises by any party other than
Tenant (any such assignment, encumbrance, sublease or the like shall sometimes
be referred to as a "Transfer"). Any Transfer without Landlord's consent except
for a Transfer pursuant to Subparagraph 16.6 below) shall constitute a default
by Tenant under this Lease, and
15
in addition to all of Landlord's other remedies at law, in equity or under this
Lease, such Transfer shall be voidable at Landlord's election. In addition, this
Lease shall not, nor shall any interest of Tenant herein, be assignable by
operation of law without the written consent of Landlord. For purposes of this
Paragraph 16, if Tenant is a corporation, partnership or other. entity, any
transfer, assignment, encumbrance or hypothecation of twenty-five percent (25%)
or more (individually or in the aggregate) of any stock or other ownership
interest in such entity, and/or any transfer, assignment, hypothecation or
encumbrance of any controlling ownership or voting interest in such entity,
shall be deemed an assignment of this Lease and shall be subject to all of the
restrictions and provisions contained in this Paragraph 16. Notwithstanding the
foregoing, the immediately preceding sentence shall not apply to any transfers
of stock of Tenant if Tenant is a publicly-held corporation and such stock is
transferred publicly over a recognized security exchange or over-the-counter
market.
16.3 Landlord's Options. If at any time or from time to time during the
Term Tenant desires to effect a Transfer, Tenant shall deliver to Landlord
written notice ("Transfer Notice.") setting forth terms and provisions of the
proposed Transfer and the identity of the proposed assignee, sublessee or other
transferee (sometimes referred to hereinafter as a "Transferee"). Tenant shall
also deliver to Landlord with the Transfer Notice; a current financial statement
and financial statements for the preceding two (2) years of the Transferee, and
such other information concerning the business background and financial
condition of the proposed Transferee as Landlord may reasonably request.
Landlord shall have the option, exercisable by written notice delivered to
Tenant within twenty (20) days after Landlord's receipt of the Transfer Notice,
such financial statements and other information, either to:
(a) approve or disapprove such Transfer, which approval all not be
unreasonably withheld; or
(b) sublet from Tenant that portion of the Premises which Tenant
has requested to sublease at the rental and on the other terms set forth in this
Lease for the term set forth in Tenant's Notice, or, in the case of an
assignment or encumbrance, terminate this Lease with respect to the entire
Premises, which termination shall be effective thirty (30) days after Tenant's
receipt of Landlord's notice.
If Landlord exercises its option to sublease any such space from Tenant
following Tenant's request for Landlord's approval of the proposed sublease of
such space, (i) Landlord shall be responsible for the construction of any
partitions which Landlord reasonably deems necessary to separate such space from
the remainder of the Premises, and (ii) Landlord and any sub-subtenant or
assignee of Landlord with respect to such subleased space shall have the right
to use in common with Tenant all lavatories, corridors and lobbies which are
within the Premises and which are reasonably required for the use of such space.
16.4 Additional Conditions; Excess Rent. If Landlord does not exercise
its sublease or termination option and instead approves of the proposed Transfer
pursuant to Subparagraph 16.3(a) above, Tenant may enter into the proposed
Transfer with such proposed Transferee subject to the following further
conditions:
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(a) the Transfer shall be on the same terms set forth in the
Transfer Notice delivered to Landlord (if the terms have changed, Tenant must
submit a revised Transfer Notice to Landlord and Landlord shall have another
twenty (20) days after receipt thereof to make the election in Subparagraphs
16.3(a) or 16.3(b) above);
(b) no Transfer shall be valid and no Transferee shall take
possession of the Premises until an executed counterpart of the assignment,
sublease or other instrument affecting the Transfer has been delivered to
Landlord pursuant to which the Transferee shall expressly assume all of Tenant's
obligations under this Lease (or with respect to a sublease of a portion of the
Premises or for a portion of the Term, all of Tenant's obligations applicable to
such portion);
(c) no Transferee shall have a further right to assign, encumber or
sublet, except on the terms herein contained; and
(d) any rent or other economic consideration received by Tenant as
a result of such Transfer which exceeds, in the aggregate, (i) the total rent
which Tenant is obligated to pay Landlord under this Lease (prorated to reflect
obligations allocable to any portion of the Premises subleased), plus (ii) any
reasonable brokerage commissions, attorneys, fees and moving costs actually paid
by Tenant in connection with such Transfer, shall be paid to Landlord within ten
(10) days after receipt thereof as additional rental under this Lease, without
affecting or reducing any other obligations of Tenant hereunder.
16.5 Reasonable Disapproval. Landlord and Tenant hereby acknowledge that
Landlord's disapproval of any proposed Transfer pursuant to Subparagraph 16.3(a)
shall be deemed reasonably withheld if based upon any reasonable factor,
including, without limitation, any or all of the following factors: (a) the
proposed Transfer would result in more than two subleases of portions of the
Premises being in effect at any one time during the Term; (b) the net effective
rent payable by the Transferee (adjusted on a rentable square foot basis) is
less than the net effective rent then being quoted by Landlord for new leases in
the Building for comparable size space for a comparable period of time; (c) the
proposed Transferee is an existing tenant of the Building or is negotiating with
Landlord (or has negotiated with Landlord in the last six (6) months) for space
in the Building; (d) the proposed Transferee is a governmental entity; (e) the
portion of the Premises to be sublet or assigned is irregular in shape with
inadequate means of ingress and egress; (f) the use of the Premises by the
Transferee (i) is not permitted by the use provisions in Paragraph 8 hereof, or
(ii) violates any exclusive use granted by Landlord to another tenant in the
Building; (g) the Transfer would likely result in significant increase in the
use of the parking areas or Common Areas by the Transferee's employees or
visitors, and/or significant increase in the demand upon utilities and services
to be provided by Landlord to the Premises; (h) the Transferee does not have the
financial capability to fulfill the obligations imposed by the Transfer; (i) the
Transferee is not in Landlord's reasonable opinion of reputable or good
character or consistent with Landlord's desired tenant mix; or (j) the
Transferee is a real estate developer or landlord or is acting directly or
indirectly on behalf of a real estate developer or landlord.
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16.6 Permitted Controlled Transfers. Notwithstanding the provisions of
Subparagraphs 16.1, 16.2 and 16.3 above to the contrary, Tenant may assign this
Lease or sublet the Premises or any portion thereof, without Landlord's consent
and without extending any sublease or termination option to Landlord, to any
corporation which controls is controlled by or is under common control with
Tenant, or to any corporation resulting from a merger or consolidation with
Tenant, or to any person or entity which acquires all of the assets of Tenant's
business as a going concern, provided that: (a) at least twenty (20) days prior
to such assignment or sublease, Tenant delivers to Landlord the financial
statements and other financial and background information of the assignee or
sublessee described in Subparagraph 16.3 above; (b) if an assignment, the
assignee assumes, in full, the obligations of Tenant under this Lease (or if a
sublease, the sublessee of a portion of the Premises or Term assumes, in full,
the obligations of Tenant with respect to such portion); (c) the financial net
worth of the assignee or sublessee equals or exceeds that of Tenant as of the
date of execution of this Lease; (d) Tenant remains fully liable under this
Lease; (e) the use of the Premises under Article 8 remains unchanged; and (f)
such transaction is not entered into as a subterfuge to avoid the restrictions
and provisions of this Paragraph 16.
16.7 No Release. No Transfer shall release Tenant of Tenant's obligations
under this Lease or alter the primary liability of Tenant to pay the rent and to
perform all other obligations to be performed by Tenant hereunder. Landlord may
require that any Transferee remit directly to Landlord on a monthly basis, all
monies due Tenant by said Transferee. However, the acceptance of rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision hereof. Consent by Landlord to one Transfer shall not be deemed
consent to any subsequent Transfer. In the event of default by any Transferee of
Tenant or any successor of Tenant in the performance of any of the terms hereof,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against such Transferee or successor. Landlord may consent to
subsequent assignments of the Lease or sublettings or amendments or
modifications to the Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and any such actions shall not relieve Tenant of liability under this Lease.
16.8. Administrative and Attorneys' Fees. If Tenant effects a Transfer or
requests the consent of Landlord to any Transfer, then Tenant shall, upon
demand, pay Landlord a non-refundable administrative fee of Two Hundred Fifty
Dollars ($250.00), plus any reasonable attorneys' and paralegal fees incurred by
Landlord in connection with such Transfer or request for consent (whether
attributable to Landlord's in-house attorneys or paralegals or otherwise).
Acceptance of the $250.00 administrative fee and/or reimbursement of Landlord's
attorneys, and paralegal fees shall in no event obligate Landlord to consent to
any proposed Transfer.
16.9 Material Inducement. Tenant understands, acknowledges and agrees
that (a) Landlord's option to sublease from Tenant any space which Tenant
proposes to sublease or terminate this Lease upon any proposed assignment or
encumbrance of this Lease by Tenant as provided in Subparagraph 16.3(b) above
rather than approve the proposed sublease, assignment or encumbrance, and (b)
landlord's right to receive any excess consideration paid by a Transferee in
connection with an approved Transfer as provided in Subparagraph 16.4(d) above,
are a
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material inducement for Landlord's agreement to lease the remises to Tenant upon
the terms and conditions herein set forth.
17. Entry by Landlord. Landlord and its employees and agents shall at all
-----------------
times have the right to enter the Premises to inspect the same, to supply
janitorial service and any other service required to be provided by Landlord to
Tenant under this Lease, to exhibit the Premises to prospective lenders or
purchasers (or during the last year of the Term, to prospective tenants), to
post notices of non-responsibility, and/or to alter, improve or repair the
Premises or any other portion of the Building, all without being deemed guilty
of or liable for any breach of Landlord's covenant of quiet enjoyment or any
eviction of Tenant, and without abatement of rent. In exercising such entry
rights, Landlord shall endeavor to minimize, as reasonably practicable, the
interference with Tenant's business, and shall provide Tenant with reasonable
advance written notice of such entry except in emergency situations). For each
of the foregoing purposes, Landlord shall at all times have and retain a key
with which to unlock all of the doors in, upon and about the Premises, excluding
Tenant's vaults and safes, and Landlord shall have the means which Landlord may
deem proper to open said doors in an emergency in order to obtain entry to the
Premises. Any entry to the Premises obtained by Landlord by any of said means or
otherwise shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an eviction
of Tenant from the Premises or any portion thereof, or grounds for any abatement
or reduction of rent. Any damages or losses on account of any such entry by
Landlord shall be Tenant's sole responsibility except as otherwise expressly
provided in Subparagraph 19.3. Nothing in this Paragraph 17 shall be construed
as obligating Landlord to perform any repairs, alterations or decorations,
except as otherwise expressly required in this Lease to be performed by
Landlord.
18. Utilities and Services.
-----------------------
18.1 Standard Utilities and Services. As long as Tenant has not committed
an uncured default under any of the provisions of this Lease, and subject to the
text, and conditions of this Lease and the obligations of Tenant as set forth
hereinbelow, Landlord shall furnish or cause to be furnished to the Premises the
following utilities and services, the costs of which shall be included in
Operating Expenses, unless otherwise specified below (Landlord reserves the
right to adopt non-discriminatory modifications and additions to the following
provisions from time to time):
(a) Landlord shall make available for Tenant's non-exclusive use,
the non-attended passenger elevator facilities of the Building, Monday through
Friday, except holidays, from 6:00 a.m. to 6:00 p.m., with one (1) elevator
available at all other times.
(b) Landlord shall furnish during "Business Hours" heating,
ventilation and air conditioning ("HVAC") for the Premises as required in
Landlord's judgment for the comfortable and normal occupancy of the Premises.
For purposes of this Subparagraph 18.1, the "Business Hours" shall mean 6:00
a.m. to 6:00 p.m. on Monday through Friday (except holidays). The cost of
maintenance and service calls to adjust and regulate the HVAC system shall be
charged to Tenant if the need for maintenance work results from either Tenant's
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adjustment of room thermostats or Tenant's failure to comply with its
obligations under this Paragraph 18, including keeping window coverings closed
as needed. Such work shall be charged at hourly rates equal to then-current
journeyman's wages for HVAC mechanics. If Tenant desires HVAC at any time other
than during Business Hours, Landlord shall provide such "after-hours" usage
after advance reasonable request by Tenant, and Tenant shall pay to Landlord, as
additional rent (and not as part of the Operating Expenses) the cost, as fairly
determined by Landlord, of such after-hours usage (as well as the cost of any
HVAC used by Tenant in excess of what Landlord considers reasonable or normal),
including any minimum hour charges for after-hours requests and any special
start-up costs for after-hours services which require a special start-up (such
as late evenings, weekends and holidays).
(c) Landlord shall furnish to the Premises twenty-four (24) hours
per day, reasonable quantities of electric current as required in Landlord's
judgment for normal lighting and fractional horsepower office business machines.
In no event shall Tenant's use of electric current ever exceed the capacity of
the feeders to the Building or the risers or wiring installation of the
Building. Landlord shall also furnish water to the Premises twenty-four (24)
hours per day for drinking and lavatory purposes, in such quantities as required
in Landlord's judgment for the comfortable and normal use of the Premises. If
Tenant requires or consumes water or electrical power in excess of what is
considered reasonable or normal by Landlord, Landlord may require Tenant to pay
to Landlord, as additional rent, the cost, as fairly determined by Landlord,
incurred for such excess usage.
(d) Landlord shall furnish janitorial services to the Premises five
(5) days per week pursuant to janitorial and cleaning specifications as may be
adopted by Landlord from time to time. No person(s) other than those persons
approved by Landlord shall be permitted to enter the Premises for such purposes.
Janitor service shall include ordinary dusting and cleaning by the janitor
assigned to such work and shall not include cleaning of carpets or rugs, except
normal vacuuming, or moving of furniture, interior window cleaning, coffee or
eating area cleaning and other special services. Such additional services may be
rendered by Landlord pursuant to written agreement with Tenant as to the extent
of such services and the payment of the cost thereof. Janitor service will not
be furnished on nights when rooms are occupied after 10:30 p.m. or to rooms
which are locked unless a key is furnished to the Landlord for use by the
janitorial contractor. Window cleaning shall be done only by Landlord at such
time and frequency as determined by Landlord at Landlord's sole discretion.
Tenant shall pay to Landlord the cost of removal of any of Tenant's refuse and
rubbish to the extent that the same exceeds the refuse and rubbish usually
attendant upon the use of the Premises as offices.
(e) At Landlord's option, Landlord may install water, electricity
and/or HVAC meters in the Premises to measure Tenant's consumption of such
utilities, including any after-hours and extraordinary usage described above.
Tenant shall pay to Landlord, within ten (10) days after demand, the cost of the
installation, maintenance and repair of such meter(s).
18.2 Tenant's Obligations. Tenant shall cooperate fully at all times with
Landlord, and abide by all reasonable regulations and requirements which
Landlord may prescribe for the proper functioning and protection of the
Building's services and systems. Tenant shall not use any apparatus or device
in, upon or about the Premises which may in any way increase the
20
amount of services or utilities usually furnished or supplied to the Premises or
other premises in the Building. In addition, Tenant shall not connect any
conduit, pipe, apparatus or other device to the Building's water, waste or other
supply lines or systems for any purpose. Neither Tenant nor its employees,
agents, contractors, licensees or invitees shall at any time enter, adjust,
tamper with, touch or otherwise in any manner affect the mechanical
installations or facilities of the Building.
18.3 Failure to Provide Utilities. Landlord's failure to furnish any of
the utilities and services described in Subparagraph 18.1 above when such
failure is caused by all or any of the following shall not result in any
liability of Landlord: (a) accident, breakage or pairs; (b) strikes, lockouts or
other labor disturbances or labor disputes of any such character; (c)
governmental regulation, moratorium. or other governmental action; (d)
inability, despite the exercise of reasonable diligence, to obtain electricity,
water or fuel; or (e) any other cause beyond Landlord's reasonable control. In
addition, in the event of the failure of any said utilities or services, Tenant
shall not be entitled to any abatement or reduction of rent (except as expressly
provided in Subparagraphs 20.3 and 21.2 if such failure is a result of a damage
or taking described therein), no eviction of Tenant shall result, and Tenant
shall not be relieved from the performance of any covenant or agreement in this
Lease. In the event of any stoppage or interruption of services or utilities,
Landlord shall diligently attempt to resume such services or utilities promptly
as is practicable.
19. Indemnification and Exculpation.
-------------------------------
19.1 Tenant's Indemnification of Landlord. Tenant shall be liable for,
and shall indemnify, defend and hold Landlord and Landlord's partners, officers,
directors, employees, agents, successors and assigns (collectively, "Landlord
Indemnified Parties") harmless from and against any and all claims, damages,
judgments, suits, causes of action, losses, liabilities and expenses, including
attorneys' fees and court costs (collectively, "Indemnified Claims"), arising or
resulting from (a) any act or omission of Tenant or any of Tenant's agents,
employees, contractors, subtenants, assignees, licensees or invitees
(collectively, "Tenant Parties"); (b) the use of the Premises and Common Areas
and conduct of Tenant's business by Tenant or any Tenant Parties, or any other
activity, work or thing done, permitted suffered by Tenant or any Tenant
Parties, in or about the Premises, Building or elsewhere on the Site; and/or (c)
any default by Tenant of any obligations on Tenant's part to be performed under
the terms of this Lease. In case any action or proceeding is brought against
Landlord or any Landlord Indemnified Parties by reason of any such Indemnified
Claims, Tenant, upon notice from Landlord, shall lend the same at Tenant's
expense by counsel approved in writing by Landlord, which approval shall not be
unreasonably withheld.
19.2 Tenant's Assumption of Risk and Waiver. Except to the extent
specifically included in Landlord's indemnification obligations set forth in
Subparagraph 19.3 below, Tenant, as a material part of the consideration to
Landlord, hereby agrees that neither Landlord nor any Landlord Indemnified
Parties shall be liable to Tenant for, and Tenant expressly assumes the risk of
and waives any and all claims it may have against Landlord or any Landlord
Indemnified Parties with respect to, any and all damage to property or injury to
persons in, upon or about the Premises, the Building or Site resulting from any
act or omission of Landlord or of any Landlord
21
Indemnified Party (whether or not negligent) or from any other cause whatsoever,
including, without limitation, (a) any damage to property entrusted to employees
of the Building, (b) any loss of or damage to property by theft or otherwise,
and (c) any injury or damage to persons or property resulting from any casualty,
explosion, falling plaster or other masonry or glass, steam, gas, electricity,
water or rain which may leak from any part of the Building or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface or
from any other place, or resulting from dampness, or any other cause whatsoever.
Landlord or its agents shall not be liable for interference with the light or
other intangible rights.
19.3 Landlord's Indemnification. Notwithstanding the provisions
Subparagraph 19.2 to the contrary, but subject to the limitation on Landlord's
liability set forth in Paragraph 35 below, Landlord shall liable for, and shall
indemnify, defend and hold Tenant and Tenant's partners, officers, directors,
employees, agents, successors and assigns (collectively, "Tenant Indemnified
Parties") harmless from and against, any injury to persons or damage to property
located on the Premises or Site (but not for injury to, or interference with,
Tenant's or any Tenant Indemnified Parties, business or for consequential
damages), to the extent such damage or injury arises or results from (a) the
gross negligence or willful misconduct of Landlord, its agents or employees
and/or (b) the default by Landlord any obligations on Landlord's part to be
performed under the terms this Lease; provided, however, that Landlord's
indemnity shall not apply or extend to any such damage or injury which is
covered by any insurance maintained by Tenant or any Tenant Indemnified Parties
(or would have been covered had Tenant obtained the insurance as required under
this Lease). In case any action or proceeding is brought against Tenant or any
Tenant Indemnified Parties by reason of any such injury damage indemnified by
Landlord as set forth hereinabove, Landlord, upon notice from Tenant, shall
defend the same at Landlord's expense counsel approved in writing by Tenant,
which approval shall not be unreasonably withheld.
19.4 Survival; No Release of Insurers. Tenant's and Landlord's
indemnification obligations under Subparagraphs 19.1 and 19.3, respectively,
shall survive the expiration or earlier termination of this Lease. Tenant's
covenants, agreements and indemnification in Subparagraphs 19.1 and 19.2 above,
and Landlord's indemnification in Subparagraph 19.3 above, are not intended to
and shall not relieve any insurance carrier of its obligations under policies
required to be carried by Landlord or Tenant, respectively, pursuant to the
provisions of this Lease.
20. Damage or Destruction.
---------------------
20.1 Landlords Rights and Obligations. In the event the Premises or any
part of the Building is damaged by fire or other casualty to an extent not
exceeding twenty-five percent (25%) of the full replacement cost thereof, and
Landlord's contractor estimates in a writing.. livered to the parties that the
damage thereto is such that the Building and/or Premises may be repaired,
reconstructed or restored to substantially its condition immediately prior to
such damage within one hundred twenty (120) days from the date of such casualty,
and Landlord will receive insurance proceeds sufficient to cover the costs such
repairs, reconstruction and restoration (including proceeds from Tenant and/or
Tenant's insurance which Tenant is required to deliver to Landlord pursuant to
Subparagraph 20.2 below), then Landlord shall commence and
22
proceed diligently with the work of pair, reconstruction and restoration and
this Lease shall continue full force and effect. If, however, the Premises or
any other part the Building is damaged to an extent exceeding twenty-five
percent (25%) of the full replacement cost thereof, or Landlord's contractor
estimates that such work of repair, reconstruction and restoration will require
longer than one hundred twenty (120) days to complete, Landlord will not receive
insurance proceeds (and/or proceeds from Tenant, as applicable) sufficient to
cover the costs of such repairs, construction and restoration, then Landlord may
elect to either:
(a) repair, reconstruct and restore the portion of the Building and
Premises damaged by such casualty (including the Leasehold Improvements and
Tenant Changes), in which case this Lease all continue in full force and effect;
or
(b) terminate this Lease effective as of the date which is thirty (30)
days after Tenant's receipt of Landlord's election to so terminate.
Under any of the conditions of this Subparagraph 20.1, Landlord shall give
written notice to Tenant of its intention to repair or terminate within the
later of sixty (60) days after the occurrence of such casualty, or fifteen (15)
days after Landlord's receipt of the estimate from Landlord's contractor.
20.2 Tenant's Costs and Insurance Proceeds. In the event of any damage or
destruction of all or any part of the Premises, Tenant shall immediately: (a)
notify Landlord thereof; and (b) deliver to Landlord all insurance proceeds
received by Tenant with respect to the Leasehold Improvements and Tenant Changes
in the Premises to the extent such items are not covered by Landlord's casualty
insurance obtained by Landlord pursuant to Paragraph 23 below (excluding this
Lease upon thirty (30) days' prior written notice to Tenant.
20.5 Damage Near End of Term. In addition to its termination rights in
Subparagraphs 20.1 and 20.4 above, Landlord shall have the right to terminate
this Lease if any damage to the Building or Premises occurs during the last
twelve. (12) months of the Term of this Lease and Landlord's contractor
estimates in a writing delivered to the parties that the repair, reconstruction
or restoration of such damage cannot be completed within the earlier of (a) the
scheduled expiration date of the Lease Term, or (b) sixty (60) days after the
date of such casualty.
20.6 Waiver of Termination Right. The provisions of California Civil Code
Section 1932, Subsection 2, and Section 1933, Subsection 4 and any successor
statutes thereof permitting Tenant to terminate this Lease as a result of any
damage or destruction) are hereby expressly waived by Tenant.
21. Eminent Domain.
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21.1 Substantial Taking. Subject to the provisions of Subparagraph 21.4
below, in case the while of the premises, or such part thereof as shall
substantially interfere with Tenant's use and occupancy of the Premises as
reasonably determined by Landlord, shall be taken for any
23
public or quasi-public purpose by any lawful power or authority by exercise of
the right of appropriation, condemnation or eminent domain, or sold to prevent
such taking, either party shall have the right to terminate this Lease effective
as of the date possession is required to be surrendered to said authority.
21.2 Partial Taking; Abatement of Rent. In the event of a taking of a
portion of the Premises which does not substantially interfere with the conduct
of Tenant's business, then, except as otherwise provided in the immediately
following sentence, neither party shall have the right to terminate this Lease
and Landlord shall thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Landlord receives proceeds
therefore from the condemning authority), and rent shall be abated with respect
to the part of the Premises which Tenant shall be so deprived on account of such
taking. Notwithstanding the immediately preceding sentence to the contrary, if
any part of the Building or the Site shall be taken (whether or not such taking
substantially interferes with Tenant's use of the Premises), Landlord may
terminate this Lease upon thirty (30) days' prior written notice to Tenant as
long as Landlord also terminates leases of other tenants leasing comparably
sized space within the Building for comparable lease terms.
21.3 Condemnation Award. Subject to the provisions of Subparagraph 21.4
below, in connection with any taking of the Premises Building, Landlord shall be
entitled to receive the entire amount of any award which may be made or given in
such taking or condemnation, without deduction or apportionment for any estate
or interest of Tenant, it being expressly understood and agreed by Tenant that
no portion of any such award shall be allowed or paid to Tenant for any so-
called bonus or excess value of this Lease, and such bonus excess value shall be
the sole property of Landlord. Tenant shall not assert any claim against
Landlord or the taking authority for any compensation because of such taking
(including any claim for bonus or excess value of this Lease); provided,
however, if any portion of the Premises is taken, Tenant shall be granted the
right to recover from e condemning authority (but not from Landlord) any
compensation as be separately awarded or recoverable by Tenant for the taking of
Tenant's furniture, fixtures, equipment and other personal property within the
Premises, for Tenant's relocation expenses, and for any loss of goodwill or
other damage to Tenant's business by reason of such taking.
21.4 Temporary Taking. In the event of a taking of the Premises or any
part thereof for temporary use, (a) this Lease shall be and remain affected
thereby and rent shall not xxxxx, and (b) Tenant shall be titled to receive for
itself such portion or portions of any award made for such use with respect to
the period of the taking which is within the Term, provided that if such taking
shall remain in force at the expiration or earlier termination of this Lease,
Tenant shall then pay to Landlord a sum equal to the reasonable cost of
performing Tenant's obligations under Paragraph 11 with respect to surrender of
the Premises and upon such payment shall be excused from such obligations. For
purpose of this Subparagraph 21.4, a temporary taking shall be defined as a
taking for a period of two hundred seventy (270) days or less.
22. Tenant's Insurance.
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24
22.1 Types of Insurance. On or before the earlier of the Commencement Date
or the date Tenant commences or causes to be commenced any work of any type in
or on the Premises pursuant to this Lease, and continuing during the entire
Term, Tenant shall obtain and keep in full force and effect, the following
insurance:
(a) All Risk insurance, including fire and extended coverage,
sprinkler leakage (including earthquake sprinkler leakage), vandalism, malicious
mischief and earthquake coverage upon property of every description and kind
owned by Tenant and located in the Premises or Building, or for which Tenant is
legally liable or installed by or on behalf of Tenant including, without
limitation, furniture, equipment and any other personal property, and the Tenant
Changes to the extent required under Subparagraph 14.1(c) above, (but excluding
the initial Leasehold Improvements previously existing or installed the
Premises), in an amount not less then the full replacement cost thereof. In the
event that there shall be a dispute as to the amount which comprises full
replacement cost, the decision of Landlord or the mortgagees of Landlord shall
control.
(b) Comprehensive general liability insurance coverage, including
personal injury, bodily injury (including wrongful death), broad form property
damage, operations hazard, owner's protective coverage, contractual liability
(including Tenant's indemnification obligations under this Lease, including
Paragraph 19 hereof), liquor liability (if Tenant serves alcohol on the
Premises), products and completed operations liability, and owned/non-owned auto
liability, with an initial combined single limit of liability of not less than
Two Million Dollars ($2,000,000.00). The limits of liability of such
comprehensive general liability insurance shall be increased every five (5)
years during the Term of this Lease to an amount reasonably required by
Landlord.
(c) Worker's compensation and employer's liability insurance, in
statutory amounts and limits.
(d) Loss of income, extra expense and business interruption insurance
in such amounts as will reimburse Tenant for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises, Tenant's parking areas or
to the Building as a result of such perils.
(e) Any other form or forms of insurance as Tenant or Landlord or the
mortgagees of Landlord may reasonably require from time to time, in form,
amounts and for insurance risks against which a prudent tenant would protect
itself, but only to the extent such risks and amounts are available in the
insurance market at commercially reasonable costs.
22.2 Requirements. Each policy required to be obtained by Tenant hereunder
shall: (a) be issued by insurers authorized to do business in the state in which
the Building is located and rated not less than financial class X, and not less
than policyholder rating A in the most recent version of Best's Key Rating Guide
(provided that, in any event, the same insurance company shall provide the
coverages described in Subparagraphs 22.1 (a) and 22.1 (d) above); (b) be in
form reasonably satisfactory from time to time to Landlord; (c) name Tenant as
named
25
insured thereunder and shall name Landlord and, at Landlord's request,
Landlord's mortgagees and ground lessors of which Tenant has been informed in
writing, as additional insured thereunder, all as their respective interests may
appear; (d) shall not have a deductible amount exceeding Five Thousand Dollars
($5,000.00); (e) specifically provide that the insurance afforded by such policy
for the benefit of Landlord and Landlord's mortgagees and ground lessors shall
be primary, and any insurance carried by Landlord or Landlord's mortgagees and
ground lessors shall be excess and non-contributing; (f) except for worker's
compensation insurance, contain an endorsement that the insurer waives its right
to subrogation as described in Paragraph 24 below; and (9) contain an
undertaking by the insurer to notify Landlord (and the mortgagees and ground
lessors of Landlord who are named as additional insured) in writing not less
than thirty (30) days prior to any material change, reduction in coverage,
cancellation or other termination thereof. Tenant agrees to deliver to Landlord,
as soon as practicable after the placing of the required insurance, but in no
event later than ten (10) days after the date Tenant takes possession of all or
any part of the Premises, certified copies of each such insurance policy (or
certificates from the insurance company evidencing the existence of such
insurance and Tenant's compliance with the foregoing provisions of this
Paragraph 22). Tenant shall cause replacement policies or certificates to be
delivered to Landlord not less than thirty (30) days prior to the expiration of
any such policy or policies. If any such initial or replacement policies or
certificates are not furnished within the time(s) specified herein, Tenant shall
be deemed to be in material default under this Lease without the benefit of any
additional notice or cure period provided n Subparagraph 25.1 below, and
Landlord shall have the right, but not the obligation, to procure such policies
and certificates at Tenant's expense.
23. Landlord's Insurance. During the Term, Landlord shall be required to
--------------------
insure the Building, the Premises, the Leasehold Improvements initially
installed in the Premises pursuant to Exhibit "F" and certain Tenant Changes to
----------
the extent described in Subparagraph 14.1(c) above (excluding, however, Tenant's
furniture, equipment and other personal property and those Tenant Changes which
Tenant is obligated to insure pursuant to the provisions of Subparagraphs
14.1(c) and 22.1(a) above) against damage by fire and standard extended coverage
perils and general liability insurance, in such reasonable amounts and with such
reasonable deductibles as would be carried by a prudent owner of a similar
building in San Francisco, Ca. At Landlord's option, such insurance may be
carried under any blanket or umbrella policies which Landlord has in force for
other buildings and projects. In addition, at Landlord's option, Landlord may
elect to self-insure all or any part of such required insurance coverage.
Landlord may, but shall not be obligated to, carry any other form or forms of
insurance as Landlord or the mortgagees or ground lessors of Landlord may
reasonably determine is advisable. The cost of insurance obtained by Landlord
pursuant to this Paragraph 23 shall be included in operating expenses.
24. Waivers of Subrogation.
----------------------
24.1 Mutual Waiver of Parties. Landlord and Tenant hereby waive their
rights against each other as well as the officers, partners, directors,
employees, agents and authorized representatives of Landlord and Tenant with
respect to any claims or damages or losses including any claims for bodily
injury to persons and/or damage to property) which are caused by or result from
(a) risks insured against under any insurance policy carried by Landlord or
Tenant (as the case may be) pursuant to the provisions of this Lease and
enforceable at the time of such
26
damage, loss and/or injury, or (b) risks which would have been covered under any
insurance required to be obtained and maintained by Landlord or Tenant (as the
case may be) under Paragraphs and 23 of this Lease (as applicable) had such
insurance been obtained and maintained as required therein. Foregoing waivers
shall in addition to, and not a limitation of, any other waivers or leases
contained in this Lease.
24.2 Waiver of insurer. Each party shall cause each insurance policy
required to be obtained by it pursuant to Paragraphs 22 and 23 (excluding
Tenant's worker's compensation insurance) to provide that the insurer waives all
rights of recovery by way of subrogation against either Landlord or Tenant, as
the case may be, and against the officers, employees, agents, partners and
authorized representatives of Landlord and Tenant in connection with any claims,
losses and damages covered by such policy. If either party fails to maintain
insurance required hereunder, such insurance shall be deemed to be self-insured
with a deemed full waiver of subrogation as set forth in the immediately
preceding sentence.
25. Tenant's Default and Landlord's Remedies.
----------------------------------------
25.1 Tenant's Default. The occurrence of any one or more of the following
events shall constitute a default under this Lease by Tenant:
(a) the vacation or abandonment of the Premises by Tenant.
Abandonment is herein defined to include, but is not limited to, any absence by
Tenant from the Premises for five (5) business days or longer while in default
of any other provision of this Lease;
(b) the failure by Tenant to make any payment of rent or additional
rent or any other payment required to be made by Tenant hereunder, as and when
due;
(c) the failure by Tenant to timely perform any of those covenants
described in Paragraphs 8.2, 15, 22.2 and 27.1 of this Lease, which Paragraphs
expressly provide that such failure shall be deemed a default by Tenant under
this Lease without any additional notice or cure periods;
(d) the failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be served or performed by
Tenant, other than as specified in Subparagraphs 25.1(a), (b) or (c) above,
where such failure shall continue for a period of ten (10) days after written
notice thereof from Landlord to Tenant; provided, however, that any such notice
shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure, Section 1161 and provided further that if
the nature of Tenant's default is such that more than ten (10) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant shall commence such cure within said ten (10) day period and
thereafter diligently prosecute such cure to completion, which completion shall
occur not later than sixty (60) days from the date of such notice from Landlord;
and
(e) (i) the making by Tenant of any general assignment for the benefit
of creditors, (ii) the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or
27
a petition for reorganization or arrangement under any law relating to
bankruptcy (unless, in the case of a petition filed against the Tenant, the same
is dismissed within sixty (60) days), (iii) the appointment of a trustee or
receiver to take possession of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within sixty (60) days, or (iv) the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease where such seizure is not
discharged within sixty (60) days.
25.2 Landlord's Remedies; Termination. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall have the immediate option to
terminate this Lease and all rights of Tenant hereunder. In the event that
Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:
(a) the worth at the time of award of any unpaid rent which had been
earned at the time of such termination; plus
(b) the worth at the time of the award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(c) the worth at the time of award of the amount by which he unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; plus
(d) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which, in the ordinary course of things, would be likely to
result therefrom including, but not limited to: "Unreimbursed Leasehold
Improvement Costs" (as defined below); attorneys' fees; brokers, commissions;
the costs of refurbishment, alterations, renovation and repair of the Premises;
and removal including the repair of any damage caused by such removal) and
storage (or disposal) of Tenant's personal property, equipment, fixtures, Tenant
Changes, Leasehold Improvements and any other items which Tenant is required
under this Lease to remove but does not remove. As used herein, the term
"Unreimbursed Leasehold Improvement Costs" shall mean the product when
multiplying (i) the sum of any Leasehold Improvement allowance plus any other
costs provided, paid or incurred by Landlord in connection with the design and
construction of the initial Leasehold Improvements installed in the Premises
prior to he Commencement Date pursuant to Exhibit "F", by (ii) the fraction, he
----------
numerator of which is the number of months of the Term of this Lease not yet
elapsed as of the date on which this Lease is terminated (excluding any
unexercised renewal options), and the denominator of which is the total number
of months of the Term of this Lease (excluding any unexercised renewal options).
For example, if the total costs paid or incurred by Landlord with respect to the
initial Leasehold Improvements was $100,000.00, the Lease Term was sixty (60)
months, and the Lease was terminated by reason of Tenant's default at the end of
twelve (12) months, the Unreimbursed Leasehold Improvement Costs would be equal
to $80,000.00 (i.e., $80,000.00 equals $100,000.00 x 48/60).
28
As used in Subparagraphs 25.2(a) and 25.2(b) above, the "worth at the time of
award" is computed by allowing interest at the Interest Rate set forth in
Subparagraph 1.18. As used in Subparagraph 25.2(c) above, the "worth at the
time of award" is computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
25.3 Landlord's Remedies; Re-Entry Rights. In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord shall also have the right, with or
without terminating this Lease, to re-enter the Premises and remove all persons
and property from the Premises; such property may be removed, stored and/or
disposed of pursuant to Subparagraph 14.4 of this Lease or any other procedures
permitted by applicable law. No re-entry or taking possession of the Premises
by Landlord pursuant to this Subparagraph 25.31 and no acceptance of surrender
of the Premises or other action on Landlord's part, shall be construed as an
election to terminate this Lease unless a written notice of such intention be
given to Tenant or unless the termination hereof be decreed by a court of
competent jurisdiction.
25.4 Landlord's Remedies; Continuation of Lease. In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord all have the right to continue this
Lease in full force and effect, whether or not Tenant shall have abandoned the
Premises. The foregoing remedy shall also be available to Landlord pursuant to
California Civil Code Section 1951.4 and any successor statute thereof in the
event Tenant has abandoned the Premises. In the event Landlord elects to
continue this Lease in full force and effect pursuant to this Subparagraph 25.4,
then Landlord shall be entitled to enforce all of the rights and remedies under
this Lease, including the right to recover rent as it becomes due. Landlord's
election not to terminate this Lease pursuant to this Subparagraph 25.4 or
pursuant to any other provision of this Lease, at law or in equity, shall not
preclude Landlord from subsequently electing to terminate this Lease or pursuing
any of its other remedies.
25.5 Rights and Remedies Cumulative. All rights, options and remedies of
Landlord contained in this Paragraph 25 and elsewhere in his Lease (including
Paragraph 30 below) shall be construed and held to be cumulative, and no one of
them shall be exclusive of the other, and Landlord shall have the right to
pursue any one or all of such remedies or any other remedy or relief which may
be provided by law or in equity, whether or not stated in this Lease. Nothing
in this Paragraph 25 shall be deemed to limit or otherwise affect Tenant's
indemnification of Landlord pursuant to any provision of this Lease.
26. Landlord's Default. Landlord shall not be in default in the performance of
------------------
any obligation required to be performed by Landlord under this Lease unless
Landlord has failed to perform such obligation within thirty (30) days after the
receipt of written notice from Tenant specifying in detail Landlord's failure to
perform; provided however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, then Landlord
shall not be deemed in default if it commences such performance within such
thirty (30) day period and thereafter diligently pursues the same to completion.
Upon any such uncured default by Landlord, Tenant may exercise any of its rights
provided in law or at equity; provided, however: (a) Tenant shall have no right
to offset or xxxxx rent in the event of any
29
default by Landlord under this Lease, except to the extent offset rights are
specifically provided to Tenant in this Lease; and (b) Tenant's rights and
remedies hereunder shall be limited to the extent (i) Tenant has expressly
waived in this Lease any of such rights or remedies and/or (ii) this Lease
otherwise expressly limits Tenant's rights or remedies, including the limitation
on Landlord's liability contained in Paragraph 35 hereof.
27. Subordination. Without the necessity of any additional document being
-------------
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee of a mortgage or a beneficiary of a deed
of trust now or hereafter encumbering all or any portion of the Building or
Site, or any lessor of any ground or master lease now or hereafter affecting all
or any portion of the Building or Site, this Lease shall be subject and
subordinate at all times to such ground or master leases (and such extensions
and modifications thereof), and to the lien of such mortgages and deeds of trust
(as well as to any advances made thereunder and to all renewals, replacements,
modifications and extensions thereof). As a condition precedent to the
effectiveness of any such subordination of this Lease to any future ground or
master leases or the lien of any future mortgages or deeds of trust, Landlord
shall provide to Tenant a commercially reasonable non-disturbance and attornment
agreement in favor of Tenant executed by such future ground lessor, master
lessor, mortgagee or deed of trust beneficiary, as the case may be, which shall
provide that Tenant's quiet possession of the Premises shall not be disturbed on
account of such subordination to such future lease or lien so long as Tenant is
not in default under any provisions of this Lease. Notwithstanding the
foregoing, Landlord shall have the right to subordinate or cause to be
subordinated any or all ground or master Leases or the lien of any or all
mortgages or deeds of trust to this Lease. In the event that any ground or
master lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason, at the
election of Landlord's successor in interest, Tenant shall attorn to and become
the tenant of such successor. Tenant hereby waives its rights under any current
or future law which gives or purports to give Tenant any right to terminate or
otherwise adversely affect this Lease and the obligations of Tenant hereunder in
the event of any such foreclosure proceeding or sale. Tenant covenants and
agrees to execute and deliver to Landlord within ten (10) days after receipt of
written demand by Landlord and in the form reasonably required by Landlord, any
additional documents evidencing the priority or subordination of this Lease with
respect to any such ground or master lease or the lien of any such mortgage or
deed of trust. Should Tenant fail to sign and return any such documents within
said 10-day period, Tenant shall be in default hereunder without' the benefit
of. any additional notice or cure periods specified in Subparagraph 25.1 above.
28. Estoppel Certificate
--------------------
28.1 Tenant's Obligations. Within ten (10) business days following
Landlord's written request, Tenant shall execute and deliver to Landlord an
estoppel certificate, in a form substantially similar o the form of Exhibit "G"
-----------
attached hereto, certifying: (a) the Commencement Date of this Lease; (b) that
this Lease is unmodified and in full force and effect (or, if modified, that
this Lease is in full force and effect as modified, and stating the date and
nature of such modifications); (c) the date to which the rent and other sums
payable under this Lease have been paid; (d) that there are not, to the best of
Tenant's knowledge, any defaults under this Lease by either Landlord or Tenant,
except as specified in such certificate; and (e)
30
such other matters as are reasonably requested by Landlord. Any such estoppel
certificate delivered pursuant to this Subparagraph 28.1 may be relied upon by
any mortgagee, beneficiary, purchaser or prospective purchaser of any portion of
the Site, as well as their assignees.
28.2 Tenant's Failure to Deliver. Tenant's failure to deliver such
estoppel certificate within such time shall be conclusive upon Tenant that: (a)
this Lease is in full force and effect without modification, except as may be
represented by Landlord; (b) there are no uncured defaults in Landlord's or
Tenant's performance; and (c) not more than one (1) month's rental has been paid
in advance. Tenant shall indemnify, defend (with counsel reasonably approved by
Landlord in writing) and hold Landlord harmless from and against any and all
claims, judgments, suits, causes of action, damages, losses, liabilities and
expenses (including attorneys' fees and court costs) attributable to any failure
by Tenant to timely deliver any such estoppel certificate to Landlord pursuant
to Subparagraph 28.1 above.
29. Building Planning. If Landlord requires the Premises for use by another
------------------
tenant or for other reasons connected with the Building planning program, then
Landlord shall have the right, upon sixty (60) days' prior written notice to
Tenant, to relocate the Premises to other space in the Building of substantially
similar size as the Premises, and with tenant improvements of substantially
similar age, quality and layout as then existing in the Premises. In the event
of any such relocation, Landlord shall pay for the cost of providing
substantially similar tenant improvements (but not any furniture or personal
property), and Landlord shall reimburse Tenant, within thirty (30) days after
Landlord's receipt of invoices and paid receipts, for the reasonable moving,
telephone installation and stationery reprinting costs actually paid for by
Tenant in connection with such relocation. If Landlord so relocates Tenant, the
terms and conditions of this Lease shall remain in full force and effect and
apply to the new space, except that (a) a revised Exhibit "B" shall become part
----------
of this Lease and shall reflect the location of the new space, (b) Paragraph 1
of this Lease shall be amended to include and state all correct data as to the
new space, and (c) such new space shall thereafter be deemed to be the
"Premises". Notwithstanding the foregoing provisions of this Paragraph 29 to the
contrary, if the new space contains more Rentable Square Feet than the original
Premises, Tenant shall not be obligated to pay any more Annual Basic Rent or
Excess Expenses than otherwise applicable to the original Premises. Landlord and
Tenant agree to cooperate fully in order to minimize the inconvenience of Tenant
resulting from such relocation.
30. Performance by Tenant: Interest and Late Charges.
--------------------------------------------------
30.1 Landlord's Right to Perform. Except as specifically provided
otherwise in this Lease, all covenants and agreements by Tenant under this Lease
shall be performed by Tenant at Tenant's sole cost and expense and without any
abatement or offset of rent. If Tenant shall fai1 to pay any sum of money (other
than Annual Basic Rent) or perform any other act on its part to be paid or
performed hereunder and such failure shall continue for three (3) days with
respect to monetary obligations (or ten (10) days with respect to non-monetary
obligations) after Tenant's receipt of written notice thereof from Landlord,
Landlord may, without waiving or releasing Tenant from any Tenant's obligations,
make such payment or, perform such other act behalf of Tenant. All sums so paid
by Landlord and all necessary incidental costs incurred by Landlord in
performing such other acts shall be payable by Tenant to Landlord within five
(5) days after
31
demand therefor as additional rent. The foregoing rights are in addition to any
and all remedies available to Landlord upon Tenant's default as described in
Paragraph 25.
30.2 Interest. If any monthly installment of Annual Basic Rent or Excess
Expenses, or other amount payable by Tenant hereunder is not received by
Landlord by the date when due, it shall bear interest at the Interest Rate set
forth in Subparagraph 1.18 from the date due until paid. All interest, and any
late charges imposed pursuant to Subparagraph 30.3 below shall be considered
additional rent due from Tenant to Landlord under the terms of this Lease.
30.3 Late Charges. Tenant acknowledges that, in addition to interest costs,
the late payments by Tenant to Landlord of any Annual Basic Rent or other sums
due under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and impractical
to fix. Such other costs include, without limitation, processing, administrative
and accounting charges and late charges that may be imposed on Landlord by the
terms of any mortgage, deed of trust or related loan documents encumbering the
Premises, the Building or the Site. Accordingly, if any monthly installment of
Annual Basic Rent or Excess Expenses or any other amount payable by Tenant
hereunder is not received by Landlord by the due date thereof, Tenant shall pay
to Landlord an additional sum of ten percent (10%) of the overdue amount as a
late charge, but in no event more than the maximum late charge allowed by law
The parties agree that such late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of any late payment as
hereinabove referred to by Tenant, and the payment of late charges and interest
are distinct and separate in that the payment of interest is to compensate
Landlord for the use of Landlord's money by Tenant while the payment of late
charges is to compensate Landlord for Landlord's processing, administrative and
other costs incurred by Landlord as a result of Tenant's delinquent payments.
Acceptance of a late charge or interest shall not constitute a waiver of
Tenant's default with respect to the overdue amount or prevent Landlord from
exercising any of the other rights and remedies available to Landlord under this
Lease or at law or in equity now or hereafter in effect.
31. Modification and Cure Rights of Landlord's Mortgagees and Lessors.
-----------------------------------------------------------------
31.1 Modifications. If, in connection with Landlord's obtaining or
entering into any financing or ground lease for any portion of the Building or
Site, the lender or ground lessor shall request modifications to this Lease,
Tenant shall, within ten (10) days after request therefor, execute an amendment
to this Lease including such modifications, provided such modifications are
reasonable, do not increase the obligations of Tenant hereunder, or adversely
affect the leasehold estate created hereby or Tenant's rights hereunder.
31.2 Cure Rights. In the event of any default on the part of Landlord,
Tenant will give notice by registered or certified mail to any beneficiary of a
deed of trust or mortgagee covering the Premises or ground lessor of Landlord
whose address shall have been furnished to Tenant and shall offer such
beneficiary, mortgagee or ground lessor a reasonable opportunity to cure the
default (including with respect to any such beneficiary or mortgagee, time to
obtain possession of the Premises, subject to this Lease and Tenant's rights
hereunder by power of sale or a judicial foreclosure, if such should prove
necessary to effect a cure).
32
32. Transfer of Owner's Interest. The term "Landlord" as used in this Lease, so
----------------------------
far as covenants or obligations on the part of the Landlord are concerned,
shall be limited to mean and include only the owner or owners, at the time in
question, of the fee title to, or a lessee's interest in a ground lease of, the
Site. In the event of any transfer or conveyance of any such title or interest
(other than a transfer for security purposes only), the transferor shall be
automatically relieved of all covenants and obligations on the part of Landlord
contained in this Lease accruing after the date of such transfer or conveyance.
Landlord and Landlord's transferees and assignees shall have the absolute right
to transfer all or any portion of their respective title and interest in the
Site, the Building, the Premises and/or this Lease without the consent of
Tenant, and such transfer or subsequent transfer shall not be deemed a violation
on Landlord's part any of the terms and conditions of this Lease.
33. Quiet Enjoyment. Landlord covenants and agrees with Tenant that, upon
---------------
Tenant performing all of the covenants and provisions on Tenant's part to be
observed and performed under this Lease (including payment of rent hereunder),
Tenant shall and may peaceably and quietly have, hold and enjoy the Premises in
accordance with and subject to the terms and conditions of this Lease.
34. Parking.
-------
34.1 Tenant's Parking privileges. During the Term of this Lease, Landlord
shall lease to Tenant, and Tenant shall lease from Landlord, the number of
parking privileges specified in Subparagraph 1.20 hereof for use by Tenant's
employees in the common parking areas of the Building, as designated by Landlord
from time to time. Landlord shall at all times have the right to establish and
modify the nature and extent of the parking areas for the Building (including
whether such areas shall be surface, underground and/or other structures) as
long as Tenant is provided the number of parking privileges designated in
Subparagraph 1.20. In addition, Landlord may, in its sole discretion, assign any
unreserved and unassigned parking privileges, and/or make all or a portion of
such privileges unreserved/reserved.
34.2 Parking Rules. The use of the parking areas shall be subject to the
Parking Rules and Regulations attached hereto as Exhibit "H" and any other
-----------
reasonable, non-discriminatory rules and regulations adopted by Landlord and/or
Landlord's parking operators from time to time, including any system for
controlled ingress and egress and charging visitors and invitees, with
appropriate provision for validation of such charges. Tenant shall not use more
parking privileges than its allotment and shall not use any parking spaces
specifically assigned by Landlord to other tenants or for such other uses as
visitor parking. Tenant's parking privileges shall be used only for parking by
vehicles no larger than normally sized passenger automobiles or pick-up trucks.
Tenant shall not permit or allow any vehicles that belong to or are controlled
by Tenant or Tenant's employees, suppliers, shippers, customers or invitees to
be loaded, unloaded, or parked in areas other than those designated by Landlord
or such activities. If Tenant permits or allows any of the prohibited activities
described herein, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost thereof to Tenant, which cost
shall be immediately payable by Tenant upon demand by Landlord.
33
35. Limitation on Landlord's Liability. Notwithstanding anything contained in
----------------------------------
this Lease to the contrary, the obligations of Landlord under this Lease
(including any actual or alleged breach or default by Landlord) do not
constitute personal obligations of the individual partners, directors, officers
or shareholders of Landlord or Landlord's partners, and Tenant shall not seek
recourse against the individual partners, directors, officers or shareholders of
Landlord or Landlord's partners, or any of their personal assets for
satisfaction of any liability with respect to this Lease. In addition, in
consideration of the benefits accruing hereunder to Tenant and notwithstanding
anything contained in this Lease to the contrary, Tenant hereby covenants and
agrees for itself and all of its successors and assigns that the liability of
Landlord for its obligations under this Lease (including any liability as a
result of any actual or alleged failure, breach or default hereunder by
Landlord), shall be limited solely to, and Tenant's and its successors, and
assigns' sole and exclusive remedy shall be against, Landlord's interest in the
Site and proceeds therefrom, and no other assets of Landlord.
36. Hazardous Materials.
-------------------
36.1 Tenant's Covenants. In addition to its other obligations under this
Lease (including Paragraph 8 hereof), Tenant covenants to comply with all laws
relating to Hazardous Materials with respect to the Premises and the Building.
Except for general office supplies typically used in an office area in the
ordinary course of business (such as copier toner, liquid paper, glue, ink, and
cleaning solvents), for use in the manner for which they were designed and only
in accordance with all Hazardous Materials laws and the highest standards
prevailing in the industry for such use, and then only in such amounts as may be
normal for the office business operations conducted by Tenant on the Premises,
neither Tenant nor any Tenant Parties (as defined in Subparagraph 19.1) shall
use, handle, store or dispose of any Hazardous Materials in, on, under or about
the Premises, the Building or the Site. Tenant shall promptly take all actions,
at its sole cost and expense, as are necessary to return the Premises, Building
and Site to the condition existing prior to the introduction of any such
Hazardous Materials by Tenant or any Tenant Parties, provided Landlord's
approval of such actions shall first be obtained. Furthermore, Tenant shall
immediately notify Landlord of any inquiry, test, investigation or enforcement
proceeding by or against Tenant or the Premises concerning the presence of any
Hazardous Material.
36.2 Tenant's Indemnity. Tenant shall be solely responsible for and shall
indemnify, defend (with counsel reasonably approved by Landlord) and hold
Landlord harmless from and against any and all claims, judgments, suits, causes
of action, damages, penalties, fines, liabilities, losses and expenses
(including, without limitation, investigation and clean-up costs, attorneys'
fees, consultant fees and court costs) which arise during or after the Term of
this Lease as a result of the breach of any of the obligations and covenants set
forth in Subparagraph 36.1 above, and/or any contamination of the Premises,
Building or Site directly or indirectly arising from the activities of Tenant or
any Tenant Parties.
36.3 Definition of Hazardous Materials. For purposes of this Lease, the
term "Hazardous Materials" shall mean, collectively, asbestos, any petroleum
fuel, and any hazardous or toxic substance, material or waste which is or
becomes regulated by any local governmental authority, the State of California
or the United States government, including, but not limited to,
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any material or substance defined as a "hazardous waste," "extremely hazardous
waste," "restricted hazardous waste," "hazardous substance," "hazardous
material" or "toxic pollutant" under the California Health and Safety) Code
and/or under the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601, et seq.
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36.4 Survival. The foregoing covenants and indemnities of Tenant all
survive the expiration or earlier termination of the Lease.
37. Miscellaneous.
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37.1 Governing Law. This Lease shall be governed by, and construed
pursuant to, the laws of the state in which the Building is located.
37.2 Successors and Assigns. Subject to the provisions of Paragraph 32
above, and except as otherwise provided in this Lease, all of the covenants,
conditions and provisions of this Lease shall be binding upon, and shall inure
to the benefit of, the parties hereto d their respective heirs, personal
representatives and permitted successors and assigns; provided, however, no
rights shall inure to the benefit of any Transferee of Tenant unless the
Transfer to such Transferee is made in compliance with the provisions of
Paragraph 16, and no options other rights which are expressly made personal to
the original Tenant hereunder or in any rider attached hereto shall be
assignable to or exercisable by anyone other than the original Tenant under this
Lease.
37.3 No Merger. The voluntary or other surrender of this Lease by Tenant
or a mutual termination thereof shall not work as a merger and shall, at the
option of Landlord, either (a) terminate all or any existing subleases, or (b)
operate as an assignment to Landlord of Tenant's interest under any or all such
subleases.
37.4 Professional Fees. If either Landlord or Tenant should bring suit
against the other with respect to this Lease, including for unlawful detainer or
any other relief against the other hereunder, then all costs and expenses
incurred by the prevailing party therein (including, without limitation, its
actual appraisers', accountants', attorneys' and other professional fees and
court costs), shall be paid the other party.
37.5 Waiver. The waiver by either party of any breach by the other party
of any term, covenant or condition herein contained shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant and
condition herein contained, nor shall any custom or practice which may become
established between the parties in the administration of the terms hereof be
deemed a waiver of, or in any way affect, the right of any party to insist upon
the performance the other in strict accordance with said terms. No waiver of any
fault of either party hereunder shall be implied from any acceptance by Landlord
or delivery by Tenant (as the case may be) of any rent or other payments due
hereunder or any omission by the non-defaulting party to take any action on
account of such default if such default persists or is repeated, and no express
waiver shall affect defaults, other than as specified in said waiver. The
subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding
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breach by Tenant of any term, covenant or condition of this Lease other than the
failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent.
37.6 Joint and Several Liability. If more than one person or entity
executes this Lease as Tenant: (a) each of them is and shall be jointly and
severally liable for the covenants, conditions, provisions and agreements of
this Lease to be kept, observed and performed by Tenant; and (b) the act or
signature of, or notice from or to, any one or more of them with respect to this
Lease shall be binding upon each and all of the persons and entities executing
this Lease as Tenant with the same force and effect as if each and all of them
had so acted or signed, or given or received such notice.
37.7 Terms and Readings. The words "Landlord" and "Tenant" as used herein
shall include the plural as well as the singular. Words used in any gender
include other genders. The paragraph headings of this Lease are not a part of
this Lease and shall have no effect upon the construction or interpretation of
any part hereof.
37.8 Time. Time is of the essence with respect to performance of every
provision of this Lease in which time or performance is a factor. All references
in this Lease to "days" shall mean calendar days unless specifically modified
herein to be "business" days.
37.9 Prior Agreements; Amendments. This Lease (and the Exhibits and
Riders attached hereto) contain all of the covenants, provisions, agreements,
conditions and understandings between Landlord and Tenant concerning the
Premises and any other matter covered or mentioned in this Lease, and no prior
agreement or understanding, oral or written, express or implied, pertaining to
the Premises or any such other matter shall be effective for any purpose. No
provision of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.
The parties acknowledge that all prior agreements, representations and
negotiations are deemed superseded by the execution of this Lease to the extent
they are not expressly incorporated herein.
37.10 Severability. The invalidity or unenforceability of any provision of
this Lease (except for Tenant's obligation to pay Annual Basic Rent and Excess
Expenses under Paragraphs 5 and 6 hereof) shall in no way affect, impair or
invalidate any other provision hereof, and such other provisions shall remain
valid and in full force and effect to the fullest extent permitted by law.
37.11 Recording. Neither Landlord nor Tenant shall record this Lease. In
addition, neither party shall record a short form memorandum of this Lease
without the prior written consent (and signature on the memorandum) of the
other, and provided that prior to recordation Tenant executes and delivers to
Landlord, in recordable form, a properly acknowledged quitclaim deed or other
instrument distinguishing all of the Tenant's rights and interest in and to the
Site, Building and Premises, and designating Landlord as the transferee, which
deed or other instrument shall be held by Landlord and may be recorded by
Landlord once the Lease terminates or expires (but not prior thereto). If such
short form memorandum is recorded in
36
accordance with the foregoing, the party requesting the recording shall pay for
all costs of or related to such recording, including, but not limited to,
recording charges and documentary transfer taxes.
37.12 Exhibits and Riders. All Exhibits and Riders attached to this Lease
are hereby incorporated in this Lease as though set forth at length herein.
37.13 Signs and Auctions. Except for Tenant's identity sign on the entry
doors of the Premises and Tenant's elevator lobby identity sign on any full
floor of the Building leased by Tenant (which signs shall be consistent with the
Building's signage program and otherwise subject to Landlord's prior written
approval), Tenant shall have no right to place any sign upon the Premises, the
Building or Site or which can be seen from outside the Premises. In addition,
Tenant shall have no right to conduct any auction in, on or about the Premises,
the Building or Site.
37.14 Accord and Satisfaction. No payment by Tenant or receipt by
Landlord of a lesser amount than the rent payment herein stipulated shall be
deemed to be other than on account of the rent, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as rent
be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy provided in this Lease. Tenant agrees that each
of the foregoing covenants and agreements shall be applicable to any covenant or
agreement either expressly contained in this Lease or imposed by statute or at
common law.
37.15 Financial Statements. Upon ten (10) days prior written request from
Landlord (which Landlord may make at any time during the Term but no more often
that two (2) times in any calendar year), Tenant shall deliver to Landlord (a) a
current financial statement of Tenant and any guarantor of this Lease, and (b)
financial statements of Tenant and such guarantor for the two (2) years prior to
the current financial statement year. Such statements shall be prepared in
accordance with generally acceptable accounting principles and certified as true
in all material respects by Tenant (if Tenant is an individual) or by an
authorized officer or general partner of Tenant if Tenant is a corporation or
partnership, respectively).
37.16 Tenant's Authority. If Tenant executes this Lease as a partnership
or corporation, then Tenant and the persons and/or entities executing this Lease
on behalf of Tenant represent and warrant that: (a) Tenant is a duly authorized
and existing partnership or corporation, as the case may be, and is qualified to
do business in the state in which the Building is located; (b) such persons
and/or entities executing this Lease are duly authorized to execute and deliver
this Lease on Tenant's behalf in accordance with the Tenant's partnership)
agreement (if Tenant is a partnership), or a duly adopted resolution of Tenant's
board of directors and the Tenant's by-laws (if Tenant is a corporation); and
(c) this Lease is binding upon, Tenant in accordance with its terms.
37.17 Guaranty. If this Lease is subject to and conditional upon Tenant's
delivery to Landlord, concurrently with Tenant's execution and delivery of this
Lease of a Guaranty in the form of and
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upon the terms contained in Exhibit "H" attached hereto and incorporated-herein
----------
by this reference, which shall be fully executed by the Guarantor (s) specified
in Subparagraph 1.21.
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.
"TENANT" Sunpark Properties, Inc.
By: ____________________________________
Chi-Xxxx Xxxx, Its General Manager
Date: ____________________________________
"LANDLORD" Imagine Media, Inc.
By: ____________________________________
Its: ____________________________________
Date: ____________________________________
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