0000 XXXXXXXX
OFFICE LEASE
By and Between
SHORENSTEIN REALTY INVESTORS THREE, L.P.,
a California limited partnership,
as Landlord
and
APL LIMITED, a Delaware corporation,
as Tenant
Dated: Effective as of December 31, 1996
TABLE OF CONTENTS
ARTICLE 1 Premises 2
Section 1.1. Premises 2
Section 1.2. Rentable Area 2
Section 1.3. Common Areas 3
Section 1.4.Basement and
Parking Level Space 4
Section 1.5.Communications
Facilities 5
Section 0.0.Xxxxxx Club Memberships 7
Section 1.7. Elevators 7
ARTICLE 2 Initial Construction of the Building and
Premises 7
Section 2.1.Base Building Work and
Tenant Improvements 7
Section 2.2.Compliance with Laws 7
Section 2.3. Repair 8
ARTICLE 3 Deleted. 8
ARTICLE 4 Term; Option to Extend; Expansion
Options 8
Section 4.1. Term 8
Section 4.2. Option to Extend 8
Section 4.3. Expansion Options 8
Section 4.4.Fair Market Rental 10
Section 4.5.Right of First Offer 12
ARTICLE 5 Rent 15
Section 5.1. Annual Base Rent 15
Section 5.2. Payment 16
Section 5.3.Building Operating
Costs 16
Section 5.4. Taxes 23
Section 5.5. Interest 25
ARTICLE 6 Use of Premises 25
ARTICLE 7 Signs and Building Directory 26
Section 7.1. 26
Section 7.2. 26
Section 7.3. 26
Section 7.4. 26
ARTICLE 8 Insurance 27
Section 8.1. APL's Insurance 27
Section 8.2.Landlord's Insurance 27
Section 8.3. Miscellaneous 28
Section 8.4. Certificates 28
Section 8.5.Waiver of Subrogation 28
Section 8.6.Blanket Policies and
Self-Insurance 28
ARTICLE 9 Indemnification 29
Section 9.1. APL 29
Section 9.2. Landlord 29
Section 9.3. Mechanics' Liens 29
ARTICLE 10 Utilities and Services 29
Section 10.1.Basic Utilities and
Services 29
Section 10.2. Electricity 30
Section 10.3.Interruption 30
Section 10.4.Janitorial Services 30
Section 10.5. Security 31
ARTICLE 11 Alterations and Build Out of Expansion
Spaces 31
Section 11.1.Alterations and Expansion
Space 31
Section 11.2.Landlord Repair or
Alterations 31
Section 11.3.Removal of Alterations 32
ARTICLE 12 Repairs and Maintenance 32
Section 12.1. Landlord Repair 32
Section 12.2. Tenant Repair 33
ARTICLE 13 Operation 33
Section 13.1. Operation 33
ARTICLE 14 Damage and Destruction 33
Section 14.1.Reconstruction by
Landlord 33
Section 14.2.Substantial
Destruction 34
Section 14.3.Destruction During Last
Part of Term 34
Section 14.4.Abatement or Reduction of
Rent 34
Section 14.5.Inapplicability of Civil
Code Sections 34
Section 14.6.APL's Right to Terminate
Lease 34
Section 00.0.Xxxxxxxxx Proceeds 35
ARTICLE 15 Condemnation 35
Section 15.1. Definitions 35
Section 15.2. Effect on Lease 36
Section 15.3. Award 36
Section 15.4. Waiver 36
Section 15.5.Restoration of the
Premises 37
Section 15.6.Rescission of APL's
Election to Terminate Lease 37
Section 15.7.Reduction of Rent 37
Section 15.8.Temporary Occupancy 37
Section 15.9.Separate
Representation 38
Section 15.10.Temporary Taking 38
ARTICLE 16 Entry by Landlord 38
ARTICLE 17 Assignment and Subletting 38
Section 17.1. 38
Section 17.2. 38
Section 17.3. 39
ARTICLE 18 Partial Subordination 40
ARTICLE 19 Default 41
Section 00.0.Xxxxxx of Default 41
Section 19.2.Landlord's Remedies 41
Section 19.3. Landlord Default 42
Section 19.4. Waiver 43
ARTICLE 20 Notices 43
ARTICLE 21 Landlord Representations and
Warranties 44
Section 21.1. 44
Section 21.2. 44
ARTICLE 22 Commissions 44
ARTICLE 23 Estoppel Certificates 45
ARTICLE 24 Surrender 45
ARTICLE 25 Rules and Regulations 46
ARTICLE 26 Parking 46
Section 26.1. Parking 46
ARTICLE 27 Leasehold Financing 47
Section 27.1.Leasehold Mortgage 47
Section 27.2. Default 47
ARTICLE 28 Tenth Floor Termination Option 49
ARTICLE 29 Generator Equipment 49
Section 29.1.APL's Generator
Equipment 49
Section 29.2.Use of Building
Generator 52
Section 29.3. Evacuation 52
ARTICLE 30 Termination of Original Lease
and Storage Space Lease 52
ARTICLE 31 Miscellaneous 53
Section 31.1.Words 53
Section 31.2.Successors 53
Section 31.3.Time 53
Section 00.0.Xxxx 53
Section 31.5.Unenforceability 53
Section 31.6.Attorneys' Fees 53
Section 31.7.Governing Law 53
Section 00.0.Xxxxx Expression 53
Section 31.9.Headings 54
Section 31.10 Memorandum of Lease 54
Section 31.11.Force Majeure 54
Section 31.12.Reasonableness 54
Section 31.13.Light and Air
Easement 54
Section 31.14.Holding Over 54
Section 31.15.Nondiscrimination 55
Section 31.16.Relationship of
Parties 55
Section 00.00.Xxxxx Authority 55
Section 31.18.Merger 56
Section 31.19.Quiet Enjoyment 56
Section 00.00.Xxxx Efforts Defined 56
Section 31.21.Waiver 56
Section 31.22.Condition Precedent 56
Exhibits
Reference
Exhibits
Exhibit A Real Property Recitals
Exhibit B Premises Section
1.1
Exhibit C Rentable Area Section
1.2
Exhibit D Communications Facilities Section
1.5
Exhibit E Elevator Performance Requirements Sec
tion 10.1
Exhibit F Janitorial Services Section 10.4
Exhibit G Security Services Section 10.5
Exhibit H Rules and Regulations Article 25
Exhibit I Equipment Site Section 29.1
Exhibit J Memorandum of Lease Section 31.10
Exhibit K Subordination, Non-disturbance
& Attornment Agreement Section 31.10
APL OFFICE LEASE
0000 XXXXXXXX
This OFFICE LEASE ("Lease"), effective as of
DecemberE31, 1996, is made by and between SHORENSTEIN
REALTY INVESTORS THREE, L.P., a limited partnership
("Landlord"), and APL LIMITED, a Delaware corporation
(formerly known as "American President Companies,
Ltd.") ("APL").
RECITALS
A. Bramalea Pacific, Inc., a California
corporation ("Bramalea"), and APL entered into a lease,
dated April 18, 1988 (the "Original Lease"), pursuant
to which Bramalea undertook the obligation to acquire
certain unimproved property in Oakland, California, and
to construct an office building on such property, and
further pursuant to which Bramalea leased to APL and
APL leased from Bramalea certain premises in such
building. Bramalea's obligations under the Original
Lease were guaranteed by Bramalea, Inc., a Delaware
corporation, pursuant to a Lease Guaranty dated April
18, 1988, and Bramalea, Inc.'s obligations under the
guaranty were guaranteed by Bramalea Limited, an
Ontario corporation, pursuant to an additional Lease
Guaranty, also dated April 18, 1988. 1111 Associates,
a California limited partnership, succeeded to
Bramalea's interest in the Original Lease.
B. 1111 Associates ultimately constructed a
24-story office building, located at 0000 Xxxxxxxx,
Xxxxxxx, Xxxxxxxxxx (the "Building"), on certain
previously unimproved real property containing
approximately sixty-seven thousand (67,000) square feet
of space (as described on Exhibit "A" attached hereto
and incorporated herein by reference) (the "APL
Parcel"), which is part of that larger parcel of real
property bounded by Xxxxxxxx, Xxxx Xxxxxx, Xxxxxxxx
Xxxxxx and Twelfth Street (also described on the
attached Exhibit "A") (the "APL Block").
C. The Original Lease was modified by a
First Amendment to Office Lease, dated April 26, 1990,
a Second Amendment to Office Lease, dated SeptemberE13,
1990, a Third Amendment to Office Lease, dated October
29, 1990, a Fourth Amendment to Office Lease, dated
January 1, 1991, a Fifth Amendment to Office Lease,
dated January 1, 1991, a Sixth Amendment to Office
Lease, dated June 21, 1991, and a Seventh Amendment to
Office Lease, dated May 12, 1993, which amendments,
among other matters, modified certain construction
timing matters, confirmed rent commencement dates and
move-in dates, modified expansion options, and
redefined the premises. Further references in this
Lease to the Original Lease shall refer to the Original
Lease, as so amended. Certain matters regarding the
termination of the Original Lease are set forth in
Article 30 of this Lease.
D. Toronto Dominion Bank foreclosed on all
of 1111 Associates's interest in the APL Parcel, the
APL Block, and the Building, and such interest was
acquired by 0000 Xxxxxxxx, Inc., a Delaware
corporation. Landlord anticipates that, on or before
December 31, 1996, Landlord will acquire all of the
interest of 1111 Broadway, Inc., in the APL Parcel, the
APL Block, and the Building, together with a portion of
that certain first class office and retail complex in
Oakland, California, presently located within an area
bounded by Broadway, Fourteenth Street, Xxxxxx Xxxxxx
Xxxx, Xx. Xxx, Xxxxxxxx Xxxxxx, Xxxx Xxxxxx and Twelfth
Street (the "Balance of City Center"). Landlord and
APL acknowledge that Landlord does not presently expect
to acquire the entire Balance of City Center.
E. Landlord and APL presently desire to
enter into a lease of the premises presently occupied
by APL pursuant to the Original Lease, on the terms and
conditions set forth herein, effective as of December
31, 1996.
NOW, THEREFORE, Landlord and APL agree as follows:
ARTICLE 1
Premises
Section 1.1. Premises .1. Premises. Landlord
leases to APL, and APL leases from Landlord, for the
term and subject to the covenants, agreements and
conditions contained in this Lease, those certain
premises located in the Building, consisting of a
portion of several of the basement parking levels of
the Building, a portion of the first floor and all of
the rentable area and public common areas on floors 2 -
10, inclusive, as shown by outline more particularly on
Exhibit "B" attached hereto and incorporated herein by
reference, and a portion of the roof of the Building
(collectively, the "Premises"). Landlord and APL
acknowledge that APL is now, and will be at the
commencement of the Term hereof, in possession of the
entire Premises, other than that portion of the
Premises located on the roof of the Building, pursuant
to the Original Lease. The area to be leased by APL on
the roof shall be composed of an area of approximately
twenty (20) feet by twenty (20) feet on the roof
together with an area of approximately eight (8) feet
by ten (10) feet within the penthouse mechanical room
located on the roof. The exact location of the roof
portion of the Premises shall be determined at such
time as APL elects to use the roof. The space referred
to in this Section 1.1 shall sometimes be referred to
as the "Initial Premises". The Premises shall mean the
Initial Premises and any additional area added to the
area leased during the term ("Term" as defined in
Section 4.1).
Section 1.2. Rentable Area.
(a) The total number of square feet of rentable
space (the "Rentable Area") contained within the
Premises and the Building is deemed for the purposes of
this Lease to be as listed in Exhibit "C" attached
hereto and incorporated herein by reference. The
computation of Annual Base Rent (as defined in
SectionE5.1) for all extension terms ("Extension Terms"
as defined in SectionE4.2) shall be made based upon the
Rentable Area.
(b) Landlord shall not have the right to make any
material change to the Premises, the ground floor lobby
of the Building or the outdoor plazas of the APL Parcel
without APL's prior written consent, which consent
shall not be unreasonably withheld or delayed. Without
APL's consent, Landlord shall have the right to
undertake customary and usual maintenance and repair of
the Premises, Common Areas (as hereinafter defined) and
Building; to undertake customary and usual construction
of tenant improvements for other tenants of the
Building; and to install, maintain, use, repair and
replace pipes, ducts, conduits, wires and other
components of the Building systems leading through the
Premises and servicing other parts of the Building.
All changes to the ground floor lobby of the Building
and outdoor plazas of the APL Parcel shall be subject
to APL's prior written consent, which consent shall not
be unreasonably withheld or delayed.
(c) APL shall not have or acquire any property
right or interest in or to any name(s) or distinctive
designations which may become identified or associated
with City Center, any other building or area in City
Center, or any portion thereof. If APL refers to City
Center in its advertising such name shall not be used
after the termination of this Lease or at locations
other than the Premises. Landlord and/or the other
owner(s) of the Balance of City Center shall have the
right to change the name of City Center and/or any
portion of City Center or City Square from time to time
at Landlord's and/or such party's or parties' election.
Section 1.3. Common Areas. APL and its agents,
employees, customers, invitees and licensees shall have
the non-exclusive right to use the Common Areas. The
term "Common Areas" shall mean all areas and facilities
outside of the boundaries of the Premises and within
the exterior boundaries of the APL Parcel that are not
leased to other tenants and that are designated by
Landlord, from time to time, for the general use and
convenience of tenants in the Building. Common Areas
include, without limitation, pedestrian walkways,
patios, landscape areas, sidewalks, service corridors,
restrooms, stairways, escalators, decorative walls,
plazas, fountains, malls, throughways, loading areas
and ramps and parking areas (except as parking areas
are separately treated elsewhere herein). Landlord
shall have the right to:
(a) Establish and uniformly enforce reasonable
nondiscriminatory rules and regulations applicable to
all tenants concerning the maintenance, management, use
and operation of the Common Areas;
(b) Close, if necessary, parts of the Common
Areas, to whatever extent may be legally necessary to
prevent dedication of any of the Common Areas or the
accrual of any rights of any person or of the public to
the Common Areas;
(c) Close temporarily any parts of the Common
Areas for maintenance, repair and renovation purposes,
provided all such maintenance, repair and renovation
shall be done as promptly as reasonably practicable;
(d) Reduce, increase, enclose or otherwise change
at any time and from time to time the size, number,
location, lay-out and nature of the Common Areas and
facilities (subject to the provisions of the first
sentence of SubsectionE1.2(b) above) and other
tenancies and premises in the Building or APL Parcel
and to create additional rentable areas through use or
enclosure of Common Areas (subject to the provisions of
the first sentence of Subsection 1.2(b) above); and
(e) Select a person, firm or corporation to
maintain and operate the Common Areas if at any time
Landlord determines that the best interests of the
tenants of the Building shall be served by having the
Common Areas maintained and operated by such person,
firm or corporation.
Notwithstanding the foregoing, in no event shall
the exercise by Landlord of any of the rights described
above in any manner materially reduce any of APL's
rights hereunder or in any manner materially obstruct
or materially interfere with APL's access to and from
the Premises or APL's use and quiet enjoyment of the
Premises.
Landlord and its affiliates shall exercise such
voting and other control (if any) as they may have over
the entities which control the common areas located in
that portion of the Balance of the City Center bounded
on the west by Clay Street so as to continue to make
such common areas and the amenities and facilities
located therein available for the use and enjoyment of
APL, its officers, employees, agents, customers and
invitees on a non-exclusive basis with other tenants,
officers, employees, invitees and customers of the
other buildings located in the Balance of the City
Center. "Affiliates" shall mean (i) any parent of
Landlord, (ii) any entity under common control with
Landlord or (iii)Eany joint venture, partnership,
corporation (foreign or domestic) or other entity of
which Landlord, or a subsidiary of Landlord or any
corporation controlled by or under common control with
Landlord is the general partner or owns at least fifty
percent (50%) of the net assets or fifty percent (50%)
of the voting stock or other equity interest.
During the Term if APL determines, in its
reasonable judgment, that sharing of management,
operation, repair and maintenance expenses for all
common areas contained within the APL Block would be
fair and equitable then APL, if requested by Landlord
and upon approval of the terms of such amendment, shall
enter into an amendment of this Lease incorporating the
common areas of the APL Block into the definition of
Common Areas and otherwise incorporating any other
agreed upon terms regarding allocation of common area
costs.
Section 1.4. Basement and Parking Level Space.
(a)Mailroom and Storage Space.
That portion of the Premises located in the
basement Level B of the Building shown outlined and
labeled "Mailroom" on Exhibit "B" (the "Mailroom"),
that portion of the Premises located in the basement
Level B of the building shown outlined and labeled
"Basement Storage" on Exhibit "B" (the "Basement
Storage Area"), and that portion of the Premises
consisting of the 5 increments of space on basement
Levels A, B and C of the Building shown outlined and
labeled "Storage Area" on Exhibit "B" (the "Parking
Level Storage Area") shall be used by APL as a mailroom
and for receiving, distribution and storage. The
Basement Storage Area and the Parking Level Storage
Area are sometimes collectively referred to herein as
the "Storage Area", and the Mailroom and Storage Area
are sometimes collectively referred to herein as the
"Basement Space". Commencing on JanuaryE1, 1998, APL
shall pay Increased Building Operating Costs and
Increased Real Property Taxes allocable to the Mailroom
and only Increased Real Property Taxes applicable to
the Storage Area. Maintenance of the exterior of the
Basement Space, the portion of the Building in which
the Basement Space is located and of access thereto
shall be the responsibility of Landlord, which
responsibility Landlord shall perform in the same
manner as is provided with respect to other areas of
the Building for which Landlord has responsibility.
(b) Relocation of Parking Level Storage Area.
(i) Conditions. Landlord shall have the
right from time to time during the term of this Lease
to relocate one or more increments of the Parking Level
Storage Area within the Building on the following terms
and conditions:
(A) The square footage of the new
space shall be equal in size to the applicable
increment(s) of existing Parking Level Storage Area
being relocated, subject to a variation of ten percent
(10%). Provided, however, the amount of rent
attributable to the Parking Level Storage Area shall
not be increased if the square footage is increased,
but shall be proportionately decreased if the square
footage is decreased.
(B) The improvements provided by
Landlord in the new space shall be comparable to the
improvements, if any, provided by Landlord in the
applicable increment(s) of existing Parking Level
Storage Area being relocated; provided that Landlord
may relocate improvements from the applicable
increment(s) of existing Parking Level Storage Area
being relocated to the new space.
(C) Landlord shall pay the moving
expenses reasonably incurred by APL in connection with
such relocation of such increment(s) of Parking Level
Storage Area.
(D) APL's access to the new space
shall be equivalent to its access to the applicable
increment(s) of existing Parking Level Storage Area
being relocated.
(ii) Notice. Landlord shall deliver to
APL written notice of Landlord's election to relocate
any increment of Parking Level Storage Area at least
thirty (30) days prior to the date the relocation is to
be effective.
Section 1.5. Communications Facilities. APL
shall have the right, at its expense, to install,
maintain, replace and operate communications equipment
and facilities (collectively, the "Installation") on
the roof of the Building in such location as APL shall
reasonably designate, subject to Landlord's reasonable
approval. The location of the Installation shall be
selected so as to minimize the aesthetic impact on the
Building and, if reasonably requested by Landlord, APL
shall construct an enclosure around the Installation,
provided such an enclosure will not adversely affect
operation of the Installation or materially increase
the cost of the Installation. APL's requirements for
the construction of the Installation, including its
energy requirements and general specifications, are
more particularly described on Exhibit "D" attached
hereto and incorporated herein by reference. The
Installation shall not require the stationing on the
roof of the Building of any personnel except for
construction, maintenance, adjustment and replacement
of the Installation. The Installation shall not
adversely affect the Building structure or the
operation of the Building mechanical systems. No other
person shall have the right to install any
communications equipment and facilities on the roof of
the Building if such installation will materially
interfere with APL's use and quiet enjoyment of the
Installation. The Installation may include a dish-type
microwave transmitter and/or receiver of a diameter not
to exceed twenty (20) feet. In fastening the
Installation to the Building, by tripod tower, direct
attachment or other means, APL shall promptly repair
any damage to the Building, or any portion thereof, and
shall provide a secure and stable attachment capable of
withstanding reasonably anticipated wind loads. APL
shall have the right of access to the Installation at
all times including the use of communications cable
between a location or locations in the Premises
designated by APL and the Installation, the supplying
of alternating current power from the Premises to the
Installation and the provision of earthen grounding of
the Installation. The Installation shall remain the
property of APL and may be removed by APL at any time.
In exercising its rights hereunder, APL shall use
reasonable care so as to cause as little interference
with Landlord's operation of the Building as is
reasonably practicable. The Installation shall be
constructed, maintained, repaired and operated in
compliance with all applicable laws, statutes,
ordinances and regulations (collectively, "Applicable
Laws"). If Applicable Laws do not permit construction
or operation of the Installation APL shall have the
right to install, maintain, repair and operate other
equipment and facilities outside the Premises and in,
on or about the Building in order to establish and
enjoy the beneficial use of a comparable communications
facility. In selecting an alternative location for the
Installation APL and Landlord shall attempt to find an
area within the Building which does not constitute
usable area. If usable area of the Building is desired
by APL, APL shall pay Fair Market Rental for such
space. The inability of APL to construct, maintain,
repair or operate the Installation due to Applicable
Laws shall not constitute a default by Landlord or
result in an abatement of rent. APL shall indemnify,
defend and hold Landlord harmless from and against any
and all claims, expenses and liability arising from
damage to property or injury to persons caused by APL's
construction, repair, maintenance or operation of the
Installation. APL shall give Landlord not less than
sixty (60) days notice of APL's desire to construct the
Installation. Following receipt of such notice APL and
Landlord shall determine the exact location of the roof
space to be leased by APL. If the microwave dish
erected by APL is twelve (12) feet or less in diameter
APL shall pay monthly rent of Two Hundred Fifty Dollars
($250.00). If the microwave dish erected by APL is
greater than twelve (12) feet in diameter but less than
or equal to twenty (20) feet in diameter APL shall pay
monthly rent of Five Hundred Dollars ($500.00). In
addition, APL shall pay monthly rent of One Dollar
($1.00) per square foot of usable space actually used
by APL in the mechanical system penthouse located on
the roof of the Building. The above described monthly
rent shall only be applicable during those portions of
the Initial Term (prorated for partial months) when the
Installation is on the roof. APL shall not pay any
Building Operating Costs or Real Property Taxes in
connection with the leasing of the roof space.
Section 1.6. Health Club Membership. If and
when a health or sports club facility is opened by the
Landlord on the APL Block or Balance of the City
Center, APL, its officers and employees shall be
offered any and all corporate and individual membership
plans at the lowest fees then being charged to any
other corporation or individual for comparable
memberships in the health or sports club facility.
Landlord's obligations under this Section 1.6 shall
only be effective as to those portions of the APL Block
and/or Balance of the City Center owned or controlled
by Landlord or its affiliates and only so long as
Landlord and/or its affiliates own or control such real
property.
Section 1.7. Elevators. With regard to the
lowrise elevator bank (floorsE1-14) APL shall have the
right to establish or to require Landlord to provide
(at APL's cost) such security in addition to that
already maintained by Landlord for such elevator bank
as APL, in its sole discretion, desires including,
without limitation, a reception desk and/or security
guards on the ground floor level of the Building and in
the lobby of each floor occupied by APL. Any changes
to APL's existing reception and security desk on the
ground floor shall be subject to Landlord's reasonable
approval as to design and location. Signs reflecting
those elevators controlled by APL may be placed by APL
in the ground floor lobby area provided the cost of
construction, maintenance and repair of such signs is
borne by APL and such signs are constructed and
maintained in a first class condition.
ARTICLE 2
Initial Construction of the Building and Premises
Section 2.1. Base Building Work and Tenant
Improvements. Article 2 of the Original Lease set
forth certain obligations of the parties regarding the
initial construction of the Building and the initial
improvement of Tenant's premises. The terms "Building
Shell Work" and "Tenant Improvements", as used in this
Lease, shall have the meanings set forth in the
Original Lease, and the term "Base Building Elements"
shall mean the elements in the "Base Building" column
of Exhibit "J" to the Original Lease.
Section 2.2. Compliance with Laws. Landlord
shall, at Landlord's sole cost and expense and without
reimbursement from APL pursuant to any provision of
this Lease or otherwise (except as specifically
provided in this Section 2.2), maintain and keep the
Building, Common Areas, Premises and Tenant
Improvements (except for subsequent improvements to the
Premises made or to be made by APL) in compliance with
all governmental codes, laws, ordinances, rules,
regulations and requirements applicable to the
Building, Common Areas, Premises, Tenant Improvements
or to APL's use of the Premises for general office,
marketing, sales and service, data processing,
training, administrative, storage and related uses.
Notwithstanding the foregoing, if any improvements,
alterations, additions or modifications (collectively
"Modifications") to the Premises are or were initiated
by APL after Substantial Completion (as defined in
Section 2.6 of the Original Lease) of the Tenant
Improvements and if the initiation of such
Modifications causes certain codes, laws, ordinances,
rules, regulations or requirements to be applied to the
Premises, then the cost of compliance within the
Premises (including any changes to Building systems
serving the Premises to the extent the portions
affected are located in the Premises) shall be borne by
APL.
Section 2.3. Repair. Landlord shall repair, or
cause to be repaired or replaced, at its sole cost and
expense, any defects or damage to the Building Shell
Work, Base Building Elements, or Tenant Improvements
due to defective materials or workmanship in
construction thereof or nonconformance with the plans
and specifications approved as provided in Sections 2.1
and 2.2 of the Original Lease. The existence of any
guarantees or warranties shall not relieve Landlord of
its primary responsibility for the Building and all
Tenant Improvements constructed on the APL Parcel.
ARTICLE 3
Deleted.
ARTICLE 4
Term; Option to Extend; Expansion Options
Section 4.1. Term.The term of this Lease (the
"Term") shall commence on December 31, 1996 (the
"Commencement Date"). The Term of this Lease shall
expire on December 31, 2006.
Section 4.2. Option to Extend. Landlord grants
to APL the option to extend the Term on all the
provisions hereof, except for Rent, for three (3)
successive five (5) year extension terms (each, an
"Extension Term"). A failure to exercise any one of
the options to extend shall automatically extinguish
all succeeding options. APL shall exercise its option
as to each Extension Term by giving irrevocable written
notice of exercise of the option (each, an "Option
Notice") to Landlord by January 1 of the immediately
preceding calendar year, that is Landlord is to receive
twelve (12) months prior notice. If APL fails to give
the Option Notice by such date Landlord shall give APL
written notice of its failure to exercise the subject
option and APL shall have five (5) business days after
receipt of Landlord's written notice within which APL
may give the Option Notice notwithstanding APL's
failure to timely exercise its rights. As used herein,
the "Term" shall mean the initial Term, plus all
Extension Terms as to which APL gives a timely Option
Notice. Except as provided in Section 4.5, the Annual
Base Rent for each Extension Term shall be of the fair
market rental ("Fair Market Rental" as hereinafter
defined) of the Premises as of the commencement of each
Extension Term (each, an "Adjustment Date").
Section 4.3. Expansion Options.
(a) First Expansion. APL shall have the option
(the "First Expansion Option") to lease between 10,000
and 12,000 rentable square feet of space on one floor
of the Building (the location and exact size and
configuration of which shall be designated by Landlord
as provided below and which space, at Landlord's
election, may consist of either one (1) or two (2)
increments, in Landlord's sole discretion, provided
that no increment shall consist of less than four
thousand (4,000) rentable square feet of space) (the
"First Expansion Space") for a term (A) commencing on a
date (or dates, if the First Expansion Space consists
of two (2) increments) to be designated by Landlord,
but which shall be within the period commencing on
January 1, 2001, and ending on December 31, 2002, and
(B)Eending upon the termination of this Lease. APL
shall exercise the option for the First Expansion
Space, if at all, by written notice from APL to
Landlord given not earlier than May 1, 2000, and not
later than June 30, 2000 (subject to the provisions of
Subsection 4.3(c) below). Landlord shall notify APL in
writing (the "Expansion Designation Notice") of the
date of commencement of the term of the lease of each
increment of the First Expansion Space, and the exact
size and location of each increment of the First
Expansion Space, not less than six (6) months prior to
such commencement date.
(b) Second Expansion. APL shall have the option
(the "Second Expansion Option") to lease one additional
floor of the Building (which shall be designated by
Landlord, as provided below) (the "Second Expansion
Space") for a term (A)Ecommencing on a date to be
designated by Landlord, but which shall be within the
period commencing on January 1, 2003, and ending on
June 30, 2004, and (B)Eending upon the termination of
this Lease. APL shall exercise the option for the
Second Expansion Space, if at all, by written notice
from APL to Landlord given not earlier than May 1,
2002, and not later than June 30, 2002 (subject to the
provisions of Subsection 4.3(c) below). Landlord shall
notify APL in writing (the "Expansion Designation
Notice") of the date of commencement of the term of the
lease of the Second Expansion Space, and the exact size
and location of the Second Expansion Space, not less
than six (6) months prior to such commencement date.
(c) Late Notice. If APL fails to give any notice
under this Section 4.3 within the time specified above,
Landlord shall deliver to APL written notice of APL's
failure to give notice and APL shall have an additional
five (5) business days after receipt of Landlord's
notice to give the subject notice.
(d) Terms and Conditions. If APL exercises an
Expansion Option, then as soon as reasonably feasible
thereafter the parties hereto shall enter into an
amendment of this Lease, adding the First Expansion
Space or the Second Expansion Space, as applicable, to
the Premises leased hereunder on the following terms
and conditions:
i. For the purposes of the balance of this
Subsection 4.3(d) the term "Expansion Space" shall
mean either the Second Expansion Space or an
increment of the First Expansion Space. The term
of the lease as respects the Expansion Space shall
commence on the date stated in Landlord's notice
and shall continue thereafter coextensively with
the then-remaining term hereof, provided that in
the event of the inability of Landlord to deliver
possession of the Expansion Space to APL on the
availability date stated in Landlord's notice,
Landlord shall not be liable for any damage
thereby, nor shall Tenant's lease of the Expansion
Space be void or voidable, but Landlord shall use
diligent good faith efforts to obtain possession
of the Expansion Space and deliver the Expansion
Space to APL as soon as reasonably practicable and
APL shall have no liability with respect to the
Expansion Space until the date Landlord delivers
possession of the Expansion Space to APL (and the
Expansion Space Rent Commencement Date, as defined
in subparagraph ii. below, shall be computed based
on the date Landlord delivers possession of the
Expansion Space to APL, as provided in
subparagraph ii. below);
ii. Commencing on the date (the "Expansion
Space Rent Commencement Date") which is the
earlier of (a) three (3) months after the date
Landlord delivers possession of the Expansion
Space to APL or (b) the date on which APL
commences conduct of its business in the Expansion
Space, and continuing throughout the term of the
lease of the Expansion Space, the Annual Base Rent
payable by APL under Section 5.1 hereof for the
Expansion Space shall be the Fair Market Rental
(as defined in SectionE4.4) thereof, determined in
accordance with Section 4.4 below (and subject to
the further provisions of Subsection 4.3(e)below);
iii. Commencing on the Expansion Space Rent
Commencement Date and continuing throughout the
term of the lease of the Expansion Space, APL's
Share as set forth in Section 5.3 hereof with
respect to the Expansion Space shall be based on
the rentable square footage of the Expansion
Space, and the Base Year with respect to the
Expansion Space shall be the calendar year in
which the Expansion Space is delivered to APL;
iv. The Expansion Space shall be delivered
to and accepted by APL in its then "as is" state
and condition and Landlord shall have no
obligation to perform or pay for any remodeling,
renovation or improvements to prepare same for
APL's occupancy, provided that with respect to the
First Expansion Space, Landlord at its sole cost
and expense shall provide all necessary demising
walls taped and painted on the side APL occupies;
and
v. Except as otherwise provided above, the
Expansion Space shall be subject to all the terms
and conditions set forth herein as applicable to
the Initial Premises.
(e) Special Factors Regarding Rent. Rent as
agreed upon by the parties or as determined pursuant to
arbitration shall be effective until the next Rent
Adjustment Date occurring pursuant to Section 4.2.
Thereafter Rent for the subject Expansion Space shall
be the same per square foot as that determined for the
Premises pursuant to Section 4.4. The Fair Market
Rental of the subject Expansion Space shall be
determined assuming the term of the lease as to the
subject Expansion Space is the greater of (i) three (3)
years or (ii) the period until the next Rent Adjustment
Date. In computing the Annual Base Rent for the
subject space, Fair Market Rental shall be determined
by the parties (or arbitrators, if necessary).
Section 4.4. Fair Market Rental.
(a) "Fair Market Rental" shall mean the rate
being paid for comparable space in similar buildings in
Oakland, California, with similar amenities, taking
into consideration the following: size of space subject
to rent determination, location, floor level, floor
efficiency (load factor) and the manner used to
determine the usable square footage of the relevant
space, proposed term of the lease, extent of services
to be provided, leasing commissions, tenant improvement
allowances, "free rent" and other forms of rental
concessions, all items included in operating expenses
and taxes which are reimbursable by tenant, the level
and types of building security provided, the net worth
and creditworthiness of the tenant, the time that the
particular rate under consideration became or is to
become effective, the value, utility and condition of
tenant improvements paid for by Landlord, and view,
light and air taking into consideration Section 31.13.
Leasing commissions for purposes of determining Fair
Market Rental for any extension periods pursuant to
Section 4.2 shall only be xxxxxxxxxx.xx the extent
commissions are then generally being paid upon
extensions. Reimbursement for lease termination
payments and relocation costs shall not be considered
in determining Fair Market Rental. Fair Market Rental
as of the Adjustment Date shall be determined by
Landlord with written notice (the "Notice") given to
APL together with Landlord's delivery of the Expansion
Designation Notice (but no sooner than six (6) months
prior to the date the Expansion Space is to be added to
the Lease), subject to APL's right to arbitration as
hereinafter provided. Failure on the part of APL to
demand arbitration within thirty (30) days after
receipt of the Notice from Landlord shall bind APL to
the Fair Market Rental as determined by Landlord.
Should APL elect to arbitrate and should the
arbitration not have been concluded prior to the
Adjustment Date, then until Fair Market Rental is
determined by arbitration APL shall pay rent for the
space which is the subject of the arbitration at the
same rent per square foot then being paid by APL for
the Initial Premises. If the amount of the Fair Market
Rental as determined by arbitration is greater than or
less than the amount actually paid by APL, then any
adjustment required to adjust the amount previously
paid shall be made by payment by the appropriate party
within ten (10) days after such determination of Fair
Market Rental.
(b) If APL disputes the amount claimed by
Landlord as Fair Market Rental, APL may require that
Landlord submit the dispute to arbitration. The
arbitration shall be conducted and determined in the
City of Oakland, California in accordance with the then
prevailing rules of the American Arbitration
Association or its successor for arbitration of
commercial disputes, except that the procedures
mandated by such rules shall be modified as follows:
(i) APL shall make any demand for
arbitration in writing within thirty (30) days after
service of the Notice, specifying therein the name and
address of the person to act as the arbitrator on APL's
behalf. The arbitrator shall be a real estate
appraiser or broker with at least ten (10) years full
time commercial appraisal experience who is familiar
with the Fair Market Rental of first-class commercial
office space in Oakland, California. Failure on the
part of APL to make the timely and proper demand for
such arbitration shall constitute a waiver of the right
thereto. Within ten (10) business days after the
service of the demand for arbitration, Landlord shall
give notice to APL specifying the name and address of
the person designated by Landlord to act as arbitrator
on its behalf, which arbitrator shall be similarly
qualified. If Landlord fails to notify APL of the
appointment of its arbitrator within or by the time
specified, then the arbitrator appointed by APL shall
be the arbitrator to determine the Fair Market Rental
for the subject space.
(ii) If two arbitrators are chosen pursuant
to Subsection 4.4(b)(i) above, the arbitrators so
chosen shall meet within ten (10) business days after
the second arbitrator is appointed and shall appoint a
third arbitrator, who shall be a competent and
impartial person with qualifications similar to those
required of the first two arbitrators pursuant to
Subsection 4.4(b)(i) above. If they are unable to
agree upon such appointment within five (5) business
days after expiration of such ten (10) day period, the
third arbitrator shall be selected by the parties
themselves. If the parties do not so agree, then
either party, on behalf of both, may request
appointment of such a qualified person by the then
president of the Alameda County Board of Realtors. The
three arbitrators shall decide the dispute, if it has
not been previously resolved, by following the
procedures set forth in Subsection 4.4(b)(iii) below.
(iii) The Fair Market Rental shall be
fixed by the three arbitrators in accordance with the
following procedures. Each of the arbitrators selected
by the parties shall state, in writing, his or her
determination of the Fair Market Rental, supported by
the reasons therefor, and shall make counterpart copies
for each of the other arbitrators. The arbitrators
shall arrange for a simultaneous exchange of such
proposed resolutions. The role of the third arbitrator
shall be to select which of the two proposed
resolutions more closely approximates his or her
determination of Fair Market Rental. The third
arbitrator shall have no right to propose a middle
ground or any modification of either of the two
proposed resolutions. The resolution he or she chooses
as that more closely approximating his or her
determination of the Fair Market Rental shall
constitute the decision of the arbitrators and shall be
final and binding upon the parties.
(iv) In the event of a failure, refusal or
inability of any arbitrator to act, his or her
successor shall be appointed by him or her, but in the
case of the third arbitrator, his or her successor
shall be appointed in the same manner as that set forth
herein with respect to the appointment of the original
third arbitrator. The arbitrators shall attempt to
decide the issue within ten (10) business days after
the appointment of the third arbitrator. Any decision
in which the arbitrator appointed by Landlord and the
arbitrator appointed by APL concur shall be binding and
conclusive upon the parties, except that such
arbitrators shall not attempt by themselves to mutually
ascertain the Fair Market Rental and any such
determination, in a manner other than that provided for
in Subsection 4.4(b)(iii) hereof, shall not be binding
on the parties. Each party shall pay the fees and
expenses of its respective arbitrator and both shall
share the fees and expenses of the third arbitrator.
Attorneys' fees and expenses of counsel and of
witnesses for the respective parties shall be paid by
the respective party engaging such counsel or calling
such witnesses.
(v) The arbitrators shall have the right to
consult experts and competent authorities for factual
information or evidence pertaining to a determination
of Fair Market Rental, but any such consultation shall
be made in the presence of both parties with full right
on their part to cross-examine. The arbitrators shall
render the decision and award in writing with
counterpart copies to each party. The arbitrators
shall have no power to modify the provisions of this
Lease, including, without limitation, any provision
relating to the floor on Fair Market Rental.
Section 4.5. Right of First Offer.
(a) First Offer Right; Available Space. APL
shall have a continuing right of first offer to lease
each increment of space in the Building containing more
than ten thousand (10,000) square feet of rentable area
(each of which is an "Available Space") which becomes
"available for lease" during the period commencing on
December 31, 1997, and ending on December 31, 2004,
subject to the provisions of this Section 4.5. An
increment of space shall not be deemed "available for
lease" if any tenant of the Building exercises an
option or right of first offer to lease such space,
which option or right of first offer has been granted
prior to the date of this Lease.
(b) Notice of Available Space. Within thirty
(30) days after any such Available Space becomes
available to lease, or, if sooner, within thirty (30)
days after Landlord shall be in a position to project
when an Available Space will be available to lease (but
in no event earlier than twelve (12) months prior to
such projected availability date), Landlord shall give
APL written notice thereof (an "Availability Notice").
Each Availability Notice shall identify the space and
specify the availability date (or estimated
availability date) and shall identify the rent and
rental concessions, such as "free rent" and tenant
improvement allowance, which Landlord proposes to offer
for such Available Space. APL acknowledges that, as of
the date this Lease is executed, APL does not require
additional space in the Building other than the Initial
Premises and that APL has no rights hereunder with
respect to space in the Building which is vacant as of
the commencement of the term hereof (the "Current
Vacant Space"), unless such space shall again become
"available for lease" at a future date; provided,
however, if Landlord has not leased any increment of
the Current Vacant Space to a third-party tenant by
December 31, 1997, then the provisions of this
SectionE4.5 shall apply to such increment of the
Current Vacant Space [except with respect to increments
of the Current Vacant Space for which Landlord is then
actively and in good-faith negotiating with a third-
party to lease (which negotiations have included, at a
minimum, exchange of a proposal and counter proposal),
in which event the provisions of this Section 4.5 shall
apply to such increment of the Current Vacant Space
only if such negotiations conclude without execution of
a lease with respect to such space].
(c) Exercise of First Offer Right. If APL elects
to lease all or a portion of Available Space, APL shall
so notify Landlord in writing (the "Acceptance Notice")
within ten (10) business days after the date of the
Availability Notice (provided if APL elects to accept
less than all of the Available Space, APL must accept
all space described in the Availability Notice on the
particular floor or floors accepted by APL). If APL
does not exercise its right to lease an Available Space
within such ten (10) day period, then Landlord shall be
released of its obligation to lease such Available
Space to APL and all rights of APL with respect thereto
under this Section 4.5 shall cease until the Available
Space becomes "available for lease" again at a future
date. The Acceptance Notice shall also contain APL's
determination of Fair Market Rental and market and
rental concessions for the portion of the Available
Space which APL desires.
(d) Terms and Conditions. Upon APL's election to
lease an Available Space, Landlord and APL shall
promptly enter into an amendment of this Lease, adding
such Available Space to the Premises on all the terms
and conditions set forth in this Lease as to the
Initial Premises originally demised hereunder, except
that (i) the term of the lease to APL of such Available
Space shall commence upon the later of the availability
date or the date Landlord delivers possession of the
Available Space to APL (but in no event sooner than
thirty (30) days after the date of Landlord's
Availability Notice to APL) and shall continue
coextensively with the remaining term hereof and any
extension thereof, (ii)Ecommencing on the Available
Space Rent Commencement Date (as defined below), the
Base Annual Rent payable by APL under Section 5.1 for
the Available Space shall be the fair market rent for
such space, as provided for below, (iii)Ecommencing on
the Available Space Rent Commencement Date, APL's
proportionate share payable under Sections 5.3 and 5.4
hereof with respect to such Available Space shall be
determined by dividing the rentable square footage of
such Available Space by the rentable square footage of
the Building, and (iv)EAPL shall take the Available
Space in its then "as-is" condition. The "Available
Space Rent Commencement Date" shall be the date which
is the later of (a) three (3) months after receipt of
the Acceptance Notice or (b) the date Landlord delivers
possession of the Available Space to APL, provided that
if APL commences the conduct of its business in the
Available Space prior to the Available Space Rent
Commencement Date, the Available Space Rent
Commencement Date shall be the date on which APL so
commences conduct of its business in such space.
(e)Determination of Rental. During the thirty
(30) day period following Landlord's receipt of the
Acceptance Notice, Landlord and APL shall attempt to
agree on Fair Market Rental and market rental
concessions for the subject portion of the Available
Space. If Landlord and APL are unable to agree during
such period then Fair Market Rental and market rental
concessions shall be determined pursuant to Section
4.4. For purposes of Section 4.4 the "Availability
Notice" shall be deemed the "Notice" provided APL shall
have sixty (60) days after receipt of the Availability
Notice within which to demand arbitration. The Fair
Market Rental of the portion of the Available Space
being taken shall be determined assuming the term of
the lease as to such space is the greater of (a)Ethree
(3) years or (b) the period until the next Rent
Adjustment Date. The arbitrators shall determine Fair
Market Rental, market "free rent", market tenant
improvement allowance and any other rental concessions
then being offered. The parties (or the arbitrators,
if necessary) shall first determine the Fair Market
Rental of the subject space. Then the component of the
Fair Market Rental allocable to amortization of the
fair market tenant improvement allowance (the "Fair
Market T.I. Allowance") shall be deducted from the Fair
Market Rental. Determination of this component shall
be made by the parties (or the arbitrators, if
necessary). The initial Annual Base Rent for the
subject space shall be the Fair Market Rental after
deduction of the amortization of the Fair Market T.I.
Allowance (the "Initial Annual Base Rent"). The
Initial Annual Base Rent, as agreed by the parties or
as determined by arbitration, shall be effective until
the later of (a) three (3) years after the commencement
of the Lease as to the Available Space accepted by APL
(unless this Lease is terminated or expires prior to
that date) or (b) the next rent Adjustment Date
occurring pursuant to Section 4.2. Thereafter the
Annual Base Rent for the Available Space accepted by
APL shall be the same per square foot as that
determined for the Initial Premises under Section 4.4.
The Fair Market T.I. Allowance for the portion of the
Available Space accepted by APL shall be amortized and
added to the Initial Annual Base Rent over the period
until the next rent Adjustment Date (or date of
expiration of the Lease if the applicable option to
extend is not exercised). The following are two
examples of application of this section.
Assume the date rent commences for the subject
Available Space is the eighth (8th) anniversary of the
Commencement Date and assume APL does not exercise its
next option to extend prior to commencement of APL's
obligation to pay rent as to the subject space (that
is, the Lease Term will expire on the tenth anniversary
of the Commencement Date). Assume the arbitrators
determine that Fair Market Rental (assuming a three (3)
year term) is $30.00 per square foot and that $10.00
per square foot is a Fair Market T.I. Allowance. The
Initial Annual Base Rent for the portion of the
Available Space taken by APL (until the tenth
anniversary of the Commencement Date) is $26.67 ($30.00
Fair Market Rental minus the $3.33 amortization of the
Fair Market T.I. Allowance). The $10.00 Fair Market
T.I. Allowance is then amortized over the two (2) year
term ($5.00 per year) resulting in a rental rate for
the subject space of $31.67 per square foot ($26.67
Initial Annual Base Rent plus $5.00 amortization of
Fair Market T.I. Allowance).
Assume the date rent commences for the subject
Available Space is the eighth anniversary of the
Commencement Date and assume APL exercises its next
option to extend prior to commencement of APL's
obligation to pay rent as to the subject space (that
is, the Lease Term will expire on the fifteenth
anniversary of the Commencement Date). Assume the
arbitrators determine that Fair Market Rental (assuming
a three year term) is $30.00 per square foot and that
$10.00 per square foot is a Fair Market T.I. Allowance.
The Initial Annual Base Rent for the portion of the
Available Space taken by APL (until the eleventh
anniversary of the Commencement Date) is $26.67 ($30.00
Fair Market Rental minus the $3.33 amortization of the
Fair Market T.I. Allowance). The $10.00 Fair Market
T.I. Allowance is then amortized over the two year term
($5.00 per year) resulting in a rental rate for the
subject space for the ninth and tenth years of the Term
of $31.67 per square foot ($26.67 Initial Annual Base
Rent plus $5.00 amortization of Fair Market T.I.
Allowance). The resulting rental rate for the subject
space for the eleventh year of the Term will be $26.67
per square foot (that is, the Initial Annual Base Rent
and no amortization of Fair Market T.I. Allowance).
During the twelfth through fifteenth years of the Term
the Annual Base Rent for the subject space shall be the
same as that of the Initial Premises as computed on the
tenth anniversary of the Commencement Date.
ARTICLE 5
Rent
Section 5.1. Annual Base Rent. Commencing on
December 31, 1996, Annual Base Rent for the Premises
(excluding the Mailroom and Storage Area) shall be as
follows:
Annual Base Rent
Per Square Foot
Monthly
Period of Rentable Area Annual Base Rent Installments
12/31/96 + 1997 $16.15 $3,321,441.30 $276,786.78
1998 $23.75 $4,884,472.50 $407,039.38
1999 $24.00 $4,935,888.00 $411,324.00
2000 $24.25 $4,987,303.50 $415,608.63
2001 $26.00 $5,347,212.00 $445,601.00
2002-2006 $29.00 $5,964,198.00 $497,016.50
Commencing on December 31, 1996, Annual Base Rent
for the Mailroom and Storage Area shall be:
Annual Base Rent
Per Square Foot
Monthly
Period of Rentable Area Annual Base Rent Installments
12/31/96 - 2001 $12.00 $38,988.00 $3,249.00
2002-2006 $15.00 $48,735.00 $4,061.25
Equal monthly installments of Annual Base Rent and
other sums payable as rent shall be due and payable in
advance, on the first day of each calendar month during
the Term. Monthly installments of Annual Base Rent for
any partial calendar months during the Lease Term shall
be proportionately adjusted. Annual Base Rent shall be
payable without notice or demand and except as
otherwise provided herein shall be made without any
setoff, deduction or counterclaim whatsoever.
Section 5.2. Payment. All payments of Annual
Base Rent, Increases in Building Operating Costs and
Real Property Taxes (collectively "Rent") and all other
monetary obligations which are required to be made by
APL hereunder shall be made payable to and sent to
Landlord at the office of Shorenstein Company, L.P.,
000 Xxxxxxxxxx Xxxxxx, 00xx xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, unless Landlord notifies APL of
another address for the payment of Rent.
Section 5.3. Building Operating Costs.
Commencing on January 1, 1998, APL shall pay to
Landlord, at the times hereinafter set forth, 38.298%
("APL's Share") of Increased Building Operating Costs.
"Increased Building Operating Costs" shall mean the
amount by which Building Operating Costs for a calendar
year exceed the Building Operating Costs for calendar
year 1997 (the "Base Year").
(a) "Building Operating Costs" shall mean
all reasonable costs, charges and expenses actually
incurred by Landlord in connection with operating,
maintaining, repairing, insuring and managing the
Building and Common Areas as a first class office
building, computed on an accrual basis. In the event
of any inconsistency, ambiguity or overlap between the
exclusion provisions of SectionE5.4(b) and the
inclusion provisions of Section 5.4(c) the provisions
of Section 5.4(b) shall control in determining whether
a particular cost or expense is to be excluded from or
included in Building operating Costs.
(b) Building Operating Costs shall not
include:
(i) Repairs or other work occasioned by
fire, windstorm or other cause to the extent Landlord
is reimbursed by insurance, condemnation or other
proceeds.
(ii) Leasing commissions and fees,
attorneys' fees, costs and disbursements and other
expenses incurred in connection with negotiations or
disputes with present or prospective tenants or other
occupants or associated with the enforcement of any
leases or the defense of Landlord's title to or
interest in the Building or any part thereof.
(iii) Costs (including permit,
license and inspection fees) incurred in renovating or
otherwise improving or decorating, painting or
redecorating space for tenants or other occupants of
vacant space.
(iv) Costs of any services (including
utilities) sold or provided tenants or other occupants
for which Landlord is entitled to be reimbursed by such
tenants or other occupants as an additional charge or
rental over and above the basic rental and escalations
payable under the lease with such tenant or other
occupant.
(v) Depreciation and amortization not
expressly permitted under the provisions of Section
5.4(c).
(vi) Costs of a capital nature,
including, without limitation, capital improvements,
capital repairs, capital equipment, and capital tools,
all as determined in accordance with generally accepted
accounting principles, consistently applied, provided,
however, Landlord may include costs of capital
improvements, equipment or devices installed in order
to effect a labor saving, energy saving or other
economy, amortized over the useful life of such
improvement, equipment or device, but in no event may
the amount included in Building operating costs in any
year exceed the actual economies or savings realized
during such year. Amortization of such permitted
capital items may include interest on the unamortized
balance at ten percent (10%) per annum.
(vii) Expenses in connection with
services or other benefits of a type which are not
provided to APL, but which are provided to another
tenant or occupant.
(viii) Costs incurred due to
violation by Landlord or any tenant of the terms and
conditions of any lease.
(ix) Overhead and profit increment paid
to Landlord, its partners or their subsidiaries or
affiliates for management or other services on or to
the Building or for supplies or other materials to the
extent that the costs of such services, supplies or
materials exceed the costs that would have been paid
had the services, supplies or materials been provided
by unaffiliated parties on a competitive basis.
Notwithstanding anything in this Section 5.3 to the
contrary, during the Initial Term for the purposes of
determining APL's Share of Increases in Building
Operating Costs, APL's Share of the aggregate of all
management and related fees (collectively "Management
Fees") for any calendar year shall not exceed two and
one-half percent (2.5%) of APL's Annual Base Rent for
the same calendar year. The two and one half percent
(2.5%) shall be increased by the CPI-U Index (as
defined in Section 17.2) on each January 1, using
January 1, 1991 as the beginning Index. In no event
shall APL's Share of Management Fees at any time during
the Term exceed the amounts then being paid by other
major anchor tenants with "gross" leases in comparable
first class buildings in the San Francisco-Oakland
area. The amount of the Management Fees shall be
adjusted on each Adjustment Date during the Term to the
amounts then being paid by other major anchor tenants
with "gross" leases in comparable first class buildings
in the San Francisco/Oakland area. If at least three
(3) comparable "gross" leases are not then available
then the available "net" leases and comparable "net"
leases shall be used for purposes of this limitation.
(x) Interest on debt or amortization
payments on any mortgages or deeds of trust or rental
payments under any ground or other similar underlying
lease or leases.
(xi) Landlord's general overhead and
general administrative expenses including, without
limitation, entertainment, relocation, hiring and
training.
(xii) Any compensation paid to
clerks, attendants or other persons in commercial
concessions, if any, operated by Landlord.
(xiii) Rentals and other related
expenses incurred in leasing air conditioning systems,
elevators or other equipment ordinarily considered to
be of a capital nature, except equipment which is used
in providing janitorial services and which is not
affixed to the Building.
(xiv) All items and services for
which APL reimburses Landlord or pays third persons or
which Landlord provides selectively to one or more
tenants or occupants of the Building (other than APL)
without reimbursement.
(xv) Advertising, marketing and
promotional expenditures.
(xvi) Any costs, fines or penalties
incurred due to violations by Landlord of any
governmental rule or authority and any penalties and
interest on late payment of taxes, mortgages, ground
leases, equipment leasing or other financing.
(xvii) Cost of acquisition of and
extraordinary security for any art work.
(xviii) Cost of the initial
development and construction of the Building and common
Areas and the cost of any "punch list" or similar
corrective work with respect thereto and the cost of
repairing defects therein in order to obtain full and
final completion of the Building and Common Areas, the
cost of any work required in order to rectify design
and/or construction defects and bring the Building and
Common Areas into compliance with governmental code or
law requirements applicable to the work in' order to
obtain certificates of occupancy for APL to occupy the
Premises.
(xix) Costs of installing, operating
and maintaining the garage facilities and any specialty
services, such as an observatory, broadcasting
facilities, luncheon club and athletic or recreational
club.
(xx) Unless required by applicable
California or local law, statute, rule, regulation or
ordinance insurance premiums or other costs for
earthquake insurance .
(xxi) Professional fees not directly
attributable to the Building.
(xxii) Salaries of leasing agents,
promotional directors, executives of Landlord or its
partners, building management employees, all off-site
personnel and executives and all management personnel
above the level of senior on-site property manager and
senior on-site engineer. These exclusions shall
include, without limitation, pension plans, fringe
benefits, medical insurance, life and disability
insurance, welfare benefits, union contributions,
payroll taxes and other related expenses in connection
with such excluded agents, directors, executives and
employees.
(xxiii) Traffic and other studies or
reports required in connection with initial
construction or any subsequent alteration or
modification of the Building, Common Areas or City
Center.
(xxiv) Contributions of any kind,
including, without limitation, contributions to local
civic organizations, museums, charities and political
candidates or organizations.
(xxv) Amounts owed by Landlord to
other tenants.
(xxvi) Expenses incurred in removing,
storing or disposing of the personal property,
fixtures, equipment of improvements of former tenants
or occupants of the Building.
(xxvii) Construction, remodelling,
alterations or additions of or to the Building and/or
the Common Areas; and any and all costs, taxes, fees
and other impositions by public authorities (including,
without limitation, impositions for infrastructure,
housing, schools and parks) associated with the
increase or expansion of the size of the Building or
City Center by adding additional land, buildings and/or
other structures.
(c) Building Operating Costs shall include
by way of example:
(i) Costs of providing rubbish and
waste pickup and disposal.
(ii) Costs of janitorial services and
window cleaning (including materials, supplies,
Building standard light bulbs and ballasts, equipment
and tools therefor), and rental and depreciation costs
related to any of the foregoing or contracts with third
parties to provide same.
(iii) costs in providing customary
and usual security for the Building consistent with the
requirements hereof, but excluding extraordinary
security costs such as crowd control.
(iv) Insurance premiums for insurance
required or permitted hereunder, including, without
limitation, rental interruption insurance and other
types of insurance coverage then being maintained by
prudent owners of comparable first class office
buildings in the San Francisco/Oakland metropolitan
area, provided such insurance coverage is available at
commercially reasonable rates, in amounts and with
deductible amounts consistent with those maintained by
owners of similar office buildings in Oakland,
California, the costs of which may include a reasonable
and appropriate allocation of a portion of the premium
of a blanket insurance policy maintained by Landlord if
such allocated amount is less than the premium for a
separate policy of insurance.
(v) Costs of electricity, water, sewer,
and other utilities used in connection with the
operation of the Building and Common Areas.
(vi) Costs of operation, maintenance,
and repair (excluding items which are considered
capital in nature under generally accepted accounting
principles) of the Building, including, without
limitation, heat, ventilation and air conditioning
systems, fire prevention sprinkler systems, elevators,
escalators and all other mechanical or electrical
systems serving the Building and service agreements for
all such systems and equipment;
(vii) License, permit and inspection
fees relating directly to operation of the Building;
(viii) Non-capital costs of
compliance with fire, safety or other governmental
rules, regulations, laws, statutes, ordinances or
requirements imposed by any governmental authority with
respect to the Building.
(ix) Wages, salaries, employee benefits
and taxes (or an allocation of the foregoing) for on-
site personnel working full or part time in connection
with the operation, maintenance or management of the
Building and the Common Areas.
(x) Administrative and management fees
for the Building, subject to the limitations contained
in Section 5.4(b)(ix).
(xi) Costs of indoor and outdoor
landscaping (including, without limitation, planting,
replacing and replanting of flowers and bushes, and the
maintenance thereof).
(xii) Subject to APL's prior written
approval, which approval may be withheld in its sole
discretion, expenses and fees (including attorneys'
fees) reasonably incurred contesting the validity or
applicability of any governmental enactments which may
affect Building Operating Costs.
(xiii) Personal property taxes levied
and assessed against personal property in Common Areas
used exclusively in the operation, maintenance and
repair of the Common Areas.
(d) There shall be deducted from Building
operating Costs the following:
(i) Net recoveries received by Landlord
from tenants as a result of any act, omission, default
or negligence of such tenants or by reason of a breach
by such tenants of the provisions of their respective
leases that reduce the expenses incurred by Landlord in
operating, repairing, and maintaining the Building and
the Common Areas to the extent such amounts were
previously included in Building Operating Costs.
(ii) Net proceeds received by Landlord
as contributions toward Building Operating Costs for
use of Common Areas by shows and promotions, displays,
kiosks, lockers, advertising, temporary tenants, and
licensees.
(iii) Net proceeds received by
Landlord under any insurance policy issued to Landlord
provided that the claim is related to the operation,
maintenance, repair and management of the Building and
Common Areas to the extent that such amount of proceeds
were previously included as Building Operating Costs.
(iv) Net amounts received from a
manufacturer or builder or a warranty claim to the
extent such amounts were previously included in
Building Operating Costs.
(e) Adjustment for Occupancy Factor.
Notwithstanding any other provision herein to the
contrary, in the event the Building is not fully
occupied during the Base Year or any year of the term
of this Lease, an adjustment shall be made by Landlord
in computing Building Operating Costs for such year so
that the Building Operating Costs shall be computed for
such year as though the Building had been fully
occupied during such year. To accomplish the
foregoing, all variable components of Building
Operating Costs for such calendar year (e.g.,
janitorial service, utilities, mechanical maintenance,
but excluding expenses which do not vary with occupancy
levels such as insurance and elevator maintenance)
shall be "grossed-up", employing sound accounting and
property management principles, to the amount such
variable components would have been if the Building had
been fully occupied during the entire calendar year and
the adjusted amount of the variable components shall be
used in determining Building Operating Costs for such
calendar year.
(f) Notice and Payment. During December of
each calendar year (commencing with calendar year 1997)
or as soon after December as practicable, Landlord
shall give APL written notice of Landlord's reasonable
estimate of APL'S Share of Increased Building Operating
Costs (commencing with calendar year 1998) for the
following year. On or before the first day of each
month during the ensuing calendar year, APL shall pay
to Landlord one-twelfth (1/12th) of such estimated sum;
provided, that if such notice is not given in December
of any calendar year, APL shall continue to pay on the
basis of the prior year's estimate until the month
after such notice is given, at which time APL shall pay
any difference due for the period from the beginning of
such calendar year until the date of the notice. If at
any time it appears in Landlord's reasonable judgment
that the sum so estimated for the current calendar year
will vary from actual Increased Building Operating
Costs, Landlord may, by written notice to APL, revise
its estimate for such year, and subsequent payments by
APL for such year shall be based upon such revised
estimate.
(g) Annual Statements. Within one hundred
twenty (120) days after the end of each calendar year,
Landlord shall deliver to APL a detailed statement of
each item of Building Operating Costs or Increased
Building Operating Costs payable for such calendar
year, in each instance prepared and certified by an
independent certified public accountant reasonably
acceptable to APL. The cost of preparation and
certification by the independent certified public
accountant shall be included in Building Operating
Costs. If such statement for any calendar year shows
an amount owing by APL that is less than the estimated
payments for such calendar year previously made by APL,
it shall be accompanied by a refund of the excess by
Landlord to APL. If such statement shows an amount
owing by APL that is more than the estimated payments
for such calendar year previously made by APL, APL
shall pay the deficiency to Landlord within thirty (30)
days after delivery of such statement. If the Term has
expired prior to the final determination of APL's share
of any item of Increased Building Operating Costs, APL
shall, within thirty (30) days of receipt of Landlord's
invoice, pay any increase due over the estimated sums
paid by APL and, conversely, any overpayment by APL
shall be immediately refunded by Landlord to APL. At
any time during the Term, and within two (2) years
after expiration of the Term, APL shall be entitled,
upon five (5) days prior written notice and during
normal business hours at Landlord's office in the
Building to inspect and examine those books and records
of Landlord relating to the determination of any item
of Building Operating Cost or Real Property Taxes. All
books and records of Landlord relating to Building
Operating Costs shall be maintained in accordance with
generally accepted accounting principles, consistently
applied. If, after inspection and examination of such
books and records, APL disputes the amounts of Building
Operating Costs, Increased Building Operating Costs
and/or Real Property Taxes charged by Landlord, APL
may, by written notice to Landlord, request an
independent audit of such books and records. APL may
withhold payment of the disputed amount of any cost
disputed by APL in good faith. Any sum determined to
be payable to the other party shall bear interest from
the date paid or due, as applicable, at the Default
Rate. The independent audit of the books and records
shall be conducted by a certified public accountant
designated by APL and reasonably acceptable to
Landlord. If, within thirty (30) days after Landlord's
receipt of APL's notice requesting an audit, Landlord
and APL are unable to agree on the certified public
accountant to conduct such audit, then APL may
designate a "Big Six" accounting firm not then employed
by Landlord or APL to conduct such audit. The audit
shall be limited to the determination of the amount of
any or all items of Building Operating Costs, Increased
Building Operating Costs and Real Property Taxes for
the subject calendar year. If the audit discloses that
any item of Building Operating Costs or Real Property
Taxes included in the computation of Increases in
Building Operating Costs or Real Property Taxes billed
to APL was incorrect, the appropriate party shall pay
to the other party the deficiency or overpayment, as
applicable. All costs and expenses of the audit shall
be paid by APL unless the audit shows that Landlord
overstated in the aggregate Building Operating Costs,
Increased Building Operating Costs and/or Real Property
Taxes for the subject calendar year by more than three
percent (3%), in which case Landlord shall pay all
costs and expenses of the audit.
(h) Confirmation of Occupancy Factor. If
APL believes that the adjustments to Building Operating
Expenses made pursuant to Subsection 5.3(e) above may
have been based on incorrect occupancy data, APL shall
so notify Landlord in writing and within thirty (30)
days of such notice Landlord shall deliver to APL a
copy of Landlord's rent roll report covering the
preceding calendar year, which rent roll report shall
show the following: the name and suite number of each
tenant in the Building; the usable and rentable square
footage of each tenant's premises in the Building; and,
the commencement and expiration dates (if within the
Term, including all unexercised extension options), and
the actual occupancy date of each such tenant's lease.
The contents of the rent roll report shall be kept
confidential by APL. If Landlord does not provide APL
with a copy of such rent roll report, then during the
period beginning with the date that Landlord is
obligated to deliver the rent roll report to APL and
ending on the date that Landlord actually delivers same
to APL, APL shall have the right to withhold payment of
the disputed portion of the monthly payments otherwise
payable pursuant hereto, provided, that upon delivering
the rent roll report to APL, APL shall pay to Landlord
all of the previously withheld monthly payments,
subject to APL's rights hereunder.
Section 5.4. Taxes
(a) APL shall pay-before delinquency all
taxes, assessments, license fees, and other charges
that are levied and assessed on APL's personal property
located in the Premises. Within ten (10) business days
after Landlord's request, APL shall furnish Landlord
with satisfactory evidence of these payments. APL
shall comply with the provisions of any law, ordinance
or rule of the taxing authorities which requires APL to
file a report of APL's personal property located in the
Premises. If any such taxes are levied against the
Building, or if the assessed value of the Building is
increased by the inclusion of a value placed on APL's
personal property and if Landlord pays such taxes then
APL and Landlord shall equitably allocate the amounts
paid by Landlord and APL, within ten (10) business days
after receipt of request therefor, shall reimburse
Landlord for the sum of the taxes levied against
Landlord, or the portion of the taxes resulting from
the increase in Landlord's assessment. In the event of
any dispute regarding equitable allocation of such
taxes the dispute shall be resolved in the manner
provided in Section 2.6 of the Original Lease.
(b) Commencing on January 1, 1998, APL shall
pay to Landlord, in the manner and at the times set
forth in this section, 38.484% ("APL's Tax Share") of
Increased Real Property Taxes. "Increased Real
Property Taxes" shall mean the amount by which Real
Property Taxes for a calendar year exceed Real Property
Taxes for the Base Year.
(i) "Real Property Taxes" shall mean
all taxes, assessments, and other governmental charges,
general and special, ordinary and extraordinary, of
every kind and nature whatsoever, including, without
limitation, assessments for public improvements or
benefits, which shall during the Term be levied,
assessed and imposed upon the Building, Tenant
Improvements and the APL Parcel. Real Property Taxes
shall also include, without limitation, any tax, fee or
excise levied, assessed and/or based on the square
footage of premises in the Building, on the act of
entering into leases for premises in the Building, on
the occupancy by tenants of space in the Building, and
any other tax, fee or excise however described, in
substitution for any charge, tax, levy, fee or
assessment (or any increase thereof) included in this
definition of Real Property Taxes, including, without
limitation, taxes levied on property used in the
operation of the Building; and the cost to Landlord of
reasonably contesting the amount, validity or
applicability of the taxes and charges defined herein
as Real Property Taxes. Landlord shall credit against
Real Property Taxes any refunds received as a result of
tax contests, after deduction of Landlord's costs in
connection with the same. Real Property Taxes shall
not include the following: any municipal, county, state
or federal income, corporate, estate, transfer or
franchise taxes; capital gains taxes; impositions or
penalties arising from Landlord's failure to comply
with any governmental laws, ordinances, or directives;
personal property taxes on the furniture, equipment,
fixtures and other personal property or tenant
improvements of Landlord, APL or any other tenant in
the Building; real property taxes assessed against any
tenant improvements constructed for or by other tenants
or occupants of the Building, any tax on oil, gas, and
mineral rights; inheritance taxes, business, license,
and/or income taxes based on rents or gross receipts;
and taxes personally owed by Landlord. With respect to
assessments which may be levied against or upon the
Building, Tenant Improvements and APL Parcel and which
under the laws then in force may be evidenced by
improvement or other bonds, or may be paid in annual
installments, there shall be included within Real
Property Taxes for any fiscal tax year only the current
annual installment for such year. With regard to
"changes in ownership" occurring during the Term, if
all or a portion of the Premises is not reassessed,
then no increase in Real Property Taxes associated with
such "change in ownership" of the Building shall be
included in Real Property Taxes payable by APL
hereunder. In addition if a "change of ownership"
occurs during the Initial Term and if all or a portion
of the Premises is reassessed then for the balance of
the Initial Term, only one-half of any increases in
Real Property Taxes resulting from the first such
"change in ownership" occurring after Landlord's
acquisition of the Building and the APL Parcel shall be
included in Real Property Taxes. If a "change in
ownership" of APL's leasehold estate created by this
Lease occurs during the Initial Term, then APL shall
pay one-half (1/2) of any increases in Real Property
Taxes resulting from such "change in ownership" of the
leasehold estate and one-half (1/2) of any increases in
Real Property Taxes resulting from such "change in
ownership" of APL's leasehold estate shall be included
in Real Property Taxes. After the Initial Term all
increases in Real Property Taxes resulting from a
"change in ownership" (including, without limitation, a
"change in ownership" of APL's leasehold estate or
Landlord's fee interest) whenever occurring shall be
included in Real Property Taxes. For purposes of this
Lease, "changes in ownership" has the same definition
as in California Revenue and Taxation Code Sections 60-
62, inclusive, or any amendments or successor statutes
to those sections.
(ii) APL's Tax Share of Increased Real
Property Taxes (commencing with calendar year 1998)
shall be as set forth in Section 5.3 above.
(iii) APL shall pay to Landlord ten
(10) days prior to delinquency of the applicable tax
xxxx an amount equal to APL's Tax Share of Increased
Real Property Taxes (commencing in calendar year 1998).
(iv) APL's liability to pay its share of
Increased Real Property Taxes shall be prorated on the
basis of a 365-day year to account for any fractional
portion of a tax fiscal year included in the Term at
its expiration.
(v) If, for any reason other than the
default of APL, this Lease shall terminate on a day
other than the last day of the calendar year, the
additional sums due in connection with the Increased
Real Property Taxes from APL applicable to the calendar
year in which such termination shall occur shall be
prorated according to the ratio that the number of days
from the commencement of such calendar year to and
including such termination date bears to 365.
Section 5.5. Interest Any Rent and other
monetary obligations due hereunder not paid when due
shall bear interest from the date of receipt of the
notice until paid at the then discount rate of interest
charged by the Federal Reserve Bank of San Francisco
plus five percent (5%) (the "Default Rate").
Notwithstanding the foregoing, APL shall be forgiven
from such interest obligation upon the first occurrence
during any twelve (12) consecutive month period
provided that such interest obligation shall in any
case commence three (3) days after receipt by APL of
notice of failure to pay.
ARTICLE 6
Use of Premises
APL shall be permitted to use the Premises for
marketing, sales and service, general office, data
processing, training, administrative, storage and
related uses and for any other use which is consistent
with the uses then prevalent in other office buildings
located in the APL Block and the Balance of the City
Center (in each case, a "Permitted Use"), in compliance
with applicable law. Permitted Use shall also include
uses in the lower elevator bank which are an incidental
benefit to and primarily made available to APL
personnel, including, without limitation, restaurant,
health care and recreational uses. Use of the Premises
for any use other than a Permitted Use shall be subject
to the prior written approval of Landlord, which
approval shall not be unreasonably withheld or delayed.
Landlord warrants to APL that use of the Premises for
the specific purposes in the first sentence of this
Article is permitted by all applicable zoning codes.
APL, at its sole cost and expense, shall comply with
all laws, statutes, ordinances, regulations and
requirements now enforced or hereafter enacted relating
to or affecting condition, use or occupancy of the
Premises; provided, however, APL shall have no
obligation to bear the cost and expense of compliance
with such laws, statutes, ordinances, regulations and
requirements unless required as a result of a
particular or unique use of the Premises by APL other
than as general office, and related uses such as
marketing, sales and service, data processing,
training, administrative and storage. APL shall not
permit anything to be done on the Premises or keep or
permit anything to be kept in the Premises which will
void the coverage of any insurance upon the Building or
any of its contents; provided, however, APL shall have
no liability or obligations hereunder with respect to
the voiding of such insurance if such voiding of the
insurance results from any Permitted Use of the
Premises by APL.
ARTICLE 7
Signs and Building Directory
Section 7.1. At all times following the
execution of this Lease and during the Term, but only
so long as APL or an affiliated company (as defined by
SectionE17.2) or successor to APL by merger,
consolidation or reorganization leases One Hundred
Twenty-Five Thousand (125,000) or more square feet of
Rentable Area in the Building, the Building shall be
known as the "APL Limited Building" or such other name
as APL reasonably desires which designates one or more
of its businesses. APL shall be entitled to construct,
maintain, repair and replace the following signs on and
about the Building and the Common Areas: a sign on the
ground level exterior of the Premises on the facade of
the Building and over the Broadway main entrance, and a
monument sign in the Common Areas. The following shall
apply with respect to this Section:
(a) All signs shall contain the name of APL,
APL's logo, and/or any other insignia generally used by
APL and shall be of such sizes, colors and materials
and in locations reasonably determined by APL subject
to Landlord's reasonable approval;
(b) All signs shall be professionally
prepared and of good quality and condition; and
(c) The signs shall comply with all
applicable governmental statues, laws, regulations and
ordinances.
Section 7.2. At the expiration or earlier
termination of the Term, Landlord, at APL's expense,
may remove any displays of APL's name, logo or other
insignia and restore the areas on which they were
located. At the request of APL at any time during or
after the Term, Landlord shall rename the Building to
eliminate any identification with APL. APL's rights
under Section 7.1 are personal to APL and to any
affiliated company or successor to APL by merger,
consolidation, or reorganization and to any parent,
affiliate or subsidiary of APL.
Section 7.3. Landlord shall, at Landlord's expense
(which shall be an element of Building Operating
Costs), maintain a Building directory at a location
reasonably acceptable to APL, and shall furnish APL
with its proportionate share of such directory (based
on Rentable Area contained in the Premises and the
Building) but in no event less than twenty (20) lines.
Section 7.4. Landlord shall have no right
whatsoever to use the name, logo or other insignia of
APL without the prior written consent of APL, which
consent may be withheld by APL in its sole and absolute
discretion. The preceding prohibition shall not apply
to photographs or depictions of the Building which
contain APL's signs or factual statements to the effect
that APL leases the Premises.
ARTICLE 8
Insurance
Section 8.1. APL's Insurance .1. APL's
Insurance;. APL shall maintain, throughout the Term, a
policy or policies of worker's compensation insurance
in an amount not less than the statutorily prescribed
limits and comprehensive general liability insurance,
naming Landlord as an additional insured, insuring
against all claims in connection with APL's use or
occupancy of the Premises or its activities in, on or
about the Premises. Such policy shall have a minimum
combined single limit of coverage of Five Million
Dollars ($5,000,000) for bodily injury and property
damage. The comprehensive general liability insurance
shall specifically include the liability assumed
hereunder by APL; provided, however, that the amount of
such insurance shall not be construed to limit the
liability of APL hereunder. APL shall also maintain,
throughout the Term, a policy or policies of fire and
extended coverage insurance covering damage to the
Tenant Improvements and any alterations, additions or
other improvements made to the Premises by or at the
direction of APL in the amount of at least eighty
percent (80%) of the full replacement value. APL shall
furnish Landlord, upon written demand therefor at
reasonable intervals a certificate evidencing such
insurance.
Section 8.2. Landlord's Insurance. Landlord
shall maintain, throughout the Term, a policy or
policies of insurance covering damage to the Premises
and the Building, excluding APL's personal property,
the Tenant Improvements and any other tenant
improvements in the Building, in the amount of at least
eighty percent (80%) of the full replacement value
thereof, excluding excavations, foundations and
footings, providing protection against all perils
included within the classification of "all risk"
coverage. Landlord may, at its election, maintain
rental interruption insurance in an amount customary
for similar first class office buildings, the premium
cost of which shall be included in Building Operating
Costs. All policies maintained by Landlord shall
provide for deductibles in amounts customary for
similar first-class office buildings in the vicinity of
the Building. In addition, Landlord shall maintain
during the Term comprehensive general liability
insurance, with a minimum combined single limit of
coverage of not less than Five Million Dollars
($5,000,000). Landlord may maintain such other
insurance in such amounts (excluding earthquake
insurance) as other owners of similar first class
office buildings in the San Francisco/Oakland area are
then maintaining provided such insurance coverage is
available at commercially reasonable rates. All
liability insurance maintained by Landlord shall
specifically include the liability assumed hereunder by
Landlord (provided, however, that the amount of such
insurance shall not be construed to limit the liability
of Landlord hereunder) and shall provide that it is
primary insurance and not "excess over" or contributory
with any other valid, existing and applicable insurance
in force for or on behalf of APL. The policies
required of APL and Landlord shall not eliminate cross-
liability and shall contain a severability of interest
clause. Notwithstanding the foregoing, APL shall have
the right at any time during the Term when APL leases
ninety percent (90%) or more of the Rentable Area of
the Building upon not less than sixty (60) days advance
written notice to Landlord to undertake and maintain
any or all of the insurance policies required of
Landlord hereunder. If APL elects to maintain any
policy required of Landlord hereunder, APL shall be
entitled to reimbursement of the cost of that portion
insurance not allocable to the Premises. Landlord's
payment of its proportionate share of such insurance
premiums shall be made in the same manner as payment of
Building Operating Costs by APL. Any installments of
reimbursement of such insurance premiums shall be made
in the same manner as payment of Building Operating
Costs by APL. Any installments of reimbursement of
such insurance premiums not received when due shall
bear interest from the date due until paid at the
Default Rate
Section 8.3. Miscellaneous. All insurance
policies to be maintained by either party hereunder
shall:
(a) be issued by insurance companies, with a
general policyholder's rating of not less than A XIII
in the most currently available Best's Insurance
Reports and are licensed to do business in the State of
California or shall be one of the recognized London,
England insurance companies; and
(b) provide that such insurance shall not be
cancelled nor shall there be any material change in the
scope or amount of coverage of such policy, unless
thirty (30) days' prior written notice shall have been
given to the other party hereunder.
Section 8.4. Certificates. All policy or
policies of insurance to be obtained by either party or
certificates thereof shall be delivered to the other
party prior to or promptly upon the commencement of the
Term and upon each renewal of such insurance.
Section 8.5. Waiver of Subrogation. Landlord
and APL hereby mutually waive their respective rights
of recovery against each other for any loss of, or
damage to, either party or its property, to the extent
that such loss or damage is insured by an insurance
policy required to be in effect at the time of such
loss or damage or in the case of self-insurance to the
extent it would have been covered by such a policy in
the absence of self insurance. Each party shall obtain
any special endorsements, if required by its insurer,
whereby the insurer waives its rights of subrogation
against the other party hereto. The provisions of this
Section 8.5 shall not, however, apply in those
instances in which waiver of subrogation would cause
either party's insurance coverage to be voided or
otherwise made uncollectible.
Section 8.6. Blanket Policies and Self-
Insurance. Notwithstanding anything to the contrary
contained in this Article 8, a party's obligations to
carry the insurance provided herein may be brought
within the coverage of a so-called blanket policy or
policies of insurance carried and maintained by the
party; provided, however, that the other party shall be
named as an additional insured thereunder as its
interest may appear and that the coverage afforded the
other party will not be reduced or diminished by reason
of such blanket policy of insurance (with an
endorsement to that effect provided to such other
party), and provided further that the requirements set
forth herein are otherwise satisfied. APL may elect to
self-insure with respect to any of its insurance
obligations hereunder and Landlord may elect to self-
insure any of its liability insurance obligations
hereunder; provided, however, that such right to self-
insure shall have no limits so long as the self-
insuring party maintains a net worth of Five Hundred
Million Dollars ($500,000,000.00) as determined in
accordance with generally accepted accounting
principles. If either party's net worth falls below
Five Hundred Million Dollars ($500,000,000.00) then
such party's self insurance limit, when aggregated with
all other self-insurance obligations then undertaken by
such party, shall be five percent (5%) of its then net
worth. The self insuring party shall give the other
party not less than thirty (30) days notice of its
election to self insure.
ARTICLE 9
Indemnification
Section 9.1. APL APL shall hold Landlord
harmless from, and indemnify and defend Landlord
against, any and all claims or liability for any injury
or damage to any person or property whatsoever
occurring in, on or about the Premises, the Building,
or the Common Areas, to the extent that such injury or
damage is caused by the negligence or willful
misconduct of APL, its agents, employees or licensees.
Section 9.2. Landlord Landlord shall hold APL
harmless from, and indemnify and defend APL against,
any and all claims or liability for any injury or
damage to any person or property whatsoever occurring
in, on or about the Premises, the Building or the
Common Areas, to the extent that such injury or damage
is caused by the negligence or willful misconduct of
Landlord, its agents, employees or invitees.
Section 9.3. Mechanics' Liens Each party
shall indemnify, defend and hold the other party
harmless from and against any liens or encumbrances
affecting the APL Parcel, Building or Premises arising
out of any work performed or materials furnished by or
for the indemnifying party
ARTICLE 10
Utilities and Services
Section 10.1. Basic Utilities and Services.
Landlord shall furnish to the Premises during APL's
hours of operation all utilities, maintenance and
similar services then customarily supplied to major
anchor tenants of other first class office buildings in
amounts sufficient for the comfortable use and
occupancy of the Premises, as reasonably determined by
APL, including, without limitation: (a)Ewater,
electricity, and heating, ventilating and air
conditioning; (b) high quality lighting levels,
including fluorescent tube replacement and ballast
repair; (c)Etrash collection service; (d) elevator
service satisfying the elevator performance
specifications attached hereto as Exhibit "E" and
incorporated herein by reference; and (e) window
washing. Heating, ventilating and air conditioning
shall be provided to the Premises on Mondays through
Fridays between 7:00 a.m. and 6:00 p.m. in amounts
sufficient for the comfortable use and occupancy of the
Premises, as reasonably determined by APL. Hot and
cold water shall be provided twenty-four (24) hours per
day in all lavatories and through all fixtures and
pipes within the Premises. With APL's prior written
consent, which consent may be withheld by APL in its
sole discretion, Landlord may provide only tepid water
in the lavatories. Landlord shall provide repair and
maintenance of all Common Areas to a standard and in a
manner consistent with the maintenance and repair of
Common Areas of other comparable first class office
buildings. Landlord shall promptly replace, as
necessary, all Building Standard light bulbs,
florescent tubes and ballasts in the Premises.
Elevator service shall be supplied on a twenty-four
(24) hour per day basis. If utilities or services in
excess of those specified above are requested by APL,
in writing, APL shall reimburse Landlord for the actual
direct costs of providing such additional services
within thirty (30) days of receipt for any invoice
therefor. Reimbursement not timely made shall bear
interest at the Default Rate from the date due until
paid.
Section 10.2. Electricity. Landlord shall
operate and maintain in good and operable condition the
electrical systems servicing the Premises as of
commencement of the term of this Lease, which shall
have a capacity of 3 xxxxx per square foot of Rentable
Area for lighting and 2.5 xxxxx per square foot of
Rentable Area for standard electrical. APL may use any
and all equipment, machinery or devices in the Premises
which it desires provided such use does not exceed the
capacity of the feeders, conductors, risers and wiring
and other components of the electrical system in or to
the Premises existing in the Premises as of the
commencement date of this Lease (provided that Landlord
has maintained such system in a good and operable
condition). If APL's electrical requirements exceed
the capacity of the existing feeders, conductors,
risers, wiring and other components of the electrical
system and provided that Landlord has properly
maintained the electrical systems existing in the
Premises as of the commencement date of this Lease,
then APL shall have the right, at APL's expense, to
require Landlord to increase the capacity of the
subject feeders, conductors, risers, wiring and other
components of the electrical system so as to
accommodate the increased electrical requirements of
APL.
Section 10.3. Interruption. Rent shall be
equitably abated, if Landlord, for any reason
whatsoever (including Force Majeure), is unable to
supply any of the Building's sanitary, electrical,
heating, air-conditioning, water or other systems
serving the Premises for a period in excess of twenty-
four (24) hours, unless the damage or defective
condition relating to such systems is solely caused by
the negligence or willful misconduct of APL, its
employees, licensees or invitees. Such abatement shall
reflect the extent to which such unavailability
materially disrupts APL's normal business operations on
the Premises. Abatement of Rent shall be determined on
a floor by floor basis if the disruption affects less
than the entire Premises. In the event of any stoppage
or interruption of services, Landlord shall use all
deliberate speed in restoring such services as soon as
possible; APL, however, shall have the right, at its
option, to terminate this Lease if any such stoppage or
interruption of such services affects more than twenty-
five percent (25%) of the Rentable Area of the Premises
and continues for any reason (including Force Majeure)
for more than seventy-five (75) consecutive days and
materially disrupts, as reasonably determined by APL,
APL's normal business operations in the Premises.
Section 10.4. Janitorial Services. Landlord
shall provide the Premises and the Common Areas with
janitorial services in accordance with the janitorial
services attached hereto as Exhibit "F" and
incorporated herein by reference. Landlord shall cause
all exterior windows of the Building to be cleaned not
less often than once during every calendar quarter
during the Term.
Section 10.5.. Landlord shall provide the
security services more particularly described on
Exhibit "G" attached hereto and incorporated herein by
reference, which security services shall be increased
and modified from time to time so that the security
services in effect in the Building at any time shall
not be less than those then maintained by other first-
class office buildings in Oakland, California. APL
shall have the right, at its cost, to establish its own
procedures in the lobby area of the Building and on any
floor occupied by APL in order to maintain and protect
the internal security of the Premises in accordance
with APL's needs. At its election, APL may require
that Landlord provide such additional security at APL's
sole cost and expense. Further, APL shall have the
right, in its sole discretion, to install additional
security devices for the Premises, including, without
limitation, 24-hour monitored heat and smoke sensors
throughout the Premises, a "group alert" system capable
of notifying APL's personnel of any emergencies, and a
security monitoring system on all stairwell doors. APL
shall be responsible, at its own cost and expense, for
all security personnel needed to operate its additional
security devices.
ARTICLE 11
Alterations and Build Out of Expansion Spaces
Section 11.1. Alterations and Expansion Space.
APL shall not make any alterations to the structural
portions of the Building or to mechanical or utility
systems without Landlord's consent, which consent shall
not be unreasonably withheld or delayed. APL may make
alterations to the Premises (including Expansion Space)
not affecting structural portions or mechanical or
utility systems of the Building without Landlord's
consent, if the cost of such alterations does not
exceed Fifty Thousand Dollars ($50,000.00). Such
Alterations, the cost of which exceeds Fifty Thousand
Dollars ($50,000.00), shall be subject to Landlord's
consent, which consent shall not be unreasonably
withheld or delayed. APL shall not permit any
mechanics' or materialmen's liens or other liens to
stand against the Premises, the Building or the APL
Parcel for any labor or material furnished APL in
connection with work of any character performed on the
Premises by or at the direction of APL; and Landlord
shall not permit any such liens for work or material
furnished by Landlord to be placed against the
Premises, the Building or the APL Parcel. Either party
shall have the right to remove any lien by posting of
the applicable statutorily prescribed lien release
bond. Liens must be bonded after request by the other
party, within ninety (90) days of recordation of the
lien, unless bonding is required within a shorter
period in order to facilitate the closing of any
pending financing transaction. Landlord and APL shall
each have the right to contest the validity or amount
of any such lien, but upon the final determination of
such contest shall immediately pay any judgment
rendered with all proper costs and charges and shall
have the lien released at the contestant's own expense.
Before the commencement of any substantial repairs,
alterations, additions, replacements or restorations in
and about the Premises (including the Expansion Space)
by or at the direction of APL, APL shall give to
Landlord notice thereof, specifying the nature and
location of the intended work and the expected date of
commencement thereof.
Section 11.2. Landlord Repair or Alterations.
With respect to any permitted repairs or alterations
made by Landlord within the Premises, Landlord shall
not install pipes, ducts or conduits except in
concealed areas, including concealed areas above the
finished ceiling line, and the installation of the same
shall not in any way alter or affect the size or
character of the Premises or APL's ability to utilize
the same for the conduct of its business. Landlord
shall have the right to make such changes to the
Building as may be necessary or desirable for the
efficient operation of the Building, provided, however
that (except as elsewhere provided) Landlord shall make
no changes of any kind to the Building without the
prior written consent of APL (which consent shall not
be unreasonably withheld or delayed), if such changes
are of such a nature that they would have required the
consent of APL pursuant to the construction by landlord
of the Tenant Improvements had they been made during
the initial buildout of the Premises pursuant to the
Original Lease or if the changes would alter the
character of the Building, affect the usability of the
Premises, diminish the quantity or quality of the
services provided by Landlord under this Lease, or
affect the functional utilization of the Building or
the ingress or egress thereto. Notwithstanding the
foregoing, Landlord shall be permitted to make changes
to the Building that are required by law or by
direction of governmental authority and that are not
attributable to actions or activities which Landlord
could avoid; provided, however, that the Rent shall be
abated to the extent such changes interfere with APL's
normal use of the Premises and provided that changes to
the Premises to comply with legal requirements may only
be made if the legal requirements cannot be satisfied
by undertaking repairs or alterations elsewhere in the
Building.
Section 11.3. Removal of Alterations. All
alterations, additions and improvements made by APL at
any time to the Premises shall be and remain the
property of APL during the Term. APL may at any time
during the Term or upon the termination of this Lease,
remove any alterations and any of APL's moveable
furniture, business machines, kitchen equipment and
appliances, equipment and trade fixtures purchased or
installed at APL's expense, provided that APL shall
repair all damage to the Building and the Premises
caused by such removal.
ARTICLE 12
Repairs and Maintenance
Section 12.1. Landlord Repair. Subject to the
provisions of Articles 14 and 15, except to the extent
such repair is required as a result of the negligence
or willful misconduct of APL, its employees, agents,
and officers, Landlord, at its sole cost and expense,
shall maintain in good condition and repair, and
consistent with the operation of the Building as a
first class office building, the Building and the
Common Areas, including, without limitation, the
plumbing, electrical, HVAC and other utility facilities
serving the Building and the Premises; as well as the
structural parts of the Building, including, without
limitation, footings and foundations, bearing and
exterior walls, subflooring and roof; and the elevator
and fire sprinkler systems which are a part of and/or
service the Building, the Common Areas and/or the
Premises. If Landlord fails to perform any of its
maintenance or repair obligations hereunder and such
failure continues for a period of twenty (20) days
after notice from APL, then APL shall have the right to
undertake such repair or maintenance and Landlord shall
reimburse APL for such sums incurred by APL within ten
(10) days after receipt of invoice therefor. Sums not
timely paid by Landlord shall accrue interest at the
Default Rate from the date due until paid.
Notwithstanding the foregoing, if the subject
maintenance or repair item cannot be completed within
twenty (20) days, then Landlord shall have such
additional time as may be reasonably necessary provided
Landlord commences such maintenance or repair within
such twenty (20) day period and thereafter diligently
prosecutes such maintenance and repair to completion.
Except as provided above, APL expressly waives the
benefits of any statute now or hereafter in effect
which would afford APL the right to make repairs at
Landlord's expense because of Landlord's failure to
keep the Premises in good order, condition and repair.
Section 12.2. Tenant Repair. APL, at its
expense, shall make all interior, non-structural and
non-mechanical system repairs to the Premises
(including Expansion Space and any Available Space
added to the Premises pursuant to SectionE4.3 or 4.5
above) which are not the obligation of Landlord
hereunder and which become necessary during the Term to
keep the Premises in substantially as good condition as
on the Commencement Date, reasonable wear and tear,
acts or omissions of Landlord or of Landlord's agents
or employees and damage by fire or other casualty
excepted.
ARTICLE 13
Operation
Section 13.1. Operation. Landlord shall use due
diligence to operate the Building and the Common Areas
in as economically reasonable a manner as commercially
practicable, consistent with the manner in which other
comparable first-class office buildings are operated.
Subject to the foregoing, Landlord shall use due
diligence to operate the Building at a cost not
disproportionately high when compared to the cost of
operating comparable first-class office buildings.
ARTICLE 14
Damage and Destruction
Section 14.1. Reconstruction by Landlord
Subject to the provisions of this Article 14, if during
the Term the Premises or the portions of the Common
Areas providing direct vehicular or pedestrian access
to the Premises are totally or partially destroyed from
any casualty, Landlord shall promptly restore the
Premises and/or such portions of the Common Areas to
substantially the same condition as they were in
immediately before destruction; provided, Landlord's
obligations shall not exceed the landlord's
construction obligations required to be completed by
the commencement of the term of the Original Lease
(excluding the Tenant Improvements), and APL shall
restore the balance of the Premises including the
Tenant Improvements and fixtures to substantially the
same condition as they were in immediately before
destruction. APL shall have the right, at its cost, to
install tenant improvements of a style, utility, type
and construction different from the original Tenant
Improvements provided APL constructs improvements,
fixtures and equipment consistent with a Permitted Use.
Such destruction shall not terminate this Lease. If
the existing laws do not permit the Premises to be
restored to substantially the same condition as they
were in immediately before destruction and if
restoration as permitted by law will result in APL
having materially less Rentable Area than existed in
the Premises prior to the destruction or will result in
a material reduction in the amount of expansion space
available to APL or will result in a material adverse
effect on the conduct of APL's business in the
Premises, as reasonably determined by APL, then either
party may terminate this Lease by giving notice to the
other party.
Section 14.2. Substantial Destruction . If
there is destruction to the Building in excess of fifty
percent (50%) of its then replacement value (regardless
of whether the Premises are destroyed) and if the
Building cannot be substantially restored within twelve
(12) months of the date of damage or destruction
Landlord or APL shall have the right to terminate this
Lease by giving notice to the other party. Such
election must be made within a reasonable time after
the destruction occurs.
Section 14.3. Destruction During Last Part of
Term. If any destruction of the Premises occurs during
the last twelve (12) months of the Term regardless of
the nature and extent of the destruction, either
Landlord or APL may elect to terminate this Lease
within a reasonable time thereafter. If any
destruction occurs to the Premises during the last
twelve (12) months of the then current Term and APL
waives its right to exercise any further unexercised
extension terms, then either Landlord or APL may elect
to terminate this Lease within a reasonable time
thereafter.
Section 14.4. Abatement or Reduction of Rent In
case of a partial or total destruction of the Premises,
there shall be an abatement or reduction (as
applicable) of all monetary obligations hereunder
including, without limitation, Rent between the date of
destruction and the date upon which APL Substantially
Completes reconstruction of the tenant improvements,
fixtures, equipment and furnishings in the Premises and
recommences the conduct of its business therein.
Promptly following Landlord's completion of its
restoration obligations, Landlord shall tender the
premises to APL in a condition ready for commencement
of APL's work. Thereafter, APL shall diligently
prosecute its restoration work to completion. Such
abatement shall be based on the extent to which the
destruction interferes with APL's enjoyment and use of
the Premises.
Section 14.5. Inapplicability of Civil Code
Sections. The provisions of California Civil Code
Sections 1932(2) and 1933(4), and any successor
statutes, are inapplicable with respect to any
destruction of the Premises, such sections providing
that a lease terminates upon the destruction of the
Premises unless otherwise agreed between the parties to
the contrary.
Section 14.6. APL's Right to Terminate Lease
APL's Right to Terminate Lease;. As soon as reasonably
practicable after any such damage or destruction to the
Premises or the Building, Landlord shall inform APL of
Landlord's reasonable and bona fide estimate of the
period of time it will take Landlord to perform its
restoration obligations as herein provided, which
estimate shall be based upon estimates obtained from
Landlord's contractors and architect. If Landlord
reasonably estimates that the period of restoration
will exceed two hundred seventy (270) days from the
date of the damage or destruction, APL shall have the
right, exercisable within sixty (60) days after receipt
of Landlord's estimate, within which to terminate this
Lease and if Tenant does not so exercise such
termination right, Tenant shall be deemed for the
purposes of this Section 14.6 to have accepted the
estimated redelivery dated specified in Landlord's
notice. If APL elects to terminate this Lease as
herein provided, the effective date of such termination
shall be no earlier than sixty (60) days following the
date APL elects to terminate, in which event the
parties shall be relieved of all obligations accruing-
under this Lease from and after the effective date of
termination. If APL does not elect to terminate this
Lease within such sixty (60) day period, then this
Lease shall remain in full force and effect and
Landlord shall restore the Premises and Building as
provided in this Article except that APL shall pay Rent
and APL's Share of Building Operating Costs and Real
Property Taxes based on the proportionate share of
space in the Building which remains occupied by APL.
If Landlord fails to Substantially Complete (as such
term was defined in Section 2.5 of the Original Lease)
the restoration of the Premises and tender the restored
Premises to APL within three hundred (300) days after
the date of the damage or destruction, then APL may
terminate this Lease by written notice to Landlord
(unless APL has agreed to an estimated redelivery date
which is more than three hundred (300) days from the
date of the damage or destruction, in which event APL
may terminate this Lease by written notice to Landlord
only if Landlord fails to Substantially Complete the
restoration of the Premises and tender the restored
Premises to APL by the agreed estimated redelivery
date). The effective date of such termination shall be
no earlier than sixty (60) days after APL elects to
terminate
Section 14.7. Insurance Proceeds;. If this Lease
is terminated pursuant to Article 14, Landlord shall be
entitled to that portion of the proceeds, if any,
actually received by APL from casualty insurance equal
to the unamortized cost of the Tenant Improvements paid
by Landlord. In such event APL shall use reasonable
efforts to collect the insurance proceeds to which it
is entitled under the subject casualty insurance
policy. Such sum shall be paid out of the payment made
by APL's insurer for the Tenant Improvements and shall
be paid to Landlord within thirty (30) days of receipt
by APL. Sums not timely paid shall bear interest at
the Default Rate from the date due until paid.
ARTICLE 15
Condemnation
Section 15.1. Definitions. "Condemnation" or
"Taking" means (a) the exercise of any governmental
power, whether by legal proceedings or otherwise, by a
condemnor, or (b) a voluntary sale or transfer by
Landlord to any condemnor, either under threat of
condemnation or while legal proceedings for
condemnation are pending.
"Date of taking" means the date the condemnor has
the right to possession of the property being
condemned.
"Award" means all compensation, sums, and anything
of value awarded, paid or received on a total or
partial condemnation excluding the award to APL for
goodwill and relocation costs.
"Condemnor" means any public or quasi-public
authority, or private corporation or individual, having
the power of eminent domain.
Section 15.2. Effect on Lease. If there is a
taking of all the Premises, or part of the balance of
the Building (other than the Premises) such that a
material portion of the expansion space is eliminated,
or part of the Common Area that materially prevents
direct pedestrian access to the Premises, or part of
the Premises so that the remaining part of the Premises
is rendered unsuitable for APL's continued use of the
Premises for the purpose of conducting APL's business
thereon, as reasonably determined by APL, APL shall
have the right to terminate this Lease effective as of
the date of the taking. The election to terminate this
Lease as provided herein shall be exercised, if at all,
within one hundred twenty (120) days after the nature
and extent of the taking is determined.
Section 15.3. Award APL and Landlord
shall cooperate in the condemnation proceeding so as to
maximize the Award. APL shall be entitled to recover a
separate amount for its goodwill and relocation
expenses. After determination of the amount of the
Award, APL and Landlord shall meet and attempt to
determine:
(a) The value of the Award assuming that (i)
the Building occupancy rate is its then actual
percentage, including the Premises, (ii) all other
rents paid in the Building are then actual effective
rates and (iii) the Premises are leased at then current
fair rental value, not the actual rents paid by APL
under this Lease. Such value shall be referred to as
the "Adjusted Award".
(b) The value of APL's leasehold interest in
the Building or that portion thereof if less than all
is taken, taking into consideration the actual terms of
this Lease (such value is referred to as the "APL
Leasehold Value").
If APL and Landlord are unable to agree within thirty
(30) days after determination of the amount of the
Award, then the matter shall be resolved by arbitration
using the mechanism more particularly described in
Section 4.4 except that the arbitrators who shall
decide the issue shall be qualified MAI real estate
appraisers with at least ten (10) years full-time
commercial appraisal experience. Once the Leasehold
Value and the Adjusted Award are determined, the amount
of the award payable to APL shall be computed as
follows:
APL Leasehold Value x Award = Amount payable to
APL.
Adjusted Award
For example, assuming a full taking of the APL Parcel,
the computations might be:
$30 M x $130 M = $26 M
$150 M
The balance of the Award shall be retained by
Landlord, subject to the possible interests of third
parties.
The Award shall be retained by the condemning
authority until APL's and Landlord's respective rights
to the Award have been determined at which point the
Award shall be distributed by the condemning authority
to the parties as herein provided.
Section 15.4. Waiver. Each party waives the
provisions of California Code of Civil Procedure
Section 1265.130, and any successor statute, allowing
either party to petition the Superior Court to
terminate this Lease in the event of condemnation.
Section 15.5. Restoration of the Premises. If
APL does not terminate this Lease as provided in this
Article 15, Landlord shall, at its cost and expense,
promptly make all necessary repairs or alterations to
the Premises so that the portion of the Premises not
taken shall be placed in a condition as close to the
original condition of the Premises immediately before
the taking as is possible; provided, Landlord's
obligations shall not exceed Landlord's construction
obligations at the commencement of the Term, and APL
shall restore the balance of the Premises, including
the Tenant Improvements and fixtures to substantially
the same condition as they were in immediately before
the taking.
Section 15.6. Rescission of APL's Election to
Terminate Lease. If between the period commencing on
the date APL elects to terminate this Lease and the
effective date of termination any condemnation
proceeding which gave rise to the termination shall be
abandoned, then APL shall have the election to rescind
its previous election to terminate this Lease by giving
notice thereof to Landlord within thirty (30) days
following the date Landlord notifies APL that the
condemnation proceedings have been abandoned. If APL
does not elect to rescind its previous election to
terminate this Lease within such thirty (30) day
period, this Lease shall terminate in accordance with
the terms of APL's election to terminate this Lease
Section 15.7. Reduction of Rent. Anything
contained in this Article 15.7 to the contrary
notwithstanding, nothing shall be construed to impose
upon APL the obligation to pay any Rent or other
monetary obligations beyond the date of taking in the
event of a total taking of the Premises, or in the
event of a partial taking, the difference between the
Rent set forth in this Lease and the new Rent as
computed pursuant hereto. Rent shall be prorated as of
the earlier of the date of taking, or the date APL
specifies in its notice of election to terminate
provided that APL surrenders possession of the Premises
on or before such date set forth in APL's notice to
terminate, otherwise, on such later date on which APL
surrenders possession of the Premises, and Landlord
agrees to refund to APL any rent paid in advance. If
there is a partial taking of the Premises and this
Lease remains in effect as to the remaining portion of
the Premises, Rent shall be reduced as of the date of
taking in the proportion which the total number of
square feet of Rentable Area remaining in the Premises
bears to the total number of square feet of Rentable
Area in the Premises immediately before the date of
taking.
. If APL elects to terminate this Lease when a portion
of the Premises is taken by condemnation, APL shall
have the right, until such time as it can relocate to
new premises, to holdover for up to one (1) year, in
that portion of the Premises not taken, after the date
specified in APL's notice of election to terminate, on
a month-to-month basis at the same Rent on a pro rata
basis, and under the same terms, covenants, conditions,
and agreements contained in this Lease. If APL elects
to exercise its right to holdover pursuant to the terms
of this Section 15.8, APL shall, if not prevented by
the condemnor, give Landlord three (3) months notice of
the date it intends to terminate such holdover tenancy,
and Landlord shall not terminate such holdover tenancy
prior to the expiration of the one (1) year period
unless APL is in default of this Lease.
Section 15.9. Separate Representation. Landlord
and APL shall be entitled to separate representation in
any condemnation proceedings involving the Premises.
Section 15.10. Temporary Taking. If all of the
Premises shall be condemned or taken for governmental
occupancy for a period more than seventy-five (75) days
and less than the balance of the Term (including
unexercised extension rights) APL may either (a)
terminate this Lease as of the date of the taking or
(b) elect not to terminate this Lease in which event
any award for such temporary taking shall be paid to
Landlord and APL's Annual Base Rent and all other
obligations with regard to the subject space shall
xxxxx until ninety (90) days after expiration of the
temporary taking.
ARTICLE 16
Entry by Landlord
Landlord and its agents shall have the right,
during normal business hours, upon reasonable notice to
APL, to enter upon the Premises, so long as it does not
unreasonably interfere with the business activities of
APL on the Premises, for the purpose of inspection,
serving or posting notices, showing the Premises to
prospective lenders, purchasers or tenants (provided
the Premises may only be shown to prospective tenants
during the last twelve (12) months of the Term),
maintaining the Premises or making necessary repairs,
to any portion of the Premises to the extent required
or permitted under this Lease. Notwithstanding the
foregoing, the right to enter upon the Premises or any
portion thereof pursuant to any provision of this Lease
(other than in an emergency as to which it is
impossible to give prior notice to APL) shall be
limited, in the case of such portions of the Premises
as APL shall designate as security areas, to entry with
a duly authorized representative of APL, after having
first given APL reasonable advance notice of the reason
for and time of such entry. Landlord shall indemnify,
defend and hold APL harmless from and against any loss,
liability or claim in any way resulting from Landlord's
entry into the Premises to the extent caused by the
acts or omissions of Landlord, its agents, employees,
officers or contractors. Landlord shall use due
diligence and all commercially practical efforts to
cause all work performed on the Premises to be done as
promptly as reasonably possible and so as to cause as
little interference to APL's use of the Premises as
possible.
ARTICLE 17
Assignment and Subletting
Section 17.1. Subject to compliance with Permitted
Uses hereunder, APL shall have the right to sublet all
or any portion of the Premises without Landlord's
consent.
Section 17.2. If APL desires to assign all or any
part of its interest under the Lease to a third party
the provisions of this section shall apply. Landlord
shall have the option, to be exercised irrevocably by
giving notice to APL within thirty (30) days after
receipt of APL's notice of intent to assign, to
recapture the portion of the Premises which is being
assigned and to terminate this Lease as to such portion
of the Premises on the effective date stated in APL's
notice of intent to assign. In the event of such a
termination all Rent and other monetary obligations
hereunder shall be prorated to the date of termination
based upon the number of square feet of Rentable Area
recaptured and all liabilities of either party accruing
after the date of termination with respect to the
recaptured space shall be extinguished. Upon any
partial assignment, the assignee shall only have the
right to exercise the next two (2) accruing options to
extend and such assignee shall have no expansion rights
or right of first refusal rights hereunder. APL shall
be permitted to assign or sublet the Premises, or any
part thereof, to any of APL's subsidiaries or
affiliated companies, or to any corporate successor
(upon merger, consolidation or reorganization) (the
"Permitted Assignees"), without the need to obtain
Landlord's consent. Upon any assignment with the
consent of Landlord (or, if the consent of Landlord is
not necessary for an assignment, upon such assignment),
if the net worth of the assignee is greater than One
Hundred Seventy Five Million Dollars (U.S.
$175,000,000.00) (the "Minimum Net Worth") then APL
shall be relieved of its obligations under this Lease
to the extent of the interest assigned. The Minimum
Net Worth shall be increased on January 1 of each year
commencing on January 1, 1992 by the same percentage as
any increase in the Consumer Price Index for All Urban
Consumers (CPI-U) for the San Francisco/Oakland/San
Jose, California Area ALL ITEMS (1982-84 equals 100),
as published by the United States Department of Labor,
Bureau of Labor Statistics (the "Index"). For purposes
of application of the formula, the Index for January,
1991 shall be compared to the Index for the month of
January of the year of adjustment. For purposes of
this Article, "affiliated company" shall mean any
parent of APL or any entity under common control with
APL, or any joint venture, partnership, corporation
(foreign or domestic), or other entity of which APL or
a subsidiary of APL or any corporation controlled by or
under common control with APL owns at least fifty
percent (50%) of the net assets or fifty percent (50%)
of the voting stock or other equity interest.
Section 17.3. The provisions of this Section 17.3
shall never apply to Permitted Assignees. One-half
(1/2) of any sums or the monetary equivalent of other
economic consideration received by APL directly or
indirectly in connection with any sublease under this
Section 17.3 which exceed, in the aggregate: (a) the
total sums which APL is obligated to pay Landlord
hereunder (prorated in the case of a sublease of less
than all of the Premises to reflect obligations
allocable to the portion of the Premises sublet) plus,
(b) the cost, amortized over the period of the sublease
of any additional tenant improvements paid for by APL
and not reimbursed by the sublessee shall be payable to
Landlord as additional Rent under this Lease. APL
shall also be entitled to deduct from the sums due
Landlord under Section 17.3 one-half (1/2) of all other
costs and expenses incurred by APL in connection with
such subletting, including, without limitation, "free
rent", rental concessions, attorneys' fees and brokers'
fees. APL shall also be entitled to recapture all Rent
and other charges paid hereunder with respect to the
subleased space which was actually incurred by APL
during periods when the subject subletting space was
vacant and being offered for sublease.
ARTICLE 18
Partial Subordination
This Lease may, at the option of Landlord, be made
subordinate to any deed of trust now or hereafter
placed upon or affecting the Premises, Building, Common
Area or APL Parcel or to any ground lease or underlying
lease which now or hereafter may exist and to all
advances made or to be made upon the security thereof,
renewals, modifications, replacements and extensions
thereof, provided that as a condition of such
subordination:
(a) such deed of trust or ground or
underlying lease shall contain a covenant which
provides, so long as the security of the mortgagee or
beneficiary is not impaired, that the proceeds of all
insurance policies maintained by or on behalf of
Landlord and covering the Building, the Common Areas,
the Premises and/or the improvements, equipment and/or
appurtenances constituting the Premises, and all
proceeds of any condemnation, whether any such proceeds
are to be held by Landlord or the beneficiary, shall be
paid and/or made available for repair, replacement or
rebuilding as provided in this Lease;
(b) a separate written agreement is entered
into by the trustee and beneficiary named in any such
deed of trust or the lessor under the ground or
underlying lease, and is recorded simultaneously with
such deed of trust or ground or underlying lease
providing that notwithstanding any default under the
deed of trust or ground or underlying lease or any
foreclosure or termination thereof, or the enforcement
by the holder thereof or lessor of any rights or
remedies, including sale thereunder, or otherwise, APL
shall not be joined in or made a party to such
foreclosure or termination proceedings and this Lease
shall be recognized and remain in full force and
effect, and APL shall be permitted to remain in quiet
and peaceful possession of the Premises throughout the
Term in accordance with the provisions of this Lease,
as long as APL is not in default under this Lease or,
if APL is in default, as long as APL's time to cure
such default has not expired.
APL shall, within thirty (30) days of Landlord's
written request, execute and deliver such instruments
as may be reasonably necessary or convenient to
evidence such subordination. Such instrument or
agreement may provide, (i) that APL pay rent to such
beneficiary or lessor from the date of such attornment,
(ii). that such beneficiary or lessor shall not be
responsible to APL under this Lease except for
obligations accruing subsequent to the date of such
attornment, and (iii) that APL, in the event of
foreclosure or a deed in lieu thereof or a termination
of the ground or underlying lease, will enter into a
new lease with the beneficiary, lessor or other person
having or acquiring title on the same terms and
conditions as this Lease and for the balance of the
Term. If any beneficiary, trustee or ground lessor
elects to have this Lease prior to the lien of such
beneficiary's, trustee's or ground lessor's deed of
trust or ground lease, and gives notice of such
election to APL, this Lease shall be deemed prior to
the lien of such deed of trust or ground lease, whether
this Lease is dated prior or subsequent to the date of
such deed of trust or ground lease, or the date of the
recording thereof. Any such instrument or instruments
shall provide that APL shall have the right to enforce
the terms thereof.
ARTICLE 19
Default
Section 19.1. Events of Default. If any of the
following shall occur, it shall be deemed to be in
default under this Lease: (a) if APL fails to pay any
installment of Annual Base Rent or other sum when and
as the same becomes due and payable and such failure
continues for more than ten (10) days after receipt of
written notice thereof from Landlord; (b) if APL fails
to pay any other monetary obligations when and as the
same become due and payable and such failure continues
for more than thirty (30) days after receipt of written
notice thereof from Landlord; (c) if APL materially
fails to perform any of the other obligations required
to be performed by APL under this Lease and such
failure continues for more than thirty (30) days after
receipt of written notice thereof from Landlord;
provided, however, that if any such obligation cannot
reasonably be performed within such thirty (30) day
period, APL shall have such additional time as is
reasonably necessary to perform such obligation,
provided APL timely commences the cure of such default
and thereafter diligently prosecutes such cure to
completion; or (d) if APL makes a general assignment
for the benefit of creditors, admits in writing its
inability to pay its debts as they become due, files a
petition in bankruptcy, is adjudicated bankrupt, or
files a petition seeking any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or
future statute, law or regulation, if, with respect to
any involuntary filing, the same is not discharged
within ninety (90) days.
Section 19.2. Landlord's Remedies. Landlord
shall have the following remedies if APL commits a
default. These remedies are not exclusive; they are
cumulative in addition to all other remedies now or
later available at law or in equity
(a) Landlord shall have the right upon ten
(10) days notice (during which time APL may cure the
default) to terminate this Lease and all rights of APL
hereunder by giving written notice to APL of such
election by Landlord. On termination, Landlord may
recover the following from APL:
(i) the worth at the time of the award
of any unpaid Rent which had been earned at the time of
termination;
(ii) 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 the
award exceeds the amount of such rental loss that APL
proves could have been reasonably avoided;
(iii) the worth at the time of the
award of the amount by which the unpaid Rent for the
balance of the Term after the time of the award exceeds
the amount of such Rent loss that APL proves could have
been reasonably avoided;
(iv) any other amount necessary to
compensate Landlord for the detriment proximately
caused by APL's default or which in the ordinary course
of things would be likely to result therefrom; and
(v) at Landlord's election, such other
amounts in addition to or in lieu of the foregoing as
may be permitted from time to time by applicable
California law.
As used in subparagraphs (i) and (ii) above, the
"worth at the time of the award" is computed by
allowing interest at the Default Rate. As used in
subparagraph (iii) above, the "worth at the time of the
award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San
Francisco at the time of the award plus one percent
(1%).
(b) Landlord may continue this Lease in full
force and effect, and this Lease will continue in
effect as long as Landlord does not terminate APL's
right to possession, and Landlord shall have the right
to collect Rent when due.
Section 19.3. Landlord Default
(a) If Landlord is in default under this
Lease, APL may take whatever acts may be reasonably
necessary to cure the same at the expense of Landlord,
if such default continues for thirty (30) days (except
in the event of emergency) following notice thereof
from APL to Landlord of APL's intentions to perform the
same; provided, however, that in the case of such
default which, for causes beyond Landlord's reasonable
control (financial inability excepted), cannot with due
diligence be cured within such thirty (30) day period,
such thirty (30) day period shall be deemed extended if
Landlord: (i) immediately upon the receipt of such
notice, advises APL of Landlord's intention to
institute all steps necessary to cure such default, and
(ii) institutes and thereafter with diligence and
dispatch prosecutes to completion all steps necessary
to cure the same. With regard to emergency, APL shall
only be obligated to give Landlord twenty-four (24)
hours within which to commence to cure its default.
(b) Whether or not APL chooses to cure
Landlord's default pursuant to subparagraph (a) above,
all Rent shall be equitably and proportionately abated
to the extent Landlord's default interferes with APL's
normal business operations on the Premises, as
reasonably determined by APL.
(c) Notwithstanding the foregoing, if any
default of Landlord continues for more than a period of
seventy-five (75) days following notice thereof from
APL to Landlord and such default materially interferes
with APL's occupancy and use of twenty-five percent
(25%) or more of the Premises, APL shall, without
limiting any other remedies of APL hereunder,
including, without limitation, any right of offset or
damages, have the right to terminate this Lease by
written notice to Landlord.
(d) Any sums payable by Landlord to APL
pursuant to this SectionE19.3 shall be paid on demand
and, if not paid within ten (10) days, shall be
credited to and deducted from the next installments of
Rent payable hereunder.
(e) No remedy or election given to APL by
any provisions in this Lease shall be deemed exclusive
unless so indicated, but it shall, whenever possible,
be cumulative with all other remedies at law or in
equity except as otherwise herein specifically
provided.
(f) Nothing contained in this Section 19.3
shall confer upon APL any right to pay, or adjust or
compromise any lien, charge, encumbrance or claim which
Landlord in good faith disputes or contests, so long as
any such dispute or contest (i) continues and is being
litigated in a court of competent jurisdiction and has
not been reduced to a final judgment therein, and (ii)
does not affect APL's possession of the Premises and/or
APL's use of the Building and the Common Areas as
provided in this Lease and (iii) does not subject APL
to any civil or criminal liability; nor shall anything
herein contained be construed as imposing any
obligation upon APL to perform any obligation of
Landlord to pay any liens, charges, encumbrances or
claims above mentioned, nor shall any such performance
or the making of any such payment by APL be construed
as obligating APL to further perform or make any
further payments.
(g) APL shall give any beneficiary of any
deed of trust recorded against the Building and/or APL
Parcel by certified mail, a copy of any notice of
default served upon Landlord, provided that prior to
such notice, APL has been notified in writing of the
address of such beneficiary. If Landlord fails to cure
such default within the time period provided for in
this Lease, then the beneficiary shall have an
additional thirty (30) days within which to cure such
default, or if such default cannot be cured within that
time, then such additional time as may be necessary if
within such additional thirty (30) days the beneficiary
has commenced and is diligently pursuing the remedies
necessary to cure such default (including, without
limitation, the commencement of foreclosure proceedings
if necessary to effect such cure), in which event this
Lease shall not be terminated while remedies are being
so diligently pursued.
Section 19.4. Waiver No waiver by either party
of any default hereunder by the other party shall be
deemed to be a waiver of any subsequent default under
the same or any other term, covenant or condition of
this Lease.
ARTICLE 20
Notices
All notices which are required to be given by
either party hereunder shall be in writing, personally
delivered or sent by certified or registered mail,
postage prepaid, return receipt requested, or by a
reputable air courier service which provides written
evidence of delivery and addressed to the parties at
the following addresses:
Landlord: Shorenstein Company, L.P.
000 Xxxxxxxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxxxxxxx, XX 00000
APL: APL Limited
0000 Xxxxxxxx
Xxxxxxx, XX 00000
Attention: Manager of Office Services
Copy to: APL Limited
0000 Xxxxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
or to such other addresses and to such other persons as
the parties may from time to time designate in writing,
by notice as aforesaid. The time of giving of any such
notice shall be deemed to be (a) the date of delivery
by personal service; or (b) on the earlier of the
expiration of the fifth day after the day on which such
notice is so mailed in the United States or Canadian
Mail or the delivery date shown on the return receipt
prepaid in connection therewith or (c) if notice is
given by a reputable air courier service, then it shall
be deemed to be given or served on the business day
next following the date of delivery to the subject air
courier service prepaid and addressed as provided
above; provided, however, that change of address shall
be effective only upon actual receipt.
ARTICLE 21
Landlord Representations and Warranties
Section 21.1. In addition to all other
representations and warranties made by Landlord to APL
in this Lease, Landlord further represents and warrants
to APL As follows:
(a) Landlord has full right and power to
execute this Lease and upon acquisition of the APL
Parcel will have full right and power to perform its
obligations under this Lease and to grant the estate
demised herein and APL, on paying the Rent and
performing the other covenants hereof, shall peaceably
and quietly have, hold and enjoy the Premises and all
appurtenances during the Term (including extensions);
(b) Upon notice of nonconformance, Landlord
will promptly cause the Building, Common Areas,
Premises, and Tenant Improvements to conform, to every
applicable requirement of law or duly authorized
authority or of any Board of Underwriters, or rating
bureau, or similar organizations, or the requirements
of the insurance carriers on the Premises and the
Building, and Landlord shall, at all times during the
Term (including extensions), promptly comply with all
such requirements, all at Landlord's sole cost and
expense without reimbursement from APL except as
permitted by Section 14.1. Landlord shall not permit
any property in the vicinity of the Premises which is
owned or controlled by it to be used in a manner to
create a nuisance, undue noise, obnoxious odors or
other interference with APL's enjoyment of the
Premises; and
Section 21. Landlord shall indemnify and save
harmless APL from and against any and all liabilities,
claims, suits, demands, damages, judgments, costs,
interests and expenses (including without limitation
reasonable attorneys' fees) arising out of the
inaccuracy of any representation or warranty made by
Landlord to APL in this Lease.
ARTICLE 22
Commissions
APL is represented by Colliers Damner Pike.
Landlord is represented by Shorenstein Management, Inc.
APL shall be responsible for any compensation due
Colliers Damner Pike. Landlord shall be responsible
for any compensation due Shorenstein Management, Inc.
Except for Colliers Damner Pike and Shorenstein
Management, Inc., each party represents to the other
that it has dealt with no broker in connection with the
execution and delivery of this Lease and that the other
party shall not be required to pay any commission
whatsoever with regard to this Lease or the exercise of
any option granted to APL herein resulting from the
actions of the party making such representation. Each
party shall indemnify and defend the other party
against and hold the other party harmless from any and
all losses, costs, damages, liabilities or expenses
(including court costs and reasonable attorneys' fees)
resulting from a breach by the indemnifying party of
the foregoing representations.
ARTICLE 23
Estoppel Certificates
Landlord or APL shall, at any time and from time
to time, upon not less than ten (10) days' prior notice
by the other party, execute, acknowledge and deliver to
the other party a statement in writing certifying that
this Lease is unmodified and in full force and effect
(or, if there have been modifications or other
qualifications, that the same is in full force and
effect as modified and stating the modifications or
other qualifications), the commencement and expiration
dates of the Term, as extended if such is the case,
whether there are then existing any defaults by the
other party in the performance of its obligations under
this Lease (and, if so, specifying the same), that no
notice has been received by the party of any default
which has not been cured (except as to defaults
specified in the certificate), the dates to which Rent
has been paid in advance, and such other matters as may
be reasonably requested by either party, it being
intended that any such statement delivered pursuant to
this Article may be addressed to and/or relied upon by
any prospective assignee, purchaser or encumbrancer of
the APL Parcel, Building, Common Areas, Premises or
ownership interest therein, or any prospective assignee
of APL's leasehold interest.
ARTICLE 24
Surrender
Upon the expiration or earlier termination of this
Lease APL shall peaceably and quietly leave and
surrender the Premises in as good a condition as when
it was delivered, except for ordinary wear and tear,
repairs and replacements required to be made by
Landlord, loss by fire, casualty and causes beyond
APL's control, and alterations, additions and
improvements herein permitted. APL may remove
furniture, business machines, kitchen equipment and
appliances, trade fixtures, signs, alterations,
additions, and improvements of any kind purchased or
installed at APL's expense, prior to the termination of
this Lease provided that if damage is caused by such
removal, APL shall repair such damage.
ARTICLE 25
Rules and Regulations
APL shall faithfully observe and comply with the
rules and regulations that are attached hereto as
Exhibit "H" (the "Rules and Regulations"). Landlord
reserves the right from time to time upon thirty (30)
days advance written notice to make reasonable
additions and modifications to the Rules and
Regulations, and all such additions and modifications
shall be binding upon APL commencing ten (10) business
days after delivery of a copy thereof to APL.
Notwithstanding the foregoing, Landlord shall not
change or modify the Rules and Regulations in any way
which (a) diminishes or otherwise reduces the specific
obligations of the Landlord to perform under the terms
and conditions of this Lease, (b) interferes with APL's
use and enjoyment of or access to the Premises, Common
Areas or Building, or (c) interferes with the conduct
of APL's normal business operations. Landlord shall
apply and administer all Rules and Regulations in a
fair and nondiscriminatory manner. Should any tenant
in the Building receive any waiver or special
dispensation from Landlord with regard to the Rules and
Regulations, Landlord shall advise APL promptly and APL
shall be entitled upon request to a similar waiver or
similar dispensation.
ARTICLE 26
Parking
Section 26.1. Parking
(a) During the Term, Landlord shall make
available for APL's exclusive use one (1) automobile
parking space for every one thousand (1,000) square
feet of Rentable Area of the Premises. As of December
31, 1996, Tenant is entitled to a total of 206
automobile parking spaces hereunder. Not less than
fifty percent (50%) of such parking spaces shall be
reserved and shall be located in the parking garage in
the Building and the balance shall be located in the
City Center Garage located at 000 00xx Xxxxxx, 0000
Xxxxxxxx Garage, Convention Center Garage or a parking
structure at 11th and Clay Streets. The foregoing list
of non-Building garages is in order of APL's
preference; therefore, Landlord shall use its best
efforts to satisfy APL's requirements in order of APL's
preference. Landlord shall use reasonable efforts to
provide that all of the reserved parking spaces in the
Building garage shall be on the highest levels of the
garage. The subject parking spaces shall be available
on a 24-hours-a-day, 7-days-a-week basis. Not less
than fifty percent (50%) of the reserved spaces shall
be for full-size cars with parking space dimensions of
not less than eight and one-half (8-1/2) feet by
eighteen (18) feet.
(b) Each time that the Premises are expanded
under this Lease (whether pursuant to an option, right
of first refusal or otherwise), Landlord shall provide
such additional parking as may be necessary to ensure
that APL at all times has a total of one (1) parking
space for every one thousand (1,000) square feet of
Rentable Area of the Premises, one-half of which spaces
shall be reserved.
(c) During the Term, APL shall pay to
Landlord or to the operator of the subject garage, as
directed by Landlord, monthly, in advance, on the day
installments of Annual Base Rent are due, the then
current prevailing parking charge for each parking
space in the Building garage provided, however, that
such prevailing rate shall not exceed the prevailing
market rate for comparable privately owned and operated
parking facilities located in the downtown Oakland
area. The rate charged APL shall also not be higher
than the rate charged any other tenant or occupant of
the Building. The parking rate through December 31,
1997 for a reserved stall shall not exceed One Hundred
Sixty-Eight Dollars ($168.00) per month, and for a non-
reserved stall shall not exceed One Hundred Thirty
Dollars ($130.00) per month. Parking rates may not be
increased more than once during any twelve (12)
consecutive month period.
(d) APL may elect from time to time to use
fewer parking spaces and, upon thirty (30) days prior
written notice of such election, APL shall be relieved
of the obligation for payment for the spaces not used.
In its notice APL shall designate the exact location of
any reserved spaces which it elects to relinquish. Any
such spaces so relinquished, however, shall be subject
to recovery and shall be made available to APL again on
the terms and conditions hereof upon not less than
sixty (60) days prior written notice and demand by APL.
(e) If a portion of the Premises is
recaptured by landlord pursuant to Article 17, APL's
right to parking spaces shall revert to Landlord at the
rate of one parking space per 1,000 square feet of
Rentable Area so recaptured.
ARTICLE 27
Leasehold Financing
Section 27.1. Leasehold Mortgage. The term
"Leasehold Mortgage" shall mean a mortgage or deed of
trust upon APL's interest in this Lease and the term
"Leasehold Mortgagee" shall include the mortgagee under
such a mortgage and the beneficiary under such a deed
of trust. APL shall have the right to hypothecate,
convey or transfer its interest in this Lease in whole
or in part by a Leasehold Mortgage to a bank, insurance
company, savings and loan association or other
established institutional lender without the necessity
of obtaining the approval of Landlord, or, upon the
written approval of Landlord, which shall not be
unreasonably withheld or delayed, to any other lender.
Landlord shall, on APL's request, execute in connection
with such Leasehold Mortgage such written consents or
acknowledgments and such other instruments
incorporating the substance of this Article 27.
Section 27.2. Default. Upon the occurrence of
any default by APL in its obligations under this Lease,
Landlord shall take no action to terminate this Lease
with respect to the Leasehold Mortgagee without first
giving written notice of such default to the Leasehold
Mortgagee and a period of thirty (30) days after such
notice, and such additional time as may be reasonably
necessary to cure such default so long as the Leasehold
Mortgagee is diligently and continually attempting (i)
to obtain possession of the Premises, or (ii) to
institute, prosecute and complete proceedings to
acquire APL's interest under this Lease. The Leasehold
Mortgagee, upon obtaining possession or acquiring APL's
interest under this Lease, shall be required promptly
to cure all defaults of APL which are reasonably
susceptible of being cured by the Leasehold Mortgagee.
The following shall further apply with respect to any
such Leasehold Mortgage:
(a) the Leasehold Mortgagee and the owner of
the indebtedness secured by the Leasehold Mortgage
shall not become liable upon the covenants of this
Lease unless and until they become owners of the legal
and equitable title to the leasehold estate under this
Lease;
(b) Landlord shall be notified in writing of
any such Leasehold Mortgage, of the name and address of
the Leasehold Mortgagee, and of the amount of the
indebtedness to be secured by the Leasehold Mortgage;
(c) during the existence of the Leasehold
Mortgage, any notice of default in the Performance of
the covenants of this Lease or any notice of
termination of this Lease given to APL and copies of
all other notices required to be given by Landlord to
APL shall simultaneously be given to the Leasehold
Mortgagee at the address specified in subparagraph (b)
above, or at such other address as the Leasehold
Mortgagee shall designate to Landlord in writing;
(d) the Leasehold Mortgagee shall have the
right, to the same extent, and with the same effect as
APL, under the default provisions of this Lease, to
take such action or to make such payment as may be
necessary or appropriate to cure any such default;
(e) the Leasehold Mortgagee shall not be
obligated to continue any possession of the Premises or
to continue any foreclosure proceedings if all defaults
have been cured by APL in accordance with the
provisions of this Lease;
(f) the Leasehold Mortgagee shall comply
during the period of Landlord's forbearance from
terminating this Lease, with such terms, conditions,
and covenants of the Lease as are reasonably
susceptible of being complied with by the Leasehold
Mortgagee. As long the Leasehold Mortgagee is in
compliance with the provisions of this Article,
Landlord will not accept any surrender of the Premises
or otherwise accomplish cancellation of this Lease by
agreement with APL without the prior written consent of
the Leasehold Mortgagee;
(g) if the Lease is terminated for any
reason, Landlord and the Leasehold Mortgagee shall, at
the Leasehold Mortgagee's option, enter into a new
lease for the Premises upon the same terms as this
Lease, and with the same priority as this Lease except
that the term of the new lease shall be the same as the
unexpired Term (and the new lease shall contain all
option and extension rights and rights of first refusal
pending and unexercised under this Lease) and
Landlord's obligation to construct the Improvements
shall not be applicable to the extent that this
obligation has been fulfilled;
(h) there shall be no merger of the estates
of Landlord and APL hereunder notwithstanding any
acquisition of the leasehold estate through purchase,
foreclosure or otherwise, so long as the Leasehold
Mortgage is in effect;
(i) if any Leasehold Mortgagee acquires
APL's interest under this Lease, Landlord shall
recognize the Leasehold Mortgagee as the tenant
hereunder and this Lease shall continue as a direct
lease between the Leasehold Mortgagee as tenant and
Landlord for the unexpired portion of the Term
including any extension options. Any option rights,
extension rights or rights of first refusal contained
herein may be exercised by the Leasehold Mortgagee on
behalf of APL, or in its own behalf;
(j) if any Leasehold Mortgagee acquires
title to APL's interest in this Lease by foreclosure,
assignment in lieu of foreclosure or otherwise, APL
shall not be released from any of its obligations or
liabilities hereunder and the Leasehold Mortgagee may
assign this Lease provided the prior written consent of
the Landlord is first obtained, which consent shall not
be unreasonably withheld or delayed. Upon such
assignment, the Leasehold Mortgagee shall be released
from any further liability for the performance or
observance of any of the covenants of the Lease,
provided the assignee of the Leasehold Mortgagee has
assumed in writing the tenant's obligations hereunder.
ARTICLE 28
Tenth Floor Termination Option
At any time after December 31, 1998, and prior to
January 1, 2002, upon not less than twelve (12) months'
advance written notice (the "Termination Notice"), APL
shall have the right to delete the tenth (10th) floor
space (the "Deletion Increment") (consisting of Twenty-
two Thousand One Hundred Eighty-seven (22,187) square
feet of Rentable Area) from the Premises. The
Termination Notice shall specify the date upon which
APL intends to relinquish the Deletion Increment (the
"Deletion Date"). On or before the Deletion Date, APL
shall pay to Landlord a termination payment equal to
twelve (12) times the average of (i) the monthly
installment of Annual Base Rent attributable to the
Deletion Increment payable twelve (12) months prior to
the Deletion Date and (ii) the monthly installment of
Annual Base Rent attributable to the Deletion Increment
payable as of the Deletion Date. Notwithstanding
anything to the contrary in this Lease, APL shall
surrender the Deletion Increment on the Deletion Date
in the condition required by this Lease and on the day
following the Deletion Date the Rent and APL's Share
shall be adjusted accordingly to reflect the decreased
area of the Premises.
ARTICLE 29
Generator Equipment
Section 29.1. APL's Generator Equipment
(a) Equipment Site and Equipment. Landlord
hereby grants to APL a license to use that area (the
"Equipment Site") in the basement of the Building in
the approximate location shown on Exhibit "J" (attached
hereto and incorporated herein by this reference) for
the installation, operation, maintenance and
replacement by APL, at APL's sole expense (except as
specifically provided in this Section 29.1), of one
self-contained electrical generator package unit, the
exact design of which shall be subject to Landlord's
prior reasonable approval. The Equipment Site shall be
provided to APL without charge of any kind. APL shall
have the further right to install and maintain
electrical conduits as reasonably required to connect
such generator to the Premises. The generator and all
related wiring, pipes, equipment and cabling are
referred to herein as the "Equipment." If either APL
or Landlord ascertain that the Equipment Site will not
be suitable for the installation of a generator, APL
and Landlord shall promptly and in good faith attempt
to locate and designate a mutually agreeable alternate
site which is suitable for the installation of the
Equipment, and upon such designation such alternate
site shall be the "Equipment Site".
(b) Impositions. APL shall be responsible for
promptly paying all additional real and personal
property taxes, assessments, charges, fees or other
governmental impositions levied or assessed on the
Building or the APL Parcel due to the Equipment or the
construction or operation thereof.
(c)Installation; Proper Identification of
Equipment; Cost. APL shall submit to Landlord detailed
plans and specifications detailing the location and
size of the Equipment and specifically describing all
proposed construction and/or installation work,
including engineered drawings for the cables, pipes and
wires that APL wishes to install, but shall not
commence any construction, installation or operation of
the Equipment until the drawings, plans and
specifications have been approved in writing by
Landlord, which approval shall not be unreasonably
withheld, and until APL has secured all necessary
governmental approvals and permits in connection
therewith and has supplied the same to Landlord. The
visible elements of the exhaust vent for the Equipment
(the "Exterior Element") must be aesthetically pleasing
and appropriate to its location, provided that Landlord
shall not require APL to install an unreasonably
expensive Exterior Element if APL proposes a less
expensive, reasonably acceptable, aesthetically
pleasing alternative. Landlord shall have no
responsibility for, and APL holds Landlord harmless
from, any failure of the Equipment to comply with law
or to function properly notwithstanding the fact that
Landlord may have approved plans and specifications
therefor. Landlord and APL shall cooperate in
determining the locations of the risers and other areas
of the Building through which APL's conduits will be
installed, in order to satisfy APL's reasonable
requirements without unduly interfering with the
operation of Building systems or other tenants' systems
and without interfering with Landlord's ability to
provide services and utilities to other tenants. APL
shall keep the Equipment and the Building free from any
liens arising out of any work performed, materials
furnished or obligations incurred with respect to the
Equipment. APL shall give Landlord not less than
fifteen (15) days prior written notice of the
commencement of any construction or installation under
this Section. The contractor(s) performing the
construction and/or installation work under this
Section shall be subject to Landlord's prior written
approval, which approval shall not be unreasonably
withheld or delayed. APL shall cause APL's
contractor(s) to clearly identify the Equipment
(including all wires, cables and pipes) on the exterior
of each piece of Equipment.
(d) Cost. The cost of the Equipment and of the
installation of the Equipment shall be borne by
Landlord up to a total of Two Hundred Fifty Thousand
Dollars ($250,000.00) (the "Allowance"), and the
balance of the cost shall be borne by APL. Landlord
shall disburse the Allowance directly to APL's
contractor, and/or to the applicable subcontractors or
suppliers, and/or to APL, as APL shall determine, upon
receipt of a disbursement request accompanied by
invoices of APL's architect, engineer, or contractor to
be furnished to Landlord by APL covering work actually
performed, construction in place and materials
delivered to the site (as may be applicable) describing
in reasonable detail such work, construction and/or
materials. No payment will be made for work not
performed or materials or supplies not located on the
site. APL shall cause the installation to be completed
no later than twelve (12) months following the date of
Landlord's initial disbursement hereunder, which date
shall be extended by delays caused by Landlord and
delays resulting from force majeure. Landlord shall
not charge a fee in connection with the installation of
the Equipment.
(e)Compliance with Law; Permits. APL, at APL's
sole expense, shall comply with all laws regarding the
installation, construction, operation and maintenance
of the Equipment, and shall be solely responsible for
obtaining and shall obtain and keep in force all
permits, licenses and approvals necessary for operation
of the Equipment.
(f)Removal of Equipment. Upon the expiration or
any sooner termination of this Lease, APL may, at its
option, either leave the Equipment or, at its expense,
remove all of the Equipment from the Equipment Site and
other Building areas and restore such areas to their
condition prior to installation. If APL is required to
remove any of the Equipment by any governmental agency
having jurisdiction, then APL shall at its expense
remove the applicable Equipment and restore the
affected areas to their condition prior to
installation.
(g)Access to Equipment Site. APL shall have the
right to enter upon the Equipment during normal
business hours and weekends and to construct, install,
operate and maintain the Equipment, until the Lease
terminates. APL may have access to the Equipment Site
for repairs, maintenance, or operation at all times
provided that Tenant shall use reasonable efforts to
provide Landlord with adequate advance notice thereof
(except in the event of an emergency). APL shall
designate in writing to Landlord the person or persons
authorized to have access to the Equipment. Upon such
designation and prior identification to Landlord's
Building security personnel, such authorized person(s)
may enter upon the portions of the Building where the
Equipment is located.
(h)Liability; Indemnity; Insurance. Landlord
shall have no obligation to design, install, construct,
use, operate, maintain, repair, replace or remove the
Equipment, nor shall Landlord have any other
responsibility or liability in connection therewith or
the operations thereof, except as expressly set forth
in this Section.
(i)Repair. APL acknowledges and agrees that it
accepts the Equipment Site in its "as-is" condition.
APL, at APL's sole cost and expense, shall keep the
Equipment in good condition and repair (except for
damage caused by the wilful acts or negligence of
Landlord or its agents or representatives), including
monthly maintenance and testing of the Equipment by
service companies reasonably approved by Landlord. If
the Generator Site is damaged as a result of APL's
failure to properly maintain the Equipment, APL, at
APL's sole cost and expense, shall promptly repair such
damage.
(j)Use of Generator Equipment. The Equipment
shall be used solely to provide back-up power to APL's
equipment used in the Building and shall not be used
for any other purposes whatsoever and shall not be used
by anyone other than APL.
Section 29.2. Use of Building Generator
Landlord shall permit APL to tie into the Building's
emergency generator (the "Building Generator") to
provide back-up power to APL's equipment used in the
Building solely as an emergency back-up to the
Equipment. If the electricity to the Building is
interrupted and APL's Equipment described in Section
29.1 is not functioning, APL may draw power from the
Building Generator. In any such event, APL shall
reimburse Landlord, on demand, for Landlord's
reasonable estimate of APL's pro-rata share of the cost
of the fuel used by the Building Generator while the
Building Generator was in operation. If Landlord
reasonably and in good faith determines that the
Building Generator should not be used by APL, for
safety reasons, or to ensure the proper operation of
the Building's life safety equipment, or because such
use violates any applicable law, then APL shall not be
permitted to use the Building Generator. In no event
will Landlord be liable to APL for any loss or damage
incurred by APL as a result of the unavailability of
the Building Generator.
Section 29.3. Evacuation. If Landlord closes the
Building and calls for its evacuation, or suggests that
the Building be evacuated for any reason, including
because of an electrical failure, and if one or more of
APL's employees, agents, or other persons acting on
behalf of or at the request of APL ("APL's Personnel")
remain in or later enters the Building or the Premises
during the evacuation period, then APL hereby waives
all claims against Landlord and Landlord's building
manager for any injury incurred by any of APL's
Personnel, or injury to property, due in whole or in
part to APL's failure to evacuate all of APL's
Personnel for the Premises and the Building. Further,
APL will hold Landlord and Landlord's building manager
harmless from and defend and indemnify them against any
and all claims, liabilities, damages or costs,
including reasonable attorney's fees, incurred by them
due to injury to APL's personnel or property as a
direct or indirect result of APL's Personnel remaining
in the Premises or the Building during such evacuation
period.
ARTICLE 30
Termination of Original Lease and Storage Space Lease
Notwithstanding the provisions of the Original
Lease to the contrary, and notwithstanding the
provisions of that certain Storage Space Lease, dated
November 26, 1990, between 1111 Associates, as
landlord, and APC, as tenant (the "Storage Lease"), to
the contrary, the Original Lease and the Storage Lease
shall terminate effective as of 12:00 midnight on the
date immediately preceding the date the term of this
Lease commences; provided, however, that neither
Landlord nor APL shall be relieved of any of its
obligations under the Original Lease or the Storage
Lease accruing prior to such termination of the
Original Lease and the Storage Lease and the parties's
indemnification obligations under the Original Lease
shall survive the termination of the Original Lease
with regard to events occurring prior to such
termination (and provided further that for the purposes
of this Article 30, Landlord shall be deemed to be the
landlord under the Original Lease and the Storage
Lease).
ARTICLE 31
Miscellaneous
Section 31.1. Words. The words "Landlord" and
"APL", as used in this Lease, shall include the plural
as well as the singular. Words used in one gender
herein shall include other genders, as the context may-
require.
Section 31.2. The covenants and conditions
contained in this Lease shall be binding upon and inure
to the benefit of the heirs, executors, administrators,
successors and assigns of the parties hereto. The
provisions of this Section 31.2 shall not be construed
to grant to APL any rights to assign or in any way
otherwise to transfer any rights under this Lease.
Section 31.3. Time is of the essence in each and
every provision of this Lease.
Section 31.4. Each conveyance by Landlord or the
successors in interest to the Landlord's interest in
the Building, Common Areas, APL Parcel or the Premises
prior to the expiration or earlier termination of this
Lease shall be subject to this Lease and shall relieve
the grantor of all further liability as Landlord,
except for such liability or obligations accruing prior
to the date of such conveyance. APL shall attorn to
Landlord's successors in interest, whether such
interest is acquired by sale, transfer, foreclosure,
deed in lieu of foreclosure or otherwise.
Section 31.5. Unenforceability If any
provision of this Lease or the application thereof to
any persons or circumstances is to any extent held to
be invalid or unenforceable, neither the remainder of
this Lease nor the application of such provision to
persons or circumstances other than those as to whom or
which it is held to be invalid or unenforceable shall
be affected thereby, and every provision of this Lease
shall be valid and enforceable to the fullest extent
permitted by law.
Section 31.6. Attorneys' Fees In the event of
any litigation or other proceedings (including
arbitration) involving the parties hereto for the
enforcement or interpretation of any of the provisions
of this Lease, or any right of either party hereto, the
unsuccessful party in such litigation or other
proceedings hereby agrees to pay to the successful
party all costs and expenses, including reasonable
attorneys' fees and court costs (whether incurred at
the trial, appellate or administrative levels),
incurred by the successful party in such litigation or
other proceedings, all of which may be included in, and
is a part of, any judgment or decision rendered in such
litigation or other proceedings
Section 31.7. This Lease shall be construed and
enforced in accordance with the laws of the State of
California.
Section 31.8. The terms of this Lease together
with all attached exhibits, schedules, addenda and
riders (which are hereby incorporated by this
reference) are intended by the parties hereto as a
final expression of their agreement with respect
to the subject matter hereof, and may not be
contradicted by evidence of any prior or
contemporaneous agreement. The parties further intend
that this Lease constitutes the complete and exclusive
statement of its terms, and that no extrinsic evidence
whatsoever may be introduced in any proceedings, if any
(judicial or otherwise), other than by written
agreement, executed by all of the parties hereto or
their successors in interest.
Section 31.9. The headings of the various
articles of this Lease are intended solely for means of
reference, and are not intended for any purposes
whatsoever to modify, explain or place any construction
on any of the provisions of this Lease.
Section 31.10. The parties have executed,
acknowledged and delivered into escrow, concurrently
herewith, a short form memorandum of this Lease (the
"Memorandum of Lease") in the form attached hereto as
ExhibitE"K" and incorporated herein by reference and a
Subordination, Non-Disturbance and Attornment Agreement
(the "SNDA") in the form attached hereto as Exhibit "L"
and incorporated herein by reference. On the date
Landlord acquires title to the APL Parcel, the
Memorandum of Lease shall be recorded immediately
following recordation of the grant deed conveying the
APL Parcel to Landlord. The Memorandum of Lease shall
be recorded before any other documents, including,
without limitation, any loan documents.
Section 31.11. Except as otherwise expressly
provided therein, if either party is delayed or
hindered in or prevented from the performance of any
act required hereunder by reason of strikes, lockouts,
labor troubles, inability to procure materials, failure
of power, restrictive governmental laws or regulations,
riots, insurrection, war or other reason of a like
nature not the fault of either party (financial
inability excepted), then performance of such act shall
be excused for the period of delay and the period of
the performance of any such act shall be extended for a
period equivalent to the period of such delay except
for delivery of possession of the Premises to APL.
Section 31.12. Reasonableness. Except as
otherwise provided herein, wherever the consent,
permission or approval of either party is required as a
prerequisite to the exercise of any right under this
Lease, such consent, permission or approval shall not
be unreasonably delayed or withheld. Whenever any
right of estimate, judgment, determination, decision,
or promulgation is vested in either party, such
estimate, judgment, determination, decision, or
promulgation shall be reasonable.
Section 31.13. Light and Air Easement. Any
diminution or shutting off of light, air or view by any
structure which is now or hereafter erected on lands
adjacent to the Building shall impose no liability on
Landlord. If any building is constructed on the APL
Block or in the Balance of City Center which is larger
or of a different shape than that shown on Exhibit "U"
to the Original Lease incorporated by reference, then
the effect, if any, on light, air or view resulting
from construction of such building shall be considered
in establishing the Annual Base Rent on each
subsequently occurring Adjustment Date.
Section 31.14. If APL remains in possession after
the expiration or sooner termination of this Lease,
Landlord shall be entitled to consequential damages
arising from such breach of the Lease by APL. Holding
over shall not be deemed an extension or renewal of the
Term.
Section 31.15. Nondiscrimination. APL
acknowledges and agrees that this Lease is subject to
the following nondiscrimination provisions contained in
documents recorded against the APL Parcel:
"The lessee herein covenants by and for himself,
his heirs, executors, administrators and assigns,
and all persons claiming under or through him and
this lease is made and accepted upon and subject
to the following conditions:
"That there shall be no discrimination against or
segregation of any person or group of persons on
account of race, color, creed, national origin,
ancestry, sex, sexual preference or age in the
leasing, subleasing, transferring, use, occupancy,
tenure or enjoyment of the premises herein leased
nor shall the lessee himself, or any person
claiming under or through him, establish or permit
any such practice or practices of discrimination
or segregation with reference to the selection,
location, number, use or occupancy of tenants,
sublessees, subtenants or vendees in the premises
herein leased."
APL shall conduct its activities on the Premises in
compliance with such provisions. Landlord shall
indemnify APL for any violation of the above quoted
provisions by Landlord, its agents, contractors,
officers or employees.
Section 31.16. Relationship of Parties. Landlord
is not and shall not, in any way or for any purpose,
become an agent or partner of APL in its business or
otherwise, or a joint venture, or a member of any joint
enterprise with APL solely as a result of this Lease.
Section 31.17. Legal Authority. Each individual
executing or attesting this Lease on behalf of either
party hereby covenants, warrants and represents:
(a) that he or she is duly authorized to
execute or attest and deliver this Lease on behalf of
such partnership or corporation in accordance with a
duly adopted resolution of the governing body of the
partnership or of the corporation's board of directors
and in accordance with such partnership's governing
documents and such partnership's governing documents
and such corporation's articles of incorporation or
charter and by-laws;
(b) that this Lease is binding upon such
partnership or corporation;
(c) that the entity upon whose behalf such
individual is executing or attesting this Lease is a
duly organized and legally existing corporation in good
standing in the State of California; and
(d) the execution and delivery of this Lease
by such entity shall not result in any breach of, or
constitute a default under, any mortgage, deed of
trust, lease, loan, credit agreement, partnership
agreement or other contract or instrument to which such
party is a party or by which such party may be bound.
Section 31.18. Merger. Notwithstanding the
acquisition by the same party (of-the-title-and
interest of both Landlord and APL under this Lease,
there shall never be a merger of the estates of
Landlord and APL under this Lease, but instead, the
separate estates, rights, duties and obligations of
Landlord and APL as existing hereunder, shall remain
unextinguished and continue separately, in full force
and effect until this Lease expires or otherwise
terminates in accordance with express provisions herein
contained.
Section 31.19. Quiet Enjoyment. As a material
part of the consideration for the execution of this
Lease by APL, Landlord covenants and agrees with APL
that APL shall and may peaceably and quietly have,
hold, and enjoy the Premises for the Term subject,
however, to the terms of this Lease.
Section 31.20. Best Efforts Defined. "Best
efforts" as used herein shall mean proceeding with due
diligence and in as economically and reasonable a
manner as commercially practicable.
Section 31.21. Waiver. If either party waives the
performance of any term, covenant or condition
contained in this Lease, such waiver shall not be
deemed to be a waiver of the term, covenant or
condition itself or a waiver of any subsequent breach
of the same or any other term, covenant, or condition
contained herein. Furthermore, the acceptance of Rent
by Landlord shall not constitute a waiver of any
preceding breach by APL of any term, covenant or
condition of this Lease, regardless of Landlord's
knowledge of such preceding breach at the time Landlord
accepts such Rent. Failure by Landlord to enforce any
of the terms, covenants or conditions of this Lease for
any length of time shall not be deemed to waive or to
decrease the right of Landlord to insist thereafter
upon strict performance by APL.
Section 31.22. Condition Precedent. This Lease
shall be ineffective for any purpose, and neither
Landlord nor APL shall have any obligation or liability
hereunder, if Landlord does not acquire the APL Parcel
and the Building on or before January 31, 1997.
Landlord shall have no liability to APL if Landlord for
any reason fails to acquire the APL Parcel and the
Building on or before such date and APL is not a third
party beneficiary of any purchase agreement that may
exist, now or hereafter, between Landlord and the
current owner of the Property.
IN WITNESS WHEREOF, the parties hereto have
executed this Lease on the dates set forth below and it
shall be effective and enforceable as of the later of
such dates.
Dated: 12/24/96 LANDLORD:
SHORENSTEIN REALTY INVESTORS THREE, L.P.,
a California limited partnership
By Shorenstein Company, L.P.,
a California limited partnership, Manager
By Shorenstein Management, Inc.,
a California corporation, its Agent
By /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Executive Vice President
APL:
Dated: December 11, 1996 APL LIMITED, a Delaware
corporation
By:
/s/ Xxxx X.Xxxxxxx
Title:
ExecutiveVicePresident
By:
/s/Xxxxxxx X. Xxxxxx
Title:
Assistant Secretary
