OFFICE LEASE
ONE EMBARCADERO CENTER
ONE EMBARCADERO CENTER VENTURE
a California general partnership,
as Landlord,
and
SUPERUS HOLDINGS, INC.
a Delaware corporation,
as Tenant.
ONE EMBARCADERO CENTER
OFFICE LEASE
This Office Lease (the "Lease"), dated as of the date set forth in
Section 1 of the Summary of Basic Lease Information (the "Summary"), below, is
made by and between ONE EMBARCADERO CENTER VENTURE, a California general
partnership ("Landlord"), and SUPERUS HOLDINGS, INC., a Delaware
corporation("Tenant").
SUMMARY OF BASIC LEASE INFORMATION
TERMS OF LEASE DESCRIPTION
-------------- -----------
1. Date: March 27, 2000
2. Premises
(Article 1).
2.1 Building: ONE EMBARCADERO CENTER
2.2 Premises: 3,829 rentable square feet of space located on
the twentieth (20th) floor of the Building and
commonly known as Suite 2040, as further set
forth in Exhibit A to the Office Lease.
3. Lease Term
(Article 2).
3.1 Length of Term: Approximately five (5) years and two and one
half (2.5) months.
3.2 Lease Commencement The date upon which Landlord delivers the
Date: Premises to Tenant, which is anticipated to be
April 1, 2000.
3.3 Lease Expiration Date: June 30, 2005.
4. Base Rent (Article 3):
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Monthly Annual Base Rental
Annual Installment Rate Per Rentable
Base Rent of Base Rent Square Foot
--------- ------------ -----------
$344,610.00 $28,717.50 $90.00
5. Base Year Calendar year 2000; provided, however, the
(Article 4): Base Year shall be the period from July 1,
2000 through June 30, 2001 for purposes of
calculating Tenant's Share of Tax Expenses only.
6. Tenant's Share .51%
(Article 4):
7. Permitted Use General office use.
(Article 5):
8. Security Deposit $28,717.50
(Article 21):
Letter of Credit $344,604.00
(Article 21):
9. Address of Tenant Superus Holdings, Inc.,
(Article 28): 00000 Xxxx Xxxxxx Xxx, Xxxxx 000
Xxxxxx Xxx Xxx, XX 00000
Attention: Xxxx X. Xxxxxxx
(Prior to Lease Commencement Date)
and
Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
(After Lease Commencement Date)
10. Address of Landlord See Article 28 of the Lease.
(Article 28):
11. Broker(s) Cresa San Francisco
(Section 29.24): 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
12. Guarantor (Section 29.34): None.
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ARTICLE 1
PREMISES, BUILDING, PROJECT, AND COMMON AREAS
1.1 Premises, Building Project and Common Areas.
1.1.1 The Premises. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the premises set forth in Section 2.2 of the Summary
(the "Premises"). The outline of the Premises is set forth in Exhibit A attached
hereto and each floor or floors of the Premises has the number of rentable
square feet as set forth in Section 2.2 of the Summary. The parties hereto agree
that the lease of the Premises is upon and subject to the terms, covenants and
conditions herein set forth, and Tenant covenants as a material part of the
consideration for this Lease to keep and perform each and all of such terms,
covenants and conditions by it to be kept and performed and that this Lease is
made upon the condition of such performance. The parties hereto hereby
acknowledge that the purpose of Exhibit A is to show the approximate location of
the Premises in the "Building," as that term is defined in Section 1.1.2, below,
only, and such Exhibit is not meant to constitute an agreement, representation
or warranty as to the construction of the Premises, the precise area thereof or
the specific location of the "Common Areas," as that term is defined in Section
1. 1. 3, below, or the elements thereof or of the access ways to the Premises or
the "Project," as that term is defined in Section 1.1.2, below. Except as
specifically set forth in this Lease , Landlord shall not be obligated to
provide or pay for any improvement work or services related to the improvement
of the Premises, and Tenant shall accept the Premises in its currently existing,
"as-is" condition. Tenant also acknowledges that neither Landlord nor any agent
of Landlord has made any representation or warranty regarding the condition of
the Premises, the Building or the Project or with respect to the suitability of
any of the foregoing for the conduct of Tenant's business, except as
specifically set forth in this Lease. The taking of possession of the Premises
by Tenant shall conclusively establish that the Premises and the Building were
at such time in good and sanitary order, condition and repair.
1.1.2 The Building and the Project. The Premises are a part of the
building set forth in Section 2.1 of the Summary (the "Building"). The Building
is part of an office project known as "Embarcadero Center." The term "Project,"
as used in this Lease, shall mean (i) the Building and the Common Areas, (ii)
the land (which is improved with landscaping, subterranean parking facilities
and other improvements) upon which the Building and the Common Areas are
located, (iii) those certain other office buildings located in the vicinity of
the Building and known as Two Embarcadero Center, Three Embarcadero Center, Four
Embarcadero Center, Embarcadero Center West Tower and the Old Federal Reserve
Bank Building, respectively, and the land upon which such office buildings are
located, and (iv) at Landlord's discretion, any additional real property, areas,
land, buildings or other improvements added thereto outside of the Project.
1.1.3 Common Areas. Tenant shall have the non-exclusive right to
use in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other
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portions of the Project designated by Landlord, in its discretion, including
certain areas designated for the exclusive use of certain tenants, or to be
shared by Landlord and certain tenants, are collectively referred to herein as
the "Common Areas"). The Common Areas shall consist of the "Project Common
Areas" and the " building Common Areas." The term "Project Common Areas," as
used in this Lease, shall mean the portion of the Project designated as such by
Landlord, which Project Common Areas may include, from time to time, in
Landlord's sole discretion, a conference center and other amenities. The term
"Building Common Areas," as used in this Lease, shall mean the portions of the
Common Areas located within the Building designated as such by Landlord. The
manner in which the Common Areas are maintained and operated shall be at the
sole discretion of Landlord and the use thereof shall be subject to such rules,
regulations and restrictions as Landlord may make from time to time. Landlord
reserves the right to close temporarily, make alterations or additions to, or
change the location of elements of the Project and the Common Areas; provided
that Landlord shall use commercially reasonable efforts to minimize any
interference with Tenant's use of, or access to, the Premises.
1.2 Verification of Rentable Square Feet of Premises and Building. For
purposes of this Lease, "rentable square feet" in the Premises and the Building,
as the case may be, shall be calculated pursuant to Landlord's then current
method for measuring rentable square footage. Landlord and Tenant hereby
stipulate and agree that the rentable area of the Premises is as set forth in
Section 2.2 of the Summary. Notwithstanding the foregoing, if Landlord, at its
option, re-measures the Premises in connection with a re-measurement of the
Building to determine the exact amount of rentable area contained therein
pursuant to Landlord's then current method for measuring rentable square
footage, then the rentable area of the Premises and/or the Building, as the case
may be, shall be appropriately adjusted as of the date of such re-measurement
based upon the written verification by Landlord's space planner of such revised
rentable area. In the event of any such adjustment to the rentable area of the
Premises and/or the Building, all amounts, percentages and figures appearing or
referred to in this Lease based upon such rentable area (including, without
limitation, "Tenant's Share," as that term is defined in Section 4.2.9 of this
Lease) shall be modified in accordance with such determination; provided,
however, notwithstanding anything to the contrary contained in this Section 1.2,
"Base Rent," as defined in Article 3 of this Lease, shall not be modified in
accordance with such determination.
ARTICLE 2
LEASE TERM
The terms and provisions of this Lease shall be effective as of the
date of this Lease. The term of this Lease (the "Lease Term") shall be 6 set
forth in Section 3.1 of the Summary, shall commence on the date set forth in
Section 3.2 of the Summary (the "Lease Commencement Date"), and shall terminate
on the date set forth in Section 3.3 of the Summary (the "Lease Expiration
Date") unless this Lease is sooner terminated as hereinafter provided. For
purposes of this Lease, the term "Lease Year" shall mean each consecutive twelve
(12) month period during the Lease Term. At any time during the Lease Term,
Landlord may deliver to Tenant a notice in the form as set forth in Exhibit
4
C, attached hereto, as a confirmation only of the information set forth therein,
which Tenant shall execute and return to Landlord within five (5) days of
receipt thereof; provided, however, Tenant's failure to execute and return such
notice to Landlord within such time shall be conclusive upon Tenant that the
information set forth in such notice is as specified therein.
ARTICLE 3
BASE RENT
Tenant shall pay, without prior notice or demand, to Boston Properties
- Embarcadero One, File #73669-01, X.X. Xxx 00000, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000-0000, or, at Landlord's option, to such other party or at such other place
as Landlord may from time to time designate in writing, by a check for currency
which, at the time of payment, is legal tender for private or public debts in
the United States of America, base rent ("Base Rent") as set forth in Section 4
of the Summary, payable in equal monthly installments as set forth in Section 4
of the Summary in advance on or before the first day of each and every calendar
month during the Lease Term, without any setoff or deduction whatsoever. The
Base Rent for the first full month of the Lease Tenn shall be paid at the time
of Tenant's execution of this Lease. If any Rent payment date (including the
Lease Commencement Date) falls on a day of the month other than the first day of
such month or if any payment of Rent is for a period which is shorter than one
month, the Rent for any fractional month shall accrue on a daily basis for the
period from the date such payment is due to the end of such calendar month or to
the end of the Lease Term at a rate per day which is equal to 1/365 of the
applicable annual Rent. All other payments or adjustments required to be made
under the terms of this Lease that require proration on a time basis shall be
prorated on the same basis.
ARTICLE 4
ADDITIONAL RENT
4.1 General Terms. In addition to paying the Base Rent specified in
Article 3 of this Lease, Tenant shall pay "Tenant's Share" of the annual
"Building Direct Expenses," as those terms are defined in Sections 4.2.9 and
4.2.2 of this Lease, respectively, which are in excess of the amount of Building
Direct Expenses applicable to the "Base Year," as that term is defined in
Section 4.2.1, below; provided, however, that in no event shall any decrease in
Building Direct Expenses for any "Expense Year," as that term is defined in
Section 4.2.6 below, below Building Direct Expenses for the Base Year entitle
Tenant to any decrease in Base Rent or any credit against sums due under this
Lease. Such payments by Tenant, together with any and all other amounts payable
by Tenant to Landlord pursuant to the terms of this Lease, are hereinafter
collectively referred to as the "Additional Rent," and the Base Rent and the
Additional Rent are herein collectively referred to as "Rent." All amounts due
under this Article 4 as Additional Rent shall be payable for the same periods
and in the same manner as the Base Rent. Without limitation on other obligations
of Tenant
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which survive the expiration of the Lease Term, the obligations of Tenant to pay
the Additional Rent provided for in this Article 4 shall survive the expiration
of the Lease Term.
4.2 Definitions of Key Terms Relating to Additional Rent. As used
in this Article 4, the following terms shall have the meanings hereinafter set
forth:
4.2.1 "Base Year" shall mean the period set forth in Section 5 of
the Summary.
4.2.2 "Building Direct Expenses" shall mean "Building Operating
Expenses" and "Building Tax Expenses", as those terms defined in Sections 4.2.3
and 4.2.4, below, respectively.
4.2.3 "Building Operating Expenses" shall mean the portion of
"Operating Expenses," as that term is defined in Section 4.2. below, allocated
to the tenants of the Building pursuant to the terms of Section 4.3.1 below.
4.2.4 "Building Tax Expenses" shall mean that portion of "Tax
Expenses", as that term is defined in Section 4.2.8 below, allocated to the
tenants of the Building pursuant to the terms of Section 4.3.1 below.
4.2.5 "Direct Expenses" shall mean "Operating Expenses" and "Tax
Expenses."
4.2.6 "Expense Year" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires, provided that Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and, in the event of any such change, Tenant's Share of Building
Direct Expenses shall be equitably adjusted for any Expense Year involved in any
such change.
4.2.7 "Operating Expenses" shall mean all expenses, costs and
amounts of every kind and nature which Landlord pays or acquires during any
Expense Year because of or in connection with the ownership, management,
maintenance, security, repair, replacement, restoration or operation of the
Project, or any portion thereof. Without limiting the generality of the
foregoing, Operating Expenses shall specifically include any and all of the
following: (i) the cost of supplying all utilities, the cost of operating,
maintaining, repairing, replacing, renovating and managing the utility systems,
mechanical systems, sanitary, storm drainage systems, communication systems and
escalator and elevator systems, and the cost of supplies, tools, and equipment
and maintenance and service contracts in connection therewith; (ii) the cost of
licenses, certificates, permits and inspections and the cost of contesting any
governmental enactments which may affect Operating Expenses, and the costs
incurred in connection with a transportation system management program or
similar program; (iii) the cost of all insurance carried by Landlord in
connection with the Project as reasonably determined by Landlord (including,
without limitation, commercial general liability insurance, physical damage
insurance covering damage or other loss caused by fire, earthquake, flood and
other water damage, explosion, vandalism and malicious mischief, theft or other
casualty,
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rental interruption insurance and such insurance as may be required by any
lessor under any present or future ground or underlying lease of the Building or
Project or any holder of a mortgage, trust deed or other encumbrance now or
hereafter in force against the Building or Project or any portion thereof); (iv)
the cost of landscaping, decorative lighting, relamping, fountains, sculptures,
bridges and all supplies, tools, equipment and materials used in the operation,
repair and maintenance of the Project, or any portion thereof; (v) the cost of
parking area repair, restoration, and maintenance, including, without
limitation, resurfacing, repainting, restriping and cleaning; (vi) fees, charges
and other costs, including management fees (or amounts in lieu thereof),
consulting fees (including, without limitation, any consulting fees incurred in
connection with the procurement of insurance), legal fees and accounting fees,
of all contractors, engineers, consultants and all other persons engaged by
Landlord or otherwise incurred by or charged by Landlord in connection with the
management, operation, administration, maintenance and repair of the Building
and the Project; (vii) payments under any equipment rental agreements or
management agreements (including the cost of any actual or charged management
fee and the actual or charged rental of any management fee and the actual or
charged rental of any management office space); (viii) wages, salaries and other
compensation and benefits, including taxes levied thereon, of all persons
engaged in the operation, maintenance and security of the Project; (ix) costs
under any instrument pertaining to the sharing of costs by the Project; (x)
operation, repair, maintenance and replacement of all systems and equipment and
components thereof of the Project; (xi) the cost of janitorial, alarm, security
and other services, replacement of wall and floor coverings, ceiling tiles and
fixtures in common areas, maintenance and replacement of curbs and walkways,
repair to roofs and re-roofing; (xii) amortization (including interest on the
unamortized cost) of the cost of acquiring or the rental expense of personal
property used in the maintenance, operation and repair of the Project, or any
portion thereof; (xiii) the cost of capital improvements or other costs incurred
in connection with the Project (A) which are intended to effect economies in the
operation, cleaning or maintenance of the Project, or any portion thereof, (B)
that are required to comply with present or anticipated conservation programs,
(C) which are replacements or modifications of nonstructural items located in
the Common Areas required to keep the Common Areas in good order or condition,
or (D) that are required under any governmental law or regulation; provided,
however, that any capital expenditure shall be amortized (including interest on
the amortized cost) over its useful life as Landlord shall reasonably determine;
(xiv) costs, fees, charges or assessments imposed by, or resulting from any
mandate imposed on Landlord by, any federal, state or local government for fire
and police protection, trash removal, community services, or other services
which do not constitute "Tax Expenses" as that term is defined in Section 4.2.8,
below; (xv) advertising, marketing and promotional expenditures incurred in
connection with the Project, including, without limitation, costs of signs in,
on or about the Project identifying or promoting the Project; and (xvi) payments
und any casement, license, operating agreement, declaration, restrictive
covenant, or instrument pertaining to the sharing of costs by the Project or
related to the use or operation of the Project.
Notwithstanding the foregoing, Operating Expenses for purposes of this
Lease shall not include (a) except as otherwise specifically provided in this
Section 4.2.7, costs incurred by Landlord for capital repairs, improvements,
equipment and alterations to the Building which are considered capital
improvements and replacements under generally accepted accounting principles,
consistently
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applied; (b) except as otherwise specifically provided in this Section 4.2.7,
costs of interest on debt or amortization on any mortgages, and rent and other
charges, costs and expenses payable under any mortgage, if any; (c) any costs
included as a Tax Expense pursuant to Section 4.2.8 below; (d) the wages and
benefits of any employee who does not devote substantially all of his or her
employed time to the Building unless such wages and benefits are prorated to
reflect time spent on operating and managing the Building vis-a-vis time spent
on matters unrelated to operating and managing the Building; provided, that in
no event shall Operating Expenses for purposes of this lease include wages
and/or benefits attributable to personnel above the level of Building manager or
Building engineer; (e) costs of leasing commissions, attorneys' fees and other
costs and expenses incurred in connection with negotiations or disputes with
present or prospective tenants or other occupants of the Building; (f) costs
(including permit, license and inspection costs) incurred in renovating or
otherwise improving, decorating or redecorating rentable space for other tenants
or vacant rentable space; (g) costs of overhead or profit increment paid to
Landlord or to subsidiaries or affiliates of Landlord for services in or in
connection with Building to the extent the same exceeds the cost of such
services which could be obtained from third parties on a competitive basis; (h)
costs of any compensation and employee benefits paid to clerks, attendants or
other persons in a commercial concession operated by Landlord, except the
Project parking facility; (i) marketing costs, legal fees, space planner's fees,
and advertising and promotional expenses and brokerage fees incurred in
connection with the original development, subsequent improvement, or original or
future leasing of the Building; j)costs of depreciation of the Building; (k)
except as otherwise specifically provided in this Section 4.2.7, costs incurred
by Landlord in the repairs, capital additions, alterations or replacements made
or incurred to rectify or correct defects in design, materials or workmanship in
connection with any portion of the Building; (1) cost of utilities or services
sold to Tenant or others for which Landlord is entitled to and actually receives
reimbursement (other than through any operating cost reimbursement provision
identical or substantially similar to the provisions set forth in this Lease);
(m) any costs covered by any warranty, rebate, guarantee or service contract
which are actually collected by Landlord (which shall not prohibit Landlord from
passing through the costs of any such service contract if otherwise includable
in Operating Expenses); (n) all items and services for which Tenant or any other
tenant in the Building reimburses Landlord or which Landlord provides
selectively to one or more tenants (other than Tenant) without reimbursement;
(o) costs incurred to comply with laws relating to "Hazardous Substance," as
that term is defined in Section 5.2, below, which was in existence in the
Building or the Project prior to the Lease Commencement Date, and was of such a
nature that a federal, State or municipal governmental authority, if it had then
had knowledge of the presence of such Hazardous Substance, in the state, and
under the conditions that it then existed in the Building or the Project, would
have then required the removal of such Hazardous Substance or other remedial or
containment action with respect thereto; and costs incurred to remove, remedy,
contain, or treat Hazardous Substance, which Hazardous Substance is brought into
the Building or the Project after the date hereof by Landlord or any other
tenant of the Building and is of such a nature, at that time, that a federal,
State or municipal governmental authority, if it had then had knowledge of the
presence of such Hazardous Substance, in the state, and under the conditions,
that it then existed in the Building or the Project, would have then required
the removal of such Hazardous Substance or other remedial or containment action
with respect thereto; and (p) any bad debt loss, rent loss, or reserves for bad
debts or rent loss;
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If Landlord is not furnishing any particular work or service (the cost
of which, if performed by Landlord, would be included in Operating Expenses) to
a tenant who has undertaken to perform such work or service in lieu of the
performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such work or service to such tenant. If the Project is not
at least one hundred percent (100%) occupied during all or a portion of the Base
Year or any Expense Year, Landlord may elect to make an appropriate adjustment
to the components of Operating Expenses for such year to determine the amount of
Operating Expenses that would have been incurred had the Project been one
hundred percent (100%) occupied; and the amount so determined shall be deemed to
have been the amount of Operating Expenses for such year. Operating Expenses for
the Base Year shall not include market-wide labor-rate increases due to
extraordinary circumstances, including, but not limited to, boycotts and
strikes, and utility rate increases due to extraordinary circumstances
including, but not limited to, conservation surcharges, boycotts, embargoes or
other shortages, or amortized costs relating to capital improvements. In no
event shall the components of Direct Expenses for any Expense Year related to
electrical costs be less than the components of Direct Expenses related to
electrical costs in the Base Year.
4.2.8 Taxes.
4.2.8.1 "Tax Expenses" shall mean all federal, state, county,
or local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, business taxes, leasehold taxes or taxes based upon
the receipt of rent, including gross reeipts or sales taxes applicable to the
receipt of rent, unless required to be paid by Tenant, personal property taxes
imposed upon the fixtures, machinery, equipment, apparatus, systems and
equipment, appurtenances, furniture and other personal property used in
connection with the Project, or any portion thereof), which shall be paid or
accrued during any Expense Year (without regard to any different fiscal year
used by such governmental or municipal authority) because of or in connection
with the ownership, leasing and operation of the Project, or any portion
thereof.
4.2.8.2 Tax Expenses shall include, without limitation: (i)
Any tax on the rent, right to rent or other income from the Project, or any
portion thereof, or as against the business of leasing the Project, or any
portion thereof, (ii) Any assessment, tax, fee, levy or charge in addition to,
or in substitution, partially or totally, of any assessment, tax, fee, levy or
charge previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Tax Expenses shall also include
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any governmental or private assessments or the Project's contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or
improving the quality of services and amenities normally provided by
governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable
to or measured by the area of the Premises, the tenant improvements in the
Premises, or the Rent payable hereunder, including, without limitation, any
business or gross income tax or excise tax with respect to the receipt of such
rent, or upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or
any portion thereof; (iv) Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or transferring
an interest or an estate in the Premises; and (v) All of the real estate taxes
and assessments imposed upon or with respect to the Building and all of the real
estate taxes and assessments imposed on the land and improvements comprising the
Project.
4.2.8.3 If Tax Expenses for any period during the Lease Term
or any extension thereof are increased after payment thereof for any reason,
including, without limitation, error or reassessment by applicable governmental
or municipal authorities, Tenant shall pay Landlord upon demand Tenant's Share
of any such increased Tax Expenses included by Landlord as Building Tax Expenses
pursuant to the terms of this Lease. Notwithstanding anything to the contrary
contained in this Section 4.2.8 (except as set forth in Section 4.2.8. 1,
above), there shall be excluded from Tax Expenses (i) all excess profits taxes,
franchise taxes, gift taxes, capital stock taxes, inheritance and succession
taxes, estate taxes, federal and state income taxes, and other taxes to the
extent applicable to Landlord's general or net income (as opposed to rents,
receipts or income attributabl-, to operations at the Project), (ii) any items
included as Operating Expenses, and (iii) any items paid by Tenant under Section
4.5 of this Lease.
4.2.8.4 Notwithstanding anything to the contrary set forth in
this Lease, the amount of Tax Expenses for the Base Year and any Expense Year
shall be calculated without taking into account any decreases in real estate
taxes obtained in connection with Proposition 8, and, therefore, the Tax
Expenses in the Base Year and/or an Expense Year may be greater than those
actually incurred by Landlord, but shall, nonetheless, be the Tax Expenses due
under this Lease; provided that (i) any costs and expenses incurred by Landlord
in securing any Proposition 8 reduction shall not be deducted from Tax Expenses
nor included in Direct Expenses for purposes of this Lease, and (ii) tax refunds
under Proposition 8 shall not be deducted from Tax Expenses nor refunded to
Tenant, but rather shall be the sole property of Landlord. Landlord and Tenant
acknowledge that the preceding sentence is not intended to in any way affect (A)
the inclusion in Tax Expenses of the statutory two percent (2.0%) annual
increase in Tax Expenses (as such statutory increase may be modified by
subsequent legislation), or (B) the inclusion or exclusion of Tax Expenses
pursuant to the terms of Proposition 13. Notwithstanding the foregoing, upon a
reassessment of the Building and/or the Project pursuant to the terms of
Proposition 13 (a "Reassessment") occurring after the Base Year which results in
a decrease in Tax Expenses, the component of Tax Expenses for the Base Year
which is attributable to the assessed value of the Building and/or the Project
under Proposition 13 prior to the Reassessment (without taking into account any
Proposition 8 reductions) (the "Base Year Prop 13 Taxes") shall be reduced, if
at all,
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for the purposes of comparison to all subsequent Expense Years (commencing with
the Expense Year in which the Reassessment takes place) to an amount equal to
the real estate taxes based upon such Reassessment, and if thereafter, in
connection with a subsequent Reassessment, the assessed value of the Building
and/or the Project under Proposition 13 shall increase, the current Base Year
Prop 13 Taxes shall be increased for purposes of comparison to all subsequent
Expense Years (commencing with the Expense Year in which the Reassessment takes
place) to an amount equal to the lesser of the original Base Year Prop 13 Taxes
and an amount equal to the real estate taxes based upon such Reassessment.
4.2.9 "Tenant's Share" shall mean the percentage set forth in
Section 6 of the Summary. Tenant's Share was calculated by multiplying the
number of rentable square feet of the Premises, as set forth in Section 2.2 of
the Summary by 100, and dividing the product by the total number of rentable
square feet in the Building. If Tenant's Share shall be adjusted in accordance
with Section 1.2, above, at any time er the Base Year, then, as to the Expense
Year in which such change occurs, Tenant's Share for such Expense Year shall be
determined on the basis of the number of days during such Expense Year that each
such Tenant's Share was in effect.
4.3 Allocation of Direct Expenses.
4.3.1 Method of Allocation. The parties acknowledge that the
Building is a part of a multi-building project and that the cost and expenses
incurred in connection with the Project (i.e., the Direct Expenses) should be
shared between the tenants of the Building and the tenants of the other
buildings in the Project. Accordingly, as set forth in Section 4.2 above, Direct
Expenses (which consists of Operating Expenses and Tax Expenses) are determined
annually for the Project as a whole, and a portion of the Direct Expenses, which
portion shall be determined by Landlord on an equitable basis, shall be
allocated to the tenants of the Building (as opposed to the tenants of any other
buildings in the Project) and such portion shall be the Building Direct Expenses
for purposes of this Lease. Such portion of Direct Expenses allocated to the
tenants of the Building shall include all Direct Expenses attributable solely to
the Building and an equitable portion of the Direct Expenses attributable to the
Project as a whole.
4.3.2 Cost Pools. Landlord shall have the right, from time to time,
to equitably allocate some or all of the Direct Expenses for the Project among
different portions or occupants of the Project (the "Cost Pools"), in Landlord's
discretion. Such Cost Pools may include, but shall not be limited to, the office
space tenants of a building of the Project or of the Project, and the retail
space tenants of a building of the Project or of the Project. The Direct
Expenses allocable to each such Cost Pool shall be allocated to such Cost Pool
and charged to the tenants within such Cost Pool in an equitable manner.
4.4 Calculation and Payment of Additional Rent. If for any Expense Year
ending or commencing within the Lease Term, Tenant's Share of Building Direct
Expenses for such Expense Year exceeds Tenant's Share of Building Direct
Expenses applicable to the Base Year, then Tenant
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shall pay to Landlord, in the manner set forth in Section 4.4. 1, below, and as
Additional Rent, an amount equal to the excess (the "Excess").
4.4.1 Statement of Actual Building Direct Expenses and Payment by
Tenant. Landlord shall endeavor to give to Tenant following the end of each
Expense Year, a statement (the "Statement") which shall state the Building
Direct Expenses incurred or accrued for such preceding Expense Year, and which
shall indicate the amount of the Excess. Upon receipt of the Statement for each
Expense Year commencing or ending during the Lease Term, if an Excess is
present, Tenant shall pay, with its next installment of Base Rent due or within
thirty (30) days, whichever is earlier, the full amount of the Excess for such
Expense Year, less the amounts, if any, paid during such Expense Year an
"Estimated Excess," as that term is defined in Section 4.4.2, below. If the
amounts paid by Tenant during an Expense Year as Estimated Excess exceed the
Excess for such Expense Year, then such difference shall be reimbursed by
Landlord to Tenant, provided that any such reimbursement, at Landlord's option,
may be credited against the Additional Rent next coming due under this Lease
unless the Lease Term has expired, in which event Landlord shall refund the
appropriate amount to Tenant. The failure of Landlord to timely furnish the
Statement for any Expense Year shall not prejudice Landlord or Tenant from
enforcing its rights under this Article 4. Even though the Lease Term has
expired and Tenant has vacated the Premises, when the final determination is
made of Tenant's Share of Building Direct Expenses for the Expense Year in which
this Lease terminates, if an Excess is present, Tenant shall immediately pay to
Landlord such amount. The provisions of this Section 4.4.1 shall survive the
expiration or earlier termination of the Lease Term.
4.4.2 Statement of Estimated Building Direct Expenses. In addition,
Landlord shall endeavor to give Tenant a yearly expense estimate statement (the
"Estimate Statement") which shall set forth Landlord's reasonable estimate (the
"Estimate") of what the total amount of Building Direct Expenses for the
then-current Expense Year shall be and the estimated excess (the "Estimated
Excess") as calculated by comparing the Building Direct Expenses for such
Expense Year, which shall be based upon the Estimate, to the amount of Building
Direct Expenses for the Base Year. The failure of Landlord to timely furnish the
Estimate Statement for any Expense Year shall not preclude Landlord from
enforcing its rights to collect any Estimated Excess under this Article 4, nor
shall Landlord be prohibited from revising any Estimate Statement or Estimated
Excess theretofore delivered to the extent necessary. Thereafter, Tenant shall
pay, with its next installment of Base Rent due, a fraction of the Estimated
Excess for the then-current Expense Year (reduced by any amounts paid pursuant
to the last sentence of this Section 4.4.2). Such fraction shall have as its
numerator the number of months which have elapsed in such current Expense Year,
including the month of such payment, and twelve (12) as its denominator. Until a
new Estimate Statement is furnished (which Landlord shall have the right to
deliver to Tenant at any time), Tenant shall pay monthly, with the monthly Base
Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated
Excess set forth in the previous Estimate Statement delivered by Landlord to
Tenant.
4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.
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4.5.1 Tenant shall be liable for and shall pay thirty (30) days
before delinquency, taxes levied against Tenant's equipment, furniture, fixtures
and any other personal property located in or about the Premises. If any such
taxes on Tenant's equipment, furniture, fixtures and any other personal property
are levied against Landlord or Landlord's property or if the assessed value of
Landlord's property is increased by the inclusion therein of a value placed upon
such equipment, furniture, fixtures or any other personal property and if
Landlord pays the taxes based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof but only under
proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.
4.5.2 If the tenant improvements in the Premises, whether installed
and/or paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which tenant improvements
conforming to Landlord's "building standard" in other space in the Building are
assessed, then the Tax Expenses levied against Landlord or the property by
reason of such excess assessed valuation shall be deemed to be taxes levied
against personal property of Tenant and shall be governed by the provisions of
Section 4.5. 1, above.
4.5.3 Notwithstanding any contrary provision herein, Tenant shall
pay prior to delinquency any (i) rent tax or sales tax, service tax, transfer
tax or value added tax, business tax or any other applicable tax on the rent or
services herein or otherwise respecting this Lease, (ii) taxes assessed upon or
with respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion of
the Project, including the Project parking facility; or (iii) taxes assessed
upon this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises.
ARTICLE 5
USE OF PREMISES
5.1 Permitted Use. Tenant shall use the Premises solely for the
Permitted Use set forth in Section 7 of the Summary and Tenant shall not use or
permit the Premises or the Project to be used for any other purpose or purposes
whatsoever without the prior written consent of Landlord, which may be withheld
in Landlord's sole discretion.
5.2 Prohibited Uses. Tenant further covenants and agrees that Tenant
shall not use, or suffer or permit any person or persons to use, the Premises or
any part thereof for any use or purpose contrary to the provisions of the Rules
and Regulations set forth in Exhibit D, attached hereto, or in violation of the
laws of the United States of America, the State of California, or the
ordinances, regulations or requirements of the local municipal or county
governing body or other lawful authorities having jurisdiction over the Project,
including, without limitation, any such laws, ordinances, regulations or
requirements relating to hazardous materials or substances, as those terms
13
are defined by applicable laws now or hereafter in effect. Tenant shall not do
or permit anything to be done in or about the Premises which will in any way
damage the reputation of the Project or obstruct or interfere with the rights of
other tenants or occupants of the Building, or injure or annoy them or use or
allow the Premises to be used for any improper, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises. Tenant shall comply with, and Tenant's rights and obligations
under the Lease and Tenant's use of the Premises shall be subject and
subordinate to, all recorded easements, covenants, conditions, and restrictions
now or hereafter affecting the Project. Tenant shall not cause or permit any
"Hazardous Substance," as that term is defined below, to be kept, maintained,
used, stored, produced, generated or disposed of (into the sewage or waste
disposal system or otherwise) on or in the Premises by Tenant or Tenant's
agents, employees, contractors, invitees, assignees or sublessees, without first
obtaining Landlord's written consent. Tenant shall immediately notify, and shall
direct Tenant's agents, employees contractors, invitees, assignees and
sublessees to immediately notify, Landlord of any incident in, on or about the
Premises, the Building or the Project that would require the filing of a notice
under any federal, state, local or quasi-governmental law (whether under common
law, statute or otherwise), ordinance, decree, code, ruling, award, rule,
regulation or guidance document now or hereafter enacted or promulgated, as
amended from time to time, in any way relating to or regulating any Hazardous
Substance. As used herein, "Hazardous Substance" means any substance which is
toxic, ignitable, reactive, or corrosive and which is regulated by any local
government, the State of California, or the United States government. "Hazardous
Substance" includes any and all material or substances which are defined as
"hazardous waste," "extremely hazardous waste" or a "hazardous substance"
pursuant to state, federal or local governmental law. "Hazardous Substance" also
includes asbestos, polychlorobiphenyls (i.e., PCB's) and petroleum. Landlord
acknowledges, however, that Tenant will maintain products in the Premises which
are incidental to the operation of its offices, such as photocopy supplies,
secretarial supplies and limited janitorial supplies, which products contain
chemicals which are categorized as Hazardous Substances. Landlord agrees that
the use of such products in the Premises in compliance with all applicable laws
and in the manner in which such products are designed to be used shall not be a
violation by Tenant of this Section 5.2.
ARTICLE 6
SERVICES AND UTILITIES
6.1 Standard Tenant Services. Landlord shall provide the following
services on all days (unless otherwise stated below) during the Lease Term.
6.1.1 Subject to limitations imposed by all governmental rules,
regulations and guidelines applicable thereto, Landlord shall provide heating,
ventilation and air conditioning ("HVAC") when necessary for normal comfort for
normal office use in the Premises from 7:00 A.M. to 6:00 P.M. Monday through
Friday, and on Saturdays from 8:00 A.M. to 1:00 P.M. (collectively, the
"Building Hours"), except for the date of observation of New Year's Day,
Independence Day, Labor Day, Memorial Day Thanksgiving Day, Christmas Day and,
at Landlord's discretion, other locally or nationally recognized holidays
(collectively, the "Holidays"). Tenant shall cooperate fully
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with Landlord at all times and abide by all regulations and requirements that
Landlord may reasonably prescribe for the proper functioning and protection of
the HVAC, electrical, mechanical plumbing systems.
6.1.2 Landlord shall provide electricity to the Premises (including
adequate electrical wiring and facilities for connection to Tenant's lighting
fixtures and incidental use equipment) for lighting and power suitable for the
Permitted Use as determined by Landlord, provided that Tenant's electrical usage
shall be subject to applicable laws and regulations. Tenant shall bear the cost
of replacement of lamps, starters and ballasts for non-Building standard
lighting fixtures within the Premises.
6.1.3 Landlord shall provide city water from the regular Building
outlets for drinking, lavatory and toilet purposes in the Building Common Areas.
6.1.4 Landlord shall provide nonexclusive, non-attended automatic
passenger elevator service during the Building Hours, shall have one elevator
available at all other times, including on the Holidays, except in the event of
emergency, and shall provide nonexclusive, non-attended automatic passenger
escalator service during Building Hours only.
6.1.5 Landlord shall provide nonexclusive freight elevator service
subject to scheduling by Landlord.
6.1.6 Landlord shall provide customary weekday janitorial services
to the Premises, except the date of observation of the Holidays, in and about
the Premises and customary occasional window washing services, each in a manner
consistent with other Class "A" office buildings located in the vicinity of the
Project.
6.2 Overstandard Tenant Use. Tenant shall not, without Landlord's prior
written consent, use heat-generating machines, machines other than normal
fractional horsepower office machines, or equipment or lighting other than
Building standard lights in the Premises, which may affect the temperature
otherwise maintained by the air conditioning system or increase the water
normally furnished for the Premises by Landlord pursuant to the terms of Section
6.1 of this Lease. If Tenant uses water, electricity, heat ) air conditioning in
excess of that supplied by Landlord pursuant to Section 6.1 of this Lease,
Tenant shall pay to Landlord, upon billing, the cost of such excess consumption,
the cost of installation, operation, and maintenance of equipment which is
installed in order to supply such excess consumption, and the cost of the
increased wear and tear on existing equipment caused by such excess consumption;
and Landlord may install devices to separately meter any increased use and in
such event Tenant shall pay the increased cost directly to Landlord, on demand,
at the rates charged by the public utility company furnishing the same,
including the cost of such additional metering devices. Tenant's use of
electricity shall never exceed the capacity of the feeders to the Project or the
risers or wiring installation, and subject to the terms of Section 29.32, below,
Tenant shall not install or use or permit the installation or use of any
computer or electronic data processing equipment in the Premises, without the
prior written consent
15
of Landlord. If Tenant desires to use heat, ventilation or air conditioning
during hours other than those for which Landlord is obligated to supply such
utilities pursuant to the terms of Section 6.1 of this Lease, Tenant shall give
Landlord such prior notice, if any, as Landlord shall from time to time
establish as appropriate, of Tenant's desired use in order to supply such
utilities, and Landlord shall supply such utilities to Tenant at such hourly
cost to Tenant (which shall be treated as Additional Rent) as Landlord shall
from time to time establish. Landlord shall have the exclusive right, but not
the obligation, to provide any additional services which may be required by
Tenant, including, without limitation, locksmithing, lamp replacement,
additional janitorial service, and additional repairs and maintenance. If Tenant
requests any such additional services, then Tenant shall pay to Landlord the
cost of such additional services, including Landlord's standard fee for its
involvement with such additional services, promptly upon being billed for same.
6.3 Interruption of Use. Tenant agrees that Landlord shall not be
liable for damages, by abatement of Rent or otherwise, for failure to furnish or
delay in furnishing any service (including telephone and telecommunication
services), or for any diminution in the quality or quantity thereof, when such
failure or delay or diminution is occasioned, in whole or in part, by breakage,
repairs, replacements, or improvements, by any strike, lockout or other labor
trouble, by inability to secure electricity, gas, water, or other fuel at the
Building or Project after reasonable effort to do so, by any riot or other
dangerous condition, emergency, accident or casualty whatsoever, by act or
default of Tenant or other parties, or by any other cause beyond Landlord's
reasonable control; and such failures or delays or diminution shall never be
deemed to constitute an eviction or disturbance of Tenant's use and possession
of the Premises or relieve Tenant from paying Rent or performing any of its
obligations under this Lease. Furthermore, Landlord shall not be liable under
any circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any of the services or utilities as set forth in this Article
6.
6.4 Abatement of Rent. In the event that Tenant is prevented from
using, and does not use, the Premises or any portion thereof, as a result of a
failure to provide services or utilities as required by this Lease, which
substantially interferes with Tenant's use of the Premises (an "Abatement
Event"), then Tenant shall give Landlord notice of such Abatement Event, and if
such Abatement Event continues for five (5) consecutive business days after
Landlord's receipt of any such notice and Landlord does not diligently pursue to
completion the remedy of such Abatement Event (the "Eligibility Period"), then
the Base Rent and Tenant's Share of Building Direct Expenses shall be abated or
reduced, as the case may be, after expiration of the Eligibility Period for such
time that Tenant continues to be prevented from using, and does not use, the
Premises or a portion thereof, in the portion that the rentable area of the
portion of the Premises that Tenant is prevented from using, and does not use,
bears to the total rentable area of the Premises, to the extent covered by
Landlord's insurance; provided, however, in the event that Tenant is prevented
from using, and does not use,, a portion of the Premises for a period of time in
excess of the Eligibility Period and the remaining portion of the Premises is
not sufficient to allow Tenant to effectively conduct its business therein, and
if Tenant does not conduct its business from such remaining portion, then for
such time after expiration of the Eligibility Period during which Tenant is so
prevented from
16
effectively conducting its business therein, the Base Rent and Tenant's Share of
Building Direct Expenses for the entire Premises shall be abated for such time
as Tenant continues to be so prevented from using, and does not use, the
Premises, to the extent covered by Landlord's insurance. If, however, Tenant
re-occupies any portion of the Premises during such period, the rent allocated
to such re-occupied portion, based on the proportion that the rentable area of
such re-occupied portion of the Premises bears to the total rentable area of the
Premises, shall be payable by Tenant from the date Tenant re-occupies such
portion of the Premises. Such right to xxxxx Base Rent and Tenant's Share of
Building Direct Expenses shall be Tenant's sole and exclusive remedy for rent
abatement at law or in equity for an Abatement Event. Except as provided in this
Section 6.4, nothing contained herein shall be interpreted to mean that Tenant
is excused from paying Rent due hereunder.
ARTICLE 7
REPAIRS
Tenant shall, at Tenant's own expense, keep the Premises, including all
improvements, fixtures and furnishings therein, and the floor or floors of the
Building on which the Premises are located, in good order, repair and condition
at times during the Lease Term. In addition, Tenant shall, at Tenant's own
expense, but under the supervision and subject to the prior approval of
Landlord, and within any reasonable period of time specified by Landlord,
promptly and adequately repair all damage to the Premises and replace or repair
all damaged, broken, or worn fixtures and appurtenances, except for damage
caused by ordinary wear and tear or beyond the reasonable control of Tenant;
provided however, that, Landlord shall have the exclusive right, at Landlord's
option, but not the obligation, to make such repairs and replacements, and
Tenant shall pay to Landlord the cost thereof, including Landlord's standard fee
for its involvement with such repairs and replacements, promptly upon being
billed for same. Notwithstanding the foregoing, Landlord shall be responsible
for repairs to the exterior walls, foundation and roof of the Building, the
structure, portions of the floors of the Building, and the systems and equipment
of the Building, except to the extent that such repairs are required due to the
negligence or willful misconduct of Tenant; provided however, that if such
repairs are due to the negligence or willful misconduct of Tenant, Landlord
shall nevertheless make such repairs at Tenant's expense, or, if covered by
Landlord's insurance, Tenant shall only be obligated to pay any deductible in
connection therewith. Landlord may, but shall not be required to, enter the
Premises at all reasonable times to make such repairs, alterations, improvements
or additions to the Premises or to the Project or to any equipment located in
the Project as Landlord shall desire or deem necessary or as Landlord may be
required to do by governmental or quasi- governrnental authority or court order
or decree. Tenant hereby, waives any and all rights under and benefits of
subsection 1 of Section 1932 and Sections 1941 and 1942 of the California Civil
Code or under any similar law, statute, or ordinance now or her after in effect.
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ARTICLE 8
ADDITIONS AND ALTERATIONS
8.1 Landlord's Consent to Alterations. Tenant may not make or suffer to
be made any improvements, alterations, additions or changes to the Premises or
any mechanical, plumbing or HVAC facilities or systems pertaining to the
Premises (collectively, the "Alterations") without first procuring the prior
written consent of Landlord to such Alterations, which consent shall be
requested by Tenant in accordance with the terms and conditions of this Article
8, and which consent shall not be unreasonably withheld or delayed by Landlord,
provided it shall be deemed reasonable for Landlord to withhold its consent to
any Alteration which adversely affects the structural portions or the systems or
equipment of the Building or is visible from the exterior of the Building.
Landlord may impose, as a condition of its consent to any and all Alterations or
repairs of the Premises or about the Premises, such requirements as Landlord in
its sole discretion may deem desirable. Notwithstanding the foregoing, Tenant
shall be permitted to make Alterations") following ten (10) business days notice
to Landlord, but without Landlord's consent, to the extent that such Alterations
do not (i) involve the expenditure of more than $25,000.00 in the aggregate per
Alteration nor (ii) affect the exterior appearance of the Building, the
structural portions of the Building, or the systems and equipment in the
Building. The construction of the initial improvements to the Premises shall be
governed by the terms of the Tenant Work Letter and not the term of this Article
8.
8.2 Manner of Construction. Landlord shall have the exclusive right, at
Landlord's option, but not the obligation, to make the Alterations at Tenant's
sole cost and expense. Prior to the commencement of construction of any
Alterations or repairs, Tenant shall submit to Landlord, for Landlord's review
and approval in its reasonable discretion, all plans, specifications and working
drawings relating thereto. Tenant, at its sole cost and expense, shall retain an
architect/space planner selected by Tenant, and reasonably approved by Landlord,
to prepare such plans, specifications and working drawings; provided that,
Tenant shall also retain the engineering consultants designated by Landlord to
prepare all plans and engineering working drawings, if any, relating to the
structural, mechanical, electrical, plumbing, HVAC, life safety and sprinkler
work of the Alterations. Tenant shall cause each architect/space planner and
engineer retained by Tenant to follow Landlord's standard construction
administration procedures and to utilize the standard specifications and details
for the Building, all as promulgated by Landlord from time to time. Tenant and
Tenant's architect/space planner shall verify, in the field, the dimensions and
conditions, as shown on the relevant portions of the "Base Building" plans, and
Tenant and Tenant's architect / space planner shall be solely responsible for
the same, and Landlord shall have no responsibility in connection therewith.
Landlord's review of plans, specifications and working drawings as set forth in
this Section 8.2, shall be for its sole purpose and shall not imply Landlord's
review of the same, or obligate Landlord to review the same, for quality,
design, compliance with applicable building codes or other like matters.
Accordingly, notwithstanding that any plans, specifications or working drawings
are reviewed by Landlord or its space planner, architect, engineers and
consultants, and notwithstanding any advice or assistance which may be rendered
to Tenant by Landlord or Landlord's space planner, architect, engineers, and
consultants, Landlord shall have no liability whatsoever in connection therewith
and shall not be responsible for any omissions or errors contained in the plans,
specifications and working drawings for the Alterations, and Tenant's waiver and
indemnity set forth in Section 10.1 of this Lease, below, shall specifically
apply to the plans, specifications and working drawings for the Alterations.
Following Landlord's approval in its reasonable discretion of all plans,
18
specifications and working drawings for the Alterations, a contractor to
construct the Alterations shall be selected by Tenant from the list of
contractors approved by Landlord or, at Tenant's option, exercisable by written
notice to Landlord, pursuant to a competitive bidding process. If Tenant shall
select a contractor from Landlord's list of approved contractors, then Landlord
shall provide to Tenant an itemized statement of costs, as set forth in the
proposed contract with such contractor. If Tenant shall elect to have a
contractor selected by a competitive bidding process, then (i) Landlord shall
solicit bids for construction of the Alterations from three (3) qualified,
licensed and reputable contractors selected by Landlord (each of which
contractors shall be notified in the bidding package of the requirement that,
unless Landlord otherwise requires, the selected contractor shall use the fire,
life safety subcontractor designated by Landlord), (ii) Landlord shall perform a
reconciliation of the submitted bids to adjust for inconsistent or incorrect
assumptions so that a like-kind comparison can be made and a low bid determined,
and (iii) Landlord shall provide to Tenant an itemized statement of costs, as
set forth in the proposed contract with the contractor wh submits the lowest
bid. Tenant shall approve and deliver to Landlord the itemized statement of
costs provided to Tenant in accordance with this Section 8.2, and upon receipt
of such itemized statement of costs by Landlord, Landlord shall be released by
Tenant (i) to retain the contractor who submitted such itemized statement of
costs, and (ii) to purchase the items set forth in such itemized statement of
costs and to commence the construction relating to such items. Landlord hereby
assigns to Tenant all warranties and guaranties by the contractor selected in
accordance with this Section 8.2 to construct the Alterations, and Tenant hereby
waives all claims against Landlord relating to, or arising out of the
construction of, the Alterations. In the event Tenant requests any Alterations
in the Premises which require or give rise to governmentally required changes to
the "Base Building," as that term is defined below, then Landlord shall, at
Tenant's expense, make such changes to the Base Building. As used in this Lease,
the "Base Building" shall include the structural portions of the Building, and
the public restrooms, elevators, exit stairwells and the systems and equipment
located in the internal core of the Building on the floor or floors on which the
Premises are located. In addition to Tenant's obligations under Article 9 of
this Lease, upon completion of any Alterations, Tenant agrees to cause a Notice
of Completion to be recorded in the office of the Recorder of the County in
which the Project is located in accordance with Section 3093 of the Civil Code
of the State of California or any successor statute, and Tenant shall deliver to
the Project construction manager a reproducible copy of the "as built" drawings
of the Alterations as well as all permit, approvals and other documents issued
by any governmental agency in connection with the Alterations.
8.3 Payment for Improvements. Tenant shall pay to Landlord, within ten
(10) days after being billed for the same, all costs related to the construction
of the Alterations, including, without limitation, the following items and
costs: (i) all amounts actually paid by Landlord to any architect/space planner,
engineer, consultant, contractor, subcontractor, mechanic, materialman or other
person, whether retained by Landlord or Tenant, in connection with the
Alterations, and all fees incurred by, and the actual cost of documents and
materials supplied by, Landlord and Landlord's consultants in connection with
the preparation and review of all plans, specifications and working drawings for
the Alterations; (ii) all plan check, permit and license fees relating to
construction of the Alterations paid by Landlord; (iii) the cost of any changes
in the Base Building when such changes are required by any plans, specifications
or working drawings for the Alterations (including
19
if such changes are due to the fact that such work is prepared on an unoccupied
basis), such cost to include all direct architectural and/or engineering fees
and expenses incurred by Landlord in connection therewith; (iv) the cost of any
changes to the plans, specifications and working drawings for the Alterations or
to the Alterations themselves required by all applicable zoning and building
codes and other laws and paid by Landlord; (v) sales and use taxes and Title 24
fees imposed on, assessed against or paid by Landlord; (vi) Landlord's standard
fee for its involvement with such Alterations; and (vii) all other costs
incurred by Landlord in connection with the construction of the Alterations.
Landlord, at its option, may render bills to Tenant in advance of, or during,
construction of the Alterations so as to enable Landlord to pay all costs and
expenses incurred by Landlord in connection with the Alterations (including,
without limitation, costs of the contractor retained to construct the
Alterations) without advancing Landlord's own funds. At Landlord's election in
its sole and absolute discretion, Tenant shall deliver to Landlord prior to
commencement of construction of the Alterations cash in an amount equal to all
estimated costs related to the construction of such Alterations, or such lesser
amount as Landlord shall specify, to be held by Landlord and disbursed by
Landlord for costs related to the construction of the Alterations as such costs
are incurred. In the event that, after Tenant's approval of a cost proposal for
the Alterations in accordance with Section 8.2, above, any revisions, changes or
substitutions shall be made to the plans, specifications and working drawings or
the Alterations, any additional costs which arise in connection with such
revisions, changes or substitutions or any other additional costs shall be paid
by Tenant to Landlord immediately upon Landlord's request. Any surplus funds
delivered by Tenant and held by Landlord in connection with the Alterations
shall be refunded to Tenant when the all costs related to the construction of
the Alterations have been paid in full.
8.4 Construction Insurance. In addition to the requirements of Article
10 of this Lease, in the event that any Alterations are made pursuant to this
Article 8, prior to the commencement of such Alterations, Tenant shall provide
Landlord with evidence that Tenant carries "Builder's All Risk" insurance in an
amount approved by Landlord covering the construction of such Alterations, and
such other insurance as Landlord may require, it being understood and agreed
that all of such Alterations shall be insured by Tenant pursuant to Article 10
of this Lease immediately upon completion thereof. In addition, Landlord may, in
its discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee.
8.5 Landlord's Property. All Alterations, improvements, fixtures,
equipment and/or appurtenances which may be installed or placed in or about the
Premises, from time to time, shall be at the sole cost of Tenant and shall be
and become the property of Landlord; provided, however, Landlord may, by written
notice to Tenant prior to the end of the Lease Term, or given following any
earlier termination of this Lease, require Tenant, at Tenant's expense, to
remove any Alterations or improvements and to repair any damage to the Premises
and Building caused by such removal and return the affected portion of the
Premises to their condition existing prior to the installment of such
Alterations or improvements or, at Landlord's election, to a building standard
tenant improved condition as determined Landlord. If Tenant fails to complete
such removal and/or to repair any damage caused by the removal of any
Alterations or improvements in the Premises and return the
20
affected portion of the Premises to their condition existing prior to the
installment of such Alterations or improvements or, if elected by Landlord, to a
building standard tenant improved condition as determined by Landlord, prior to
the expiration or earlier termination of this Lease, then Rent shall continue to
accrue under this Lease in accordance with Article 16, below, after the end of
the Lease Term until such work shall be completed, and Landlord shall have the
right, but not the obligation, to perform such work and to charge the cost
thereof to Tenant. Tenant hereby protects, defends, indemnifies and holds
Landlord harmless from any liability, cost, obligation, expense or claim of lien
in any manner relating to the installation, placement, removal or financing of
any such Alterations, improvements, fixtures and/or equipment in, on or about
the Premises, which obligations of Tenant shall survive the expiration or
earlier termination of this Lease.
ARCTICLE 9
COVENANT AGA1NST LIENS
Tenant shall keep the Project and Premises free from any liens or
encumbrances arising out of the work performed, materials furnished or
obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including, without limitation, reasonable attorneys' fees
and costs) arising out of same or in connection therewith. Tenant shall give
Landlord notice at least twenty (20) days prior to the commencement of any such
work on the Premises (or such additional time as may be necessary under
applicable laws) to afford Landlord the opportunity of posting and recording
appropriate notices of non-responsibility. Tenant shall remove any such lien or
encumbrance by bond or otherwise within five (5) days after notice by Landlord,
and if Tenant shall fail to do so, Landlord may pay the amount necessary to
remove such lien or encumbrance, without being responsible for investigating the
validity thereof. The amount so paid shall be deemed Additional Rent under this
Lease payable upon demand, without limitation as to other remedies available to
Landlord under this Lease. Nothing contained in this Lease shall authorize
Tenant to do any act which shall subject Landlords title to the Building or
Premises to any liens or encumbrances whether claimed by operation of law or
express or implied contract. Any claim to a lien or encumbrance upon the
Building or Premises arising in connection with any such work or respecting the
Premises not performed by or at the request of Landlord shall be null and void,
or at Landlord's option shall attach only against Tenant's interest in the
Premises and shall in all respects be subordinate to Landlord's title to the
Project, Building and Premises.
ARCTICLE 10
INSURANCE
10.1 Indemnification and Waiver. Tenant hereby assumes all risk of
damage to property or injury to persons in, upon or about the Premises from any
cause whatsoever (including, but not limited to, any personal injuries resulting
from a slip and fall in, upon or about the Premises) and agrees that Landlord,
its partners, subpartners and their respective officers, agents, servants,
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employees, and independent contractors (collectively, "Landlord Parties") shall
not be liable for, and are hereby released from any responsibility for, any
damage either to person or property or resulting from the loss of use thereof,
which damage is sustained by any person in, upon or about the Premises or by
Tenant or by other persons claiming through Tenant in, upon or about the
Project, including, without limitation, the Project parking facility. Tenant
promptly upon notice shall indemnify, defend, protect, and hold harmless the
Landlord Parties from any and all loss, cost, damage, expenses and liability
(including without limitation court costs and reasonable attorneys' fees)
incurred in connection with or arising from any cause in, on or about the
Premises (including, but not limited to, a slip and fall), any acts, omissions
or negligence of Tenant or of any person claiming by, through or under Tenant,
or of the contractors, agents, servants, employees, invited guests or licensees
of Tenant or any such person, in, on or about the Project or any breach of the
terms of this Lease, either prior to, during, or after the expiration of the
Lease Term, provided that the terms of the foregoing indemnity shall not apply
to the negligence or willful misconduct of Landlord. Should Landlord be named as
a defendant in any suit brought against Tenant in connection with or arising out
of Tenant's occupancy of the Premises, Tenant shall pay to Landlord its costs
and expenses incurred in such suit, including without limitation, its actual
professional fees such as reasonable appraisers', accountants' and attorneys'
fees. The provisions of this Section 10.1 shall survive the expiration or sooner
termination of this Lease with respect to any claims or liability arising in
connection with any event occurring prior to such expiration or termination.
10.2 Tenant's Compliance With Landlord's Fire and Casualty Insurance.
Tenant shall, at Tenant's expense, comply with all insurance company
requirements pertaining to the use of the Premises. Tenant shall not cause or
permit anything to be done in, upon or about the Premises which would in any way
increase the premium for, cause the cancellation of or otherwise affect any
insurance carried by Landlord in connection with the Project or any part
thereof, or cause a cancellation of any insurance policy covering the Building
or any part thereof. Without limiting Landlord's remedies for Tenant's breach of
the foregoing covenant, if Tenant's conduct or use of the Premises causes any
increase in the premium for such insurance policies then Tenant shall reimburse
Landlord for any such increase promptly upon being billed therefor. Tenant, at
Tenant's expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board
of Fire Underwriters) and any similar body.
10.3 Tenant's Insurance. Tenant shall maintain the following coverages
in the following amounts.
10.3.1 Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage (including
loss of use thereof) arising out of Tenant's operations, and contractual
liabilities (covering the performance by Tenant of its indemnity agreements)
including a Broad Form endorsement covering the insuring provisions of this
Lease and the performance by Tenant of the indemnity agreements set forth in
Section 10. 1 of this Lease, for limits of liability not less than:
Bodily Injury and $5,000,000 each occurrence
Property Damage Liability $5,000,000 annual aggregate
Personal Injury Liability $5,000,000 each occurrence
$5,000,000 annual aggregate
0% insured's participation
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10.3.2 Physical Damage Insurance covering (i) all office furniture,
business and trade fixtures, office equipment, free-standing client work,
movable partitions, merchandise and all other items of Tenant's property on the
Premises installed by, for, or at the expense of Tenant, (ii) the
"Improvements," as that term is defined in the Tenant Work Letter, and any other
improvements which exist in the Premises as of the Lease Commencement Date
(excluding the Base Building) (collectively, the "Original Improvements"), and
(iii) all other improvements, alterations and additions to the Premises. Such
insurance shall be written on an "all risks" of physical loss or damage basis,
for the fall replacement cost value (subject to reasonable deductible amounts)
new without deduction for depreciation of the covered items and in amounts that
meet any co-insurance clauses of the policies of insurance and shall include
coverage for damage or other loss caused by fire or other peril including, but
not limited to, vandalism and malicious mischief, theft, water damage of any
type, including sprinkler leakage, bursting or stoppage of pipes, and explosion,
and providing business interruption coverage for a period of one year.
10.3.3 Worker's Compensation and Employer's Liability or other
similar insurance pursuant to all applicable state and local statutes and
regulations.
10.4 Form of Policies. The minimum limits of policies of insurance
required of Tenant under this Lease shall in no event limit liability of Tenant
under this Lease. Such insurance shall (i) name Landlord, and any other property
the Landlord so specifies, as an additional insured, including Landlord's
managing agent, if (ii) specifically cover the liability assumed by Tenant under
this Lease, including, but not limited to, Tenant's obligations under Section
10. 1 of this Lease; (iii) be issued by an insurance company having a rating of
not less than A-VIII in Best's Insurance Guide or which is otherwise acceptable
to Landlord and licensed to do business in the State of California; (iv) be
primary insurance as to all claims thereunder and provide that any insurance
carried by Landlord is excess and is non-contributing with any insurance
requirement of Tenant; (v) be in form and content reasonably acceptable to
Landlord; and (vi) provide that said insurance shall not be canceled or coverage
changed unless thirty (30) days' prior written notice shall have been given to
Landlord and any mortgagee of Landlord. Tenant shall deliver said policy or
policies or certificates thereof to Landlord on or before the Lease Commencement
Date and at least thirty (30) days before the expiration dates thereof. In the
event Tenant shall fail to procure such insurance, or to deliver such policies
or certificates, Landlord may, at its option, procure such policies for the
account of Tenant, and the cost thereof shall be paid to Landlord within five
(5) days after delivery to Tenant of bills therefor.
10.5 Subrogation. Landlord and Tenant intend that their respective
property loss risks shall be borne by reasonable insurance carriers to the
extent above provided, and Landlord and Tenant hereby agree to look solely to,
and seek recovery only from, their respective insurance
23
carriers in the event of a property loss to the extent that such coverage is
agreed to be provided hereunder. The parties each hereby waive all rights and
claims against each other for such losses, and waive all rights of subrogation
of their respective insurers, provided such waiver of subrogation shall not
affect the right to the insure to recover thereunder. The parties agree that
their respective insurance policies are now, or shall be, endorsed such that the
waiver of subrogation shall not affect the right of the insured to recover
thereunder, so long as no material additional premium is charged therefor.
10.6 Additional Insurance Obligations. Tenant shall carry and maintain
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to Article 10
and such other reasonable types of insurance coverage and in such reasonable
amounts covering the Premises and Tenant's operations therein, as may be
reasonably requested by Landlord.
ARTICLE 11
DAMAGE AND DESTRUCTION
11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas necessary to Tenant's use of or
access to the Premises shall be damaged by fire or other casualty, Landlord
shall Promptly and diligently, subject to reasonable delays for insurance
adjustment or other matters beyond Landlord's reasonable control, and subject to
all other terms of this Article 11, restore the Base Building and such Common
Areas. Such restoration shall be to substantially the same condition of the Base
Building and the Common Areas prior to the casualty, except for modifications
required by zoning and building codes and other laws or by the holder of a
mortgage on the Building or Project or any other modifications to the Common
Areas deemed desirable by Landlord, provided that access to the Premises and any
common restrooms serving the Premises shall not be materially impaired. Upon the
occurrence of any damage to the Premises, upon notice (the "Landlord Repair
Notice") to Tenant from Landlord, Tenant shall assign to Landlord (or to any
party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant's insurance required under items (ii) and (iii) of Section 10.3 of this
Lease, Landlord shall repair any injury or damage to the Improvements and the
Original Improvements installed in the Premises and shall return such
Improvements and Original Improvements to their original condition; provided
that if the cost of such repair by Landlord exceeds the amount of insurance
proceeds received by Landlord from Tenant's insurance carrier, as assigned by
Tenant, the cost of such repairs shall be paid by Tenant to Landlord prior to
Landlord's commencement of repair of the damage. In the event that Landlord does
not deliver the Landlord Repair Notice within sixty (60) days following the date
the casualty becomes known to Landlord, Tenant shall, at its sole cost and
expense, repair any injury or damage to the Improvements and the Original
Improvements installed in the Premises and shall return such Improvements and
Original Improvements to their original condition. Whether or not Landlord
delivers a Landlord Repair Notice, prior to the commencement of construction,
Tenant shall submit to Landlord, for Landlord's review and approval, all plans,
specifications and working
24
drawings relating thereto, and Landlord shall select the contractors to perform
such improvement work. Landlord shall not be liable for any inconvenience or
annoyance to Tenant or its visitors, or injury to Tenant's business resulting in
any way from such damage or the repair thereof; provided, however, if such fire
or other casualty shall have damaged the Premises or a portion thereof or Common
Areas necessary to Tenant's occupancy, then Landlord shall allow Tenant a
proportionate abatement of Rent during the time and to the extent and in the
proportion that the Premises or such portion thereof are unfit for occupancy for
the purposes permitted under this Lease, and are not occupied by Tenant as a
result thereof, provided that such abatement of Rent shall be allowed only to
the extent Landlord is reimbursed from the proceeds of rental interruption
insurance purchased by Landlord as part of Operating Expenses; provided further,
however, if the damage or destruction is due to the negligence or willful
misconduct of Tenant or any of its agents, employees, contractors, invitees or
guests, then Tenant shall be responsible for any reasonable, applicable
insurance deductible (which shall be payable to Landlord upon demand) and there
shall be no rent abatement. In the event that Landlord shall not deliver the
Landlord Repair Notice, Tenant's right to rent abatement pursuant to the
preceding sentence shall terminate as of the date which is reasonably determined
by Landlord to be the date Tenant should have completed repairs to the Premises
assuming Tenant used reasonable due diligence in connection therewith.
11.2 Landlord's Option to Repair. Notwithstanding the terms of Section
11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises, Building and/or Project, and instead terminate this Lease, by
notifying Tenant in writing of such termination within sixty (60) days after the
date of discovery of the damage, such notice to include a termination date
giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect
only if the Building or Project shall be damaged by fire or other casualty or
cause, whether or not the Premises are affected, and one or more of the
following conditions is present: (i) in Landlord's reasonable judgment, repairs
cannot reasonably be completed within one hundred eighty (180) days after the
date of discovery of the damage (when such repairs are made without the payment
of overtime or other premiums); (ii) the holder of any mortgage on the Building
or Project or ground lessor with respect to the Building or Project shall
require that the insurance proceeds or any portion thereof be used to retire the
mortgage debt, or shall terminate the ground lease, as the case may be; (iii)
the damage is not fully covered by Landlord's insurance policies or that portion
of the proceeds from Landlord's insurance policies allocable to the Building or
the Project, as the case may be; (iv) Landlord decides to rebuild the Building
or Common Areas so that they will be substantially different structurally or
architecturally; (v) the damage occurs during the last twelve (12) months of the
Lease Term; or (vi) any owner of any other portion of the Project, other than
Landlord, does not intend to repair the damage to such portion of the Project.
In the event this Lease is terminated in accordance with the terms of this
Section 11.2, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable to Tenant under Tenant's insurance
required under items (ii) and (iii) of Section 10.3 of this Lease.
11. Waiver of Statutory Provisions. The provisions of this Lease,
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or
25
regulation of the State of California, including, without limitation, Sections
1932(2) and 1933(4) of the California Civil Code, with respect to any rights or
obligations concerning damage or destruction in t he absence of an express
agreement between the parties, and any other statute or regulation, now or
hereafter in effect, shall have no application to this Lease or any damage or
destruction to all or any part of the Premises, the Building or the Project.
ARTICLE 12
NONWAIVER
No provision of this Lease shall be deemed waived by either party
hereto unless expressly waived in a writing signed thereby. The waiver by either
party hereto of any breach of any term, covenant or condition herein contained
shall not be deemed to be a waiver of any subsequent breach of same or any other
term, covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance o such
Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be
deemed waiver of Landlord's right to receive the full amount due, nor shall any
endorsement or statement on any check or payment or any letter accompanying such
check or payment be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the full
amount due. No receipt of monies by Landlord from Tenant after the termination
of this Lease shall in any way alter the length of the Lease Term or of Tenant's
right of possession hereunder, or after the giving of any notice shall
reinstate, continue or extend the Lease Term or affect any notice given Tenant
prior to the receipt of such monies, it being agreed that after the service of
notice or the commencement of a suit, or after final judgment for possession of
the Premises, Landlord may receive and collect any Rent due, and the payment of
said Rent shall not waive or affect said notice, suit or judgment.
ARTICLE 13
CONDEMNATION
If the whole or any part of the Premises, Building or Project shall be
taken by power of eminent domain or condemned by any competent authority for any
public or quasi-public use or purpose, or if any adjacent property or street
shall be so taken or condemned, or reconfigured or vacated by such authority in
such manner as to require the use, reconstruction or remodeling of any part of
the Premises, Building or Project or if Landlord shall grant a deed or other
instrument in lieu of such taking by eminent domain or condemnation, Landlord
shall have the option to terminate this Lease effective as of the date of
possession is required to be surrendered to the authority. If more than
twenty-five percent (25%) of the rentable square feet of the Premises is taken,
or if all reasonable access to the Premises is substantially impaired, in each
case for a period in excess of one hundred eighty (180) days, Tenant shall have
the option to terminate this Lease effective as of
26
the date possession is required to be surrendered to the authority. Tenant shall
not because of such taking assert any claim against Landlord or the authority
for any compensation because of such taking and LandLord shall be entitled to
the entire award or payment in connection therewith, except that Tenant shall
have the right to file any separate claim available to Tenant for any taking of
Tenant's personal property and fixtures belonging to Tenant and removable by
Tenant upon expiration of the Lease Term pursuant to the terms of this Lease,
and for moving expenses, so long as such claims do not diminish the award
available to Landlord, its ground lessor with respect to the Building or Project
or its mortgagee, and such claim is payable separately to Tenant. All Rent shall
be apportioned as of the date of such termination. If any part of the Premises
shall be taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Tenant hereby waives any and all rights it might
otherwise have pursuant to Section 1265.130 of The California Code of Civil
Procedure. Notwithstanding anything to the contrary contained in this Article
13, in the event of a temporary taking of all or any portion of the Premises for
a period of one hundred and eighty (180) days or less, then this Lease shall not
terminate but the Base Rent and the Additional Rent shall be abated for the
period of such taking in proportion to the ratio that the amount of rentable
square feet of the Premises taken bears to the total rentable square feet of the
Premises. Landlord shall be entitled to receive the entire award made in
connection with any such temporary taking.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
14.1 Transfers. Tenant shall not, without the prior written consent of
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or enter into any
license or concession agreements or otherwise permit the occupancy or use of the
Premises or any part thereof by any persons other than Tenant and its employees
and contractors (all of the foregoing are hereinafter sometimes referred to
individually as a "Transfer," and, collectively, as "Transfers" and any person
to whom any Transfer is made or sought to be made is hereinafter sometimes
referred to as a "Transferee"). If Tenant desires Landlord's consent to any
Transfer, Tenant shall notify Landlord in writing, which notice (the "Transfer
Notice") shall include (i) the proposed effective date of the Transfer, which
shall not be less than thirty (30) days nor more than one hundred eighty (180)
days after the date of delivery of the Transfer Notice, (ii) a description of
the portion of the Premises to be transferred (the "Subject Space"), (iii) all
of the terms of the proposed Transfer and the consideration therefor, including
calculation of the "Transfer Premium", as that term is defined in Section 14.3
below, in connection with such Transfer, the name and address of the proposed
Transferee, and a copy of all existing executed and/or proposed documentation
pertaining to the proposed Transfer, including all existing operative documents
to be executed to evidence such Transfer or the agreements incidental or related
to such Transfer, provided that Landlord shall have the right to require Tenant
to utilize Landlord's standard Transfer documents in connection with the
documentation of such Transfer, (iv) current financial statements of the
proposed Transferee certified by an officer, partner or owner thereof, business
credit and personal references and history of the
27
proposed Transferee and any other information required by Landlord which will
enable Landlord to determine the financial responsibility, character, and
reputation of the proposed Transferee, nature of such Transferee's business and
proposed use of the Subject Space, and (v) an executed estoppel certificate from
Tenant in the form attached hereto as Exhibit E. Any Transfer made without
Landlord's prior written consent shall, at Landlords option, be null, void and
of no effect, and shall, at Landlord's option, constitute a default by Tenant
under this Lease. Whether or not Landlord consents to any proposed Transfer,
Tenant shall pay Landlord's review and processing fees, as well as any
reasonable professional fees (including, without limitation, attorneys,
accountants', architects', engineer's and consultants' fees) incurred by
Landlord, within thirty (30) days after written request by Landlord.
14. Landlord's Consent. Landlord shall not unreasonably withhold its
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:
14.2. The Transferee is of a character or reputation or engaged in
a business which is not consistent with the quality of the Building or the
Project, or would be a significantly less prestigious occupant of the Building
than Tenant;
14.2.2 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;
14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;
14.2.4 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested;
14.2.5 The proposed Transfer would cause a violation of another
lease for space in the Project, or would give an occupant of the Project a right
to cancel its lease;
14.2.6 Either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (i) occupies space in the Project at the
time of the request for consent, or (ii) is negotiating or has negotiated with
Landlord to lease space in the Project.
14.2.7 In Landlord's reasonable judgment, the use of the Premises
by the proposed Transferee would not be comparable to the types of office use by
other tenants in the Project, would entail any alterations which would lessen
the value of the tenant improvements in the Premises, would result in more than
a reasonable density of occupants per square foot of the Premises, would
28
increase the burden on elevators or other Building systems or equipment over the
burden thereon prior to the proposed Transfer, or would require increased
services by Landlord; or
14.2.8 The proposed Transfer is (i) of less than the entire
Premises, and (ii) would result in a subdivision of the Premises into more than
two (2) separately demised office suites.
If Landlord consents to any Transfer pursuant to the terms of this
Section 14.2 (and does not exercise any recapture rights Landlord may have under
Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's
consent, but not later than the expiration of said six month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant
to Landlord pursuant to Section 14.1 of this Lease, provided that if there are
any changes in the terms and conditions from those specified in the Transfer
Notice (i) such that Landlord would initially have been entitled to refuse its
consent to such Transfer under this Section 14.2, or (ii) which would cause the
proposed Transfer to be more favorable to the Transferee than the terms set
forth in Tenant's original Transfer Notice, Tenant shall again submit the
Transfer to Landlord for its approval and other action under this Article 14
(including Landlord's right of recapture, if any, under Section 14.4 of this
Lease). Notwithstanding anything to the contrary in this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent under Section 14.2 or otherwise has breached or acted unreasonably
under this Article 14, their sole remedies shall be a declaratory judgment and
an injunction for the relief sought, and Tenant hereby waives the provisions of
Section 1995.310 of the California Civil Code, or any successor statute, and all
other remedies, including, without limitation, any right at law or equity to
terminate this Lease, on its own behalf and, to the extent permitted under all
applicable laws, on behalf of the proposed Transferee. Tenant shall indemnify,
defend and hold harmless Landlord from any and all liability, losses, claims,
damages, costs, expenses, causes of action and proceedings involving any third
party or parties (including without limitation Tenant's proposed subtenant or
assignee) who claim they were damaged by Landlord's wrongful withholding or
conditioning of Landlords consent.
14.3 Transfer Premium. If Landlord consents to a Transfer, as a
condition thereto which the parties hereby agree is reasonable, Tenant shall pay
to Landlord fifty percent (50%) of any "Transfer Premium," as that term is
defined in this Section 14.3, received by Tenant from such Transferee. "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred, after deducting the reasonable expenses incurred by Tenant for (i)
any changes, alterations and improvements to the Premises in connection with the
Transfer, (ii) any free base rent reasonably provided to the Transferee in
connection with the Transfer, and (iii) any brokerage commissions in connection
with the Transfer (collectively, "Tenant's Subleasing Costs"). "Transfer
Premium" shall also include, but not be limited to, key money, bonus money or
other cash consideration paid by Transferee to Tenant in connection with such
Transfer, and an payment in excess of fair market value for services rendered by
Tenant to Transferee or assets, fixtures, inventory, equipment, or furniture
transferred by Tenant to Transferee
29
in connection with such Transfer. Tenant shall make a determination of the
amount of Landlord's applicable share of the Transfer Premium on a monthly basis
as rent or other consideration is paid by Transferee to Tenant under the
Transfer. For purposes of calculating the Transfer Premium, on a monthly basis,
(A) Tenant's Subleasing Costs shall be deemed to be expended by Tenant in equal
monthly amounts over the entire term of the Transfer and (B) the Rent paid for
the Subject Space by Tenant shall be computed after adjusting such rent to the
actual effective rent to be paid, taking into consideration any and all
leasehold concessions granted in connection therewith, including, but not
limited to, any rent credit and tenant improvement allowance. For purposes of
calculating any such effective rent all such concessions shall be amortized on a
straight-line basis over the relevant term.
14.4 Landlord's Option as to Subject Space. Notwithstanding anything to
the contrary contained in this Article 14, Landlord shall have the option, by
giving written notice to Tenant within thirty (30) days after receipt of any
Transfer Notice, to recapture the Subject Space. Such recapture shall cancel and
terminate this Lease with respect to the Subject Space as of the date stated in
the Transfer Notice as the effective date of the proposed Transfer. In the event
of a recapture by Landlord, if this Lease shall be canceled with respect to less
than the entire Premises, then (i) the Rent reserved herein shall be prorated on
the basis of the number of rentable square feet retained by Tenant in proportion
to the number of rentable square feet contained in the Premises; (ii) this Lease
as so amended shall continue thereafter in full force and effect, and upon
request of either party, the parties shall execute written confirmation of the
same; and (iii) Landlord shall construct or cause to be constructed a demising
wall separating that portion of the Premises recaptured by Landlord from that
portion of the Premises retained by Tenant; provided that, Tenant hereby agrees
that, notwithstanding Tenant's occupancy of its retained portion of the Premises
during the construction of such demising wall by Landlord, Landlord shall be
permitted to construct such demising wall during normal business hours, without
any obligation to pay overtime other premiums, and the construction of such
demising wall by Landlord shall in no way constitute a constructive eviction of
Tenant nor entitle Tenant to any abatement of Rent, and Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant's business arising from the construction
of such demising wall, nor shall Tenant be entitled to any compensation or
damages from Landlord for loss of the use of the whole or pay part of its
retained portion of the Premises or of Tenant's personal property or
improvements resulting from the construction of such demising wall, or for any
inconvenience or annoyance occasioned by the construction of such demising wall;
and provided further that, Tenant shall be responsible for, and shall pay to
Landlord promptly upon being billed therefor, fifty percent (50%) of all costs
related to the construction of such demising wall, including Landlord's standard
fee for its involvement with such demising wall. If Landlord declines, or fails
to elect in a timely manner, to recapture the Subject Space under this Section
14.4, then, provided Landlord has consented to the proposed Transfer, Tenant
shall be entitled to proceed to transfer the Subject Space to the proposed
Transferee, subject to provisions of this Article 14.
14.5 Effect of Transfer. If Landlord consents to a Transfer, then
(i) the terms and conditions of this Lease shall in no way be deemed to have
been waived or modified; (ii) such
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consent shall not be deemed consent to any further Transfer by either Tenant or
a Transferee; (iii) Tenant shall deliver to Landlord, promptly after execution,
an original executed copy of all documentation pertaining to the Transfer in
form and content reasonably acceptable to Landlord, including, without
limitation, at Landlord's option, a "Transfer Agreement," as that term is
defined in this Section 14.5, below; (iv) Tenant shall furnish upon Landlord's
request a complete statement, certified by an independent certified public
accountant, or Tenant's chief financial officer, setting forth in detail the
computation of any Transfer Premium Tenant has derived and shall derive from
such Transfer; and (v) no Transfer relating to this Lease or agreement entered
into with respect thereto, whether with or without Landlord's consent, shall
relieve Tenant or any guarantor of the Lease from any liability under this
Lease, including, without limitation, in connection with the Subject Space, and,
in the event of a Transfer of Tenant's entire interest in this Lease, the
liability of Tenant and such Transferee shall be joint and several. Landlord or
its authorized representatives shall have the right at all reasonable times to
audit the books, records and papers of Tenant relating to any Transfer, and
shall have the right to make copies thereof. If the Transfer Premium respecting
any Transfer shall be found understated, Tenant shall, within thirty (30) days
after demand, pay the deficiency and if understated by more than two percent
(2%), Tenant shall pay Landlord's costs of such audit. Notwithstanding anything
to the contrary contained in this Article 14, Landlord, at its opinion in its
sole and absolute discretion, may require, as a condition to the validity of any
Transfer that both Tenant and such Transferee enter into a separate written
agreement directly with Landlord (a "Transfer Agreement"), which Transfer
Agreement, among other things, shall create privity of contract between Landlord
and such Transferee with respect to the provisions of this Article 14, and shall
contain such terms and provisions as Landlord may reasonably require, including,
without limitation, the following: (A) such Transferee's agreement to be bound
by all the obligations of Tenant under this Lease (including, but not limited
to, Tenant's obligation to pay Rent), provided that, in the event of a Transfer
of less than the entire Premises, the obligations to which such Transferee shall
agree to be so bound shall be prorated on a basis of the number of rentable
square feet of the Subject Space in proportion to the number of square feet in
the Premises; (B) such Transferee's acknowledgment of, and agreement that such
Transfer shall be subordinate and subject to, Landlord's rights under Section
19.3 of this Lease; and (C) Tenant's and such Transferee's recognition of and
agreement to be bound by all the terms and provisions of this Article 14,
including, but not limited to, any such terms and provisions which Landlord, at
its option, requires to be expressly set forth in such Transfer Agreement. Upon
the occurrence of any default by Transferee under such Transfer, Landlord shall
have the right, at its option, but not the obligation, on behalf of Tenant, to
pursue any or all of the remedies available to Tenant under such Transfer or at
law or in equity (all of which remedies shall be distinct, separate and
cumulative).
14.6 Occurrence of Default. Any Transfer hereunder, whether or not such
Transferee shall have executed a Transferee Agreement, shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, then Landlord shall have all of the rights set
forth in Section 19.3 of this Lease with respect to such Transfer. In addition,
if Tenant shall be in default under this Lease, then Landlord is hereby
irrevocably authorized, as Tenant's agent and attorney-in-fact, to direct any
Transferee to make all payments under or in connection with a Transfer directly
to Landlord (which payments Landlord shall apply towards
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Tenant's obligations under this Lease) until such default is cured. Such
Transferee shall rely on any representation by Landlord that Tenant is in
default hereunder, without any need for confirmation thereof by Tenant. Upon any
assignment, the assignee shall assume in writing all obligations and covenants
of Tenant thereafter to be performed or observed under this Lease. No collection
or acceptance of rent by Landlord from any Transferee shall be deemed a waiver
of any provision of this Article 14 or the approval of any Transferee or a
release of Tenant from any obligation under its Lease, whether theretofore or
thereafter accruing. In no event shall Landlord's enforcement of any provision
of this Lease against any Transferee be deemed a waiver of Landlord's right to
enforce any term of this Lease against Tenant or any other person. If Tenant's
obligations hereunder have been guaranteed, Landlord's consent to any Transfer
shall not be effective unless the guarantor also consents to such Transfer.
14.7 Additional Transfers. For purposes of this Lease, the term
"Transfer" shall also include (i) if Tenant is a partnership, the withdrawal or
change, voluntary, involuntary or by operation of law, of fifty percent (50%) or
more of the partners, or transfer of fifty percent (50%) or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more of the voting shares of
Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of an aggregate of fifty percent (50%) or more of the value of the
unencumbered assets of Tenant within a twelve (12) month period.
14.8 Non-Transfers. Notwithstanding anything to the contrary contained
in this Article 14, neither (i) an assignment to an entity which acquires all or
substantially all of the stock or assets of Tenant, (ii) an assignment of the
Premises to a transferee which is the resulting entity of a merger or
consolidation of Tenant with another entity, nor (iii) an assignment or
subletting of all or a portion of the Premises to an affiliate of Tenant (an
entity which is controlled by, controls, or is under common control with,
Tenant) (collectively, "Affiliates"), shall be deemed a Transfer under this
Article 14, provided that Tenant notifies Landlord of any such assignment or
sublease and promptly supplies Landlord with any documents or information
reasonably requested by Landlord regarding such assignment or sublease or such
affiliate (excluding any documentation regarding the economic terms of the
merger or sale transaction, but including documentation regarding the assignment
or subletting), and further provided that such assignment or sublease is not a
subterfuge by Tenant to avoid its obligations under this Lease. "Control," as
used in this Section 14.8, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person or entity, whether by ownership of voting securities, by contract, or
otherwise.
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ARTICLE 15
SURRENDER OF PREMISES; OWNERSHIP AND
REMOVAL OF TRADE FIXTURES
15.1 Surrender of Premises. No act or thing done by Landlord or any
agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in writing by Landlord. The delivery of keys
to the Premises to Landlord or any agent or employee of Landlord shall not
constitute a surrender of the Premises or effect a termination of this Lease,
whether or not the keys are thereafter retained by Landlord, and notwithstanding
such delivery Tenant shall be entitled to the return of such keys at any
reasonable time upon request until this Lease shall have been properly
terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a
merger, and at the option of Landlord shall operate as an assignment to Landlord
of all subleases or subtenancies affecting the Premises or terminate any or all
such sublessees or subtenants.
15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, such items of furniture, equipment, business and trade fixtures,
free-standing cabinet work, movable partitions and other articles of personal
property owned by Tenant or installed or placed by Tenant at its expense in the
Premises, and such similar articles of any other persons claiming under Tenant,
as Landlord may, in its sole discretion, require to be removed, and Tenant shall
repair at its own expense all damage to the Premises and Building resulting from
such removal.
ARTICLE 16
HOLDING OVER
If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with the express or implied consent of Landlord, such
tenancy shall be from month-to-month only, and shall not constitute a renewal
hereof or an extension for any further term, and in such case Rent shall be
payable at a monthly rate equal to one hundred fifty percent (150%) of the Rent
applicable during the last rental period of the Lease Term under this Lease.
Such month-to-month tenancy shall be subject to every other applicable term,
covenant and agreement contained herein. Nothing contained in this Article 16
shall be construed as consent by Landlord to any holding over by Tenant, and
Landlord expressly reserves the right to require Tenant to surrender possession
of the Premises to Landlord as provided in this Lease upon the expiration or
other termination of this Lease. The provisions of this Article 16 shall not be
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law. If Tenant fails to surrender the Premises
upon the termination or expiration of this Lease, in addition to any other
liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs
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(including reasonable attorneys' fees) and liability resulting from such
failure, including, without limiting the generality of the foregoing, any claims
made by any succeeding tenant founded upon such failure to surrender and any
lost profits to Landlord resulting therefrom.
ARTICLE 17
ESTOPPEL CERTIFICATES
Within ten (10) days following a request in writing by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord an estoppel certificate,
which, as submitted by Landlord, shall be substantially in the form of Exhibit
E, attached hereto (or such other form as may be required by any prospective
mortgagee or purchaser of the Project, or any portion thereof, indicating
therein any exceptions thereto that may exist at that time, and shall also
contain any other information reasonably requested by Landlord or Landlord's
mortgagee or prospective mortgagee. Any such certificate may be relied upon by
any prospective mortgagee or purchaser of all or any portion of the Project.
Tenant shall execute and deliver whatever other instruments may be reasonably
required for such purposes. At any time during the Lease Term, Landlord may
require Tenant to provide Landlord with a current financial statement and
financial statements of the two (2) years prior to the current financial
statement year. Such statements shall be prepared in accordance with generally
accepted accounting principles and, if such is the normal practice of Tenant,
shall be audited by an independent certified public accountant. Failure of
Tenant to timely execute, acknowledge and deliver such estoppel certificate or
other instruments shall constitute an acceptance of the Premises and an
acknowledgment by Tenant that statements included in the estoppel certificate
are true and correct, without exception.
ARTICLE 18
MORTGAGE OR GROUND LEASE
18.1 Subordination. This Lease shall be subject and subordinate to all
present and future ground or underlying leases of the Building or Project and to
the lien of any mortgage, trust deed or other encumbrances now or hereafter in
force against the Building or Project or any part thereof, if any, and to all
renewals, extensions, modifications, consolidations and replacements thereof,
and to all advances made or hereafter to be made upon the security of such
mortgages or trust deeds, unless the holders of such mortgages, trust deeds or
other encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto. Tenant covenants and
agrees in the event any proceedings are brought for the foreclosure of any such
mortgage or deed in lieu thereof (or if any ground lease is terminated), to
attorn, without any deductions or set-offs whatsoever, to the lienholder or
purchaser or any successors thereto upon any such foreclosure sale or deed in
lieu thereof (or to the ground lessor), if so requested to do so by such
purchaser or lienholder or ground lessor, and to recognize such purchaser or
lienholder or ground lessor as the lessor under this Lease, provided such
lienholder or purchaser or ground lessor shall agree to accept
34
this Lease and not disturb Tenant's occupancy, so long as Tenant timely pays the
rent and observes and performs the terms, covenants and conditions of this Lease
to be observed and performed by Tenant. Landlord's interest herein may be
assigned as security at any time to any lienholder. Tenant shall, within five
(5) days of request by Landlord, execute such further instruments or assurances
as Landlord may reasonably deem necessary to evidence or confirm the
subordination or superiority of this Lease to any such mortgages, trust deeds,
ground leases or underlying leases. Tenant waives the provisions of any current
or future statute, rule or law which may give or purport to give Tenant any
right or election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.
18.2 Notice to Lienholder or Ground Lessor. Notwithstanding anything to
the contrary contained in Article 28, below, or elsewhere in this Lease, upon
receipt by Tenant of notice from any holder of a mortgage, trust deed or other
encumbrance in force against the Building or the Project or any part thereof
which includes the Premises or any lessor under a ground lease or underlying
lease of the Building or the Project, or from Landlord, which notice sets forth
the address of such lienholder or ground lessor, no notice from Tenant to
Landlord shall be effective unless and until a copy of the same is given to such
lienholder or ground lessor at the appropriate address therefor (as specified in
the above-described notice or at such other places as may be designated from
time to time in a notice to Tenant in accordance with Article 28, below), and
the curing of any of Landlord's defaults by such lienholder or ground lessor
within a reasonable period of time after such notice from Tenant (including a
reasonable period of time to obtain possession of the Building or the Project,
as the case may be, if such lienholder or ground lessor elects to do so) shall
be treated as performance by Landlord. For the purposes of this Article 18, the
term "mortgage" shall include a mortgage on a leasehold interest of Landlord
(but not a mortgage on Tenant's leasehold interest hereunder).
18.3 Assignment of Rents. With reference to any assignment by Landlord
of Landlord's interest in this Lease, or the Rent payable to Landlord hereunder,
conditional in nature or otherwise, which assignment is made to any holder of a
mortgage, trust deed or other encumbrance in force against the Building or the
Project or any part thereof which includes the Premises or to any lessor under a
ground lease or underlying lease of the Building or the Project, Tenant agrees
as follows:
18.3.1 The execution of any such assignment by Landlord, and the
acceptance thereof by such lienholder or ground lessor, shall never be treated
as an assumption by such lienholder or ground lessor of any of the obligations
of Landlord under this Lease, unless such lienholder or ground lessor shall, by
notice to Tenant, specifically otherwise elect.
18.3.2 Notwithstanding delivery to Tenant of the notice required by
Section 18.3.1, above, such lienholder or ground lessor, respectively, shall be
treated as having assumed Landlord's obligations under this Lease only upon such
lienholder's foreclosure of any such mortgage, trust deed or other encumbrance
or acceptance of a deed in lieu thereof, and taking of possession of the
Building or the Project or applicable portion thereof, or such ground lessor's
termination of any such ground lease or underlying leases and assumption of
Landlord's position hereunder, as the case may be. In no event shall such
lienholder, ground lessor or any other successor to Landlord's interest in
35
this Lease, as the case may be, be liable for any security deposit paid by
Tenant to Landlord, unless and until such lienholder, ground lessor or other
such successor, respectively, actually has been credited with or has received
for its own account as landlord the amount of such security deposit or any
portion thereof (in which event the liability of such lienholder, ground lessor
or other such successor, as the case may be, shall be limited to the amount
actually credited or received).
18.3.3 In no event shall the acquisition of title to the Building
and the land upon which the Building is located or the Project or part thereof
which includes the Premises by a purchaser which, simultaneously therewith,
leases back to the seller thereof the entire Building or the land upon which the
Building is located or the Project or the entirety of that part thereof acquired
by such purchaser, as the case may be, be treated as an assumption, by operation
of law or otherwise, of Landlord's obligations under this Lease, but Tenant
shall look solely to such seller-lessee, or to the successors to or assigns of
such seller-lessee's estate, for performance of an Landlord's obligations under
this Lease. In any such event, this Lease shall be subject and subordinate to
the lease to such seller-lessee, an Tenant covenants and agrees in the event the
lease to such seller-lessee is terminated to attorn, without any deductions or
set-offs whatsoever, to such purchaser-lessor, if so requested to do so by such
purchaser-lessor, and to recognize such purchaser-lessor as the lessor under
this Lease, provided such purchaser-lessor shall agree to accept this Lease and
not disturb Tenant's occupancy so long as Tenant timely pays the rent and
observes and performs the terms, covenants an conditions of this Lease to be
observed and performed by Tenant. For all purposes, such seller-lessee or the
successors to or assigns of such seller-lessee's estate, shall be the lessor
under this Lease unless and until such seller-lessee's position shall have been
assumed by such purchaser-lessor.
ARTICLE 19
DEFAULTS; REMEDIES
19.1 Events of Default. The occurance of any of the following shall
constitute a default of this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due; provided,
however, notwithstanding anything to the contrary set forth in this Section
19.1.1, Tenant's failure to pay any Rent or any other charge required to be paid
under this Lease, or any part thereof, when due shall constitute a default of
this Lease by Tenant only if such failure is not cured within five (5) days
following notice that said amount is due, provided that Tenant theretofore shall
not have so failed to pay any Rent or any other charge within five (5) days
after said amount is due on two (2) occasions during any given Lease Year, in
which event Tenant thereafter shall not be entitled to such five (5) day period;
or
19.1.2 Except where a specific time period is otherwise set forth
for Tenant's performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this Section
19.1.2, any failure by Tenant to observe or perform
36
any other provision, covenant or condition of this Lease to be observed or
performed by Tenant where such failure continues for thirty (30) days after
written notice thereof from Landlord to Tenant; provided that if the nature of
such default is such that the same cannot reasonably be cured within a thirty
(30) day period, Tenant shall not be deemed to be in default if it diligently
commences such cure within such period and thereafter diligently proceeds to
rectify and cure such default; or
19.1.3 Abandonment or vacation of all or a substantial portion of
the Premises by Tenant, as defined by applicable law; or
19.1.4 The failure by Tenant to observe or perform according to the
provisions of Articles 5, 10, 14, 17 or 18 of this Lease or the failure by
Tenant to observe or perform any other provision, covenant or condition of this
Lease which failure, because of the character of such provision, covenant or
condition, would immediately jeopardize Landlord's interest, where such failure
continues for more than two (2) business days after notice from Landlord; or
19.1.5 Tenant's failure to occupy the Premises within thirty (30)
business days after the Lease Commencement Date. The notice periods provided in
this Section 19.1 are in lieu of, and not in addition to, any notice periods
provided by law.
19.2 Remedies Upon Default. Upon the occurrence of any event of default
by Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.
19.2.1 Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearage in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the
Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor; and Landlord may recover from Tenant the following:
(i) The worth at the time, of any unpaid rent which has been
earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) The worth at the time of award of the amount by which
the unpaid rent for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
37
(iv) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, specifically including but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; 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
law.
The term "rent" as used in this Section 19.2 shall be deemed to be and
to mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in Paragraphs
19.2.1.1 and 19.2.1.2, above, the "worth at the time of award" shall be computed
by allowing interest at the rate set forth in Article 25 of this Lease, but in
no case greater than the maximum amount of such interest permitted by law. As
used in Paragraph 19.2.1.3 above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).
19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
19.2.3 Landlord shall at all times have the rights and remedies
(which shall be cumulative with each other and cumulative and in addition to
those rights and remedies available under Sections 19.2.1 and 19.2.2, above, or
any law or other provision of this Lease), without prior demand or notice except
as required by applicable law, to seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof.
19.3 Subleases of Tenant. If Landlord elects to terminate this Lease on
account of any default by Tenant, as set forth in this Article 19, then Landlord
shall have the right, at Landlord's option in its sole discretion, (i) to
terminate any and all assignments, subleases, licenses, concessions or other
consensual arrangements for possession entered into by Tenant and affecting the
Premises, in which event Landlord shall have the right to repossess such
affected portions of the Premises by any lawful means, or (ii) to succeed to
Tenant's interest in any or all such assignments, subleases, licenses,
concessions or arrangements, in which event Landlord may require any assignees,
sublesees, licensees or other parties thereunder to attorn to and recognize
Landlord as its assignor, sublessor, licensor, concessionaire or transferor
thereunder. In the event of Landlord's election to succeed to Tenant's interest
in any such assignments, subleases, licenses, concessions or
38
arrangements, Tenant shall, as of the date of notice by Landlord of such
election, have no further right to or interest in the rent or other
consideration receivable thereunder.
19.4 Efforts to Relet. No re-entry or repossession, repairs,
maintenance, changes, alterations and additions, reletting, appointment of a
receiver to protect Landlord's interests hereunder, or any other action or
omission by Landlord shall be construed as an election by Landlord to terminate
this Lease or Tenant's right to possession, or to accept a surrender of the
Premises, nor shall same operate to release Tenant in whole or in part from any
of Tenant's obligations hereunder, unless express written notice of such
intention is sent by Landlord to Tenant. Tenant hereby irrevocably waives any
right otherwise available under any law to redeem or reinstate this Lease.
ARTICLE 20
COVENANT OF QUIET ENJOYMENT
Landlord covenants that Tenant, on paying the Rent, charges for
services and other payments herein reserved and on keeping, observing and
performing all the other terms, covenants, conditions, provisions and agreements
herein contained on the part of Tenant to be kept, observed and performed,
shall, during the Lease Term, peaceably and quietly have, hold and enjoy the
Premises subject to the terms, covenants, conditions, provisions and agreements
hereof without interference by any persons lawfully claiming by or through
Landlord. The foregoing covenant is in lieu of any other covenant express or
implied.
ARTICLE 21
SECURITY DEPOSIT; LETTER OF CREDIT
21.1 Security Deposit. Upon the fourth (4h) anniversary of the Lease
Commencement Date, Tenant shall deposit with Landlord a security deposit (the
"Security Deposit") in the amount set forth in Section 8 of the Summary, as
security for the faithful performance by Tenant of all of its obligations under
this Lease. If Tenant defaults with respect to any provisions of this Lease,
including, but not limited to, the provisions relating to the payment of Rent,
the removal of property and the repair of resultant damage, Landlord may,
without notice to Tenant, but shall not be required to apply all or any part of
the Security Deposit for the payment of any Rent or any other sum in default and
Tenant shall, upon demand therefor, restore the Security Deposit to its original
amount. Any unapplied portion of the Security Deposit shall be returned to
Tenant, or, at Landlord's option, to the last assignee of Tenant's interest
hereunder, within thirty (30) days following the expiration of the Lease Term.
Tenant shall not be entitled to any interest on the Security Deposit and
Landlord shall have the right to commingle the Security Deposit with Landlord's
other funds. Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code, or any successor statute.
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21.2 Letter of Credit.
21.2.1 Delivery of Letter of Credit. Tenant shall deliver to
Landlord concurrent with Tenant's execution of this Lease, an unconditional,
clean, irrevocable letter of credit (the "L-C") in the initial amount of
$344,604.00, which L-C shall be issued by a money-center bank (a bank which
accepts deposits, maintains accounts, has a local San Francisco office which
will negotiate a letter of credit, and whose deposits are insured by the FDIC)
reasonably acceptable to Landlord, and which L-C shall be in a form and content
as set forth on Exhibit-G, or otherwise reasonably acceptable to Landlord.
Tenant shall pay all expenses, points and/or fees incurred by Tenant in
obtaining the L-C.
21.2.2 Application of Letter of Credit. The L-C shall be held by
Landlord as security for the faithful performance by Tenant of all the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the Lease Term. The L-C shall not be mortgaged, assigned or encumbered in
any manner whatsoever by Tenant without the prior written consent of Landlord.
If Tenant defaults with respect to any provisions of this Lease, including, but
not limited to, the provisions relating to the payment of Rent, or if Tenant
fails to renew the L-C at least thirty (30) days before its expiration, Landlord
may, but shall not be required to, draw upon all or any portion of the L-C for
payment of any Rent or any other sum in default, or for the payment of any
amount that Landlord may reasonably spend or may become obligated to spend by
reason of Tenant's default, or to compensate Landlord for any other loss or
damage that Landlord may suffer by reason of Tenant's default. The use,
application or retention of the L-C, or any portion thereof, by Landlord shall
not prevent Landlord from exercising any other right or remedy provided by this
Lease or by law, it being intended that Landlord shall not first be required to
proceed against the L-C and shall not operate as a limitation on any recovery to
which Landlord may otherwise be entitled. Any amount of the L-C which is drawn
upon by Landlord, but is not used or applied by Landlord, shall be held by
Landlord and deemed a security deposit (the "L-C Security Deposit"). If any
portion of the L-C is drawn upon, Tenant shall, within ten (10) business days
after written demand therefor, either (i) deposit cash with Landlord (which cash
shall be applied by Landlord to the L-C Security Deposit) in an amount
sufficient to cause the sum of the L-C Security Deposit and the amount of the
remaining L-C to be equivalent to the amount of the L-C then required under this
Lease or (ii) reinstate the L-C to the amount then required under this Lease,
and if any portion of the L-C Security Deposit is used or applied, Tenant shall,
within ten (10) business days 3 days after written demand therefor, deposit cash
with Landlord (which cash shall be applied by Landlord to the L-C Security
Deposit) in an amount sufficient to restore the L-C Security Deposit to the
amount then required under this Lease, and Tenant's failure to do so shall be a
default under this Lease. Tenant acknowledges that Landlord has the right to
transfer or mortgage its interest in the Real Property and the Building and in
this Lease and Tenant agrees that in the event of any such transfer or mortgage,
Landlord shall have the right to transfer or assign the L-C Security Deposit
and/or the L-C to the transferee or mortgagee, and in the event of such
transfer, Tenant shall look solely to such transferee or mortgagee for the
return of the L-C Security Deposit and/or the L-C. Tenant shall, within ten (10)
business days of request by Landlord, execute such further instruments or
assurances as Landlord may reasonably deem necessary to evidence or confirm
Landlord's transfer or assignment of the L-C Security Deposit and/or the L-C to
such transferee or mortgagee. In the event Tenant is not in default of this
Lease, beyond any applicable cure period set forth herein, following the second
(2nd)
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anniversary of the Lease Commencement Date, the Security Deposit shall be
reduced to an amount equal to $258,453.00. In the event Tenant is not in default
of this Lease, beyond any applicable cure period set forth herein, following the
third (3rd) anniversary of the Lease Commencement Date, the Security Deposit
shall be reduced to an amount equal to $172,302.00. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the L-C
Security Deposit and/or the L-C, or any balance thereof, shall be returned to
Tenant within three (3) business days following the fourth (4th) anniversary of
the Lease Commencement Date, notwithstanding any obligations under Section
4.4.1, above.
ARTICLE 22
SUBSTITUTION OF OTHER PREMISES,
Landlord shall have the right to relocate Tenant to other space in the
Project comparable to the Premises, and all terms hereof shall apply to the new
space with equal force and effect, except as otherwise provided in this Article
22. In such event, Landlord shall give Tenant prior notice of Landlord's
election to so relocate Tenant, and shall move Tenant's effects to the new space
at Landlord's sole cost and expense at such time and in such manner as to
inconvenience Tenant as little as reasonably practicable. Simultaneously with
such relocation of the Premises, the parties shall immediately execute an
amendment to this Lease stating the relocation of the Premises, and amending
those Sections of the Summary, and replacing Exhibit A to this Lease, as shall
be necessary to accurately describe the new space (including, without
limitation, the location and the rentable area of the new space). In the event
Tenant is relocated in accordance with this Article 22, and the rentable area of
the new space is not equal to the rentable area of the Premises, of any such
adjustment to the rentable of the Premises and/or the Building, all amounts,
percentages and figures appearing or referred to in this Lease based upon such
rentable area (including, without limitation, the amounts of the "Rent" and the
"Security Deposit," as those terms are defined in Article 4 and Article 21 of
this Lease, respectively, and "Tenant's Share," as that term is defined in
Section 4.2.9 of this Lease) shall be modified accordingly. Should Tenant refuse
to permit Landlord to move Tenant to the new space, Landlord shall have the
right to cancel and terminate this Lease effective sixty (60) days from the date
of Landlord's election to relocate Tenant.
ARTICLE 23
SIGNS
23.1 Full Floors. Subject to Landlord's prior written approval, in its
sole discretion, and provided all signs are in keeping with the quality, design
and style of the Building and Project, Tenant, if the Premises comprise an
entire floor of the Building, at its sole cost and expense, may install
identification signage anywhere in the Premises including in the elevator lobby
of the Premises, provided that such signs must not be visible from the exterior
of the Building.
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23.2 Multi-Tenant Floors. If other tenants occupy space on the floor on
which the Premises is located, Tenant's identifying signage shall be provided by
Landlord, at Tenant's cost, and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with
Landlord's then-current Building standard signage program.
23.3 Prohibited Sinage and Other Items. Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord may be removed without notice by Landlord at the
sole expense of Tenant. Tenant may not install any signs on the exterior or roof
of the Project or the Common Areas. Any signs, window coverings, or blinds (even
if the same are located behind the Landlord-approved window coverings for the
Building), or other items visible from the exterior of the Premises or Building,
shall be subject to the prior approval of Landlord, in its sole discretion.
ARTICLE 24
COMPLIANCE WITH LAW
Tenant shall not do anything or suffer anything to be done in or about
the Premises or the Project which will in any way conflict with any law,
statute, ordinance or other governmental rule, regulation or requirement now in
force or which may hereafter be enacted or promulgated (collectively,
"Applicable Laws"). At its sole cost and expense, Tenant shall promptly comply
with all such Applicable Laws which relate to Tenant's use of the Premises for
non-general office use, (ii) the Alterations or Tenant Improvements in the
Premises, or (iii) the Base Building, but as to the Base Building, only to the
extent such obligations are triggered by Tenant's Alterations, the Improvements,
or Tenant's use of the Premises for non-general office use. Should any standard
or regulation now or hereafter be imposed on Landlord or Tenant by a state,
federal or local governmental body charged with the establishment, regulation
and enforcement of occupational, health or safety standards for employers,
employees, landlords or tenants, then Tenant agrees, at its sole cost and
expense, to comply promptly with such standards or regulations and to cooperate
with Landlord, including, without limitation, by taking such actions as Landlord
may reasonably require, in Landlord's efforts to comply with such standards or
regulations. Tenant shall be responsible, at its sole cost and expense, to make
all alterations to the Premises as are required to comply with the governmental
rules, regulations, requirements or standards described in this Article 24. The
judgment of any court of competent jurisdiction or the admission of Tenant in
any judicial action, regardless of whether Landlord is a party thereto, that
Tenant has violated any of said governmental measures, shall be conclusive of
that fact as between Landlord and Tenant. Tenant shall promptly pay all fines,
penalties and damages that may arise out of or be imposed because of its failure
to comply with the provisions of this Article 24. Landlord shall comply with all
Applicable Laws relating to the Base Building, provided that compliance with
such Applicable laws is not the responsibility of Tenant under this Lease, and
provided further that Landlord's failure to comply therewith would prohibit
Tenant from obtaining or maintaining a certificate of occupancy for the
Premises, or would unreasonably and materially affect the safety of Tenant's
employees or create a significant health hazard for Tenant's employees. Landlord
shall be permitted to include in Operating
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Expenses any costs or expenses incurred by Landlord under this Article 24, but
only to the extent consistent with the terms of Section 4.2.7 above.
ARTICLE 25
LATE CHARGES
If any installment of Rent or any other sum due from Tenant shall not
be received by Landlord or Landlord's designee (i) within five (5) days after
said amount is due, or (ii) upon the date said amount is due if any installment
of Rent or other sum due from Tenant has not been received by Landlord or
Landlord's designee within five (5) days after the date due on two (2) or more
occasions during any given Lease Year, then Tenant shall pay to Landlord a late
charge equal to six percent (6%) of the overdue amount plus any attorneys' fees
incurred by Landlord by reason of Tenant's failure to pay Rent and/or other
charges when due hereunder. The late charge shall be deemed Additional Rent and
the right to require it shall be in addition to all of Landlord's other rights
and remedies hereunder or at law and shall not be construed as liquidated
damages or as limiting Landlord's remedies in any manner. In addition to the
late charge described above, any Rent or other amounts owing hereunder which are
not paid (i) within five (5) days after the date they are due, or (ii) upon the
date they are due if any Rent or other amounts owing hereunder have not been
received by Landlord or Landlord's designee within five (5) days after the date
due on two (2) or more occasions during any given Lease Year, shall bear
interest from the date when due until paid at a rate per annum equal to the
lesser of (i) the annual "Bank Prime Loan" rate cited in the Federal Reserve
Statistical Release Publication G.13(415), published on the first Tuesday of
each calendar month (or such other comparable index as Landlord and Tenant shall
reasonably agree upon if such rate ceases to be published) plus four (4)
percentage points, and (11) the highest rate permitted by applicable law.
ARTICLE 26
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
26.1 Landlord's Cure. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction of Rent, except to the extent,
if any, otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.
26.2 Tenant's Reimbursement. Except as may be specifically provided to
the contrary in this Lease, Tenant shall pay to Landlord the following sums
(which sums shall bear interest from the date accrued by Landlord until paid by
Tenant at a rate per annum equal to interest at the rate set
43
forth in Article 25 of this Lease, but in no case greater than the maximum
amount of such interest permitted by law), upon delivery by Landlord to Tenant
of statements therefor: (i) sums equal to expenditures reasonably made and
obligations incurred by Landlord in connection with the remedying by Landlord of
Tenant's defaults pursuant to the provisions of Section 26.1; (ii) sums equal to
all losses, costs, liabilities, damages and expenses referred to in Article 10
of this Lease; and (iii) sums equal to expenditures made and obligations
incurred by Landlord in collecting or attempting to collect the Rent or in
enforcing or attempting to enforce any rights of Landlord under this Lease or
pursuant to law, including, without limitation, all legal fees and other amounts
so expended. Tenant's obligations under this Section 26.2 shall survive the
expiration or sooner termination of the Lease Term.
ARTICLE 27
ENTRY BY LANDLORD
Landlord reserves the right at all reasonable times and upon
twenty-four (24) hours notice to Tenant (which notice, notwithstanding anything
to the contrary contained in Article 28 of this Lease, may be oral, and which
notice shall not be required in the case of an emergency) to enter the Premises
to (i) inspect them; (ii) show the Premises to prospective purchasers or
tenants, or to current or prospective mortgagees, ground or underlying lessors
or insurers; (iii) post notices of nonresponsibility; or (iv) alter, improve or
repair the Premises or the Building, or for structural alterations, repairs or
improvements to the Building or the Building's systems and equipment.
Notwithstanding anything to the contrary contained in this Article 27, Landlord
may enter the Premises at any time to (A) perform services required of Landlord,
including janitorial service; (B) take possession due to any breach of this
Lease in the manner provided herein; and (C) perform any covenants of Tenant
which Tenant fails to perform. Landlord may make any such entries without the
abatement of Rent and may take such reasonable steps as required to accomplish
the stated purposes. Tenant hereby waives any claims for damages or for any
injuries or inconvenience to or interference with Tenant's business, lost
profits, any loss of occupancy or quiet enjoyment of the Premises, and any other
loss occasioned thereby. For each of the above purposes, Landlord shall at all
times have a key with which to unlock all the doors in the Premises, excluding
Tenant's vaults, safes and special security areas designated-in advance by
Tenant. In an emergency, Landlord shall have the right to use any means that
Landlord may deem proper to open the doors in and to the Premises. Any entry
into the Premises by Landlord in the manner hereinbefore described shall not be
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises,
or an actual or constructive eviction of Tenant from any portion of the
Premises. No provision of this Lease shall be construed as obligating Landlord
to perform any repairs, alterations or decorations except as otherwise expressly
agreed to be performed by Landlord herein. Landlord shall use commercially
reasonable efforts to minimize interference with Tenant's use of, and access to,
the Premises in connection with any entry by Landlord pursuant to this Article
27.
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ARCTICLE 28
NOTICES
All notices, demands, statements, designations, approvals or other
communications (collectively, "Notices") given or required to be given by either
party to the other hereunder or by law shall be in writing, shall be (A) sent by
United States certified or registered mail, postage prepaid, return receipt
requested ("Mail"), (B) transmitted by telecopy, if such telecopy is promptly
followed by a Notice sent by Mail, (C) delivered by a nationally recognized
overnight courier, or (D) delivered personally. Any Notice shall be sent,
transmitted, or delivered, as the case may be, to Tenant at the appropriate
address set forth in Section 9 of the Summary, or to such other place as Tenant
may from time to time designate in a Notice to Landlord, or to Landlord at the
addresses set forth below, or to such other places as Landlord may from time to
time designate in a Notice to Tenant. Any Notice will be deemed given (i) three
(3) days after the date it is posted if sent by Mail, (ii) the date the telecopy
is transmitted, (iii) the date the overnight courier delivery is made, or (iv)
the date personal delivery is made. Any Notice given by an attorney on behalf of
Landlord or by Landlord's managing agent shall be considered as given by
Landlord and shall be fully effective. As of the date of this Lease, any Notices
to Landlord must be sent, transmitted, or delivered, as the case may be, to the
following addresses:
Boston Properties Limited Partnership
Four Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxx
and
Boston Properties, Inc.
Prudential Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: General Counsel
and
Allen, Matkins, Xxxx, Xxxxxx & Xxxxxxx
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
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ARTICLE 29
MISCELLANEOUS PROVISIONS
29.1 Terms; Captions. The words " Landlord" and "Tenant" as used herein
shall include the plural as well as the singular. The necessary grammatical
changes required to make the provisions hereof apply either to corporations or
partnerships or individuals, men or women, as the case may require, shall in all
cases be as urned as though in each case fully expressed. The captions of
Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.
29.2 Binding Effect. Subject to all other provisions of this Lease,
each of the covenants, conditions and provisions of this Lease shall extend to
and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.
29.3 No Light, Air or View Rights. No rights to any view or to light or
air over any property, whether belonging to Landlord or any other person, are
granted to Tenant by this Lease. Under no circumstances whatsoever at any time
during the Lease Term shall any temporary darkening of any windows of the
Premises or any temporary obstruction of the light or view therefrom by reason
of any repairs, improvements, maintenance or cleaning in or about the Project,
or any diminution, impairment or obstruction (whether partial or total) of
light, air or view by any structure which may be erected on any land comprising
a part of, or located adjacent to or otherwise in the path of light, air or view
to the Project, in any way impose any liability upon Landlord or in any way
reduce or diminish Tenant's obligations under this Lease.
29.4 Modification of Lease. Should any current or prospective mortgagee
or ground lessor for the Building or Project require a modification of this
Lease, which modification will not cause an increased cost or expense to Tenant
or in any other way materially and adversely change the rights and obligations
of Tenant hereunder, then and in such event, Tenant agrees that this Lease may
be so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) days following a
request therefor. At the request of Landlord or any mortgagee or ground lessor,
Tenant agrees to execute a short form of Lease and deliver the same to Landlord
within ten (10) days following the request therefor.
29.5 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
has the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, including the return of any Security Deposit,
and Tenant shall attorn to such transferee.
46
29.6 Prohibition Against Recording. Except as provided in Section 29.4
of this Lease, neither this Lease, nor any memorandum, affidavit or other
writing with respect thereto, shall be recorded by Tenant or by anyone acting
through, under or on behalf of Tenant.
29. Landlord's Title. Landlord's title is and always shall be paramount
to the title of Tenant. Nothing herein contained shall empower Tenant to do any
act which can, shall or may encumber the title of Landlord.
29.8 Relationship of Parties. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
29.9 Application of Payments. Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
29.10 Time of Essence. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor, including, without limitation, the giving of any Notice required to be
given under this Lease or by law, the time periods for giving any such Notice
and the taking of any action with respect to any such Notice.
29.11 Partial Invalidity. If any term, provision or condition contained
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
29.12 No Warranty. In executing and delivering this Lease, Tenant has
not relied on any representations, including, but not limited to, any
representation as to the amount of any item comprising Additional Rent or the
amount of the Additional Rent in the aggregate or that Landlord is furnishing
the same services to other tenants, at all, on the same level or on the same
basis, or any warranty or any statement of Landlord which is not set forth
herein or in one or more of the exhibits attached hereto.
29.13 Landlord Exculpation. The liability of Landlord or the Landlord
Parties to Tenant for any default by Landlord under this Lease or arising in
connection herewith or with Landlord's operation, management, leasing, repair,
renovation, alteration or any other matter relating to the Project or the
Premises shall be limited solely and exclusively to an amount which is equal to
the lesser of (a) the interest of Landlord in the Building or (b) the equity
interest Landlord would have in the Building if the Building were encumbered by
third-party debt in an amount equal to eighty percent (80%) of the value of the
Building (as such value is determined by Landlord), provided that
47
in no event shall such liability extend to any sales or insurance proceeds
received by Landlord or the Landlord Parties in connection with the Project,
Building or Premises. Neither Landlord, nor any of the Landlord Parties shall
have any personal liability therefor, and Tenant hereby expressly waives and
releases such personal liability on behalf of itself and all persons claiming
by, through or under Tenant. The limitations of liability contained in this
Section 29.13 shall inure to the benefit of Landlord's and the Landlord Parties'
present and future partners, beneficiaries, officers, directors, trustees,
shareholders, agents and employees, and their respective partners, heirs,
successors and assigns. Under no circumstances shall any present or future
partner of Landlord (if Landlord is a partnership), or trustee or beneficiary
(if Landlord or any partner of Landlord is a trust), have any liability for the
performance of Landlord's obligations under this Lease. Notwithstanding any
contrary provision herein, neither Landlord nor the Landlord Parties shall be
liable under any circumstances for any indirect or consequential damages or any
injury or damage to, or interference with, Tenant's business, including but not
limited to, loss of profits, loss of rents or other revenues, loss of business
opportunity, loss of goodwill or loss of use, in each case, however occurring.
29.14 Entire Agreement. It is understood and acknowledged that there
are no oral agreements between the parties hereto affecting this Lease and this
Lease constitutes the parties' entire agreement with respect to the leasing of
the Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. None of the terms covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties hereto.
29.15 Right to Lease. Landlord reserves the absolute right to effect
such other tenancies in the Project as Landlord in the exercise of its sole
business judgment shall determine to best promote the interests of the Building
or Project. Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.
29.16 Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease (collectively, a "Force Majeure"), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.
29.17 Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant
and for all those claiming under Tenant, any and all rights now or hereafter
existing to redeem by order or
48
judgment of any court or by any legal process or writ, Tenant's right of
occupancy of the Premises after any termination of this Lease.
29.18 Tenant Parking. Subject to availability, Tenant may rent, on a
month-to-month basis, non-transferable parking passes for unreserved parking
spaces in the Project parking facility directly from the Project parking
facility operator. Tenant shall pay to the parking facility operator or, at
Landlord's option, directly to Landlord for automobile parking passes on a
monthly basis the prevailing rate charged from time to time at the location of
such parking passes. In addition, Tenant shall be responsible for the full
amount of any taxes imposed by any governmental authority in connection with the
renting of such parking passes by Tenant or the use of the parking facility by
Tenant. Tenant shall supply Landlord with an identification roster listing, for
each parking pass, the name of the employee and the make, color and registration
number of the vehicle to which such parking pass has been assigned, and shall
provide a revised roster to Landlord monthly indicating changes thereto.
Tenant's continued right to use the parking passes is conditioned upon Tenant
abiding by all rules and regulations which are prescribed from time to time for
the orderly operation and use of the parking facility where the parking passes
are located, including any sticker or other identification system established by
Landlord, Tenant's cooperation in seeing that Tenant's employees and visitors
also comply with such rules and regulations and Tenant not being in default
under this Lease. Landlord specifically reserves the right to change the size,
configuration, design, layout and all other aspects of the Project parking
facility at any time and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of Rent
under this Lease, from time to time, close-off or restrict access to the Project
parking facility for purposes of permitting or facilitating any such
construction, alteration or improvements. Landlord may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to the Landlord.
The parking passes rented by Tenant pursuant to this Section 29.18 are provided
to Tenant solely for use by Tenant's own personnel and such passes may not be
transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord's prior approval. Tenant may validate visitor parking by such method or
methods as the Landlord may establish, at the validation rate from time to time
generally applicable to visitor parking.
29.19 Joint and Several. If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.
29.20 Authority. If Tenant is a corporation, trust or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so. In such event, Tenant shall, within ten (10) days after
execution of this Lease, deliver to Landlord satisfactory evidence, of such
authority and, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant's state of
incorporation and (ii) qualification to do business in California.
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29.21 Attorney's Fees. In the event that either Landlord or Tenant
should bring suit for the possession of the Premises, for the recovery of any
sum due under this Lease, or because of the breach of any provision of this
Lease or for any other relief against the other, then all costs and expenses,
including reasonable attorneys' fees, incurred by the prevailing party therein
shall be paid by the other party, which obligation on the part of the other
party shall be deemed to have accrued on the date of the commencement of such
action and shall be enforceable whether or not the action is prosecuted to
judgment.
29.22 Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be
construed and enforced in accordance with the laws of the State of California.
IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT
TO (1) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA,
(II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN
THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S
USE OR OCCUPANCY OF THE PREMISES, AND OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY
PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT
SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH
COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE
RELEGATED TO AN INDEPENDENT ACTION AT LAW.
29.23 Submission of Lease. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of, option
for or option to lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
29.2 Brokers. Landlord and Tenant hereby warrant to each other that
they have had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, excepting only the real estate brokers or
agents specified in Section 11 of the Summary (the "Brokers"), and that they
know of no other real estate broker or agent who is entitled to a commission in
connection with this Lease. Each party agrees to indemnify and defend the other
party against and hold the other party harmless from any and all claims,
demands, losses, liabilities, lawsuits, judgments, costs and expenses (including
without limitation reasonable attorneys' fees) with respect to any leasing
commission or equivalent compensation alleged to be owing on account of any
dealings with any real estate broker or agent, other than the Brokers, occurring
by, through, or under the indemnifying party.
29.25 Independent Covenants. This Lease shall be construed as though
the covenants herein between Landlord and Tenant are independent and not
dependent and Tenant hereby expressly
50
waives the benefit of any statute to the contrary and agrees that if Landlord
fails to perform its obligations set forth herein, Tenant shall not be entitled
to make any repairs or perform any acts hereunder at Landlord's expense or to
any setoff of the Rent or other amounts owing hereunder against Landlord.
29.26 Project or Building Name and Signage. Landlord shall have the
right at any time to change the name of the Project or Building and to install,
affix and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord's sole discretion, desire.
Tenant shall not use the words "Embarcadero Center" or the name of the Project
or Building or use pictures or illustrations of the Project or Building in
advertising or other publicity or for any purpose other than as the address of
the business to be conducted by Tenant in the Premises, without the prior
written consent of Landlord.
29.27 Counterparts. This Lease may be executed in counterparts with the
same effect as if both parties hereto had executed the same . Both counterparts
shall be construed together and shall constitute a single lease.
29.28 Confidentiality. Tenant acknowledges that the content of this
Lease and any related documents are confidential information. Tenant shall keep
such confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants.
29.29 Development of the Project.
29.29.1 Subdivision. Landlord reserves the right to further
subdivide all or a portion of the Project. Tenant agrees to execute and deliver,
upon demand by Landlord and in the form requested by Landlord, any additional
documents needed to conform this Lease to the circumstances resulting from such
subdivision.
29.29.2 The Other Improvements. If portions of the Project or
property adjacent to the Project (collectively, the "Other Improvements") are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of any or all of the Other Improvements to
provide (i) for reciprocal rights of access and/or use of the Project and the
Other Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other
Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other
Improvements to the Project, and (iv) for the use or improvement of the Other
improvements and/or the Project in connection with the improvement,
construction, and/or excavation of the Other Improvements and/or the Project.
Nothing contained herein shall be deemed or construed to limit or otherwise
affect Landlord's right to convey all or any portion of the Project or any other
of Landlord's rights described in this Lease.
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29.29.3 Construction of Projects and Other Improvements. Tenant
acknowledges that portions of the Project and/or the Other Improvements may be
under construction following Tenant's occupancy of the Premises, and that such
construction may result in levels of noise, dust, odor, obstruction of' access,
etc. which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.
29.30 Building Renovations. It is specifically understood and agreed
that Landlord has no obligation and has made no promises to alter, remodel,
improve, renovate, repair or decorate the Premises, Building, or any part
thereof and that no representations respecting the condition of the Premises or
the Building have been made by Landlord to Tenant except as specifically set
forth herein or in the Tenant Work Letter. However, Tenant hereby acknowledges
that Landlord is currently renovating or may during the Lease Term renovate,
improve, alter, or modify (collectively, the "Renovations") the Project, the
Building and/or the Premises. Tenant hereby agrees that such Renovations shall
in no way constitute a constructive eviction of Tenant nor entitle Tenant to any
abatement of Rent. Landlord shall have no responsibility and shall not be liable
to Tenant for any injury to or interferance with Tenant's business arising from
the Renovations, nor shall Tenant be entitled to any compensation or damages
from Landlord for loss of the use of the whole or any part of the Premises or of
Tenant's personal property or improvements resulting from the Renovations, or
for any inconvenience or annoyance occasioned by such Renovations.
29.3 No Violation. Tenant hereby warrants and represents that neither
its execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs, arising from Tenant's breach of this warranty and representation.
29.32 Communications and Computer Lines. Tenant may install, maintain,
replace, remove or use any communications or computer wires and cables
(collectively, the "Lines") at the Project in or serving the Premises, provided
that (i) Tenant shall obtain Landlord's prior written consent, use an
experienced and qualified contractor approved in writing by Landlord, and comply
with all of the other provisions of Articles 7 and 8 of this Lease, (ii) an
acceptable number of spare Lines and space for additional Lines shall be
maintained for existing and future occupants of the Project, as determined in
Landlord's reasonable opinion, (iii) the Lines therefor (including riser cables)
shall be appropriately insulated to prevent excessive electromagnetic fields or
radiation, and shall be surrounded by a protective conduit reasonably acceptable
to Landlord, (iv) any new or existing Lines servicing the Premises shall comply
with all applicable governmental laws and regulations, (v) as a condition to
permitting the installation of new Lines, Landlord may require that Tenant
remove existing Lines located in or serving the Premises and repair any damage
in connection with such removal, and (vi) Tenant shall pay all costs in
connection therewith. Landlord reserves the right to require that Tenant remove
any Lines located in or serving the Premises which are installed in violation of
these provisions, or which are at any time in violation of any laws or
52
present a dangerous or potentially dangerous condition. Landlord further
reserves the right to require that Tenant remove any and all Lines located in or
serving the Premises upon the expiration of the Lease Term or upon any earlier
termination of this Lease.
29.3 No Discrimination. There shall be no discrimination against, or
segregation of, any person or persons on account of sex, marital status, race,
color, religion, creed, national origin or ancestry in the Transfer of the
Premises or any portion thereof, nor shall the Tenant itself, or any person
claiming under or through it, establish or permit any such practice or practices
of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants,sublessees, or vendees
of the Premises, or any portion thereof.
29.34 Asbestos Disclosures. Landlord has advised Tenant that there is
asbestos-containing material ("ACM") in the Building. Attached hereto as Exhibit
F is a disclosure statement regarding ACM in the Building. Tenant acknowledges
that such notice complies with the requirements of Section 25915 et. seq. and
Section 25359.7 of the California Health and Safety Code.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
"Landlord"
ONE EMBARCADERO CENTER VENTURE,
a California general partnership
By: Boston Properties LLC,
a Delaware limited liability company,
its managing general partner
By: Boston Properties Limited Partnership,
a Delaware limited partnership,
its managing member
By: Boston Properties, Inc.,
a Delaware corporation,
its sole general member
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Date:
------------------------------
"Tenant":
SUPER HOLDINGS, INC.,
a Delaware corporation
By: /s/ Xxxx Xxxxxxx
---------------------------------
Its; Chairman & C.E.O.
-----------------------------
By:
--------------------------------
Its;
-----------------------------
53
EXHIBIT A
ONE EMBARCADERO CENTER
OUTLINE OF PREMISES
54
EXHIBIT B
ONE EMBARCADERO CENTER
TENANT WORK LETTER
Landlord, at Tenant's sole cost and expense, shall construct a demising
wall separating the Premises from Suite 2020 as shown on the attached Schedule 1
to Exhibit B. In addition, Landlord shall, at Tenant's expense, perform
remodeling work in Suite 2020, in accordance with the attached Schedule 1 to
Exhibit B (collectively, the "Improvements"). Upon the execution of this Lease,
Tenant shall pay to Landlord the sum of Fifteen Thousand and no/100 Dollars
($15,000.00) for the estimated costs of such work. Following the completion of
the Improvements, Tenant shall, within five (5) business days following receipt
of an invoice from Landlord, reimburse Landlord for the total costs of the
Improvements in excess of the Fifteen Thousand and no/100 Dollars ($15,000.00).
In the event the cost of the Improvements is less than the Fifteen Thousand and
no/100 Dollars ($15,000.00) already paid by Tenant, Landlord shall promptly
refund to Tenant the amount of the over payment.
55
EXHIBIT B - SCHEDULE 1
56
EXHIBIT C
ONE EMBARCADERO CENTER
NOTICE OF LEASE TERM DATES
To:________________
________________
________________
________________
Re: Office Lease dated __________ ,200_ between ___________, a
____________ ("Landlord"), and __________ a ____________("Tenant") concerning
Suite ____ on floor(s)_______ of the office building located at_______________ .
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise
you and/or confirm as follows:
1. The Lease Term shall commence on or has commenced on ____________
for a term of ____________ ending on ____________.
2. Rent commenced to accrue on ____________ in the amount of
____________.
3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.
4. Your rent checks should be made payable to ____________ at
____________. Pursuant to Article 2 of the Lease, we hereby request that you
sign this letter where indicated below, confirming the formation provided above
and return it to our office at your earliest convenience.
"Landlord":
__________________________,
a_________________________
By:________________________
Its:____________________
Agreed to and Accepted as
of________________________ , 200__.
"Tenant":
__________________________________ ,
a_________________________________
By:_______________________________
Its:___________________________
57
EXHIBIT D
ONE EMBARCADERO CENTER
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
confiict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.
1. Tenant shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the Premises without obtaining
Landlord's prior written consent. Tenant shall bear the cost of any lock changes
or repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord. Upon the
termination of this Lease, Tenant shall restore to Landlord all keys of stores,
offices, and toilet rooms, either furnished to, or otherwise procured by, Tenant
and in the event of the loss of keys so furnished, Tenant shall pay to Landlord
the cost of replacing same or of changing the lock or locks opened by such lost
key if Landlord shall deem it necessary to make such changes.
2. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises.
3. Landlord reserves the right to close, the Building during such hours
as are customary r comparable buildings in the vicinity of the Project. Tenant,
its employees and agents must be sure that the doors to the Premises are
securely closed and locked when leaving the Premises if it is after the normal
hours of business for the Building. Any tenant, its employees, agents or any
other persons entering or leaving the Building at any time when it is so locked,
or any time when it is considered to be after normal business hours for the
Building, may be required to sign or card access the Building register. Access
to the Building may be refused unless the person seeking access has proper
identification or has a previously arranged pass for access to the Building.
Landlord will furnish passes to persons for whom Tenant requests same in
writing. Tenant shall be charged Landlord's actual costs for the replacement of
lost access cards. Tenant shall be responsible for all persons for whom Tenant
requests passes and shall be liable to Landlord for all acts of such persons.
The Landlord and his agents shall in no case be liable, for damages for any
error with regard to the admission to or exclusion from the Building of any
person. In case of invasion, mob, riot, public excitement, or other commotion,
Landlord reserves the right to prevent access to the Building or the Project
during the continuance thereof by any means it deems appropriate for the safety
and protection of life and property.
58
4. No furniture, freight or equipment (if any kind shall be brought
into the Building without prior notice to Landlord. All moving activity into or
out of the Building shall be scheduled with Landlord and done only at such time
and in such manner as Landlord designates. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy property
brought into the Building and also the times and manner of moving the same in
and out of the Building. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to
properly distribute the weight. Landlord will not be responsible for loss of or
damage to any such safe or property in any case. Any damage to any part of the
Building, its contents, occupants or visitors by moving or maintaining any such
safe or other property shall be the sole responsibility and expense of Tenant.
5. No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours, in such specific elevator and by such personnel as shall be
designated by Landlord.
6. The requirements of Tenant will be attended to only upon application
at the management office for the Project or at such office location designated
by Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
7. No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by Tenant on any part of the Premises or the
Building without the prior written consent of the Landlord. Tenant shall not
disturb, solicit, peddle, or canvass any occupant of the Project and shall
cooperate with Landlord and its agents of Landlord to prevent same.
8. The toilet rooms, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose servants, employees, agents, visitors or
licensees shall have caused same.
9. Tenant shall not overload the floor of the Premises beyond the
Building standard floor loading specifications, nor xxxx, drive nails or screws,
or drill into the partitions, woodwork or drywall or in any way deface the
Premises or any part thereof without Landlord's prior written consent. Tenant
shall not purchase spring water, ice, towel, linen, maintenance or other like
services from any person or persons not approved by Landlord.
10. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
59
11. Tenant shall not use or keep in or on the Premises, the Building,
or the Project any kerosene, gasoline or other inflammable or combustible fluid,
chemical, substance or material that is considered hazardous.
12. Tenant shall not without the prior written consent of Landlord use
any method of heating or air conditioning other than that supplied by Landlord.
13. Tenant shall not use, keep or permit to be used or kept, any foul
or noxious gas or substance in or on the Premises, or permit or allow the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Project by reason of noise, odors, vibrations
or electronic disruption, or interfere with other tenants or those having
business therein, whether by the use of any musical instrument, radio,
phonograph, or in any other way. Tenant shall not throw anything out of doors,
windows or skylights or down passageways.
14. Tenant shall not bring into or keep within the Project, the
Building or the Premises any animals, birds, aquariums, or, except in areas
designated by Landlord, bicycles or other vehicles.
15. No cooking shall be done or permitted on the Premises, nor shall
the Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state, county and city laws, codes, ordinances,
rules and regulations.
16. The Premises shall not be used, for manufacturing or for the
storage of merchandise except as such storage may be incidental to the use of
the Premises provided for in the Summary. Tenant shall not occupy or permit any
portion of the Premises to be occupied as an office for a messenger-type
operation or dispatch office, public stenographer or typist, or for the
manufacture or sale of liquor, narcotics, or tobacco in any form, or as a
medical office, or as a xxxxxx or manicure shop, or as an employment bureau
without the express prior written consent of Landlord. Tenant shall not engage
or pay any employees on the Premises except those actually working for such
tenant on the Premises nor advertise for laborers giving an address at the
Premises.
17. Landlord reserves the right to exclude or expel from the Project
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of these Rules and Regulations.
18. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators,
vestibules or any Common Areas for the purpose of smoking tobacco products or
for any other purpose, nor in any way obstruct such areas, and shall use them
only as a means of ingress and egress for the Premises.
60
19. Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls.
20. Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in the city
in which the Project is located without violation of any law or ordinance
governing such disposal. All trash, garbage and refuse disposal shall be made
only through entry- ways and elevators provided for such purposes at such times
as Landlord shall designate.
21. Tenant shall comply with all safety fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22. Any persons employed by Tenant to do janitorial work shall be
subject to the prior written approval of Landlord, and while Building and
outside of the Premises, shall be subject to and under the control and direction
of the Building manager (but not as an agent or servant of such manager or of
Landlord), and Tenant shall be responsible for all acts of such persons.
23. No awnings or other projection all be attached to the outside walls
of the Building without the prior written consent of Landlord, and no curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises other than Landlord standard drapes.
All electrical ceiling fixtures hung in the Premises or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design
and a warm white bulb color approved in advance in writing by Landlord. Neither
the interior nor exterior of any windows shall be coated or otherwise
sunscreened without the prior written consent of Landlord. Tenant shall abide by
Landlord's regulations concerning the opening and closing of window coverings
which are attached to the windows in the Premises, if any, which have a view of
any interior portion of the Building or Building Common Areas.
24. The sashes, sash doors, skylights, windows, and doors that reflect
or admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
25. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
26. Tenant must comply with the State of California "No-Smoking" law
set forth in California Labor Code Section 6404.5, and any local "No-Smoking"
ordinance which may be in effect from time to time and which is not superseded
by such State law.
27. Tenant hereby acknowledges that Landlord shall have no obligation
to provide guard service or other security measures for the benefit of the
Premises, the Building or the Project. Tenant
61
hereby assumes all responsibility for the protection of Tenant and its agents,
employees, contractors, invitees and guests, and the property thereof, from acts
of third parties, including keeping doors locked and other means of entry to the
Premises closed, whether or not Landlord, at its option, elects to provide
security protection for the Project or any portion thereof. Tenant further
assumes the risk that any safety and security devices, services and programs
which Landlord elects, in its sole discretion, to provide may not be effective,
or may malfunction or be circumvented by an unauthorized third party, and Tenant
shall, in addition to its other insurance obligations under this Lease, obtain
its own insurance coverage to the extent Tenant desires protection against
losses related to such occurrences. Tenant shall cooperate in any reasonable
safety or security program developed by Landlord or required by law.
28. All office equipment of any electrical or mechanical nature shall
be placed by Tenant in the Premises in settings approved by Landlord, to absorb
or prevent any vibration, noise and annoyance.
29. Tenant shall not use in any space in the public halls of the
Building, any hand trucks except those equipped with rubber tires and rubber
side guards.
30. No auction, liquidation, fire sale, going-out-of-business or
bankruptcy sale shall be conducted in the Premises without the prior written
consent of Landlord.
31. No tenant shall use or permit the use of any portion of the
Premises for living quarters, sleeping apartments or lodging rooms.
Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, the Common Areas and the Project, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
therein. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.
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EXHIBIT E
ONE EMBARCADERO CENTER
FORM OF TENANT'S ESTOPPEL CERTIFICATE
The undersigned, as Tenant under that certain Office Lease (the
"Lease") made and entered into as of ____________ 200__ by and between
____________ as Landlord, and the undersigned, as Tenant, for Premises on the
____________ floor(s) of the office building located at ____________ certifies
as follows:
1. Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in Exhibit
A represent the entire agreement between the parties as to the Premises.
2. The undersigned currently occupies the Premises described in the
Lease, the Lease Term commenced on ____________, and the Lease Term expires on
____________, and the undersigned has no option to terminate or cancel the Lease
or to purchase all or any part of the Premises, the Building and/or the Project.
3. Base Rent became payable on__________________________.
4. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
5. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
6. Tenant shall not modify the documents contained in Exhibit A without
the prior written consent of Landlord's mortgagee, which consent shall not be
unreasonably withheld.
7. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through ____________. The current monthly installment of Base Rent is
$____________.
8. All conditions of the Lease to performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.
9. No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except the Security Deposit in the
amount of $____________ as provided in the Lease.
63
10. As of the date hereof, there are no existing defenses or offsets,
or, to the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord.
11. If Tenant is a corporation, limited liability company, partnership
or limited liability partnership, each individual executing this Estoppel
Certificate on behalf of Tenant hereby represents and warrants that Tenant is a
duly formed and existing entity qualified to do business in California and that
Tenant has full right and authority to execute and deliver this Estoppel
Certificate and that each person signing on behalf of Tenant is authorized to do
so.
12. There are no actions pending against the undersigned under the
bankruptcy or similar laws of the United States or any state.
13. Other than in compliance with all applicable laws and incidental to
the ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
14. All tenant improvement work to be performed by Landlord under the
Lease has been completed in accordance with the Lease and has been accepted by
the undersigned and all reimbursements and allowances due to the undersigned
under the Lease in connection with any tenant improvement work have been paid in
full.
The undersigned acknowledges that this Estoppel Certificate may be
delivered to Landlord or to a prospective mortgagee or prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.
Executed at_______________ on the______ day of 200__.
"Tenant":
________________________________ ,
a ______________________________
By:_____________________________
Its:_________________________
By:_____________________________
Its:_________________________
64
EXHIBIT F
ONE EMBARCADERO CENTER
CALIFORNIA ASBESTOS NOTICE
In 1988, California enacted Legislation specifically, Chapter 10.4 of
the Health and Safety Code, Section 25915 et seq.) requiring landlords and
tenants of commercial buildings constructed prior to 1979 to notify certain
people, including each other and their respective employees working within such
building, of any knowledge they may have regarding any asbestos-containing
construction materials ("ACM ") in the Building.
On July 13, 1995, Title 29, Code of Federal Regulations, Section
1910.1001 and 1926.1101 defined Presumed Asbestos Containing Material ("PACM")
as Thermal System Insulation and Surfacing Material found in buildings
constructed no later than 1980. The Federal Standard requires the building
and/or facility owner to notify contractors and tenants. of the presence of
ACM/PACM. On May 3, 1996, Cal/OSHA adopted the same notification requirements
for PACM in Title 8 CCR 5208 & 1 A29. This notification is being given to
provide the information required under this Legislation in order to help you
avoid any unintentional contact with the ACM/PACM, to assure that appropriate
precautionary measures are taken before disturbing any ACM/PACM, and to assist
you in making appropriate disclosures to your employees and others.
We have engaged qualified asbestos consultants to survey the property
for asbestos and to assist in implementing an asbestos manage ent plan that
includes, among other things, periodic reinspection and surveillance, air
monitoring, information and training programs for building engineering and other
measures to minimize potential fiber releases. A description of the current
Operations and Management Plans prepared for the Building (the "O&M Plans") is
set forth on Schedule A attached hereto. Our asbestos consultant has certified
to us that the O&M Plans fully comply with the disclosure requirements of Health
and Safety Code Section 25915. 1.
We have no reason to believe, based upon the O&M Plans, that the
ACM/PACM in the Building is currently in a condition to release asbestos fibers,
which would pose a significant health hazard to the Building's occupants. This
should remain so if such ACM/PACM is properly handled and remains undisturbed.
You should take into consideration that our knowledge as to the absence of
health risks is based solely upon general information and the information
contained in the O&M Plans, and that we have no special knowledge concerning
potential health risks resulting from exposure to asbestos in the Building. We
are therefore required by the above-mentioned legislation to encourage you to
contact local or state public agencies if you wish to obtain a better
understanding of the potential impacts resulting from exposure to asbestos.
Because any tenant alterations or other work at the property could
disturb ACM/PACM and possibly release asbestos fibers into the air, we must
require that you obtain our written approval prior to beginning such projects.
This includes major alterations, but might also include such
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activities as drilling or boring holes, installing electrical,
telecommunications or computer lines, sanding floors, removing ceiling tiles or
other work which disturbs ACM/PACM. In many cases, such activities will not
affect ACMJPACM, but you must check with the property manager in advance, just
in case. You should check with the property manager at the address set forth on
Schedule A. The property manager will make valuable such instruction as may be
required. Any such work should not be attempted by an individual or contractor
who is not qualified to handle ACM/PACM. In the areas specified in Schedule A,
you should avoid touching or disturbing the ACNI/PACM in any way. If you observe
any activity which has the potential to disturb the ACM/PACM, please report the
same to the property manager immediately.
Further information concerning asbestos handling procedures in general
can be found in the building's Asbestos Operation and Maintenance Plan, located
in the building office. At this time, we are unaware of specific handling
restrictions or procedures which might be necessary in any particular situation
to avoid exposure. We are therefore required by the above-mentioned legislation
to encourage you to contact local, state or federal public health agencies if
you which to obtain further information regarding handling procedures and
restrictions.
In connection with the foregoing, we have adopted the following
policies (which shall be considered rules under tenant leases) : (1) the owner,
and representatives of the owner, including, without limitation, the owner's
ACNVPACM consultant, are entitled to enter into the premises of any tenant to
inspect for ACNVPACM, perform air tests and abatement; (2) any tenant,
contractor, or other party must obtain our, prior written approval before
performing any alterations on any tenant space, or performing any other work at
the property that might disturb ACNVPACM or involve exposure to asbestos fibers
as described above.
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SCHEDULE A TO NOTICE CONCERNING ASBESTOS
BUILDING:
GENERAL MANAGER:
ADDRESS OF BUILDING OFFICE: Telephone:
1. EXISTING OPERATIONS AND MANAGEMENT PLAN ("O&M PLAN") AND
ASBESTOS SURVEYS WHICH DESCRIBE THE EXISTENCE, LOCATION AND
CONDITION OF ACM
The O&M Plans which have been prepared for the Building since
____________, 19__ are generally described as follows:
DATE DESCRIPTION
A. O&M PLAN
1 .
2.
3.
4.
B. SURVEYS
1 .
2.
3.
4.
5.
6.
7.
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8.
9.
II. CONTENTS OF O&M PLAN
The Table of Contents of the O&M Plan contains the following sections:
III. SPECIFIC LOCATIONS WHERE ACM I IS PRESENT IN ANY QUANTITY
THE O&M PLAN AND THE RESULTS OF MONITORING DESCRIBED ABOVE, INCLUDING
MONITORING DATA AND SAMPLING PROCEDURES AND THE ASBESTOS SURVEYS, ARE
AVAILABLE FOR REVIEW DURING NORMAL BUSINESS HOURS IN THE BUILDING
OFFICE, AT THE ABOVE ADDRESS, MONDAY THROUGH FRIDAY EXCEPT LEGAL
HOLIDAYS. NO REPRESENTATIONS OR WARRANTIES WHATSOEVER ARE MADE
REGARDING THE O&M PLAN, THE PORTS CONCERNING SUCH O&M PLAN OR THE
SURVEYS (INCLUDING WITHOUT LIMITATION, THE CONTENTS OR ACCURACY
THEREOF), OR THE PRESENCE OR ABSENCE OF TOXIC OR HAZARDOUS MATERIALS
IN, AT, OR UNDER ANY PREMISES OR THE BUILDING.
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EXHIBIT
ONE EMBARCADERO CENTER
FORM OF LETTER OF CREDIT
------------------------
(Letterhead of a money center bank
acceptable to the Landlord)
_________________________ 200_
______________________________
______________________________
______________________________
______________________________
Gentlemen:
We hereby establish our Irrevocable Letter of Credit and authorize you
to draw on us at sight for the account of Superus Holdings, Inc., a Delaware
corporation, the aggregate amount of Three Hundred Forty-Four Thousand Six
Hundred Four and No/100 Dollars ($344,604.00).
Funds under this Letter of Credit are available to the beneficiary
hereof as follows:
Any or all of the sums hereunder may be drawn down at any time and from
time to time from and after the date hereof by One Embarcadero Center Venture, a
California general partnership ("Beneficiary") when accompanied by this Letter
of Credit and a written statement signed by an authorized representative of
Beneficiary, certifying that such moneys are due and owing to Beneficiary, due
to a default of the Lease by Tenant beyond any applicable cure period set forth
therein, together with a certificate of incumbency executed by an authorized
representative of Beneficiary, certifying the position and signature of the
officer signing the statement, and a sight draft executed and endorsed by an
authorized representative of Beneficiary.
This Letter of Credit is transferable in its entirety. Should a
transfer be desired, such transfer will be subject to the return to us of this
advice, together with written instructions.
The amount of each draft must be endorsed on the reverse hereof by the
negotiating bank. We hereby agree that this Letter of Credit shall be duly
honored upon presentation and delivery of the certification specified above.
This Letter of Credit shall expire on ____________ 200__.
Notwithstanding the above expiration date of this Letter of Credit, the
term of this Letter of Credit shall be automatically renewed for successive,
additional one (1) year periods unless, at least thirty (30) days prior to any
such date of expiration, the undersigned shall give written notice to
69
Beneficiary, by certified mail, return receipt requested and at the address set
forth above or at such other address as may be given to the undersigned by
Beneficiary, that this Letter of Credit will not be renewed.
This Letter of Credit is governed by the Uniform Customs and Practice
for Documentary Credits (1983 Revision), International Chamber of Commerce
Publication 400.
Very truly yours,
(Name of Issuing Bank)
By:_____________________
70