1
EXHIBIT 10.7
000 XXXXXXXXXX XXXXXX
OFFICE LEASE AGREEMENT
entered into by and between
XXXXX X. XXXX, As Attorney In-Fact, Landlord
and
INTELLIPOST CORPORATION, a Delaware corporation, Tenant
for the
SECOND FLOOR
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TABLE OF CONTENTS
ATRICLE 1 DEFINITIONS .................................................. 1
1.1 Lease Date .................................................. 1
1.2 Landlord ..................................................... 1
1.3 Tenant ....................................................... 1
1.4 Building ..................................................... 1
1.5 Lease Premises ............................................... 1
1.6 Rentable Area of Premises .................................... 1
1.7 Common Area .................................................. 1
1.8 Lease ........................................................ 1
1.9 Lease Term ................................................... 1
1.10 Term Commencement Date ....................................... 1
1.11 Expiration Date .............................................. 1
1.12 Base Rent .................................................... 2
1.13 Tenant's Percentage Share .................................... 2
1.14 Security Deposit ............................................. 2
1.15 Tenant's Permitted Use ....................................... 2
1.16 Business Hours ............................................... 2
1.17 Landlord's Address for Notices ............................... 2
1.18 Tenant's Address for Notices ................................. 2
1.19 Tenant's Address for Notices (Before Tenant Takes Possession of
Premises) .................................................... 2
1.20 Landlord's and Tenant's Broker, If Any ....................... 2
1.21 Prepaid Rent ................................................. 2
1.22 Property Manager ............................................. 2
ARTICLE 2 PREMISES...................................................... 3
2.1 Lease of Premises ............................................ 3
2.2 Acceptance of Premises ....................................... 3
2.3 Rentable Area of the Premises ................................ 3
ARTICLE 3 TERM ......................................................... 3
3.1 Term ......................................................... 3
3.2 Determination of Term Commencement Date ...................... 3
3.3 Option to Extend ............................................. 3
3.4 Term ......................................................... 4
ARTICLE 4 BASE RENT .................................................... 4
4.1 Payment of Base Rent ......................................... 4
ARTICLE 5 ADDITIONAL CHARGES; OPERATING EXPENSES AND APPLICABLE
TAXES......................................................... 4
5.1 Payment of Additional Charges; Operating Expenses and
Applicable Taxes.............................................. 4
5.2 Definitions .................................................. 5
(A) "Base Year" .............................................. 5
(B) "Applicable Taxes" ....................................... 5
(C) "Operating Expenses" ..................................... 5
5.3 Adjustment Procedure: Estimate ............................... 6
5.4 View of Landlord's Statement ................................. 6
5.5 Late Charge; Interest ........................................ 7
ARTICLE 6 ADDITIONAL TAXES ............................................. 7
6.1 Reimbursement ................................................ 7
ARTICLE 7 SECURITY DEPOSIT ..............................................7
ARTICLE 8 USE OF PREMISES .............................................. 8
8.1 Tenant's Permitted Use ....................................... 8
8.2 Compliance With Laws and Other Requirements .................. 8
8.3 Hazardous Material ........................................... 9
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ARTICLE 9 UTILITIES AND SERVICE ........................................ 10
9.1 Building Services ............................................ 10
9.2 Interruption of Services ..................................... 11
ARTICLE 10 MAINTENANCE AND REPAIRS ...................................... 11
10.1 Landlord Repairs ............................................. 11
10.2 Tenant Repairs ............................................... 11
10.3 Request for Repairs .......................................... 12
10.4 Tenant Damages ............................................... 12
10.5 Landlord's Rights ............................................ 12
ARTICLE 11 ALTERATIONS ADDITIONS AND IMPROVEMENTS ....................... 12
11.1 Landlord's Consent; Conditions ............................... 12
11.2 Performance of Alterations Work .............................. 12
11.3 Liens ........................................................ 12
11.4 Lease Termination ............................................ 13
ARTICLE 12 INDEMINIFICATION ............................................. 13
12.1 Waiver of Liability .......................................... 13
12.2 Indemnification .............................................. 13
12.3 Survival ..................................................... 13
ARTICLE 13 INSURANCE .................................................... 14
13.1 Property Insurance ........................................... 14
13.2 Liability Insurance .......................................... 14
13.3 Workers Compensation Insurance ............................... 14
13.4 Policy Requirements .......................................... 14
13.5 Waiver of Subrogation ........................................ 15
13.6 Failure of Insure ............................................ 15
ARTICLE 14 DAMAGE OR DESTRUCTION ........................................ 15
14.1 Landlord's Restoration ....................................... 15
14.2 Rent Abatement ............................................... 15
14.3 Tenant's Restoration ......................................... 15
14.4 Waiver of Right to Terminate ................................. 15
14.5 Damage During Last Twenty-Four (24) Months ................... 16
ARTICLE 15 CONDEMNATION ................................................. 16
15.1 Taking ....................................................... 16
15.2 Award ........................................................ 16
15.3 Temporary Taking ............................................. 16
ARTICLE 16 ASSIGNMENT AND SUBLETTING .................................... 16
16.1 Restriction .................................................. 16
16.2 Notice to Landlord ........................................... 16
16.3 Landlord's Recapture Rights .................................. 17
16.4 Landlord's Consent: Standard ................................. 17
16.5 Additional Rent .............................................. 17
16.6 Landlord's Costs ............................................. 17
16.7 Continuing Liability of Tenant ............................... 17
16.8 Non-Waiver ................................................... 18
ARTICLE 17 DEFAULT AND REMEDIES ......................................... 18
17.1 Events of Default by Tenant .................................. 18
17.2 Landlord's Right to Terminate Upon Tenant Default ............ 18
17.3 Landlord's Right to Continue Lease Upon Tenant Default ....... 19
17.4 Right of Landlord to Perform ................................. 19
17.5 Default Under Other Lease .................................... 19
17.6 Non-Waiver ................................................... 19
17.7 Cumulative Remedies ......................................... 20
17.8 Default by Landlord .......................................... 20
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ARTICLE 18 ATTORNEY'S FEES: COSTS OF SUIT ................................ 20
18.1 Attorneys' Fees ............................................... 20
18.2 Indemnification ............................................... 20
ARTICLE 19 SUBORDINATION AND ATTORNMENT .................................. 20
19.1 Subordination ................................................. 20
19.2 Attornment .................................................... 20
19.3 Mortgage and Ground Lessor Protection ......................... 21
ARTICLE 20 QUIET ENJOYMENT ............................................... 21
ARTICLE 21 RULES AND REGULATION .......................................... 21
ARTICLE 22 ESTOPPEL CERTIFICATES ......................................... 21
ARTICLE 23 ENTRY BY LANDLORD ............................................. 22
ARTICLE 24 LANDLORD'S LEASE UNDERTAKING-
EXCULPATION FROM PERSONAL LIABILITY
TRANSFER OF LANDLORD'S INTEREST .............................. 22
24.1 Landlord's Lease Undertaking ................................. 22
24.2 Transfer of Landlord's Interest ............................... 22
ARTICLE 25 HOLDOVER TENANCY .............................................. 23
ARTICLE 26 NOTICES ....................................................... 23
ARTICLE 27 MISCELLANEOUS ................................................. 23
27.1 Entire Agreement .............................................. 23
27.2 Amendments .................................................... 23
27.3 Successors .................................................... 23
27.4 Force Majeure ................................................. 23
27.5 Survival of Obligations ....................................... 24
27.6 Light and Air ................................................. 24
27.7 Governing Law ................................................. 24
27.8 Severability .................................................. 24
27.9 Captions ..................................................... 24
27.10 Interpretation ................................................ 24
27.11 Independent Covenants ......................................... 24
27.12 Number and Gender ............................................. 24
27.13 Time is of the Essence ........................................ 24
27.14 Joint and Several Liability ................................... 24
27.15 Exhibits ...................................................... 24
27.16 Offer of Lease ................................................ 24
27.17 No Counterclaim; Choice of Laws ............................... 24
27.18 Rights Reserved by Landlord ................................... 24
27.19 No Other Broker or Agent ...................................... 25
27.20 Compliance .................................................... 25
27.21 Delay in Enforcement .......................................... 25
27.22 No Waiver by Acceptance of Payment ............................ 25
27.23 Qualification and Authority ................................... 25
27.24 Landlord Rights to Change Property ............................ 26
27.25 Landlord's Improvements Work .................................. 26
27.26 Right of First Negotiation .................................... 26
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SECOND FLOOR OFFICE LEASE
000 XXXXXXXXXX XXXXXX, XXX XXXXXXXXX, XX
THIS LEASE ("Lease"), dated as of November 15, 1996, is made and
entered into by and between XXXXX X. XXXX, not individually, but as
attorney-in-fact for: Xxxx Xxxxxxx, Xxxxxxx X. Xxxxxxx; Xxxxx X. Xxxx
Professional Corporation; Xxxxxx X. Xxxxxxxx Professional Corporation; Xxxxx X.
Xxxxx and Xxxxx Xxxxx; Xxxx & Xxxxxxxx (a California general partnership); Xxxx
Xxxxx; Xxxxxx X. Friend (as Trustee of the Xxxxxx X. Friend 1982 Revocable
Trust), Fee Owners of 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
(hereafter collectively referred to as 'Landlord" without regard to number or
gender) and INTELLIPOST CORPORATION, a Delaware corporation ("Tenant") upon the
following terms and conditions.
ARTICLE 1
DEFINITIONS
Unless the context otherwise specifies or requires, the following terms
shall have the following meaning:
1.1 Lease Date. November 15, 1996.
1.2 Landlord. 'Landlord" means Xxxxx X. Xxxx, as Attorney-In-Fact.
1.3 Tenant. "Tenant" means Intellipost Corporation, a California
corporation.
1.4 Building. The term "Building" shall mean 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx.
1.5 Leased Premises. The term "Leased Premises" shall mean the second
floor of the Building, as cross-hatched on Exhibit A attached hereto and made a
part hereof.
1.6 Rentable Area of the Premises. The term "Rentable Area of the
Premises" shall mean approximately 3,939 square feet, which Landlord and Tenant
stipulate to be the Rental Area of
the Premises.
1.7 Common areas. The term "Common Areas" shell mean all areas within
the Building not reserved for the exclusive use of the Landlord, Tenant, or any
other tenant, including the areas on individual floors devoted to corridors,
fire vestibules, elevator foyers, lobbies, electric and telephone closets,
restrooms, mechanical rooms, janitor closets and other similar facilities for
the benefit of all tenants (or invitees) on the particular floor, parking
facilities, if any, walkways and landscaped areas. Landlord retains the right to
make changes in boundaries and in facilities, and to grant exclusive rights over
certain Common Areas. Landlord retains the right to the use, and licensing of
the use of, the exterior walls and roof of the Building.
1.8 Lease. The term "Lease" shall mean this Lease document and any
Exhibits and Addenda attached hereto now or in the future.
1.9 Lease Term. The term "Lease Term" shall mean the period between the
Commencement Date and the Expiration Date (as such terms are hereinafter
defined), unless sooner terminated or extended as otherwise provided in this
Lease. The Lease Term is for three (3) years.
1.10 Term Commencement Date. Subject to adjustment as provided in
Article 3, the Term Commencement Date shall mean November 15, 1996.
1.11 Expiration Date. The term "Expiration Date" shall mean November
30, 1999.
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1.12 Base Rent. Subject to adjustment as provided in Article 4, the
term "Base Rent" shall mean:
ANNUAL
MONTHLY ANNUAL BASE RENT
MONTH(S) YEAR(S) BASE RENT BASE RENT PER SQ. FOOT
-------- ------- --------- --------- ------------
1-36 1, 2 & 3 $4,760.00 $57,120.00 $14.50
1.13 Tenant's Percentage Share. The term "Tenant's Percentage Share"
shall mean 28.56% with respect to Property Taxes and Operating Expenses (as such
terms are hereinafter defined) and with respect to Tenant's law compliance
obligations under Paragraph 8.2(B) of this Lease.
1.14 Security Deposit. The term "Security Deposit" shall mean Four
Thousand Seven Hundred Sixty Dollars ($4,760.00), payable upon execution of this
Lease.
1.15 Tenant's Permitted Use. The term "Tenant's Permitted Use" shall
mean general office use and no other use.
1.16 Business Hours. The term "Business Hours" shall mean the hours of
8:00 a.m. to 6:00 p.m,, Monday through Friday, and 8:00 a.m. to 1:00 p.m.,
Saturdays (federal and state holidays excepted). The term "Business Hours" means
when the exterior door to the Building is kept unlocked. Tenant will
nevertheless, have twenty-four (24) hours access to the Premises. Landlord will
provide Tenant with a key to the exterior door to the Building and one elevator
key permitting elevator service to the second floor.
1.17 Landlord's Address for Notices. The term "Landlord's Address for
Notices" shall mean: c/o Haas & Xxxxxxxx, 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq., telephone
(000) 000-0000, facsimile (000) 000-0000, with copy to Xxxx Xxxxxx at the
address noted in Paragraph 1.20 below.
1.18 Tenant's Address for Notices. The term "Tenant's Address for
Notices" shall mean 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx,
Attn: President.
1.19 Tenant's Address for Notices (Before Tenant Takes Possession of
Premises). Tenant's address for Notices before tenant takes possession of
Premises shall mean 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000-0000, Attn:
President.
1.20 Landlord's and Tenant's Broker, if Any. The term "Landlord's
Broker" shall mean Xxxx Xxxxxx, Xxxxxx Commercial, Embarcadero West, 000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 0000, and the term "Tenant's
Broker" shall mean Xxxxx X. Xxxxx, CB Commercial, Embarcadero Center West, 000
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
1.21 Prepaid Rent The term "Prepaid Rent" shall mean $33,320.00,
representing Base Rent for the first seven (7) months of the Lease Term,
1.22 Property Manager. The term "Property Manager" shall mean Colton
Commercial at the address listed in Paragraph 1.21 above.
THE FOREGOING DEFINITIONS ARE HEREBY INCORPORATED INTO AND MADE A PART
OF THIS LEASE. EACH REFERENCE IN THIS LEASE TO ANY OF THE DEFINITIONS
SHALL MEAN THE INFORMATION SET FORTH ABOVE. IN THE EVENT OF A CONFLICT
BETWEEN ANY OF THE DEFINITIONS AND THE LEASE, THE LEASE SHALL CONTROL.
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ARTICLE 2
PREMISES
2.1 Lease of Premises. Landlord hereby leases the Premises to Tenant,
and Tenant hereby leases the Premises from Landlord, upon all of the terms,
covenants and conditions contained in this Lease. On the Commencement Date
described herein, Landlord shall deliver the Premises to Tenant "AS IS" and
Tenant accepts the Premises in its present condition and acknowledges that
Landlord has no responsibility or obligation to make any tenant improvements
whatsoever, except for the work described in Paragraph 27.25.
2.2 Acceptance of Premises. Tenant acknowledges that Landlord has not
made any representation or warranty with respect to the condition of the
Premises or the Building or with respect to the suitability or fitness of either
for the conduct of Tenant's Permitted Use or for any other purpose.
2.3 Rentable Area of the Premises. The 3,939 square feet referred to in
Paragraph 1.6 of the Lease reflects Landlord's good faith estimate of the
approximate rentable area of the Premises based upon information supplied to
Landlord by its architect. Landlord has not performed an independent calculation
of the rentable area of the Premises and, therefore, cannot warrant or represent
that the square footage is 100% accurate. The square footage was determined by
applying a modified BOMA method of calculating square footage. Accordingly,
should the actual square footage be greater or less than the square footage
stated in Paragraph 1.6. Landlord and Tenant agree that The rent shall remain
the same.
ARTICLE 3
TERM
3.1 Term. Except as otherwise provided in this Lease, the Lease Term
shall be for the period described in Paragraph 1.9 of this Lease, commencing on
the Commencement Date described in Paragraph 1.10 of this Lease and ending on
the Expiration Date described in Paragraph 1.11 of this Lease; provided,
however, that, if, for any reason, Landlord is unable to deliver possession of
the Premises on the date described in Paragraph 1.10 of this Lease, Landlord
shall not be liable for any damage caused thereby, nor shall the Lease be void
or voidable, but, rather, the Lease Term shall commence upon, and the
Commencement Date shall be, the date that possession of the Premises is so
tendered to Tenant (except for Tenant-caused delays which shall not be deemed to
delay commencement of the Lease Term), and the Expiration Date described in
Paragraph 1.11 of this Lease shall be extended by an equal number of days.
3.2 Determination of Term Commencement Date. The dates upon which the
Initial Term commences and terminates pursuant to this Article 3 are herein
coiled the "Term Commencement Date" and the "Term Expiration Date,"
respectively. If the Term Commencement Date occurs on other than the first day
of the month, the Base Rent and any additional charges shall be prorated
according to the ratio that the number of the days of the month within the Term
bears to the total number of days in the month, and such amounts shall be paid
on the Term Commencement Date. As soon as practicable after the Term
Commencement Date is determined in accordance with this Lease, Landlord and
Tenant shall execute and deliver to each other an agreement confirming the Term
Commencement Date; provided, however, failure by the parties to execute and
deliver such agreement shall not affect determination of the Term Commencement
Date.
3.3 Option to Extend. Provided Tenant is not in default under this
Lease either on the date of exercise or at the end of the Term, Tenant shall
have an option to extend the Term of this Lease for one additional period of
three (3) years (the "Optional Term") on the expiration of the Initial Term,
upon the same terms and conditions as contained herein for the Initial Term,
except that the Base Rent to be paid by Tenant to Landlord for the Optional Term
shall be the then fair market rental value of the Premises to be determined as
set forth below. The option shall be exercised by written nonce setting forth
Tenant's election to exercise the option and must be delivered to Landlord not
less than ninety (90) days prior to the expiration of the Initial Term.
(A) Following Tenant's exercise of the option hereunder, Landlord
and Tenant shall negotiate for not more than thirty (30) days to agree on the
fair rental value of the Premises. If
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the parties are unable to agree, then within ten (10) days after the expiration
of such 30-day period, each party at its cost and by giving notice to the other
party, shall appoint M.A.I.-licensed appraiser with at least five (5) years
continuous full-time appraisal experience in the geographical area in which the
Premises are located, to appraise and determine the fair rental value. If a
party does not appoint an M.A.I.-licensed appraiser within ten (10) days after
the other party has given notice of the name of its M.A.I.-licensed appraiser,
the single M.A.I.-licensed appraiser appointed shall be the sole appraiser and
shall appraise and determine the fair rental value.
(B) If the two M.A.I.-licensed appraisers are so appointed by the
parties, they shall meet promptly and attempt to appraise and determine the fair
rental value. If they are unable to agree within ten (10) days after the second
M.A.I.-licensed appraiser has been appointed, they shall together select a third
M.A.I.-licensed appraiser meeting the qualifications stated in (A) above within
ten (10) days after the last date the two M.A.I. appraisers are given to
appraise and determine the fair rental value. If the two M.A.I.-licensed
appraisers are unable to agree on the third M.A.I.-licensed appraiser, either of
the parties, by ten (10) days written notice to the other party, may apply to
the presiding judge of the Superior Court for the City and County of San
Francisco for the selection of a third such M.A.I.-licensed appraiser, who shall
be a person who has not previously acted in any capacity for either party. Each
of the parties shall bear one-half (1/2) of the cost of appointing the third
M.A.I.-licensed appraiser, however selected.
(C) Within ten (10) days after the selection of the third
M.A.I.-licensed appraiser, each M.A.I.-licensed appraiser shall prepare its
determination of the fair rental value. The determination farthest from the
other two shall be eliminated, and the fair rental value for purposes hereof
shall be the average of the remaining two determinations. Each party shall pay
the fees and expenses of the M.A.I.-licensed appraiser appointed by such party
and fifty percent (50%) of the fees and expenses of the third M.A.I.-licensed
appraiser, if any. In no event shall the fair market rental value be less than
the Base Rent paid by Tenant during the last year of the Lease Term.
3.4 Term. The term of this Lease (the "Term") shall consist of the
Initial Term and the Optional Term, if any.
ARTICLE 4
BASE RENT
4.1 Payment; of Base Rent. Tenant shall initially pay to Landlord the
Base Rent in the amount specified in Paragraph 1.12 in the Definitions section.
Base Rent shall be payable to Landlord, at the address specified in the
Definitions section or such other place as Landlord may from time to time
designate, in equal monthly installments, prorated as to any partial month. All
Base Rent shall be payable, without notice, in advance on the first day of each
calendar month during the Term, without any deduction, offset, abatement or
diminution whatsoever, except that the Base Rent for the first seven (7) months
of the Term shall be paid upon execution of this Lease. Tenant's prepayment of
the Base Rent for the first seven (7) months is consideration for: (i) Tenant's
unwillingness to provide Landlord with personal guarantees of its shareholders;
(ii) Landlord's agreement to perform the improvement work specified in Paragraph
27.25; and (iii) Landlord's agreement to pay the commissions to Tenant's Broker
following. the mutual execution of this Lease by Tenant and Landlord.
Accordingly, in the event Tenant is in default of this Lease, Tenant waives any
and all right, interest or claim to the Prepaid Rent, as the parties agree that
such amount is intended to reimburse Landlord for the costs set forth in the
immediately preceding sentence, without prejudice to Landlord's remedies
elsewhere in this Lease or under the law.
ARTICLE 5
ADDITIONAL, CHARGES: OPERATING EXPENSES AND APPLICABLE TAXES
5.1 Payment of Additional Charges: Operating Expenses and Applicable
Taxes. In addition to the Base Rent, Tenant shall pay to Landlord Tenant's
Percentage Share of such Operating Expenses and Applicable Taxes (collectively,
the "Additional Charges") to the extent such Additional Charges exceed the
amount of Operating Expenses and Applicable Taxes payable with respect to the
Base Year. All Additional Charges shall be payable to the Landlord at the
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same time and place when the Base Rent is payable without any deduction, offset,
abatement or diminution whatsoever, and shall be deemed Rent for all purposes.
Landlord shall have the same remedies for a default in the payment of Additional
Charges as for a default in the payment of the Base Rent.
5.2 Definitions. As used herein,
(A) "Base Year" shall mean the calendar year 1997.
(B) "Applicable Taxes" shall mean all taxes, assessments and
charges levied on or with respect to the Building, the Real Property, or any
personal property of Landlord used exclusively in the operation thereof and
payable by Landlord. Applicable Taxes shall include, without limitation, all
general real property taxes and general and special assessments; assessments for
transit. police, fire, housing, other governmental services, or purported
benefits to the Building; service payments in lieu of taxes; and any tax, fee or
excise on the rent payable under any lease, that are now or hereafter levied on
or assessed against Landlord by, or payable by Landlord as a result of, the
requirements of the United States of America, the State of California, or any
political subdivision, public corporation, district or other political or public
entity, and shall also include any other tax, fee or other excise, however
described, that may be levied or assessed as a substitute for, or as an addition
to, in whole or in part,, any other taxes. Applicable Taxes shall not include
franchise, transfer, inheritance or capital stock taxes or income taxes measured
by the net income of Landlord from all sources, unless, due to a change in the
method of taxation, any of such Taxes are levied or assessed against Landlord as
a substitute for, in whole or in part, any other tax which would otherwise
constitute an Applicable Tax. Applicable Taxes shall also include reasonable
legal fees, costs and disbursements incurred in connection with proceedings to
contest, determine or reduce Applicable Taxes. Notwithstanding anything to the
contrary in this Lease. in the event that any Applicable Taxes are payable, or
may at the option of the taxpayer he paid in installments, such Applicable Taxes
shall be deemed to have been paid in installments over the longest possible
term, regardless of the method of actual payment by Landlord, ant Tenant's share
of such Applicable Taxes shall only include those installments which would
become due and payable during the Term.
(C) "Operating Expenses" shall mean all costs, fees,
disbursements and expenses paid or incurred by or on behalf of Landlord in the
operation, ownership, maintenance, insurance, management, replacement and repair
of the Building (excluding Applicable Taxes) including without limitation:
(i) Premiums for property, earthquake, casuals,
liability, rent interruption or other types of insurance carried by Landlord.
(ii) Salaries, wages and other amounts paid or
payable to personnel including the Building manager, superintendent, operation
and maintenance staff, and other employees of Landlord involved in the
maintenance and operation of the Building, including contributions and premiums
towards fringe benefits, unemployment, disability and worker's compensation
insurance, pension plan contributions and similar premiums and contributions and
the total charges of any independent contractors or property managers engaged in
the operation, repair, care, maintenance and cleaning of any portion of the
Building.
(iii) Cleaning expenses, including without limitation
janitorial services, window cleaning, and garbage and refuse removal.
(iv) Landscaping expenses, including without
limitation irrigating, trimming, fertilizing, and replacing plants.
(v) Heating, ventilating, air conditioning and
steam/utilities expenses, including fuel, gas, electricity, water, sewer,
telephone, and other services.
(vi) Subject to the provisions of Paragraph 5.2(C)
(x) below, the cost of maintaining, operating, repairing and replacing
components of equipment or machinery, including without limitation heating,
refrigeration, ventilation, electrical, plumbing, mechanical, elevator,.
escalator, sprinklers, fire, life safety, security and energy management
systems, including service contracts, maintenance contracts, supplies and parts.
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(vii) Other items of repair or maintenance of
elements of the Building.
(viii) The cost of the rental of any machinery or
equipment and the cost of supplies used in the maintenance and operation of the
Building.
(ix) Audit fees and the cost of accounting services
incurred in the preparation of statements referred to in this Lease and
financial statements, and in the computation of the rents and charges payable by
tenants of the Building.
(x) The costs of improvements, repairs, or
replacements to the Building or the equipment or machinery used in connection
with the Building if the capital improvement is made after the date of this
Lease and is intended to reduce Operating Expenses; provided, however, any such
costs which are properly charged to a capital account shall not be included in
Operating Expenses in a single year but shall instead be amortized over their
useful lives, as determined by the Landlord in accordance with generally
accepted accounting principles, and only the annual amortization amount shall be
included in the Operating Expenses for a particular year.
(xi) Legal fees and expenses, including, but not
limited to, such expenses that relate to seeking or obtaining reductions in or
refunds of Property Taxes, or components thereof.
5.3 Adjustment Procedure: Estimates. The Additional Charges specified
in Paragraph 5.1 shall be determined and paid as follows:
(A) During each calendar year subsequent to the Base Year,
Landlord shall give Tenant written notice of its estimate of any increased
amounts payable under Paragraph 5.1 for that calendar year. On or before the
first day of each calendar month during the calendar year, Tenant shall pay to
Landlord one-twelfth (1/12th) of such estimated amounts; provided, however,
that, not more often than quarterly, Landlord may, by written notice to Tenant,
revise its estimate for such year, and subsequent payments by Tenant for such
year shall be based upon such revised estimate.
(B) Within ninety (90) days after the close of each calendar year
or as soon thereafter as is practicable, Landlord shall deliver to Tenant a
statement of that year's actual Applicable Taxes and Operating Expenses, as
determined and certified by Landlord (the "Landlord's Statement") and such
Landlord's Statement shall be binding upon Landlord and Tenant, except as
provided in Paragraph 5.4 below. If the amount of the actual Tax and Operating
Expenses is more than the estimated payments for such calendar year made by
Tenant, Tenant shall pay the deficiency to Landlord upon receipt of Landlord's
Statement. If the amount of the actual Tax and Operating Expenses is less than
the estimated payments for such calendar year made by Tenant, any excess shall
be credited against Rent (as hereinafter defined) next payable by Tenant under
this Lease or, if the Lease Term has expired, any excess shall be paid to
Tenant. No delay in providing the statement described in this subparagraph (B)
shall act as a waiver of Landlord's right to payment under Paragraph 5.1.
(C) If this Lease shall terminate on a day other than the end of
a calendar year, the amount of the Tax and Operating Expense Adjustment to be
paid pursuant to Paragraph 5.1 that is applicable to the calendar year in which
such termination occurs shall be prorated on the basis of the number of days
from January 1 of the calendar year to the termination date bears to 365. The
termination of this Lease shall not affect the obligations of Landlord and
Tenant pursuant to Paragraph 5.1 to be performed after such termination.
5.4 View of Landlord's Statement. Provided that Tenant is not then in
default under this Lease and provided further that Tenant strictly complies with
the provisions of this Article 5, Tenant shall have the right, once each
calendar year, to reasonably review supporting data for any portion of a
Landlord's Statement that Tenant claims is incorrect, in accordance with the
following procedure:
(A) Tenant shall, within thirty (30) business days after any
such Landlord's Statement is delivered, deliver a written notice to Landlord
specifying the portions of the Landlord's Statement that are claimed to be
incorrect, and Tenant shall simultaneously pay to Landlord all amounts due from
Tenant to Landlord as specified in the Landlord's Statement. Except as expressly
set forth in subsection (C) below, in no event shall Tenant be entitled to
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withhold, deduct, or offset any monetary obligation of Tenant to Landlord under
the Lease (including without limitation, Tenant's obligation to make all
payments of Base Rent and all payments of Tenant's Tax and Operating Expense
Adjustment) pending the completion of and regardless of the results of any
review of records under this paragraph. The right of Tenant under this paragraph
may only be exercised once for any Landlord's Statement, and if Tenant fails to
meet any of the above conditions as a prerequisite to the exercise of such
right, the right of Tenant under this paragraph for a particular Landlord's
Statement shall be deemed waived.
(B) Tenant acknowledges that Landlord maintains its records for
the Building at Landlord's attorneys' offices and Tenant agrees that any review
of records under this section shall be at the sole expense of Tenant. Tenant
acknowledges and agrees that any records reviewed under this paragraph
constitute confidential information of Landlord, which shall not be disclosed to
anyone other than the accountants performing the review and the principals of
Tenant who receive the results of the review. The disclosure of such information
to any other person, whether or not caused by the conduct of Tenant, shall
constitute a material breach of this Lease.
(C) Any errors disclosed by the review shall be promptly
corrected by Landlord, provided, however, that if Landlord disagrees with any
such claimed errors, Landlord shall have the right to cause another review to be
made by an independent firm of certified public accountants of national
standing. In the event that the results of the review of records [taking into
account, if applicable, the results of any additional review caused by Landlord]
reveal that Tenant has overpaid obligations for a preceding period, the amount
of such overpayment shall be credited against Tenant's subsequent installment
obligations to pay the estimated Tax and Operating Expense Adjustment. In the
event that such results show that Tenant has underpaid its obligations for a
preceding period, Tenant shall be liable for Landlord's accounting fees, and the
amount of such underpayment shall be paid by Tenant to Landlord with the next
succeeding installment obligation of estimated Tax and Operating Expense
Adjustment.
5.5 Late Charge. Other remedies for non-payment of Rent
notwithstanding, if any installment of Monthly Base Rent or any other sum due
from Tenant shall not be received by Landlord within ten (10) days after such
amount shall be due, Tenant shall pay to Landlord an additional sum equal to
five percent (5%) of the amount overdue as a late charge. The parties agree that
(a) such late charge represents a fair and reasonable estimate of the costs
Landlord will incur in processing each delinquent payment by Tenant and, (b)
that such late charge shall be paid to Landlord as liquidated damages for each
delinquent payment.
ARTICLE 6
ADDITIONAL TAXES
6.1 Reimbursement. Tenant shall reimburse Landlord upon demand for any
and all taxes required to be paid by Landlord (subject to the same exclusions
provided for in Paragraph 5.2{B) in connection with Applicable Taxes), whether
or not now customary or within the contemplation of the parties hereto, when:
(A) Said taxes are measured by or reasonably attributable to
the cost or value of Tenants' equipment, furniture, fixtures and other personal
property located in the Premises or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, regardless of whether
title to such improvements shall be vested in Tenant or Landlord;
The portion of any taxes payable by Tenant pursuant to this
paragraph and other tenants of the Building pursuant to similar provisions in
their leases shall be excluded from Applicable Taxes for purposes of computing
Tenant's Tax Share thereof.
ARTICLE 7
SECURITY DEPOSIT
Upon the execution of this Lease, Tenant shall deposit with Landlord
the Security Deposit described in Paragraph 1.14 above. The Security Deposit is
made by Tenant to secure the
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faithful performance of all the terms, covenants and conditions of this Lease to
be performed by Tenant. If Tenant shall default with respect to any covenant or
provision hereof, Landlord may use, apply or retain all or any portion of the
Security Deposit to cure such default or to compensate Landlord for any loss or
damage which Landlord may suffer thereby. If Landlord so uses or applies all or
any portion of the Security Deposit, Tenant shall immediately upon written
demand deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to the full amount hereinabove stated. Landlord shall not be
required to keep the Security Deposit separate from its general accounts and
Tenant shall not be entitled to interest on the Security Deposit. Within thirty
(30) days after the expiration of the Lease Term and the vacation of the
Premises by Tenant, the Security Deposit, or such part as has not been applied
to cure the default, shall be returned to Tenant.
ARTICLE 8
USE OF PREMISES
8.1 Tenant's Permitted Use. Tenant shall use the Premises only for
Tenant's Permitted Use as set forth in Paragraph 1.15 above and shall not use or
permit the Premises to be used for any other purpose. Tenant shall, at its sole
cost and expense, obtain all governmental licenses and permits required to allow
Tenant to conduct Tenant's Permitted Use.
8.2 Compliance With Laws and Other Requirements.
(A) Tenant shall not use the Premises, or permit the Premises to
be used, in any manner which: (a) violates any law, ordinance, regulation or
directive of any governmental authority having jurisdiction, including without
limitation any Certificate of Occupancy, or any covenant, condition or
restriction affecting the Building or the Premises; (b) causes or is reasonably
likely to cause damage to the Building or the Premises: c) violates a
requirement or condition of any fire and extended insurance policy covering the
Building and/or the Premises, or increases the cost of such policy; (d)
constitutes or is reasonably likely to constitute a nuisance, annoyance or
inconvenience to other tenants or occupants of the Building or interferes with
the use and occupancy of any portion of the Building for other tenants or
occupants; (e) impairs or is reasonably likely to impair the proper maintenance,
operation or repair of the Building or its equipment, facilities or systems; (f)
interferes with, or is reasonably likely to interfere with, the transmission or
reception of microwave, television, radio, telephone. or other communication
signals by antennae or other facilities located in the Building; or (g) violates
the Rules and Regulations described in Article 21.
(B) In addition to any other amounts payable by Tenant to
Landlord hereunder, Tenant shall pay to Landlord, as and when billed by Tenant
and as additional rent, Tenant's Percentage Share of the cost of any
improvements, capital expenditures, repairs or replacements to the Building, or
any equipment or machinery used in connection with the Building, if any such
item is required under governmental laws, regulations, ordinances, or
interpretations thereof, which were not applicable to the Building at the time
the Building was constructed; provided, however, that any such costs which are
properly charged to a capital account shall not be payable in a single year but
shall instead by amortized over their useful lives, as determined by the
Landlord in accordance with generally acceptable accounting principles, and only
the annual amortization amount (prorated based on the number of days of the
Lease term in the calendar year) shall be payable by the Tenant with respect to
any calendar year.
(C) Compliance With ADA Requirements. Without limiting the
generality of the foregoing, Tenant shall promptly comply with all requirements
of the Americans with Disabilities Act and the regulations promulgated
thereunder in effect from time to time ("ADA Requirements").
Tenant shall have exclusive responsibility for
compliance with ADA Requirements pertaining to the interior of the Premises,
including for the design and construction of the access thereto and egress
therefrom. Landlord shall have responsibility for compliance with ADA
Requirements which affect the common areas of the Building, subject to Tenant's
obligation to pay for its share of the expense of such compliance pursuant to
Article 5 of this Lease. Tenant shall comply promptly with any direction of any
governmental authority having jurisdiction which imposes any duty upon Tenant or
Landlord with respect to the Premises or with respect to the use or occupation
thereof, and Tenant agrees to furnish Landlord with a copy of
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any such direction promptly after receipt of the same. In addition. Tenant shall
comply with any reasonable plan adopted by Landlord which is designed to fulfill
the requirements of any Laws, including ADA Requirements.
Should compliance by Tenant with this Paragraph
require Landlord's consent pursuant to Article 11, Tenant shall promptly seek
such consent, provide the assurances and documents required by said Article and,
following receipt of such consent, promptly comply with the provisions of such
Article and this Paragraph.
If Tenant fails to comply as required in this
Paragraph, after notice to Tenant, Landlord may comply or cause compliance, in
which case Tenant shall reimburse Landlord upon demand for Landlord's costs
incurred in connection therewith.
8.3 Hazardous Materials.
(A) No Hazardous Materials, as defined herein, shall he Handled,
as also defined herein, upon, about, above or beneath the Premises or any
portion of the Building by or on behalf of Tenant, its subtenants or its
assignees, or their respective contractors, clients, officers, directors,
employees, agents, or invitees. Any such Hazardous Materials so Handled shall be
known as Tenant's Hazardous Materials. Notwithstanding the foregoing, normal
quantities of those Hazardous Materials customarily used in the conduct of
general administrative and executive office activities (e.g., copier fluids and
cleaning supplies; may be used and stored at the Premises without Landlord's
prior written consent, but only in compliance with all applicable Environmental
Laws, as defined herein.
(B) Notwithstanding the obligation of Tenant to indemnify
Landlord pursuant to this Lease, Tenant shall, at its sole cost and expense,
promptly take all actions required by any federal, state or local governmental
agency or political subdivision. or necessary for Landlord to make full economic
use of the Premises or any portion of the Building, which requirements or
necessity arises from the Handling of Tenant's Hazardous Materials upon, about,
above or beneath the Premises or any portion of the Building. Such actions shall
include, but not be limited to, the investigation of the environmental condition
of the Premises or any portion of the Building, the preparation of any
feasibility studies or reports and the performance of any cleanup, remedial,
removal or restoration work. Tenant shall take all actions necessary to restore
the Premises or any portion of the Building to the condition required under
applicable Environmental Laws. Tenant shall nevertheless obtain Landlord's
written approval prior to undertaking any actions required by this Section,
which approval shall not be unreasonably withheld so long as such actions would
not potentially have a material adverse long-term or short-term effect on the
Premises or any portion of the Building.
(C) "Environmental Laws" means and includes all new and hereafter
existing statutes, laws, ordinances, codes, regulations, rules, rulings, orders.
decrees, directives, policies and requirements by any federal, state or local
governmental authority regulating, relating to, or imposing liability or
standards of conduct concerning public health and safety or the environment.
(D) "Hazardous Materials" means: (a) any material or substance:
(i) which is defined or becomes defined as a "hazardous substance," "hazardous
waste." "infectious waste," "chemical mixture or substance," or "air pollutant"
under Environmental Laws; (ii) containing petroleum, crude oil or any fraction
thereof which is liquid at standard conditions of temperature and pressure;
(iii) containing polychlorinated biphenyls (PCB's); (iv) containing asbestos;
(v) which is radioactive; or (b) any other pollutant or contaminant or
hazardous, toxic, flammable or dangerous chemical, waste, material or substance,
as all such terms are used in their broadest sense, and defined, regulated or
become regulated by Environmental Laws, or which cause a nuisance upon or waste
to the Premises or any portion of the Building.
(E) "Handle," "Handled," or "Handling" shall mean any
installation, handling, generation, storage, treatment, use, disposal,
discharge, release, manufacture, refinement, presence, migration, emission,
abatement, removal, transportation. or any other activity of any type in
connection with or involving Hazardous Materials.
(F) Tenant and Tenant's officers and directors agree to protect,
indemnify, hold harmless and defend Landlord and any mortgagee or ground lessor,
and each of their respective partners, directors, officers, agents and
employees, successors and assigns, regardless of any
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negligence imputed to Landlord as owner of the real property involved in an
injury, from and against any and all environmental damages which arise from: (i)
the Handling of any Tenant's Hazardous Materials, as defined pursuant to
Paragraph 8.3 or (ii) the breach of any of tee provisions of this Lease. For the
purpose of this Lease, "environmental damages" shall mean (a) all claims,
judgments, damages, penalties, fines, costs, liabilities, and losses (including
without limitation, diminution in the value of the Premises or any portion of
the Building, damages for the loss of or restriction on use of rentable or
usable space or of any amenity of the Premises or any portion of the Building,
and from any adverse impact of Landlord's marketing of space); (b) all
reasonable sums paid for settlement of claims, attorneys' fees, consultants'
fees and experts' fees; and (c) all costs incurred by Landlord in connection
with investigation or remediation relating to the Handling of Tenant's Hazardous
Materials required by Environmental Laws, To the extent that Landlord is
strictly liable under any Environmental Laws. Tenant's obligation to Landlord
and the other indemnities under the foregoing indemnification shall likewise be
without regard to fault on Tenant's part with respect to the violation of any
Environmental Law which results in liability to the indemnitee. Tenant's
obligations and liabilities pursuant to this Paragraph 8.3 shall survive the
expiration or earlier termination of this Lease.
ARTICLE 9
UTILITIES AND SERVICES
9.1 Building Services. Landlord agrees to furnish or cause to be
furnished to the Premises the following utilities and services, subject to the
conditions and standards set forth herein:
(A) Non-attended automatic elevator service.
(B) During Business Hours, Monday through Friday, such air
conditioning, heating and ventilation as are reasonably required for the
comfortable use and occupancy of the Premises; provided, however, that if Tenant
shall require heating, ventilation or air conditioning in excess of that which
Landlord shall be required to provide hereunder, Landlord may provide such
additional heating, ventilation or air conditioning at such rates and upon such
additional conditions as shall be determined by Landlord from time to time.
(C) At all reasonable times, electric current as required for
building standard lighting and fractional horsepower office machines; provided,
however, that: (i) without Landlord's consent, Tenant shall not install, or
permit the installation, in the Premises of any computers, word processors,
electronic date processing equipment or other type of equipment or machines
which will increase Tenant's use of electric current in excess of that which
Landlord is obligated to provide hereunder (provided, however, that the
foregoing shall not preclude the use of personal computers or similar office
equipment); (ii) if Tenant shall require electric current which may disrupt the
provision of electrical service to other tenants, Landlord may condition its
consent upon Tenant's payment of the cost of installing and providing any
additional facilities required to furnish such excess power to the Premises and
upon the installation in the Premises of electric current meters to measure the
amount of electric current consumed, in which latter event Tenant shall pay for
the cost of such meter(s) and the cost of installation, maintenance and repair
thereof, as well as for all excess electric current consumed at the rates
charged by the applicable local public utility, plus a reasonable amount to
cover the additional expenses incurred by Landlord in keeping account of the
electric current so consumed; and (iii) if Tenant's increased electrical
requirements will materially affect the temperature level in the Premises or the
Building, Landlord's consent may be conditioned upon Tenant's requirement to pay
such amounts as will be incurred by Landlord to install and operate any
machinery or equipment necessary to restore the temperature level to that
otherwise required to be provided by Landlord, including but not limited to the
cost of modifications to the air conditioning system. Landlord shall not, in any
way, be liable or responsible to Tenant for any loss or damage or expense which
Tenant may incur or sustain if, for any reasons beyond Landlord's control,
either the quantity or character of electric service is changed or is no longer
available or suitable for Tenant's requirements. Tenant covenants that at all
times its use of electric current shall never exceed the capacity of the
feeders, risers or electrical installations of the Building. If submetering of
electricity in the Building will not be permitted under future laws or
regulations, the Rent will then be equitably and periodically adjusted to
include an additional payment to Landlord reflecting the cost to Landlord for
furnishing electricity to Tenant in the Premises.
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(D) Water for drinking and rest room purposes.
(E) Reasonable janitorial and cleaning services, provided that
the Premises-are used exclusively for office purposes and are kept reasonably in
order by Tenant. If the Premises are not used exclusively as offices or if the
Tenant elects and Landlord consents, the Premises shall be kept clean and in
order by Tenant, at Tenant's expense, to the satisfaction of Landlord and by
persons approved by Landlord; and, in all events, Tenant shall pay to Landlord
the cost of removal of Tenant's refuse and rubbish, to the extent that the same
exceeds the refuse and rubbish attendant to normal office usage.
Any amounts which Tenant is required to pay to Landlord pursuant to
this Paragraph 9.1 shall be payable upon demand by Landlord and shall constitute
additional rent.
9.2 Interruption of Services. Landlord shall not be liable for any
failure to furnish, stoppage of, or interruption in furnishing any of the
services or utilities described in Paragraph 9.1, when such failure is caused by
accident, breakage, repairs, strikes, lockouts, labor disputes, labor
disturbances, governmental regulation, civil disturbances, acts of war,
moratorium or other governmental action, or any other cause beyond Landlord's
reasonable control, and, in such event, Tenant shall not be entitled to any
damages nor shall any failure or interruption xxxxx or suspend Tenant's
obligation to pay Base Rent and additional rent required under this Lease or
constitute or be construed as a constructive or other eviction of Tenant.
Further, in the event any governmental authority or public utility promulgates
or revises any law, ordinance, rule or regulation, or issues mandatory controls
or voluntary controls relating to the use or conservation of energy, water, gas,
light or electricity, the reduction of automobile or other emissions, or the
provision of any other utility or service, Landlord may take any reasonably
appropriate action to comply with such law, ordinance, rule, regulation,
mandatory control or voluntary guideline without affecting Tenant's obligations
hereunder.
ARTICLE 10
MAINTENANCE AND REPAIRS
10.1 Landlord Repairs. Landlord shall not be required to make any
improvements, replacements or repairs of any kind or character to the Premises
during the Term of this Lease except as are set forth in this Section. Landlord
shall maintain only the roof, foundation, parking (if any) and Common Areas, and
the structural soundness of the exterior walls. Landlord's cost of maintaining
and repairing the items set forth in this Section are subject to the additional
Rent provisions in Article 5. Landlord shall not be liable to Tenant, except as
expressly provided in this Lease, for any damage or inconvenience, and Tenant
shall not be entitled to any damages nor to any abatement or reduction of Rent
by reason of any repairs, alterations or additions made by Landlord under this
Lease. Except for Landlord's obligations under this Paragraph, it is intended by
the parties that Landlord shall have no obligation, in any manner whatsoever, to
repair and maintain the Premises, nor the Building located thereon, nor the
equipment therein, whether structural or non-structural, all of which
obligations are intended to be Tenant's obligations under this Lease. Tenant
expressly waives the benefit of any statute now or hereinafter in effect which
would otherwise afford Tenant the right to make repairs at Landlord's expense or
to terminate this Lease because of Landlord's failure to keep the Premises in
good order, condition and repair.
10.2 Tenant Repairs. Tenant, at its own cost and expense, shall
maintain the Premises in a first-class condition (except for the items that are
the responsibility of Landlord under Paragraph 10.1). Without limiting the
generality of the foregoing, Tenant shall maintain and keep in good repair
(including replacement when necessary): (a) the interior of the Premises,
including walls, floors and ceilings; (b) all windows and doors, including
frames, glass, skylights, molding and hardware; (c) all wires and plumbing
within the Premises which serve the Premises {as distinguished from those
serving the Building generally); (d) all signs. air conditioning and heating
equipment, mechanical doors and other mechanical equipment situated on or in the
Premises or serving the Premises (as distinguished from those serving the
Property generally); and (e) those utility facilities that are not Landlord's
responsibility hereunder. Tenant shall further make all other repairs to the
Premises made necessary by Tenant's failure to comply with its obligations under
this Section. All fixtures installed by Tenant shall be new or shall have been
completely and recently reconditioned.
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10.3 Request for Repairs. All requests for repairs or maintenance that
are the responsibility of the Landlord pursuant to any provision of this Lease
must be made in writing to Landlord at the address in Paragraph 1.17.
10.4 Tenant Damages. Tenant shall not allow any damage to be committed
on any portion of the Premises or Property, and at the termination of this
Lease, by lapse of time or otherwise, Tenant shall deliver the Premises to
Landlord in as good condition as existed at the Commencement Date of this Lease,
ordinary wear and tear excepted. The cost and expense of any repairs necessary
to restore the condition of the Premises shall be borne by Tenant.
Notwithstanding anything to the contrary contained herein, Tenant shall leave
all electrical distribution systems, lighting fixtures, space heaters, air
conditioning, plumbing and other power systems upon the Premises in good
operating condition. In the event Tenant fails to perform Tenant's obligations
of repairs and maintenance under this Section, Landlord may at its option, but
shall not be required to, enter upon the Premises after ten (10) days prior
written notice to Tenant (except in case of an emergency, in which case no
notice shall be required), to perform such obligations on Tenant's behalf and to
place the Premises in good order, condition and repair, and Tenant shall pay the
cost thereof, together with any interest thereon at the maximum rate then
allowed by law, as Additional Rent to Landlord.
10.5 Landlord's Rights. Landlord and its contractors shall have the
right, at all reasonable times, to enter upon the Premises to make any repairs
to the Premises or the Building reasonably required or deemed reasonably
necessary by Landlord and to erect such equipment, including scaffolding, as is
reasonably necessary to effect such repairs.
ARTICLE 11
ALTERATIONS, ADDITIONS AND IMPROVEMENTS
11.1 Landlord's Consent; Conditions. Tenant shall not make or permit to
be made any alterations, additions, or improvements in or to the Premises
("Alterations") without the prior written consent of Landlord. Landlord may
impose as a condition to such consent such requirements as Landlord in its sole
discretion deems necessary or desirable including without limitation: Tenant's
submission to Landlord, for Landlord's prior written approval, of all plans and
specifications relating to the Alterations; Landlord's prior written approval of
the time or times when the Alterations are to be performed; Landlord's prior
written approval of the contractors and subcontractors performing work in
connection with the Alterations: Tenant's receipt of all necessary permits and
approvals from all governmental authorities having jurisdiction prior to the
construction of the Alterations; Tenant's written notice of whether the
Alterations include the Handling of any Hazardous Materials, pursuant to Article
8; Tenant's delivery to Landlord of such bonds and insurance as Landlord shall
reasonably require; and Tenant's payment to Landlord of all costs and expenses
incurred by Landlord because of Tenant's Alterations, including but not limited
to costs incurred in reviewing the plans and specifications for, and the
progress of, the Alterations.
11.2 Performance of Alterations Work. All work relating to the
Alterations shall be performed in compliance with the plans and specifications
approved by Landlord, all applicable laws, ordinances, rules, regulations and
directives of all governmental authorities having jurisdiction (including
without limitation Title 24 of the California Administrative Code) and the
requirements of all carriers of insurance on the Premises and the Building, the
Board of Underwriters, Fire Rating Bureau, or similar organization. All work
shall be performed in a diligent, first class manner and so as not to
unreasonably interfere with any other tenants or occupants of the Building. All
costs incurred by Landlord relating to the Alterations shall be payable to
Landlord by Tenant as additional rent upon demand.
11.3 Liens. Tenant shall pay when due all costs for work performed and
materials supplied to the Premises. Tenant shall keep Landlord, the Premises and
the Building free from all liens, stop notices and violation notices relating to
the Alterations or any other work performed for, materials furnished to or
obligations incurred by Tenant and Tenant shall protect, indemnify, hold
harmless and defend Landlord, the Premises and the Building of and from any and
all loss, cost, damage, liability and expense, including attorneys' fees,
arising out of or related to any. such liens or notices. Further, Tenant shall
give Landlord not less than seven (7) business days prior written notice before
commencing any Alterations in or about the Premises to permit Landlord to post
appropriate notices of nonresponsibility. Tenant shall secure, at Tenant's sole
expense, a
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completion and lien indemnity bond satisfactory to Landlord for such work, and
during the progress of such work, Tenant shall, upon Landlord's request, furnish
Landlord with sworn contractor's statements and lien waivers covering all work
theretofore performed. Tenant shall satisfy or otherwise discharge all liens,
stop notices or other claims or encumbrances within ten (10) days after Landlord
notifies Tenant in writing that any such lien, stop notice, claim or encumbrance
has been flied. If Tenant fails to pay and remove such lien, claim or
encumbrance within such ten {10) days. Landlord, at its election, may pay and
satisfy the same and in such event the sums so paid by Landlord, with interest
from the date of payment at the rate set forth in Paragraph 5.5 hereof for
amounts owed Landlord by Tenant shall be deemed to be additional rent due and
payable by Tenant at once without notice or demand.
11.4 Lease Termination. Except as provided in this section, upon
termination of this Lease Tenant shall surrender the Premises to Landlord in the
same condition as when received, subject to reasonable wear and tear. All
Alterations shall become a part of the Premises and shall become the property of
Landlord upon the expiration or earlier termination of this Lease, unless
Landlord shall, by written notice given to Tenant, require Tenant to remove some
or all of Tenant's Alterations, in which event Tenant shall promptly remove the
designated Alterations and shall promptly repair any resulting damage, all at
Tenant's sole expense. All business and trade fixtures, machinery and equipment,
furniture, movable partitions and items of personal property owned by Tenant or
installed by Tenant at its expense in the Premises shall be and remain the
property of Tenant; upon the expiration or sooner termination of this Lease,
Tenant shall, at its sole expense, remove all such items and repair any damage
to the Premises or the Building caused by such removal. If Tenant fails to
remove any such items or repair such damage promptly after the expiration or
sooner termination of the Lease, Landlord may, but need not, do so with no
liability to Tenant, and Tenant shall pay Landlord the cost thereof upon demand.
ARTICLE 12
INDEMNIFICATION
12.1 Waiver of Liability. Landlord shall not be liable for and Tenant
hereby waives all claims against Landlord: for damage to any property or injury,
illness or death of any person in, upon, or about the Premises, the Building
and/or the Real Property arising at any time and from any cause whatsoever other
than damages directly caused solely by the gross negligence or wilful misconduct
of Landlord or its employees or agents. Without limiting. the generality of the
foregoing, Landlord shall not be liable for any damage or damages of any nature
whatsoever to persons or property caused by explosion, fire, theft or breakage,
by sprinkler, drainage or plumbing systems, by failure for any cause to supply
adequate drainage, by the interruption of any public utility or service, by
steam, gas, water, rain or other substances leaking, issuing or flowing into any
part of the Premises, by natural occurrence, acts of a public enemy, riot,
strike, insurrection, war, court order, requisition or order of governmental
body or authority, or for any damage or inconvenience which may arise through
repair, maintenance or alteration of any part of the Building, or by anything
done or omitted to be done by any tenant, occupant or person in the Building. In
addition, Landlord shall not be liable for any loss or damage for which Tenant
is required to insure, nor for any loss or damage resulting from any
construction, alterations or repair by Landlord or by others.
12.2 Indemnification. Tenant shall defend, indemnify and hold harmless
Landlord and Landlord's employees and agents and the Lessor under any ground or
underlying leases against and from any and all claims, suits, proceedings,
orders, actions, losses, costs, damages, expenses, fines, penalties, judgments
and other liabilities (including without limitation court costs and reasonable
attorneys' fees) incurred in connection with or arising from: (a) any default by
Tenant in the observance or performance of any of the terms, covenants or
conditions of this Lease to be observed or performed by Tenant, including
without limitation the provisions of Article 8; (b) the use, possession or
occupancy or manner of use or occupancy of the Premises by Tenant or any person
claiming by, through or under Tenant; or (c) any injury to persons or property
sustained in or about the Premises; or (d) any act or omission of Tenant or any
persons claiming by, or of their employees, contractors, agents, invitees or
licensees in, on or about the Premises or the Real Property, either prior to,
during, or after the expiration of the Term, including, without limitation, any
act or omission in the making or performance of any Alterations.
12.3 Survival. The provisions of this Article 12 shall survive the
expiration or sooner termination of this Lease.
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ARTICLE 13
INSURANCE
13.1 Property Insurance.
(A) At all times during the Lease Term, Tenant shall procure and
maintain, at its sole expense, "all-risk" property insurance, in an amount not
less than one hundred percent (100%) of the replacement cost covering (a) all
leasehold improvements in and to the Premises which are made at the expense of
Tenant; and (b) Tenant's trade figures, equipment and other personal property
from time to time situated in the Premises. The proceeds of such insurance shall
be used for the repair or replacement of the property so insured, except that if
not so applied or if this Lease is terminated following a casualty, the proceeds
applicable to the leasehold improvements shall be paid to Landlord and the
proceeds applicable to Tenant's personal property shall be paid to Tenant.
(B) At all times during the Lease Term, Tenant shall procure and
maintain business interruption insurance in such amount as will reimburse Tenant
for direct or indirect loss of earnings attributable to oil perils insured
against in Paragraph 12.2.
13.2 Liability Insurance.
(A) At all times during the Lease Term, Tenant shall procure and
maintain, at its sole expense, general liability insurance applying to the use
and occupancy of the Premises and the business operated by Tenant. Such
insurance shall have a minimum combined single limit of liability of at least
$1,000,000 per occurrence and a general aggregate limit of $2,000,000. All such
policies shall be written to apply to all bodily injury, property damage,
personal injury losses and shall be endorsed to include Landlord and its agents,
beneficiaries, partners, employees, and any deed of trust holder or mortgagee of
Landlord or any ground lessor as additional insureds. Such liability insurance
shall be primary and not excess or contributing to any other insurance as may be
available to the additional insureds.
(B) Prior to the sale, storage, use or giving away of alcoholic
beverages on or from the Premises by Tenant or another person, Tenant, at its
own expense, shall obtain a policy or policies of insurance issued by a
responsible insurance company and in a form acceptable to Landlord saving
harmless and protecting Landlord and the Premises against any and all damages,
claims, liens, judgments. expenses and costs arising under any present or future
law, statute, or ordinance of the State of California or other governmental
authority having jurisdiction of the Premises, by reason of any storage, sale,
use or giving away of alcoholic beverages on or from the Premises. Such policy
or policies of insurance shall have a minimum combined single limit of $1
million per occurrence and shall apply to bodily injury, fatal or nonfatal;
injury to means of support: and injury to property of any person. Such policy or
policies of insurance shall name the Landlord and its agents, beneficiaries,
partners, employees and any mortgagee of Landlord or any ground lessor of
Landlord as additional insureds.
13.3 Workers' Compensation Insurance. At all times during the Lease
Term, Tenant shall procure and maintain Workers' Compensation Insurance in
accordance with the laws of the State of California, and Employer's Liability
insurance with a limit not less than'$1,000,000 Bodily Injury Each Accident;
$1,000,000 Bodily Injury By Disease - Each Person; and $1,000,000 Bodily Injury
to Disease - Policy Limit.
13.4 Policy Requirements. All insurance required to be maintained by
Tenant shall be issued by insurance companies authorized to do insurance
business in the State of California and rated not less than A-VII in Best's
Insurance Guide. A certificate of insurance (or, at Landlord's option, copies of
the applicable policies) evidencing the insurance required under this Article
shall be delivered to Landlord prior to the Commencement Date. No such policy
shall be subject to cancellation or modification without thirty (30) days prior
written notice to Landlord and to any deed of trust holder, mortgagee or ground
lessor designated by Landlord to Tenant. Tenant shall furnish Landlord with a
replacement certificate with respect to any insurance not less than thirty (30)
days prior to the expiration of the current policy. Tenant shall have the right
to provide the insurance required by this Article pursuant to blanket policies,
but only if such blanket policies expressly provide coverage to the Premises and
the Landlord as required by this Lease.
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13.5 Waiver of Subrogation. Each party hereby waives any right of
recovery against the other for injury or loss due to hazards covered by
insurance, to the extent of the injury or loss covered thereby. Any policy of
insurance to be provided by Tenant pursuant to this Article shall contain a
clause denying the insurer any right of subrogation against Landlord.
13.6 Failure to Insure. If Tenant fails to maintain any insurance which
Tenant is required to maintain pursuant to this Article, Tenant shall be liable
to Landlord for any loss or cost resulting from such failure to maintain.
Landlord shall have the right in its sole discretion, to procure and maintain
such insurance which Tenant is required to maintain hereunder and the cost
thereof shall be deemed additional rent due and payable by Tenant. Tenant may
not self-insure against any risks required to be covered by insurance without
Landlord's prior written consent.
ARTICLE 14
DAMAGE OR DESTRUCTION
14.1 Landlord's Restoration. Tenant shall promptly notify Landlord of
any damage to the Premises resulting from fire or any other casualty. Subject to
the remaining provision of this Article 14, if the Premises or the Building are
damaged by fire or other casualty insured against by Landlord's fire and all
risk, coverage insurance policy, and sufficient proceeds (apart from any
applicable deductible) are made available to Landlord to fully cover the cost of
repair, Landlord shall promptly undertake such repairs, so long as such repairs
can, in Landlord's opinion, be made within one hundred-eighty (180) days after
the date of such damage: in such event, this Lease shall remain in full force
and effect. If (a) such repairs cannot, in Landlord's opinion, be made within
one hundred eighty (180) days after the date of such damage, or (b) insufficient
proceeds are made available to Landlord to fully cover the cost of repair, or of
the casualty is not covered by Landlord's insurance policies, then Landlord may
elect, by written, notice to Tenant given within thirty (30) days after the date
of such damage, to either restore or repair such damage. in which event this
Lease shall continue in full force and effect, or terminate this Lease as of a
date specified in such notice, which date shall not be less than thirty (30) nor
more than sixty (60) days after the date such notice is given. In calculating
the cost of repair, Landlord shall be entitled to take into account the cost of
bringing the damaged, destroyed or remaining portions of the Premises and the
Building into compliance with any then-applicable building codes, governmental
regulations and Laws (including ADA Requirements;
14.2 Rent Abatement. If such fire or other casualty shall have damaged
the Premises, and if such damage is not the result of the negligence or willful
misconduct of Tenant or any persons claiming by, through or under Tenant or any
of their employees, agents, contractors, invitees or licensees, then during the
period a portion of the Premises is rendered unusable by such damage Tenant
shall be entitled to a reduction in the Base Rent and Additional Charges in the
proportion that the rentable area of the Premises rendered unusable as a result
of such damage bears to the total rentable area of the Premises. If any damage
to the Premises is due to the negligence or willful misconduct of Tenant or any
of the other parties described in the preceding sentence, then there shall be no
abatement of the Base Rent or Additional Charges by reason of such damages,
unless Landlord is reimbursed for such abatement of the Base Rent or Additional
Charges pursuant to any rental insurance policies that Landlord may, in its sole
discretion, elect to carry.
14.3 Tenant's Restoration. Notwithstanding any other provision of this
Lease, Landlord shall not be required to repair any injury or damage to or to
make any repairs to or replacements of any Alterations or any other improvements
installed in the Premises by Tenant, other than Building Standard Work, and
Tenant shall, at Tenant's sole cost and expense, repair and restore all
Non-Building Standard Work and such Alterations and improvements in the same
condition as existed prior to such event. Except as provided in Paragraph 14.2.
Tenant shall not be entitled to any compensation or damages from Landlord for
damage to any Non-Building Standard Work, Alterations, or Tenant's Property, for
loss of use of the Premises or any part thereof, for any damage to or
interference with Tenant's business, loss of profits, or for any disturbance to
Tenant caused by any casualty or the restoration of the Premises following such
casualty.
14.4 Waiver of Right to Terminate. The provisions of this Lease,
including this Article 14, 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 any other portion of the Real Property, and any
statute or 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
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or obligations concerning damage or destruction in the 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 any other
portion of the Real Property. Tenant hereby specifically waives all rights to
terminate this Lease under said Civil Code sections or any similar provisions of
law.
14.5 Damage During Last Twenty-Four (24) Months. If the Building or the
Premises are damaged to any extent curing the test six (6) months of the Term.
Landlord may elect to terminate this Lease as provided in Paragraph 14.1.
ARTICLE 15
CONDEMNATION
15.1 Taking. If the entire Premises or so much of the Premises as to
render the balance unusable by Tenant shall be taken by condemnation, sale in
lieu of condemnation or in any other manner for any public or quasi-public
purpose (collectively "Condemnation"), this Lease shall terminate on the date
that title or possession to the Premises is taken by the condemning authority,
whichever is earlier.
15.2 Award. In the event of any Condemnation, the entire award for such
taking shall belong to Landlord, except that Tenant shall be entitled to
independently pursue a separate award relating to the loss of, or damage to,
Tenant's personal property and trade fixtures and Tenant's moving costs directly
associated with the taking. Tenant shall have no claim against Landlord or the
award for the value of any unexpired term of this Lease or otherwise.
15.3 Temporary Taking. No temporary taking of the Premises shall
terminate this Lease or entitle Tenant to any abatement of the Rent payable to
Landlord under this Lease; provided, further, that any award for such temporary
taking shall belong to Tenant to the extent that the award applies to any time
period during the Lease Term and to Landlord to the extent that the award
applies to any time period outside the Lease Term.
ARTICLE 16
ASSIGNMENT AND SUBLETTING
16.1 Restriction. Without the prior written consent of Landlord, Tenant
shall not, either voluntarily or by operation of law, assign, encumber, or
otherwise transfer this Lease or any interest herein, or sublet the Premises or
any part thereof, or permit the Premises to be occupied by anyone other than
Tenant or Tenant's employees. An assignment, subletting or other action in
violation of the foregoing. shall be void and, at Landlord's option, snail
constitute a material breach of this Lease. For purposes of this Section, an
assignment shall include any transfer of any interest in this Lease or the
Premises by Tenant pursuant to a merger, division, consolidation or liquidation,
or pursuant to a change in ownership of Tenant involving a transfer of voting
control in Tenant (whether by transfer of partnership interests, corporate stock
or otherwise). Notwithstanding anything contained in this Article to the
contrary, Tenant expressly covenants and agrees not to enter into any lease,
sublease, license, concession or other agreement for use, occupancy or
utilization of the Premises which provides for rental or other payment for such
use, occupancy or utilization based in whole or in part on the net income or
profits derived by any person from the property leased, used, occupied or
utilized (other than an amount based on a fixed percentage or percentages of
receipts or sales), and that any such purported lease, sublease, license,
concession or other agreement shall be absolutely void and ineffective as a
conveyance of any right or interest in the possession, use, occupancy or
utilization of any part of the Premises.
16.2 Notice to Landlord. If Tenant desires to assign this Lease or any
interest herein, or to sublet all or any part of the Premises, then at least ten
(10) business days prior to the effective date of the proposed assignment or
subletting, Tenant shall submit to Landlord in connection with Tenant's request
for Landlord's consent:
(A) A statement containing (i) the name and address of the
proposed assignee or subtenant; (ii) such financial information with respect to
the proposed assignee or subtenant as
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Landlord shall reasonably require; (iii) the type of use proposed for the
Premises; and (iv) all of the principal terms of the proposed assignment or
subletting; and
(B) Four (4) originals of the assignment or sublease on a form
approved by Landlord and four (4) originals of the Landlord's Consent to
Sublease or Assignment and Assumption of Lease and Consent.
16.3 Landlord's Recapture Rights. At any time within ten (10) business
days after Landlord's receipt of all but not less than all) of the information
and documents described in Paragraph 16.2 above, Landlord may, at its option by
written notice to Tenant, elect to: (a) sublease the Premises or the portion
thereof proposed to be sublet by Tenant upon the same terms as those offered to
the proposed subtenant; (b) take an assignment of the Lease upon the same terms
as those offered to the proposed assignee; or (c) terminate the Lease in its
entirety or as to the portion of the Premises proposed to be assigned or sublet,
with a proportionate adjustment in the Rent payable hereunder if the Lease is
terminated as to less than all of the Premises. If Landlord does not exercise
any of the options described in the preceding sentence, then, during the
above-described ten (10) business day period, Landlord shall either consent or
deny its consent to the proposed assignment or subletting.
Notwithstanding Landlord's right to recapture all or a portion of the
Premises as provided in this Xxxxxxxxx 00.0, Xxxxxxxx shall not exercise its
right of recapture where Tenant enters into an arrangement to share space, if
such space-sharing arrangement meets the following conditions: (i) the
provisions of Paragraphs 16.1, 16.2, 16.4, 16.5, and 16.7 are otherwise complied
with, (ii) the entire area which Tenant so shares is less than 2,000 square
feet, (iii) the term of the proposed space-sharing arrangement is no longer than
the lesser of one (1) year or the then remainder of the term of this Lease as of
the proposed Effective Date of the proposed space-sharing, and {iv) the proposed
shared area should not be physically separated or demised within the Premises
then under ease to Tenant.
16.4 Landlord's Consent: Standards. Landlord's consent shall not be
unreasonably withheld; but, in addition to any other grounds for denial,
Landlord's consent shall be deemed reasonably withheld if, in Landlord's good
faith judgment: (i) the proposed assignee or subtenant does not have the
financial strength to perform its obligations under this Lease or any proposed
sublease; (ii) the business and operations of the proposed assignee or subtenant
are not of comparable quality to the business and operations being conducted by
other tenants in the Building; (iii) the proposed assignee or subtenant intends
to use any part of the Premises for a purpose not permitted under this Lease;
(iv) either the proposed assignee or subtenant, or any person which directly or
indirectly controls, is controlled by, or is under common control with the
proposed assignee or subtenant occupies space in the Building, or is negotiating
with Landlord to lease space in the Building; (v) the proposed assignee or
subtenant is disreputable; or (vi) the use of the Premises or the Building by
the proposed assignee or subtenant would, in Landlord's reasonable judgment,
significantly increase the pedestrian traffic in and out of the Building or
would require any alterations to the Building to comply with applicable laws.
16.5 Additional Rent. If Landlord consents to any such assignment or
subletting, fifty percent (50%) of all sums or other economic consideration
received by Tenant in connection with such assignment or subletting, less
related broker's commissions, remodelling and other costs of Tenant, whether
denominated as rent or otherwise, which exceeds in the aggregate, the total sum
which Tenant is obligated to pay Landlord under this Lease (prorated to reflect
obligations allocable to less than all of the Premises under a sublease) shall
be paid to Landlord as additional rent under the Lease without affecting or
reducing any other obligation of Tenant hereunder.
16.6 Landlord's Costs. If Tenant shall assign this Lease or snail
sublet all or any part of the Premises or shall request the consent of Landlord
to any assignment, subletting or other act, Tenant shall pay to Landlord as
additional rent Landlord's costs related thereto, including Landlord's
reasonable attorneys' fees and a minimum fee to Landlord of Five Hundred Dollars
($500.00).
16.7 Continuing Liability of Tenant. Notwithstanding any assignment or
sublease, Tenant shall remain as fully and primarily liable for the payment of
Rent and for the performance of all other obligations of Tenant contained in
this Lease to the same extent as if the assignment or sublease had not occurred;
provided, however, that any act or omission of any assignee or subtenant, other
than Landlord, that violates the terms of this Lease shall be deemed a violation
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of this Lease by Tenant, including any acts or omissions committee by any
assignee or subtenant during any Holdover period following the termination of
this Lease, whether with or without Landlord's consent.
16.8 Non-Waiver. The consent by Landlord to any assignment or
subletting shall not relieve Tenant, or any person claiming through or by
Tenant, of the obligation to obtain the consent of Landlord, pursuant to this
Article, to any further assignment or subletting. In the event of an assignment
or subletting, Landlord may collect rent from the assignee or the subtenant
without waiving any rights hereunder and collection of the rent from a person
other than Tenant shall not be deemed a waiver of any of Landlord's rights under
this Article, an acceptance of assignee or subtenant as Tenant, or a release of
Tenant from the performance of Tenant's obligations under this Lease.
ARTICLE 17
DEFAULT AND REMEDIES
17.1 Events of Default by Tenant. The occurrence of any of the
following shall constitute a material default and breach of this Lease by
Tenant:
(A) The failure by Tenant to pay Base Rent or make any other
payment required to be made by Tenant hereunder as and when due.
(B) The abandonment of the Premises by Tenant for fourteen (14)
consecutive days (without the payment of Rent).
(C) The failure by Tenant to observe or perform any other
provision of this Lease to be observed or performed by Tenant, other than those
described in Article 16 above, if such failure continues for ten (10) days after
written notice thereof by Landlord to Tenant: provided, however, that if the
nature of the default is such that it cannot be cured within the ten (10) day
period, no default shall exist if Tenant commences the curing of the default
within the ten (10) day period and thereafter diligently prosecutes the same to
completion. The ten (10) day notice described herein shall be in lieu of, and
not in addition to, any notice required under Section 1161 of the California
Code of Civil Procedure or any other law now or hereafter in effect requiring
that notice of default be given prior to the commencement of an unlawful
detainer or other legal proceeding.
(D) The making by Tenant of any general assignment for the
benefit of creditors, the filing by or against Tenant of a petition under any
federal or state bankruptcy or insolvency laws (unless, in the case of a
petition filed against Tenant, the same is dismissed within thirty (30) days
after filing); the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets at the Premises or Tenant's interest in
this Lease or the Premises, when possession is not restored to Tenant within
thirty (30) days; or the attachment, execution or other seizure of substantially
all of Tenant's assets located at the Premises or Tenant's interest in this
Lease or the Premises, if such seizure is not discharged within thirty (30)
days.
17.2 Landlord's Right to Terminate Upon Tenant Default. In the event of
any default by Tenant as provided in Paragraph 17.1 above, Landlord shall have
the right to terminate this Lease and recover possession of the Premises by
giving written notice to Tenant of Landlord's election to terminate this Lease,
in which event Landlord shall be entitled to receive from Tenant:
(A) The worth at the time of award of any unpaid Rent which had
been earned at the time of such termination; plus
(B) The worth at the time of 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 Tenant proves could have been
reasonably avoided; plus
(C) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; plus
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(D) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom; and
(E) 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.
As used in subparagraphs (A) and {B) above, "worth at the time of
award" shall be the then highest lawful rate, but event to exceed one percent
(1%) per annum plus the rate established by the Federal Reserve Bank of San
Francisco on advances made to member banks under Sections 13 and 13a of the
Federal Reserve Act ("discount rate") prevailing on the date of execution of
this Lease by Landlord. As used in paragraph (C) above. "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%).
17.3 Landlord's Right To Continue Lease Upon Tenant Default. In the
event of a breach of this Lease and abandonment of the Premises by Tenant, if
Landlord does not elect to terminate this Lease as provided it, Paragraph 17.2
above, Landlord may from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease. Without limiting the foregoing,
Landlord has the remedy described in California Civil Code Section 1951.4
(Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due. if Tenant has the right to
sublet or assign. subject only to reasonable limitations). To the fullest extent
permitted by law, the proceeds of any reletting shall be applied first to pay to
Landlord all costs and expenses of such reletting (including without limitation,
costs and expenses of retaking or repossessing the Premises, removing persons
and property therefrom, securing new tenants, including expenses for
redecoration, alterations and other costs in connection with preparing the
Premises for new tenant, and if Landlord shall maintain and operate the
Premises. the costs thereof) and receivers' fees incurred in connection with the
appointment of and performance once by a receiver to protect the Premises and
Landlord's interest under this Lease and any necessary or reasonable
alterations; second to the payment of any indebtedness of Tenant to Landlord
other than Rent due and unpaid hereunder; third, to the payment of Rent due and
unpaid hereunder; and the residue, if any. shall be held by Landlord and.
applied in payment of other or future obligations of Tenant to Landlord as the
same may become due and payable, and Tenant shall not be entitled to receive any
portion of such revenue.
17.4 Right of Landlord to Perform. All covenants and agreements to be
performed by Tenant under this Lease snail be performed by Tenant at Tenant's
sole cost and expense. If Tenant shall fail to pay any sum of money, other than
Rent, required to be paid by it hereunder or shall fail to perform any other act
on its part to be performed hereunder, Landlord may, but shall not be obligated
to, make any payment or perform any such other act on Tenant's part to be made
or performed, without waiving or releasing Tenant of its obligations under this
Lease. Any sums so paid by Landlord and all necessary incidental costs, together
with interest thereon at the lesser of the maximum rate permitted by law if any
or twelve percent (12%) per annum from the date of such payment, snail be
payable to Landlord as additional rent on demand and Landlord shall have the
same rights and remedies in the event of nonpayment as in the case of default by
Tenant in the payment of Rent.
17.5 Default Under Other Leases. If the term of any lease, other than
this Lease, heretofore or hereafter made by Tenant for any space in the Building
shall be terminated or terminable after the making of this Lease because of any
default by Tenant under such other lease, such fact shall empower Landlord, at
Landlord's sole option. to terminate this Lease by notice to Tenant or to
exercise any of the rights or remedies set forth in Paragraph 17.2.
17.6 Non-Waiver. Nothing in this Article shall be deemed to affect
Landlord's rights to indemnification for liability or liabilities arising prior
to termination of this Lease for personal injury or property damages under the
indemnification clause or clauses contained in this Lease. No acceptance by
Landlord of a lesser sum than the Rent then due shad be deemed to be other than
on account of the earliest installment of such rent due, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such installment or pursue any other remedy in the Lease provided.
The delivery of keys to any employee of Landlord or to Landlord's agent or any
employee thereof shall not operate as a termination of this Lease or a surrender
of the Premises.
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17.7 Cumulative Remedies. The specific remedies to which Landlord may
resort under the terms of the Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which it may be lawfully
entitled in case of any breach or threatened breach by Tenant of any provisions
of the Lease. In addition to the other remedies provided in the Lease, Landlord
shall be entitled to a restraint by injunction of the violation or attempted or
threatened violation of any of the covenants, conditions or provisions of the
Lease or to a decree compelling specific performance of any such covenants,
conditions or provisions.
17.8 Default by Landlord, Landlord's failure to perform or observe any
of its obligations under this Lease shall constitute a default by Landlord under
this Lease only if such failure shall continue for a period of thirty (30) days
(or the additional time, if any, that is reasonably necessary promptly and
diligently to cure the failure) after Landlord receives written notice from
Tenant specifying the default. The notice shall give in reasonable detail the
nature and extent of the failure and shall identify the Lease provision(s)
containing the obligation(s). In no event shall Tenant have the right to
terminate this Lease as a result of Landlord's default.
ARTICLE 18
ATTORNEYS' FEES: COSTS OF SUIT
18.1 Attorneys' Fees. If either Landlord or Tenant shall commence any
action or other proceeding against the other arising out of, or relating to,
this Lease or the Premises, the prevailing party shall be entitled to recover
from the losing party, in addition to any other relief, its actual attorneys'
fees irrespective of whether or not the action or other proceeding is prosecuted
to judgment and irrespective of any court schedule of reasonable attorneys'
fees. In addition, Tenant shall reimburse Landlord, upon demand, for all
reasonable attorneys' fees incurred in collecting Rent or otherwise seeking
enforcement against Tenant, its sublessees and assigns, of Tenant's obligations
under this Lease.
18.2 Indemnification Should Landlord be made a party to any litigation
instituted by Tenant against a party other than Landlord, or by a third party
against Tenant, Tenant shall indemnify, hold harmless and defend Landlord from
any and all loss. cost, liability, damage or expense incurred by Landlord,
including attorneys' fees, in connection with the litigation.
ARTICLE 19
SUBORDINATION AND ATTORNMENT
19.1 Subordination. This Lease, and the rights of Tenant hereunder, are
and shall be subordinate to the interests of (i) all present and future ground
leases and master leases of all or any part of the Building; (ii) present and
future mortgages and deeds of trust encumbering all or any part of the Building;
(iii) all past and future advances made under any such mortgages or deeds of
trust; and (iv) all renewals, modifications, replacements and extensions of any
such ground leases, master leases, mortgages and deeds of trust; provided,
however, that any lessor under any such ground lease or master lease or any
mortgagee or beneficiary under any such mortgage or deed of trust shall have the
right to elect, by written notice given to Tenant, to have this Lease made
superior in whole or in part to any such ground lease, master lease, mortgage or
deed of trust. Upon demand, Tenant shall execute, acknowledge and deliver any
instruments reasonably requested by Landlord or any such lessor, mortgagee or
beneficiary to effect the purposes of this Paragraph 19.1. Such instruments may
contain, among other things, provisions to the effect that such lessor,
mortgagee or beneficiary (hereafter, for the purposes of this Paragraph 19.1, a
"Successor Landlord") shall (i) not be liable for any act or omission of
Landlord or its predecessors, if any, prior to the date of such Successor
Landlord's succession to Landlord's interest under this Lease: (ii) not be
subject to any offsets or defenses which Tenant might have been able to assert
against Landlord or its predecessors, if any, prior to the date of such
Successor Landlord's succession to Landlord's interest under this Lease; (iii)
not be liable for the return of any security deposit under the Lease unless the
same shall have actually been deposited with such Successor Landlord; and (iv)
be entitled to receive notice of any Landlord default under this Lease plus a
reasonable opportunity to cure such default prior to Tenant having any right or
ability to terminate this Lease as a result of such Landlord default.
19.2 Attornment. If requested to do so, Tenant shall attorn to and
recognize as Tenant's landlord under this Lease any superior lessor, superior
mortgagee or other purchaser or person
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taking title to the Building by reason of the termination of any superior lease
or the foreclosure of any superior mortgage or deed of trust, and Tenant shall,
upon demand, execute any documents reasonably requested by any such person to
evidence the attornment described in this Section.
19.3 Mortgage and Ground Lessor Protection. Tenant agrees to give any
holder of any mortgage and any ground lessor, by registered or certified mail, a
copy of any notice of default served upon the Landlord by Tenant, provided that
prior to such notice Tenant has been notified in writing (by way of service on
Tenant of a copy of Assignment of Rents and Leases, or otherwise) of the address
of such mortgage holder or ground lessor thereafter the "Notified Party").
Tenant further agrees that if Landlord shall have failed to cure such default
within twenty (20) days after such notice to Landlord (or if such default cannot
be cured or corrected within that time, then such additional time as may be
necessary if Landlord has commenced within such twenty (20) days and is
diligently pursuing the remedies or steps necessary to cure or correct such
default), then the Notified Party shall have an additional thirty (30) days
within which to cure or correct such default (or if such default cannot be cured
or corrected within that time, then such additional time as may be necessary if
the Notified Party has commenced within such thirty (30) days and is diligently
pursuing the remedies or steps necessary to cure or correct such default). Until
the time allowed, as aforesaid, for the Notified Party to cure such default has
expired without cure, Tenant shall xxxx no right to, and shall not, terminate
this Lease on account of Landlord's default.
ARTICLE 20
QUIET ENJOYMENT
Provided that Tenant is not in default hereunder, Tenant shad have and
peaceably enjoy the Premises during the Lease Term, subject to all of the terms
and conditions contained in this Lease.
ARTICLE 21
RULES AND REGULATIONS
The Rules and Regulations attached hereto as Exhibit B are hereby
incorporated by reference herein and made a part hereof. Tenant shall abide by,
and faithfully observe and comply with the Rules and Regulations and any
reasonable and nondiscriminatory amendments, modifications and/or additions
thereto as may hereafter be adopted and published by written notice to tenants
by Landlord for the safety care, security, good order and/or cleanliness of the
Premises and/or the Building. Landlord shall not be liable to Tenant for any
violation of such rules and regulations by any other tenant or occupant of the
Building.
ARTICLE 22
ESTOPPEL CERTIFICATES
Tenant agrees at any time and from time to time upon not less than ten
(10) business days' prior written notice from Landlord to execute, acknowledge
and deliver to Landlord a statement in writing addressed and certifying to
Landlord, or to the holder or assignee of any existing or prospective mortgage
encumbering the Building or any part thereof (hereafter a "Mortgagee"), or to
the lessor, or existing or prospective assignee of the lessor's position, under
any existing or prospective ground lease of the land underlying the Building
(hereafter a "Ground Lessor ), or to any prospective purchaser of the land,
improvements or both comprising the Building, that this Lease is unmodified and
in full force and effect (or if there have been modifications, that the same is
in full force and effect as modified and stating the modifications); that Tenant
has accepted possession of the Premises, which are acceptable in all respects,
and that any improvements required by the terms of this Lease to be made by
Landlord have bean completed to the satisfaction of Tenant; that Tenant is in
full occupancy of the Premises; that no rent other than Prepaid Rent has been
paid more than 30 days in advance; that the first month's Base Rent has been
paid; that Tenant is entitled to no free rent or other concessions except as
stated in this Lease; that Tenant has not been notified of any previous
assignment of Landlord's or any predecessor landlord's interest under this
Lease; the dates to which Base Rent, additional rent and other charges have been
paid; that Tenant, as of the date of such certificate, has no charge, lien or
claim of setoff under this Lease or otherwise against Base Rent, additional rent
or other
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charges due or to become due under this Lease; and that Landlord is not in
default in performance of any covenant, agreement or condition contained in this
Lease or any other matter relating to this Lease or the Premises or, if so,
specifying each such default. In addition, in the event that such certificate is
being given to any Mortgagee or Ground Lessor, such statement may contain any
other provisions customarily required by such Mortgagee or Ground Lessor
including, without limitation, an agreement on the part of Tenant to furnish to
such Mortgagee or Ground Lessor, as applicable, written notice of any Landlord
default and a reasonable opportunity for such Mortgagee or Ground Lessor to cure
such default prior to Tenant being able to terminate this Lease. Any such
statement delivered pursuant to this Section may be relied upon by Landlord or
any Mortgagee, Ground Lessor or prospective purchaser to whom it is addressed
and such statement, if required by its addressee, may so specifically state.
ARTICLE 23
ENTRY BY LANDLORD
Landlord may enter the Premises at all reasonable times to: inspect the
same; exhibit the same to prospective purchasers, lenders or tenants; determine
whether Tenant is complying with all of its obligations under this Lease; supply
janitorial and other services to be provided by Landlord to Tenant under this
Lease; post notices of non-responsibility; and make repairs or improvements in
or to the Building or the Premises; provided, however, that all such work shall
be done as promptly as reasonably possible and so as to cause as little
interference to Tenant as reasonably possible. Tenant hereby waives any claim
for damages for any injury or inconvenience to, or interference with, Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises or any other
less occasioned by such entry. Landlord shall at all times have and retain a key
with which to unlock all of the doors in, on or about the Premises (excluding
Tenant's vaults, safes and similar areas designated by Tenant in writing in
advance; and Landlord shall have the right to use any and all means by which
Landlord may deem proper to open such doors to obtain entry to the Premises, and
any entry to the Premises obtained by Landlord by any such means, or otherwise,
shall not under any circumstances be deemed or construed to be a forcible or
unlawful entry into or a detainer of the Premises or an eviction, actual or
constructive, of Tenant from any part of the Premises. Such entry by Landlord
shall not act as a termination of Tenant's duties under this Lease. If Landlord
shall be required to obtain entry by means other than a key provided by Tenant,
the cost of such entry shall be payable by Tenant to Landlord as additional
rent.
ARTICLE 24
LANDLORD'S LEASE UNDERTAKINGS -
EXCULPATION FROM PERSONAL LIABILITY:
TRANSFER OF LANDLORD'S INTEREST
24.1 Landlord's Lease Undertaking. Notwithstanding anything to the
contrary contained in this Lease or in any exhibits, Riders or addenda hereto
attached {collectively the "Lease Documents"), it is expressly understood and
agreed by and between the parties hereto that: (a) the recourse of Tenant or its
successors or assigns against Landlord with respect to the alleged breach by or
on the part of Landlord of any representation, warranty, covenant, undertaking
or agreement contained in any of the Lease Documents (collectively, "Landlord's
Lease Undertakings") shall extend only to Landlord's interest in the real estate
of which the Premises demised under the Lease Documents are a part ("Landlord's
Real Estate") and not to any other assets of Landlord or its beneficiaries; and
(b) except to the extent of Landlord's interest in Landlord's Real Estate, no
personal liability or personal responsibility of any sort with respect to any of
Landlord's Lease Undertakings or any alleged breach thereof is assumed by, or
shall at any time be asserted or enforceable against, Landlord, the individual
fee owners of the Building, or against any of their respective directors,
officers, employees, agents, constituent partners, beneficiaries, trustees or
representatives.
24.2 Transfer of Landlord's Interest. Landlord and each successor to
Landlord shall be fully released from the performance of Landlord's obligations
subsequent to their transfer of Landlord's interest in the Building. Landlord
shall not be liable for any obligation hereunder after a transfer of its
interest in the Building.
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ARTICLE 25
HOLDOVER TENANCY
If Tenant holds possession of the Premises after the expiration or
termination of the Lease Term, by lapse of time or otherwise, Tenant shall
become a tenant at sufferance upon all of the terms contained herein, except as
to Lease Term and Rent. During such holdover period, Tenant shall pay to
Landlord a monthly rental equivalent to one hundred fifty percent (150%) of the
Rent payable by Tenant to Landlord with respect to the last month of the Lease
Term. The monthly rent payable for such holdover period shall in no event be
construed as a penalty or as liquidated damages for such retention of
possession. Without limiting the foregoing, Tenant hereby agrees to indemnify,
defend and hold harmless Landlord, its beneficiary, and their respective agents,
contractors and employees, from and against any and all claims, liabilities,
actions, losses, damages (including without limitation, direct, indirect,
incidental and consequential) and expenses (including, without limitation, court
costs and reasonable attorneys' fees) asserted against or sustained by any such
party and arising from or by reason of such retention of possession, which
obligations shall survive the expiration of termination of the Lease Term. If
Tenant has assigned this Lease or subleased all or a portion of the Premises,
Tenant shall be liable for the payment of all Rent and other charges due under
this Lease during any holding over by Tenant's assignee or any transfer of
Tenant's assignee whether such holding over was with or without the consent of
Tenant.
ARTICLE 26
NOTICES
All notices which Landlord or Tenant may be required, or may desire, to
serve on the other may be served, as an alternative to personal service, by
mailing the same by registered or certified mail, postage prepaid, addressed to
the Landlord at the address for Landlord set forth in Paragraph 1.17 above and
to Tenant at the address for Tenant set forth in Paragraph 1.18 or 1.19 above,
as applicable, or addressed to such other address or as addresses as either
Landlord or Tenant may from time to time designate to the other in writing. Any
notice shall be deemed to have been served at the Time the same was posted.
ARTICLE 27
MISCELLANEOUS
27.1 Entire Agreement. This Lease contains all of the agreements and
understandings relating to the leasing of the Premises and the obligations of
Landlord and Tenant in connection with such leasing. Landlord has not made, and
Tenant is not relying upon, any warranties, or representations, promises or
statements made by Landlord or any agent of Landlord, except as expressly set
forth herein. This Lease supersedes any and all prior agreements and
understandings between Landlord and Tenant and alone expresses the agreement of
the parties.
27.2 Amendments. This Lease shall not be amended, changed or modified
in any way unless in writing executed by Landlord and Tenant. Landlord shall not
have waived or released any of its rights hereunder unless in writing and
executed by the Landlord.
27.3 Successors. Except as expressly provided herein, this Lease and
the obligations of Landlord and Tenant contained herein shall bind and benefit
the successors and assigns of the parties hereto.
27.4 Force Majeure. Landlord shall incur no liability to Tenant with
respect to, and shall not be responsible for any failure to perform, any of
Landlord's obligations hereunder if such failure is caused by reason of strike,
other labor trouble, governmental rule, regulations, ordinance, statute or
interpretation, or by fire, earthquake, civil commotion, or failure or
disruption of utility services, or any and all other causes reasonably beyond
control of Landlord. The amount of time for Landlord to perform any of
Landlord's obligations shall be extended by the amount of time Landlord is
delayed in performing such obligation by reason of such force majeure
occurrence.
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27.5 Survival of Obligations. Any obligations of Tenant accruing prior
to the expiration of the Lease shall survive the termination of the Lease, and
Tenant shall promptly perform all such obligations whether or not this Lease has
expired.
27.6 Light and Air. No diminution or shutting off of any light, air or
view by any structure now or hereafter erected shall in any manner affect this
Lease or the obligations of Tenant hereunder, or increase any of the obligations
of Landlord hereunder.
27.7 Governing Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.
27.8 Severability. In the event any provision of this Lease is found to
be unenforceable, the remainder of this Lease shall not be affected, and any
provision found to be invalid shall be enforceable to the extent permitted by
law. The parties agree that in the event two different interpretations may be
given to any provision hereunder, one of which will render the provision
unenforceable, and one of which will render the provision enforceable the
interpretation rendering the provision enforceable shall be adopted.
27.9 Captions. All captions, headings, titles, numerical references and
computer highlighting are for convenience only and shall have no effect on the
interpretation of this Lease.
27.10 Interpretation. Tenant acknowledges that it has read and reviewed
this Lease and that it has had the opportunity to confer with counsel in the
negotiation of this Lease. Accordingly, this Lease shall be construed neither
for nor against Landlord or Tenant, but shall be given a fair and reasonable
interpretation in accordance with the meaning of its terms and the intent of the
parties.
27.11 Independent Covenants. Each covenant, agreement, obligation or
other provision of this Lease to be performed by Tenant are separate and
independent covenants of Tenant, and not dependent on any other provision of the
Lease.
27.12 Number and Gender. All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include the appropriate number and gender, as the context may require.
27.13 Time is of the Essence. Time is of the essence of this Lease and
the performance of all obligations hereunder.
27.14 Joint and Several Liability If Tenant comprises more than one
person or entity, or if this Lease is guaranteed by any party, all such persons
shall be jointly and severally liable for payment of rents and the performance
of Tenant's obligations hereunder.
27.15 Exhibits. Exhibit A (Outline of Premises) and Exhibit B (Building
Rules and Regulations) are incorporated into this Lease by reference and xxxx a
part hereof.
27.16 Offer to Lease The submission of this Lease to Tenant or its
broker or other agent, does not constitute an offer to Tenant to lease the
Premises. This Lease shall have no force and effect until it is executed and
delivered by Tenant to Landlord and executed by Landlord; .
27.17 No Counterclaim; Choice of Laws. It is mutually agreed that in
the event Landlord commences any summary proceeding for non-payment of Rent,
Tenant will not interpose any counterclaim of whatever nature or description in
any such proceeding. In addition, Tenant hereby submits to local' jurisdiction
in the State of California and agrees that any action by Tenant against Landlord
shall be instituted in the State of California and that Landlord shall have
personal jurisdiction over Tenant for any action brought by Landlord against
Tenant in the State of California.
27.18 Rights Reserved by Landlord. Landlord reserves the following
rights exercisable without notice (except as otherwise expressly provided to the
contrary of this Lease) and without being deemed an eviction or disturbance of
Tenant's use or possession of the Premises or giving rise to any claim for
set-off or abatement of Rent: (i) to change the name or street address of the
Building; (ii) to install, affix and maintain all signs on the exterior and/or
interior of the Building;
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(iii) to designate and/or approve prior to installation, all types of signs.
window shades, blinds, drapes, awnings or other similar items, and all internal
lighting that ,may be visible from the exterior of the Premises; (iv) to display
the Premises and/or the Building to mortgagees, prospective mortgagees,
prospective purchasers and ground lessors at reasonable hours upon reasonable
advance notice to Tenant; (v) to change the arrangement of entrances, doors,
corridors, elevators and/or stairs in the Building, provided no such change
shall materially adversely affect access to the Premises; (vi) to grant any
party the exclusive right to conduct any business or render any service in the
Building, provided such exclusive right shall not operate to prohibit Tenant
from using, the Premises for the purposes permitted under this Lease; (vii) to
prohibit the placement of vending or dispensing machines of any kind in or about
the Premises other than for use by Tenant's employees; (viii) to prohibit the
placement of video or other electronic games in the Premises; (ix) to have
access for Landlord and other tenants of the Building to any mail chutes and
boxes located in or on the Premises according to the rules of the United States
Post Office and to discontinue any mail chute business in the Building; (x) to
close the Building after normal business hours, except that Tenant and its
employees and invitees shall be entitled to admission at all times under such
rules and regulations as Landlord prescribes for security purposes; (xi) to
install, operate and maintain security systems which monitor, by close circuit
television or otherwise, all persons entering or leaving the Building; (xii) to
install and maintain pipes, ducts, conduits, wires and structural elements
located in the Premises which serve other parts or other tenants of the
Building; and (xiii) to retain at all times master keys or pass keys to the
Premises.
27.19 No Other Broker or Agent. 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 the Basic Lease Information, 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 shall defend indemnify and hold the
other party harmless from and against all claims, actions, loss, cost, damage,
expense and liability (including without limitation reasonable attorneys' fees
and court costs) with respect to any leasing commission or equivalent
compensation alleged to be owing on account of the indemnifying party's dealings
with any real estate broker or agent other than that specified herein.
27.20 Compliance. Tenant shall faithfully observe and comply with the
Rules and Regulations set forth in Exhibit B, attached hereto and made a part of
this Lease. The Rules and Regulations may be modified by Landlord from time to
time in writing. Landlord shall not be responsible to Tenant for the
nonperformance of any of said Rules end Regulations by or otherwise with respect
to the acts or omissions of any other tenants or occupants of the Building.
27.21 Delay in Enforcement. Any failure of either party to insist upon
the strict performance of any term, covenant or condition of this Lease, any
failure of either party to exercise any of its rights or remedies hereunder and
any acceptance of the keys to or possession of the Premises by Landlord prior to
the end of the Term shall not constitute a waiver or a modification of any term,
covenant or condition of this Lease. Waiver by either party of the breach of any
term, covenant or condition of this Lease may be only by an express writing and
shall not be deemed to be a waiver of such term, covenant or condition or of a
subsequent breach of such term, covenant or condition.
27.22 No Waiver by Acceptance of Payment;. If Tenant pays any money to
Landlord after the termination of this Lease or after Landlord has delivered to
Tenant any notice (other than a demand for payment of money) Landlord's
acceptance of such payment shall not reinstate, continue, or extend the Term or
negate the effect of such notice on Tenant. After the service of notice or the
commencement of a suit or other final judgment granting Landlord possession of
the Premises, Landlord may receive and collect any rent or other sums due under
the terms of this Lease or otherwise exercise Landlord's rights and remedies
hereunder and the payment of such sums, whether as rent or otherwise, shall not
waive said notice or in any manner affect any pending suit or judgment
previously obtained.
27.23 Qualification and Authority. if Tenant is a corporation 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, Tenant has full right and authority to
execute and deliver this Lease and each person signing on behalf of Tenant is
authorized to do so.
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27.24 Landlord Rights to Change Property. Landlord shall have the right
at any time to change the name of the Building, to increase the size of the Real
Property by adding additional real property thereto, to construct other
buildings or improvements on any portion of the Real Property, to change the
location and/or character of or to make alterations or additions to the Real
Property. Tenant shall not use the Building's name for any purpose other than as
a part of its business address. Any use of such name in the designation of
Tenant's business shall constitute a default under this Lease.
27.25 Landlord's Improvement; Work. Prior to the Term Commencement
Date, Landlord, at its sole cost and expense, shall paint the Premises, as
necessary, and replace the existing carpeting with new carpeting of the same
quality. Landlord shall insure that all heating, ventilating and
air-conditioning equipment, electrical and building systems in the Premises are
in good working order upon the Term Commencement Date.
27.26 Right of First Negotiation. Subject to any existing rights of
expansion, right of first refusal, first negotiation or first offer held by
tenants of the Building as of the date of this Lease, and subject to the rights
of any present tenants of such space to renew or extend the terms of their
respective Leases, Tenant shall have a right of first negotiation with respect
to the third floor of the Building (the "Negotiation Space"). If such
Negotiation Space becomes available for lease, Landlord shall deliver to Tenant
written notice stating the exact location, configuration and rentable area of
the Negotiation Space and the date upon which it is expected to become
available. Tenant shall have fifteen (15) days thereafter to deliver to Landlord
written notice (the "Negotiation Notice") exercising Tenant's right of first
negotiation with respect to the Negotiation Space. The failure of Tenant to
deliver the Negotiation Notice within. in such fifteen (15) day period shall be
deemed failure by Tenant to exercise the right herein granted and thereafter
Landlord shall be free to lease the Negotiation Space to another tenant upon any
terms and conditions without regard to Tenant. Upon receipt of the Negotiation
Notice. Tenant and Landlord shall thereafter negotiate in good faith for a
period of twenty (20) business days with respect to the Base Rent for the
Negotiation Space. If Tenant and Landlord cannot agree on the Base Rent within
such twenty (20) business days, then Tenant's right to extend the Premises to
include the Negotiation Space shall terminate and Landlord shall be free to
lease the Negotiation Space to another tenant upon any terms and conditions
without regard to Tenant. Neither party shall have The right to have a court or
other third party determine the Base Rent for the Negotiation Space. If Landlord
and Tenant agree on the Base Rent for the Negotiation Space within such time
period, then Landlord and Tenant shall promptly execute an Amendment to this
Lease, and, on the date on which the Negotiation Space becomes available, the
Premises shall be expanded to include the Negotiation Space. Notwithstanding the
foregoing, if Tenant is in default on the date of giving the Negotiation Notice,
Tenant shall have no right to so expand the Premises; or if Tenant is in default
on the date the Premises are to be expanded, the Premises shall not be so
expanded. Upon the expansion of the Premises, Tenant's percentage share shall be
increased to reflect the rentable area of the Negotiation Space. The term of the
Lease with respect to the Negotiation Space shall be conterminous with the
Premises.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first above written.
LANDLORD: TENANTS:
XXXXX X. XXXX, As Attorney-In-Fact INTELLIPOST CORPORATION, a Delaware
corporation
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------- ------------------------------------
Its: PRESIDENT
-----------------------------------
Witness: By: /s/ [Signature Illegible]
---------------------------
Title:
------------------------
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EXHIBIT A
[FLOOR PLAN]
33
FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM TO LEASE (this "Addendum') is made by and between
XXXXX X. XXXX, as Attorney-in-Fact ("Landlord"), and INTELLIPOST CORPORATION, a
Delaware corporation ("Tenant"), to be a part of that certain Second Floor
Office Lease of even date herewith between Landlord and Tenant (the "Lease")
concerning approximately 3,939 square feet of space (the "Premises") located at
000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (the "Project"). Landlord and
Tenant agree that, notwithstanding anything to the contrary in the Lease. the
Lease is hereby modified and supplemented as set forth below.
1. Term Commencement Data. The Lease shall commence on the later of (i)
December 1, 1996 or, (ii) the date by which all of the following have occurred:
(a) Landlord has delivered possession of the Premises to Tenant in broom clean
condition and as otherwise provided in the Lease: and (b) Landlord has obtained
all approvals and permits from appropriate governmental authorities required for
the legal occupancy of the Premises for Tenant's intended use. If the Term
Commencement Date has not occurred for any reason whatsoever on or before
December 31, 1996, then. in addition to Tenant's other rights or remedies,
Tenant may terminate the Lease by written notice to Land1ord. whereupon any
monies previously paid by Tenant to Landlord shall be reimbursed to Tenant and
each releases the other from liability under the Lease.
2. Condition. Landlord warrants and represents that to its best
knowledge, without any duty of inquiry, as of the Term Commencement Date. the
Premises, the Building and the Project comply with all applicable laws, rules,
relations. codes, ordinances, underwriter's requirements, covenants, conditions
and restrictions ("Laws"), the Premises will be in good and clean operating
condition and repair, and the electrical, mechanical, HVAC, plumbing, sewer,
elevator and other systems serving the Premises. the Building and the Project
will be in good operating condition and repair.
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3. Additional Charges. Tenant shall have no obligation to pay any
amount of Additional Charges for the Base Year. If any Additional Charges for
the Base Year are not based upon a fully-leased and occupied Building and
Project, then such amounts shall be increased to reflect a fully-leased and
occupied Building and Project. In addition, "Operating Expenses" shall not
include, and Tenant shall in no event have an?' obligation to perform or to pay
directly, or to reimburse Landlord for, all or any portion of the following
repairs, maintenance, improvements, replacements, premiums, claims, losses,
fees, charges, costs and expenses (collectively, "Costs"): (a) Costs occasioned
by the act. omission or violation of any Law by Landlord, any other occupant of
the Building or the Project or their respective agents, employees or
contractors; (b) Costs occasioned by fire, acts of God. or other casualties or
by the exercise of the power of eminent domain: (c) Costs to correct any
construction defect in the Premises, the Building or the Project or to comply
with any Law by Landlord, any other occupant of the Building or the Project or
their respective agents, employees or contractors: (d) Costs of any renovation,
improvement, painting or redecorating of any portion of the Building or the
Project not made available for Tenant's use: (e) Costs incurred in connection
with negotiations or disputes with any other occupant of the Building or the
Project and Costs arising from the violation by Landlord or any occupant of the
Building or the Project (other than Tenant) of the terms and conditions of any
lease or other agreement: (f) insurance Costs for coverage not customarily paid
by tenants of similar projects in the vicinity. of the Premises. increases in
insurance Costs caused by the activities of any other occupant of the Building
or the Project, insurance deductibles and coinsurance payments; (g) Costs
incurred in connection with the presence of any Hazardous Material, except to
the extent caused by the release or emission of the Hazardous Material in
question by Tenant; (h) Costs incurred on debt, mortgages and ground leases; (i)
Costs in the nature of depreciation. amortization or other expense reserves; and
(k) Costs to repair, replace, restore or maintain the structural portions of the
Building.
4. Compliance with Laws. Tenant shall not be required to comply with or
cause the Premises, the Building or the Project to comply with any Laws unless
such compliance is necessitated due to Tenant's particular use or alteration of
the Premises.
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5. Environmental. To the best knowledge of Landlord. without any duty
of inquiry, (i) no Hazardous Material is present in the Building or on the
Project or the sail, surface water or groundwater thereof, (ii) no underground
storage tanks are present on the Project, and (iii) no action, proceeding or
claim is pending or threatened regarding the Project concerning any Hazardous
Material or pursuant to any Environmental Law. Under no circumstance shall
Tenant be liable for, and Landlord shall indemnify., defend and hold harmless
Tenant, its agents, contractors, stockholders, directors, successors,
representatives and assigns from and against, all losses, costs, claims,
liabilities and damages (including attorneys' and consultants' fees) of every
type and nature, directly or indirectly arising out of or in connection with any
Hazardous Material present at any time on or about the Project, or the soil,
air, improvements. groundwater or surface water thereof. or the violation of any
Laws, relating to any such Hazardous Material, except to the extent that any of
the foregoing actually results from the release or emission of Hazard Material
on or about the Premises during the term of the Lease by Tenant or its agents or
employees in violation of applicable Environmental Laws.
6. Maintenance and Repairs. Landlord shall perform and construct, and
Tenant shall have no responsibility to perform or construct, any repair,
maintenance or improvements: (i) necessitated by the acts or omissions of
Landlord or any other occupant of the Building or the Project, or their
respective agents, employees or contractors. (ii) occasioned by fire, acts of
God or other casualty. or by the exercise of the power of eminent domain, (iii)
required as a consequence of any violation of any Laws or construction defects
in the Premises or the Building as of the Term Commencement Date, (iv) which
could be treated as a capital expenditure under generally accepted accounting
principles, (v) to the heating, ventilating, air conditioning, electrical,
mechanical, water, sewer and plumbing systems not situated in the Premises, and
(vi) to any portion of the Building or the Project outside the demising walls of
the Premises.
7. Alterations. Tenant may construct nonstructural alterations to the
Premises without Landlord's prior approval, if the cost of any alteration
project does not exceed $5,000.
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Tenant's trade fixtures. furniture, equipment and other personal property
installed in the Premises ("Tenant's Property") shall at all times be Tenant's
property, and Tenant may remove Tenant's Property. from the Premises at any time
and from time to time, provided that Tenant repairs all damage caused by such
removal.
8. Surrender. Tenant's obligations with respect to the surrender of the
Premises shall be fulfilled if Tenant surrenders possession of the Premises in
the condition existing at the Term Commencement Date, excepting ordinary. wear
and tear. acts of God, casualties, condemnation, and Hazardous Materials (other
than those released or emitted by Tenant in or about the Premises).
9. Insurance and Indemnification. Landlord shall maintain, at
Landlord's sole expense, "all risk' property insurance insuring against risk of
loss or damage to the Building and the Project for the full replacement cost
thereof. Landlord shall not be released from, and shall indemnify, defend.
protect and hold harmless Tenant and Tenant's agents and employees from, all
losses, damages, liabilities, judgments, actions, claims. attorneys' fees.
consultants' fees, payments, costs and expenses arising from the negligence or
willful misconduct of Landlord or its agents. contractors, licensees or
invitees, Landlord's violation of any Law, or a breach of Landlord's obligations
or representations under the Lease. The parties hereto' release each other and
their respective agents, employees, successors, assignees and subtenants from
all liability for injury to any person or damage to any property that is caused
by or results from a risk which is actually insured against. which is re
required to be insured against under the Lease, or which would normally be
covered by the standard form of full replacement value "all risk" property
insurance, without regard to the negligence or willful misconduct of the person
or entity so released.
10. Damage: Condemnation: the Premises are condemned or damaged by any
peril and Landlord does not elect to terminate the Lease or is not entitled to
terminate the Lease pursuant to its terms, then Tenant shall have the option to
terminate the Lease if the Premises cannot be, or are not in fact, fully
restored by Landlord to their prior condition
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within sixty (60) days after the condemnation or damage. Whenever Rent and
Additional Charges are to be abated under the Lease, all Rent and Additional
Charges shall be equitably abated based upon the extent to which Tenant's use of
the Premises is diminished.
11. Assignment and Subletting. Tenant may, without Landlord's prior
written consent, sublet the Premises or assign the Lease to (i) a subsidiary,
affiliate, division or corporation controlling, controlled by or under common
control with Tenant; or (ii) a successor corporation related to Tenant by
merger, consolidation. nonbankruptcy reorganization, or government action. For
purposes of the Lease. a sale or transfer of Tenant's capital stock. including
without limitation, a transfer in connection with the merger, consolidation or
nonbankruptcy reorganization of Tenant and any sale through any private or
public offering, shall not be deemed an assignment, subletting or any other
transfer of the Lease or the Premises.
12. Default and Late Charge. Tenant shall not be deemed to be in
default, nor shall any late charge be imposed, on account of Tenant's failure to
(i) pay money to Landlord. unless Tenant's failure to pay continues for five (5)
days after Tenant receives written notice pursuant to Article 26 of the Lease of
such delinquency, or (ii) perform any other covenant of the Lease, other than
the payment of money to Landlord, unless such failure continues for fifteen (15)
days after Tenant receives written notice pursuant to Article 26 of the Lease;
provided, however, that if the nature of the default is such that it cannot be
reasonably cured within the fifteen (15) day period, no default shall exist if
Tenant commences the curing of the default within the fifteen day period and
thereafter diligently prosecutes the same to completion. The five and fifteen
day notice periods described herein shall be in lieu of, and not in addition to,
any notice required under Section 1161 of the California Code of Civil Procedure
or any other law now or hereafter in effect requiring that notice of default be
given prior to the commencement of an unlawful detainer or other legal
proceeding.
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13. Subordination The subordination of Tenant's rights and interest
under the Lease to any ground lease, master lease, mortgage or deed of trust
shall be contingent upon Tenant's having received from any such ground or master
lessor. mortgagee or beneficiary of any deed of trust a written recognition
agreement in form reasonably 'satisfactory to Tenant providing that Tenant's
fights and interest shall not be disturbed in the event of any termination of
any such ground or master lease or foreclosure of any such mortgage or deed of
trust and confirming that Tenant shall receive all of the rights and services
provided for under the Lease.
14. Rights Reserved by Landlord: Rules. Landlord shall not exercise any
rights under Sections 1.7, 27.18 or 27.24 of the Lease, if such exercise would
unreasonably interfere with Tenant's use of the Premises or materially increase
the obligations or decrease the rights of Tenant under the Lease. Landlord shall
use its best efforts to minimize any disruption to Tenant. Tenant shall not be
required to comply with any rule or regulation unless the same applies
non-discriminatorily to all occupants of the Building and the Project, does not
unreasonably interfere with Tenant's use of the Premises, and does not
materially increase the obligations or decrease the rights of Tenant under the
Lease.
15. Approvals. Whenever the Lease requires an approval, consent,
designation, determination, selection or judgment by either Landlord or Tenant,
such approval, consent, designation, determination, selection or judgment and
any conditions imposed thereby shall be reasonable and shall not be unreasonably
withheld or delayed and. in exercising any right or remedy hereunder. each party
shall at all times act reasonably and in good faith.
16. Reasonable Expenditures. Any expenditure by a party. permitted or
required under the Lease, for which such party is entitled to demand and does
demand reimbursement from the other party shall be limited to the fair market
value of the goods and services involved, shall be reasonably incurred, and
shall be substantiated by documentary evidence available for inspection and
review by the other party. or its representative during normal business hours.
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17. Effect of Addendum. All terms with initial capital letters used
herein as defined in terms shall have the meanings ascribed to them in the Lease
unless specifically-defined herein. In the event of any inconsistency between
this Addendum and the Lease, the terms of this Addendum shall prevail. As used
herein. the term "Lease" shall mean the Lease. this Addendum and all riders,
exhibits, rules. regulations referred in the Lease or this Addendum.
LANDLORD: TENANT:
INTELLIPOST CORPORATION,
a Delaware corporation
/s/ XXXXX X. XXXX
--------------------------------
XXXXX X. XXXX, Attorney-in-Fact
By /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name Xxxxxx X. Xxxxxxxxx
-------------------------------------
Its President 11/20/96
--------------------------------------
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SECOND ADDENDUM TO LEASE
THIS SECOND ADDENDUM TO LEASE (this "Second Addendum") is made and
entered into as of January 21, 1998 (the "Effective Date") by and between XXXXX
X. XXXX, as Attorney In-Fact ("Landlord") and INTELLIPOST CORPORATION
("Tenant").
RECITALS
A. Landlord and Tenant entered into that certain Office Lease Agreement
dated as of November 15, 1996, as amended by the First Addendum of the same date
(collectively, the "Lease"), whereby Landlord leased to Tenant and Tenant leased
from Landlord approximately 3,939 square feet of space on the second floor (the
"Premises") at 000 Xxxxxxxxxx Xxxxxx., Xxx Xxxxxxxxx, Xxxxxxxxxx (the
"Building").
B. Landlord and Tenant now desire to amend the Lease to include an
additional 3,939 square feet of space on the fourth floor of the Premises (the
"Expansion Space"), pursuant to the terms and conditions contained herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant hereby agree as follows:
1. Defined Terms. All initially-capitalized terms used herein shall
have the same meanings as are ascribed to them in the Lease unless expressly
otherwise defined in this Second Addendum.
2. Expansion Space. The term "Expansion Space" shall mean the fourth
floor of the Building, as cross-hatched on Exhibit A attached hereto and made a
part hereof.
3. Rentable Area of the Expansion Space. Landlord and Tenant hereby
stipulate that the rentable area of the Expansion Space is 3,939 square feet.
4. Expansion Space Lease Term. The Lease Term for the Expansion Space
shall mean the period between the Commencement Date and the Expiration Date, as
such terms arc defined in paragraphs 5 and 6 below, unless sooner terminated or
extended under the Lease.
5. Expansion Space Commencement Date. The Commencement Date for the
Expansion Space shall mean February 1, 1998.
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6. Expansion Space Exaltation Date. The Expiration Date for the
Expansion Space shall mean November 30, 1999.
7. Expansion Space Base Rent. Subject to adjustment as provided in
Article V of the Lease, as amended by this Second Addendum, the Base Rent for
the Expansion Space shall mean:
EXPANSION SPACE ANNUAL BASE RENT
LEASE TERM MONTHLY BASE RENT ANNUAL BASE RENT PER SQUARE FOOT
--------------- ----------------- ---------------- ---------------
February 1, 1998
through $8,534.50 $102,414.00 $26.00
November 30, 1999
8. Tenant's Percentage Share for the Expansion Space. Tenant's
Percentage Share for the Expansion Space shall mean 28.56% with respect to
Property Taxes and Operating Expenses (as such terms are defined in the Lease),
and with respect to Tenant's Law Compliance Obligations under paragraph 8.2(b)
of the Lease.
9. Expansion Space Security Deposit. Tenant shall pay Landlord a
Security Deposit in the amount of $8,534.50 for the Expansion Space, payable
upon execution of this Second Addendum.
10. Expansion Space Pre-Paid Rent. Tenant shall pay Landlord pre-paid
Base Rent in the amount of $8,534.50, representing the Base Rent for the month
of February, 1998, payable upon execution of this Second Addendum.
11. Tenant Improvements. Landlord, at Landlord's sole cost and expense,
shall professionally clean and repair the carpeting and touch up the walls in
the Expansion Space on an as needed basis prior to Tenant moving in.
12. Signage. Tenant shall have the right to place additional signage in
the lobby of the Building with the prior consent of Landlord, which consent
shall not be unreasonably withheld. in addition, Tenant shall have the right to
install one exterior sign, subject to Landlord's prior written approval, which
will not be unreasonably withheld, and subject to any and all restrictions and
requirements imposed by the City and/or County of San Francisco or any other
governmental authorities. Tenant shall remove any signage installed hereunder at
the termination of its tenancy and restore the premises affected by the signage
to the condition existing prior to the installation.
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13. Additional Charges: Operating Expenses and Applicable Taxes.
Article V of the Lease, with respect to the Expansion Space, is hereby modified
as follows: Section 5.2(a) shall read: "Base Year" shall mean the Calendar Year
1998.
14. Expense Stop for Gas and Electricity. For gas and electricity
supplied to the Expansion Space, Landlord shall pay the first $500 per month
(the "Cap"), and Tenant shall pay all gas and electricity charges in excess of
the Cap.
15. Equipment. Tenant shall have the right to use the equipment and
fixtures, if any, presently located in the Expansion Space in their "AS IS"
condition. Landlord makes no representation or warranty concerning the condition
of said equipment and fixtures, and Tenant agrees to indemnify, defend and hold
harmless Landlord from and against any and all costs, damages, liability, and
expenses (including reasonable attorneys fees) arising from Tenant's use of said
equipment and fixtures. Tenant shall maintain said equipment and fixtures at its
own cost and expense.
16. Tenant's Broker or Agent. Tenant hereby warrants that it has had no
dealings with any real estate broker or agent in connection with the negotiation
of this Second Addendum except Xxxxx X. Xxxxx of CB Commercial Real Estate
Group, Inc. ("CB Commercial"), and Landlord warrants that he has had no dealings
with any real estate broker or agent except Xxxx Xxxxxx of Xxxxxx Commercial.
Each party shall defend, indemnify and the hold the other party harmless from
and against all claims, actions, loss, cost, damage, expense and liability
(including without limitation reasonable attorneys fees and court costs), with
respect to any leasing commission or equivalent compensation alleged to be owing
on account of the indemnifying party dealings with any real estate broker or
agent other than that specified herein.
17. Paragraph 27.25 of the Lease. Paragraph 27.25 of the Lease shall
not apply to the Expansion Space.
18. Applicability of the Lease. Except as modified herein, all of the
terms and conditions of the Lease shall apply to the Expansion Space and the
references in the Lease to the Premises shall also include the Expansion Space.
19. Miscellaneous. a) Except as modified in this Second Addendum, the
Lease shall be unmodified and shall remain in full force and effect; b) the
provisions this Second Addendum shall bind and inure to the benefit of the
heirs, representatives, successors and permitted assigns of the parties hereto;
c) this Second Addendum may be executed as several counterparts, each of which
shall be deemed an original, but all or which shall constitute one and the same
Agreement.
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IN WITNESS WHEREOF, this Second Addendum has been executed as of the
day and year first written above.
"Landlord" "Tenant"
INTELLIPOST CORPORATION,
a Delaware corporation
/s/ XXXXX X. XXXX
--------------------------------------
XXXXX X. XXXX, not individually but as
Attorney In-Fact
By: /s/ Xxxxxx X. Xxx
---------------------------------
Its: President CFO
By: /s/ Xxxxxxxxx Xxxxx-Xxxxx
---------------------------------
Its: General Counsel
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