Exhibit 10.50
OFFICE LEASE
between
CALIFORNIA PLAZA OF WALNUT CREEK, INC.,
a Florida not-for-profit corporation
(Landlord)
and
ELECTRONIC ARTS, INC.
a Delaware corporation
(Tenant)
TABLE OF CONTENTS
OFFICE LEASE
Article Title Page
------- ----- ----
1 Definitions 1
2 Premises 4
3 Lease Term 5
4 Rental 9
5 Security Deposit 17
6 Use of Premises 17
7 Utilities and Services 19
8 Maintenance and Repairs 22
9 Alterations, Additions and Improvements 22
10 Indemnification and Insurance 25
11 Damage or Destruction 28
12 Condemnation 29
13 [Intentionally Deleted] 29
14 Assignment and Subletting 30
15 Default and Remedies 33
16 Attorneys' Fees; Costs of Xxxx 00
00 Xxxxxxxxxxxxx xxx Xxxxxxxxxx 00
00 Quiet Enjoyment 39
19 Rules and Regulations 39
20 Estoppel Certificates 39
21 Entry by Landlord 40
22 Landlord's Lease Undertakings; Transfer of Landlord's Interest 40
23 Holdover Tenancy 41
24 Notices 42
25 Brokers 42
26 Communications and Computer Lines 42
27 Parking 43
28 Miscellaneous 44
EXHIBITS
Exhibit "A" Floor Plan
Exhibit "B" Work Letter Agreement
Exhibit "C" Rules and Regulations
Exhibit "D" Suite Acceptance Letter
Exhibit "E" Special Suite 600 Period Operating Expenses
Exhibit "F" Schedule of Janitorial Specifications
(i)
OFFICE LEASE
THIS OFFICE LEASE ("Lease"), dated for reference purposes as of
February 1, 2001, is made and entered into by and between CALIFORNIA PLAZA OF
WALNUT CREEK, lNC., a Florida not-for-profit corporation ("Landlord") and
ELECTRONIC ARTS, INC., 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 meanings specified herein;
1.01 Building. The term "Building" means the office building and
related common areas located at 0000 Xxxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxxxxxxxx 00000 and commonly known as CALIFORNIA PLAZA together with any
related land, improvements, parking facilities, common areas, driveways,
sidewalks and landscaping.
1.02 Premises. The term "Premises" means Xxxxx 000 (xxxxxxxxxx xx Xxxxx
000, and the former Suites 680 and 690) on the sixth (6th) floor of the Building
(hereinafter together referred to as "Suite 600") and Suite 700 on the seventh
(7th) floor of the Building), all as more particularly outlined on the drawing
attached hereto as Exhibit "A" and incorporated herein by reference. Provided,
however, the Premises do not include any storage area in the Building, any such
storage area used by Tenant will be the subject of a separate lease or rental
agreement.
1.03 Net Rentable Area of Building; Rentable Area of the Premises. The
phrase "Net Rentable Area of the Building" means three hundred sixty eight
thousand two hundred ninety (368,290) rentable square feet. The phrase "Rentable
Area of the Premises" shall mean a total of seventy-nine thousand two hundred
thirty two (79,232) rentable square feet as follows:
(A) With respect to Suite 600, forty-two thousand three hundred
ninety-eight (42,398) rentable square feet, and
(B) With respect to Suite 700, thirty-six thousand eight hundred
thirty-four (36,834) rentable square feet.
Landlord and Tenant hereby stipulate and agree as to the Net Rentable Area of
the Building and the Rentable Area of the Premises, and any subsequent
remeasurement of the Building or the Premises shall not affect Tenant's monetary
obligations under this Lease. Tenant acknowledges that the Net Rentable Area of
the Building and the Rentable Area of the Premises includes the usable area,
without deduction for columns or projections, multiplied by a load factor to
reflect a share of certain areas, which may include lobbies, corridors,
mechanical, utility, janitorial, boiler and service rooms and closets, restrooms
and other public, common and service areas of the Building.
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1.04 Initial Lease Term; Lease Year. The phrase "Lease Term" and/or
"Initial Lease Term" shall mean the period between the Commencement Date and the
Expiration Date (as such terms are hereinafter defined), unless sooner
terminated as otherwise provided in this Lease. Each consecutive twelve (12)
month period following the Commencement Date shall constitute a "Lease Year."
The Initial Lease Term shall consist of eight (8) Lease Years.
1.05 Commencement Date. The "Commencement Date" means February 1, 2001.
1.06 Expiration Date. The "Expiration Date" means the date which is the
last day of the eighth (8th) Lease Year (the "Expiration Date"). On the
Expiration Date, the Initial Lease Term will terminate and expire.
1.07 Monthly Base Rent. Subject to adjustment as provided in Article 4,
the phrase "Monthly Base Rent" shall be in the monthly amounts set forth below,
and shall be due and owing on the first (1st) day of each month during each
Lease Year of the Initial Lease Term:
Monthly Monthly Total
Base Rent Base Rent Monthly
Lease Year Xxxxx 000 Xxxxx 000 Base Rent
---------- --------- --------- ---------
First Lease Year:
2/1/01 - 7/31/01: $61,577.24 + $122,657.22 = $184,234.46
8/1/01 - 11/30/01: $62,287.34 + $122,657.22 = $184,944.56
12/1/01 - 1/31/02: $62,749.04 + $122,657.22 = $185,406.26
Second Lease Year:
2/1/02 - 11/30/02: $62,749.04 + $127,563.51 = $190,312.55
12/1/02 - 1/31/03: $141,185.34 + $127,563.51 = $268,748.85
Third Lease Year (2/1/03 - 1/31/04): $146,832.75 + $132,666.05 = $279,498.80
Fourth Lease Year (2/1/04 - 1/31/05): $152,706.06 + $137,972.69 = $290,678.75
Fifth Lease Year (2/1/05 - 1/31/06): $158,814.31 + $143,491.59 = $302,305.90
Sixth Lease Year (2/1/06 - 1/31/07): $165,166.88 + $149,231.25 = $314,398.13
Seventh Lease Year (2/1/07 - 1/31/08): $171,773.55 + $155,200.50 = $326,974.05
Eighth Lease Year (2/1/08 - 1/31/09): $178,644.50 + $161,408.52 = $340,053.02
2
Within three (3) business days from the date Tenant executes this
Lease, Tenant shall pay to Landlord the amount of One Hundred Twenty Two
Thousand Six Hundred Fifty Seven and 22/100 Dollars ($122,657.22) as and for an
advance payment of Monthly Base Rent for Suite 700 for the first full month of
the First Lease Year.
1.08 Property Taxes and Operating Expenses; Tenant's Percentage Share.
(A) Suite 600: In connection with Suite 600 only, the phrase "Tenant's
Percentage Share (Suite 600)" shall mean eleven and fifty-one hundredths percent
(11.51%) with respect to Property Taxes and Operating Expenses for the Building.
Tenant shall pay Tenant's Percentage Share (Suite 600) of Property Taxes and
Operating Expenses as follows:
(i) Special Suite 600 Period (Commencement Date to November
30, 2002). During the period from the Commencement Date up to and including
November 30, 2002 (the "Special Suite 600 Period"), Tenant shall pay (on a
monthly basis as additional Rent for Suite 600) Tenant's Percentage Share (Suite
600) of Property Taxes and Operating Expenses paid or incurred by Landlord
during said Special Suite 600 Period, in estimated monthly installments as
determined by Landlord. Provided, however, during the Special Suite 600 Period,
Operating Expenses shall only include the items set forth in the "Schedule of
Special Suite 600 Operating Expenses" listed in Exhibit "E" attached hereto, and
shall be subject to the limitations and adjustments set forth in Exhibit "E".
(ii) December 1, 2002 to December 31, 2002. During the period
from December 1, 2002 to December 31,2002, Tenant shall pay (on a monthly basis
as additional Rent for Suite 600) Tenant's Percentage Share (Suite 600) of
Property Taxes and Operating Expenses paid or incurred by Landlord during said
period in the same manner and pursuant to the same formula as set forth in
Section 1 .08(A)(i) above.
(iii) January 1, 2003 to December 31, 2003. During this
period, Tenant shall not be charged for any share of the Property Taxes or
Operating Expenses for the Building.
(iv) January 1, 2004 to the Expiration Date. Starting on
January 1,2004 and during each and every month thereafter during the Initial
Lease Term, Tenant shall pay Tenant's Percentage Share (Suite 600) of Property
Taxes and Operating Expenses in excess of the Property Taxes and Operating
Expenses paid or incurred by Landlord during the Suite 600 Base Year (defined in
Section 4.01(A)).
(B) Suite 700: In connection with Suite 700 only, the phrase "Tenant's
Percentage Share (Suite 700)" shall mean ten percent (10.00%) with respect to
Property Taxes and Operating Expenses for the Building.
(i) January 1, 2002 to the Expiration Date. Starting on
January 1, 2002 and during each and every month thereafter during the Initial
Lease Term, Tenant shall pay Tenant's Percentage Share (Suite 700) of Property
Taxes and Operating Expenses in excess of the
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Property Taxes and Operating Expenses paid or incurred by Landlord during the
Suite 700 Base Year (defined in Section 4.01 (A)).
(C) All references in this Lease to "Tenant's Percentage Share" shall
mean either Tenant's Percentage Share (Suite 600) or Tenant's Percentage Share
(Suite 700) as determined during the applicable period set forth above.
(D) Landlord may redetermine Tenant's Percentage Share from time to
time to reflect reconfigurations, additions or modifications to the Building.
1.90 Security Deposit. The phrase "Security Deposit" shall mean
Seventy-Five Thousand Fifty-Nine and 50/100 dollars ($75,059.50).
1.10 Tenant's Permitted Use. The phrase "Tenant's Permitted Use" shall
mean general office use including sales, training, and research and development
of software products (with related functions).
1.11 Business Hours. The phrase "Business Hours" shall mean the hours
of 7:00 A.M. to 6:00 P.M., Monday through Friday, and 7:00 A.M. to 1:00 P.M. on
Saturdays (federal and state holidays excepted). Holidays are defined as the
following: New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day, and to the extent of utilities or services
provided by union members engaged at the Building, such other holidays observed
by such unions.
1.12 Landlord's Address For Notices. The phrase "Landlord's Address for
Notices" shall mean Transwestern Commercial Services, 0000 Xxxxx Xxxxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000, Attn: Property Manager,
telephone: (000)000-0000; facsimile: (000)000-0000.
1.13 Tenant's Address For Notices. The term "Tenant's Address for
Notices" shall mean 0000 Xxxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxxx,
Xxxxxxxxxx 00000, Attn: Office Manager, telephone: (000)000-0000; facsimile:
(000)000-0000 (with a copy to, but which copy shall not constitute notice:
Electronic Arts, Inc., 000 Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx
00000, Attn: General Counsel).
1.14 Brokers. The term "Brokers" means as follows: Cornish & Xxxxx,
which represents only the interests of Landlord; and Xxxxxxx Realty Corporation,
which represents only the interests of Tenant.
ARTICLE 2
PREMISES
2.01 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,
Landlord shall deliver the Premises to
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Tenant in substantial conformance with the Work Letter Agreement attached hereto
as Exhibit "B."
2.02 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 except as
expressly set forth herein. To the best of Landlord's knowledge, without
inquiry, the Building and Premises comply with Applicable Laws (as defined in
Section 6.02(A)). Tenant currently occupies Suite 600 pursuant to a prior lease
agreement ("Prior Lease") which will be terminated on the Commencement Date and
replaced by this Lease. Prior to the Commencement Date, Landlord or its designee
and Tenant will walk Suite 700 for the purpose of reviewing the condition of the
same (and the condition of completion and workmanship of any tenant improvements
in the Premises which Landlord is required to construct in the Premises pursuant
to this Lease); after such review, Tenant shall execute a Suite Acceptance
Letter, in the form of Exhibit "D" attached hereto, accepting the Premises.
Except as is expressly set forth in this Section 2.02 or the Work Letter
Agreement attached hereto, if any, or as may be expressly set forth in Suite
Acceptance Letter, Tenant agrees to accept the Premises and the Building in
their respective "as is" physical condition without any agreements,
representations, understandings or obligations on the part of Landlord to
perform any alterations, repairs or improvements (or to provide any allowance
for same).
ARTICLE 3
LEASE TERM
3.01 Lease Term. Except as otherwise provided in this Lease, the Lease
Term shall be for the period described in Section 1.04 of this Lease, commencing
on the Commencement Date described in Section 1.05 of this Lease and ending on
the Expiration Date described in Section 1.06 of this Lease; provided, however,
that, if, for any reason, Landlord is unable to deliver possession of Suite 700
on the date described in Section 1.05 of this Lease, Landlord shall not be
liable for any damage caused thereby, nor shall the Lease be void or voidable,
but, rather, the Commencement Date shall nonetheless commence on the date set
forth in Section 1.05 but Monthly Base Rent for Suite 700 shall not be due or
payable until Suite 700 is so tendered to Tenant (except for Tenant-caused
delays which shall not be deemed to delay payment of Monthly Base Rent).
3.02 Option to Extend Term. Tenant is hereby granted the one-time right
and option to extend the Initial Lease Term ("Option to Extend Term") for a
single additional period of five (5) consecutive Lease Years ("Extension
Period") from and after the Expiration Date. The terms and conditions applicable
to the Extension Period shall be the same terms and conditions in effect under
the Lease immediately prior to the Extension Period, with the following
exceptions: (i) if the Option to Extend Term is exercised for less than all of
the Premises, then the exercise must include at least one (1) full floor in the
Building (i.e., either the entire Suite 600 and/or the entire Suite 700); (ii)
if the Option to Extend Term is exercised for more than one (1) full floor but
for less than all of the Premises, then (a) the exercise must include all of
Suite 700 and a portion of Suite 600, and (b) Tenant must obtain Landlord's
prior written consent as to which portion of Suite 600 is included and which
portion of Suite 600 is excluded from the
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exercise, which consent shall not be unreasonably nor untimely withheld; (iii)
Tenant shall have no further options to extend the Lease Term; (iv) the Monthly
Base Rent for each month of each Lease Year during the Extension Period shall be
increased to that amount which is equal to the Fair Market Rent (defined below)
for each month of each Lease Year during the Extension Period; and (v) if the
Option to Extend Term is exercised for less than all of the Premises, then (a)
at commencement of the Extension Period the definition of Premises shall be
revised to include only the portion of the Premises which was included in the
exercise, and (b) the Monthly Base Rent shall be reduced to that amount which is
equal to the number of rentable square feet in the portion of the Premises
included in the exercise multiplied by the Monthly Rental Rate Per Square Foot.
For purposes of this Lease, the phrase "Monthly Rental Rate Per Square Foot"
means the amount which is equal to the monthly Fair Market Rent (defined below)
as calculated for the entire Premises pursuant to this Section 3.02 divided by
seventy-nine thousand two hundred thirty two (79,232). In order for the Lease
Term to be extended to include the Extension Period, Tenant must timely exercise
the Option to Extend Term pursuant to the provisions set forth in Section
3.02(A) below. If Tenant timely exercises the Option to Extend Term, then
Monthly Base Rent for the Premises during each month of each Lease Year during
the Extension Period shall be the Fair Market Rent (defined in Section 3.02(B))
for each month of each Lease Year during the Extension Period (which shall in
any event not be less than the Monthly Base Rent charged Tenant during the Lease
Year preceding commencement of the Extension Period). However, any attempt by
Tenant to exercise the Option To Extend shall, at Landlord's election, be null
and void if Tenant is in default under the Lease (which default remains uncured
following expiration of any applicable notice and cure period) as of the date of
attempted exercise or at any time thereafter and prior to commencement of the
Extension Period. Following timely exercise of the Option to Extend Term, (x)
Tenant and Landlord shall during the Rent Negotiation Period (defined in Section
3.02(C)) meet and confer and in good faith, using commercially reasonable
standards, attempt to agree on what Fair Market Rent will be for each month of
each Lease Year during the Extension Period, and (y) the Lease Term shall be
extended to include the Extension Period and each and every term and condition
of this Lease shall remain in full force and effect until the date the Extension
Period expires ("Extended Expiration Date"). If by expiration of the Rent
Negotiation Period Landlord and Tenant agree on what the Fair Market Rent will
be for each month of each Lease Year during the Extension Period, they shall
within ten (10) business days following said agreement execute and deliver to
one another an amendment to this Lease which extends the Lease Term through the
Extension Period, states the number of rentable square feet in the Premises, and
what the Monthly Base Rent for the Premises shall be during each month of each
Lease Year during the Extension Period. Thereafter, all references in this Lease
to the Expiration Date shall automatically mean the Extended Expiration Date,
and all references to "Lease Year" shall mean each consecutive twelve (12) month
period commencing with the first (1st) day of the Extension Period, without
regard to calendar years. If, however, Tenant shall fail to timely exercise the
Option to Extend Lease Term, then the Option to Extend Term shall itself
terminate and expire, shall be null and void and shall have no further force and
effect. Tenant's exercise of the Option to Extend Term shall not operate to cure
any default by Tenant of any of the terms or provisions in the Lease, nor to
extinguish or impair any rights or remedies of Landlord arising by virtue of
such default. If the Lease, the Initial Lease Term or Tenant's right to
possession of the Premises shall terminate in any manner whatsoever before the
date Tenant timely exercises the Option to Extend Term, or if Tenant shall have
subleased or assigned all or any portion of the Premises without Landlord's
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prior written consent (where such consent was required), then immediately upon
such termination, sublease or assignment, the Option to Extend Term shall
simultaneously terminate and become null and void. The Option to Extend Term is
personal to Tenant, however, if Landlord consents in writing to an assignment
pursuant to this Lease, said assignee shall have the right to exercise the
Option to Extend Term. Except as provided in the immediately preceding sentence,
in no circumstance shall the assignee under a complete or partial assignment of
the Lease, or a subtenant under a sublease of the Premises, have the right to
exercise the Option to Extend Term. Any purported assignment of this Lease by
Tenant without Landlord's prior written consent (where such consent was
required), or any purported sublease by Tenant of any part of the Premises
without Landlord's prior written consent (where such consent was required),
after the date Tenant has exercised the Option to Extend Term and before
commencement of the Extension Period, shall automatically and retroactively
cause said exercise to become null and void and of no force or effect, in which
event the original Expiration Date set forth in Section 1.07 of the Lease shall
be reinstated. Time is of the essence of this provision.
(A) Exercise of Option to Extend Term. In order to timely exercise the
Option to Extend Term, Tenant must deliver unequivocal and unconditional written
notice thereof to Landlord ("Notice of Exercise of Option to Extend Term") at
least two hundred seventy (270) calendar days prior to the Expiration Date but
not more than three hundred sixty (360) calendar days prior to the Expiration
Date.
(B) Definition of Fair Market Rent. The phrase "Fair Market Rent" shall
mean the average per square foot net monthly base rental rate per month for all
leases for periods approximately as long as the Extension Period, executed by
new tenants (not renewing tenants) for similar uses and lengths of time for
comparable space in buildings similar to the Building in size, age, amenities
and condition which are located either in the downtown Walnut Creek business
district or in the Pleasant Xxxx XXXX business district during the six (6)
months immediately prior to commencement of the Extension Period, subject to
reasonable adjustments for comparable space on more or less desirable floors or
areas of the Building, as determined in accordance with Section 3.02(C) below.
If no such comparable space has been leased during such six (6) month period,
then Fair Market Rent shall be determined pursuant to the provisions set forth
in Section 3.02(C) hereof, and shall be determined based on a so-called
"modified face rate" of such comparable new leases, i.e. without regard to any
free rent periods, take-over lease obligations or other economic incentives but
taking into consideration any tenant improvement allowances provided with such
comparable new leases. If such comparable leases include base years, stop
levels, or other provisions respecting taxes or operating expenses, or include
any other economic provisions (such as but not limited to consumer price
provisions, utility reimbursements, or fixed rent increases), the same shall be
included in Tenant's renewal terms.
(C) Determination Fair Market Rent. The period which commences on the
date which is one hundred eighty (180) calendar days prior to the Expiration
Date and which ends on the date which is ninety (90) calendar days prior to the
Expiration Date shall be referred to as the "Rent Negotiation Period." On
condition that Tenant timely exercises the Option to Extend Term, then during
the Rent Negotiation Period Landlord and Tenant shall meet and confer and in
good faith, using commercially reasonable standards, attempt to agree on what
the Fair Market Rent shall be for each month during each Lease Year of the
Extension Period for the Premises.
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However, if by expiration of the Rent Negotiation Period Landlord and Tenant are
for any reason unable to agree on the Fair Market Rent, then Fair Market Rent
shall be determined as follows:
(i) If less then the entire Premises will be leased by Tenant
during the Extension Period, then the parties shall (a) determine the monthly
Fair Market Rent for the entire Premises, (b) then determine the Monthly Rental
Rate Per Square Foot by dividing the monthly Fair Market Rent for the entire
Premises by 79,232, and (c) then determine the monthly Fair Market Rent for the
reduced Premises by multiplying the Monthly Rental Rate Per Square Foot by the
number of rentable square feet in the reduced Premises.
(ii) Within ten (10) business days from expiration of the Rent
Negotiation Period, Landlord and Tenant shall (a) each place in a separate
sealed envelope their final determination as to what the Fair Market Rent shall
be during each month of each Lease Year during the Extension Period, and (b)
meet with each other, exchange the sealed envelopes and then open such envelopes
in each other's presence. If within one (1) business day of the exchange,
Landlord and Tenant do not mutually agree upon the Fair Market Rent for each
month of each Lease Year during the Extension Period, then within ten (10)
business days of said exchange and opening of envelopes Landlord shall appoint
an individual ("Landlord's Appointment"), and Tenant shall appoint an individual
("Tenant's Appointment"). Landlord's Appointment and Tenant's Appointment shall
each by profession be duly licensed real estate brokers in good standing in the
State of California who shall have been active during the most recent ten (10)
year period in the leasing of comparable commercial properties in the vicinity
of the Building (together, the "Initial Brokers"). The Initial Brokers shall
then select one of the Landlord's or Tenant's determination of Fair Market Rent
(which were in the sealed envelopes) which most closely approximates their good
faith determination of the Fair Market Rent for the Premises. The Initial
Brokers shall not have the authority to modify or change either of the
Landlord's or Tenant's determination of Fair Market Rent, nor shall the Initial
Brokers have the authority to select a middle ground or compromise position. The
Initial Broker's authority shall be limited solely to determining which of
Landlord's or Tenant's submitted Fair Market Rent determinations for the
Premises most closely approximate his/her determination of Fair Market Rent
during each month of each Lease Year during the Extension Period. The Initial
Brokers may hold such hearings and require such briefs as they determine
necessary. In addition, Landlord or Tenant may submit to the Initial Brokers
(with a copy concurrently delivered to the other party) within five (5) business
days after the appointment of the Initial Brokers any market data and additional
information that such party deems relevant to the determination of Fair Market
Rent for each month during each Lease Year of the Extension Period and the other
party may submit a reply in writing within five (5) business days after receipt
of such market data.
(iii) The Initial Brokers shall, within thirty (30) calendar
days of their appointment, reach a decision as to whether the parties shall use
Landlord's or Tenant's submitted Fair Market Rent, and shall notify Landlord and
Tenant of such determination. The decision of the Initial Brokers shall be final
and binding upon Landlord and Tenant.
(iv) If the Initial Brokers fail to timely agree upon whether
Landlord's or Tenant's submitted Fair Market Rent shall constitute the Fair
Market Rent for each month of
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each Lease Year during the Extension Period, then within forty (40) calendar
days following appointment of the Initial Brokers, Landlord and Tenant shall
meet, confer and attempt to agree on the appointment of a third qualified
individual ("Third Broker"). However, if Landlord and Tenant are unable to
timely agree on selection of a Third Broker, then one or both of said parties
may apply to the Presiding Judge of the Contra Costa County Superior Court for
appointment of the Third Broker.
(v) The role of the Third Broker shall be to review and
analyze the results of the hearings held by the Initial Brokers, review the
briefs, information, testimony and data presented to the Initial Brokers, and
review any reports submitted by the Initial Brokers. The Third Broker shall not
have the authority to modify or change either of the Landlord's or Tenant's
determination of Fair Market Rent, nor shall the Third Broker have the authority
to select a middle ground or compromise position. The Third Broker's authority
shall be limited solely to determining which of Landlord's or Tenant's submitted
Fair Market Rent determinations for the Premises most closely approximate
his/her determination of Fair Market Rent during each month of each Lease Year
during the Extension Period. Within thirty (30) calendar days of his/her
appointment, the Third Broker shall decide whether the parties shall use
Landlord's or Tenant's submitted Fair Market Rent, and shall notify Landlord and
Tenant of such determination. The decision of the Third Broker shall be final
and binding upon Landlord and Tenant.
(vi) The cost of the proceedings and any fee or charge payable
to the Initial Brokers and, if applicable, to the Third Broker, shall be paid by
Landlord and Tenant equally.
ARTICLE 4
RENTAL
4.01 Definitions. As used herein:
(A) "Base Year" shall have the following meaning:
(i) Xxxxx 000: Xxx Xxxxx 000, the phrase "Suite 600 Base Year"
shall mean as follows:
a. During the Special Suite 600 Period (Commencement
Date to November 30, 2002), there shall be no Suite 600 Base Year, instead
Tenant shall pay Tenant's Percentage Share (Suite 600) of Property Taxes and
Operating Costs pursuant to the provisions set forth in Section 1.08(A)(i).
b. During the period December 1,2002 to December 31,
2002, Tenant shall pay Tenant's Percentage Share (Suite 600) of Property Taxes
and Operating Costs pursuant to the provisions set forth in Section 1.08(A)(ii).
c. Following expiration of the Special Suite 600
Period, the phrase "Suite 600 Base Year" shall mean calendar year 2003, and
Tenant shall pay Tenant's
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Percentage Share (Suite 600) of Property Taxes and Operating Costs pursuant to
the provisions set forth in Sections 1.08(A)(iii) and (iv).
(ii) Xxxxx 000. Xxx Xxxxx 000, the phrase "Suite 700 Base
Year" shall mean calendar year 2001.
All references in this Lease to "Base Year" shall mean either the Suite
600 Base Year or the Suite 700 Base Year, as the context dictates.
(B) "Property Taxes" shall mean the aggregate amount of all real estate
taxes, assessments (whether they be general or special), sewer rents and
charges, transit taxes, taxes based upon the receipt of rent and any other
federal, state or local govermnental charge, general, special, ordinary or
extraordinary (but not including income or franchise taxes, capital stock,
inheritance, estate, gift, or any other taxes imposed upon or measured by
Landlord's gross income or profits, unless the same shall be imposed in lieu of
real estate taxes or other ad valorem taxes), which Landlord shall pay or become
obligated to pay in connection with the Building or any part thereof. Property
Taxes shall also include all reasonable fees and costs, including attorneys'
fees, appraisals and consultants' fees, reasonably incurred by Landlord in
seeking to obtain a reassessment, reduction of, or a limit on the increase in,
any Property Taxes, regardless of whether any reduction or limitation is
obtained. Property Taxes for any calendar year shall be Property Taxes which are
due for payment or paid in such year, rather than Property Taxes which are
assessed or become a lien during such year. Property Taxes shall include any
tax, assessment, levy, imposition or charge imposed upon Landlord and measured
by or based in whole or in part upon the Building or the rents or other income
from the Building, to the extent that such items would be payable if the
Building was the only property of Landlord subject to same and the income
received by Landlord from the Building was the only income of Landlord. Property
Taxes shall also include any personal property taxes imposed upon the furniture,
fixtures, machinery, equipment, apparatus, systems and appurtenances of Landlord
used in connection with the Building.
(B) Subject to the provisions set forth in Section 1.08(A) with respect
to the Special Suite 600 Period, "Operating Expenses" shall mean all costs,
fees, disbursements and expenses paid or incurred by or on behalf of Landlord
(excluding Property Taxes) in the operation, ownership, maintenance, insurance,
management, replacement and repair of the Building including without limitation:
(i) Premiums for property, casualty, liability, rent
interruption or other types of insurance carried by Landlord.
(ii) Salaries, wages and other amounts paid or payable for
personnel including the Building manager, superintendent, operation and
maintenance staff, and other employees of Landlord involved in the maintenance
and operation of 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.
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(iii) Cleaning expenses, including without
limitation janitorial services, window cleaning, and garbage and refuse removal.
(iv) Landscaping expenses, including without limitation
irrigating, trimming, mowing, fertilizing, seeding, 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 Section 4.01(C)(xii) 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.
(vii) All items of repair or maintenance of the Building not
mentioned elsewhere in this Section.
(viii) The costs of policing and providing security and
supervision of the Building.
(ix) Fair market rental with respect to the management office
for the Building.
(x) The cost of the rental of any machinery or equipment and
the cost of supplies used in the maintenance and operation of the Building.
(xi) Audit fees and the cost of accounting services incurred
in the preparation of statements referred to in this Lease and financial
statements, and in the computation of the rents and charges payable by tenants
of the Building.
(xii) Capital expenditures (a) made to reduce Operating
Expenses, (b) in connection with Suite 600, to comply with any laws or other
governmental requirements enacted after June 1, 1995; (c) in connection with
Suite 700, to comply with any laws or other governmental requirements enacted
after February 1, 2001; or (d) for replacements and repairs (as opposed to
additions or new improvements) of non-structural items located in the Building
or its common areas required to keep such areas in good condition and repair;
provided, all such permitted capital expenditures (together with reasonable
financing charges) shall be amortized for purposes of this Lease over their
useful lives as reasonably determined by Landlord's independent certified public
accountants.
(xiii) Legal fees and expenses.
(xiv) Payments under any easement, operating agreement,
declaration, restrictive covenant, or instrument pertaining to the sharing of
costs in any planned development.
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(xv) A commercially reasonable fee for the administration and
management of the Building generally consistent with other comparable Class A
office buildings in the Walnut Creek area.
(xvi) The cost to remove, remediate or encapsulate hazardous
materials or substances which are located anywhere in the Building (excluding
the Premises) or Common Areas but only if said removal, remediation or
encapsulation is related to the repair and maintenance of the Building and/or
Common Areas.
Notwithstanding the foregoing, Operating Expenses shall not include the
following: any ground lease or underlying lease rental; repair of damage to the
Building or its equipment and/or systems, to the extent Landlord is reimbursed
by insurance proceeds, warranties or guaranties; construction and installation
of tenant improvements, renovations, or decorations made for tenants or other
occupants in the Building or for vacant tenant suites within the Building,
including, without limitation, fees and costs for space planning, architectural
drawings, construction, permits, licenses and inspection; costs incurred in
connection with negotiations and transactions with present or prospective
tenants or other occupants of the Building for leases, subleases, assignments
and other related transactions, including, without limitation, attorneys' fees
for such negotiations and transactions; interest, principal, points and fees on
debts or amortization on any mortgage or any other financing instrument
encumbering the Building; Landlord's general corporate overhead; all items and
services for which Tenant or any other tenant in the Building directly
reimburses to Landlord; leasing commissions; electric power costs for which any
tenant directly contracts with the local public service company and which are
paid for by any such tenant; (i) the cost to remove, remediate or encapsulate
hazardous materials or substances located in the Premises, and (ii) unless the
same is related to the repair and maintenance of the Building and/or Common
Areas (in which case the cost shall be included in Operating Expenses), the cost
to remove, remediate or encapsulate hazardous materials or substances located
anywhere in the Building or Common Areas; Landlord's charitable or political
contributions; costs to remediate Hazardous Materials (defined below) which were
deposited, released or discharged in Suite 600 prior to June 1, 1995 (in
connection with Suite 600) or which were deposited, released or discharged in
Suite 700 prior to February 1, 2001; and legal fees and expenses incurred in
connection with the enforcement of any leases.
4.02 Monthly Base Rent. During the Lease Term, Tenant shall pay to
Landlord as rental for the Premises the Monthly Base Rent described in Section
1.07 above, subject to the following adjustments (herein called the "Rent
Adjustments"):
(A) Suite 600.
(i) Special Suite 600 Period (Commencement Date to November
30. 2002). During the Special Suite 600 Period, the Monthly Base Rent for Suite
600 payable by Tenant to Landlord, as adjusted pursuant to Section 1.07 and
subject to the provisions set forth in Section 1.08(A) above, shall be increased
by that amount which is equal to (i) Tenant's Percentage Share (Suite 600) of
all Property Taxes paid or incurred by Landlord during each calendar year, and
(ii)
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Tenant's Percentage Share (Suite 600) of the Operating Expenses paid or incurred
by Landlord during each calendar year.
(ii) December 1, 2002 to December 31, 2002. During the period
December 1, 2002 to December 31, 2002, the Monthly Base Rent for Suite 600
payable by Tenant to Landlord shall be determined in the same manner and
pursuant to the same formula as set forth in Section 4.02(A)(i) above.
(iii) January 1, 2003 to December 31. 2003. During the period
January 1, 2003 to December 31, 2003, Tenant shall have no obligation to pay any
share of Property Taxes or Operating Expenses with respect to Suite 600.
(iv) January 1, 2004 to Expiration Date. Starting on January
1,2004 and during each calendar year thereafter during the Initial Lease Term,
the Monthly Base Rent for Suite 600 payable by Tenant to Landlord, as adjusted
pursuant to Section 1.07 above (but no longer subject to the provisions set
forth in Section 1.08(A)), shall be increased by (a) Tenant's Percentage Share
(Suite 600) of the total dollar increase, if any, in Property Taxes for such
year over Property Taxes for the Suite 600 Base Year; and (b) Tenant's
Percentage Share (Suite 600) of the total dollar increase, if any, in Operating
Expenses paid or incurred by Landlord during such year over Operating Expenses
paid or incurred by Landlord during the Suite 600 Base Year. A decrease in
Property Taxes or Operating Expenses below the Suite 600 Base Year amounts shall
not decrease the amount of the Monthly Base Rent due hereunder or give rise to a
credit in favor of Tenant.
(B) Suite 700. Starting on January 1, 2002 and during each calendar
year thereafter during the Initial Lease Term, the Monthly Base Rent for Suite
700 payable by Tenant to Landlord, as adjusted pursuant to Section 1.07 above,
shall be increased by (a) Tenant's Percentage Share (Suite 700) of the total
dollar increase, if any, in Property Taxes for such year over Property Taxes for
the Suite 700 Base Year; and (b) Tenant's Percentage Share (Suite 700) of the
total dollar increase, if any, in Operating Expenses paid or incurred by
Landlord during such year over Operating Expenses paid or incurred by Landlord
during the Suite 700 Base Year. A decrease in Property Taxes or Operating
Expenses below the Suite 700 Base Year amounts shall not decrease the amount of
the Monthly Base Rent due hereunder or give rise to a credit in favor of Tenant.
(C) In each case during the Initial Lease Term where Monthly Base Rent
has been subject to a Rent Adjustment pursuant to the provisions of this Section
4.02, each specific Rent Adjustment shall be referred to as a "Tax and Operating
Expense Adjustment."
4.03 Adjustment Procedure; Estimates. The Tax and Operating Expense
Adjustments specified in Section 4.02 shall be determined and paid as follows:
(A) During each calendar year of the Lease Term, Landlord shall give
Tenant written notice of its reasonable estimate of the amounts payable under
Section 4.02(A) for that calendar year. On or before the first day of each
calendar month during the calendar year in question, Tenant shall pay to
Landlord one-twelfth (1/12th) of such estimated amounts; provided, however
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that, not more often than once per calendar year, 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 one hundred twenty (120) 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 Property Taxes and Operating Expenses, and the
actual Tax and Operating Expense Adjustment to be made pursuant to Section 4.02
for such calendar year, as determined by Landlord (the "Landlord's Statement")
and such Landlord's Statement shall be binding upon Tenant, except as provided
in Section 4.04 below. If the final amount of the Tax and Operating Expense
Adjustment as shown in Landlord's Statement is more than the estimated Tax and
Operating Expense Adjustment payments actually paid by Tenant for such calendar
year, Tenant shall pay the deficiency to Landlord within thirty (30) calendar
days from receipt of Landlord's Statement. However, if the final amount of the
Tax and Operating Expense Adjustment as shown in Landlord's Statement is less
than the estimated Tax and Operating Adjustment payments actually paid by Tenant
for such calendar year, 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 within thirty (30) calendar
days after the date the same has been determined by Landlord. No delay in
providing Landlord's Statement described in this subparagraph (B) shall act as a
waiver of Landlord's right to payment under Section 4.02 above.
(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 Section 4.02 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 in question to the termination date bears to 365.
The termination of this Lease shall not affect the obligations of Landlord and
Tenant pursuant to Section 4.03(B) to be performed after such termination.
4.04 Review of Landlord's Statement. Provided that Tenant is not in
default beyond any applicable cure period under this Lease, and provided further
that Tenant strictly complies with the provisions of this Section 4.04, Tenant
shall have the right to reasonably review supporting data for any portion of a
Landlord's Statement for the calendar year to which said Statement pertains plus
the calendar year preceding that calendar year if the same has not previously
been audited (for a possible total look-back period of two (2) calendar years);
provided, however, Tenant may not audit any calendar year more than once.
Further, Tenant may not have the right to audit all documentation relating to
all Building operations as this would far exceed the relevant information
necessary to properly document a pass-through billing statement, but real estate
tax statements, and information on utilities, repairs, maintenance and insurance
will be available), in accordance with the following procedure:
(A) Tenant shall, within sixty (60) calendar days after delivery of any
Landlord's Statement, 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 withhold
deduct, or offset any monetary obligation of Tenant to Landlord under the Lease
(including,
14
without limitation, Tenant's obligation to make all payments of Monthly Base
Rent including the annual adjustments required by Section 1.07 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 Section 4.04. The
right of Tenant under this Section 4.04 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
Section 4.04 for a particular Landlord's Statement shall be deemed waived.
(B) Tenant acknowledges that Landlord maintains its records for the
Building in Landlord's property manager's offices presently located at the
address set forth in Section 1.12 and Tenant agrees that any review of records
under this Section 4.04 shall be at the sole expense of Tenant and shall be
conducted by an independent firm of certified public accountants of national
standing which does not charge on a contingency-fee basis. Tenant acknowledges
and agrees that any records reviewed under this Section 4.04 constitute
confidential information of Landlord, which shall not be disclosed to anyone
other than Tenant's attorneys, accountants, other employees and consultants
performing the review, the principals of Tenant who receive the results of the
review and other parties pursuant to court order, subpoena or Applicable Laws as
defined below (collectively, "Permitted Recipients"). The disclosure of such
information to any person other than a Permitted Recipient, 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 which does
not charge on a contingency-fee basis. In the event of a disagreement between
the two accounting firms, the review that discloses the least amount of
deviation from Landlord's Statement shall be deemed to be correct. In the event
that the results of the review of Landlord's 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; and if
the results demonstrate that Tenant overpaid obligations by more than ten
percent (10%), Landlord shall pay Tenant's reasonable costs of the audit. In the
event that the results of the review of Landlord's records (taking into account,
if applicable, the results of any additional review caused by Landlord) reveal
that Tenant has underpaid obligations for a preceding period, the amount of such
underpayment shall be paid by Tenant to Landlord along with the next succeeding
installment of estimated Tax and Operating Expense Adjustment; and if the
results demonstrate that Tenant underpaid obligations by more than ten percent
(10%), Tenant shall pay Landlord's reasonable costs of the audit.
4.05 Payment. Within three (3) business days from the date Tenant
executes this Lease, Tenant shall pay Landlord the Monthly Base Rent for Suite
700 for the first full calendar month of the first Lease Year of Lease Term.
Thereafter the Total Monthly Base Rent described in Section 1.07, as adjusted
annually in accordance with Section 1.07 and by the Rent Adjustments set forth
in Section 4.02, shall be payable in advance on the first day of each calendar
month. All Rent, and all other amounts payable to Landlord by Tenant pursuant to
the
15
provisions of this Lease, shall be paid to Landlord, without notice, demand,
abatement (unless otherwise provided in this Lease), deduction or offset, in
lawful money of the United States at Landlord's office in the Building or to
such other person or at such other place as Landlord may designate from time to
time by written notice given to Tenant. No payment by Tenant or receipt by
Landlord of a lesser amount than the correct Rent due hereunder shall be deemed
to be other than a payment on account; nor shall any endorsement or statement on
any check or any letter accompanying any check or payment be deemed to effect or
evidence an accord and satisfaction; and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance or pursue
any other remedy in this Lease or at law or in equity provided.
4.06 Late Charge; Interest. Tenant acknowledges that the late payment
of Monthly Base Rent or any other amounts payable by Tenant to Landlord
hereunder (all of which shall constitute additional rental to the same extent as
Monthly Base Rent) will cause Landlord to incur administrative costs and other
damages, the exact amount of which would be impracticable or extremely difficult
to ascertain. Subject to the provisions of Section 4.06(A) below, Landlord and
Tenant agree that if Landlord does not receive any such payment on or before
five (5) calendar days after receipt of written notice from Landlord that such
payment is overdue ("Notice of Late Payment"), Tenant shall pay to Landlord, as
additional rent, a late charge equal to five percent (5%) of the overdue amount
to cover such additional administrative costs. In addition, Landlord and Tenant
agree that if Landlord does not receive any such payment on or before the date
when due, Tenant shall pay to Landlord, as additional rent, interest on the
delinquent amounts at the lesser of the maximum rate permitted by law if any or
ten percent (10%) per annum from the date due to the date paid.
(A) Notwithstanding the foregoing, Landlord shall only be required to
deliver one (1) Notice of Late Payment to Tenant during any Lease Year. If,
during any Lease Year, Landlord has delivered to Tenant one (1) Notice of Late
Payment, thereafter Landlord and Tenant agree that if Landlord does not receive
any such payment on or before five (5) calendar days after the date such payment
is due, Tenant shall pay to Landlord, as additional rent, (a) a late charge
equal to five percent (5%) of the overdue amount to cover such additional
administrative costs; and (b) interest on the delinquent amounts at the lesser
of the maximum rate permitted by law if any or ten percent (10%) per annum from
the date due to the date paid.
4.07 Additional Rent. For purposes of this Lease, all amounts payable
by Tenant to Landlord pursuant to this Lease, whether or not denominated as
such, shall constitute additional rental hereunder. Such additional rental,
together with the Monthly Base Rent and Rent Adjustments, shall sometimes be
referred to in this Lease as "Rent".
4.08 Additional Taxes. Notwithstanding anything in Section 4.01(B) or
Section 4.02 to the contrary, Tenant shall reimburse Landlord upon demand for
any and all taxes payable by or imposed upon Landlord (and not charged to Tenant
by Landlord as Property Taxes or Operating Expenses) upon or with respect to:
any fixtures or personal property located in the Premises; any leasehold
improvements made in or to the Premises by or for Tenant; the Rent payable
hereunder, including, without limitation, any gross receipts tax, license fee or
excise tax levied by any governmental authority; the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy of any
portion of the Premises (including
16
without limitation any applicable possessory interest taxes); or this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises.
ARTICLE 5
SECURITY DEPOSIT
5.01 Security Deposit. Tenant has already deposited with Landlord the
Security Deposit described in Section 1.9 above as security for Tenant's
performance under the Prior Lease. The Security Deposit is made by Tenant and
shall be retained and used by Landlord to secure the 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 within five (5) business days after receipt of
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 6
USE OF PREMISES
6.01 Tenant's Permitted Use. Tenant shall use the Premises only for
Tenant's Permitted Use as set forth in Section 1.10 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. Landlord disclaims any warranty that
the Premises are suitable for Tenant's intended use and Tenant acknowledges that
it has had a full opportunity to make its own determination in this regard.
6.02 Compliance With Laws and Other Requirements.
(A) Tenant shall cause the Premises to comply in all material respects
with all laws, ordinances, regulations and directives of any governmental
authority having jurisdiction including, without limitation, any certificate of
occupancy and any law, ordinance, regulation, covenant, condition or restriction
affecting the Building or the Premises which in the future may become applicable
to the Premises (collectively "Applicable Laws"), but only to the extent such
compliance obligation arises from changes in Applicable Laws after June 1, 1995
with respect to Suite 600 or from changes in Applicable Laws after the
Commencement Date with respect to Suite 700, and in each instance the same
relate either to (i) Tenant's use of the Premises which is other than a
Permitted Use, or (i) any alterations, additions or changes made by Tenant to
the Premises (whether or not with the consent of Landlord) or by Landlord at the
request of Tenant.
17
(B) Tenant shall not use the Premises, or permit the Premises to be
used, in any manner which: (i) violates any Applicable Law; (ii) causes or is
reasonably likely to cause damage to the Building or the Premises; (iii)
violates a requirement or condition of any fire and extended insurance policy
covering the Building or the Premises, or increases the cost of such policy;
(iv) constitutes or is reasonably likely to constitute a nuisance, annoyance or
inconvenience to other tenants or occupants of the Building or its equipment,
facilities or systems; (v) 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 (vi) violates the Rules and Regulations described in Article 19.
(C) Subject and subordinate to Tenant's obligations to comply with
Applicable Laws set forth in Section 6.02(A) and (B), Landlord agrees to and
shall cause the Premises to comply with Applicable Laws.
6.03 Hazardous Materials.
(A) No Hazardous Materials, as defined herein, shall be 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
Tenant's Hazardous Materials customarily used in the conduct of the Permitted
Uses (e.g., copier fluids and cleaning supplies) may be Handled at the Premises
without Landlord's prior written consent. Tenant's Hazardous Materials shall be
Handled at all times in compliance with the manufacturer's instructions therefor
and 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 Regulatory Authority, as defined herein, 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. To the extent required by any Regulatory Authority, such actions shall
include, but not be limited to, the investigation of the environmental condition
of the Premises or any affected 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 affected portion of the Building to the condition existing
prior to the introduction of Tenant's Hazardous Materials, notwithstanding any
less stringent standards or remediation allowable under applicable 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 affected
portion of the Building.
(C) Tenant agrees to execute affidavits, representations, and the like
from time to time at Landlord's request stating Tenant's actual knowledge
regarding the presence of Hazardous Materials on the Premises.
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(D) "Environmental Laws" means and includes all now and hereafter
existing statutes, laws, ordinances, codes, regulations, rules, rulings, orders,
decrees, directives, policies and requirements by any Regulatory Authority
regulating, relating to, or imposing liability or standards of conduct
concerning public health and safety or the environment.
(E) "Hazardous Materials" means: (i) any material or substance: (a)
which is defined or becomes defined as a "hazardous substance", "hazardous
waste," "infectious waste," "chemical mixture or substance," or "air pollutant"
under Environmental Laws; (b) containing petroleum, crude oil or any fraction
thereof; (c) containing polychlorinated biphenyls (PCB's); (d) containing
asbestos; (e) which is radioactive; or (f) which is infectious; or (ii) any
other material or substance displaying toxic, reactive, ignitable or corrosive
characteristics, as all such terms are used in their broadest sense, and are
defined, or become defined by Environmental Laws.
(F) "Handle," "handle," "Handled," "handled," "Handling," 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.
(G) "Regulatory Authority" shall mean any federal, state or local
governmental agency, commission, board or political subdivision.
ARTICLE 7
UTILITIES AND SERVICES
7.01 Building Services. As long as Tenant is not in default under this
Lease, 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 (if the Building has such
equipment serving the Premises), in common with Landlord and other tenants and
occupants and their agents and invitees.
(B) During Business Hours, such air conditioning, heating and
ventilation as, in Landlord's reasonable judgment and which is consistent with
other Class A office buildings in the downtown Walnut Creek area, are 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 and electricity service
at the following rates: (i) $85 per hour for heating, ventilation and air
conditioning service, and (ii) $2.50 per hour for electricity for every 10,000
square feet for after-Business Hour lighting; subject however, to Landlord's
right to reasonably increase said rates from time to time.
(C) Water for drinking and rest room purposes.
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(D) Janitorial and cleaning services five (5) days per week (consistent
with the "Schedule of Janitorial Specifications" attached hereto as Exhibit
"F"), provided that the Premises are used exclusively for the Permitted Uses and
are kept reasonably in order by Tenant. If the Premises are not used exclusively
as offices, Landlord, at Landlord's sole discretion, may require that the
Premises 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.
(E) At all reasonable times, electric current as required for building
standard lighting and fractional horsepower machines generally used in the
conduct of the Permitted Uses; 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 data 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 generally used in the conduct of the
Permitted Uses); (ii) if Tenant shall require electric current which may disrupt
the provision of electrical service to other tenants, Landlord may refuse to
grant its consent or 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 reasonable 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 as currently existing in 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.
(F) Security for the Building as reasonably determined by Landlord from
time to time. The parties acknowledge that safety and security devices, services
and programs provided by Landlord, if any, while intended to deter crime and
ensure safety, may not in given instances prevent theft or other criminal acts,
or ensure safety of persons or property. The risk that any safety or security
device, service or program may not be effective, or may malfunction, or be
circumvented by a criminal, is assumed by Tenant with respect to Tenant's
20
property and interests, and Tenant shall obtain insurance coverage to the extent
Tenant desires protection against such criminal acts and other losses, as
further described in this Lease. Tenant agrees to cooperate in any reasonable
safety or security program developed by Landlord or required by Applicable Laws.
Any amounts which Tenant is required to pay to Landlord pursuant to
this Section 7.01 shall be payable upon demand by Landlord and shall constitute
additional rent.
7.02 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 Section 7.01, when such failure is caused by
accident, breakage, repairs, strikes, lockouts, power shortages, 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 (except as otherwise provided in Section 7.02(A) below) shall any
failure or interruption xxxxx or suspend Tenant's obligation to pay Monthly 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 and Tenant's obligations hereunder shall not be affected
by any such action of Landlord. Notwithstanding the foregoing:
(A) If (i) during the Lease Term Landlord is unable to furnish to the
Premises any of the utilities and services described in Section 7.0 1(A)-(E)
hereinabove (a "Service Failure") for a continuous period of fifteen (15) or
more business days ("15-Day Period"), and (ii) during said 15-Day Period the
Service Failure renders the Premises substantially unusable for the Permitted
Uses, then (iii) commencing at expiration of the 15-Day Period and ending on the
date that the Service Failure ends, the Monthly Base Rent for the Premises shall
be abated pro rata in proportion to the portion of the Premises rendered
substantially unusable as a consequence of the Service Failure.
(B) If (i) during the Lease Term a Service Failure occurs and continues
for a continuous period of ninety (90) or more calendar days ("90-Day Period"),
and (ii) during said 90-Day Period the Service Failure renders the Premises
substantially unusable for the Permitted Uses, then (iii) commencing at
expiration of the 90-Day Period and ending thirty (30) calendar days thereafter
(the "Window Period"), Landlord and Tenant shall each have the right and option
to terminate this Lease. Landlord and/or Tenant shall exercise this termination
right, if at all, by delivery of written notice thereof to the other Landlord
prior to expiration of the Window Period, in which event this Lease shall
terminate, expire and have no further force or effect, said termination to be
effective thirty (30) calendar days after delivery of the termination notice.
However, if prior to expiration of the Window Period neither Landlord or Tenant
exercise their right to terminate the Lease as provided in this Section 7.02,
then the right to terminate herein granted shall itself terminate, expire and
have no further force or effect.
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ARTICLE 8
MAINTENANCE AND REPAIRS
8.01 Landlord's Obligations. Except as provided in Section 8.02 and
Section 8.03 below, Landlord shall maintain the Building, the common areas and
the utility delivery systems to the point of entry into the Premises in good
order and repair throughout the Lease Term; provided, however, that Landlord
shall not be liable for any failure to make any repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the need for such repairs or maintenance is given to Landlord
by Tenant. Except as provided in Article 11, there shall be no abatement of
Rent, nor shall there be any liability of Landlord, by reason of any injury or
inconvenience to, or interference with, Tenant's business or operations arising
from the making of, or failure to make, any maintenance or repairs in or to any
portion of the Building. Subject to the foregoing, Landlord agrees to use
commercially reasonable efforts to perform any necessary repairs and maintenance
to the Building.
8.02 Tenant's Obligations. During the Lease Term, Tenant shall, at its
sole cost and expense, maintain the Premises in good order and repair
(including, without limitation, the carpet, wall-covering, doors, plumbing and
other fixtures, equipment, alterations and improvements, whether installed by
Landlord or Tenant). Further, Tenant shall be responsible for, and upon demand
by Landlord shall promptly reimburse Landlord for, any damage to any portion of
the Building or the Premises caused by (a) Tenant's activities in the Building
or the Premises; (b) the performance or existence of any alterations, additions
or improvements made by Tenant in or to the Premises; (c) the installation, use,
operation or movement of Tenant's property in or about the Building or the
Premises; or (d) any actively negligent act or wilful omission by Tenant or its
officers, directors, shareholders, members, partners, employees, agents,
representatives, agents, contractors, and (while on, in or about the Building or
Premises) invitees of Tenant.
8.03 Landlord's Rights. Landlord and its contractors shall have the
right, at all reasonable times and upon prior oral or telephonic notice to
Tenant at the Premises, other than in the case of any emergency in which case no
notice shall be required, to enter upon the Premises to make any repairs to the
Premises or Building reasonably required or deemed reasonably necessary by
Landlord and to erect such equipment, including scaffolding, as is reasonably
necessary to effect such repairs. Subject to the foregoing, when entering and
working in the Premises Landlord agrees to use commercially reasonable efforts
to minimize interference with Tenant's business operations.
ARTICLE 9
ALTERATIONS, ADDITIONS AND IMPROVEMENTS
9.01 Landlord's Consent; Conditions. Subject to the provisions of
Section 9.01(A) below, 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, which consent, with respect to
non-structural alterations, shall not be unreasonably withheld. Landlord may
impose as a condition to consenting to any Alterations such requirements as
Landlord
22
reasonably 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; Tenant's receipt of
all necessary permits and approvals from all governmental authorities having
jurisdiction over the Premises prior to the construction of the Alterations;
Tenant's delivery to Landlord of such bonds and insurance as Landlord shall
reasonably require; and Tenant's payment to Landlord of all reasonable costs and
expenses paid or 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. All Alterations shall be performed by a
general contractor and/or subcontractors that is/are duly licensed and in good
standing by the State of California, who is/are bonded, reputable and who are
approved by Landlord in the exercise of its reasonable discretion. Tenant is
required to provide Landlord written notice of whether the Alterations include
the Handling of any Hazardous Materials and whether these materials are of a
customary and typical nature for industry practices. Upon completion of the
Alterations, Tenant shall provide Landlord with two (2) copies of as-built
plans. Neither the approval by Landlord of plans and specifications relating to
any Alterations nor Landlord's supervision or monitoring of any Alterations
shall constitute any warranty by Landlord to Tenant of the adequacy of the
design for Tenant's intended use or the proper performance of the Alterations.
(A) Notwithstanding the foregoing, without first receiving Landlord's
consent Tenant shall have the right to construct and install Alterations in the
Premises, but only on the following terms and conditions: (a) the cost of
constructing and installing said Alterations do not in the aggregate exceed
Fifteen Thousand and No/100 Dollars ($15,000.00); (b) the Alterations do not
affect, involve, change or modify any heating, air conditioning, ventilating,
electrical, gas, steam or other utility system in the Premises or Building; and
(c) the Alterations do no affect, involve, change or modify any structural
component or system in the Premises or Building (hereinafter, a "Small
Alteration"). Provided, however, at least ten (10) calendar days prior to
commencing the construction or installation of any Small Alteration in the
Premises, Tenant shall first deliver written notice thereof to Landlord along
with a true and correct copy of (i) all plans and specifications relating to the
Small Alterations, and (ii) all necessary permits and approvals from all
governmental authorities having jurisdiction over the Premises prior to the
construction and installation of the Small Alterations.
(B) All further references in this Lease to Alterations shall mean and
include Small Alterations but shall exclude the Work described in the Work
Letter Agreement attached hereto as Exhibit "B".
9.02 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, and similar organizations. 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
23
payable to Landlord by Tenant within thirty (30) calendar days following receipt
of written demand therefore (accompanied by reasonable supporting information
documenting said costs). No asbestos-containing materials shall be used or
incorporated in the Alterations. No lead-containing surfacing material, solder,
or other construction materials or fixtures where the presence of lead might
create a condition of exposure not in compliance with Environmental Laws shall
be incorporated in the Alterations.
9.03 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 or for 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 and
costs, arising out of or related to any such liens or notices. Further, Tenant
shall deliver to Landlord not less than ten (10) calendar days prior written
notice before commencing any Alterations in or about the Premises to permit
Landlord to post appropriate notices of non-responsibility. Tenant shall also
secure, prior to commencing any Alterations, at Tenant's sole expense, a
completion and lien indemnity bond satisfactory to Landlord for such work, but
only if reasonably required by Landlord based on the size and scope of the
contemplated Alteration project, the reputation of the contractor performing the
work and the anticipated cost of the work. 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 thirty (30) calendar days after Landlord notifies Tenant in
writing that any such lien, stop notice, claim or encumbrance has been filed. If
Tenant fails to pay and remove such lien, claim or encumbrance within such
thirty (30) calendar day period, 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 Section 4.06 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.
9.04 Lease Termination. Except as provided in this Section 9.04, upon
expiration or earlier termination of this Lease Tenant shall surrender the
Premises to Landlord in the same condition as existed on the date Tenant first
occupied the Premises (whether pursuant to this Lease or an earlier Lease),
subject to reasonable wear and tear. Unless otherwise agreed in writing by
Landlord and Tenant prior to the expiration or earlier termination of this
Lease, upon the expiration or earlier termination of this Lease Tenant shall
remove all of the 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 earlier 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 Alterations, items or repair such damage promptly after the
expiration or earlier 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. Notwithstanding the foregoing, Tenant shall have no obligation to
remove from the
24
Premises any Work constructed or installed in the Premises pursuant to the Work
Letter Agreement attached hereto as Exhibit "B".
ARTICLE 10
INDEMNIFICATION AND INSURANCE
10.01 Indemnification.
(A) Tenant agrees to protect, indemnify, hold harmless and defend
Landlord and any Mortgagee, as defined herein, and each of their respective
partners, directors, officers, shareholders, agents, employees, successors and
assigns (except to the extent the losses described below are caused by the
active negligence or wilful misconduct of Landlord, its agents and employees),
from and against:
(i) any and all loss, cost, damage, liability or expense
(including but not limited to reasonable attorneys' fees and legal costs)
arising out of or related to any claim, suit or judgment brought by or in favor
of any person or persons for damage, loss or expense due to, but not limited to,
bodily injury, including death, or property damage sustained by such person or
persons which arises out of, is occasioned by or is in any way attributable to
the use or occupancy of the Premises or any portion of the Building by Tenant or
the acts or omissions of Tenant or its agents, employees, contractors, clients,
invitees or subtenants (except to the extent the losses are caused by the active
negligence or willful misconduct of Landlord or its agents or employees). Such
loss or damage shall include, but not be limited to, any injury or damage to, or
death of, Landlord's employees or agents or damage to the Premises or any
portion of the Building.
(ii) any and all environmental damages which arise from: (a)
the Handling of any Tenant's Hazardous Materials, as defined in Section 6.03 or
(b) the breach of any of the provisions of this Lease. For the purpose of this
Lease, "environmental damages" shall mean (1) all claims, judgments, damages,
penalties, fines, costs, liabilities, and losses (including without limitation,
diminution in the value of the Premises or 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); (2) all sums paid for settlement of claims,
attorneys' fees, consultants' fees and experts' fees; and (3) all costs incurred
by Landlord in connection with investigation or remediation relating to the
Handling of Tenant's Hazardous Materials, whether or not required by
Environmental Laws or otherwise required under this Lease. To the extent that
Landlord is held strictly liable by a court or other governmental agency of
competent jurisdiction 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 Section 10.01 shall
survive the expiration or earlier termination of this Lease.
(B) Landlord agrees to protect, indemnify, hold harmless and defend
Tenant from, and against any and all loss, cost, damage, liability or
expense, including reasonable attorneys' fees,
25
with respect to any claim of damage or injury to persons or property at the
Premises, caused by the active negligence or wilful misconduct of Landlord or
its agents or employees.
(C) Notwithstanding anything to the contrary contained herein, nothing
shall be interpreted or used to in any way affect, limit, reduce or abrogate any
insurance coverage provided by any insurers to either Tenant or Landlord.
(D) Notwithstanding anything to the contrary contained in this Lease,
nothing herein shall be construed to infer or imply that Tenant is a partner,
joint venturer, agent, employee, or otherwise acting by or at the direction of
Landlord.
10.02 Property Insurance.
(A) At all times during the Lease Term, Tenant shall procure and
maintain, at its sole expense, "all-risk" property insurance, for damage or
other loss caused by fire or other casualty or cause including, but not limited
to, vandalism and malicious mischief, theft, water damage of any type, including
sprinkler leakage, bursting of pipes, explosion, in an amount not less than one
hundred percent (100%) of the replacement cost covering (i) all Alterations made
by or for Tenant in the Premises; and (ii) Tenant's trade fixtures, 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 pursuant to which Landlord contributed Landlord's Contribution
(pursuant to the Work Letter Agreement attached hereto as Exhibit "B") 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, Landlord shall procure and
maintain "all-risk" property insurance for damage and other loss caused by fire
or other casualty to the Building, in such amounts and with such insurers as
Landlord deems necessary or appropriate in the exercise of its discretion.
(C) 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 all perils insured
against in Section 10.02(A).
10.03 Liability Insurance.
(A) At all times during the Lease Term, Tenant shall procure and
maintain, at its sole expense, commercial 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 Two Million Dollars ($2,000,000) per occurrence and a general aggregate
limit of at least Two Million Dollars ($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 (whose names have been provided to Tenant) as additional
insureds. Such liability insurance shall be written as primary policies, not
excess or
26
contributing with or secondary 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, including actual attorneys' fees,
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 two Million Dollars ($2,000,000) 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 Landlord and its agents, beneficiaries, partners, employees and any
Mortgagee of Landlord or any ground lessor of Landlord as additional insureds.
(C) Landlord shall, at all times during the Lease Term, procure and
maintain commercial general liability insurance for the Building in which the
Premises are located. Such insurance shall have minimum combined single limit of
liability of at least Two Million Dollars ($2,000,000) per occurrence, and a
general aggregate limit of at least Two Million Dollars ($2,000,000).
10.04 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 One Million Dollars ($1,000,000) Bodily
Injury Each Accident; One Million Dollars ($1,000,000) Bodily Injury By Disease
- Each Person; and One Million Dollars ($1,000,000) Bodily Injury to Disease -
Policy Limit.
10.05 Policy Requirements. All insurance required to be maintained by
Landlord and Tenant shall be issued by insurance companies authorized to do
insurance business in the State of California and rated not less than A-VIII in
Best's Insurance Guide. A certificate of insurance evidencing the insurance
required under this Article 10 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 10 pursuant to blanket policies, but only if such
blanket policies expressly provide coverage to the Premises and Landlord as
required by this Lease.
10.06 Waiver of Subrogation. Each party hereby waives any right of
recovery against the other for injury or loss due to hazards covered by
insurance or required to be covered, to the extent of the injury or loss covered
thereby. Any policy of insurance to be provided by Tenant
27
or Landlord pursuant to this Article 10 shall contain a clause denying the
applicable insurer any right of subrogation against the other party.
10.07 Failure to Insure. If Tenant fails to maintain any insurance
which Tenant is required to maintain pursuant to this Article 10, Tenant shall
be liable to Landlord for any loss or cost resulting from such failure to
maintain. Tenant may not self-insure against any risks required to be covered by
insurance without Landlord's prior written consent, which Landlord may grant or
deny in its reasonable discretion.
ARTICLE 11
DAMAGE OR DESTRUCTION
11.01 Total Destruction. Except as provided in Section 11.03 below,
this Lease shall automatically terminate if the Building is totally destroyed.
11.02 Partial Destruction of Premises. If the Premises are damaged by
any casualty and, in Landlord's opinion, the Premises (exclusive of any
Alterations made to the Premises by Tenant) can be restored to its pre-existing
condition within two hundred seventy (270) calendar days after the date of the
damage or destruction, Landlord shall, upon written notice from Tenant to
Landlord of such damage, except as provided in Section 11.03, promptly and with
due diligence repair any damage to the Premises (exclusive of any Alterations to
the Premises made by Tenant, which shall be promptly repaired by Tenant at its
sole expense) and, until such repairs are completed, the Rent shall be abated
from the date of damage or destruction in the same proportion that the rentable
area of the portion of the Premises which is unusable by Tenant in the conduct
of its business bears to the total Rentable Area of the Premises. Provided,
however, the Rent shall not be abated if either (a) the damage or destruction is
repaired within five (5) business days after Landlord receives written notice
from Tenant of the casualty, or (b) the damage or destruction is the result of
the active negligence or wilful misconduct of Tenant, or any officers, partners,
employees, agents or invitees of Tenant, or any assignee or subtenant of Tenant.
(A) Notwithstanding the foregoing, if, within ninety (90) calendar days
after the date of the damage or destruction, Landlord reasonably determines (and
such determination is delivered to Tenant in writing) that such repairs cannot
be made within said two hundred seventy (270) calendar day period, then either
Landlord or Tenant shall have the right, by written notice given to the other
within thirty (30) calendar days after receipt of Landlord's written
determination, to terminate this Lease as of the date of the damage or
destruction.
(B) Notwithstanding the foregoing, if, within ninety (90) calendar days
after the damage or destruction, Landlord either (i) fails to deliver to Tenant
a written determination that such repairs cannot be made within said one hundred
eighty (180) calendar day period, or (ii) fails to commence making the repairs,
then either Landlord or Tenant shall have the right, by written notice given to
the other within two hundred ten (210) calendar days after the date of the
damage or destruction, to terminate this Lease as of the date of the damage or
destruction.
28
11.03 Exceptions to Landlord's Obligations. Notwithstanding anything to
the contrary contained in this Article 11, Landlord shall have no obligation to
repair the Premises if either: (a) the Building is so damaged as to require
repairs to the Building exceeding twenty percent (20%) of the full insurable
value of the Building; or (b) the damage or destruction occurs within three
hundred sixty-five (365) calendar days of the Expiration Date (inclusive of
option periods which either have been exercised by Tenant or which remain
capable of being exercised by Tenant).
11.04 Waiver. The provisions contained in this Lease shall supersede
any contrary laws (whether statutory, common law or otherwise) now or hereafter
in effect relating to damage, destruction, self-help or termination, including
California Civil Code Sections 1932 and 1933.
ARTICLE 12
CONDEMNATION
12.01 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"), and if Landlord, at its option, is unable
or unwilling to provide substitute premises containing at least as much rentable
area as described in Section 1.03 above, then this Lease shall terminate on the
date that title or possession to the Premises is taken by the condemning
authority, whichever is earlier.
12.02 Award. In the event of any Condemnation, the entire award for
such taking shall belong to Landlord. Tenant shall have no claim against
Landlord or the award for the value of any unexpired term of this Lease or
otherwise. However, Tenant shall be entitled to independently pursue a separate
award in a separate proceeding for Tenant's costs and expenses of relocation,
the taking of any improvements and any other costs directly associated with the
taking, and Landlord agrees to reasonably cooperate with Tenant so long as the
same does not diminish Landlord's award.
12.03 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, however, 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 13
[INTENTIONALLY DELETED]
29
ARTICLE 14
ASSIGNMENT AND SUBLETTING
14.01 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 (any such assignment, encumbrance, subletting,
occupation or transfer is hereinafter referred to as a "Transfer"). For purposes
of this Lease, the term "Transfer" shall also include (a) if Tenant is a general
partnership or limited partnership, the withdrawal or change, voluntary,
involuntary or by operation of law, of a majority of the partners (limited or
general), or a transfer of a majority of partnership interests (limited or
general), within any twelve (12) month period, or the dissolution of the
partnership, and (b) if Tenant is a corporation whose stock is not publicly held
and not traded through an exchange or over the counter, or a limited liability
company, the dissolution, merger, consolidation, division, liquidation or other
reorganization of Tenant, or if any of the following occur within any twelve
(12) month period: (i) the sale or other transfer of more than an aggregate of
fifty percent (50%) of the voting securities of Tenant (other than to immediate
family members by reason of gift or death) or (ii) the sale, mortgage,
hypothecation or pledge of more than an aggregate of fifty percent (50%) of
Tenant's net assets. Any Transfer without the prior written consent of Landlord
shall be void and shall constitute a material breach of this Lease.
(A) Notwithstanding the foregoing, Tenant shall have the right to
assign this Lease or sublease the Premises, or any part thereof, to an
"Affiliate" without the prior written consent of Landlord, but only if Tenant
first delivers fifteen (15) business days' or more prior written notice to
Landlord. For purposes of this provision, the term "Affiliate" shall mean any
corporation or other entity controlling, controlled by, or under common control
with (directly or indirectly) Tenant, including, without limitation, any parent
corporation controlling Tenant or any subsidiary that Tenant controls. The term
"control," as used herein, shall mean the power to direct or cause the direction
of the management and policies of the controlled entity through the ownership of
more than fifty percent (50%) of the voting securities in such controlled
entity.
(B) Notwithstanding the foregoing, Tenant expressly covenants and
agrees not to enter into any lease, sublease, license, concession or other
agreement for the 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.
14.02 Notice to Landlord; Request for Consent. If Tenant desires to
assign this Lease or any interest herein to a third party or entity (including
an Affiliate), or to sublet all or any part of the Premises to a third party or
entity (including an Affiliate), or to otherwise engage in a Transfer, then at
least thirty (30) days but not more than ninety (90) calendar days prior to the
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effective date of the proposed assignment, subletting or Transfer, Tenant shall
submit to Landlord in connection with Tenant's request for Landlord's consent:
(A) A statement signed by the Tenant and by the proposed assignee,
subtenant or transferee containing (i) the name and address of the proposed
assignee, subtenant or transferee; (ii) a copy of the proposed assignee's,
subtenant's or transferee's audited (if prepared, or if not prepared, unaudited)
financial statements (including a balance sheet, a profit and loss statement and
a statement of cash flows) for the fiscal year to date and for the immediately
preceding three (3) fiscal years; (iii) if the transferee is an Affiliate, a
certified statement as to how the ownership and control of the Affiliate
complies with the provisions of Section 14.0 1(A), (v) the type of use proposed
for the Premises; and (v) all of the principal terms of the proposed assignment,
subletting or Transfer; and
(B) If an assignment or sublease, one (1) true and correct copy of the
proposed final document of assignment or sublease.
Excluding a proposed assignment or sublet to an Affiliate, within
fifteen (15) business days after Landlord's receipt of all (but not less than
all) of the information and documents required by this Section 14.02, Landlord
shall, at its option by written notice to Tenant, either: (1) in good faith
acting reasonably, request such further or additional information that Landlord
may require in order to make an informed decision (in which event the fifteen
(15) business day period shall be reinstated upon Landlord's receipt of the
requested information); or (2) consent to the proposed assignment, sublease or
Transfer on the identical terms and conditions set forth in the information and
documents delivered to Landlord; or (3) exercise its rights set forth in Section
14.03. If Landlord for any reason fails to deliver any written notice to Tenant,
then Landlord shall be deemed to have reasonably withheld its consent. As a
condition to granting consent to a proposed assignment or sublease, Landlord
shall have the right to require that the Tenant and the proposed assignee or
sublessee execute and deliver to one another Landlord's form of Consent to
Sublease or Consent to Assignment of Lease, as appropriate.
14.03 Landlord's Recapture Rights. Excluding a proposed assignment or
sublet to an Affiliate, at any time within fifteen (15) business days after
Landlord's receipt of all (but not less than all) of the information and
documents described in Section 14.02 above, Landlord may, at its option by
written notice to Tenant, elect to: (a) if Tenant proposes to sublet all (100%)
of the Premises, then Landlord shall have the right but not the obligation to
terminate all (100%) of the Lease; (b) if Tenant proposes to sublet less than
all of the Premises, then Landlord shall have the right but not the obligation
to sublet the portion thereof proposed to be sublet by Tenant upon the same
terms as those offered to the proposed subtenant; (c) if Tenant proposes to
assign all (100%) of its interest in the Lease, then Landlord shall have the
right but not the obligation to terminate all (100%) of the Lease.
14.04 Landlord's Consent; Standards. Excluding a proposed assignment or
sublet to an Affiliate, Landlord's consent to a proposed assignment, subletting
or other Transfer shall not be unreasonably withheld, conditioned or delayed;
however, notwithstanding the foregoing and in addition to any other grounds for
denial, Landlord's consent shall be deemed reasonably withheld if, in Landlord's
good faith judgment: (a) the proposed assignee, subtenant or
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transferee does not have the financial strength to perform its obligations under
this Lease or any proposed sublease; (b) the business and operations of the
proposed assignee, subtenant or transferee are not of comparable quality to the
business and operations being conducted by other tenants in the Building; (c)
the proposed assignee, subtenant or transferee intends to use any part of the
Premises for a purpose not permitted under this Lease; (d) either the proposed
assignee, subtenant or transferee, or any person which directly or indirectly
controls, is controlled by, or is under common control with the proposed
assignee, subtenant or transferee occupies space in the Building, or is
negotiating with Landlord to lease space in the Building; (e) the use of the
Premises or the Building by the proposed assignee, subtenant or transferee
would, in Landlord's reasonable judgment, significantly impact the Building in a
negative manner including but not limited to significantly increasing the
pedestrian traffic in and out of the Building or requiring any substantial
alterations to the Building to comply with Applicable Laws; (f) the subject
space is not regular in shape with appropriate means of ingress and egress
suitable for normal renting purposes; (g) the proposed assignee, subtenant or
transferee is a government (or agency or instrumentality thereof); or (h) Tenant
has failed to cure a breach or default of this Lease (and the same continues
after expiration of any applicable cure periods) at the time Tenant requests
consent to the proposed Transfer.
14.05 Additional Rent. Excluding a proposed assignment or sublet to an
Affiliate, if Landlord consents to any such assignment, subletting or other
Transfer, two-thirds (2/3's) of the amount by which all sums or other economic
consideration received by Tenant in connection with such assignment, subletting
or Transfer, whether denominated as rental or otherwise, 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) after deduction for any improvement allowance or
other economic concession (planning allowance, moving expenses, etc.) actually
paid by Tenant to sublessees or assignees, broker's commissions, attorneys'
fees, costs of advertising the space for sublease or assignment, etc. Said
amount shall be paid by Tenant to Landlord promptly after receipt by Tenant as
additional Rent under the Lease without affecting or reducing any other
obligation of Tenant hereunder.
14.06 Landlord's Costs. If Tenant shall Transfer this Lease or all or
any part of the Premises or shall request the consent of Landlord to any
Transfer, Tenant shall pay to Landlord as additional rent Landlord's reasonable
costs related thereto, including Landlord's reasonable attorneys' fees.
Provided, however, Landlord's costs and it's attorneys' fees paid or incurred to
review Tenant's request for a Transfer shall not exceed Two Thousand and No/100
Dollars ($2,000.00) per Transfer.
14.07 Continuing Liability of Tenant. Notwithstanding any assignment,
subletting or other Transfer, 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,
subletting or Transfer had not occurred; provided, however, that any act or
omission of any assignee, sublessee or transferee, other than Landlord, that
violates the terms of this Lease shall be deemed a violation of this Lease by
Tenant.
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14.08 Non-Waiver. The consent by Landlord to any assignment, sublease
or other Transfer 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 14, to any further assignment, sublease or other Transfer. In the event
of an assignment, subletting or other Transfer, and with Tenant's prior consent,
Landlord may collect rent from the assignee, subtenant or transferee 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 14, an acceptance of the assignee, subtenant or transferee as Tenant, or
a release of Tenant from the performance of Tenant's obligations under this
Lease. If Tenant shall default under this Lease and fail to cure within the time
permitted, then and only in such event Landlord (after written notice to Tenant)
is irrevocably authorized to direct any assignee, sublessee or transferee to
make all payments under or in connection with the Transfer directly to Landlord
(which Landlord shall apply towards Tenant's obligations under this Lease) until
such default is cured.
ARTICLE 15
DEFAULT AND REMEDIES
15.01 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 Monthly Base Rent, additional Rent or
make any other payment required to be made by Tenant hereunder as and when due.
(B) The failure by Tenant to execute and return to Landlord the
Estoppel Certificate within the period of time required by Section 20.01 of this
Lease.
(C) The making by Tenant or its Guarantor of any general assignment for
the benefit of creditors, the filing by or against Tenant or its Guarantor of a
petition under any federal or state bankruptcy or insolvency laws (unless, in
the case of a petition filed against Tenant or its Guarantor 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.
(D) The making by Tenant of: (i) any material misrepresentation or
omission in this Lease or in connection with negotiating or entering into this
Lease; (ii) any material misrepresentation or omission in any financial
statements or other materials provided at any time during the Lease Term by
Tenant or by any Guarantor to Landlord; (iii) any material misrepresentation or
omission in any Estoppel Certificate delivered by Tenant pursuant to Article 20
of this Lease; or (iv) any material misrepresentation or omission in connection
with any proposed or actual assignment, subletting or other Transfer of this
Lease.
(E) The failure by Tenant to observe or perform any provision of this
Lease to be observed or performed by Tenant or the breach by Tenant of any
covenant in this Lease made by
33
Tenant, other than those described in Sections 15.01 (A), (B), (C) and (D)
above, if such failure continues for twenty (20) calendar days after written
notice thereof by Landlord to Tenant; provided, however, that if the nature of
the failure is such that it cannot be cured within the twenty (20) calendar day
period, no failure shall exist if (i) Tenant commences the curing of the failure
within the twenty (20) calendar day period, (ii) thereafter diligently
prosecutes the same to completion, and (iii) actually completes the cure within
ninety (90) calendar days from receipt of notice of such failure. The twenty
(20) calendar 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.
15.02 Landlord's Right To Terminate Upon Tenant Default. In the event
Tenant commits any default or breach of this Lease pursuant to Section 15.01
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
(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 computed by allowing interest on such amounts at the then
highest lawful rate of interest, but in no 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 at the time of the award. As used in paragraph
(C) above, "worth at the time of award" shall be computed by discounting such
amount by (i) the discount rate of the Federal Reserve Bank of San Francisco
prevailing at the time of award plus (ii) one percent (1%).
15.03 Mitigation of Damages. Whether or not Landlord terminates this
Lease or terminates Tenant's right to possession of the Premises, Landlord shall
under no circumstance
34
have any obligation to mitigate Landlord's damages except to the extent required
by applicable law. If Landlord is required by applicable law to mitigate damages
as provided herein: (a) Landlord shall be required only to use reasonable
efforts to mitigate, which shall not exceed such efforts as Landlord generally
uses to lease other space in the Building, (b) Landlord will not be deemed to
have failed to mitigate if Landlord or its affiliates lease any other portions
of the Building or other projects owned by Landlord or its affiliates in the
same geographic area, before reletting all or any portion of the Premises, and
(c) any failure to mitigate as described herein with respect to any period of
time shall only reduce the Rent and other amounts to which Landlord is entitled
hereunder by the reasonable rental value of the Premises during such period. In
recognition that the value of the Building depends on the rental rates and terms
of leases therein, Landlord's rejection of a prospective replacement tenant
based on an offer of rentals below Landlord's published rates for new leases of
comparable space at the Building at the time in question, or at Landlord's
option, below the rates provided in this Lease, or containing terms less
favorable than those contained herein, shall not give rise to a claim by Tenant
that Landlord failed to mitigate Landlord's damages.
15.04 Landlord's Right To Continue Lease Upon Tenant Default. In the
event Tenant commits a default or breach of this Lease pursuant to Section 15.01
above and Tenant abandons the Premises, if Landlord does not elect to terminate
this Lease as provided in Section 15.02 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 default and abandonment and recover Rent as it becomes due, if
Tenant has the right to Transfer, subject only to reasonable limitations). In
the event Landlord re-lets the Premises, 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 the
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 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.
15.05 Right of Landlord to Perform. All covenants and agreements to be
performed by Tenant under this Lease shall 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 beyond any applicable cure period,
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 ten percent (10%) per
annum from the date of such payment, shall be payable to Landlord as
35
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.
15.06 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 shall 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.
15.07 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.
15.08 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 such additional time, if any, that is reasonably necessary to promptly and
diligently 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). If Landlord shall default in the performance of any of its
obligations under this Lease (after notice and opportunity to cure as provided
herein), Tenant may pursue any remedies available to it under the law and this
Lease, except that, in no event shall Landlord be liable for punitive damages,
lost profits, business interruption, speculative, consequential or other such
damages. In recognition that Landlord must receive timely payments of Rent and
operate the Building, Tenant shall have no right of self-help to perform repairs
or any other obligation of Landlord, and shall have no right to withhold,
set-off, or xxxxx Rent.
ARTICLE 16
ATTORNEYS FEES: COSTS OF SUIT
16.01 Attorneys Fees. If either Landlord or Tenant commence any action
or other proceeding against the other arising out of, or relating to, this Lease
or the Premises or the Building, 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, where the prevailing party of any such action is
the Landlord, Tenant shall reimburse Landlord, upon demand, for all reasonable
attorneys' fees incurred in collecting Rent or
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otherwise seeking enforcement against Tenant, its sublessees and assigns, of
Tenant's obligations under this Lease. If any action or proceeding hereunder
embraces more than one dispute and one party is the prevailing party with
respect to one but not all of the disputes, the court shall apportion the costs
and expenses and reasonable attorneys' fees incurred by the parties to the
separate disputes, and thereby equitably determine the amount to be borne by
each party.
16.02 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, except
to the extent such losses, costs and damages are directly caused by the gross
negligence or wilful misconduct of Landlord.
ARTICLE 17
SUBORDINATION AND ATTORNMENT
17.01 Subordination. This Lease, and the rights of Tenant hereunder,
are and shall be subject and subordinate to the interests of(a) all present and
future ground leases and master leases of all or any part of the Building; (b)
present and future mortgages and deeds of trust encumbering all or any part of
the Building; (c) all past and future advances made under any such mortgages or
deeds of trust; and (d) 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 (any
such lessor, mortgagee or beneficiary is hereinafter referred to as a
"Mortgagee" and any such lease, mortgage or deed of trust is hereinafter
referred to as a "Mortgage") 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 Mortgage (or subject and subordinate to such Mortgage but superior to any
junior mortgage or junior deed of trust). Upon demand, Tenant shall execute,
acknowledge and deliver any instruments reasonably requested by Landlord or any
such Mortgagee to effect the purposes of this Section 17.01, provided, however,
such instruments must contain (and any subordination required pursuant to this
Section 17.01 shall be subject to and conditioned upon) the agreement by any
such Mortgagee (or by any other person taking title to the Building by reason of
the termination or foreclosure of any superior Mortgage) not to disturb Tenant's
quiet enjoyment of the Premises so long as Tenant shall not have committed an
Event of Default hereunder which remains uncured following expiration of all
applicable cure periods. Such instruments may contain, among other things,
provisions to the effect that such Mortgagee (hereafter, for the purposes of
this Section 17.01, 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; (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; (v) not be
bound by any rent
37
or additional rent which Tenant might have paid for more than the current month
to Landlord; (vi) not be bound by any amendment or modification of the Lease or
any cancellation or surrender of the same made without the existing Mortgagee's
prior written consent; (vii) not be bound by any obligation to make any payment
to Tenant which was required to be made prior to the time such Successor
Landlord succeeded to Landlord's interest, and (viii) not be bound by any
obligation under the Lease to perform any work or to make any improvements to
the demised Premises. Any obligations of any Successor Landlord under its
respective lease shall be non-recourse as to any assets of such Successor
Landlord other than its interest in the Premises and improvements.
(A) Notwithstanding the foregoing, provided Tenant is not in default
under this Lease, Landlord agrees to use diligent, commercially reasonable
efforts to obtain a subordination agreement from the Mortgagee which is
reasonably acceptable to Tenant. Such subordination agreement may be embodied in
the Mortgagee's customary form of subordination, non-disturbance and attornment
agreement. If, however, after exerting diligent, commercially reasonable
efforts, Landlord is unable to obtain a subordination agreement from any such
Mortgagee which is commercially reasonable to Tenant, Landlord shall have no
further obligation to Tenant with respect thereto and Tenant's obligations set
forth in this Section 17.01 shall remain in force and effect.
17.02 Attornment and Non-Disturbance. If the interests of Landlord
under the Lease shall be transferred to any superior Mortgagee or other
purchaser or person taking title to the Building by reason of the termination of
any superior lease or the foreclosure of any superior mortgage or deed of trust,
then Tenant shall be bound to such Successor Landlord under all of the terms,
covenants and conditions of the Lease for the balance of the term thereof
remaining and any extensions or renewals thereof which may be effected in
accordance with any option therefor in the Lease, with the same force and effect
as if Successor Landlord were the landlord under the Lease. In said event,
Tenant shall attorn to and recognize as Tenant's landlord under this Lease such
Successor Landlord, as its landlord, and the Successor Landlord shall agree not
to disturb Tenant's quiet enjoyment of the Premises to and recognize Tenant as
the Tenant under this Lease, but only so long as Tenant shall not have committed
an event of default hereunder which remains uncured following expiration of all
applicable cure periods. Said attornment and non-disturbance agreements shall
become operative without execution of any further instruments. However, if the
Successor Landlord shall require execution of an attornment and/or
non-disturbance agreement, Tenant shall, upon demand, execute any documents
reasonably requested by any such person to evidence the attornment and
non-disturbance described in this Section 17.02, but only on condition that the
same are reasonably acceptable to Tenant. Such attornment and non-disturbance
agreements may be embodied in the Mortgagee's customary form of subordination
and non-disturbance agreement.
17.03 Mortgagee Protection. Tenant agrees to give any Mortgagee, by
registered or certified mail, a copy of any notice of default served upon
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 Mortgagee (hereafter the "Notified
Party"). Tenant further agrees that if Landlord shall have failed to cure such
default within twenty (20) days after such notice to Landlord (or if such
default cannot be cured
38
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).
ARTICLE 18
QUIET ENJOYMENT
18.01 Quiet Enjoyment. Provided that Tenant timely performs all of its
obligations hereunder, Tenant shall have and peaceably enjoy the Premises during
the Lease Term free of claims by or through Landlord, subject to all of the
terms and conditions contained in this Lease.
ARTICLE 19
RULES AND REGULATIONS
19.01 Rules and Regulations. The Rules and Regulations attached hereto
as Exhibit "C" 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 non-discriminatory 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 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, provided, however, Landlord shall use
commercially reasonable efforts to cure any such violations.
ARTICLE 20
ESTOPPEL CERTIFICATES
20.01 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 or any current or
prospective Mortgagee or purchaser of the Building, a statement in writing
addressed and certifying to Landlord and any current or prospective Mortgagee or
purchaser of the Building, and to any other party designated by Landlord, to the
extent accurate, 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 been completed
to the satisfaction of Tenant; that Tenant is in full occupancy of the Premises;
that no rent has been paid more than thirty (30) days in advance; that the first
month's Monthly 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 Monthly Base Rent, additional
rental 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 Monthly Base Rent,
39
additional rental or other charges due or to become due under this Lease; that
Landlord is not in default in performance of any covenant, agreement or
condition contained in this Lease; that Tenant does not have the right to extend
the Lease Term, or to renew the Lease, or to expand into other space in the
Building; and any other matter relating to this Lease or the Premises or the
Building, and if so, specifying each such default, matter or item with
particularity. In addition, in the event that such certificate is being given to
any Mortgagee, such statement may contain any other provisions customarily
required by such Mortgagee including, without limitation, an agreement on the
part of Tenant to furnish to such Mortgagee, written notice of any Landlord
default and a reasonable opportunity for such Mortgagee to have additional time
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 current or prospective Mortgagee or purchaser of the Building to whom it
is addressed and such statement, if required by its addressee, may so
specifically state. If Tenant does not execute, acknowledge and deliver to
Landlord the statement as and when required herein, Landlord is hereby granted
the right to execute such statement on Tenant's behalf, which statement shall be
binding on Tenant to the same extent as if executed by Tenant.
ARTICLE 21
ENTRY BY LANDLORD
21.01 Entry By Landlord. Upon providing at least 24 hours advance
notice to Tenant (except in the event of an emergency, when advance notice shall
not be required), Landlord may enter the Premises at all reasonable times to:
with good cause, inspect the same; exhibit the same to prospective purchasers,
Mortgagees 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 loss 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.
ARTICLE 22
LANDLORD'S LEASE UNDERTAKINGS;
TRANSFER OF LANDLORD'S INTEREST
22.01 Landlord's Lease Undertakings. Notwithstanding anything to the
contrary contained in this Lease or in any exhibits, riders or addenda hereto
attached (collectively the
40
"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 or otherwise arising out of Tenant's use
of the Premises or the Building (collectively, "Landlord's Lease Undertakings")
shall extend only to Landlord's interest in the Building and real estate of
which the Premises are a part ("Landlord's Real Estate") and not to any other
assets of Landlord or its officers, directors or shareholders; 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, its property
manager, its asset manager, its leasing broker, or against any of their
respective directors, officers, employees, agents, constituent partners,
beneficiaries, trustees or representatives.
22.02 Transfer of Landlord's Interest. In the event of any transfer of
Landlord's interest in the Building and upon the assumption of Landlord's
obligations by the transferee, Landlord shall be automatically freed and
relieved from all applicable liability with respect to performance of any
covenant or obligation on the part of Landlord, provided any deposits or advance
rents held by Landlord are turned over to the grantee and said grantee expressly
assumes, subject to the limitations of this Article 22, all the terms, covenants
and conditions of this Lease to be performed on the part of Landlord, it being
intended hereby that the covenants and obligations contained in this Lease on
the part of Landlord shall, subject to all the provisions of this Article 22, be
binding on Landlord, its successors and assigns, only during their respective
periods of ownership.
ARTICLE 23
HOLDOVER TENANCY
23.01 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 Monthly Base Rent payable by Tenant to Landlord with
respect to the last month of the Lease Term, plus such Additional Rent as
becomes due from time to time during the holdover period. The Base 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, protect and hold harmless
Landlord, its beneficiaries, 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 or termination of the Lease Term.
41
ARTICLE 24
NOTICES
24.01 Notices. Any communication, notice or demand of any kind
whatsoever that Landlord or Tenant may be required or may desire to give to or
serve upon the other shall be in writing and addressed to Landlord at the
address set forth Section 1.13 above, and addressed to Tenant at the address set
forth in Section 1.14 above, and delivered by personal service, or by Federal
Express, DHL or other similar overnight delivery service, or by facsimile
transmission, or by registered or certified mail, postage prepaid, return
receipt requested. Any such notice shall be deemed delivered as follows: (a) if
personally delivered, the date of delivery to the address of the person to
receive such notice; (b) if sent by Federal Express, DHL or other similar
courier service, the date of delivery to the address of the person to receive
such notice; (c) if sent by facsimile transmission, the date transmitted to the
person to receive such notice if sent by 5:00 p.m. (San Francisco time) and the
next business day if sent after 5:00 p.m. (San Francisco time); or (d) if
mailed, two (2) calendar days after depositing same in the U.S. Postal Service.
Any notice sent by facsimile transmission must be confirmed by personally
delivering or mailing a copy of the notice sent by facsimile transmission. Any
party may change its address for notice by written notice given to the other at
least five (5) calendar days before the effective date of such change in the
manner provided in this section.
ARTICLE 25
BROKERS
25.01 Brokers. The parties recognize as the broker(s) who procured this
Lease the firm(s) specified in Section 1.14 and agree that Landlord shall be
solely responsible for the payment of any brokerage commissions to said
broker(s), and that Tenant shall have no responsibility therefor unless written
provision to the contrary has been made a part of this Lease. If either party
has dealt with any other person or real estate broker in respect to leasing,
subleasing or renting space in the Building, the party engaged in such dealing
shall be solely responsible for the payment of any fee due said person or firm
and said party shall protect, indemnify, hold harmless and defend the other
party from any liability in respect thereto.
ARTICLE 26
COMMUNICATIONS AND COMPUTER LINES
26.01 Communications and Computer Lines.
(A) Tenant may, in a manner consistent with the provisions and
requirements of this Lease, install, maintain, replace, remove or use any
communications or computer wires, cables and related devices (collectively the
"Lines") at the Building or in or serving the Premises, provided that: (i)
Tenant shall obtain Landlord's prior written consent, which consent may be
conditioned as required by Landlord, (ii) if Tenant at any time uses any
equipment that may create an electromagnetic field exceeding the normal
insulation ratings of ordinary twisted pair riser cable or cause radiation
higher than normal background radiation, the Lines therefor (including riser
cables) shall be appropriately insulated to prevent such excessive
electromagnetic fields or radiation, and (iii) Tenant shall pay all costs in
connection therewith
42
Landlord reserves the right to require that Tenant remove any Lines which are
installed in violation of these provisions.
1. Notwithstanding the foregoing, on condition that Tenant
delivers to Landlord at least five (5) calendar days advance written notice
prior to installation, maintenance, replacement and/or removal of any Lines in
the Building or Premises, Landlord's consent to install, maintain, replace or
remove any such Lines shall not be required, but only if (a) the cost of said
installation, maintenance, replacement or removal is less than $5,000.00, and
(b) said installation, maintenance, replacement or removal does not affect or
involve any Building systems or the structure of the Building or the safety of
the Building and/or its occupants, and (c) said installation, maintenance,
replacement or removal does not adversely affect any other Lines in the Building
or Premises.
(B) Landlord may (but shall not have the obligation to): (i) install
new Lines at the Building, and (ii) create additional space for Lines at the
Building, and adopt reasonable and uniform rules and regulations with respect to
the Lines.
(C) Notwithstanding anything to the contrary contained in Article 9,
Landlord reserves the right to require that Tenant remove any or all Lines
installed within or serving the Premises upon termination of this Lease. Tenant
shall not, without the prior written consent of Landlord in each instance, grant
to any third party a security interest or lien in or on the Lines, and any such
security interest or lien granted without Landlord's written consent shall be
null and void. Except to the extent arising from the gross negligence or willful
misconduct of Landlord or Landlord's agents or employees, Landlord shall have no
liability for damages arising from, and Landlord does not warrant that Tenant's
use of any Lines will be free from the following (collectively called "Line
Problems"): (i) any eavesdropping or wire-tapping by unauthorized parties, (ii)
any failure of any Lines to satisfy Tenant's requirements, or (iii) any
shortages, failures, variations, interruptions, disconnections, loss or damage
caused by the installation, maintenance, replacement, use or removal of Lines by
or for other tenants or occupants at the Building. Under no circumstances shall
any Line Problems be deemed an actual or constructive eviction of Tenant, render
Landlord liable to Tenant for abatement of Rent, or relieve Tenant from
performance of Tenant's obligations under this Lease. Landlord in no event shall
be liable for damages by reason of loss of profits, business interruption or
other consequential damage arising from any Line Problems.
ARTICLE 27
PARKING
27.01 Parking. So long as Tenant has not committed an event of default
under this Lease which remains uncured following expiration of all applicable
during periods, then Landlord shall lease to Tenant and Tenant shall have the
right to lease from Landlord up to a total of two hundred twenty-eight (228)
unreserved parking spaces, and ten (10) reserved parking spaces. For each
unreserved parking space, Tenant shall pay Landlord the prevailing rental rate
of Sixty Five and No/100 Dollars ($65.00) per space per month. For each reserved
parking space, Tenant shall pay Landlord the prevailing rental rate of One
Hundred Twenty Five and No/l00 Dollars ($125.00) per space per month. All
amounts due from Tenant to Landlord for
43
parking space rental shall be deemed Rent and shall be due and payable by Tenant
to Landlord along with and in addition to Tenant's payment of Monthly Base Rent
for the Premises. The monthly rate for all parking spaces shall be subject to
periodic adjustments to the then fair market value charged by other managers and
operators of parking spaces situated in the downtown Walnut Creek area (as
determined by Landlord in its reasonable discretion). Tenant shall have the
right, not more than two (2) times during any calendar year and upon at least
sixty (60) calendar days advance written notice to Landlord, to increase or
decrease the number of unreserved parking spaces in increments of ten (10)
parking spaces per change; provided, however, in no event shall Tenant have the
right to lease more than two hundred twenty-eight (228) unreserved parking
spaces. Subject to the foregoing, Tenant shall only be obligated to pay for the
actual number of the unreserved parking spaces which Tenant utilizes during the
Lease Term. Tenant shall not assign, sublease or transfer the rights and use of
any or all of the parking spaces to any third party without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or delayed
(however, if Landlord approves a sublease or assignment of the Premises or in
the event of a Permitted Transfer, the assignee or sublessee shall have the
right to use the number of parking rights set forth in said agreement of
sublease or assignment). If offered by Landlord, Tenant shall have the right to
purchase discounted validation coupon books, which discount may change from time
to time, and may from time to time be limited in volume of books available per
month, but not less than one set (a set being one book of full day coupons and
one book of 1/2 hour coupons) of discounted validation coupon books per month
will be available for Tenant's purchase. In the event Tenant exercises the
Option to Extend set forth in Section 3.02 above, and if the exercise includes
all (100%) of the Premises, then Tenant shall be entitled to lease from Landlord
the same number of unreserved parking spaces and reserved parking spaces as
Tenant is entitled to lease pursuant to this Article 27 at one hundred percent
(100%) of the then prevailing rate per parking space. However, if upon exercise
of the Option to Extend the number of rentable square feet in the Premises is
reduced, then the number of unreserved spaces that Tenant shall have the right
to lease from Landlord during the Extension Period shall also be reduced to that
number which is equal to the number of rentable square feet in the Premises
divided by 1,000, multiplied by 3, minus 10 (to account for the reserved parking
spaces Tenant will retain).
(A) Notwithstanding the foregoing, if in the normal course of business
Landlord modifies the procedures pursuant to which all tenants and occupants of
the Building can increase or decrease the number of parking spaces which they
are obligated to lease, then upon Landlord's receipt of a written request from
Tenant, Tenant shall be granted substantially the same right to increase or
decrease the number of parking spaces to which it is obligated to lease under
this Lease.
ARTICLE 28
MISCELLANEOUS
28.01 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
44
agreements and understandings between Landlord and Tenant and alone expresses
the agreement of the parties.
28.02 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 Landlord.
28.03 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.
28.04 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 any reason beyond
the control of Landlord including, but not limited to, strike, labor trouble,
governmental rule, regulations, ordinance, statute or interpretation, or by
fire, earthquake, civil commotion, or failure or disruption of utility services.
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 any force majeure occurrence whether similar to or
different from the foregoing types of occurrences.
28.05 Survival of Obligations. Any obligations of Landlord or Tenant
accruing prior to the expiration of the Lease shall survive the expiration or
earlier termination of the Lease, and Tenant and Landlord shall promptly perform
all such obligations whether or not this Lease has expired or been terminated.
28.06 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.
28.07 Governing Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.
28.08 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.
28.09 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.
28.10 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
45
be given a fair and reasonable interpretation in accordance with the meaning of
its terms and the intent of the parties.
28.11 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.
28.12 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.
28.13 Time is of the Essence. Time is of the essence of this Lease and
the performance of all obligations hereunder.
28.14 Joint and Several Liability. If either Landlord or 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 said party's obligations hereunder.
28.15 Exhibits. Exhibit "A" (Outline of Premises), Exhibit "B" (Work
Letter Agreement), Exhibit "C" (Rules and Regulations), Exhibit "D" (Suite
Acceptance Letter), Exhibit "E" (Special Suite 600 Period Operating Expenses)
and Exhibit "F" (Schedule of Janitorial Specifications) are incorporated into
this Lease by reference and made a part hereof.
28.16 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 (a) it is executed and
delivered by Tenant to Landlord and (b) it is fully reviewed and executed by
Landlord; provided, however, that, upon execution of this Lease by Tenant and
delivery to Landlord, such execution and delivery by Tenant shall, in
consideration of the time and expense incurred by Landlord in reviewing the
Lease `and Tenant's credit, constitute an offer by Tenant to Lease the Premises
upon the terms and conditions set forth herein (which offer to Lease shall be
irrevocable for twenty (20) business days following the date of delivery).
28.17 Choice of Laws. Landlord and Tenant hereby submit to local
jurisdiction in the State of California and agrees that any action by either
party against the other shall be instituted in the County of Contra Costa, State
of California, which shall have personal jurisdiction over Landlord and Tenant
for any action brought in the State of California.
28.18 Electrical Service to the Premises. Anything set forth in Section
7.01 or elsewhere in this Lease to the contrary notwithstanding, if Tenant
elects to provide its own electricity to the Premises and does not require that
the same be furnished by Landlord, then the same shall be furnished by an
electric utility company serving the Building which is approved by Landlord.
Landlord shall permit Tenant to receive such service directly from such utility
company at Tenant's cost (except as otherwise provided herein) and shall permit
Landlord's wire and conduits, to the extent available, suitable and safely
capable, to be used for such purposes.
46
In said event, Tenant's Percentage Share of Operating Expenses shall be adjusted
to include only electricity furnished to the common areas of the Building and
Real Property.
28.19 Rights Reserved by Landlord. Landlord reserves the following
rights exercisable without notice (except as otherwise expressly provided to the
contrary in 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: (a) to change the name or street address of the
Building; (b) to install, affix and maintain all signs on the exterior and/or
interior of the Building (but only to the extent that Landlord does not reduce
or alter Tenant's signage rights elsewhere set forth in this Lease); (c) 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 and,
notwithstanding the provisions of Article 9, the design, arrangement, style,
color and general appearance of the portion of the Premises visible from the
exterior, and contents thereof, including, without limitation, furniture,
fixtures, signs, art work, wall coverings, carpet and decorations, and all
changes, additions and removals thereto, shall, at all times have the appearance
of premises having the same type of exposure and used for substantially the same
purposes that are generally prevailing in comparable office buildings in the
area. Any violation of this provision shall be deemed a material breach of this
Lease; (d) 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; (e) 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; (f) 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, guests and invitees; (g) to prohibit
the placement of video or other electronic games in the Premises other than for
use by Tenant's employees, guests and invitees; (h)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; (i) to close the Building
after 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; (j) to install, operate and maintain security
systems which monitor, by close circuit television or otherwise, all persons
entering or leaving the Building; (k) 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 (1) to retain at all times
master keys or pass keys to the Premises.
28.20 Signage Rights. Tenant shall have the right to (a) two (2)
identification strips bearing Tenant's name and suite numerals at the main
Building directory, (b) two (2) identification strips for each of the sixth and
seventh floor lobby directories, (c) one (1) Building standard suite sign
located at the entrances of Suites 600 and 700, and (d) the single approximate
3' x 2' identification sign as the same is currently affixed to the lobby on the
ground floor of the Building. Tenant shall be responsible for all costs of
Tenant's signs outside of the entrance doors to Suites 600 and 700. All graphics
of Tenant visible in or from public corridors or the exterior of the Premises
shall be subject to Landlord's prior written approval.
47
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first above written.
LANDLORD TENANT
CALIFORNIA PLAZA OF WALNUT ELECTRONIC ARTS, INC.,
CREEK, INC., a Florida not-for-profit a Delaware corporation
corporation,
By: XXXXXXX CAPITAL By: Xxxxx X. Xxxxxxx
MANAGEMENT CORP., Name: Xxxxx X. Xxxxxxx
an Illinois corporation, agent Title: Sr. V.P. Finance
By: Xxxxxx X. BUEDI
Name: Xxxxxx X. BUEDI
Title: V.P.
48
EXHIBIT "A"
FLOOR PLAN OF PREMISES
TO BE XXXXXXXX
XXXXX XXXXX 0
[GRAPHIC XXXXXXXX]
XXXXX 0
Xxxxxx Xxxxxx Xxxxxxx
XXXXX XXXXX 0
[GRAPHIC OMMITTED]
FLOOR 7
Office Square Footage
EXHIBIT "B"
WORK LETTER AGREEMENT
[Tenant Performs Work]
This Work Letter Agreement ("Work Letter") is executed simultaneously
with that certain Office Lease (the "Lease") between ELECTRONIC ARTS, INC., a
Delaware corporation, as "Tenant", and CALIFORNIA PLAZA OF WALNUT CREEK, INC., a
Florida not-for-profit corporation as "Landlord", relating to demised premises
("Premises") in the building ("Building") commonly known as CALIFORNIA PLAZA OF
WALNUT CREEK, which Premises are more fully identified in the Lease. Capitalized
terms used herein, unless otherwise defined in this Work Letter, shall have the
respective meanings ascribed to them in the Lease.
For and in consideration of the agreement to lease the Premises and the
mutual covenants contained herein and in the Lease, Landlord and Tenant hereby
agree as follows:
1. Work. Tenant, at its sole cost and expense, shall perform, or cause
to be performed, the work (the "Work") in the Premises provided for in the
Approved Plans (as defined in Paragraph 2 hereof). Subject to Tenant's
satisfaction of the conditions specified in this work letter Agreement, Tenant
shall be entitled to Landlord's Contribution (as defined in Paragraphs 8[b] and
8[c] below.
2. Pre-Construction Activities.
(a) Prior to the commencement of any Work in the Premises,
Tenant shall submit the following information and items to Landlord for
Landlord's review and approval:
(i) A detailed critical path construction schedule
containing the major components of the Work and the time required for each,
including the scheduled commencement date of construction of the Work, milestone
dates and the estimated date of completion of construction.
(ii) An itemized statement of estimated construction
cost, including fees for permits and architectural and engineering fees.
(iii) Evidence satisfactory to Landlord in all
respects of Tenant's ability to pay the cost of the Work as and when payments
become due.
(iv) The names and addresses of Tenant's contractors
(and said contractor's subcontractors) and materialmen to be engaged by Tenant
for the Work (individually, a "Tenant Contractor," and collectively, "Tenant's
Contractors"). Landlord has the right to approve or disapprove all or any one or
more of Tenant's Contractors. Landlord may, at its election, designate a list of
approved contractors for performance of those portions work involving
electrical, mechanical, plumbing, heating, air conditioning or life safety
systems, from which Tenant must select its contractors for such designated
portions of work.
1
(v) Certified copies of insurance policies or
certificates of insurance as hereinafter described. Tenant shall not permit
Tenant's Contractors to commence work until the required insurance has been
obtained and certified copies of policies or certificates have been delivered to
Landlord.
(vi) Payment and performance bonds for all of
Tenant's Contractors naming Landlord (or an agent, designee or representative
appointed by Landlord's written notice to Tenant given prior to Tenant's
procurement of paid bonds) as a dual obligee.
(vii) The Plans (as hereinafter defined) for the
Work, which Plans shall be subject to Landlord's approval in accordance with
Paragraph 2(b) below.
Tenant will update such information and items by
notice to Landlord of any changes.
(b) As used herein the term "Approved Plans" shall mean the
Plans (as hereinafter defined), as and when approved in writing by Landlord. As
used herein, the term "Plans" shall mean the full and detailed architectural and
engineering plans and specifications covering the Work (including, without
limitation, architectural, mechanical and electrical working drawings for the
Work). The Plans shall be subject to Landlord's approval and the approval of all
local governmental authorities requiring approval of the work and/or the
Approved Plan. Landlord shall give its approval or disapproval (giving general
reasons in case of disapproval) of the Plans within ten (10) business days after
their delivery to Landlord. Landlord agrees not to unreasonably withhold its
approval of said Plans; provided, however, that Landlord shall not be deemed to
have acted unreasonably if it withholds its approval of the Plans because, in
Landlord's reasonable opinion: the Work as shown in the Plans is likely to
adversely affect Building systems, the structure of the Building or the safety
of the Building and/or its occupants; the Work as shown on the Plans might
impair Landlord's ability to furnish services to Tenant or other tenants; the
Work would increase the cost of operating the Building; the Work would violate
any governmental laws, rules or ordinances (or interpretations thereof); the
Work contains or uses hazardous or toxic materials or substances; the Work would
adversely affect the appearance of the Building; the Work might adversely affect
another tenant's premises; or the Work is prohibited by any mortgage or trust
deed encumbering the Building. The foregoing reasons, however, shall not be
exclusive of the reasons for which Landlord may withhold consent, whether or not
such other reasons are similar or dissimilar to the foregoing. If Landlord
notifies Tenant that changes are required to the final Plans submitted by
Tenant, Tenant shall, within three (3) business days thereafter, submit to
Landlord, for its approval, the Plans amended in accordance with the changes so
required. The Plans shall also be revised, and the Work shall be changed, all at
Tenant's cost and expense, to incorporate any work required in the Premises by
any local governmental field inspector. Landlord's approval of the Plans shall
in no way be deemed to be (i) an acceptance or approval of any element therein
contained which is in violation of any applicable laws, ordinances, regulations
or other governmental requirements, or (ii) an assurance that work done pursuant
to the Approved Plans will comply with all applicable laws (or with the
interpretations thereof) or satisfy Tenant's objectives and needs.
(c) No Work shall be undertaken or commenced by Tenant in the
Premises until (i) Tenant has delivered, and Landlord has approved, all items
set forth in Paragraph 2(a) above, and (ii) all necessary building permits have
been applied for and obtained by Tenant.
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3. Landlord's Costs and Expenses. Within thirty (30) calendar days from
receipt of written notice thereof, Tenant shall pay Landlord, as additional
Rent, an amount equal to (a) the fees, costs and expenses paid or incurred by
Landlord to attorneys, architects, engineers and other consultants to review the
Lease, the Plans and/or to coordinate the Work, (b) all equipment, materials and
other items used by Landlord and/or its consultants in reviewing the Plans
and/or coordinating the Work, and (c) the gross salaries of Landlord's employees
(prorated to reflect the actual time spent reviewing the Plans and/or
coordinating the Work).
4. Change Orders. All material changes to the Approved Plans requested
by Tenant must be approved by Landlord in advance of the implementation of such
changes as part of the Work. All delays caused by Tenant-initiated change
orders, including, without limitation, any stoppage of work during the change
order review process, are solely the responsibility of Tenant and shall cause no
delay in the commencement of the Lease or the payment of Rent and other
obligations therein set forth.
5. Standards Of Design And Construction And Conditions Of Tenant's
Performance. All work done in or upon the Premises by Tenant shall be done
according to the standards set forth in this Paragraph 5, except as the same may
be modified in the Approved Plans approved by or on behalf of Landlord and
Tenant.
(a) Tenant's Approved Plans and the design, construction,
installation and performance of the Work shall comply with all applicable
statutes, ordinances, regulations, laws, codes and industry standards,
including, but not limited to, requirements of Landlord's fire insurance
underwriters. Further, if Tenant's design, construction, installation and/or
performance of the Work triggers any governmental requirement that Landlord must
cause any other part of the Building to comply with statutes, ordinances,
regulations, laws and/or codes, then Tenant agrees to and shall pay all (100%)
of the cost of said compliance.
(b) Tenant shall, at its own cost and expense, obtain all
required building permits and occupancy permits. Tenant's failure to obtain such
permits shall not cause a delay in the obligation to pay Rent or any other
obligations set forth in the Lease.
(c) Tenant's Contractors shall be licensed contractors,
possessing good labor relations, capable of performing quality workmanship and
working in harmony with Landlord's contractors and subcontractors and with other
contractors and subcontractors in the Building. All work shall be coordinated
with any other construction or other work in the Building in order not to
adversely affect construction work being performed by or for Landlord or its
tenants.
(d) Landlord shall have the right, but not the obligation, to
perform, on behalf of and for the account of Tenant, subject to reimbursement by
Tenant, any work which pertains to patching of the Work and other work in the
Building. Landlord shall notify Tenant of its election to perform the foregoing
at the time Tenant submits the Plans for Landlord's review and consent.
(e) Tenant shall use only new, first-class materials in the
Work, except where explicitly shown in the Approved Plans. All Work shall be
done in a good and workmanlike manner. Tenant shall obtain contractors'
warranties of at least one (1) year duration from the
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completion of the Work against defects in workmanship and materials on all work
performed and equipment installed in the Premises as part of the Work.
(f) Tenant and Tenant's Contractors shall make all reasonable
efforts and take all reasonable steps appropriate to assure that all
construction activities do not unreasonably interfere with the operation of the
Building or with other tenants and occupants of the Building. In any event,
Tenant shall comply with all reasonable rules and regulations existing from time
to time at the Building. Tenant and Tenant's Contractors shall take all
reasonable precautionary steps to minimize dust, noise and construction traffic,
and to protect their facilities and the facilities of others affected by the
Work and to properly police same. Construction equipment and materials are to be
kept within the Premises and delivery and loading of equipment and materials
shall be done at such locations and at such time as Landlord shall direct so as
not to burden the construction or operation of the Building. If reasonably
required by Landlord, the Premises shall be sealed off from the balance of the
office space on the floor(s) containing the Premises so as to minimize the
dispersement of dirt, debris and noise.
(g) Landlord shall have the right to order Tenant or any of
Tenant's Contractors who violate the requirements imposed on Tenant or Tenant's
Contractors in performing work to cease work and remove its equipment and
employees from the Building. No such action by Landlord shall delay the
obligation to pay Rent or any other obligations therein set forth.
(h) Utility costs or charges for any service (including HVAC,
hoisting or freight elevator and the like) to the Premises shall be the
responsibility of Tenant from the date Tenant is obligated to commence or
commences the Work and shall be paid for by Tenant at Landlord's standard rates
then in effect. Tenant shall apply and pay for all utility meters required.
Tenant shall pay for all support services provided by Landlord's contractors at
Tenant's request or at Landlord's discretion resulting from breaches or defaults
by Tenant under this Work Letter Agreement. All use of freight elevators is
subject to scheduling by Landlord and the rules and regulations of the Building.
Tenant shall arrange and pay for removal of construction debris and shall not
place debris in the Building's waste containers. If required by Landlord, Tenant
shall sort and separate its waste and debris for recycling and/or environmental
law compliance purposes.
(i) Tenant shall permit access to the Premises, and the Work
shall be subject to inspection, by Landlord and Landlord's architects,
engineers, contractors and other representatives, at all times during the period
in which the Work is being constructed and installed and following completion of
the Work.
(j) Tenant shall proceed with its work expeditiously,
continuously and efficiently, and shall after construction has commenced
diligently prosecute said construction to completion. Tenant shall notify
Landlord upon completion of the Work and shall furnish Landlord and Landlord's
title insurance company with such further documentation as may be necessary
under Paragraphs 7 and 8 below.
(k) Tenant shall not materially or substantially deviate from
the Approved Plans in performance of the Work, except as authorized by Landlord
and its designated
4
representative in writing. Tenant shall furnish to Landlord "as-built" drawings
of the Work within thirty (30) days after completion of the Work.
(1) Landlord shall have the right to run utility lines, pipes,
conduits, duct work and component parts of all mechanical and electrical systems
where necessary or desirable through the Premises, to repair, alter, replace or
remove the same, and to require Tenant to install and maintain proper access
panels thereto.
(m) Tenant shall impose on and enforce all applicable terms of
this Work Letter Agreement against Tenant's architect and Tenant's Contractors.
6. Insurance and Indemnification.
(a) In addition to any insurance which may be required under
the Lease, Tenant shall secure, pay for and maintain or cause Tenant's
Contractors to secure, pay for and maintain during the continuance of
construction and fixturing work within the Building or Premises, insurance in
the following minimum coverages and the following minimum limits of liability:
(i) Worker's Compensation and Employer's Liability
Insurance with limits of not less than $500,000.00, or such higher amounts as
may be required from time to time by any Employee Benefit Acts or other statutes
applicable where the work is to be performed, and in any event sufficient to
protect Tenant's Contractors from liability under the aforementioned acts.
(ii) Comprehensive General Liability Insurance
(including Contractors' Protective Liability) in an amount not less than
$1,000,000.00 per occurrence, whether involving bodily injury liability (or
death resulting therefrom) or property damage liability or a combination thereof
with a minimum aggregate limit of $2,000,000.00, and with umbrella coverage with
limits not less than $5,000,000.00. Such insurance shall provide for explosion
and collapse, completed operations coverage and broad form blanket contractual
liability coverage and shall insure Tenant's Contractors against any and all
claims for bodily injury, including death resulting therefrom, and damage to the
property of others and arising from its operations under the contracts whether
such operations are performed by Tenant's Contractors or by anyone directly or
indirectly employed by any of them.
(iii) Comprehensive Automobile Liability Insurance,
including the ownership, maintenance and operation of any automotive equipment,
owned, hired, or non-owned in an amount not less than $500,000.00 for each
person in one accident, and $1,000,000.00 for injuries sustained by two or more
persons in any one accident and property damage liability in an amount not less
than $1,000,000.00 for each accident. Such insurance shall insure Tenant's
Contractors against any and all claims for bodily injury, including death
resulting therefrom, and damage to the property of others arising from its
operations under the contracts, whether such operations are performed by
Tenant's Contractors, or by anyone directly or indirectly employed by any of
them.
(iv) "All-risk" builder's risk insurance upon the
entire Work to the full insurable value thereof. This insurance shall include
the interests of Landlord and Tenant (and
5
their respective contractors and subcontractors of any tier to the extent of any
insurable interest therein) in the Work and shall insure against the perils of
fire and extended coverage and shall include "all-risk" builder's risk insurance
for physical loss or damage including, without duplication of coverage, theft
vandalism and malicious mischief. If portions of the Work are stored off the
site of the Building or in transit to said site are not covered under said
"all-risk" builder's risk insurance, then Tenant shall effect and maintain
similar property insurance on such portions of the Work. Any loss insured under
said "all-risk" builder's risk insurance is to be adjusted with Landlord and
Tenant and made payable to Landlord, as trustee for the insureds, as their
interests may appear.
All policies (except the worker's compensation policy) shall be
endorsed to include as additional insured parties the parties listed on, or
required by, the Lease, Landlord's contractors, Landlord's architects, and their
respective beneficiaries, partners, directors, officers, employees and agents,
and such additional persons as Landlord may designate. The waiver of subrogation
provisions contained in the Lease shall apply to all insurance policies (except
the workmen's compensation policy) to be obtained by Tenant pursuant to this
paragraph. The insurance policy endorsements shall also provide that all
additional insured parties shall be given thirty (30) days' prior written notice
of any reduction, cancellation or non-renewal of coverage (except that ten (10)
days' notice shall be sufficient in the case of cancellation for non-payment of
premium) and shall provide that the insurance coverage afforded to the
additional insured parties thereunder shall be primary to any insurance carried
independently by said additional insured parties. Additionally, where
applicable, each policy shall contain a cross-liability and severability of
interest clause.
(b) Without limitation of the indemnification provisions
contained in the Lease, to the fullest extent permitted by law Tenant agrees to
indemnify, protect, defend and hold harmless Landlord, the parties listed, or
required by, the Lease to be named as additional insureds, Landlord's
contractors, Landlord's architects, and their respective beneficiaries,
partners, directors, officers, employees and agents, from and against all
claims, liabilities, losses, damages and expenses of whatever nature arising out
of or in connection with the Work or the entry of Tenant or Tenant's Contractors
into the Building and the Premises, including, without limitation, mechanic's
liens, the cost of any repairs to the Premises or the Building necessitated by
activities of Tenant or Tenant's Contractors, bodily injury to persons
(including, to the maximum extent provided by law, claims arising under the
California Structural Work Act) or damage to the property of Tenant, its
employees, agents, invitees, licensees or others, except to the extent such
claims, liabilities and losses are directly caused by the gross negligence or
willful misconduct of Landlord. It is understood and agreed that the foregoing
indemnity shall be in addition to the insurance requirements set forth above and
shall not be in discharge of or in substitution for same or any other indemnity
or insurance provision of the Lease.
7. Landlord's Contribution; Excess Amounts.
(a) Upon completion of the Work, Tenant shall furnish Landlord
with full and final waivers of liens and contractors' affidavits and statements,
in such form as may be required by Landlord, Landlord's title insurance company
and Landlord's construction or permanent lender, if any, from all parties
performing labor or supplying materials or services in connection with the Work
showing that all of said parties have been compensated in full and waiving all
liens in connection with the Premises and Building. Tenant shall submit to
Landlord a
6
reasonably detailed breakdown of Tenant's total construction costs, together
with such evidence of payment as is reasonably satisfactory to Landlord.
(b) Upon completion of the Work and Tenant's satisfaction of
all requirements set forth in this Work Letter Agreement, Landlord shall make a
dollar contribution in the amount not to exceed Three Hundred Ninety Six
Thousand One Hundred Sixty and No/100 Dollars ($396,160.00) (which is Five
Dollars ($5.00) per square foot of Rentable Area in the Premises) for
application to the extent thereof to the cost of the Work ("Landlord's
Contribution"). If the cost of the Work exceeds Landlord's Contribution, Tenant
shall have sole responsibility for the payment of such excess cost. Tenant may
allocate Landlord's Contribution to Suite 600 or Suite 700 at Tenant's
discretion, and if the cost of the Work originally undertaken in one part of the
Premises is less than Landlord's Contribution, Tenant shall be entitled at a
later date to commence additional Work in the Premises and use the balance of
Landlord's Contribution. However, under no circumstance shall Tenant be entitled
to receive any payment or credit for any unused Landlord's Contribution.
Notwithstanding the foregoing: (i) Landlord may deduct from Landlord's
Contribution any amounts due to Landlord or its architects or engineers under
this Work Letter before disbursing any other portion of Landlord's Contribution;
and (ii) on May 31,2003 Landlord's obligation to make any further contributions
of Landlord's Contribution to Tenant (whether or not the same has theretofore
been made in whole or in part) shall terminate, expire and have no further force
or effect.
8. Miscellaneous.
(a) If the Plans for the Work require the construction and
installation of more fire hose cabinets or telephone/electrical closets than the
number regularly provided by Landlord in the core of the Building in which the
Premises are located, Tenant agrees to pay all costs and expenses arising from
the construction and installation of such additional fire hose cabinets or
telephone/electrical closets.
(b) Time is of the essence of this Work Letter Agreement.
(c) Any person signing this Work Letter Agreement on behalf of
Landlord and Tenant warrants and represents he has authority to sign and deliver
this Work Letter Agreement and bind the party on behalf of which he has signed.
(d) If Tenant fails to make any payment relating to the Work
as required hereunder, Landlord, at its option, may complete the Work pursuant
to the Approved Plans and continue to hold Tenant liable for the costs thereof
and all other costs due to Landlord. Tenant's failure to pay any amounts owed by
Tenant hereunder when due or Tenant's failure to perform its obligations
hereunder shall also constitute a default under the Lease and Landlord shall
have all the rights and remedies granted to Landlord under the Lease for
nonpayment of any amounts owed thereunder or failure by Tenant to perform its
obligations thereunder.
(e) Notices under this Work Letter shall be given in the same
manner as under the Lease.
7
(f) The liability of Landlord hereunder or under any amendment
hereto or any instrument or document executed in connection herewith (including,
without limitation, the Lease) shall be limited to and enforceable solely
against Landlord's interest in the Building.
(g) The headings set forth herein are for convenience only.
(h) This Work Letter sets forth the entire agreement of Tenant
and Landlord regarding the Work. This Work Letter may only be amended if in
writing, duly executed by both Landlord and Tenant.
(i) All amounts due from Tenant hereunder shall be deemed to
be Rent due under the Lease.
9. Project Manager. Tenant agrees to designate a person or persons on
its staff to coordinate, monitor and supervise the construction and installation
of the Work. Said person(s) must be experienced in supervising the design,
construction and installation of improvements such as the Work in premises such
as the Premises, and shall serve as the liaison between Landlord and Tenant with
respect to the Work. Such person(s) must become familiar with all rules and
regulations and procedures of the Building and all personnel of the Building
engaged directly or indirectly in the management, operation and construction of
the Building. Such person(s) shall be accountable and responsible to Tenant and
to Landlord. The entire cost and expense of such person(s) shall be borne and
paid for by Tenant.
10. Exculpation Of Landlord, Xxxxxxx Capital Management Corp., and
Transwestern Commercial Services. Notwithstanding anything to the contrary
contained in this Work Letter, 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 this Work Letter (collectively, "Landlord's Work Letter
Undertakings") shall extend only to Landlord's interest in the real estate of
which the Premises demised under this Lease Documents are a part (hereinafter,
"Landlord's Real Estate") and not to any other assets of Landlord or its
officers, directors or shareholders; 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 Work Letter Undertakings or any alleged breach
thereof is assumed by, or shall at any time be asserted or enforceable against,
Landlord, Xxxxxxx Capital Management Corp., Transwestern Commercial Services, or
against any of their respective directors, officers, employees, agents,
constituent partners, beneficiaries, trustees or representatives.
/
/
/
/
/
/
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IN WITNESS WHEREOF, this Work Letter Agreement is executed as of this
1st day of February, 2001.
LANDLORD TENANT
CALIFORNIA PLAZA AT WALNUT ELECTRONIC ARTS, INC.,
CREEK, INC., a Florida not-for-profit a Delaware corporation,
corporation,
By: XXXXXXX CAPITAL By: Xxxxx X. Xxxxxxx
MANAGEMENT CORP., Name: Xxxxx X. Xxxxxxx
an Illinois corporation, agent Title: Sr. V.P. Finance
By: Xxxxxx X. BUEDI
Name: Xxxxxx X. BUEDI
Title: V.P.
9
SCHEDULE 1
COPIES OF INITIAL PLAN
[Type description of Initial Plans on this cover sheet and
attach copies of such plans after this page.]
1
EXHIBIT "C"
RULES AND REGULATIONS
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or used for any purpose
other than ingress and egress. The halls, passages, entrances, elevators,
stairways, balconies and roof are not for the use of the general public, and
Landlord shall in all cases retain the right to control or prevent access
thereto by all persons whose presence in the judgment of Landlord shall be
prejudicial to the safety, character, reputation or interests of Landlord and
its tenants, provided that nothing herein contained shall be construed to
prevent such access by persons with whom the tenant normally deals in the
ordinary course of its business unless such persons are engaged in illegal
activities. No tenant and no employees of any tenant shall go upon the roof of
the Building without the written consent of Landlord.
2. No awnings or other projections shall be attached to the outside
walls or surfaces of the Building nor shall the interior or exterior of any
windows be coated without the prior written consent of Landlord. Except as
otherwise specifically approved by Landlord, all electrical ceiling fixtures
hung in offices or spaces along the perimeter of the Building must be
fluorescent and of a quality, type, design and bulb color approved by Landlord.
Tenant shall not place anything or allow anything to be placed near the glass of
any window, door, partition or wall which may appear unsightly from outside the
Premises.
3. No sign, picture, plaque, advertisement, notice or other material
shall be exhibited, painted, inscribed or affixed by any tenant on any part of,
or so as to be seen from the outside of, the Premises or the Building without
the prior written consent of Landlord. In the event of the violation of the
foregoing by any tenant, Landlord may remove the same without any liability, and
may charge the expense incurred in such removal to the tenant violating this
rule. Interior signs on doors and the directory tablet shall be inscribed,
painted or affixed for each tenant by Landlord at the expense of such tenant,
and shall be of a size, color and style acceptable to Landlord.
4. The toilets and wash basins and other plumbing fixtures shall not be
used for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags or other substances shall be thrown therein. All damage
resulting from any misuse of the fixtures shall be borne by the tenant who, or
whose servants, employees, agents, visitors or licensees, shall have caused the
same.
5. No tenant or its officers, agents, employees or invitees shall xxxx,
paint, drill into, or in any way deface any part of the Premises or the
Building. No boring, cutting or stringing of wires or laying of linoleum or
other similar floor coverings shall be permitted except with the prior written
consent of Landlord and as Landlord may direct.
6. No bicycles, vehicles or animals of any kind shall be brought into
or kept in or about the Premises and no cooking shall be done or permitted by
any tenant on the Premises except that microwave cooking in a UL-approved
microwave oven and the preparation of coffee, tea, hot chocolate and similar
items for the tenant and its employees and business visitors shall be permitted.
Tenant shall not cause or permit any unusual or objectionable odors to escape
from the Premises.
1
7. The Premises shall not be used for manufacturing or for the storage
of merchandise except as such storage may be incidental to the use of the
Premises for general office purposes. No tenant shall engage or pay any
employees on the Premises except those actually working for such tenant on the
Premises nor advertise for laborers giving an address at the Premises. The
Premises shall not be used for lodging or sleeping or for any immoral or illegal
Purposes.
8. No tenant or its officers, agents, employees or invitees shall make,
or permit to be made any unseemly or disturbing noises, sounds or vibrations or
disturb or interfere with occupants of this or neighboring buildings or Premises
or those having business with them whether by the use of any musical instrument,
radio, phonograph, unusual noise, or in any other way.
9. No tenant or its officers, agents, employees or invitees shall throw
anything out of doors, balconies or down the passageways.
10. Tenant shall not maintain armed security in or about the Premises
nor possess any weapons, explosives, combustibles or other hazardous devices in
or about the Building and/or Premises.
11. No tenant or its officers, agents, employees or invitees shall at
any time use, bring or keep upon the Premises any flammable, combustible,
explosive, foul or noxious fluid, chemical or substance, or do or permit
anything to be done in the leased Premises, or bring or keep anything therein,
which shall in any way increase the rate of fire insurance on the Building, or
on the property kept therein, or obstruct or interfere with the rights of other
tenants, or in any way injure or annoy them, or conflict with the regulations of
the Fire Department or the fire laws, or with any insurance policy upon the
Building, or any part thereof, or with any rules and ordinances established by
the Board of Health or other governmental authority.
12. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by any tenant, nor shall any changes be made in existing
locks or the mechanism thereof. Each tenant must, upon the termination of this
tenancy, restore to Landlord all keys of stores, offices, and toilet rooms,
either furnished to, or otherwise procured by, such tenant, and in the event of
the loss of any keys so furnished, such tenant shall pay to Landlord the cost of
replacing the same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such change.
13. All removals, or the carrying in or out of any safes, freight,
furniture, or bulky matter of any description must take place during the hours
which Landlord may determine from time to time. The moving of safes or other
fixtures or bulky matter of any kind must be made upon previous notice to the
manager of the Building and under his or her supervision, and the persons
employed by any tenant for such work must be acceptable to Landlord. Landlord
reserves the right to inspect all safes, freight or other bulky articles to be
brought into the Building and to exclude from the Building all safes, freight or
other bulky articles which violate any of these Rules and Regulations or the
Lease of which these Rules and Regulations are a part. Landlord reserves the
right to prohibit or impose conditions upon the installation in the Premises of
heavy objects which might overload the building floors. Landlord will not be
responsible loss of or damage to any safes, freight, bulky articles or other
property from any cause, and all
2
damage done to the Building by moving or maintaining any such safe or other
property shall be repaired at the expense of the tenant.
14. No tenant shall purchase or otherwise obtain for use in the
Premises water, ice, towel, vending machine, janitorial, maintenance or other
like services, or accept barbering or bootblacking services, except from persons
authorized by Landlord, and at hours and under regulations fixed by Landlord.
15. Landlord shall have the right to prohibit any advertising by any
tenant which, in Landlord's opinion, tends to impair the reputation of the
Building or its desirability as an office building complex and upon written
notice from Landlord any tenant shall refrain from or discontinue such
advertising.
16. Landlord reserves the right to exclude from the Building between
the hours of 10:00 p.m. and 7:00 a.m. and at all hours of Saturdays, Sundays and
legal holidays all persons who do not present a pass signed by Landlord.
Landlord shall furnish passes to persons for whom any tenant requests the same
in writing. Each tenant shall be responsible for all persons for whom he
requests passes and shall be liable to Landlord for all acts of such persons.
Landlord shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In the case of
invasion, mob, riot, public excitement or other commotion, Landlord reserves the
right to prevent access to the Building during the continuance of the same, by
the closing of the gates and doors or otherwise, for the safety of the tenants
and others and the protection of the Building and the property therein.
17. Any outside contractor employed by any tenant shall, while in the
Building, be subject to the prior written approval of Landlord and subject to
the Rules and Regulations of the Building. Tenant shall be responsible for all
acts of such persons and Landlord shall not be responsible for any loss or
damage to property in the Premises, however occurring.
18. All doors opening onto public corridors shall be kept closed,
except when in use for ingress and egress, and left locked when not in use.
19. The requirements of tenants will be attended to only upon
application to the office of the Building Manager in the Building.
20. Canvassing, soliciting and peddling in the Building are prohibited
and each tenant shall cooperate to prevent the same.
21. All office equipment of any electrical or mechanical nature shall
be placed by tenants in the Premises in settings approved by Landlord, to absorb
or prevent any vibration, noise or annoyance.
22. No air conditioning unit or other similar apparatus shall be
installed or used by any tenant without the written consent of Landlord.
23. There shall not be used in any space, or in the public halls of the
Building either by any tenant or others, any hand trucks except those equipped
with rubber tires and side guards.
3
24. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires or
stringing of wires will be allowed without written consent of Landlord. The
location of telephones, call boxes and other office equipment affixed to the
Premises shall be subject to the approval of Landlord. All such work shall be
effected pursuant to permits issued by all applicable governmental authorities
having jurisdiction.
25. No vendor with the intent of selling such goods shall be allowed to
transport or carry beverages, food, food containers, etc., on any passenger
elevators. The transportation of such items shall be via the service elevators
in such manner as prescribed by Landlord.
26. Tenants shall cooperate with Landlord in the conservation of energy
used in or about the Building, including without limitation, cooperating with
Landlord in obtaining maximum effectiveness of the cooling system by closing
drapes or other window coverings when the sun's rays fall directly on windows of
the Premises, and closing windows and doors to prevent heat loss. Tenant shall
not obstruct, alter or in any way impair the efficient operation of Landlord's
heating, lighting, ventilating and air conditioning system and shall not place
bottles, machines, parcels or any other articles on the induction unit enclosure
so as to interfere with air flow. Tenant shall not tamper with or change the
setting of any thermostats or temperature control valves, and shall in general
use heat, gas, electricity, air conditioning equipment and heating equipment in
a manner compatible with sound energy conservation practices and standards.
27. All areas of the parking garage, parking ramps and areas,
pedestrian walkways, plazas, and other public areas forming a part of the
Building shall be under the sole and absolute control of Landlord with the
exclusive right to regulate and control these areas. Tenant agrees to conform to
the rules and regulations that may be established by Landlord for these areas
from time to time.
28. Landlord reserves the right to exclude or expel from the Building
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of the rules and regulations of the Building.
29. Tenant and its employees, agents, subtenants, contractors and
invitees shall comply with all applicable "no-smoking" ordinances and,
irrespective of such ordinances, shall not smoke or permit smoking of
cigarettes, cigars or pipes outside of Tenant's Premises (including plaza areas)
in any portions of the Building except areas specifically designated as smoking
areas by Landlord. If required by applicable ordinance, Tenant shall provide
smoking areas within Tenant's Premises.
4
EXHIBIT "D"
SUITE ACCEPTANCE AGREEMENT
Tenant Name: ELECTRONIC ARTS, INC.
Lease Dated:
Premises: Suites 600 and 700
Building: 0000 Xxxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Name of Tenant's Contact: _______________________ Phone #:_______
Ladies and Gentlemen:
As a representative of the referenced Tenant, I/we certify that: (a)
Tenant has occupied Suite 600 prior to the date of this Lease pursuant to a
previous lease and accept Suite 600 in its current "as is" condition; and (b)
Tenant has physically inspected Suite 700 and its improvements with
__________________, a representative of the Landlord. Except as set forth below,
I/we accept the improvements constructed and installed in Suite 700 in their "as
is" condition and verifies that the same comply with all the requirements
indicated in the Lease. I/we also verify that the following information is true,
accurate and may be relied on by Landlord:
Commencement Date: February 1,2001
Date First Lease Year Commenced: February 1,2001
Rent Commencement Date for Suite 700: February 1,2001
Rent Commencement Date for Suite 600: February 1,2001
Expiration Date of Initial Lease Term: January 31, 2009
Date Keys To Suite 700 Delivered: February 1,2001
Suite 700 Items Requiring Attention: (i) Water leak at sliding glass doors.
(ii) To the extent required pursuant to
the Letter Agreement dated February 8,2001 between Landlord and Blue Cross, any
remediation work in connection with possible mold spores in Suite 700.
TENANT
ELECTRONIC ARTS, INC.,
a Delaware corporation
By:_________________________________ Date:______________________
Name:____________________________
Title:___________________________
1
EXHIBIT "E"
SCHEDULE OF OPERATING EXPENSES CHARGEABLE TO XXXXX 000
XXXXXX XXXXXXX XXXXX 000 PERIOD
A. Operating Expenses. "Operating Expenses" shall mean all reasonable
costs, expenses and disbursements incurred in connection with the ownership and
operation of the Building and such additional facilities as Landlord may
determine to be necessary to the operation of the Building. All Operating
Expenses shall be determined in accordance with generally accepted accounting
principles which shall be consistently applied. Operating Expenses shall include
all expenses and costs (but not specific costs which are separately billed to
and paid by specific tenants) of every kind and nature which Landlord shall pay
or become obligated to pay because of or in connection with the ownership and
operation of the Building and supporting facilities of the Building. Operating
Expenses shall include, but not be limited to, the following:
(i) Wages, salaries and related expenses and benefits of all
onsite and offsite employees or agents engaged in the operation, maintenance and
security of the Building, and the costs of an office in the Building, incurred
by Landlord.
(ii) Equipment rental and all supplies and materials used in
the operation and maintenance of the Building.
(iii) Utilities, including water and power, heating, lighting,
air conditioning and ventilating for the entire Building.
(iv) All maintenance, janitorial and service agreements for
the Building and the equipment therein, including, without limitation, alarm
service, window cleaning and elevator maintenance.
(v) A management cost recovery equal to three percent (3%) of
all Rental derived from the Building.
(vi) Building legal expense and accounting costs, including
the costs of audits by certified public accountants.
1
(vii) All insurance premiums and costs, including but not
limited to, the premiums and costs of fire, casualty and liability coverage,
rental abatement and earthquake insurance (if Landlord elects to provide such
coverage) applicable to the Building and Landlord's property used in connection
therewith.
(viii) Repairs, replacements and general maintenance
(excluding repairs and general maintenance paid from proceeds of insurance or by
Tenant or other third parties, and alterations attributable solely to tenants of
the Building other than Tenant).
(ix) All maintenance costs relating to public and service
areas of the Building, including, but not limited to, sidewalks, landscaping,
service areas, mechanical rooms and Building exteriors.
(x) All taxes, service payments in lieu of taxes, annual or
periodic license or use fees, excises, transit charges, housing fund
assessments, other assessments, levies, fees or charges, general and special,
ordinary and extraordinary, unforeseen as well as foreseen of any kind which are
assessed, levied, charged, confirmed, or imposed by any public authority upon
the Building, its operations, or on the entering of this Lease, or on the use or
occupancy of the Building, or the Rent (or any portion of component thereof), or
imposed by recorded covenants, conditions and restrictions upon the Building,
including any other tax, fee, and 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 tax or fee whether or not now customary or in the contemplation
of the parties on the date of this Lease except (a) inheritance or estate taxes
imposed upon or assessed against the Building, or any part thereof or interest
therein, and (b) taxes computed upon the basis of the net income derived from
the Building by Landlord or the owner of any interest therein.
(xi) Amortization over a period consistent with generally
accepted accounting principles, of capital improvements made to the Building
which will (a) improve the operating efficiency of the Building (but only to the
extent of savings), or (b) which may be required by any governmental
authorities.
(xii) All costs and expenses of additional services supplied
by Landlord to the Building in the future.
(xiii) Any unreimbursed amounts paid to satisfy any judgments,
claims or liens arising from third party vendor claims for Operating Expenses
during the course of Building operations during the Term of this Lease,
exclusive of penalties and other than costs which Landlord must bear under this
Lease.
B. Exclusions From Operating Expenses. Notwithstanding the foregoing,
the Operating Expenses shall not include the following:
(i) Any ground lease or underlying lease rental;
(ii) Capital improvements and equipment which are not
consistent with the capital improvements referred to above;
2
(iii) Repair of damage to the Building, to the extent Landlord
is reimbursed by insurance proceeds, warranties or guaranties;
(iv) Construction and installation of tenant improvements,
renovations, or decorations made for tenants or other occupants in the Building
or for vacant tenant suites within the Building, including, without limitation,
fees and costs for space planning, architectural drawings, construction,
permits, licenses and inspection;
(v) Costs incurred in connection with negotiations and
transactions with present or prospective tenants or other occupants of the
Building for leases, subleases, assignments and other related transactions,
including, without limitation, attorneys' fees for such negotiations and
transactions;
(vi) Sums paid to Landlord or to subsidiaries or to the
Building to the extent that such sums exceed the costs of such goods and or
service which would be rendered by unaffiliated third parties on a competitive
basis;
(vii) Interest, principal, points and fees on debts or
amortization on any mortgage or any other financing instrument encumbering the
Building.
(viii) Landlord's general corporate overhead and general and
administrative expenses other than the management fee and reasonable general and
administrative expenses related to the Building;
(ix) Rental payments incurred under leases for capital
equipment where such leases are capitalized under the tax basis accounting
principles to the extent such capital equipment are not covered under the Lease.
Landlord shall allocate to Operating Expenses only such costs for capital
equipment incurred as Landlord may reasonably determine are attributable to such
services performed for the Building;
(x) All items and services for which Tenant or any other
tenant in the Building directly reimburses or which Landlord provides
selectively to one or more tenants (other than Tenant) without reimbursement;
(xi) Marketing costs, including leasing commissions,
advertising and promotional expenditures, and costs of signs in or on the
Building identifying the owner of the Building or other tenants' signs;
(xii) Electric power costs for which any tenant directly
contracts with the local public service company and which are paid for by any
such tenant;
(xiii) Upgrading the Building to comply with handicap, life
safety, fire and safety as to the extent Landlord was in violation of such
codes; provided, Landlord shall have the right to include such upgrading costs
in the Operating Expenses in order to comply with any code or law of which
Landlord was not in violation of as of the Term Commencement date;
(xiv) The cost to remove or encapsulate the presence of
hazardous materials or substances in or about the Building or Building,
including, without limitation, hazardous
3
substances in the ground water or soil to the extent said hazardous material or
substance was not caused by the Tenant;
(xv) Landlord's charitable or political contributions;
(xvi) Sculpture, paintings or other objects of art;
(xvii) Legal fees and expenses incurred in connection with the
enforcement of any leases or defense of Landlord's title to or interest in the
Building;
(xviii) Wages/benefits of all on-site Building employees or
property/asset management employees above the classification of property
manager;
(xix) Tax penalties incurred as a result of Landlord's
negligence, inability or unwillingness to make payments and/or to file any tax
or information returns when due;
(xx) The cost of completing any punch-list work.
X. Xxxxx-Up Provision. Notwithstanding any other provision herein to
the contrary, in the event the Building is not fully occupied during any year of
the Term, an adjustment shall be made in computing the Operating Expenses for
such year so that Operating Expenses shall be computed for such year as though
the Building had been fully occupied during such year.
D. Adjustments. Notwithstanding any other provision herein to the
contrary:
(i) Tenant's obligation to pay Tenant's Percentage Share of
increases in the Operating Expenses shall except as provided below, be limited
such that Tenant's obligation to pay such increases shall not exceed a six
percent (6%) increase per year above the preceding year's Operating Expenses
("Operating Expense Cap") on all items comprising the Operating Expenses as set
forth hereinabove, except for the following items, which items comprise a
portion of the Operating Expenses of the Building to which the Operating Expense
Cap shall not apply.
1. All utility costs;
2. Extra tenant service charges;
3. Real Estate taxes and assessments;
4. Special governmental and municipal assessments,
special taxes, or mandated capital improvement costs; and
5. All insurance costs for the Building, operations,
maintenance and replacement.
The items referred to above as 1 through 5 are herein referred to as
the "Non-Capped Operating Expenses". All Operating Expenses which are not herein
defined as Non-Capped Operating Expenses may be referred to herein as the
"Capped Operating Expenses".
4
(ii) The Operating Expense Cap set forth above shall not apply
to any costs of any service(s) provided by Landlord other than the basic
services described in this Lease, and shall not apply to the costs of any
service(s) provided by Landlord (1) during hours other than normal Building
hours of operation, (2) on Saturday afternoons, (3) on Sundays, or (4) on
holidays.
5
EXHIBIT "F"
JANITORIAL SPECIFICATIONS
BUILDING STANDARD SERVICES
OFFICES
1. NIGHTLY SERVICES
a. Vacuum all carpeted areas.
b. Dust all clear surfaces with treated dust cloths.
c. Empty all wastebaskets and other trash containers. Liners changed when
needed.
d. Dust mop all resilient and composition floors with treated dust mops. Spot
mop to remove spills and stains as required.
e. Dust and spot clean walls as necessary.
f. Remove all trash from floors to the designated trash areas.
g. Polish all metal surfaces as necessary.
h. Remove fingerprints, dirt, smudges, graffiti, etc., from all doors, door
frames, glass partitions, windows, light switches, walls, elevator lobby
and elevator door jambs.
i. Clean, sanitize, polish drinking fountains.
j. Dust and remove debris from all metal door thresholds and ventilating
louvers within reach.
k. Clean lobby elevator brightwork as necessary.
1. Return chairs and wastebaskets to proper positions.
m. Secure all lights as soon as possible each night.
2. WEEKLY SERVICES
a. Dust all low reach areas including, but not limited to, chair rungs,
structural and furniture ledges, baseboards, window xxxxx, door louvers,
wood paneling, molding, etc.
b. Dust inside of all door brightwork.
c. Spot clean and polish all brightwork.
1
d. Lower all blinds.
e. Spray buff all building standard resilient composition flooring.
3. MONTHLY SERVICES
a. Dust all high reach areas including, but not limited to, tops of door
frames, structural and furniture ledges, air conditioning diffusers and
return grilles, tops of partitions, picture frames, window blinds, etc.
b. Vacuum upholstered furniture.
c. Edge vacuum all carpeted areas.
4. SEMI-ANNUAL SERVICES
a. Strip and wax all building standard resilient composition flooring.
b. Clean all sidelights in tenant suites.
5. ANNUAL SERVICES
a. Dust ceiling surfaces, other than acoustical ceiling materials.
RESTROOM SERVICES SPECIFICATIONS
1. NIGHTLY SERVICES
a. Restock all restrooms with supplies, including paper towels, toilet
tissue, seat covers and hand soap as required.
b. Remove stains, descale toilets, urinals, sinks as required.
c. Restock all sanitary napkin and tampon dispensers.
d. Wash and polish all mirrors, dispensers, faucets, flushometers and
brightwork with nonscratch disinfectant cleaner. Wipe dry all sinks.
e. Wax and sanitize all countertops with disinfectant cleaner.
f. Mop all restroom floors with disinfectant cleaner.
g. Empty and sanitize all waste and sanitary napkin and tampon receptacles.
h. Remove all restroom trash.
i. Spot clean all fingerprints, marks and graffiti from walls, partitions,
glass, aluminum and light switches as required.
2
j. Report all mechanical deficiencies, e.g., faucet leaks to Property
Manager.
2. WEEKLY SERVICES
a. Dust all low reach and high reach areas, including but not limited to,
structural ledges, mirror tops and edges, air-conditioning diffuses and
return air grilles.
3. MONTHLY SERVICES
a. Wipe down all tile walls and metal partitions. Partitions shall be left
clean and unstreaked.
b. Clean all ventilation grilles.
4. QUARTERLY SERVICES
a. Clean and reseal all ceramic tile floors, using approved sealers.
MAIN BUILDING LOBBY, ELEVATOR LOBBIES AND PUBLIC CORRIDORS
To be performed by Day Xxxxxx and Night Janitors
1. DAILY SERVICES
a. Spot clean all exterior glass at building entrances.
b. Spot clean all brightwork including door hardware, kick plates, base
framing, partition top, handrails, waste receptacles, planters, elevator
call button plates, fire extinguisher cabinets, hose cabinets and any
other visible hardware.
c. Clean all door saddles of dirt and debris.
d. Spot clean, vacuum, sweep and damp mop all flooring as required.
e. Spot clean and dust director boards.
f. Empty, clean and sanitize as required, all waste baskets and refuse
containers.
g. Vacuum all carpets.
h. Spot clean all elevator doors and frames.
i. Empty and recycle sand urns and ashtrays.
j. Clean, polish, sanitize all public telephones.
k. Spot clean all wall surfaces.
3
1. Police lobby and public corridors, keep in clean condition, spot mop
spillage, and dust and vacuum as necessary.
m. Police all stairwells and maintain in clean condition.
n. Dust all railings necessary.
o. Sweep, mop and buff all lobby flooring.
2. WEEKLY SERVICES
a. Change sand in urns.
3. MONTHLY SERVICES
a. Sweep all stairwells.
b. Clean all brass and architectural brass interior finishes.
c. Clean, polish light fixtures.
d. Dust all high reach areas, including but not limited to, structural and
architectural ledges, door frames, grilles, artwork, etc.
PASSENGER ELEVATOR CLEANING SPECIFICATIONS
1. NIGHTLY SERVICES
a. Spot clean and polish interior surface of cab walls, door and panels.
b. Spot clean and polish outside surfaces of all elevator doors and frames.
c. Sweep, mop and buff elevator cab flooring.
d. Clean all thresholds.
2. WEEKLY SERVICES
a. Clean entire interior.
b. Wipe clean cab ceiling.
EXTERIOR GROUNDS
1. NIGHTLY SERVICES
a. Sweep trash receptacle areas.
4
b. Police immediate grounds and landscape areas keeping litter debris to a
minimum.
DAY XXXXXX DUTIES
a. Vacuum all elevator cabs daily.
b. Spot clean glass in lobbies, clean sand urns and spot mop lobbies as
necessary.
c. Check restrooms for adequate supplies. Spot clean as necessary.
d. Check exterior perimeter of building and pick up any trash or litter.
5
TERMINATION OF ORIGINAL LEASE AND
CONSENT TO SUBLEASE
THIS TERMINATION OF ORIGINAL LEASE AND CONSENT TO SUBLEASE (this
"Agreement") is made to be effective as of January 31, 2001 ("Effective Date")
by and among CALIFORNIA PLAZA OF WALNUT CREEK, INC., a Florida not for-profit-
corporation ("Landlord"), ELECTRONIC ARTS , INC., a Delaware corporation
("Tenant" and/or "Sublessor", as the context dictates), and BLUE CROSS OF
CALIFORNIA, a California corporation ("Sublessee").
RECITALS
A. Air Liquide Corporation ("Air Liquide") leased the entire seventh
floor ("Suite 700") plus other space in the building ("Building") located at
0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxxxx, pursuant to an office
lease with Landlord dated September 16, 1985 (the "Air Liquide Lease"). On
August 14, 1995, Air Liquide subleased Suite 700 to Blue Cross of California
("Air Liquide/Blue Cross Sublease"). The term of the Air Liquide Lease and the
term of the Air Liquide/Blue Cross Sublease expired on January 31, 2001.
B. Tenant leased the entire sixth floor ("Suite 600") in the Building
pursuant to a separate lease agreement with Landlord dated June 2, 1995
("Tenant's Original Lease"). Pursuant to Tenant's Original Lease, and on or
about October 23, 2000, Tenant exercised its right of first opportunity to lease
Suite 700 ("Right to Lease"). Following exercise of the Right to Lease, Tenant
approached Blue Cross in connection with entering into a new sublease for Suite
700 following expiration of the Air Liquide/Blue Cross Sublease. In December,
2000, Tenant and Blue Cross executed a new sublease agreement for Suite 700
("First EA/Blue Cross Sublease"), the term of which was to commence at
expiration of the Air Liquide Lease.
C. Subsequently, Landlord and Tenant entered into negotiations for a
new master lease pursuant to which Tenant would lease Suite 600 and Suite 700 in
the Building, and the parties would concurrently terminate Tenant's Original
Lease.
D. Landlord and Tenant now intend to execute and deliver to one another
that certain office lease ("Master Lease") for the premises ("Master Premises")
located in the building ("Building") at 0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxxx
Xxxxx, Xxxxxxxxxx, and terminate Tenant's Original Lease. The Master Premises
consist of Xxxxx 000 xxx Xxxxx 000. Suite 600 contains approximately 42,398
rentable square feet, Suite 700 contains approximately 36,834 rentable square
feet, and the entire Master Premises contains a total of approximately 79,232
1 February 20, 2001 (11:50am)
rentable square feet.
E. As a consequence of the foregoing, Tenant and Blue Cross have agreed
to terminate the First EA/Blue Cross Sublease and substitute in its place the
"Second EA/Blue Cross Sublease" in the form attached hereto as Exhibit "A" and
incorporated herein by reference.
F. A condition to execution and delivery of the Master Lease is that
(i) Landlord consent to the Second EA/Blue Cross Sublease, (ii) Tenant and Blue
Cross terminate the First EA/Blue Cross Sublease, and (iii) Landlord and Tenant
terminate Tenant's Original Lease.
NOW, THEREFORE, in consideration of the covenants and conditions set
forth in the Master Lease and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the undersigned agree
as follows:
1. Recitals. The foregoing Recitals are incorporated by reference as if
fully set forth herein.
2. Landlord's Agreement. Subject to the terms and conditions of this
Agreement, Landlord hereby consents to the Second EA/Blue Cross Sublease.
a. Landlord hereby agrees, for the benefit of Tenant and
Sublessee, that the provisions of Sections 14.02, 14.03, 14.04 and 14.06 of the
Master Lease shall not apply to the foregoing consent of Landlord to the Second
EA/Blue Cross Sublease; provided, however, said Sections of the Master Lease
shall apply to any and all further assignments, subleases or sub-subleases that
may in the future be proposed by Tenant or Sublessee with respect to the Second
EA/Blue Cross Sublease or to the subleased premises which are the subject of the
Second EA/Blue Cross Sublease.
3. Termination of Tenant's Original Lease. Landlord and Tenant hereby
terminate Tenant's Original Lease.
4. Termination of First EA/Blue Cross Sublease. Pursuant to the terms
and conditions set forth in that certain Sublease Termination Agreement by and
between Tenant and Sublessee dated to be effective as of February 1, 2001 (a
copy of which is attached hereto as Exhibit "B" and incorporated herein by
reference), the First EA/Blue Cross Sublease has been terminated as of the
Effective Date of this Agreement.
5. Subordination to Master Lease. The Second EA/Blue Cross Sublease
shall be subject and subordinate at all times to the Master Lease and to all of
its terms, covenants, conditions, provisions and agreements. Sublessor and
Sublessee agree that to the extent any terms, conditions, covenants or
provisions of the Second EA/Blue Cross Sublease are inconsistent or in conflict
with, or contrary to, any terms, conditions, covenants or provisions of the
Master Lease, the inconsistent, conflicting or contrary terms, conditions and
provisions
2 February 20, 2001 (11:50am)
of the Second EA/Blue Cross Sublease are deemed revoked as to Landlord, and the
terms, conditions, covenants and provisions of the Master Lease shall govern. As
to Landlord, the terms and conditions of this Agreement and the Master Lease
shall prevail over any contrary terms and conditions of the Second EA/Blue Cross
Sublease.
6. Effect of the Second EA/Blue Cross Sublease and Consent to Sublease.
Sublessor and Sublessee each agree that neither the Second EA/Blue Cross
Sublease nor this Agreement shall in any case:
a. release or discharge Sublessor, as Tenant, from any
liability or obligation under the Master Lease;
b. be construed as a Agreement by Landlord to any further
subleasing either by Tenant under the Master Lease or by Sublessor or by
Sublessee under the Second EA/Blue Cross Sublease, of any portion of the Master
Premises or Suite 700.
c. modify, waive or affect (i) any of the provisions,
covenants or conditions of the Master Lease, (ii) any of Sublessor's obligations
as the Tenant under the Master Lease or (iii) any of Landlord's rights or
remedies under the Master Lease; or
d. be construed as extending the term of the Master Lease
beyond that which is provided therein.
7. Assignment. This Agreement shall not be assignable by operation of
law or otherwise.
8. Relationship. Except as set forth specifically herein,
notwithstanding anything to the contrary which may be contained in the Second
EA/Blue Cross Sublease, no privity of contract or estate shall exist between
Landlord and Sublessee by reason of this Agreement or the Second EA/Blue Cross
Sublease, and Landlord is neither a party to, nor obligated to perform or
refrain from performing, any act under the Second EA/Blue Cross Sublease.
9. Alterations and Improvements. Sublessees and Sublessor each
understands, acknowledges and agrees that Landlord's consent granted herein is
not a consent to any improvement or alteration work to be performed, and that
Landlord's consent thereto must be separately sought if and to the extent
provided in the Master Lease and will not necessarily be given.
10. Examination of the Master Lease. Sublessee, by the execution of
this Agreement, acknowledges and represents to Landlord that Sublessee has
received a copy of, has examined and is familiar within each and every of the
terms, provisions and conditions of the Master Lease.
3 February 20, 2001 (11:50am)
11. Attornment to Landlord. In the event of the termination of the
Master Lease, Landlord shall have the option, in its sole and absolute
discretion, upon thirty (30) days advance written notice to Sublessee, (a) to
terminate the Second EA/Blue Cross Sublease, in which event all of Sublessee' s
rights and obligations thereunder shall terminate, or (b) to keep the Second
EA/Blue Cross Sublease in full force and effect as a direct Master Lease between
Landlord and Sublessee, in which event Sublessee shall automatically attorn to
Landlord thereunder. Such attornment shall be self-operative, provided, however,
upon Landlord's written request, Sublessee shall within ten (10) days of demand
therefore execute any instruments or other documents which may be required by
Landlord to memorialize such attornment.
12. Landlord's Right to Collect Rent from Sublessee. Sublessor and
Sublessee acknowledge and agree that, in accordance with the Master Lease, in
the event of a default by Tenant under the Master Lease which remains uncured
beyond any applicable cure period, Landlord has the right, power and authority,
but not the obligation, to collect rents due to Tenant, as Sublessor, from
Sublessee and apply said rents toward any and all amounts due to Landlord from
Tenant under the Master Lease, upon delivery of written notice to Sublessor and
Sublessee. Notwithstanding the acceptance of the payment of rent from Sublessee
as a result of any default by Sublessor, as Tenant under the Master Lease, or
any other payment of rent from Sublessee directly to Landlord regardless of the
circumstances or reasons therefore, such payment of rent by Sublessee shall in
no manner whatsoever be deemed an attornment by Sublessee to Landlord, or serve
to release Sublessor, as Tenant, from any liability under the terms, covenants,
conditions and provisions under the Master Lease, in the absence of a specific
written agreement signed by Landlord to such effect. Notwithstanding the
foregoing (a) any rents accepted by Landlord from Sublessee shall be applied
toward sums due for the leased premises which are the subject of the Second
EA/Blue Cross Sublease, and (b) on condition that Sublessee has not committed a
breach or default under the Second EA/Blue Cross Sublease which remains uncured
beyond any applicable cure period, Landlord will not terminate the Second
EA/Blue Cross Sublease prior to expiration of any period for which Landlord has
accepted rent from Sublessee.
13. Brokerage Fees. Sublessor and Sublessee each jointly and severally
agree that: (a) Landlord shall not be liable under any circumstances for any
brokerage commission or other similar charge or expense in connection with the
Second EA/Blue Cross Sublease, and (b) Sublessor and Sublessee shall each
indemnify, defend and hold Landlord and each and all of its shareholders,
officers, employees, agents, affiliates, lenders and advisors (collectively,
"Landlord Indemnitees") harmless from and against all claims, demands,
proceedings, losses, obligations, liabilities, causes of action, suits,
judgments, damages, penalties, costs and expenses (including, without
limitation, attorneys' fees and court costs) (collectively "Claims, Losses and
Costs") resulting from any claims that may be asserted against Landlord by any
broker, agent, finder, person or entity who claims a right to compensation or
commission with respect to the Second EA/Blue Cross Sublease.
/
/
4 February 20, 2001 (11:50am)
14. Representations and Authority.
a. Sublessor. Sublessor hereby represents and warrants to
Landlord as follows:
(i) Authority. Sublessor has the full right and
authority to enter into the Second EA/Blue Cross Sublease and this Agreement and
the person signing the Second EA/Blue Cross Sublease and this Agreement on
behalf of Sublessor is duly authorized to do so. The Second EA/Blue Cross
Sublease and this Agreement are legal, valid, and binding obligations of
Sublessor and are enforceable against Sublessor in accordance with their
respective terms.
(ii) Ownership of Master Leasehold: No Assignment: No
Other Agreements. As of the effective date of this Agreement, (i) it is sole
owner of the Tenant's interest in the Master Lease, (ii) except as set forth in
this Agreement, it had not made any assignment, sublease, transfer, conveyance,
hypothecation, or other disposition of the Master Lease, or any interest
therein, and (iii) there are no other agreements (written or otherwise) of any
kind between Sublessor and Sublessee in connection with the subleased premises
which are the subject of the Second EA/Blue Cross Sublease except for the First
EA/Blue Cross Sublease (which is being terminated concurrently herewith), Second
EA/Blue Cross Sublease and this Agreement.
(b) Sublessee. Sublessee hereby represents and warrants to
Landlord as follows:
(i) Authority. Sublessee has the full right and
authority to enter into the Second EA/Blue Cross Sublease and this Agreement;
and the person signing the Second EA/Blue Cross Sublease and this Agreement on
behalf of Sublessee is duly authorized to do so. The Second EA/Blue Cross
Sublease and this Agreement are legal, valid, and binding obligations of
Sublessee and are enforceable against Sublessee in accordance with their
respective terms.
(ii) No Other Agreements. As of the effective date of
this Agreement, there are no other agreements (written or otherwise) of any kind
between Sublessor and Sublessee in connection with the subleased premises which
are the subject of the Second EA/Blue Cross Sublease except for the First
EA/Blue Cross Sublease (which is being terminated concurrently herewith), the
Second EA/Blue Cross Sublease and this Agreement.
(c) Landlord. Landlord has the full right and authority to
enter into this Agreement and the person signing this Agreement on behalf of
Landlord is duly authorized to do so. This Agreement is a legal, valid, and
binding obligation of Landlord and is enforceable against Landlord in accordance
with its terms.
5 February 20, 2001 (11:50am)
15. No Right to Self-Insure. Sublessee hereby acknowledges and agrees
that is has no right under the Second EA/Blue Cross Sublease to self-insure any
of its insurance obligations thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
LANDLORD: CALIFORNIA PLAZA OF WALNUT CREEK, INC.,
a Florida not-for-profit corporation,
By: XXXXXXX CAPITAL
MANAGEMENT CORP.,
an Illinois corporation, agent,
By: Xxxxxx X. BUEDI
Name: Xxxxxx X. BUEDI
Title: V.P.
TENANT/SUBLESSOR: ELECTRONIC ARTS, INC., a Delaware corporation,
By: Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Sr. V.P. Finance
By: ___________________________
Name: _____________________
Title: ____________________
SUBLESSEE: BLUE CROSS OF CALIFORNIA, a California corporation,
By: Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
By: ___________________________
Name: _____________________
Title: ____________________
6 February 20, 2001 (11:50am)
EXHIBIT "A"
ATTACH COPY OF SECOND EA/BLUE CROSS SUBLEASE
1 February 20, 2001 (11:50am)
