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EXHIBIT 10.1
OFFICE LEASE
POST MONTGOMERY CENTER
One Montgomery Tower
San Francisco, California
LANDLORD:
POST-MONTGOMERY ASSOCIATES
TENANT:
FIRST ALBANY COMPANIES
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TABLE OF CONTENTS
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Page
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1.
Definitions...............................................................
1
1.1 Terms
Defined.........................................................
1
1.2 Basic Lease
Information............................................... 12
1.3 Certain Defined
Terms................................................. 12
2. Lease of
Premises.........................................................
12
3. Term; Condition and Acceptance of
Premises................................ 13
3.1 Delivery of Premises; Term
Commencement............................... 13
3.2 Early
Entry...........................................................
14
4.
Rent......................................................................
14
4.1 Obligation to Pay Base
Rent........................................... 14
4.2 Manner of Rent
Payment................................................ 14
4.3 Additional
Rent....................................................... 14
4.4 Late Payment of Rent;
Interest........................................ 14
5. Calculation and Payments of Escalation
Rent............................... 15
5.1 Payment of Estimated Escalation
Rent.................................. 15
5.2 Escalation Rent Statement and
Adjustment.............................. 15
5.3 Proration for Partial
Year............................................ 16
5.4 Abatement of Escalation
Rent.......................................... 16
5.5 Building Property
Taxes............................................... 16
5.6 Audit
Right...........................................................
16
6. Impositions Payable by
Tenant............................................. 17
7. Use of
Premises...........................................................
17
7.1 Permitted
Use......................................................... 17
7.2 No Violation of
Requirements.......................................... 17
7.3 Compliance with
Requirements.......................................... 18
7.4 No
Nuisance...........................................................
19
7.5 Compliance With Environmental Laws; Use of Hazardous
Materials........ 19
7.6 Gas Fire Suppression System; UPS
Unit................................. 21
8. Building
Services.........................................................
21
8.1 Maintenance of
Project................................................ 21
8.2 Building-Standard
Services............................................ 21
8.3 Interruption or Unavailability of
Services............................ 22
8.4 Tenant's Use of Excess Electricity and
Water.......................... 23
8.5 Provision of Additional
Services...................................... 23
8.6 Tenant's Supplemental Air
Conditioning................................ 23
9. Maintenance of
Premises................................................... 24
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10. Alterations to
Premises.................................................. 24
10.1 Landlord Consent;
Procedure......................................... 24
10.2 General
Requirements................................................ 25
10.3 Landlord's Right to
Inspect......................................... 26
10.4 Tenant's Obligations Upon
Completion................................ 27
10.5
Repairs.............................................................
27
10.6 Ownership and Removal of
Alterations................................ 27
10.7 Minor
Alterations...................................................
27
10.8 Landlord's
Fee...................................................... 28
11.
Liens....................................................................
28
12. Damage or
Destruction....................................................
28
12.1 Obligation to
Repair................................................ 28
12.2 Landlord's
Election................................................. 29
12.3 Tenant's
Election................................................... 29
12.4 Cost of
Repairs..................................................... 29
12.5 Damage at End of
Term............................................... 29
12.6 Waiver of
Statutes.................................................. 30
13. Eminent
Domain...........................................................
30
13.1 Effect of
Taking.................................................... 30
13.2 Condemnation
Proceeds............................................... 30
13.3 Restoration of
Premises............................................. 31
13.4 Taking at End of
Term............................................... 31
13.5 Tenant
Waiver.......................................................
31
14.
Insurance................................................................
31
14.1 Tenant's
Insurance.................................................. 31
14.2 Form of
Policies.................................................... 32
14.3 Vendors'
Insurance.................................................. 33
14.4 Landlord's
Insurance................................................ 33
15. Waiver of Subrogation
Rights............................................. 33
16. Tenant's Waiver of Liability and
Indemnification......................... 33
16.1 Waiver and
Release.................................................. 33
16.2 Indemnification of
Landlord......................................... 34
16.3 Indemnification of
Tenant........................................... 35
17. Assignment and
Subletting................................................ 35
17.1 Compliance
Required................................................. 35
17.2 Request by Tenant; Landlord
Response................................ 35
17.3 Standards and Conditions for Landlord
Approval...................... 37
17.4 Costs and
Expenses.................................................. 37
17.5 Payment of Excess Rent and Other
Consideration...................... 38
17.6 Assumption of
Obligations........................................... 38
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17.7 No
Release..........................................................
39
17.8 No Encumbrance; No Change in Permitted
Use.......................... 39
17.9 Right to Assign or Sublease Without Landlord's
Consent.............. 39
18. Rules and
Regulations....................................................
40
19. Entry of Premises by Landlord; Modification to Common
Areas.............. 40
19.1 Entry of
Premises................................................... 40
19.2 Modifications to Common
Areas....................................... 41
19.3 Waiver of
Claims.................................................... 41
20. Default and
Remedies.....................................................
42
20.1 Events of
Default................................................... 42
20.2 Tenant Cure
Periods................................................. 43
20.3 Landlord's Remedies Upon Occurrence of Event of
Default............. 43
20.4 Damages Upon
Termination............................................ 43
20.5 Computation of Certain Rent for Purposes of
Default................. 43
20.6 Landlord's Right to Cure
Defaults................................... 43
20.7 Waiver of
Forfeiture................................................ 44
20.8 Remedies
Cumulative................................................. 44
20.9 Landlord's
Default.................................................. 44
21. Subordination, Attornment and
Nondisturbance............................. 44
21.1 Subordination and
Attornment........................................ 44
21.2 Notice to
Encumbrancer.............................................. 45
21.3 Rent Payment
Direction.............................................. 45
22. Sale or Transfer by Landlord; Lease
Non-Recourse......................... 46
22.1 Release of Landlord on
Transfer..................................... 46
22.2 Lease Nonrecourse to Landlord; Limitation of
Liability.............. 46
23. Estoppel
Certificate.....................................................
47
23.1 Procedure and
Content............................................... 47
23.2 Effect of
Certificate............................................... 47
24. No Light, Air, or View
Easement.......................................... 47
25. Holding
Over.............................................................
48
26.
Reserved.................................................................
48
27.
Waiver...................................................................
48
28. Notices; Tenant's Agent for
Service...................................... 48
29. Tenant's
Authority.......................................................
49
30.
Parking..................................................................
49
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30.1 Lease of Parking
Spaces............................................ 49
30.2 Management of Project Parking
Garage............................... 49
30.3 Waiver of
Liability................................................ 50
31.
Miscellaneous............................................................
50
31.1 No Joint
Venture................................................... 50
31.2 Successors and
Assigns............................................. 50
31.3 Construction and
Interpretation.................................... 50
31.4
Severability.......................................................
51
31.5 Entire
Agreement................................................... 51
31.6 Governing
Law...................................................... 51
31.7 Costs and
Expenses................................................. 51
31.8 Standards of Performance and
Approvals............................. 52
31.9
Brokers............................................................
53
31.10 Memorandum of
Lease................................................ 53
31.11 Quiet
Enjoyment....................................................
53
31.12 Force
Majeure......................................................
53
31.13 Surrender of
Premises.............................................. 53
31.14 Building
Directory................................................. 54
31.15 Name of Building;
Address.......................................... 54
31.16
Exhibits...........................................................
54
31.17 Survival of
Obligations............................................ 54
31.18 Time of the
Essence................................................ 54
31.19 Waiver of Trial By Jury; Waiver of
Counterclaim.................... 54
31.20 Consent to
Venue................................................... 55
31.21 Financial
Statements............................................... 55
31.22 Subdivision; Future
Ownership...................................... 55
31.23 Modification of
Lease.............................................. 55
31.24 Intentionally
deleted.............................................. 56
31.25 No
Option..........................................................
56
31.26 Independent
Covenants.............................................. 56
31.27 First Source Hiring
Program........................................ 56
31.28 Compliance with Anti-Terrorism
Law................................. 56
31.29 Bankruptcy of
Tenant............................................... 56
31.30 Rent Not Based on
Income........................................... 57
31.31
Counterparts.......................................................
57
32. Communications and Computer Lines and
Equipment.......................... 57
32.1 Lines and
Equipment................................................ 57
32.2
Interference.......................................................
58
32.3 General
Provisions................................................. 58
33. Option To
Extend.........................................................
60
33.1 Grant of Extension
Option.......................................... 60
33.2 Terms Applicable to Premises During Extension
Term................. 60
33.3 Prevailing Market
Rate............................................. 60
33.4 Procedure for Determining Prevailing Market
Rate................... 61
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33.5 General
Provisions................................................. 63
34. Option To
Expand.........................................................
64
34.1 Grant of Expansion
Option.......................................... 64
34.2 Offering
Notice.................................................... 64
34.3 Terms Applicable to Expansion
Space................................ 64
34.4 Prevailing Market
Rate............................................. 65
34.5 General
Provisions................................................. 65
35.
Signage..................................................................
66
36. Satellite
Dish...........................................................
67
36.1 Grant of
License................................................... 67
36.2 Permitted Use; Equipment;
Location................................. 67
36.3 Tenant's Roof
Area................................................. 67
36.4 Rooftop Installation
Work.......................................... 67
36.5 General
Requirements............................................... 68
36.6
Services...........................................................
69
36.7 Roof
Damage........................................................
69
36.8 Compliance With
Requirements....................................... 69
36.9 Radio Frequency Emitting
Equipment................................. 69
36.10 Temporary Removal;
Relocation...................................... 70
36.11 Termination; Equipment As Property of
Tenant....................... 70
36.12 Landlord
Exculpation............................................... 70
36.13
Insurance..........................................................
70
36.14 Waiver of
Claims................................................... 70
36.15 Roof
Repairs.......................................................
71
36.16 Rights Personal to
Tenant.......................................... 71
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OFFICE LEASE
POST MONTGOMERY CENTER
ONE MONTGOMERY TOWER
San Francisco, California
BASIC LEASE INFORMATION
Lease Date: March 31, 2005
Landlord: Post-Montgomery Associates,
a California general partnership
Tenant: First Albany Companies,
a New York corporation
Premises: 19,620 square feet of rentable area located on the
24th Floor, commonly referred to as Suite 2400, as
shown on the Floor Plan attached to this Lease as
Exhibit A
Term: Approximately One Hundred Twenty-Four (124) months,
commencing on the Commencement Date
Commencement Date: The date Landlord delivers possession of the
Premises
to Tenant, which shall be immediately following mutual
execution and delivery of this Lease.
Target Delivery Date: April 1, 2005
Rent Commencement Date: December 1, 2005
Expiration Date: July 31, 2015
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Base Rent:
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Rentable Square Annual Base
Dates Feet Rent/Sq. Ft. Annual Base Rent Monthly Base Rent
<S> <C> <C> <C> <C>
December 1, 2005 19,620 $32.50 $637,650.00 $53,137.50
through
July 31, 2007
August 1, 2007 19,620 $34.50 $676,890.00 $56,407.50
through
July 31, 2009
August 1, 2009 19,620 $36.50 $716,130.00 $59,677.50
through
July 31, 2011
August 1, 2011 19,620 $38.50 $755,370.00 $62,947.50
through
July 31, 2013
August 1, 2013 19,620 $40.50 $794,610.00 $66,217.50
through
July 31, 2015
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Base Year: 2005
Tenant's Percentage Share: 2.90%
Permitted Use: General corporate and administrative offices
consistent with first-class office buildings in
the San Francisco downtown financial district
Security Deposit: None
Building Directory Spaces: Ten (10) directory strips, which
shall be
proportionately increased if Tenant leases
additional space
Parking Spaces: Four (4)
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Tenant's Address: Prior to Commencement Date:
First Albany Companies
677 Broadway
Albany, NY 12207
Attn: Counsel
On and after Commencement Date:
First Albany Companies
677 Broadway
Albany, NY 12207
Attn: Counsel
With a copy to:
Post Montgomery Center
One Montgomery Street, Suite 2400
San Francisco, CA 94104
Attn: Phil Johnston -- Managing Director of
Salestrading
Landlord's Address: Post Montgomery Center
One Montgomery Street, Suite 3220
San Francisco, CA 94104
Brokers:
Landlord's Broker: Cushman & Wakefield of California,
Inc.
Tenant's Broker: Tory Corporate R/E Advisors (dba The
Staubach
Company)
Exhibits:
Exhibit A: Floor Plan of Premises
Exhibit B: Rules and Regulations
Exhibit C: Work Letter
Schedule 1: Base Building Improvements
Exhibit D: Confirmation of Lease Term
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OFFICE LEASE
THIS LEASE is made and entered into by and between Landlord and
Tenant as
of the Lease Date.
Landlord and Tenant hereby agree as follows:
1. Definitions.
1.1 Terms Defined. The following terms have the meanings set
forth
below. Certain other terms have the meanings set forth elsewhere
in this Lease.
Alterations: Any alterations, additions, changes or other
improvements to the Premises made by or on behalf of Tenant
(other than the
initial leasehold improvements, if any, made by or on behalf of
Tenant pursuant
to the Work Letter). All references to Alterations shall mean
both Minor
Alterations and Major Alterations.
Anti-Terrorism Law: Any Requirements relating to terrorism,
anti-terrorism, money-laundering or anti-money laundering
activities, including
without limitation the United States Bank Secrecy Act, the
United States Money
Laundering Control Act of 1986, Executive Order No. 13224, and
Title 3 of the
USA Patriot Act, and any regulations promulgated under any of
them.
Appraisal Panel: Appraisal Panel shall have the meaning set
forth in
Section 33.4(d).
Bankruptcy Code: Bankruptcy Code shall mean the United
States
Bankruptcy Code.
Base Building Operating Expenses: The Building Operating
Expenses
allocable to the Base Year.
Base Building Property Taxes: The Building Property Taxes
allocable
to the Base Year.
Base Year: Base Year shall have the meaning set forth in the
Basic
Lease Information.
Building: The high-rise office portion of the Project,
commonly
known as One Montgomery Tower, including related Common Areas.
The Building does
not include the Galleria.
Building Holidays: New Year's Day, Martin Luther King, Jr.
Day,
President's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day,
the day after Thanksgiving, and Christmas Day.
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Building Operating Expenses: Operating Expenses allocable to
the
Building. Landlord, in its reasonable discretion, shall
determine the portion of
Operating Expenses allocable to the Building in accordance with
its operating
principles and practices for the Project and/or the Building, as
determined by
Landlord from time to time; provided, however, that Landlord
shall make such
allocation in a consistent and nondiscriminatory manner. If less
than one
hundred percent (100%) of the rentable area of the Building is
occupied during
the Base Year or any subsequent calendar year during the Term,
then actual
Building Operating Expenses for the Base Year and each such
subsequent calendar
year shall be adjusted to reflect Landlord's reasonable estimate
of Building
Operating Expenses as if one hundred percent (100%) of the
entire rentable area
of the Building had been occupied. Landlord's reasonable "gross
up" of such
Building Operating Expenses shall be final and binding on
Tenant, in the absence
of manifest error. Notwithstanding any provision in this Lease
to the contrary,
in no event shall the amount of Building Operating Expenses for
any calendar
year subsequent to the Base Year be deemed to be less than the
amount of Base
Building Operating Expenses.
Building Property Taxes: Eighty-eight and Four Tenths
Percent
(88.4%) of Real Estate Taxes, except that to the extent the
Building, or a
portion thereof, is separately assessed, then One Hundred
Percent (100%) of such
separately assessed Real Estate Taxes. Notwithstanding any
provision in this
Lease to the contrary, in no event shall the amount of Building
Property Taxes
for any calendar year subsequent to the Base Year be deemed to
be less than the
amount of Base Building Property Taxes.
Building Standard Hours: 7:00 a.m. to 6:00 p.m. on weekdays and
8:00
a.m. to 2:00 p.m. on Saturdays (except Building Holidays).
Building Systems: The life-safety, electrical, mechanical,
heating,
ventilation, airconditioning, plumbing, fireprotection,
telecommunications, or
other utility systems serving the Premises, the Building, the
Project or the
Galleria, as applicable.
Casualty: Fire, earthquake, or any other event of a sudden,
unexpected, or unusual nature.
Casualty Discovery Date: Casualty Discovery Date shall have
the
meaning set forth in Section 12.1.
Claims: Any and all obligations, losses, claims, actions
(including
remedial or enforcement actions of any kind and administrative
or judicial
proceedings, suits, orders or judgments), causes of action,
liabilities,
penalties, damages (including consequential and punitive
damages), costs and
expenses (including reasonable attorneys' and consultants' fees
and expenses).
Common Areas: Those areas of the Project designated by Landlord,
in
its reasonable discretion, from time to time for the
nonexclusive use of
occupants of the Project, and their agents, employees,
customers, invitees and
licensees, and other members of the public, including the
rooftop garden terrace
located in the Project. Common Areas do not include the exterior
windows and
walls and the roof of the Project (other than the rooftop garden
terrace), or
any space in the Project (including in the Premises) used for
common shafts,
stacks, pipes,
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conduits, ducts, electrical or other utilities,
telecommunication systems, or
other installations for Building Systems serving the
Project.
Comparison Buildings: Comparison Buildings shall have the
meaning
set forth in Section 33.3.
Comparison Leases: Comparison Leases shall have the meaning
set
forth in Section 33.3.
Confidential Information: Confidential Information shall have
the
meaning set forth in Section 31.24.
Construction Guide: The Post Montgomery Center Construction
&
Remodeling Guide, as updated, revised and/or superseded from
time to time.
Consumer Price Index: The United States Department of Labor,
Bureau
of Labor Statistics ("Bureau"), Consumer Price Index (All Urban
Consumers, All
Items, 19821984 = 100) for the Metropolitan Area of which San
Francisco,
California, is a part. If the Consumer Price Index is
discontinued or revised,
the Consumer Price Index shall mean the index designated as the
successor or
substitute index by the Bureau, or its successor agency, and if
none is
designated, a comparable index as determined by Landlord in its
sole discretion,
which would likely achieve a comparable result to that achieved
by the use of
the Consumer Price Index. If the base year of the Consumer Price
Index is
changed, then the conversion factor specified by the Bureau, or
successor
agency, shall be utilized to determine the Consumer Price
Index.
Contemplated Transfer Date: Contemplated Transfer Date shall
have
the meaning set forth in Section 17.2(b).
Control: Ownership of more than fifty percent (50%) of all of
the
voting stock of a corporation or more than fifty percent (50%)
of all of the
legal and equitable interest in any other business entity.
Default Interest Rate: The greater of (i) ten percent (10%)
per
annum, or (ii) the Prime Rate plus five percent (5%) per annum;
provided,
however, that if such rate of interest shall exceed the maximum
rate allowed by
law, the Default Interest Rate shall be automatically reduced to
the maximum
rate of interest permitted by applicable law.
Dish Cable Path: Dish Cable Path shall have the meaning set
forth in
Section 36.2(b).
Dish Connections: Dish Connections shall have the meaning set
forth
in Section 36.2(b).
Dish Equipment: Dish Equipment shall have the meaning set forth
in
Section 36.2(b).
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Dish Roof Area: Dish Roof Area shall have the meaning set forth
in
Section 36.2(a).
Dispute Notice: Dispute Notice shall have the meaning set forth
in
Section 5.6(a).
Encumbrance: Any ground lease or underlying lease, or the lien
of
any mortgage, deed of trust, or any other security instrument
now or hereafter
affecting or encumbering the Project, or any part thereof or
interest therein.
Encumbrancer: The holder of the beneficial interest under an
Encumbrance.
Environmental Laws: All laws, ordinances, rules,
regulations,
orders, decrees, permits, and requirements of courts and
governmental
authorities now or hereafter in effect relating to the
environment, health and
safety, or the use, generation, handling, emission, release,
discharge, storage
or disposal of Hazardous Materials.
Equipment: Equipment shall have the meaning set forth in
Section
32.1.
Escalation Rent: Tenant's Percentage Share of the total
dollar
increase, if any, in Building Operating Expenses allocable to
each calendar
year, or part thereof, after the Base Year, over the amount of
Base Building
Operating Expenses, and Tenant's Percentage Share of the total
dollar increase,
if any, in Building Property Taxes allocable to the tax year or
years occurring
in each such calendar year over the Base Building Property Taxes
for the tax
year or years occurring in the Base Year.
Essential Services: Essential Services shall have the meaning
set
forth in Section 8.3.
Event of Default: Event of Default shall have the meaning set
forth
in Section 20.1.
Excess Rent: Excess Rent shall have the meaning set forth in
Section
17.5(a).
Executive Order No. 13224: Executive Order No. 13224 on
Terrorist
Financing effective September 24, 2001, and relating to
"Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support
Terrorism," as may be amended from time to time.
Expansion Option: Expansion Option shall have the meaning set
forth
in Section 34.1.
Expansion Option Notice: Expansion Option Notice shall have
the
meaning set forth in Section 34.2(a).
Expansion Space: Expansion Space shall have the meaning set
forth in
Section 34.1.
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Expansion Term: Expansion Term shall have the meaning set forth
in
Section 34.3.
Expiration Date: The Expiration Date shall have the meaning
set
forth in the Basic Lease Information.
Extension Option: Extension Option shall have the meaning set
forth
in Section 33.1.
Extension Term: Extension Term shall have the meaning set forth
in
Section 33.1.
FAA: The Federal Aviation Administration.
FCC: The Federal Communications Commission.
Floor: The entire rentable area of any floor in the
Building.
FSHP: The First Source Hiring Program, as described in
Section
31.27.
Galleria: The retail shopping center portion of the Project,
commonly known as The Crocker Galleria, including related Common
Areas and the
Project parking garage.
Hazardous Materials: Petroleum, asbestos, polychlorinated
biphenyls,
radioactive materials, radon gas, mold, or any chemical,
material or substance
now or hereafter defined as or included in the definition of
"hazardous
substances," "hazardous wastes," "hazardous materials,"
"pollutants,"
"contaminants," "extremely hazardous waste," "restricted
hazardous waste" or
"toxic substances," or words of similar import, under any
Environmental Laws,
including those materials identified in Sections 66680 through
66685 of Title 22
of the California Administrative Code, Division 4, Chapter 30,
as they may be
amended from time to time.
Impositions: Taxes, assessments, charges, excises and
levies,
business taxes, license, permit, inspection and other
authorization fees,
transit development fees, assessments or charges for housing
funds, service
payments in lieu of taxes and any other fees or charges of any
kind at any time
levied, assessed, charged or imposed by any Federal, State or
local entity, (i)
upon, measured by or reasonably attributable to the cost or
value of Tenant's
equipment, furniture, fixtures or other personal property
located in the
Premises, or the cost or value of any Alterations; (ii) upon, or
measured by,
any Rent payable hereunder, including any gross receipts tax;
(iii) upon, with
respect to or by reason of the development, possession, leasing,
operation,
management, maintenance, alteration, repair, use or occupancy by
Tenant of the
Premises, or any portion thereof; or (iv) upon this Lease
transaction, or any
document to which Tenant is a party creating or transferring any
interest or
estate in the Premises. Impositions do not include franchise,
transfer,
inheritance or capital stock taxes, or income taxes measured by
the net income
of Landlord from all sources, unless any such taxes are levied
or assessed
against Landlord as a substitute for, in whole or in part, any
Imposition.
Indemnitees: Indemnitees shall have the meaning set forth in
Section
16.1.
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Intention to Transfer Notice: Intention to Transfer Notice
shall
have the meaning set forth in Section 17.2(b).
Interest Rate: The Prime Rate plus two percent (2%);
provided,
however, that if such rate of interest shall exceed the maximum
rate allowed by
law, the Interest Rate shall be automatically reduced to the
maximum rate of
interest permitted by applicable law.
Interference: Interference shall have the meaning set forth
in
Section 32.1.
Interim Leases: Interim Leases shall have the meaning set forth
in
Section 34.1.
Interruption Notice: Interruption Notice shall have the meaning
set
forth in Section 8.3.
Land: The parcel of land shown as Lots 4, 5, 6, 7, 8, 14, 15 and
16
on that certain Parcel Map, filed February 13, 1981, at Page 6,
in Book 19, of
Parcel Maps, of the Official Records of the City and County of
San Francisco,
California.
Landlord's Determination: Landlord's Determination shall have
the
meaning set forth in Section 33.4(b).
Landlord's Statement: Landlord's Statement shall have the
meaning
set forth in Section 5.2.
Lease Year: Each consecutive twelve (12) month period during
the
Term of this Lease, provided that the last Lease Year shall end
on the
Expiration Date.
License: License shall have the meaning set forth in Section
36.1.
Lines: Lines shall have the meaning set forth in Section
32.1.
Major Alterations: Alterations which (i) may affect the
structural
portions of the Project, (ii) may affect or interfere with the
Project roof,
walls, elevators, heating, ventilating, air conditioning,
electrical, plumbing,
telecommunications, security, life-safety or other Building
Systems, (iii) may
adversely affect the use and enjoyment by other tenants or
occupants of the
Project of their premises, (iv) may be visible from outside the
Premises, (v)
utilize materials or equipment which are inconsistent with
Landlord's standard
building materials and equipment for the Project, (vi) result in
the imposition
on Landlord of any requirement to make any alterations or
improvements to any
portion of the Project (including handicap access and life
safety requirements)
in order to comply with Requirements, or (vii) increase the cost
to clean,
maintain or repair the Premises.
Minor Alterations: Alterations (i) that are not Major
Alterations,
(ii) that do not require the issuance of a building or other
governmental
permit, authorization or approval, (iii) that do not require
work to be
performed outside the Premises in order to comply with
Requirements, and (iv)
the cost of which does not exceed Twenty-Five Thousand Dollars
($25,000.00) in
any one instance.
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Monthly Base Rent: The monthly installment of annual Base Rent
(as
defined in the Basic Lease Information) to be paid by Tenant
from time to time
during the Term.
Negotiation Period: Negotiation Period shall have the meaning
set
forth in Section 33.4(b).
Net Worth: The excess of total assets over total
liabilities,
determined in accordance with generally accepted accounting
principles,
excluding, however, from the determination of total assets,
goodwill and other
intangibles.
Offering Notice: Offering Notice shall have the meaning set
forth in
Section 34.2.
Operating Expenses: All costs of management, operation,
ownership,
maintenance and repair of the Project, including: (i) salaries,
wages,
reasonable bonuses and other reasonable compensation of
employees engaged in the
management, operation, maintenance or repair of the Project,
(ii) all payroll
burden, social security, worker's compensation, unemployment and
similar taxes
and impositions with respect to such employees, (iii) the cost
of providing
disability or other benefits imposed by law or otherwise with
respect to such
employees; (iv) property management fees and expenses, including
Landlord's fees
and expenses for any management performed by it; provided,
however, that any
property management fees shall not exceed three percent (3%) of
the annual gross
revenues of the Project; (v) rental and other costs and expenses
for Landlord's
and property management offices providing services to the
Project; (vi)
electricity, natural gas, water, waste disposal and recycling,
sewer, heating,
lighting, air conditioning and ventilating and other utilities;
(vii)
janitorial, maintenance, security, life safety and other
services, such as alarm
service, window cleaning, elevator maintenance, landscaping and
uniforms (and
the cleaning and/or replacement thereof) for personnel providing
services to the
Project; (viii) materials, supplies, tools and rental equipment
needed in the
operation, repair, replacement and maintenance of the Project;
(ix) license,
permit and inspection fees and costs; (x) insurance premiums and
costs
(including earthquake and/or flood if so elected by Landlord in
its sole
discretion), and the deductible portion of any insured loss
under Landlord's
insurance or the amount that would be the deductible portion of
such loss but
for selfinsurance thereof by Landlord, provided that the
deductible amounts
included in Operating Expenses under Landlord's commercial
general liability
policy and "all risk" property insurance policies or such
selfinsurance amounts
shall not exceed commercially reasonable amounts, taking into
consideration
market pricing at the time such insurance policies were
purchased, and provided
further, that the deductible amounts payable by Tenant with
respect to any
earthquake, flood or terrorism policy shall not, in the
aggregate, exceed Two
Dollars ($2.00) per rentable square foot of the Premises during
any calendar
year; (xi) sales, use and excise taxes imposed on items that
otherwise are
included as Operating Expenses; (xii) legal, accounting and
other professional
services for the Project, including costs, fees and expenses of
contesting the
validity or applicability of any law, ordinance, rule,
regulation or order
relating to the Project; (xiii) the cost of supplies and
services such as
telephone, courier services, postage and stationery supplies;
(xiv) normal
repair and replacement of wornout equipment, facilities and
installations; (xv)
depreciation on personal property, including exterior window
draperies provided
by Landlord and Common Area floor coverings, and/or rental costs
of leased
furniture, fixtures, and equipment; and (xvi) expenditures
7
<PAGE>
for capital improvements or modifications made at any time to
the Project (A)
that are intended in Landlord's judgment as labor saving
devices, or to reduce
or eliminate other Operating Expenses or to effect other
economies in the
operation, maintenance, or management of the Project, or (B)
that are necessary
or appropriate in Landlord's reasonable judgment for the health
and safety of
occupants of the Project, or (C) that are necessary under any
Requirements which
were not applicable to the Project at the time it was
constructed, or (D) that
are replacements of items which Landlord is obligated to
maintain, all amortized
over such reasonable period as Landlord shall determine at the
Interest Rate,
or, if applicable, the rate paid by Landlord on funds borrowed
for the purpose
of constructing or installing such capital improvements.
Notwithstanding
subsection (x) above, if during any calendar year after the Base
Year Landlord
incurs expenses relating to insurance premiums for earthquake,
flood or
terrorism insurance coverage and Landlord did not insure against
such peril
during the Base Year, or, if Landlord insured against such peril
during the Base
Year, but the extent of the coverage carried by Landlord during
any calendar
year after the Base Year is materially increased from the
coverage carried by
Landlord during the Base Year with respect to such peril (e.g.
Landlord changes
from an earthquake policy based on the probable maximum loss to
an earthquake
policy for full replacement cost ), Operating Expenses for the
Base Year shall
be deemed increased by the amount Landlord would have incurred
during the Base
Year had such insurance been in effect during the Base Year.
Conversely, if
Landlord incurs expenses during the Base Year relating to
insurance premiums for
earthquake, flood or terrorism insurance, and Landlord elects
not to insure
against such peril during any calendar year after the Base Year,
or, if after
the Base Year Landlord materially decreases the extent of its
insurance coverage
with respect to any such peril resulting in a reduction in
insurance premiums,
Operating Expenses for the Base Year shall be deemed reduced by
the amounts
Landlord incurred during the Base Year with respect to such
discontinued
insurance coverage or greater insurance coverage that was in
effect during the
Base Year. Operating Expenses do not include: (1) Real Estate
Taxes; (2) legal
fees, real estate sale or brokers' commissions or other costs
incurred in the
negotiation, termination, or extension of leases or in
proceedings involving a
specific tenant, including lease marketing and advertising
expenses,
concessions, lease takeover or rental assumption obligations,
architectural
costs, engineering fees and other similar professional costs and
fees in
connection with lease negotiations; (3) depreciation, except as
set forth in
subsection (xv) above; (4) principal and interest payments on
loans secured by
deeds of trust recorded against the Project, except as set forth
in subsection
(xvi) above; (5) the cost of capital improvements or
modifications characterized
as such using generally accepted real estate accounting
practices, except as set
forth in subsection (xvi) above; (6) costs paid for directly by
Tenant or any
other tenant of the Project; provided, however, that if any
tenant of the
Project contracts directly with Landlord or a third party for
services the cost
of which would otherwise be included in Operating Expenses, the
total amount of
Operating Expenses shall be "grossed up" to reflect what those
costs would have
been had such tenants not directly contracted for such services;
(7) the cost of
additional or extraordinary services provided to other tenants
of the Project
and not offered to Tenant without additional charge; (8) officer
and executive
salaries of personnel employed by Landlord above the level of
the manager of the
Project; (9) costs payable by proceeds of insurance or other
third parties; (10)
the cost of repairs or other work to the extent Landlord is
reimbursed by
insurance or condemnation proceeds; (11) the cost of tenant
allowances or
inducements made for tenants of the Project, including permit,
license and
inspection fees and any other contribution by Landlord to the
cost of tenant
improvements; (12) except for legal and accounting costs
attributed to the
8
<PAGE>
normal operation of the Project, monetary damages, awards,
judgments or
settlement amounts paid by Landlord as a result of disputes with
other tenants,
occupants or third parties relating to the Project; (13)
expenditures for
repairing or replacing any defect in the design or construction
of the Project,
to the extent such expenditures are actually recovered by
warranty for such
work; (14) the costs of any Hazardous Materials removal or
remediation required
to be performed by Landlord, except for the disposal, removal or
remediation of
Hazardous Materials customarily found in other first class
office buildings
(e.g., janitorial supplies, light bulbs, and computer
equipment); (15) any bad
debt loss, rent loss, or reserves for bad debts or rent loss;
(16) costs
relating to maintaining Landlord's legal existence, either as a
corporation,
partnership or other entity; (17) all costs of Landlord's
general corporate and
general administrative and overhead expenses; (18) ground rent,
if any; (19)
costs and expenses incurred in connection with enforcement of
leases, including
court costs, accounting fees, auditing fees, attorneys' fees in
connection with
any summary proceeding to dispossess any tenant; (20) Landlord's
franchise,
transfer, inheritance, estate, succession and capital stock
taxes; and (21)
costs and expenses attributable to any property other than the
Project.
Option Notice: Option Notice shall have the meaning set forth
in
Section 33.1.
OSHA: The U.S. Occupational Safety and Health
Administration.
Permitted Use: Permitted Use shall have the meaning set forth in
the
Basic Lease Information.
Pre-Existing Hazardous Materials: Hazardous Materials
(classified as
such on the Commencement Date) existing in or on the Premises on
the date
possession thereof is delivered to Tenant.
Prevailing Market Rate: Prevailing Market Rate shall have
the
meaning set forth in Section 33.3.
Prime Rate: The prime rate (or base rate) reported in the
Money
Rates column or section of The Wall Street Journal as being the
base rate on
corporate loans at large U.S. money center commercial banks
(whether or not such
rate has actually been charged by any such bank) on the first
day on which The
Wall Street Journal is published in the month in which the
subject sums are
payable or incurred.
Prohibited Person: (i) A person or entity that is listed in
the
Annex to Executive Order No. 13224, or a person or entity owned
or controlled by
an entity that is listed in the Annex to Executive Order No.
13224; (ii) a
person or entity with whom Landlord is prohibited from dealing
or otherwise
engaging in any transaction by any Anti-Terrorism Law; or (iii)
a person or
entity that is named as a "specially designated national and
blocked person" on
the most current list published by the U.S. Treasury Department
Office of
Foreign Assets Control at its official website,
http://www.treas.gov/ofac/t11sdn.pdf or at any replacement
website or other
official publication of such list.
Project: The Land, all buildings and other improvements at any
time
located on the Land (including the Building and the Galleria),
and all
appurtenances related thereto,
9
<PAGE>
including the rooftop garden terrace and loading dock area,
collectively
commonly known as Post Montgomery Center.
Real Estate Taxes: Taxes, assessments and charges now or
hereafter
levied or assessed upon, or with respect to, the Project, or any
personal
property of Landlord used in the operation thereof or located
therein, or
Landlord's interest in the Project or such personal property, by
any Federal,
State or local entity, including: (i) all real property taxes
and general,
special, supplemental and escape assessments applicable to the
respective
accounting period; (ii) charges, fees or assessments for
transit, public
improvements, employment, job training, housing, day care, open
space, art,
police, fire or other governmental services or benefits imposed
by any Federal,
State or local governmental or quasi-governmental entity; (iii)
service payments
in lieu of taxes; (iv) any tax, fee or excise on the use or
occupancy of any
part of the Project; (v) any tax, assessment, charge, levy or
fee for
environmental matters, or as a result of the imposition of
mitigation measures,
such as parking taxes, employer parking regulations or fees,
charges or
assessments due to the treatment of the Project, or any portion
thereof or
interest therein, as a source of pollution or stormwater runoff,
provided that
the same are generally applicable to comparable buildings; (vi)
any other tax,
fee or 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 Real
Estate Taxes; and
(vii) consultants' and attorneys' fees and expenses reasonably
incurred in
connection with proceedings to contest, determine or reduce Real
Estate Taxes.
Real Estate Taxes do not include: (A) franchise, transfer,
inheritance, estate,
succession or capital stock taxes, or income taxes measured by
the net income of
Landlord from all sources, unless any such taxes are levied or
assessed against
Landlord as a substitute for, in whole or in part, any Real
Estate Tax; and (B)
penalties, fines, interest or charges due for late payment of
Real Estate Taxes
by Landlord. If any Real Estate Taxes are payable, or may at the
option of the
taxpayer be paid, in installments, such Real Estate Taxes shall,
together with
any interest that would otherwise be payable with such
installment, be deemed to
have been paid in installments, amortized over the maximum time
period allowed
by applicable law.
Recapture Notice: Recapture Notice shall have the meaning set
forth
in Section 7.2(b).
Related Company: (i) An entity which controls, is controlled by,
or
is under common control with Tenant; (ii) an entity into or with
which Tenant is
merged or consolidated; or (iii) an entity to which at least
eighty percent
(80%) of Tenant's assets are transferred.
Remedial Work: Any investigation or monitoring of site
conditions or
any cleanup, containment, restoration, removal or remediation of
Hazardous
Materials.
Rent: Base Rent, Escalation Rent and all other additional
charges
and amounts payable by Tenant in accordance with this Lease.
Rent Payment Direction: Rent Payment Direction shall have
the
meaning set forth in Section 21.3.
Repair Estimate: Repair Estimate shall have the meaning set
forth in
Section 12.1.
10
<PAGE>
Requirements: All laws, including Environmental Laws,
ordinances,
rules, regulations, orders, decrees, permits, and requirements
of courts and
governmental authorities now or hereafter in effect, including
the Americans
With Disabilities Act (42 U.S.C. Section 12101 et seq.) and
Title 24 of the
California Code of Regulations and all regulations and
guidelines promulgated
thereunder; the provisions of any insurance policy carried by
Landlord or Tenant
on any portion of the Project, or any property therein; the
requirements of any
independent board of fire underwriters; any directive or
certificate of
occupancy issued pursuant to any law by any public officer or
officers
applicable to the Project; the provisions of all recorded
documents affecting
any portion of the Project (including the Declaration of Crocker
Properties,
Inc., regarding building electric lighting, recorded August 26,
1981, as
modified by Amended and Restated Declaration, dated December 5,
1984, recorded
December 5, 1984), as any such document may be amended from time
to time; and
all life safety programs, procedures and rules from time to time
or at any time
implemented or promulgated by Landlord.
Roof Repairs: Roof Repairs shall have the meaning set forth
in
Section 36.15.
Rooftop Installation Work: Rooftop Installation Work shall have
the
meaning set forth in Section 36.4.
Rooftop Survey: Rooftop Survey shall have the meaning set forth
in
Section 36.9.
Satellite Dish: Satellite Dish shall have the meaning set forth
in
Section 36.2.
Six Month Period: Six Month Period shall have the meaning set
forth
in Section 7.2(b).
Substantial Completion Date: Substantial Completion Date shall
have
the meaning set forth in the Work Letter.
Target Delivery Date: Target Delivery Date shall have the
meaning
set forth in the Basic Lease Information.
Taxable Value: Taxable Value shall have the meaning set forth
in
Section 5.5.
Tenant Parties: Tenant, all persons or entities claiming by,
through
or under Tenant, and their respective employees, agents,
contractors, licensees,
invitees, representatives, officers, directors, shareholders,
partners, and
members.
Tenant's Accountant: Tenant's Accountant shall have the meaning
set
forth in Section 5.6(a).
Tenant's Determination: Tenant's Determination shall have
the
meaning set forth in Section 33.4(b).
Tenant's Percentage Share: The percentage set forth in the
Basic
Lease Information as Tenant's Percentage Share, as adjusted from
time to time to
take into account changes in the physical size of the
Premises.
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<PAGE>
Term: Term shall have the meaning set forth in the Basic
Lease
Information.
USA Patriot Act: The "Uniting and Strengthening America by
Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001"
(Public Law 10756), as may be amended from time to time.
Wattage Allowance: 4.5 watts times the rentable area in the
Premises
divided by 1,000, multiplied by the Building Standard Hours,
with respect to
connected load for general purposes, and 1.5 watts times the
rentable area in
the Premises divided by 1,000, multiplied by the Building
Standard Hours, with
respect to lighting, which shall result in kilowatt hours.
Work Letter: The agreement attached hereto as Exhibit C, which
sets
forth the respective responsibilities of Landlord and Tenant
regarding the
design and construction of alterations, additions and
improvements to prepare
the Premises for occupancy by Tenant.
1.2 Basic Lease Information. The Basic Lease Information is
incorporated into and made a part of this Lease. Each reference
in this Lease to
any Basic Lease Information shall mean the applicable
information set forth in
the Basic Lease Information, except that in the event of any
conflict between an
item in the Basic Lease Information and this Lease, this Lease
shall control.
1.3 Certain Defined Terms. The parties acknowledge that (i)
the
rentable area of the Premises and the Building have been finally
determined by
the parties for all purposes under this Lease, including the
calculation of
Tenant's Percentage Share and will not, except as otherwise
provided in this
Lease, be changed, and (ii) the percentage for allocation of
Building Property
Taxes is conclusive and binding on the parties. The rentable
areas of the
Premises and the Building have been measured substantially in
accordance with
the Standard Method for Measuring Floor Area in Office
Buildings, ANSI Z65.1
1996. If any space is added to or deleted from the Premises, or
any abatement of
Rent is based on rentable area, the rentable area for the added
or deleted
space, or such abatement, shall be reasonably determined by
Landlord utilizing
the preceding standard.
2. Lease of Premises. Landlord leases to Tenant and Tenant
leases from
Landlord the Premises, together with the nonexclusive right to
use, in common
with others, the Common Areas, subject to the terms, covenants
and conditions
set forth in this Lease. Landlord reserves from the leasehold
estate hereunder
(i) all exterior walls and windows bounding the Premises, (ii)
all space located
within the Premises for common shafts, stacks, pipes, conduits,
ducts,
utilities, telecommunications systems, and other installations
for Building
Systems, the use thereof and access thereto, and (iii) the right
to install,
remove or relocate any of the foregoing for service to any part
of the Project,
including the premises of other tenants of the Building,
provided that unless
necessary to comply with applicable Requirements, such action
shall not
materially reduce the usable area of the Premises or require any
Alterations to
be made or paid for by Tenant. Landlord shall have no right to
relocate Tenant
from the Premises.
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<PAGE>
3. Term; Condition and Acceptance of Premises.
3.1 Delivery of Premises; Term Commencement.
(a) This Lease shall be effective as of the Lease Date. The
Term of this Lease shall commence on the Commencement Date and
end on the
Expiration Date, unless sooner terminated or extended pursuant
to the provisions
of this Lease. The design and construction of any alterations,
additions or
improvements that Tenant may deem necessary or appropriate to
prepare the
Premises for occupancy by Tenant shall be governed by the Work
Letter. Except as
specifically provided in this Lease (including the Work Letter),
Tenant agrees
to accept the Premises in their "as-is" condition, without any
representations
or warranties by Landlord, and with no obligation of Landlord to
make any
alterations or improvements to the Premises or to provide any
tenant improvement
allowance. Landlord shall exercise commercially reasonable
efforts to deliver
possession of the Premises to Tenant on the Target Delivery
Date. If Landlord,
for any reason whatsoever, cannot deliver possession of the
Premises to Tenant
on the Target Delivery Date, this Lease shall not be void or
voidable, and
Landlord shall not be in default or liable to Tenant for any
loss or damage
resulting therefrom. Tenant's commencing business operations in
all or any
portion of the Premises shall constitute Tenant's acceptance of
the Premises in
the condition required by this Lease. Within thirty (30) days
after request,
Tenant shall execute and deliver to Landlord a Confirmation of
Lease Term in the
form of Exhibit D attached hereto.
(b) Landlord represents to Tenant that, as of the
Substantial
Completion Date (as defined in the Work Letter), to Landlord's
knowledge, the
structural elements of the Building and the Building Systems
serving the
Premises shall be in good working condition and repair. If it is
determined that
the foregoing representation was untrue as of the Substantial
Completion Date,
Landlord shall not be liable to Tenant for any damages, but as
Tenant's sole
remedy, Landlord, at no cost to Tenant, shall perform such work
or take such
other action as may be necessary to place the structural
elements of the
Building and the Building Systems serving the Premises in good
working condition
and repair.
(c) Tenant acknowledges and agrees that Landlord may perform
work on the structural elements of the Building or the Building
Systems serving
the Premises on or after the Commencement Date, which work may
create noise,
dust, vibration, odors or leave debris in the Premises and/or
the Project.
Without limiting the generality of Section 16.1 below, Tenant
hereby agrees that
Landlord's activities under this Section 3.1(c) shall in no way
constitute an
actual or constructive eviction of Tenant nor entitle Tenant to
any abatement of
Rent. Landlord shall not be liable to Tenant for any direct or
indirect injury
to or interference with Tenant's business arising from
Landlord's activities
under this Section 3.1(c), nor shall Tenant be entitled to any
compensation or
damages from Landlord for loss of the use of the whole or any
part of the
Premises or of Tenant's personal property or improvements
resulting from
Landlord's activities hereunder, or for any inconvenience or
annoyance
occasioned by such activities; provided, however, that Landlord
shall exercise
commercially reasonable efforts to minimize interference
(without any obligation
to engage overtime labor) with Tenant's performance of the
Tenant Improvements
or Tenant's business in the Premises.
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<PAGE>
3.2 Early Entry. If Tenant enters into the Premises prior to
the
Commencement Date for any reason, including for the purposes of
preparing the
Premises for Tenant's occupancy pursuant to the Work Letter,
such entry shall be
subject to all of the terms, covenants and conditions of this
Lease, including
Tenant's insurance obligations contained in Article 14 and
Tenant's indemnity
obligations contained in Article 16, but excluding Tenant's
obligation to pay
Base Rent or Escalation Rent.
4. Rent.
4.1 Obligation to Pay Base Rent.
(a) Tenant shall pay Base Rent to Landlord during the Term,
in
advance, in equal monthly installments, commencing on the Rent
Commencement
Date, and thereafter on or before the first day of each calendar
month during
the Term; provided, however, that upon signing this Lease,
Tenant shall pay to
Landlord an amount equal to the Monthly Base Rent for the month
in which the
Rent Commencement Date occurs, which amount shall be applied to
the Base Rent
owing for the month in which the Rent Commencement Date occurs.
If the Rent
Commencement Date is other than the first day of a calendar
month, the
installment of prepaid Base Rent for the month in which the Rent
Commencement
Date occurs shall be prorated on the basis of a thirty (30) day
month, and the
balance shall be credited to Base Rent owing for the month of
the Term following
the month in which the Rent Commencement Date occurs. If the
Expiration Date is
other than the first day of a calendar month, or if this Lease
shall be
terminated as of a day other than the last day of a calendar
month (except in
the case of an Event of Default), the installment of Base Rent
for the last
fractional month of the Term shall be prorated on the basis of a
thirty (30) day
month.
(b) Notwithstanding any provision in this Section 4.1 to the
contrary, Base Rent and Escalation Rent shall abate, and Tenant
shall not be
required to pay Base Rent or Escalation Rent, until the Rent
Commencement Date.
4.2 Manner of Rent Payment. All Rent shall be paid by Tenant
without
notice, demand, abatement, deduction or offset, in lawful money
of the United
States of America, and if payable to Landlord, at Landlord's
Address, or to such
other person or at such other place as Landlord may from time to
time designate
by notice to Tenant.
4.3 Additional Rent. All Rent not characterized as Base Rent
or
Escalation Rent shall constitute additional rent, and if payable
to Landlord
shall, unless otherwise specified in this Lease, be due and
payable thirty (30)
days after Tenant's receipt of Landlord's invoice therefor.
4.4 Late Payment of Rent; Interest. Tenant acknowledges that
late
payment by Tenant of any Rent will cause Landlord to incur
administrative costs
not contemplated by this Lease, the exact amount of which is
extremely difficult
and impracticable to ascertain based on the facts and
circumstances pertaining
as of the Lease Date. Accordingly, if Tenant fails to pay Rent
when due (and
such failure continues for a period of five (5) business days
after receipt of a
notice of such failure), then Tenant shall pay to Landlord a
late charge equal
to three percent (3%) of such Rent; provided, however, that the
foregoing notice
and grace period shall not apply
14
<PAGE>
during the remainder of any twelve (12) month period if Landlord
has previously
sent to Tenant a notice of failure to pay any Rent one (1) time
in such twelve
(12) month period. Any Rent, other than late charges, due
Landlord under this
Lease, if not paid when due, shall also bear interest at the
Default Interest
Rate from the date due until paid. The parties acknowledge that
such late charge
and interest represent a fair and reasonable estimate of the
administrative
costs and loss of use of funds Landlord will incur by reason of
a late Rent
payment by Tenant, but Landlord's acceptance of such late charge
and/or interest
shall not constitute a waiver of an Event of Default with
respect to such Rent
or prevent Landlord from exercising any other rights and
remedies provided under
this Lease.
5. Calculation and Payments of Escalation Rent. During each full
or
partial calendar year of the Term subsequent to the Base Year,
Tenant shall pay
to Landlord Escalation Rent in accordance with the following
procedures:
5.1 Payment of Estimated Escalation Rent. During December of
the
Base Year and December of each subsequent calendar year, or as
soon thereafter
as practicable, Landlord shall give Tenant notice of its good
faith, written
estimate of Escalation Rent due for the ensuing calendar year.
On or before the
first day of each month during each ensuing calendar year,
Tenant shall pay to
Landlord in advance, in addition to Base Rent, one-twelfth
(1/12th) of such
estimated Escalation Rent, unless such notice is not given by
December tenth
(10th) of any calendar year, in which event Tenant shall
continue to pay on the
basis of the prior calendar year's estimate until the month
after such notice is
given, and subsequent payments by Tenant shall be based on
Landlord's notice.
With the first monthly payment based on Landlord's notice,
Tenant shall also pay
the difference, if any, between the amount previously paid for
such calendar
year and the amount which Tenant would have paid through the
month in which such
notice is given, based on Landlord's noticed estimate. If at any
time Landlord
reasonably determines that the Escalation Rent for the current
calendar year
will vary from Landlord's estimate, Landlord may, by notice to
Tenant, revise
its estimate for such calendar year, and subsequent payments by
Tenant for such
calendar year shall be based upon such revised estimate.
5.2 Escalation Rent Statement and Adjustment. Within one
hundred
twenty (120) days after the close of each calendar year, or as
soon thereafter
as practicable, Landlord shall deliver to Tenant a statement of
the actual
Escalation Rent for such calendar year, showing in reasonable
detail (i) the
Building Operating Expenses and the Building Property Taxes
comprising the
actual Escalation Rent, and (ii) payments made by Tenant on
account of Building
Operating Expenses and Building Property Taxes for such calendar
year
("Landlord's Statement"). If Landlord's Statement shows that
Tenant owes an
amount that is more than the payments previously made by Tenant
for such
calendar year, Tenant shall pay the difference to Landlord
within thirty (30)
days after delivery of the statement. If Landlord's Statement
shows that Tenant
owes an amount that is less than the payments previously made by
Tenant for such
calendar year, Landlord shall credit the difference first
against any sums then
owed by Tenant to Landlord and then against the next payment or
payments of Rent
due Landlord, except that if a credit amount is due Tenant after
the termination
of this Lease, Landlord shall pay to Tenant, within thirty (30)
days after
delivery of Landlord's Statement, any excess remaining after
Landlord credits
such amount against any sums owed by Tenant to Landlord.
Notwithstanding any
provision in this Lease to the contrary, however, in no event
shall any decrease
in Building
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Operating Expenses or Building Property Taxes below the Base
Building Operating
Expenses or Base Building Property Taxes, respectively, entitle
Tenant to any
refund, decrease in Base Rent, or any credit against sums due
under this Lease.
All annual statements shall be conclusive and binding upon
Tenant; provided,
however, that Landlord may revise the Landlord's Statement for
any calendar year
if Landlord first receives invoices from third parties, tax
bills or other
information relating to adjustments to Building Operating
Expenses or Building
Property Taxes allocable to such calendar year after the initial
issuance of
such Landlord's Statement, and/or the amount of Building
Operating Expenses or
Building Property Taxes allocable to the Base Year is
subsequently adjusted.
5.3 Proration for Partial Year. If the Commencement Date is
other
than the first day of a calendar year or if this Lease
terminates other than on
the last day of a calendar year (other than due to an Event of
Default), the
amount of Escalation Rent for such fractional calendar year
shall be prorated on
the basis of twelve 30day months in each calendar year. Upon
such termination,
Landlord may, at its option, calculate the adjustment in
Escalation Rent prior
to the time specified in Section 5.2 above.
5.4 Abatement of Escalation Rent. Notwithstanding any provision
in
this Lease to the contrary, Escalation Rent shall abate, and
Tenant shall not be
required to pay Escalation Rent, until July 1, 2006.
5.5 Building Property Taxes. Notwithstanding anything to the
contrary set forth in this Lease, the Building Property Taxes
for the Base Year
and any subsequent calendar year during the Term shall be
calculated assuming
the Project is assessed at its taxable value as determined under
Section
51(a)(1) (but excluding Section 51(a)(2)) of the California
Revenue and Taxation
Code ("Taxable Value") without taking into account any decreases
in real estate
taxes obtained in connection with Proposition 8 or an assessed
value lower than
the Taxable Value, and, therefore, the Building Property Taxes
payable under
this Lease may be greater than those actually incurred by
Landlord. Tax refunds
under Proposition 8 or otherwise shall not be deducted from Real
Property Taxes
nor refunded to Tenant, but rather shall be the sole property of
Landlord.
5.6 Audit Right.
(a) Landlord shall respond to any informal inquiries by
Tenant
regarding the Escalation Rent within thirty (30) days after
receipt of same. In
addition, Tenant shall have ninety (90) days after receipt of
Landlord's
Statement to notify Landlord in writing that Tenant disputes the
correctness of
Landlord's Statement ("Dispute Notice"). If Tenant timely
delivers a Dispute
Notice to Landlord, Tenant's accountant ("Tenant's Accountant")
shall have the
right, upon reasonable prior notice, during normal business
hours, to examine
all relevant records of Landlord concerning the year that is
covered by
Landlord's Statement at the Building management office or other
location in San
Francisco designated by Landlord. Tenant's Accountant shall be
subject to
Landlord's prior written approval, which shall not be
unreasonably, withheld or
delayed. Without limiting the generality of the preceding
sentence, Tenant's
Accountant must have at least seven (7) years of experience
reviewing financial
operating records of comparable office buildings in the San
Francisco downtown
financial district and must not be retained on a contingency fee
basis. The
inspection of Landlord's
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records must be completed within five (5) business days after
Tenant's
Accountant commences its inspection and within sixty (60) days
after Landlord's
receipt of the Dispute Notice. Tenant agrees to keep, and to
cause Tenant's
Accountant to keep, all information obtained by Tenant or
Tenant's Accountant
confidential. If requested by Landlord, Tenant shall require
Tenant's Accountant
to sign and deliver a confidentiality agreement to Landlord,
reasonably
acceptable in form and content to Landlord, prior to Landlord
making its books
and records available for inspection. If Tenant fails to deliver
a Dispute
Notice to Landlord within ninety (90) days after receipt of
Landlord's
Statement, Tenant shall have no further right to dispute the
correctness of
Landlord's Statement.
(b) If, following the examination of Landlord's records by
Tenant's Accountant, Tenant continues to object to Landlord's
Statement, the
parties shall meet and attempt in good faith to resolve the
dispute. If it is
finally determined (by agreement between the parties, voluntary
mediation or
arbitration, settlement or court order) that Landlord's
Statement was incorrect,
the appropriate party shall pay to the other party the
deficiency or
overpayment, as applicable, within thirty (30) days after said
determination, or
at Landlord's option, any overpayment by Tenant shall be
credited against the
next installment(s) of Rent payable by Tenant. All costs and
expenses of
Tenant's Accountant shall be paid by Tenant unless it is finally
determined that
Landlord's Statement overstated the actual Operating Expenses
and Real Estate
Taxes for the applicable calendar year by five percent (5%) or
more, in which
case Landlord shall pay the reasonable costs of Tenant's
Accountant for the
audit of Landlord's records, up to a maximum amount of Fifteen
Thousand Dollars
($15,000.00).
6. Impositions Payable by Tenant. Tenant shall pay all
Impositions
directly billed to Tenant prior to delinquency. If billed
directly, Tenant shall
pay such Impositions and concurrently present to Landlord
satisfactory evidence
of such payments. If any Impositions are billed to Landlord or
included in bills
to Landlord for Real Estate Taxes, then Tenant shall pay to
Landlord all such
amounts within thirty (30) days after receipt of Landlord's
invoice therefor. If
applicable law prohibits Tenant from reimbursing Landlord for an
Imposition, but
Landlord may lawfully increase the Base Rent to account for
Landlord's payment
of such Imposition, the Base Rent payable to Landlord shall be
increased to net
to Landlord the same return without reimbursement of such
Imposition as would
have been received by Landlord with reimbursement of such
Imposition.
7. Use of Premises.
7.1 Permitted Use. The Premises shall be used solely for the
Permitted Use and for no other use or purpose.
7.2 No Violation of Requirements. Tenant shall not do or permit
to
be done, or bring or keep or permit to be brought or kept, in or
about the
Premises, or any other portion of the Project, anything which
(i) is prohibited
by, will in any way conflict with, or would invalidate any
Requirements; or (ii)
would cause a cancellation of any insurance policy carried by
Landlord or
Tenant, or give rise to any defense by an insurer to any claim
under any such
policy of insurance, or increase the existing rate of or
adversely affect any
insurance policy carried by Landlord, or subject Landlord to any
liability or
responsibility for injury to any person or property; or (iii)
will in any way
obstruct or interfere with the rights of other tenants or
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occupants of the Project, or injure or annoy them. If Tenant
does or permits
anything to be done which increases the cost of any policy of
insurance carried
by Landlord, or which results in the need, in Landlord's
reasonable judgment,
for additional insurance to be carried by Landlord or Tenant
with respect to any
portion of the Project, then Tenant shall reimburse Landlord,
upon demand, for
any such additional premiums or costs, and/or procure such
additional insurance,
at Tenant's sole cost and expense. Invocation by Landlord of
such right shall
not limit or preclude Landlord from prohibiting Tenant's
impermissible use that
gives rise to the additional insurance premium or requirement or
from invoking
any other right or remedy available to Landlord under this
Lease. Subject to
Section 7.6 below, Tenant shall not bring into the Premises or
any portion
thereof, any furniture, fixtures and/or equipment, and/or make
any Alterations
to the Premises, the aggregate weight of which would exceed the
specified live
load capacity of the Floor or Floors on which the Premises are
located.
7.3 Compliance with Requirements.
(a) Landlord represents to Tenant that, as of the date
hereof,
Landlord has not received any written notice from any
governmental authority
that the Building Systems serving the Premises or the Common
Areas of the
Building, including the path of travel to the Premises, are in
violation of
Requirements as currently interpreted, which violation remains
uncured. If any
existing violation of applicable Requirements relating to the
Building Systems
or Common Areas prevents Tenant from obtaining a certificate of
occupancy for
the Premises or otherwise materially, adversely affects Tenant's
use of or
access to the Premises, Landlord shall not be liable to Tenant
for any damages,
but Landlord, at no cost to Tenant, shall, as Tenant's sole
remedy (except for
the potential abatement of Base Rent and Escalation Rent as
provided below in
this Section 7.3(a)), perform such work or take such other
action as may be
necessary to cure the violation of Requirements that existed as
of the date
hereof, provided that nothing contained herein shall be deemed
to prohibit
Landlord from obtaining a variance or relying upon a
grandfathered right in
order to achieve compliance with Requirements. Further, if
solely as a result of
the failure of the Building Systems serving the Premises (but
not any heating,
ventilation or air conditioning units located in or exclusively
serving the
Premises) or the Common Areas to comply with applicable
Requirements, Tenant is
prohibited by local authorities from legally occupying the
Premises, Base Rent
and Escalation Rent (if applicable) shall abate one (1) day for
each day after
the Rent Commencement Date that such violation prevents Tenant
from legally
occupying the Premises. Notwithstanding the foregoing, Landlord
shall have the
right to contest any alleged violation in good faith, including,
without
limitation, the right to apply for and obtain a waiver or
deferment of
compliance, the right to assert any and all defenses allowed by
law, and the
right to appeal any decisions, judgments or rulings to the
fullest extent
permitted by law, and Landlord's obligation to perform work or
take such other
action to cure a violation under this Section 7.3(a) shall apply
after the
exhaustion of any and all rights to appeal or contest. In
addition,
notwithstanding any provision in this Section 7.3(a) to the
contrary, Landlord's
obligation under this Section 7.3(a) shall not apply to the life
safety systems
located wholly within the Premises, and Tenant, at its sole
cost, shall perform
any work to ensure the compliance of the life safety systems
serving the
Premises with applicable Requirements.
(b) Except to the extent of Landlord's obligations, Tenant,
at
its cost and expense, shall promptly comply with all
Requirements applicable to
Tenant's use or
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occupancy of, or business conducted in, the Premises, and shall
maintain the
Premises and all portions thereof in compliance with all
applicable
Requirements. The judgment of any court of competent
jurisdiction, or the
admission of Tenant in any action or proceeding involving
Tenant, whether or not
Landlord is party thereto, that Tenant is in noncompliance with
any Requirement
shall be conclusive of that fact. In addition, Tenant shall make
all
modifications to any portion of the Project outside the Premises
(including
whether structural or capital in nature), which are necessitated
by (i) Tenant's
use or occupancy of, or business conducted in, the Premises
(other than
investment banking and securities trading, so long as such
activities are
consistent with classification of the Premises as a "commercial
facility" and
not a "public accommodation" under the Americans With
Disabilities Act), (ii)
any acts or omissions of Tenant or any other Tenant Parties, or
(iii) any
Alterations (subject to Landlord's obligations pursuant to
Section 7.3(a)
above), or Landlord may elect to perform such modifications at
Tenant's expense.
7.4 No Nuisance. Tenant shall not (i) do or permit anything to
be
done in or about the Premises, or any other portion of the
Project, which would
injure or annoy, or obstruct or interfere with the rights of,
Landlord or other
occupants of the Project, or others lawfully in or about the
Project; (ii) use
or allow the Premises to be used in any manner inappropriate for
a firstclass
office building and the Project, or for any improper or
objectionable purposes,
or do or permit any act which in Landlord's reasonable judgment
might damage the
reputation of the Project; or (iii) cause, maintain or permit
any nuisance or
waste in, on or about the Premises, or any other portion of the
Project.
7.5 Compliance With Environmental Laws; Use of Hazardous
Materials.
(a) Environmental Laws. Without limiting the generality of
Section 7.3 above, Tenant and all other Tenant Parties shall at
all times comply
with all applicable Environmental Laws with respect to the use
and occupancy of
any portion of the Project pursuant to this Lease.
(b) Prohibition Against Hazardous Materials. Except as
outlined in Paragraph 26 of the Rules and Regulations and in the
third (3rd)
sentence of this Section 7.5(b), Tenant shall not cause or
permit any Hazardous
Materials to be brought upon, produced, stored, used, discharged
or disposed of
in or near the Project without Landlord's prior written consent,
which Landlord
may give or withhold in its sole discretion. Any handling,
transportation,
storage, treatment, disposal or use of any Hazardous Materials
in or about the
Project by Tenant or any other Tenant Parties shall strictly
comply with all
applicable Environmental Laws. Tenant shall be solely
responsible for obtaining
and complying with all permits necessary for the maintenance and
operation of
its business in the Premises, and the installation, maintenance
and operation of
equipment in the Premises, including, without limitation, the
gas fire
suppression system, FM 200 system, and UPS unit that may be
installed by Tenant
pursuant to Section 7.6 below, and all permits governing the
use, handling,
storage, treatment, transport, discharge and disposal of
Hazardous Materials.
Tenant shall indemnify, defend and hold Landlord harmless from
and against any
Claims (including, without limitation, diminution in value of
the Premises or
the Project, damages for the loss or restriction on use of
rentable space or of
any amenity of the Premises or the Project, damages arising from
any adverse
impact on marketing of space in the Project, Remedial Work, and
sums paid in
settlement of Claims) which result from or arise out of the use,
storage,
treatment, transportation, release, or disposal of any Hazardous
Materials
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on or about the Project by Tenant or any other Tenant Parties.
If, as a result
of Tenant's use, handling, storage, treatment, transportation,
discharge or
disposal of Hazardous Materials, any Encumbrancer or
governmental agency shall
require testing for Hazardous Materials in the Premises, Tenant
shall pay for
such testing. Tenant's obligations under this Section shall
survive the
expiration or earlier termination of this Lease until all Claims
within the
scope of this Section are fully, finally, and absolutely barred
by the
applicable statutes of limitations.
(c) Landlord Notification. Tenant shall promptly provide
Landlord with complete copies of all documents, correspondence
and other written
materials directed to or from Tenant concerning environmental
issues at the
Premises or the Project, including, without limitation,
documents relating to
the release, potential release, investigation, compliance,
cleanup and abatement
of Hazardous Materials, and any Claims related to same. Within
twenty-four (24)
hours after Tenant has actual knowledge of any unauthorized
release, spill or
discharge of Hazardous Materials in, on, or about the Premises
or Project,
Tenant shall provide written notice to Landlord fully describing
the event.
Tenant shall also provide Landlord with a copy of any document
or correspondence
submitted by or on behalf of Tenant to any regulatory agency as
a result of or
in connection with the unauthorized release, spill or discharge.
Within
twenty-four (24) hours after receipt by Tenant of any warning,
notice of
violation, permit suspension or similar disciplinary measure
relating to
Tenant's actual or alleged failure to comply with any
Environmental Law, Tenant
shall provide written notice thereof to Landlord.
(d) Remedial Work. If any Remedial Work is required under
any
Environmental Laws as a result of any act or omission of Tenant
or any other
Tenant Parties, then Tenant shall perform or cause to be
performed the Remedial
Work in compliance with Environmental Laws or, at Landlord's
option, Landlord
may cause such Remedial Work to be performed and Tenant shall
reimburse Landlord
for the reasonable costs thereof within thirty (30) days after
demand therefor.
All Remedial Work performed by Tenant shall be performed by one
or more
contractors, selected by Tenant and approved in advance in
writing by Landlord,
which approval shall not be unreasonably withheld, conditioned
or delayed, and
under the supervision of a consulting engineer selected by
Tenant and approved
in advance in writing by Landlord, which approval shall not be
unreasonably
withheld, conditioned or delayed. All costs and expenses of such
Remedial Work
shall be paid by Tenant, including, without limitation, the
charges of such
contractor(s), the consulting engineer and Landlord's reasonable
attorneys' and
experts' fees and costs incurred in connection with the
monitoring or review of
such Remedial Work.
(e) Tenant as Generator. In no event shall Landlord be
designated as the "generator" on, nor shall Landlord be
responsible for
preparing, any manifest relating to Hazardous Materials
generated or used by
Tenant or any other Tenant Parties.
(f) Pre-Existing Hazardous Materials. Landlord shall be
responsible for the clean up, removal or remediation of
PreExisting Hazardous
Materials in or at the Premises or the Project in accordance
with applicable
Requirements. Notwithstanding anything to the contrary contained
in this
Article, in no event shall Tenant be required to clean up,
remove or remediate
any PreExisting Hazardous Materials in or at the Premises or the
Project, except
to the extent that any hazard posed by such PreExisting
Hazardous Materials is
knowingly exacerbated by, or the cost to clean up, remove or
remediate such
PreExisting Hazardous
20
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Materials is knowingly increased as a result of, the acts or
omissions of Tenant
or any other Tenant Parties.
7.6 Gas Fire Suppression System; UPS Unit. Tenant shall have
the
right to install, at Tenant's sole cost and expense, a gas fire
suppression
system or FM 200 system in its server/IT room. In addition,
Tenant shall have
the right to install, at Tenant's sole cost and expense, a UPS
unit in the
Premises in a location reasonably approved by Landlord. Tenant,
at Tenant's sole
cost and expense, shall structurally reinforce a portion of the
floor of the
Premises, to the extent reasonably required by Landlord to
accommodate the
equipment described in this Section. All work under this Section
shall comply
with Article 10 and all other applicable provisions of this
Lease.
8. Building Services.
8.1 Maintenance of Project. Landlord shall keep and maintain
the
Common Areas, all exterior landscaping, the windows in the
Building, the skin of
the Building, the parking garage, elevators, the mechanical,
plumbing and
electrical equipment serving the Building, the telephone cable
distribution
system serving the Building to the telephone terminal on each
Floor, the common
shafts, stacks, pipes, conduits, and ducts containing such
equipment and systems
and the space containing them, and the structure of the
Building, in good order
and condition consistent with a first-class office building,
except for ordinary
wear and tear, damage by Casualty or condemnation, or damage
occasioned by the
act or omission of Tenant or any other Tenant Parties, which
damage shall be
repaired by Landlord at Tenant's expense, except as provided in
Article 12.
Landlord shall have the right, exercised by Landlord in its
reasonable
discretion, in connection with its maintenance of the Project
hereunder, (i) to
change the arrangement and/or location of any Common Area
amenity, installation
or improvement, or other public parts of the Project, and (ii)
to utilize
portions of the Common Areas from time to time for
entertainment, displays,
product shows, leasing of kiosks or such other uses that
Landlord may determine
are desirable.
8.2 Building-Standard Services. Landlord shall cause to be
furnished
to Tenant: (i) tepid and cold water to those points of supply
and in volumes
provided for general use of tenants in the Building; (ii)
electricity up to the
Wattage Allowance (on a daily, noncumulative basis) for lighting
and the
operation of electrically powered office equipment; (iii) heat,
ventilation and
air conditioning as reasonably determined by Landlord during
Building Standard
Hours; (iv) passenger elevator service; (v) freight elevator
service subject to
then applicable Building-standard procedures and scheduling;
(vi) lighting
replacement for Building-standard lights; (vii) restroom
supplies; (viii) window
washing as determined by Landlord, but in all events not less
than twice per
year; and (ix) janitor service on a five (5) day per week basis
(excluding
Building holidays), except Landlord shall not be required to
clean portions of
the Premises used for preparing or consuming food or beverages
or provide
special treatment or services for above-standard tenant
improvements. Landlord
may establish in the Premises or other portions of the Project
such measures as
it deems necessary or appropriate to conserve energy, including
automatic
switching of lights and/or more efficient forms of lighting.
When and if so
elected by Landlord, in its reasonable discretion from time to
time or at any
time, Landlord may also provide security services for the
Project (but not
individually for Tenant or the Premises) of such scope and type
as Landlord may
determine in its sole discretion. Landlord
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shall not be liable in any manner to Tenant or any other Tenant
Parties for any
acts (including criminal acts) of others, or for any direct,
indirect, or
consequential damages, or any injury or damage to, or
interference with,
Tenant's business, including, but not limited to, loss of
profits, loss of rents
or other revenues, loss of business opportunity, loss of
goodwill or loss of
use, or other loss or damage, bodily injury or death, related to
any
malfunction, circumvention or other failure of any security
services which
Landlord elects to provide, or on account of Landlord's election
not to provide
any security service or services, or for the failure of any
security services to
prevent bodily injury, death, or property damage, or loss, or to
apprehend any
person suspected of causing such injury, death, damage or loss.
Landlord shall
provide Tenant, at no charge to Tenant, with up to a maximum of
one hundred
twenty (120) access cards for the Building for occupants of the
Premises. Tenant
shall pay Landlord's standard charge for replacement or
additional access cards.
If Tenant elects to install a security system in the Premises,
and such system
is compatible with the then-current Building security system (if
any), the same
access cards may be utilized with respect to both security
systems at no cost to
Tenant for such dual usage. However, Landlord shall have no
responsibility or
liability whatsoever with respect to Tenant's security system.
Tenant, at
Tenant's expense, shall be solely responsible for installing,
monitoring,
maintaining, operating and, at Landlord's election, removing
Tenant's security
system at the expiration or earlier termination of this
Lease.
8.3 Interruption or Unavailability of Services. Landlord shall
not
be in default hereunder or liable for any damages directly or
indirectly
resulting from, Rent shall not be abated, no constructive or
other eviction
shall be construed to have occurred, and Tenant shall not be
relieved from any
of its obligations under this Lease, by reason of the failure to
furnish or
delay in furnishing any maintenance or services under this
Article 8, regardless
of the cause of such failure. Landlord shall use commercially
reasonable efforts
promptly to remedy any failure or interruption in the furnishing
of such
maintenance or services. Landlord makes no warranty or
representation to Tenant
regarding the adequacy or fitness of the heating, air
conditioning or
ventilation equipment in the Project or the Premises to maintain
temperatures
that may be required for, or because of, any of Tenant's
fixtures or equipment
which uses other than the fractional horsepower normally
required for standard
office equipment and Landlord shall have no liability for loss
or damage
suffered by Tenant or others in connection therewith.
Notwithstanding anything
contained in this Section 8.3 to the contrary, if (i) there is
an interruption
in the Essential Services (as defined below) and Tenant supplies
Landlord with
written notice thereof (the "Interruption Notice"), (ii) such
interruption is
not the result of an act or omission of Tenant or Tenant's
Parties, (iii) such
interruption is not the result of a Casualty (in which case
Article 12 of this
Lease shall apply), (iv) the repair or restoration of the
Essential Service is
within the reasonable control of Landlord, and (v) as a result
of such
interruption the Premises, or a material portion thereof, is
rendered
untenantable and is in fact not used by Tenant for five (5)
consecutive business
days, then Tenant's sole remedy for such interruption shall be
as follows:
commencing on the sixth (6th) consecutive business day following
the later to
occur of the date Tenant ceases to use the Premises (or a
material portion
thereof) and the date Tenant provides Landlord with an
Interruption Notice, the
Base Rent and Escalation Rent payable under this Lease shall
abate in proportion
to the portion of the Premises that is rendered untenantable on
a per diem basis
for each day thereafter until the date the Premises becomes
tenantable again.
Such failures or delays or diminution shall never be deemed to
constitute an
eviction or disturbance of Tenant's use and possession of the
Premises or excuse
Tenant from performing any of its obligations under this Lease.
For the purposes
of this Section 8.3, "Essential Services"
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shall mean services provided by the heating, ventilation and air
conditioning
systems, life safety systems, mechanical systems, elevator,
plumbing and waste
disposal systems and electrical systems as are reasonably
necessary to operate
the Premises for its Permitted Use as set forth in Section 7.1
above, to the
extent Landlord is required to provide the same under this
Lease.
8.4 Tenant's Use of Excess Electricity and Water. Tenant shall
not,
without Landlord's prior consent, which shall not be
unreasonably withheld,
conditioned or delayed, install in the Premises: (A) lighting,
equipment, and/or
apparatus, the aggregate average monthly power usage of which
exceeds the
Wattage Allowance, or which requires a voltage other than 110
volts
single-phase; (B) heat-generating or heat-sensitive equipment,
or lighting other
than Building-standard lights; (C) supplementary air
conditioning facilities;
(D) Alterations which reconfigure the Premises, or fixtures or
equipment
therein, affecting the temperature otherwise maintained by the
Building-standard
heating, ventilation and air conditioning system; or (E)
equipment that requires
a separate temperature-controlled room. If Landlord consents to
any installation
pursuant to this Section 8.4, Landlord may, at Landlord's
election after notice
to Tenant or upon Tenant's request, install supplementary air
conditioning
facilities in the Premises, or otherwise modify the heating,
ventilation and air
conditioning system serving the Premises, and/or increase the
supply of
electricity to the Premises, in order to maintain the
temperature otherwise
maintained by the Building heating, ventilation, and air
conditioning system,
and/or to supply any increase in the electricity demand of the
Premises, and/or
to serve any separate temperature-controlled room. Tenant shall
pay the cost of
any transformers, additional risers, panel boards, and all other
facilities if,
when and to the extent installed hereunder or required to
furnish power for, and
all costs of supplying and maintaining, any supplementary air
conditioning
facilities or modified ventilating and air conditioning
equipment. The capital,
maintenance and service costs of installing, supplying, and
maintaining any such
facilities, utilities, and modifications shall be paid by Tenant
as Rent.
Landlord, at its election and at Tenant's expense, may also
install and maintain
an electric current meter or water meter (together with all
necessary wiring and
related equipment) at the Premises to measure the power and/or
water usage of
electricity and/or such ventilation and air conditioning
equipment, or may
otherwise cause such usage to be measured by reasonable
methods.
8.5 Provision of Additional Services. If Tenant desires services
in
amounts additional to or at times different from those set forth
in Section 8.2
above, or any other services that are not provided for in this
Lease, Tenant
shall make a request for such services to Landlord with such
advance notice as
Landlord may reasonably require. If Landlord provides such
services to Tenant,
Tenant shall pay Landlord's reasonable charges for such services
(including
engineers' expenses, a reasonable allowance for wear and tear on
the Building
Systems, and a reasonable administrative fee), with no minimum
usage or startup
charges, within thirty (30) days after Tenant's receipt of
Landlord's invoice.
8.6 Tenant's Supplemental Air Conditioning. If Landlord consents
to
Tenant's installation of supplementary air conditioning
facilities under Section
8.4 above or the Work Letter, Tenant shall have access to and
use of the
Building's condenser water up to and not to exceed ten (10) tons
for such
facilities. Tenant shall reimburse Landlord for (i) Landlord's
charges for
Tenant's usage of such condenser water, and (ii) Tenant's
Percentage Share of
Landlord's charges for maintaining the system that supplies such
condenser
water, within thirty (30) days after Tenant's receipt of
Landlord's invoice.
Landlord shall have the right to install, at
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Tenant's cost and expense, meters to measure Tenant's usage
hereunder for
purposes of calculating the charges payable by Tenant for such
condenser water.
9. Maintenance of Premises. Tenant shall, at Tenant's cost and
expense,
keep the Premises in good condition and repair, except for
ordinary wear and
tear, damage by Casualty or condemnation, and the maintenance
and repair to be
performed by Landlord pursuant to Section 8.1 above. Except as
specifically set
forth in this Lease, Landlord (i) has no obligation to alter,
remodel, improve,
repair, decorate or paint the Premises, or any part thereof, and
(ii) has no
obligation respecting the condition, maintenance and repair of
the Premises or
any other portion of the Project. Tenant hereby waives all
rights, including
under Subsection 1 of Section 1932 and Sections 1941 and 1942 of
the California
Civil Code and under any similar law now or hereafter in effect,
to make repairs
which are Landlord's obligation under this Lease at the expense
of Landlord or
to receive any setoff or abatement of Rent or in lieu thereof to
vacate the
Premises or terminate this Lease.
10. Alterations to Premises. All Alterations shall be made in
accordance
with the Construction Guide, the Building-standard procedures,
specifications,
and details (including the standard for construction and quality
of materials in
the Project) as then established by Landlord, all applicable
Requirements, and
the provisions of this Article 10. In the event of any conflict
between this
Article 10 and the Construction Guide, the Building-standard
procedures,
specifications or details then in effect, the provisions of this
Article 10
shall govern.
10.1 Landlord Consent; Procedure. Tenant shall not make or
permit to
be made any Major Alterations without Landlord's prior written
consent, which
shall not be unreasonably withheld, conditioned or delayed. If
Landlord has not
responded to Tenant's request for approval of proposed Major
Alterations within
thirty (30) days after receipt of Tenant's request, Tenant may
give Landlord a
second notice requesting approval. The second notice must
specifically reference
this Section 10.1 and prominently state in capital or bold
letters that the
proposed Major Alterations previously submitted by Tenant shall
be deemed
approved unless Landlord objects thereto within five (5)
business days after
receipt of such second notice. If Landlord fails to respond
within five (5)
business days after receipt of such second notice, Landlord
shall be deemed to
have approved of the proposed Major Alterations. If Landlord
disapproves of any
proposed Major Alterations, such disapproval shall state with
reasonable
particularity the reasons for such disapproval. Further, upon
Tenant's written
request expressly referring to this Section 10.1, Landlord shall
advise Tenant
at the time of Landlord's approval of any Major Alterations, or
within ten (10)
business days after such written request by Tenant with respect
to Minor
Alterations, whether Landlord will require the removal of the
applicable
Alterations and restoration of the Premises to its previous
condition at the
expiration or earlier termination of this Lease. If Landlord
fails to respond to
such written request by Tenant seeking to confirm Tenant's
removal obligation,
Tenant may give Landlord a second notice inquiring about
Tenant's removal
obligation. The second notice must specifically reference this
Section 10.1 and
prominently state in capital or bold letters that Tenant will
not be obligated
to remove the Major Alterations or Minor Alterations described
in Tenant's
earlier notice and restore the Premises to its previous
condition unless
Landlord notifies Tenant of such removal requirement within five
(5) business
days after receipt of such second notice. If Landlord fails to
respond within
five (5) business days after receipt of such second notice,
Tenant shall have no
obligation to remove the applicable Alterations and restore the
Premises to its
previous condition.
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10.2 General Requirements.
(a) Except as otherwise provided in the Work Letter with
respect to the initial leasehold improvements to the Premises
(if any), all
Alterations shall be designed and performed by Tenant at
Tenant's cost and
expense; provided, however, that if any Alterations require work
to be performed
outside the Premises, Landlord may elect to perform such work at
Tenant's
expense.
(b) All Alterations shall be performed only by contractors,
engineers or architects approved by Landlord, and shall be made
in accordance
with complete and detailed architectural, mechanical and
engineering plans and
specifications approved in writing by Landlord. Landlord shall
not unreasonably
withhold or delay its approval of any such contractors,
engineers, architects,
plans or specifications; provided, however, that Landlord may
specify
contractors, engineers or architects to perform work affecting
the structural
portions of the Project or the Building Systems. Tenant shall
engage only labor
that is harmonious and compatible with other labor working in
the Project. In
the event of any labor disturbance caused by persons employed by
Tenant or
Tenant's contractor, Tenant shall immediately take all actions
necessary to
eliminate such disturbance.
(c) Prior to commencement of the Alterations, Tenant shall
deliver to Landlord (i) any building or other permit required by
Requirements in
connection with the Alterations; (ii) a copy of executed
construction
contract(s); and (iii) written acknowledgments from all
materialmen,
contractors, artisans, mechanics, laborers and any other persons
furnishing to
Tenant with respect to the Premises any labor, services,
materials, supplies or
equipment in excess of Twenty-Five Thousand Dollars ($25,000.00)
in the
aggregate that they will look exclusively to Tenant for payment
of any sums in
connection therewith and that Landlord shall have no liability
for such costs.
In addition, Tenant shall require its general contractor to
carry and maintain
the following insurance at no expense to Landlord, and Tenant
shall furnish
Landlord with satisfactory evidence thereof prior to the
commencement of
construction of the Alterations: (A) commercial general
liability insurance with
limits of not less than Two Million Dollars ($2,000,000.00)
combined single
limit for bodily injury and property damage, including personal
injury and
death, and contractor's protective liability, and products and
completed
operations coverage in an amount not less than Five Million
Dollars
($5,000,000.00) in the aggregate; (B) commercial automobile
liability insurance
with a policy limit of not less than Five Million Dollars
($5,000,000.00) each
accident for bodily injury and property damage, providing
coverage at least as
broad as the Insurance Services Office (ISO) Business Auto
Coverage form
covering Automobile Liability, code 1 "any auto," and insuring
against all loss
in connection with the ownership, maintenance and operation of
automotive
equipment that is owned, hired or nonowned; and (C) worker's
compensation with
statutory limits and employer's liability insurance with a limit
of not less
than One Million Dollars ($1,000,000.00) per occurrence. All
insurance required
by this Article 10 shall be issued by solvent companies
qualified to do business
in the State of California, and with a Best & Company rating
of A:VIII or
better. All such insurance policies (except workers'
compensation insurance)
shall (i) provide that Landlord, Landlord's managing agent, any
Encumbrancer,
and any other person requested by Landlord is designated as an
additional
insured with respect to liability arising out of work performed
by or for
Tenant's general contractor without limitation as to coverage
afforded under
such policy pursuant to an endorsement providing coverage at
least as broad as
ISO form CG 20 37 10 01 or
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its equivalent, (2) specify that such insurance is primary and
that any
insurance or selfinsurance maintained by Landlord shall not
contribute with it,
and (3) provide that the insurer agrees not to cancel the policy
without at
least thirty (30) days' prior written notice to all additional
insureds (except
in the event of a cancellation as a result of nonpayment, in
which event the
insurer shall give all additional insureds at least ten (10)
days' prior
notice). Tenant shall cause Tenant's general contractor to
notify Landlord
within ten (10) days after any material modification of any
policy of insurance
required under this Article. Landlord may inspect the original
policies of such
insurance coverage at any time. Upon Landlord's request, Tenant
shall deliver
complete certified copies of such policies. Tenant's general
contractor shall
furnish Landlord evidence of insurance for its subcontractors as
may be
reasonably required by Landlord. Tenant acknowledges and agrees
that Landlord
may require other types of insurance coverage and/or increase
the insurance
limits set forth above if Landlord determines such increase is
required to
protect adequately the parties named as insureds or additional
insureds under
such insurance.
(d) Tenant shall give Landlord at least ten (10) days' prior
written notice of the date of commencement of any construction
on the Premises
to afford Landlord the opportunity of posting and recording
appropriate notices
of nonresponsibility. Tenant shall comply with the requirements
of Section
3110.5 of the California Civil Code as the contracting owner, to
the extent
applicable, and prior to commencement of construction, Tenant
shall provide
Landlord with evidence of compliance with said statute. Tenant
acknowledges that
the contractual waiver of the benefits of California Civil Code
Section 3110.5
is expressly declared to be against public policy.
(e) Tenant shall promptly commence construction of
Alterations, cause such Alterations to be constructed in a good
and workmanlike
manner and in such a manner and at such times so that any such
work shall not
unreasonably disrupt or interfere with the use, occupancy or
operations of other
tenants or occupants of the Project, and complete the same with
due diligence as
soon as possible after commencement. All trash which may
accumulate in
connection with Tenant's construction activities shall be
removed by Tenant at
its own expense from the Premises and the Project.
(f) In addition to the foregoing, as a condition of its
consent to Alterations hereunder, Landlord may impose any
reasonable
requirements that Landlord reasonably considers necessary or
desirable,
including a requirement that Tenant provide Landlord with a
surety bond, a
letter of credit, or other financial assurance that the cost of
the Alterations
exceeding Two Hundred Fifty Thousand Dollars ($250,000.00) will
be paid when
due.
10.3 Landlord's Right to Inspect. Landlord or its agents shall
have
the right (but not the obligation) to inspect the construction
of Alterations,
and to require corrections of faulty construction or any
material deviation from
the plans for such Alterations as approved by Landlord;
provided, however, that
no such inspection shall (i) be deemed to create any liability
on the part of
Landlord, or (ii) constitute a representation by Landlord that
the work so
inspected conforms with such plans or complies with any
applicable Requirements,
or (iii) give rise to a waiver of, or estoppel with respect to,
Landlord's
continuing right at any time or from time to time to require the
correction of
any faulty work or any material deviation from such plans. In
addition, under no
circumstances shall Landlord be liable to Tenant for any damage,
loss, cost or
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expense incurred by Tenant on account of Tenant's plans and
specifications,
Tenant's contractors, mechanics or engineers, design or
construction of any
Alteration, or delay in completion of any Alteration.
10.4 Tenant's Obligations Upon Completion. Promptly
following
completion of any Alterations, Tenant shall (i) furnish to
Landlord "as-built"
drawings and specifications in CAD format showing the
Alterations as made and
constructed in the Premises, (ii) cause a timely notice of
completion to be
recorded in the Office of the Recorder of the County of San
Francisco in
accordance with Civil Code Section 3093 or any successor
statute, and (iii)
deliver to Landlord evidence of full payment and unconditional
final waivers of
all liens for labor, services, or materials in excess of Five
Thousand Dollars
($5,000.00) in the aggregate (or record a release bond in
accordance with
California Civil Code Section 3143 where there is a good faith
dispute as to
cost).
10.5 Repairs. If any part of the Building Systems shall be
damaged
during the performance of Alterations, Tenant shall promptly
notify Landlord,
and Landlord may elect to repair such damage at Tenant's
expense. Alternatively,
Landlord may require Tenant to repair such damage at Tenant's
sole expense using
contractors approved by Landlord.
10.6 Ownership and Removal of Alterations.
(a) Ownership. All Alterations shall be surrendered at the
expiration or earlier termination of the Term, unless Tenant
shall be required
to remove any such Alterations as otherwise provided in this
Article 10;
provided, however, that equipment and movable furniture shall
remain the
property of Tenant.
(b) Removal. If required by Landlord, subject to the
provisions of Section 10.1 above, Tenant, prior to the
expiration of the Term or
termination of this Lease, shall, at Tenant's sole cost and
expense, (i) remove
any or all Alterations, (ii) restore the Premises to the
condition existing
prior to the installation of such Alterations, and (iii) repair
all damage to
the Premises or Project caused by the removal of such
Alterations. Tenant shall
use a contractor designated by Landlord for such removal and
repair. If Tenant
fails to remove, restore and repair under this Section, then
Landlord may remove
such Alterations and perform such restoration and repair, and
Tenant shall
reimburse Landlord for costs and expenses incurred by Landlord
in performing
such removal, restoration and repair. Subject to the foregoing
provisions
regarding removal, all Alterations shall be Landlord's property
and at the
expiration of the Term or termination of this Lease shall remain
on the Premises
without compensation to Tenant.
10.7 Minor Alterations. Notwithstanding any provision in
Section
10.1 above, Tenant may construct Minor Alterations in the
Premises without
Landlord's prior written consent, but with prior notification to
Landlord.
Before commencing construction of Minor Alterations, Tenant
shall submit to
Landlord such documentation as Landlord may reasonably require
to determine
whether Tenant's proposed Alterations qualify as Minor
Alterations. Except to
the extent inconsistent with this Section 10.7, Minor
Alterations shall
otherwise comply with the provisions of this Article 10. All
references in this
Lease to "Alterations" shall mean and include Minor Alterations,
unless
specified to the contrary.
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<PAGE>
10.8 Landlord's Fee. In connection with installing Major
Alterations
or removing Minor Alterations or Major Alterations, Tenant shall
pay Landlord's
reasonable charges for review and approval of Tenant's plans,
specifications and
working drawings, and administration by Landlord of the
construction,
installation or removal of Alterations, and restoration of the
Premises to their
previous condition, provided that Landlord's review and
administrative charges
shall not exceed, in the aggregate, two percent (2%) of the hard
costs of
installing or constructing the applicable Alterations. If
reasonably required
due to the nature of the proposed Alterations, Landlord may hire
third parties
to review Tenant's plans, specifications and working drawings
and/or to
supervise the construction, installation or removal of
Alterations from the
Premises, in which event Tenant shall also reimburse Landlord
for the reasonable
fees and costs charged by such third parties. Tenant shall pay
the amount of all
reasonable fees and costs owing pursuant to this Section 10.8
within thirty (30)
days after receipt from Landlord of a statement or invoice
therefor.
11. Liens. Tenant shall keep the Project free from any liens
arising out
of any work performed or obligations incurred by or for, or
materials furnished
to, Tenant pursuant to this Lease or otherwise. Landlord shall
have the right to
post and keep posted on the Premises any notices permitted or
required by law or
which Landlord may deem to be proper for the protection of
Landlord and the
Project from such liens. If Tenant does not, within ten (10)
days following the
recording of notice of any such lien, cause the same to be
released of record or
bonded against, Landlord shall have, in addition to all other
remedies provided
herein and by law, the right, but not the obligation, to cause
the same to be
released by any means as Landlord shall deem proper, including
by payment of the
claim giving rise to such lien. All sums paid by Landlord for
such purpose, and
all expenses incurred by it in connection therewith, shall be
payable to
Landlord by Tenant, as additional rent, on demand, together with
interest at the
Default Interest Rate from the date such expenses are incurred
by Landlord to
the date of the payment thereof by Tenant to Landlord. The bond
permitted under
this Article shall be issued by a company reasonably acceptable
to Landlord.
12. Damage or Destruction.
12.1 Obligation to Repair. Except as otherwise provided in
this
Article 12, if the Premises, or any other portion of the Project
necessary for
Tenant's use and occupancy of the Premises, are damaged or
destroyed by
Casualty, Landlord shall, within sixty (60) days after Landlord
obtains actual
knowledge of such damage or destruction ("Casualty Discovery
Date"), notify
Tenant of the estimated time, in Landlord's reasonable judgment,
required to
repair such damage or destruction ("Repair Estimate"). If the
Repair Estimate
indicates that the necessary repairs can be completed within
three hundred
sixty-five (365) days after the Casualty Discovery Date, then
subject to the
other provisions of this Article 12, (i) Landlord shall repair
the Premises,
and/or the portion of the Project necessary for Tenant's use and
occupancy of
the Premises, to substantially the condition existing
immediately before such
damage or destruction, to the extent commercially reasonable and
as permitted by
and subject to then applicable Requirements; (ii) this Lease
shall remain in
full force and effect; and (iii) Base Rent and Escalation Rent
shall abate for
such part of the Premises rendered unusable by Tenant in the
conduct of its
business during the time such part is so unusable, in the
proportion that the
rentable area contained in the unusable part of the Premises
bears to the total
rentable area of the Premises.
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12.2 Landlord's Election. If the Repair Estimate indicates that
the
necessary repairs cannot be completed (when such repairs are
made without the
payment of overtime or other premiums) within three hundred
sixty-five (365)
days after the Casualty Discovery Date, Landlord may elect, in
its Repair
Estimate, to terminate this Lease or to repair the Premises and
any portion of
the Project necessary for Tenant's use and occupancy of the
Premises in
accordance with the applicable provisions of Section 12.1 above.
In addition, if
(A) (i) any Encumbrancer requires, and in Landlord's good faith
judgment is
entitled to require, that insurance proceeds be applied to the
payment of debt
encumbering all or any portion of the Project or (ii) material
damage to the
Project occurs (whether or not the Premises are affected) that
is not fully
covered by insurance proceeds (excluding deductibles), and (B)
Landlord, in its
sole discretion, does not intend in the reasonably foreseeable
future to rebuild
the Project in substantially the same form as existed before the
fire or other
casualty, Landlord may elect, in its Repair Estimate, to
terminate this Lease or
repair the Premises and any portion of the Project necessary for
Tenant's use
and occupancy of the Premises; provided, however, that Landlord
shall not
exercise its termination right pursuant to subsection (ii) above
unless Landlord
also terminates the leases of other tenants in the Building
similarly affected
by the casualty and with respect to which Landlord has
comparable termination
rights. If Landlord terminates this Lease, then this Lease shall
terminate as of
the date specified in Landlord's notice.
12.3 Tenant's Election. If Landlord does not elect to terminate
this
Lease pursuant to Section 12.2 above, and the Repair Estimate
indicates that
repairs cannot be completed within three hundred sixty-five
(365) days after the
Casualty Discovery Date, Tenant may elect to terminate this
Lease by giving
written notice of such election to Landlord within ten (10)
business days after
receipt of the Repair Estimate. If Tenant terminates this Lease,
then this Lease
shall terminate as of the date specified in Tenant's notice, but
in no event
later than thirty (30) days after Landlord's receipt of Tenant's
termination
notice.
12.4 Cost of Repairs. Upon the occurrence of any damage to
the
Premises, Tenant shall assign to Landlord (or to any party
designated by
Landlord) all insurance proceeds payable to Tenant under the
insurance policies
Tenant is required to carry under subsections (ii) and (iii) of
Section 14.1(c).
If neither party elects to terminate this Lease pursuant to the
provisions of
this Article 12, Landlord shall repair the Building Systems and
any portion of
the Project necessary for Tenant's use and occupancy of the
Premises and, to the
extent Landlord receives insurance proceeds therefor, all
improvements in the
Premises, including Alterations. Tenant shall replace or repair,
at Tenant's
cost and expense, Tenant's furniture, equipment, trade fixtures
and other
personal property in the Premises.
12.5 Damage at End of Term. Notwithstanding anything to the
contrary
contained in this Article 12, if the Premises, or any portion
thereof or of the
Project, are damaged or destroyed by Casualty within the last
twelve (12) months
of the Term, and the Repair Estimate indicates that the
necessary repairs cannot
be completed (when such repairs are made without the payment of
overtime or
other premiums) so that at least six (6) full calendar months
will remain in the
Term following completion of the repairs, then either party
shall have the
right, in its sole discretion, to terminate this Lease by notice
to the other
party. Landlord's notice of termination shall be included in the
Repair
Estimate. Tenant's notice of termination must be given to
Landlord within ten
(10) days after Tenant's receipt of the Repair Estimate. Such
termination
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shall be effective on the date specified in either party's
termination notice to
the other party, but in no event later than thirty (30) days
after Tenant's
receipt of the Repair Estimate.
12.6 Waiver of Statutes. The respective rights and obligations
of
Landlord and Tenant in the event of any damage to or destruction
of the
Premises, or any other portion of the Project, are governed
exclusively by this
Lease. Accordingly, Tenant hereby waives the provisions of any
law to the
contrary, including California Civil Code Sections 1932(2) and
1933(4),
providing for the termination of a lease upon destruction of the
leased
property.
13. Eminent Domain.
13.1 Effect of Taking. Except as otherwise provided in this
Article
13, if all or any part of the Premises is taken as a result of
the exercise of
the power of eminent domain or condemned for any public or
quasipublic purpose,
or if any transfer is made in avoidance of such exercise of the
power of eminent
domain (collectively, "taken" or a "taking"), this Lease shall
terminate as to
the part of the Premises so taken as of the effective date of
such taking. On a
taking of a portion of the Premises, Landlord and Tenant shall
each have the
right to terminate this Lease by notice to the other given
within sixty (60)
days after the effective date of such taking, if the portion of
the Premises
taken is of such extent and nature so as to materially impair
Tenant's operation
of its business in the balance of the Premises. Such termination
shall be
operative as of the effective date of the taking. Landlord may
also terminate
this Lease on a taking of any portion of the Project if Landlord
determines in
its sole discretion that (i) such taking is of such extent and
nature as to
render the operation of the remaining Project economically
infeasible or to
require a substantial alteration or reconstruction of such
remaining portion, or
(ii) the amount of the award payable to Landlord under Section
13.2 below, after
deducting all costs and expenses incurred by Landlord in
connection with such
taking, is not sufficient to restore the Project (including the
Premises)
pursuant to Section 13.3 below and Landlord does not then intend
to restore the
Project. Landlord shall elect termination under clause (i) or
(ii) above by
notice to Tenant given within ninety (90) days after the
effective date of such
taking or as soon thereafter as possible, and such termination
shall be
operative as of the effective date of such taking. Upon a taking
of the Premises
which does not result in a termination of this Lease (other than
as to the part
of the Premises so taken), the Base Rent shall thereafter be
reduced as of the
effective date of such taking in the proportion that the
rentable area of the
Premises so taken bears to the total rentable area of the
Premises.
13.2 Condemnation Proceeds. All compensation awarded or received
in
connection with a taking shall be the property of Landlord, and
Tenant hereby
assigns to Landlord any and all elements of said compensation
which Tenant
would, in the absence of said assignment, have been entitled to
receive.
Specifically, and without limiting the generality of the
foregoing, said
assignment is intended to include: (i) the "bonus value"
represented by the
difference, if any, between Rent under this Lease and market
rent for the
unexpired Term of this Lease, (ii) the value of improvements to
the Premises,
whether said improvements were paid for by Landlord or by
Tenant, and (iii) the
value of any and all other items and categories of property for
which payment of
compensation may be made in any such taking. Notwithstanding the
foregoing,
Tenant shall be entitled to receive any award of compensation
for (1) loss of or
damage to the goodwill of Tenant's business (but only to the
extent the same
does not constitute "bonus value"), (2) any loss incurred by
Tenant in removing
Tenant's furniture, trade fixtures and
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equipment and (3) any business interruption or relocation
expenses which Tenant
is entitled under the law to recover directly from the public
agency which
acquires the Premises.
13.3 Restoration of Premises. On a taking of the Premises which
does
not result in a termination of this Lease (other than as to the
part of the
Premises so taken), Landlord and Tenant shall restore the
Premises to
substantially the condition existing immediately before such
taking, to the
extent commercially reasonable and as permitted by and subject
to then
applicable Requirements. Landlord and Tenant shall perform such
restoration in
accordance with the applicable provisions and allocation of
responsibility for
repair and restoration of the Premises on damage or destruction
pursuant to
Article 12 above, and both parties shall use any awards received
by such party
attributable to the restoring of the Premises for such
purpose.
13.4 Taking at End of Term. Notwithstanding anything to the
contrary
contained in this Article 13, if the Premises, or any portion
thereof or of the
Project, are taken within the last twelve (12) months of the
Term, then either
party shall have the right, in its sole discretion, to terminate
this Lease by
notice to the other party given within thirty (30) days after
the date of such
taking. Such termination shall be effective on the date
specified in either
party's notice to the other party, but in no event later than
the end of such
30day period.
13.5 Tenant Waiver. The rights and obligations of Landlord
and
Tenant on any taking of the Premises or any other portion of the
Project are
governed exclusively by this Lease. Accordingly, Tenant hereby
waives the
provisions of any law to the contrary, including California Code
of Civil
Procedure Sections 1265.120 and 1265.130, or any similar
successor statute.
14. Insurance.
14.1 Tenant's Insurance. Tenant, at its cost and expense,
shall
procure and maintain, from the Lease Date and throughout the
Term, the following
insurance:
(a) Commercial General Liability Insurance. Tenant shall
maintain a policy(ies) of commercial general liability insurance
written on an
"occurrence" basis, with limits of liability, in the aggregate,
of not less than
Five Million Dollars ($5,000,000.00). Such policy(ies) shall
cover bodily
injury, property damage, personal injury, and advertising injury
arising out of
or relating (directly or indirectly) to Tenant's business
operations, conduct,
assumed liabilities, or use or occupancy of the Premises or the
Project, and
shall include all the coverages typically provided by the Broad
Form Commercial
General Liability Endorsement, including broad form property
damage coverage
(which shall include coverage for completed operations).
Tenant's liability
coverage shall further include premises-operations coverage,
products liability
coverage (if applicable), products-completed operations
coverage, owners and
contractors protective coverage (when reasonably required by
Landlord), and
blanket contractual coverage including both oral and written
contracts. It is
the parties' intent that Tenant's contractual liability coverage
provide
coverage to the maximum extent possible of Tenant's
indemnification obligations
under this Lease.
(b) Tenant's Workers' Compensation and Employer Liability
Coverage. Tenant shall maintain workers' compensation insurance
as required by
law and
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employer's liability insurance with limits of no less than One
Million Dollars
($1,000,000.00) per occurrence.
(c) Tenant's Property Insurance. Tenant shall maintain
property insurance coverage for (i) all office furniture, trade
fixtures, office
equipment, merchandise, and all other items of Tenant's property
in, on, at, or
about the Premises and the Project, (ii) the Tenant
Improvements, as that term
is defined in the Work Letter (including during installation and
after
completion), and any other improvements which exist in the
Premises as of the
date of this Lease, and (iii) all Alterations (including during
installation and
after completion). Such policy shall (A) be written on the
broadest available
"all risk" (special-causes-of-loss) policy form or an equivalent
form acceptable
to Landlord, (B) include an agreed-amount endorsement for no
less than the full
replacement cost (new without deduction for depreciation) of the
covered items
and property, and (C) include vandalism and malicious mischief
coverage,
sprinkler leakage coverage, and earthquake sprinkler leakage
coverage.
(d) Business Interruption, Loss of Income, and Extra Expense
Coverage. Tenant shall maintain business interruption, loss of
income, and extra
expense insurance, to the extent such insurance is commercially
available at
reasonable terms, covering all direct or indirect loss of income
and charges and
costs incurred arising out of all perils, failures, or
interruptions covered
under the broadest available "all risk" policy, including any
failure or
interruption of Tenant's business equipment (including, without
limitation,
telecommunications equipment), and the prevention of, or denial
of use of or
access to, all or part of the Premises or the Project, as a
result of those
perils, failures, or interruptions. The business interruption,
loss of income,
and extra expense coverage shall provide coverage for no less
than twelve (12)
months and shall be carried in amounts necessary to avoid any
coinsurance
penalty that could apply. The business interruption, loss of
income and extra
expense coverage shall be issued by the insurer that issues
Tenant's property
insurance under Section 14.1(c) above.
(e) Other Tenant Insurance Coverage. Not more often than
once
every year and upon not less than thirty (30) days' prior
written notice,
Landlord may require Tenant, at Tenant's sole cost and expense,
to procure and
maintain other types of insurance coverage and/or increase the
insurance limits
set forth above if Landlord reasonably determines such increase
is required to
protect adequately the parties named as insureds or additional
insureds under
such insurance.
14.2 Form of Policies. The minimum limits of policies and
Tenant's
procurement and maintenance of such policies described in
Section 14.1 shall in
no event limit the liability of Tenant under this Lease. All
insurance required
by this Article 14 shall be issued on an occurrence basis by
solvent companies
qualified to do business in the State of California, and with a
Best & Company
rating of A:VIII or better. Any insurance policy under this
Article 14 may be
maintained under a "blanket policy," insuring other parties and
other locations,
so long as the amount and coverage required to be provided
hereunder is not
thereby diminished. No policy maintained by Tenant under this
Article 14 shall
contain a deductible greater than Twenty-Five Thousand Dollars
($25,000.00).
Tenant shall provide Landlord a certificate of each policy of
insurance required
hereunder certifying that the policies contain the provisions
required. Tenant
shall deliver such certificates to Landlord within thirty (30)
days after the
Lease Date, but in no event later than the date that Tenant or
any other Tenant
Parties first enter
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the Premises and, upon renewal, not fewer than ten (10) days
prior to the
expiration of such coverage. In addition, Tenant shall deliver
to Landlord a
copy of each policy of insurance required hereunder upon
Landlord's request. All
Tenant's liability insurance shall provide (i) that Landlord,
Landlord's
managing agent, any Encumbrancer, and any other person
requeste
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