Exhibit 10.9
ONE
BAY PLAZA
BURLINGAME, CALIFORNIA
OFFICE LEASE AGREEMENT
BETWEEN
CA-ONE BAY PLAZA LIMITED PARTNERSHIP, a Delaware limited
partnership
(“LANDLORD”)
AND
Opta Corporation, a Delaware corporation
(“TENANT”)
OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT (the
“Lease”) is made and entered into as of the 31
st day of October, 2004, by and between CA-ONE BAY PLAZA
LIMITED PARTNERSHIP, a Delaware limited partnership
(“Landlord”) and Opta Corporation, a Delaware
corporation (“Tenant”). The following exhibits
and attachments are incorporated into and made a part of the Lease:
Exhibit A (Outline and Location of Premises), Exhibit B
(Expenses and Taxes), Exhibit C (Work Letter),
Exhibit C-1 (Depiction of Landlord Work), Exhibit D
(Commencement Letter), Exhibit E (Building Rules and
Regulations), Exhibit F (Additional Provisions),
Exhibit G (Parking Agreement) and Exhibit H (Asbestos
Notification).
1.
Basic Lease Information.
1.01
“Building” shall mean the building located at 1350 Old
Bayshore Highway, Burlingame, California, commonly known as One Bay
Plaza. “Rentable Square Footage of the Building”
is deemed to be 176,533 square feet.
1.02
“Premises” shall mean the area shown on Exhibit A
to this Lease. The Premises is located on the 7th floor and
known as suite no. 740. If the Premises include one or more floors
in their entirety, all corridors and restroom facilities located on
such full floor(s) shall be considered part of the Premises. The
“Rentable Square Footage of the Premises” is deemed to
be 3,196 square feet. Landlord and Tenant stipulate and agree that
the Rentable Square Footage of the Building and the Rentable Square
Footage of the Premises are correct.
1.03
“Base Rent”:
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Period or Months of
Term
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Annual Rate
Per Square Foot
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Monthly
Base Rent
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Months 1 – 12
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$
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18.00
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$
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4,794.00
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1.04
“Tenant’s Pro Rata Share”: 1.8104%.
1.05
“Base Year” for Taxes (defined in
Exhibit B): 2005; “Base Year” for Expenses
(defined in Exhibit B): 2005.
1.06
“Term”: A period of 12 months and 0 days. Subject
to Section 3, the Term shall commence on October 29, 2004
(the “Commencement Date”) and, unless terminated early
in accordance with this Lease, end on October 31, 2005 (the
“Termination Date”).
1.07
Allowance(s): None
1.08
“Security Deposit”: $ 4,794 as more fully
described in Section 6.
1.09
“Guarantor(s)”: None
1.10
“Broker(s)”: Jon Mackey of Cornish &
Carey.
1.11
“Permitted Use”: General office use.
1.12
“Notice Address(es)”:
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Landlord:
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Tenant:
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CA-One Bay Plaza Limited Partnership
c/o Equity Office Management, L.L.C.
950 Tower Lane
Suite 950
Foster City, California 94404
Attention: Property Manager
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Opta Corporation
2402 Michelson Drive
Suite 220
Irvine, CA 92612
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A
copy of any notices to Landlord shall be sent to Equity Office, One
Market, Spear Street Tower, Suite 600, San Francisco, California
94105, Attn: San Francisco Regional Counsel.
1.13
“Business Day(s)” are Monday through Friday of each
week, exclusive of New Year’s Day, Presidents Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day (“Holidays”). Landlord may designate
additional Holidays that are commonly recognized by other office
buildings in the area where the Building is located.
“Building Service Hours” are 8:00 a.m. to 6:00 p.m. on
Business Days.
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1.14
“Landlord Work” means the work, if any, that Landlord
is obligated to perform in the Premises pursuant to a separate
agreement (the “Work Letter”), if any, attached to this
Lease as Exhibit C.
1.15
“Property” means the Building and the parcel(s) of land
on which it is located and, at Landlord’s discretion, the
parking facilities and other improvements, if any, serving the
Building and the parcel(s) of land on which they are located.
2.
Lease Grant.
The
Premises are hereby leased to Tenant from Landlord, together with
the right to use any portions of the Property that are designated
by Landlord for the common use of tenants and others (the
“Common Areas”).
3.
Adjustment of Commencement Date;
Possession.
3.01 If Landlord is required to perform
Landlord Work prior to the Commencement Date: (a) the date set
forth in Section 1.06 as the Commencement Date shall instead
be defined as the “Target Commencement Date”;
(b) the actual Commencement Date shall be the date on which
the Landlord Work is Substantially Complete (defined below); and
(c) the Termination Date will be the last day of the Term as
determined based upon a period of 12 months and 0 days from
the actual Commencement Date. Landlord’s failure to
Substantially Complete the Landlord Work by the Target Commencement
Date shall not be a default by Landlord or otherwise render
Landlord liable for damages. Promptly after the determination of
the Commencement Date, Landlord and Tenant shall enter into a
commencement letter agreement in the form attached as
Exhibit D which commencement letter agreement shall be deemed
accepted by Tenant if not executed and returned to Landlord by
Tenant within 30 days after the date that Landlord delivers the
commencement letter agreement to Tenant for execution. If the
Termination Date does not fall on the last day of a calendar month,
Landlord and Tenant may elect to adjust the Termination Date to the
last day of the calendar month in which Termination Date occurs by
the mutual execution of a commencement letter agreement setting
forth such adjusted date. The Landlord Work shall be
deemed to be “Substantially Complete” on the date that
all Landlord Work has been performed, other than any details of
construction, mechanical adjustment or any other similar matter,
the non-completion of which does not materially interfere with
Tenant’s use of the Premises. If Landlord is delayed in the
performance of the Landlord Work as a result of the acts or
omissions of Tenant, the Tenant Related Parties (defined in
Section 13) or their respective contractors or vendors,
including, without limitation, changes requested by Tenant to
approved plans, Tenant’s failure to comply with any of its
obligations under this Lease, or the specification of any materials
or equipment with long lead times (a “Tenant Delay”),
the Landlord Work shall be deemed to be Substantially Complete on
the date that Landlord could reasonably have been expected to
Substantially Complete the Landlord Work absent any Tenant
Delay.
3.02 Subject to Landlord’s obligation, if
any, to perform Landlord Work, the Premises are accepted by Tenant
in “as is” condition and configuration without any
representations or warranties by Landlord. By taking possession of
the Premises, Tenant agrees that the Premises are in good order and
satisfactory condition. Landlord shall not be liable for a
failure to deliver possession of the Premises or any other space
due to the holdover or unlawful possession of such space by another
party, however Landlord shall use reasonable efforts to obtain
possession of the space. The commencement date for the space,
in such event, shall be postponed until the date Landlord delivers
possession of the Premises to Tenant free from occupancy by any
party. If Tenant takes possession of the Premises before the
Commencement Date, such possession shall be subject to the terms
and conditions of this Lease and Tenant shall pay Rent (defined in
Section 4.01) to Landlord for each day of possession before
the Commencement Date. However, except for the cost of
services requested by Tenant (e.g. freight elevator usage), Tenant
shall not be required to pay Rent for any days of possession before
the Commencement Date during which Tenant, with the approval of
Landlord, is in possession of the Premises for the sole purpose of
performing improvements or installing furniture, equipment or other
personal property.
4.
Rent.
4.01 Tenant shall pay Landlord, without
any setoff or deduction, unless expressly set forth in this Lease,
all Base Rent and Additional Rent due for the Term (collectively
referred to as “Rent”). “Additional Rent”
means all sums (exclusive of Base Rent) that Tenant is required to
pay Landlord under this Lease. Tenant shall pay and be liable for
all rental, sales and use taxes (but excluding income taxes), if
any, imposed upon or measured by Rent. Base Rent and
recurring monthly charges of Additional Rent shall be due and
payable in advance on the first day of each calendar month without
notice or demand, provided that the installment of Base Rent for
the first full calendar month of the Term, and the first
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monthly installment of Additional Rent for
Expenses and Taxes, shall be payable upon the execution of this
Lease by Tenant. All other items of Rent shall be due and
payable by Tenant on or before 30 days after billing by
Landlord. Rent shall be made payable to the entity, and sent
to the address, Landlord designates and shall be made by good and
sufficient check or by other means acceptable to Landlord.
Tenant shall pay Landlord an administration fee equal to 5% of all
past due Rent, provided that Tenant shall be entitled to a grace
period of 5 days for the first 2 late payments of Rent in a
calendar year. In addition, past due Rent shall accrue interest at
12% per annum. Landlord’s acceptance of less than the correct
amount of Rent shall be considered a payment on account of the
earliest Rent due. Rent for any partial month during the Term shall
be prorated. No endorsement or statement on a check or letter
accompanying payment shall be considered an accord and
satisfaction. Tenant’s covenant to pay Rent is
independent of every other covenant in this Lease.
4.02 Tenant shall pay Tenant’s Pro
Rata Share of Taxes and Expenses in accordance with Exhibit B
of this Lease.
5.
Compliance with Laws;
Use.
The
Premises shall be used for the Permitted Use and for no other use
whatsoever. Tenant shall comply with all statutes, codes,
ordinances, orders, rules and regulations of any municipal or
governmental entity whether in effect now or later, including the
Americans with Disabilities Act (“Law(s)”), regarding
the operation of Tenant’s business and the use, condition,
configuration and occupancy of the Premises. In addition, Tenant
shall, at its sole cost and expense, promptly comply with any Laws
that relate to the “Base Building” (defined below), but
only to the extent such obligations are triggered by Tenant’s
use of the Premises, other than for general office use, or
Alterations or improvements in the Premises performed or requested
by Tenant. “Base Building” shall include the
structural portions of the Building, the public restrooms and the
Building mechanical, electrical and plumbing systems and equipment
located in the internal core of the Building on the floor or floors
on which the Premises are located. Tenant shall promptly provide
Landlord with copies of any notices it receives regarding an
alleged violation of Law. Tenant shall comply with the rules
and regulations of the Building attached as Exhibit E and such
other reasonable rules and regulations adopted by Landlord from
time to time, including rules and regulations for the performance
of Alterations (defined in Section 9).
6.
Security Deposit.
The
Security Deposit, if any, shall be delivered to Landlord upon the
execution of this Lease by Tenant and held by Landlord without
liability for interest (unless required by Law) as security for the
performance of Tenant’s obligations. The Security
Deposit is not an advance payment of Rent or a measure of
damages. Landlord may use all or a portion of the Security
Deposit to satisfy past due Rent or to cure any Default (defined in
Section 18) by Tenant. If Landlord uses any portion of
the Security Deposit, Tenant shall, within 5 days after demand,
restore the Security Deposit to its original amount. Landlord shall
return any unapplied portion of the Security Deposit to Tenant
within 45 days after the later to occur of: (a) determination
of the final Rent due from Tenant; or (b) the later to occur
of the Termination Date or the date Tenant surrenders the Premises
to Landlord in compliance with Section 25. Landlord may assign
the Security Deposit to a successor or transferee and, following
the assignment, Landlord shall have no further liability for the
return of the Security Deposit. Landlord shall not be required to
keep the Security Deposit separate from its other accounts.
Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code, or any similar or successor Laws now or
hereinafter in effect.
7.
Building Services.
7.01 Landlord shall furnish Tenant with
the following services: (a) water for use in the Base Building
lavatories; (b) customary heat and air conditioning in season
during Building Service Hours. Tenant shall have the right to
receive HVAC service during hours other than Building Service Hours
by paying Landlord’s then standard charge for additional HVAC
service and providing such prior notice as is reasonably specified
by Landlord; (c) standard janitorial service on Business Days;
(d) Elevator service; (e) Electricity in accordance with
the terms and conditions in Section 7.02; and (f) such
other services as Landlord reasonably determines are necessary or
appropriate for the Property.
7.02 Electricity used by Tenant in the
Premises shall be paid for by Tenant through inclusion in Expenses
(except as provided for excess usage). Without the consent of
Landlord, Tenant’s use of electrical service shall not
exceed, either in voltage, rated capacity, use beyond Building
Service Hours or overall load, that which Landlord reasonably deems
to be standard for the Building. Landlord shall have the right to
measure electrical usage by commonly accepted methods. If it is
determined that Tenant is using excess electricity, Tenant shall
pay Landlord for the cost of such excess electrical usage as
Additional Rent.
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7.03 Landlord’s failure to furnish,
or any interruption, diminishment or termination of services due to
the application of Laws, the failure of any equipment, the
performance of repairs, improvements or alterations, utility
interruptions or the occurrence of an event of Force Majeure
(defined in Section 26.03) (collectively a “Service
Failure”) shall not render Landlord liable to Tenant,
constitute a constructive eviction of Tenant, give rise to an
abatement of Rent, nor relieve Tenant from the obligation to
fulfill any covenant or agreement. However, if the Premises, or a
material portion of the Premises, are made untenantable for a
period in excess of 3 consecutive Business Days as a result of a
Service Failure that is reasonably within the control of Landlord
to correct, then Tenant, as its sole remedy, shall be entitled to
receive an abatement of Rent payable hereunder during the period
beginning on the 4 th consecutive Business Day of the
Service Failure and ending on the day the service has been
restored. If the entire Premises have not been rendered
untenantable by the Service Failure, the amount of abatement shall
be equitably prorated.
8.
Leasehold
Improvements.
All
improvements in and to the Premises, including any Alterations
(collectively, “Leasehold Improvements”) shall remain
upon the Premises at the end of the Term without compensation to
Tenant. Landlord, however, by written notice to Tenant at
least 30 days prior to the Termination Date, may require Tenant, at
its expense, to remove (a) any Cable (defined in
Section 9.01) installed by or for the benefit of Tenant, and
(b) any Landlord Work or Alterations that, in Landlord’s
reasonable judgment, are of a nature that would require removal and
repair costs that are materially in excess of the removal and
repair costs associated with standard office improvements
(collectively referred to as “Required
Removables”). Required Removables shall include,
without limitation, internal stairways, raised floors, personal
baths and showers, vaults, rolling file systems and structural
alterations and modifications. The designated Required Removables
shall be removed by Tenant before the Termination Date. Tenant
shall repair damage caused by the installation or removal of
Required Removables. If Tenant fails to perform its
obligations in a timely manner, Landlord may perform such work at
Tenant’s expense. Tenant, at the time it requests approval
for a proposed Alteration, may request in writing that Landlord
advise Tenant whether the Alteration or any portion of the
Alteration is a Required Removable. Within 10 days after
receipt of Tenant’s request, Landlord shall advise Tenant in
writing as to which portions of the Alteration are Required
Removables.
9.
Repairs and
Alterations.
9.01 Tenant shall periodically inspect the
Premises to identify any conditions that are dangerous or in need
of maintenance or repair. Tenant shall promptly provide
Landlord with notice of any such conditions. Tenant shall, at its
sole cost and expense, perform all maintenance and repairs to the
Premises that are not Landlord’s express responsibility under
this Lease, and keep the Premises in good condition and repair,
reasonable wear and tear excepted. Tenant’s repair and
maintenance obligations include, without limitation, repairs to:
(a) floor covering; (b) interior partitions;
(c) doors; (d) the interior side of demising walls;
(e) electronic, phone and data cabling and related equipment
that is installed by or for the exclusive benefit of Tenant
(collectively, “Cable”); (f) supplemental air
conditioning units, kitchens, including hot water heaters,
plumbing, and similar facilities exclusively serving Tenant; and
(g) Alterations. To the extent Landlord is not reimbursed by
insurance proceeds, Tenant shall reimburse Landlord for the cost of
repairing damage to the Building caused by the acts of Tenant,
Tenant Related Parties and their respective contractors and
vendors. If Tenant fails to make any repairs to the Premises for
more than 15 days after notice from Landlord (although notice shall
not be required in an emergency), Landlord may make the repairs,
and Tenant shall pay the reasonable cost of the repairs, together
with an administrative charge in an amount equal to 10% of the cost
of the repairs.
9.02 Landlord shall keep and maintain in good
repair and working order and perform maintenance upon the:
(a) structural elements of the Building; (b) mechanical
(including HVAC), electrical, plumbing and fire/life safety systems
serving the Building in general; (c) Common Areas;
(d) roof of the Building; (e) exterior windows of the
Building; and (f) elevators serving the Building. Landlord
shall promptly make repairs for which Landlord is
responsible. Tenant hereby waives any and all rights under
and benefits of subsection 1 of Section 1932, and
Sections 1941 and 1942 of the California Civil Code, or any
similar or successor Laws now or hereinafter in effect.
9.03 Tenant shall not make alterations,
repairs, additions or improvements or install any Cable
(collectively referred to as “Alterations”) without
first obtaining the written consent of Landlord in each instance,
which consent shall not be unreasonably withheld or delayed.
However, Landlord’s consent shall not be required for any
Alteration that satisfies all of the following criteria (a
“Cosmetic Alteration”): (a) is of a cosmetic
nature such as painting, wallpapering, hanging pictures and
installing carpeting; (b) is not visible from the exterior of
the Premises or Building; (c) will not affect the Base
Building; and (d) does not require work to be performed inside
the walls or above the ceiling of the Premises. Cosmetic
Alterations shall be subject to all the other provisions of this
Section 9.03. Prior to starting work, Tenant shall
furnish Landlord with plans and specifications; names of
contractors reasonably acceptable to Landlord (provided that
Landlord may designate specific contractors with respect to Base
Building); required permits and approvals; evidence of
contractor’s and subcontractor’s insurance
in
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amounts reasonably required by Landlord and
naming Landlord as an additional insured; and any security for
performance in amounts reasonably required by Landlord.
Changes to the plans and specifications must also be submitted to
Landlord for its approval. Alterations shall be constructed in a
good and workmanlike manner using materials of a quality reasonably
approved by Landlord. Tenant shall reimburse Landlord for any sums
paid by Landlord for third party examination of Tenant’s
plans for non-Cosmetic Alterations. Upon completion, Tenant shall
furnish “as-built” plans for non-Cosmetic Alterations,
completion affidavits and full and final waivers of lien.
Landlord’s approval of an Alteration shall not be deemed a
representation by Landlord that the Alteration complies with
Law.
10.
Entry by Landlord.
Landlord may enter the Premises to inspect,
show or clean the Premises or to perform or facilitate the
performance of repairs, alterations or additions to the Premises or
any portion of the Building. Except in emergencies or to
provide Building services, Landlord shall provide Tenant with
reasonable prior verbal notice of entry and shall use reasonable
efforts to minimize any interference with Tenant’s use of the
Premises. If reasonably necessary, Landlord may temporarily
close all or a portion of the Premises to perform repairs,
alterations and additions. However, except in emergencies,
Landlord will not close the Premises if the work can reasonably be
completed on weekends and after Building Service Hours. Entry
by Landlord shall not constitute a constructive eviction or entitle
Tenant to an abatement or reduction of Rent.
11.
Assignment and
Subletting.
11.01 Except in connection with a
Permitted Transfer (defined in Section 11.04), Tenant shall
not assign, sublease, transfer or encumber any interest in this
Lease or allow any third party to use any portion of the Premises
(collectively or individually, a “Transfer”) without
the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed if Landlord does not
exercise its recapture rights under Section 11.02. If
the entity which controls the voting shares/rights of Tenant
changes at any time, such change of ownership or control shall
constitute a Transfer unless Tenant is an entity whose outstanding
stock is listed on a recognized securities exchange or if at least
80% of its voting stock is owned by another entity, the voting
stock of which is so listed. Tenant hereby waives the
provisions of Section 1995.310 of the California Civil Code,
or any similar or successor Laws, now or hereinafter in effect, and
all other remedies, including, without limitation, any right at law
or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable Laws, on behalf of the
proposed transferee. Any attempted Transfer in violation of
this Section is voidable by Landlord. In no event shall any
Transfer, including a Permitted Transfer, release or relieve Tenant
from any obligation under this Lease.
11.02 Tenant shall provide Landlord with
financial statements for the proposed transferee, a fully executed
copy of the proposed assignment, sublease or other Transfer
documentation and such other information as Landlord may reasonably
request. Within 15 Business Days after receipt of the required
information and documentation, Landlord shall either:
(a) consent to the Transfer by execution of a consent
agreement in a form reasonably designated by Landlord;
(b) reasonably refuse to consent to the Transfer in writing;
or (c) in the event of an assignment of this Lease or
subletting of more than 20% of the Rentable Square Footage of the
Premises for more than 50% of the remaining Term (excluding
unexercised options), recapture the portion of the Premises that
Tenant is proposing to Transfer. If Landlord exercises its
right to recapture, this Lease shall automatically be amended (or
terminated if the entire Premises is being assigned or sublet) to
delete the applicable portion of the Premises effective on the
proposed effective date of the Transfer. Tenant shall pay
Landlord a review fee of $1,500.00 for Landlord’s review of
any Permitted Transfer or requested Transfer.
11.03 Tenant shall pay Landlord 50% of
all rent and other consideration which Tenant receives as a result
of a Transfer that is in excess of the Rent payable to Landlord for
the portion of the Premises and Term covered by the Transfer.
Tenant shall pay Landlord for Landlord’s share of the excess
within 30 days after Tenant’s receipt of the excess.
Tenant may deduct from the excess, on a straight-line basis, all
reasonable and customary expenses directly incurred by Tenant
attributable to the Transfer. If Tenant is in Default,
Landlord may require that all sublease payments be made directly to
Landlord, in which case Tenant shall receive a credit against Rent
in the amount of Tenant’s share of payments received by
Landlord.
11.04 Tenant may assign this Lease to a
successor to Tenant by purchase, merger, consolidation or
reorganization (an “Ownership Change”) or assign this
Lease or sublet all or a portion of the Premises to an Affiliate
without the consent of Landlord, provided that all of the following
conditions are satisfied (a “Permitted
Transfer”): (a) Tenant is not in Default;
(b) in the event of an Ownership Change, Tenant’s
successor shall own substantially all of the assets of Tenant and
have a net worth which is at least equal to Tenant’s net
worth as of the day prior to the proposed Ownership Change;
(c) the Permitted Use does not allow the Premises to be used
for retail purposes; and (d) Tenant shall give Landlord
written notice at least 15 Business Days prior to the effective
date of the Permitted Transfer. Tenant’s notice to Landlord
shall include information and documentation evidencing the
Permitted Transfer and showing
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that each of the above conditions has been
satisfied. If requested by Landlord, Tenant’s successor
shall sign a commercially reasonable form of assumption agreement.
“Affiliate” shall mean an entity controlled by,
controlling or under common control with Tenant.
12.
Liens.
Tenant shall not permit mechanics’ or
other liens to be placed upon the Property, Premises or
Tenant’s leasehold interest in connection with any work or
service done or purportedly done by or for the benefit of Tenant or
its transferees. Tenant shall give Landlord notice at least
15 days prior to the commencement of any work in the Premises to
afford Landlord the opportunity, where applicable, to post and
record notices of non-responsibility. Tenant, within 10 days of
notice from Landlord, shall fully discharge any lien by settlement,
by bonding or by insuring over the lien in the manner prescribed by
the applicable lien Law. If Tenant fails to do so, Landlord
may bond, insure over or otherwise discharge the lien. Tenant
shall reimburse Landlord for any amount paid by Landlord,
including, without limitation, reasonable attorneys’
fees.
13.
Indemnity and Waiver of
Claims.
Tenant hereby waives all claims against and
releases Landlord and its trustees, members, principals,
beneficiaries, partners, officers, directors, employees, Mortgagees
(defined in Section 23) and agents (the “Landlord
Related Parties”) from all claims for any injury to or death
of persons, damage to property or business loss in any manner
related to (a) Force Majeure, (b) acts of third parties,
(c) the bursting or leaking of any tank, water closet, drain
or other pipe, (d) the inadequacy or failure of any security
services, personnel or equipment, or (e) any matter not within
the reasonable control of Landlord. Notwithstanding the foregoing,
except as provided in Article 15 to the contrary, Tenant shall
not be required to waive any claims against Landlord (other than
for loss or damage to Tenant’s business) where such loss or
damage is due to the negligence or willful misconduct of Landlord
or any Landlord Related Parties. Nothing herein shall be
construed as to diminish the repair and maintenance obligations of
Landlord contained elsewhere in this Lease. Except to the
extent caused by the negligence or willful misconduct of Landlord
or any Landlord Related Parties, Tenant shall indemnify, defend and
hold Landlord and Landlord Related Parties harmless against and
from all liabilities, obligations, damages, penalties, claims,
actions, costs, charges and expenses, including, without
limitation, reasonable attorneys’ fees and other professional
fees (if and to the extent permitted by Law) (collectively referred
to as “Losses”), which may be imposed upon, incurred by
or asserted against Landlord or any of the Landlord Related Parties
by any third party and arising out of or in connection with any
damage or injury occurring in the Premises or any acts or omissions
(including violations of Law) of Tenant, the Tenant Related Parties
or any of Tenant’s transferees, contractors or
licensees. Except to the extent caused by the negligence or
willful misconduct of Tenant or any Tenant Related Parties,
Landlord shall indemnify, defend and hold Tenant, its trustees,
members, principals, beneficiaries, partners, officers, directors,
employees and agents (“Tenant Related Parties”)
harmless against and from all Losses which may be imposed upon,
incurred by or asserted against Tenant or any of the Tenant Related
Parties by any third party and arising out of or in connection with
the acts or omissions (including violations of Law) of Landlord or
the Landlord Related Parties.
14.
Insurance.
Tenant shall maintain the following insurance
(“Tenant’s Insurance”): (a) Commercial
General Liability Insurance applicable to the Premises and its
appurtenances providing, on an occurrence basis, a minimum combined
single limit of $2,000,000.00; (b) Property/Business
Interruption Insurance written on an All Risk or Special Perils
form, with coverage for broad form water damage including
earthquake sprinkler leakage, at replacement cost value and with a
replacement cost endorsement covering all of Tenant’s
business and trade fixtures, equipment, movable partitions,
furniture, merchandise and other personal property within the
Premises (“Tenant’s Property”) and any Leasehold
Improvements performed by or for the benefit of Tenant;
(c) Workers’ Compensation Insurance in amounts required
by Law; and (d) Employers Liability Coverage of at least
$1,000,000.00 per occurrence. Any company writing
Tenant’s Insurance shall have an A.M. Best rating of not less
than A-VIII. All Commercial General Liability Insurance
policies shall name as additional insureds Landlord (or its
successors and assignees), the managing agent for the Building (or
any successor), EOP Operating Limited Partnership, Equity Office
Properties Trust and their respective members, principals,
beneficiaries, partners, officers, directors, employees, and
agents, and other designees of Landlord and its successors as the
interest of such designees shall appear. All policies of
Tenant’s Insurance shall contain endorsements that the
insurer(s) shall give Landlord and its designees at least 30
days’ advance written notice of any cancellation,
termination, material change or lapse of insurance. Tenant shall
provide Landlord with a certificate of insurance evidencing
Tenant’s Insurance prior to the earlier to occur of the
Commencement Date or the date Tenant is provided with possession of
the Premises, and thereafter as necessary to assure that Landlord
always has current certificates evidencing Tenant’s
Insurance. So long as the same is available at commercially
reasonable rates, Landlord shall maintain so called All Risk
property insurance on the Building at replacement cost value as
reasonably estimated by Landlord.
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15.
Subrogation.
Landlord and Tenant hereby waive and shall
cause their respective insurance carriers to waive any and all
rights of recovery, claims, actions or causes of action against the
other for any loss or damage with respect to Tenant’s
Property, Leasehold Improvements, the Building, the Premises, or
any contents thereof, including rights, claims, actions and causes
of action based on negligence, which loss or damage is (or would
have been, had the insurance required by this Lease been carried)
covered by insurance.
16.
Casualty Damage.
16.01 If all or any portion of the
Premises becomes untenantable by fire or other casualty to the
Premises (collectively a “Casualty”), Landlord, with
reasonable promptness, shall cause a general contractor selected by
Landlord to provide Landlord and Tenant with a written estimate of
the amount of time required using standard working methods to
Substantially Complete the repair and restoration of the Premises
and any Common Areas necessary to provide access to the Premises
(“Completion Estimate”). If the Completion
Estimate indicates that the Premises or any Common Areas necessary
to provide access to the Premises cannot be made tenantable within
180 days from the
date the repair is started, then either party shall have the right
to terminate this Lease upon written notice to the other within 10
days after receipt of the Completion Estimate. Tenant,
however, shall not have the right to terminate this Lease if the
Casualty was caused by the negligence or intentional misconduct of
Tenant or any Tenant Related Parties. In addition, Landlord, by
notice to Tenant within 90 days after the date of the Casualty,
shall have the right to terminate this Lease if: (1) the
Premises have been materially damaged and there is less than 2
years of the Term remaining on the date of the Casualty;
(2) any Mortgagee requires that the insurance proceeds be
applied to the payment of the mortgage debt; or (3) a material
uninsured loss to the Building occurs. In addition, Tenant shall
have the right to terminate this Lease if: (a) a substantial
portion of the Premises has been damaged by fire or other casualty
and such damage cannot reasonably be repaired within 60 days after
receipt of the Completion Estimate; (b) there is less than 1 year
of the Term remaining on the date of such casualty; (c) the
casualty was not caused by the negligence or willful misconduct of
Tenant or its agents, employees or contractors; and (d) Tenant
provides Landlord with written notice of its intent to terminate
within 30 days after the date of the fire or other
casualty.
16.02 If this Lease is not terminated,
Landlord shall promptly and diligently, subject to reasonable
delays for insurance adjustment or other matters beyond
Landlord’s reasonable control, restore the Premises and
Common Areas. Such restoration shall be to substantially the same
condition that existed prior to the Casualty, except for
modifications required by Law or any other modifications to the
Common Areas deemed desirable by Landlord. Upon notice from
Landlord, Tenant shall assign to Landlord (or to any party
designated by Landlord) all property insurance proceeds payable to
Tenant under Tenant’s Insurance with respect to any Leasehold
Improvements performed by or for the benefit of Tenant; provided if
the estimated cost to repair such Leasehold Improvements exceeds
the amount of insurance proceeds received by Landlord from
Tenant’s insurance carrier, the excess cost of such repairs
shall be paid by Tenant to Landlord prior to Landlord’s
commencement of repairs. Within 15 days of demand, Tenant
shall also pay Landlord for any additional excess costs that are
determined during the performance of the repairs. Landlord shall
not be liable for any inconvenience to Tenant, or injury to
Tenant’s business resulting in any way from the Casualty or
the repair thereof. Provided that Tenant is not in Default,
during any period of time that all or a material portion of the
Premises is rendered untenantable as a result of a Casualty, the
Rent shall abate for the portion of the Premises that is
untenantable and not used by Tenant.
16.03 The provisions of this Lease,
including this Section 16, constitute an express agreement
between Landlord and Tenant with respect to any and all damage to,
or destruction of, all or any part of the Premises or the Property,
and any Laws, including, without limitation, Sections 1932(2)
and 1933(4) of the California Civil Code, with respect to any
rights or obligations concerning damage or destruction in the
absence of an express agreement between the parties, and any
similar or successor Laws now or hereinafter in effect, shall have
no application to this Lease or any damage or destruction to all or
any part of the Premises or the Property.
17.
Condemnation.
Either party may terminate this Lease if any
material part of the Premises is taken or condemned for any public
or quasi-public use under Law, by eminent domain or private
purchase in lieu thereof (a “Taking”). Landlord
shall also have the right to terminate this Lease if there is a
Taking of any portion of the Building or Property which would have
a material adverse effect on Landlord’s ability to profitably
operate the remainder of the Building. The terminating party
shall provide written notice of termination to the other party
within 45 days after it first receives notice of the Taking.
The termination shall be effective on the date the physical taking
occurs. If this Lease is not terminated, Base Rent and
Tenant’s Pro Rata Share shall be appropriately adjusted to
account for any reduction in the square footage of the Building or
Premises. All compensation awarded for a Taking shall be the
property of Landlord. The
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right to receive compensation or proceeds are
expressly waived by Tenant, however, Tenant may file a separate
claim for Tenant’s Property and Tenant’s reasonable
relocation expenses, provided the filing of the claim does not
diminish the amount of Landlord’s award. If only a part
of the Premises is subject to a Taking and this Lease is not
terminated, Landlord, with reasonable diligence, will restore the
remaining portion of the Premises as nearly as practicable to the
condition immediately prior to the Taking. Tenant hereby
waives any and all rights it might otherwise have pursuant to
Section 1265.130 of the California Code of Civil Procedure, or
any similar or successor Laws.
18.
Events of Default.
Each of the following occurrences shall be a
“Default”: (a) Tenant’s failure to pay any
portion of Rent when due, if the failure continues for 3 days after
written notice to Tenant (“Monetary Default”);
(b) Tenant’s failure (other than a Monetary Default) to
comply with any term, provision, condition or covenant of this
Lease, if the failure is not cured within 10 days after written
notice to Tenant provided, however, if Tenant’s failure to
comply cannot reasonably be cured within 10 days, Tenant shall be
allowed additional time (not to exceed 60 days) as is reasonably
necessary to cure the failure so long as Tenant begins the cure
within 10 days and diligently pursues the cure to completion;
(c) Tenant or any Guarantor becomes insolvent, makes a
transfer in fraud of creditors, makes an assignment for the benefit
of creditors, admits in writing its inability to pay its debts when
due or forfeits or loses its right to conduct business;
(d) the leasehold estate is taken by process or operation of
Law; (e) in the case of any ground floor or retail Tenant,
Tenant does not take possession of or abandons or vacates all or
any portion of the Premises; or (f) Tenant is in default
beyond any notice and cure period under any other lease or
agreement with Landlord at the Building or Property. If Landlord
provides Tenant with notice of Tenant’s failure to comply
with any specific provision of this Lease on 3 separate occasions
during any 12 month period, Tenant’s subsequent violation of
such provision shall, at Landlord’s option, be an incurable
Default by Tenant. All notices sent under this Section shall
be in satisfaction of, and not in addition to, notice required by
Law.
19.
Remedies.
19.01 Upon the occurrence of any Default
under this Lease, whether enumerated in Section 18 or not,
Landlord shall have the option to pursue any one or more of the
following remedies without any notice (except as expressly
prescribed herein) or demand whatsoever (and without limiting the
generality of the foregoing, Tenant hereby specifically waives
notice and demand for payment of Rent or other obligations, except
for those notices specifically required pursuant to the terms of
Section 18 or this Section 19, and waives any and all
other notices or demand requirements imposed by applicable
law):
(a)
Terminate this Lease and Tenant’s right to possession of the
Premises and recover from Tenant an award of damages equal to the
sum of the following:
(i)
The Worth at the Time of Award of the unpaid Rent which had been
earned at the time of termination;
(ii)
The Worth at the Time of Award of the amount by which the unpaid
Rent which would have been earned after termination until the time
of award exceeds the amount of such Rent loss that Tenant
affirmatively proves could have been reasonably avoided;
(iii)
The Worth at the Time of Award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds
the amount of such Rent loss that Tenant affirmatively proves could
be reasonably avoided;
(iv)
Any other amount necessary to compensate Landlord for all the
detriment either proximately caused by Tenant’s failure to
perform Tenant’s obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom;
and
(v)
All such other amounts in addition to or in lieu of the foregoing
as may be permitted from time to time under applicable law.
The
“Worth at the Time of Award” of the amounts referred to
in parts (i) and (ii) above, shall be computed by allowing
interest at the lesser of a per annum rate equal
to: (A) the greatest per annum rate of interest permitted
from time to time under applicable law, or (B) the Prime Rate
plus 5%. For purposes hereof, the “Prime Rate”
shall be the per annum interest rate publicly announced as its
prime or base rate by a federally insured bank selected by Landlord
in the State of California. The “Worth at the Time of
Award” of the amount referred to in part (iii), above, shall
be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus
1%;
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(b)
Employ the remedy described in California Civil Code
§ 1951.4 (Landlord may continue this Lease in effect
after Tenant’s breach and abandonment and recover Rent as it
becomes due, if Tenant has the right to sublet or assign, subject
only to reasonable limitations); or
(c)
Notwithstanding Landlord’s exercise of the remedy described
in California Civil Code § 1951.4 in respect of an event
or events of default, at such time thereafter as Landlord may elect
in writing, to terminate this Lease and Tenant’s right to
possession of the Premises and recover an award of damages as
provided above in Paragraph 19.01(a).
19.02 The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any
preceding breach by Tenant of any term, covenant or condition of
this Lease, other than the failure of Tenant to pay the particular
Rent so accepted, regardless of Landlord’s knowledge of such
preceding breach at the time of acceptance of such Rent. No
waiver by Landlord of any breach hereof shall be effective unless
such waiver is in writing and signed by Landlord.
19.03 TENANT HEREBY WAIVES ANY AND ALL
RIGHTS CONFERRED BY SECTION 3275 OF THE CIVIL CODE OF
CALIFORNIA AND BY SECTIONS 1174 (c) AND 1179 OF THE CODE OF
CIVIL PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER LAWS AND RULES
OF LAW FROM TIME TO TIME IN EFFECT DURING THE LEASE TERM PROVIDING
THAT TENANT SHALL HAVE ANY RIGHT TO REDEEM, REINSTATE OR RESTORE
THIS LEASE FOLLOWING ITS TERMINATION BY REASON OF TENANT’S
BREACH. TENANT ALSO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION
ARISING OUT OF OR RELATING TO THIS LEASE.
19.04 No right or remedy herein conferred
upon or reserved to Landlord is intended to be exclusive of any
other right or remedy, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given
hereunder or now or hereafter existing by agreement, applicable law
or in equity. In addition to other remedies provided in this
Lease, Landlord shall be entitled, to the extent permitted by
applicable law, to injunctive relief, or to a decree compelling
performance of any of the covenants, agreements, conditions or
provisions of this Lease, or to any other remedy allowed to
Landlord at law or in equity. Forbearance by Landlord to
enforce one or more of the remedies herein provided upon an event
of default shall not be deemed or construed to constitute a waiver
of such default.
19.05 If Tenant is in Default of any of
its non-monetary obligations under the Lease, Landlord shall have
the right to perform such obligations. Tenant shall reimburse
Landlord for the cost of such performance upon demand together with
an administrative charge equal to 10% of the cost of the work
performed by Landlord.
19.06 This Section 19 shall be
enforceable to the maximum extent such enforcement is not
prohibited by applicable law, and the unenforceability of any
portion thereof shall not thereby render unenforceable any other
portion.
20.
Limitation of
Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS LEASE, THE LIABILITY OF LANDLORD (AND OF ANY
SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE LESSER OF (A) THE
INTEREST OF LANDLORD IN THE PROPERTY, OR (B) THE EQUITY
INTEREST LANDLORD WOULD HAVE IN THE PROPERTY IF THE PROPERTY WERE
ENCUMBERED BY THIRD PARTY DEBT IN AN AMOUNT EQUAL TO 70% OF THE
VALUE OF THE PROPERTY. TENANT SHALL LOOK SOLELY TO
LANDLORD’S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY
JUDGMENT OR AWARD AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY.
NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY
LIABLE FOR ANY JUDGMENT OR DEFICIENCY, AND IN NO EVENT SHALL
LANDLORD OR ANY LANDLORD RELATED PARTY BE LIABLE TO TENANT FOR ANY
LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR ANY FORM OF SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN
ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE
MORTGAGEE(S) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED
IN SECTION 23 BELOW), NOTICE AND REASONABLE TIME TO CURE THE
ALLEGED DEFAULT.
21.
Relocation. Intentionally Omitted.
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22.
Holding Over.
If
Tenant fails to surrender all or any part of the Premises at the
termination of this Lease, occupancy of the Premises after
termination shall be that of a tenancy at sufferance.
Tenant’s occupancy shall be subject to all the terms and
provisions of this Lease, and Tenant shall pay an amount (on a per
month basis without reduction for partial months during the
holdover) eq
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