Exhibit 10.5
WATERGATE OFFICE
TOWERS
EMERYVILLE TOWER
III
EMERYVILLE,
CALIFORNIA
OFFICE LEASE
AGREEMENT
BETWEEN
CA-EMERYVILLE PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited partnership
(“LANDLORD”)
AND NEUROBIOLOGICAL TECHNOLOGIES,
INC., a Delaware
corporation
(“TENANT”)
OFFICE LEASE
AGREEMENT
THIS OFFICE LEASE
AGREEMENT (the
“Lease” ) is made and entered into as of the
22 nd day of April, 2005, by and between
CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited
partnership ( “Landlord” ) and
NEUROBIOLOGICAL TECHNOLOGIES, INC., 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 D (Commencement Letter), Exhibit E (Building
Rules and Regulations), Exhibit F (Additional Provisions)
and Exhibit G (Parking Agreement).
|
1.
|
Basic Lease
Information.
|
|
|
1.01
|
“
Building ” shall mean the building located at 2000
Powell Street, Emeryville, California, commonly known as Emeryville
Tower III. “ Rentable Square Footage of the Building
” is deemed to be 367,793 square feet.
|
|
|
1.02
|
“
Premises ” shall mean the area shown on Exhibit
A to this Lease. The Premises is located on the 8th floor and
known as suite 800. 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 park of the Premises. The
“ Rentable Square Footage of the Premises ” is
deemed to be 9,650 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.
|
|
|
|
|
|
|
|
|
|
Period or Months of Term
|
|
Annual Rate Per
Square Foot
|
|
Monthly Base Rent
|
|
1 – 12
|
|
$
|
22.80
|
|
$
|
18,335.00
|
|
13 – 24
|
|
$
|
23.52
|
|
$
|
18,914.00
|
|
25 – 36
|
|
$
|
24.24
|
|
$
|
19,493.00
|
|
37 – 48
|
|
$
|
24.96
|
|
$
|
20,072.00
|
|
49 – 60
|
|
$
|
25.68
|
|
$
|
20,651.00
|
|
61 – 63
|
|
$
|
26.40
|
|
$
|
21,230.00
|
Notwithstanding anything contained
in the Lease to the contrary, as long as Tenant is not in default
beyond any applicable cure period under the terms of the Lease,
Tenant shall be entitled to an abatement of Base Rent in the amount
of $18,335.00 per month for 3 consecutive full calendar months of
the Lease Term, beginning with the 1 st full calendar month of the Lease
Term (the “ Initial Base Rent Abatement Period
”). The total amount of Base Rent abated during the Initial
Base Rent Abatement Period shall equal $55,005.00 (the
“ Initial Abated Base Rent ”). In the event
Tenant is in default beyond any applicable cure period
at any time during the Lease Term or
any extensions thereof, all Initial Abated Base Rent shall
immediately become due and payable. The payment by Tenant of the
Initial Abated Base Rent in the event of a default shall not limit
or affect any of Landlord’s other rights, pursuant to this
Lease or at law or in equity. During the Initial Base Rent
Abatement Period, only Base Rent shall be abated, and all
Additional Rent and other costs and charges specified in this Lease
shall remain as due and payable pursuant to the provisions of this
Lease.
Notwithstanding anything contained
in the Lease to the contrary, as long as Tenant is not in default
beyond any applicable cure period under the terms of the Lease,
Tenant shall be entitled to an additional abatement of Base Rent in
the amount of $18,914.00 per month for 2 consecutive full calendar
months of the Lease Term, beginning with the 13
th
full calendar month of
the Lease Term (the “ Second Base Rent Abatement
Period ”). The total amount of Base Rent abated during
the Second Base Rent Abatement Period shall equal $37,828.00
(the “ Second Abated Base Rent ”). In the event
Tenant is in default beyond any applicable cure period at any time
during the Lease Term or any extensions thereof, the Second Abated
Base Rent shall immediately become due and payable. The payment by
Tenant of the Second Abated Base Rent in the event of a default
shall not limit or affect any of Landlord’s other rights,
pursuant to this Lease or at law or in equity. During the Second
Base Rent Abatement Period, only Base Rent shall be abated, and all
Additional Rent and other costs and charges specified in this Lease
shall remain as due and payable pursuant to the provisions of this
Lease.
|
|
1.04
|
“
Tenant’s Pro Rata Share ”: 2.6237%
.
|
|
|
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 63 months and 0 days. Subject to
Section 3, the Term shall commence on July 1, 2005 (the “
Commencement Date ”) and, unless terminated early in
accordance with this Lease, end on September 30, 2010 (the “
Termination Date ”).
|
|
|
1.07
|
“
Allowance(s) ”: None.
|
|
|
1.08
|
“
Security Deposit ”: $52,000.00, subject to reduction
as more fully described in Section 6.
|
|
|
1.09
|
“
Guarantor(s) ”: There are no Guarantors at this
time.
|
|
|
1.10
|
“
Broker(s) ”: Alan Bernier of Aegis Realty
Partners.
|
|
|
1.11
|
“
Permitted Use ”: General office use; provided that in
no event shall the Premises, or any portion of the Premises, be
used for the operation of (i) a quick printing business; and (ii) a
full table service, sit-down restaurant selling Mexican food and/or
South American style food.
|
3
|
|
1.12
|
“
Notice Address(es) ”:
|
|
|
|
|
|
Landlord:
|
|
Tenant:
|
|
|
|
|
CA-Emeryville
Properties Limited Partnership
|
|
(The
Premises)
|
|
c/o Equity
Office Management, L.L.C.
|
|
|
|
One Market,
Spear Tower, Suite 600
|
|
|
|
San Francisco.
California 94105
|
|
|
|
Attn: Property
Manager
|
|
|
A copy of any notices to Landlord
shall be sent to Equity Office, One Market, Spear 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.
|
|
|
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.
|
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 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
|
4
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 . Tenant’s failure to
execute and return the commencement letter, or to provide written
objection to the statements contained in the letter, within 30 days
after the date of the letter shall be deemed an approval by Tenant
of the statements contained therein. 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 the 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
|
If the
Commencement Date has not occurred on or before the Outside
Completion Date (defined below), Tenant shall be entitled to a rent
abatement following the Commencement Date of $611.60 for every day
in the period beginning on the Outside Completion Date and ending
on the Commencement Date. The “ Outside Completion
Date ” shall mean the date which is 120 days after the
later of the date this Lease is properly executed and delivered by
Tenant, the date all prepaid rental, and Security Deposits and
Guaranties required sunder this Lease are delivered to Landlord.
Landlord and Tenant acknowledge and agree that: (i) the
determination of the Commencement Date shall take into
consideration the effect of any Tenant Delays by Tenant; and (ii)
the Outside Completion Date shall be postponed by the number of
days the Commencement Date is delayed due to events of Force
Majeure.
|
|
|
3.03
|
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
|
5
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.
|
|
4.01
|
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 fourth full calendar month of
the Term, and the first 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
6
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).
The Security Deposit 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, to cure any Default
(defined in Section 18) by Tenant, or to satisfy any other loss or
damage resulting from Tenant’s Default as provided in Section
19. 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.
|
|
6.01
|
Subject to the
remaining terms of this Section 6, and provided Tenant has timely
paid all Rent due under this Lease during the 12 month period
immediately preceding the effective date of any reduction of the
Security Deposit and can demonstrate a net worth equal to or
greater than Tenant’s net worth as of the date of this Lease
(with evidence reasonably satisfactory to Landlord), Tenant shall
have the right to reduce the amount of the Security Deposit so that
the new Security Deposit amount will be $35,000.00 effective
as of the first anniversary of the Commencement Date.
Notwithstanding anything to the contrary contained herein, if
Tenant has been in default at any time prior to the effective date
of any reduction and has failed to cure such default within any
applicable cure period, then Tenant shall have no further right to
reduce the amount of the Security Deposit as described
herein.
|
|
|
6.02
|
If Tenant is
entitled to a reduction in the Security Deposit, Tenant shall
provide Landlord with written notice requesting that the Security
Deposit be reduced as provided above (the “ Reduction
Notice ”). If Tenant provides Landlord with a Reduction
Notice, and Tenant is entitled to reduce the Security Deposit as
provided herein, Landlord shall refund the applicable portion of
the Security Deposit to Tenant within 45 days after the later to
occur of (a) Landlord’s receipt of the Reduction Notice, or
(b) the date upon which Tenant is entitled to a reduction is the
Security Deposit as provided above.
|
7
|
|
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, although
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; (a)
electricity in accordance with the terms and conditions in Section
7.02; (f) access to the Building for Tenant and its employees 24
hours per day/7 days per week, subject to the terms of this Lease
and such protective services or monitoring systems, if any, as
Landlord may reasonably impose, including, without limitation,
sign-in procedures and/or presentation of identification cards; and
(g) such other services as Landlord reasonably determines are
necessary or appropriate for the Property. As of the date hereof,
landlord’s charge for after hours heating and air
conditioning service is $35.00 per hour, subject to change from
time to time.
|
|
|
7.02
|
Electricity
used by Tenant in the Premises shall, at Landlord’s option,
be paid for by Tenant either: (a) through inclusion in Expenses
(except as provided for excess usage); (b) by u separate charge
payable by Tenant to Landlord; or Q by separate charge billed by
the applicable utility company and payable directly by Tenant.
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 !8&d’ that which
Landlord reasonably deems to be standard for the Building. Landlord
shall have the right to measure electrical usage by commonly
accepted methods, including the installation of measuring devices
such as submeters and check meters. If it is determined that Tenant
is using excess electricity, Tenant shall pay Landlord Additional
Rent for 1h8 cost of such excess electrical usage and for the cost
of purchasing and installing the measuring device(s).
|
|
|
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, improvement or alternations, utility interruptions r
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
|
8
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 (defined in Section 9.03)
(collectively, “ Leasehold Improvements ”) shall
remain upon the Premises at the end of the Term without
compensation to Tenant, provided that Tenant, at its expense, in
compliance with the National Electric Code or other applicable Law,
shall remove any Cable (defined in Section 9.01 below). In
addition, Landlord, by written notice to Tenant at least 30 days
prior to the Termination Date, may require Tenant, at its expense,
to remove 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 (the Cable and such other items collectively are
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 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, including any Initial
Alterations or Landlord Work, as such terms may be defined in the
Work Letter attached as Exhibit C , may request in writing
that Landlord advise Tenant whether the Alteration, including any
Initial Alterations or Landlord Work, or any portion thereof, 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 or other improvements are Required
Removables. Notwithstanding the foregoing, Tenant shall not be
required to remove any portion of the Landlord Work shown on the
Plans as of the date of this Lease, as such terms are defined in
Exhibit C .
|
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, fiber, 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. Subject to the terms of Section 15 below, to the
extent Landlord is not reimbursed by insurance proceeds, Tenant
shall reimburse Landlord for the cost of repairing damage to the
Budding caused by the act of Tenant, Tenant Related Parties and
their respective
|
9
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 [or 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 0[improvements 0[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 he 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 he 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 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. In addition, Tenant shall pay Landlord a fee for
Landlord’s oversight and coordination of any non-Cosmetic
Alterations equal to 10% of the cost of the 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 the
Law.
|
10
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(ies) which directly or
indirectly 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 Transfer in violation of this Section shall, at
Landlord’s option, be deemed a Default by Tenant as described
in Section 18, and shall be 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
|
11
proposed effective date of the
Transfer, although Landlord may require Tenant to execute a
reasonable amendment or other document reflecting such reduction or
termination. 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 t8 8 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, or in the event of a
Transfer to an Affiliated (defined below), Tenant continues to have
a net worth equal or greater than Tenant’s net worth at the
date of this Lease or the Affiliate has a net worth equal to
Tenant’s net worth at the date of this Lease; (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 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.
|
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 N
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 and, if Tenant fails to do so, Tenant shall
be deemed in Default under this Lease and, in addition to any other
remedies available to Landlord as a result of such Default by
Tenant, Landlord, at its option, 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.
12
|
13.
|
Indemnity
and Waiver of Claims.
|
Except to the extent caused by the
negligence or willful misconduct of Landlord or any Landlord
Related Parties (defined below), 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 (defined below) 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.
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 or protective services, personnel or
equipment, or (e) any matter not within the reasonable control of
Landlord.
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; (b) Property/Business
Interruption Insurance written on an All Risk or Special Cause of
Loss Form, 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 lease $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 Landlord and its
successors as the interest of such designees shall appear. In
addition, Landlord shall be named as a loss payee with respect
to
13
Property/Business Interruption Insurance on the
Leasehold Improvements. 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,
together with such other insurance coverage as Landlord, in its
reasonable judgment, may elect to maintain.
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. For the purposes of this waiver, any
deductible with respect to a party’s insurance shall be
deemed covered by and recoverable by such party under valid and
collectable policies of insurance.
|
|
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 270 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 or Premises
occurs.
|
|
|
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
|
14
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 or endorse over 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. In
no event shall Landlord be required to spend more for the
restoration than the proceeds received by Landlord, whether
insurance proceeds or proceeds from Tenant. 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 use 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.
|
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 as of the effective date of any
order granting possession to, or vesting legal title in, the
condemning authority. 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 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 apart of the
Premises is
15
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 pur
|