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THE HAMM?S BUILDING OFFICE LEASE 1550 BRYANT STREET SAN FRANCISCO, CALIFORNIA HAMMS BUILDING ASSOCIATES ?Landlord

Office Lease Agreement

THE HAMM?S BUILDING OFFICE LEASE 1550 BRYANT STREET SAN FRANCISCO, CALIFORNIA HAMMS BUILDING ASSOCIATES ?Landlord | Document Parties: HAMMS BUILDING ASSOCIATES You are currently viewing:
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HAMMS BUILDING ASSOCIATES

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Title: THE HAMM?S BUILDING OFFICE LEASE 1550 BRYANT STREET SAN FRANCISCO, CALIFORNIA HAMMS BUILDING ASSOCIATES ?Landlord
Governing Law: California     Date: 11/14/2006
Industry: Recreational Products     Sector: Consumer Cyclical

THE HAMM?S BUILDING OFFICE LEASE 1550 BRYANT STREET SAN FRANCISCO, CALIFORNIA HAMMS BUILDING ASSOCIATES ?Landlord, Parties: hamms building associates
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Exhibit 10.33

THE HAMM’S BUILDING

OFFICE LEASE

1550 BRYANT STREET

SAN FRANCISCO, CALIFORNIA

HAMMS BUILDING ASSOCIATES

—Landlord—

DIGITAL RIGHTS AGENCY

—Tenant—

 


TABLE OF CONTENTS

 

          Page

SECTION 1.

   DEFINITIONS    2

SECTION 2.

   PREMISES    5

SECTION 3.

   TERM; CONDITION OF PREMISES    5

SECTION 4.

   RENTAL    6

SECTION 5.

   ESCALATION RENT    7

SECTION 6.

   USE AND ACCESS TO PREMISES    8

SECTION 7.

   SERVICES    9

SECTION 8.

   ALTERATIONS    10

SECTION 9.

   REPAIRS; LANDLORD’S RESERVATION OF RIGHTS    10

SECTION 10.

   DAMAGE OR DESTRUCTION    11

SECTION 11.

   SUBROGATION    12

SECTION 12.

   INSURANCE    12

SECTION 13.

   INDEMNIFICATION    13

SECTION 14.

   COMPLIANCE WITH LEGAL REQUIREMENTS    13

SECTION 15.

   ASSIGNMENT AND SUBLETTING    14

SECTION 16.

   RULES AND REGULATIONS    15

SECTION 17.

   ENTRY BY LANDLORD    16

SECTION 18.

   EVENTS OF DEFAULT    16

SECTION 19.

   TERMINATION UPON DEFAULT    17

SECTION 20.

   EMINENT DOMAIN    18

SECTION 21.

   ESTOPPEL CERTIFICATE    18

SECTION 22.

   SURRENDER OF PREMISES; HOLDING OVER    18

SECTION 23.

   SECURITY DEPOSIT    19

SECTION 24.

   LANDLORD’S LIABILITY    20

SECTION 25.

   BROKERS    20

SECTION 26.

   SMOKING    20

SECTION 27.

   ENTIRE AGREEMENT    20

SECTION 28.

   ILLEGALITY OR UNENFORCEABILITY OF PORTION OF LEASE    21

SECTION 29.

   GOVERNING LAW    21

SECTION 30.

   QUIET ENJOYMENT    21

SECTION 31.

   SIGNAGE    21

SECTION 32.

   SUBORDINATION    21

 

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TABLE OF CONTENTS (cont.)

          Page

SECTION 33.

   ATTORNEYS FEES    21

SECTION 34.

   RELOCATION OF TENANT    22

SECTION 35.

   NOTICES    22

SECTION 36.

   TENANT AUTHORITY    23

SECTION 37.

   EXHIBITS    23

Exhibit A—Legal Description

Exhibit B—Work Letter

Exhibit C—Commencement Date Agreement

Exhibit D—Rules and Regulations

 

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This Lease (“Lease”) is entered into between HAMMS BUILDING ASSOCIATES, a California Limited Partnership (“Landlord”), and DIGITAL RIGHTS AGENCY, a California limited liability company (“Tenant”).

Recitals

A. Landlord is the owner of real property (“Real Property”) located at 1550 Bryant Street, San Francisco, California, and the building (“Building”) located on it. The Real Property and the Building are collectively the “Property.”

B. Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord the Premises (as defined below) for the term and subject to the terms, covenants, agreements, and conditions in this Lease.

For good and valuable consideration the receipt and adequacy of which are acknowledged, the parties agree as follows:

Basic Lease Information

 

Date:    As of July 19, 2006
Landlord:    HAMMS BUILDING ASSOCIATES, a California Limited Partnership
Tenant:    DIGITAL RIGHTS AGENCY, a California limited liability company
Premises:    That portion of the 3rd floor designated on Exhibit A and known as Suite 305.
Rentable Area of Premises:    3,039 rentable square feet
Estimated Commencement Date:    Later of August 1, 2006, or substantial completion of the Landlord’s Work as described in Exhibit B .
Termination Date:    The last day of the 50th calendar month following the Commencement Date which is estimated to be September 30, 2010
Base Rent   

Months

  

Monthly

  

Annual

      1-2    0
   3-14    $5,318.25    $63,819.00
   15-26    $5,571.50    $66,858.00
   27-38    $5,824.75    $69,897.00
   39-50    $6,078.00    $72,936.00

 

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   Upon Lease execution, Tenant shall pay the third month’s rent in the amount of $5,318.25 to Landlord.
Base Year:    Calendar Year 2006
Security Deposit:    Upon Lease execution, Tenant shall pay the Security Deposit in the amount of $10,636.50 to Landlord.
Tenant’s Percentage Share Of Operating Expenses Escalations and Tenant’s Percentage Share of Property Tax Escalations:    1.67%
Parking    One space
Exhibits:   

Exhibit A         Description of Premises

Exhibit B         Work Letter

Exhibit C         Commencement Date Agreement

Exhibit D         Rules and Regulations

Tenant’s Address for Notice:   

1550 Bryant Street, Suite 305

San Francisco, California 94103

   Attention: President
Landlord’s Address for Notice:   

Hamms Building Associates

1550 Bryant Street, Suite 825

San Francisco, California 94103

Tenant’s Broker:    NONE

Section 1. Definitions.

As used in this Lease, the following terms shall have the meanings specified in this Section 1.

Alterations is defined in Section 8.

Base Operating Expenses means the Operating Expenses paid or incurred by Landlord in the Base Year.

Base Property Taxes means the amount of Property Taxes for the tax year ending June 30 of the Base Year.

 

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Base Rent means the Base Rent as set forth in the Basic Lease Information.

Base Year means the calendar year specified in the Basic Lease Information as the Base Year.

Building means the building constructed on the Real Property known as 1550 Bryant Street, San Francisco, California, commonly known as the Hamm’s Building, any property interest in the area of The Hamm’s Building and all other improvements on or appurtenances to the Real Property or the streets abutting the Real Property. The Building includes, but is not limited to, an office building with twelve (12) floors of office space and an open-air parking lot located as shown on the attached site plan.

Common Area means the total area on a floor consisting of rest rooms, janitor, telephone and electrical closets, mechanical areas, public corridors providing access to tenant space, public stairs, elevator shafts and pipe shafts, together with their enclosing walls.

Deposit is defined in Section 23.

Escalation Rent is defined in Section 4(a).

Event of Default is defined in Section 18.

Landlord’s Work is defined in Exhibit B .

Legal Requirements is defined in Section 14.

Tenant’s Percentage Share means the percentage figure specified as Tenant’s Percentage Share in the Basic Lease Information. Tenant’s Percentage Share has been obtained by dividing the net rentable area of the Premises, as specified in the Basic Lease Information, by the total net rentable area of the Building, which is 182,352 square feet, and multiplying that quotient by one hundred (100). In the event the rentable area of the Premises is increased or decreased by the addition to or deletion from the Premises of any office space, Tenant’s percentage share shall be appropriately adjusted. For the purposes of Section 4, Tenant’s Percentage Share shall be based on the number of days during the calendar year in which this change occurs.

Operating Expenses means (a) all reasonable costs of management, operation and maintenance of the Building determined by generally accepted accounting principles, including without limitation: wages, salaries and payroll burden of employees excluding employees above the rank of Building Manager, property management fees and other related compensation; janitorial, maintenance, security and other services; Building office rent or rental value for a building office as small as reasonably practical to operate the building; power, water, waste disposal and other utilities; materials and supplies; maintenance and repairs (including the repair and replacement of glass and return to normal and the roof covering or membrane); permit and license costs; insurance premiums and the deductible portion of any insured loss under Landlord’s insurance; accounting, legal or other professional fees of independent service providers who are not employees of Landlord incurred in connection with operating the Building and the calculation of Operating Expenses and Property Taxes; and (b) the cost of any capital improvements made to the Building by Landlord after the Base

 

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Year, the cost to be amortized over the useful life of the capital improvements, together with interest on the unamortized balance at the rate equal to that paid by Landlord on funds borrowed for the purpose of constructing or installing those capital improvements. Operating expenses shall not include: property taxes; depreciation on the Building; costs of tenant improvements; real estate brokers’ commissions; interest; expenses incurred by Landlord in enforcing leases of other tenants in the Building, and capital items other than those referred to in clause (b). Actual Operating Expenses for both the Base Year and each subsequent calendar year will be adjusted to equal Landlord’s reasonable estimate of Operating Expenses had ninety-five (95) percent of the building been occupied.

Premises means the portion of the Building located on the floor or floors specified in the Basic Lease Information which is cross-hatched on the Floor plan or plans attached to this Lease as Exhibit A .

Property Taxes means all real property taxes and general, special or district assessments or other governmental impositions, of whatever kind, imposed on or by reason of the ownership or use of the Property; governmental charges, fees or assessments for police, fire or other governmental services; service payments in lieu of taxes and taxes and assessments of every kind levied in addition to, in lieu of or in substitution for existing or additional real or personal property taxes on the Property; and all real estate tax consultant expenses and attorney fees of consultants and attorneys who are not employees of Landlord incurred for the purpose of maintaining an equitable assessed valuation of the Building or contesting the validity of any taxes, assessments or charges described above.

Rentable Area means the rentable area of the Premises specified on the Basic Lease Information. If any office space is added to or deleted from the Premises, the rentable area of the space added or deleted shall mean: (a) as to an entire floor added to or deleted from the Premises, all areas within outside permanent Building walls, measured to the inside glass surface of outside permanent Building walls, including rest rooms; janitor, telephone, and electrical closets; allocated mechanical areas and columns and projections necessary to the Building, but excluding public stairs, elevator shafts, and pipe shafts, together with their enclosing walls; (b) as to a portion of a floor added to or deleted from the Premises, the aggregate of the usable area of the portion of the floor added to or deleted from the Premises, plus the result obtained by multiplying the area of the Common Area on this floor by a fraction, the numerator of which is the aggregate of the usable area of the portion of the floor added to or deleted from the Premises and the denominator of which is the usable area of all tenant space on the floor.

Tenant Delay means any delay in the substantial completion of the work described in Exhibit B which occurs as a result of (i) special work, changes, alterations or additions requested by Tenant in the design or finish in any part of the Premises after approval of the Design Documents; as described in the Workletter); (ii) Tenant’s delay in submitting plans, supplying information, approving plans, specifications or estimates, giving authorizations or otherwise; (iii) Tenant’s failure to approve and pay for such Tenant Work as Landlord undertakes to complete at Tenant’s expense; or (iv) the failure to perform or comply with any obligation or condition of Exhibit B.

 

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Term is defined in Section 3 of this Lease.

Section 2. Premises.

(a) Landlord leases to Tenant, and Tenant leases from Landlord the Premises for the Term and subject to the terms, covenants, agreements, and conditions set forth in this Lease.

(b) During the Term of this Lease, Tenant shall have the right to use the conference room on the first floor and the penthouse in the Building (the “Common Facilities”) on a non-exclusive basis with the other tenants. The Common Facilities shall be subject to a reservation system and to such rules and regulations regarding such usage as Landlord shall promulgate from time to time. Notwithstanding the foregoing, Landlord reserves the right, upon notice to Tenant, to terminate the use of the Common Facilities as common area amenities, if and during the period that Landlord withdraws the right for tenants of the Building to use the same.

(c) During the Term of this Lease, Tenant shall have the right to use the number of Parking Spaces set forth in the Basic Lease Information at the prevailing rate for such spaces as determined by Landlord from time to time in its sole discretion. Landlord may change the rental rate charged from time-to-time upon not less than thirty (30) days’ notice to Tenant. The right to use the Parking Spaces under this Lease shall terminate upon the occurrence of an Event of Default under the Lease or upon thirty (30) day’s notice from Landlord to Tenant if Landlord ceases or reduces parking operations, including without limitation if Landlord does not continue to lease the property upon which the parking lot is located. Tenant agrees that the Landlord shall not be responsible in any way for any loss, damage, theft or other damages arising out of the use of Landlord’s parking facilities. The use of the parking spaces shall be subject to such rules and regulations as Landlord may establish from time to time.

Section 3. Term; Condition of Premises; Right of Termination.

(a) The term (“Term”) of this Lease shall commence on the Commencement Date and, unless sooner terminated as later provided, shall end on the Termination Date.

(b) Except for the Landlord’s Work described in the Work Letter attached to this Lease as Exhibit B which Landlord shall complete at Landlord’s sole cost and expense, Landlord shall deliver to Tenant the Premises on the Commencement Date “as is”, in its then existing condition. Tenant is responsible for the installation and maintenance of all cabling serving the Premises.

(c) If Landlord cannot deliver the Premises to Tenant on or before the estimated Commencement Date for any reason other than as a result of a Tenant Delay, this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting from nondelivery, but in that event such delay in delivery shall also extend the Term of this Lease by an equal number of days unless the delay is the result of a Tenant Delay. Landlord and Tenant shall enter into a letter in the form of Exhibit C confirming the actual Commencement Date and the Expiration Date if any of these dates are different from the dates set forth in the Basic Lease Information. The Commencement Date of the Lease will not be changed if delivery of the Premises is delayed by reason of a Tenant Delay.

 

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(d) Tenant shall have a one time right to terminate the Lease upon the following terms and conditions:

(i) The termination option shall be exercised, if at all on or before the last day of the 18th month of the Term (“Exercise Date”) by sending written notice to Landlord of Tenant’s intent to terminate the Lease on the Termination Effective Date (as defined in (ii) below).

(ii) The effective date of the termination shall be on the first day of the 25th month of the Term (“Termination Effective Date”).

(iii) Tenant shall not be in default under the Lease either at the Exercise Date or the Termination Effective Date.

(iv) Tenant shall pay a termination fee on the Exercise Date equal to (i) $11,649.00, which is two month’s rent based on the base rent schedule for months 27-38 of $23 per rentable square foot; plus (ii) the costs of the unamortized tenant improvements and leasing commissions (which is estimated to be approximately $44,346.00 but which amount shall be adjusted based upon the actual costs of the tenant improvements), together with interest thereon computed at the rate of 8% per annum

Section 4. Rental.

(a) Tenant shall pay to Landlord throughout the Term as rental for the Premises the Base Rent. In addition to the Base Rent, for each calendar year subsequent to the Base Year the Base Rent shall be increased by (i) Tenant’s Percentage Share of the total dollar increase, if any, in Operating Expenses paid or incurred by Landlord in that year over the Base Year Operating Expenses and (ii) Tenant’s Percentage Share of the total dollar increase, if any, in Property Taxes paid or incurred by Landlord in that year over the Base Year Property Taxes. The increased rental due pursuant to this Section 4(a) is the Escalation Rent.

(b) Monthly Rental shall be paid to Landlord, in advance, on or before the first day of the Term of this Lease and on or before the first day of each successive calendar month during the Term of this Lease. In the event the Term of this Lease commences on a day other than the first day of a calendar month or ends on a day other than the last day of a calendar month, the monthly rental for the first and last fractional months of the Term of this Lease shall be appropriately prorated.

(c) All sums of money due to Landlord under this Lease, not specifically characterized as rental, shall constitute additional rent and shall be due within thirty (30) days after receipt by Tenant of a billing. If any sum is not paid when due, it shall be collectible as additional rent with the next installment of rental falling due.

(d) Tenant acknowledges that late payment of rent and other sums due under this Lease after the expiration of any applicable cure period under Section 18(a) will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be difficult to ascertain. These costs include, but are not limited to, processing and accounting charges and late charges which may be imposed on Landlord by the terms of any trust deed covering the Premises. Accordingly, if any installment of rent or any other

 

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sums due from Tenant are not received within five (5) business days of its due date, or if a cure period is applicable under Section 18(a), prior to the expiration of the cure period, Tenant shall pay to Landlord a late charge equal to ten percent (10%) of the overdue amount. The parties agree that the late charge represents a fair and reasonable estimate of the costs Landlord will incur because of late payment. Acceptance of the late charge by Landlord shall not constitute a waiver of Tenant’s default for the overdue amount, nor prevent Landlord from exercising the other rights and remedies granted under this Lease.

 

______ [Initials of landlord]

   ______ [Initials of Tenant]

(e) If any installment of rent or any other sums due from Tenant are not received within five (5) business days of its due date, or if a cure period is applicable under Section 18(a), prior to the expiration of the cure period, such amount will bear interest from the due date until paid at the rate of ten percent (10%) per year. However, interest shall not be payable on late charges incurred by Tenant nor on any amounts on which late charges are paid by Tenant to the extent this interest would cause the total interest to be in excess of that legally permitted. Payment of interest shall not excuse or cure any default by Tenant.

(f) All payments due shall be paid to Landlord, without deduction or offset, in lawful money of the United States of America at Landlord’s address for notices under this Lease or to another person or at another place as Landlord may designate by notice to Tenant. If Tenant pays by check and the check is returned for non-sufficient funds more than once, upon request of the Landlord, the Tenant shall make future payments by cashier’s check.

Section 5. Escalation Rent.

Escalation Rent shall be paid monthly on an estimated basis, with subsequent annual reconciliation, in accordance with the following procedures:

(a) No later than fifteen (15) days after to the end of the Base Year and no later than fifteen (15) days after to the end of each subsequent calendar year, or as soon after that time as practicable, Landlord shall give Tenant notice of Landlord’s estimate of any Escalation Rent due under Section 4(a) for the ensuing calendar year with respect to (i) Operating Expenses and/or (ii) Property Taxes. On or before the first day of each month during the ensuing calendar year, Tenant shall pay to Landlord one-twelfth (1/12th) of the estimated Escalation Rent. If Landlord fails to give notice as required in this Section, Tenant shall continue to pay on the basis of the prior year’s estimate until the month after that notice is given. If at any time it appears to Landlord that the Escalation Rent for Operating Expenses and/or Property Taxes for the current calendar year will vary from the estimate, Landlord may, by notice to Tenant, revise the estimate for that year, and subsequent payments by Tenant for that year shall be based on the revised estimate.

(b) Within ninety (90) days after the close of each calendar year, or as soon after the ninety (90) day period as practicable, Landlord shall deliver to Tenant a statement of (i) the actual Escalation Rent for that calendar year with respect to Operating Expenses and (ii) the actual Escalation Rent for that calendar year with respect to Property Taxes. At Tenant’s request, Landlord

 

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shall provide Tenant reasonable supporting detail underlying the calculations of Operating Expenses and/or Property Taxes. If Landlord’s statement discloses that Tenant owes an amount that is less than the estimated payments for the calendar year for either Operating Expenses or Property Taxes previously made by Tenant, Landlord shall credit the excess first against any sums then owed by Tenant, and then against the next payments of rental due. If Landlord’s statement discloses that Tenant owes an amount that is more than the estimated payments for the calendar year previously made by Tenant for either Operating Expenses or Property Taxes, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the statement.

(c) Landlord shall maintain at all times during the term of this Lease, at the office of Landlord in the Building or such other office as Landlord may designate full, complete and accurate books of account and records prepared in accordance with generally accepted accounting principles with respect to Escalation Rent, and shall retain such books and records, as well as contracts, bills, vouchers, and checks, and such other documents as are reasonably necessary to properly audit the Escalation Rent. Upon reasonable notice from Tenant, Landlord shall make available for Tenant’s inspection (or inspection performed by Tenant’s accountant and/or consultants) at Landlord’s office in the Building, during normal business hours, Landlord’s books and records relating to the Escalation Rent for the previous calendar year. If Tenant’s inspection reveals that Tenant was overcharged for Escalation Rent for Operating Expenses or Escalation Rent for Property Taxes and Landlord does not dispute such findings, the amount of the overcharge shall be promptly refunded to Tenant.

(d) The amount of Escalation Rent for Operating Expenses and the amount of Escalation Rent for Property Taxes for any fractional year in the Term shall be appropriately prorated. The proration of Operating Expenses for the calendar year in which termination occurs shall be calculated on the basis of a fraction of the Operating Expenses for that entire calendar year; the proration of Property Taxes for the calendar year in which termination occurs shall be calculated on the basis of a fraction of the Property Taxes for that entire calendar year, but shall exclude any Property Taxes attributable to any increase in the assessed valuation of the Building occurring after termination. The termination of this Lease shall not affect the obligations of the parties pursuant to Section 5(b) to be performed after the termination.

Section 6. Use and Access to Premises.

The Premises shall be used for general office use. In no event shall (i) the maximum floor load exceed 40 pounds per rentable square foot, including personnel, furniture and equipment or (ii) the regular occupancy of the Premises exceed one person per 160 rentable square feet of space without Landlord’s prior written consent. Tenant acknowledges that the heating and ventilating system is designed to accommodate density of one person per 250 rentable square feet. Tenant shall not do or permit to be done on the Premises, nor bring or keep or permit to be brought or kept in the Premises, anything (a) which is prohibited by or in conflict with any law, ordinance, or governmental rule or, (b) which is prohibited by the standard form of fire insurance policy or, (c) which will increase the existing rate of or affect fire or other insurance on the Building or its contents or cause a cancellation of any insurance policy covering the Building or any part of it or its contents. Tenant shall not use or store in the Premises any hazardous or toxic substances, with the sole exception of reasonably necessary substances that are kept in reasonably necessary quantities for normal

 

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office operations, provided that their use and storage are in accordance with applicable laws. Tenant shall not do or permit anything to be done on the Premises that will obstruct or interfere with the rights of other tenants of the Building, or injure or annoy them, or use or allow the Premises to be used for any unlawful purposes, nor shall Tenant cause, maintain, or permit any nuisance or waste on or about the Premises. Tenant shall have access to the Premises 24 hours a day, 365 days a year, subject however to force majeure events.

Section 7. Services.

(a) Landlord shall maintain the Common Areas of the Building, including lobbies, stairs, elevators, corridors, rest rooms, all exterior landscaping, windows, the mechanical, plumbing, and electrical equipment serving the Building, and the structure itself, in reasonably good order and condition so as to meet the reasonable needs of Tenant, except for damage, excluding normal wear and tear, caused by the Tenant. Damage caused by Tenant, other than normal wear and tear by Tenant, shall be repaired by Landlord at Tenant’s expense. The standard of maintenance shall be equal to that of other office buildings of a similar class in San Francisco, California. If Landlord engages an outside vendor to perform a work order or provide equipment or services for or on behalf of Tenant, Landlord shall charge an administrative fee equal to 15% of the cost of such work order.

(b) Landlord shall furnish (i) electricity for normal business use, including lighting and the operation of office machines (“Base Electricity”), (ii) heat and air conditioning, to the extent reasonably required for the comfortable occupancy by Tenant in Tenant’s use of the Premises during the period from 7:00 a.m. to 7:00 p.m. on weekdays, except holidays, or a shorter period as may be prescribed by applicable policies or regulations adopted by any utility or governmental agency, (iii) elevator service, (iv) lighting replacement, for building standard lights, (v) rest room supplies, (vi) window washing with reasonable frequency, (vii) water for the rest rooms and kitchen areas, and (viii) security guard services and daily janitor services during the times and in the manner that these services are customarily furnished in comparable office buildings in the area (“Standard Utilities and Services”). Landlord may establish reasonable measures to conserve energy and water, including but not limited to, automatic light shut off after hours and efficient lighting forms, so long as these measures do not unreasonably interfere with Tenant’s use of the Premises. If Tenant uses more than its allocable share of the Standard Utilities and Services, Tenant shall pay for any non-standard utilities or services used. If Landlord determines that Tenant is using electricity in excess of the Base Electricity, Landlord shall have the right either (i) to install a meter, at Tenant’s cost, to measure the amount of electricity consumption in the Premises or (ii) to reasonably estimate the amount of electricity usage in excess of the Base Electricity and Tenant shall pay all such costs in excess of the Base Electricity.

(c) Landlord shall not be in default under this Lease, nor be liable for any damages resulting from, nor shall the required rental be abated because of (i) any reasonably necessary installation, use, or interruption of use of any equipment in connection with furnishing the previously listed services, (ii) failure to furnish or delay in furnishing these services, when failure or delay is caused by accident or conditions beyond the reasonable control of Landlord or by necessary repairs or improvements to the Premises or to the Building, or (iii) the limitation, curtailment, rationing, or restrictions on use of water, electricity, gas, or any other form of

 

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energy serving the Premises or the Building. Landlord shall use reasonable efforts to diligently remedy interruptions in the furnishing of these services. Notwithstanding the foregoing, Landlord shall make reasonable efforts not to disrupt Tenant’s use of the Premises.

Section 8. Alterations.

Tenant shall not make or allow any alterations, additions, or improvements to the Premises or any part of the Premises (“Alterations”), without Landlord’s prior written consent. Landlord may in its discretion withhold or condition approval of Alterations that affect the building systems or structure of the Building. Landlord shall not unreasonably withhold its consent to the installation of furnishings, fixtures, equipment, or decorative improvements, none of which shall affect Building systems or the structure of the Building, and the repainting or recarpeting of the Premises. If and to the extent that any Alterations require improvements to the Premises or to the Building to comply with applicable Legal Requirement (“Compliance Improvements”), if Tenant elects to undertake such Alterations, Tenant shall be responsible for the payment of the costs of all such Compliance Improvements. All Alterations shall immediately become Landlord’s property and, at the end of the Term, shall remain on the Premises without compensation to Tenant, unless Landlord elects by notice to Tenant at the time of installation to have Tenant remove any Alterations that are peculiar to Tenant’s use of the Premises and are not normally required or used by other tenants. In this event, Tenant shall bear the cost of restoring the Premises to their condition prior to the installment of the Alterations. All Alterations shall comply with the requirements of the Rules and Regulations which are Exhibit D and the Tenant Construction Standards and Requirements which is Schedule 1 to the Rules and Regulations.

Section 9. Repairs; Landlord’s Reservation of Rights.

(a) 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) window coverings; (c) interior partitions; (d) doors; (e) the interior side of demising walls; (f) electronic, phone and data cabling and related equipment that is installed by or for the exclusive benefit of Tenant (collectively, “Cable”); (g) supplemental air conditioning units, kitchens, including hot water heaters, plumbing, and similar facilities exclusively serving Tenant; and (h) 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.

(b) 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 15% of the cost of the repairs. Tenant hereby waives all right to make repairs at the expense of Landlord or in lieu thereof to vacate the Premises and its other similar rights as provided in California Civil Code

 

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Sections 1932(1), 1941 and 1942 or any other Legal Requirement (whether now or hereafter in effect). In addition to the foregoing, Tenant shall be responsible for repairing all special tenant fixtures and improvements, including garbage disposals, showers, plumbing, and appliances.

(c) If Landlord performs any work to the Premises at Tenant’s request or provides any additional services (“Additional Work”) to Tenant, including without limitation repairs to appliances or fixtures within Tenant’s Premises, Tenant shall pay the reasonable cost of the Additional Work, together with an administrative charge in an amount equal to 15% of the cost of the Additional Work.

(d) Tenant accepts the Premises as being in the condition in which Landlord is obligated to deliver the Premises, subject to the tenant improvements, if any, that Landlord has agreed to make. Landlord has no obligation and has made no promise to alter, remodel, improve, repair, decorate, or paint the Premises or any part of them, except as specifically set forth in Section 3. Landlord has made no representations respecting the condition of the Premises or the Building, except as specifically set forth in this Lease.

(e) Landlord reserves the right, at any time and from time to time, without the same constituting an actual or constructive eviction, but provided that Landlord does not unreasonably interfere with Tenant’s use and occupancy of the building, to (i) make alterations, additions, repairs, improvements to or in, or to decrease the size of area of all or any part of the Building, the fixtures and equipment therein, the heating, ventilation, air-conditioning, plumbing, electrical, fire protection, life safety, security and all mechanical systems of the building (“Building Systems”), the common areas and all other parts of the Building; (ii) to change the arrangement and/or location of entrances or passageways, doors and doorways, corridors, elevators, stairs, toilets and other public parts of the Building and to create additional rentable areas through use or enclosure of common areas; (iii) to change the Building’s name or street address or to change the room number or numbers of the Premises; (iv) to install, affix and maintain any and all signs on the exterior and interior of the Building.

Section 10. Damage or Destruction.

(a) In the event the Premises or any portion of the Building necessary for Tenant’s occupancy are damaged by fire, earthquake, act of God, the elements, or other casualty, within thirty (30) days after that event, Landlord shall notify Tenant of the estimated time, in Landlord’s reasonable judgment, required for repair or restoration. If the estimated time is one hundred and fifty (150) days or less after the commencement of the physical work and one hundred and eighty (180) days or less after the casualty event, Landlord shall proceed promptly and diligently to adjust the loss with applicable insurers, to secure all required governmental permits and approvals, and to repair or restore the Premises or the portion of the Building necessary for Tenant’s occupancy. This Lease shall remain in full force, except that for the time unusable, Tenant shall receive a rental abatement for that part of the Premises rendered unusable in the conduct of Tenant’s business.

(b) If the estimated time for repair or restoration is in excess of one hundred and fifty (150) days after the commencement of the physical work or one hundred and eighty (180) days after the casualty event, Tenant or Landlord may elect to terminate this

 

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Lease as of the date of the casualty event by giving notice to the other party within fifteen (15) days following receipt of Landlord’s notice of the estimated time for repair.

(c) Notwithstanding the foregoing, Landlord’s obligation to restore or repair the Building shall be limited to the amount of insurance proceeds actually received by Landlord for such reconstruction or repair.

Section 11. Subrogation.

Landlord and Tenant shall each obtain from their respective insurers under all policies of fire, theft, public liability, worker’s compensation, and other insurance maintained during the term of this Lease covering the Building, or any portion of it, or operations in it, a waiver of all rights of subrogation that the insurer of one party might have against the other party. Landlord and Tenant shall each indemnify the other against any loss or expense, including reasonable attorney fees, resulting from the failure to obtain this waiver.

Section 12. Insurance.

(a) Public Liability . Tenant, at its own cost and expense, shall keep and maintain in full force and effect during the Term the following insurance coverages, written by an insurance company licensed by and admitted to issue insurance in the State of California, with a general policyholders’ rating of “A” or better and a financial size ranking of “Class VIII” or higher, in the most recent edition of Best’s Insurance Guide, in the form customary to the locality, (i) commercial general liability insurance, including contractual liability coverage, insuring Tenant’s activities with respect to the Premises and/or the Building against loss, damage or liability for personal injury or death of any person or loss or damage to property occurring in, upon or about the Premises, with a minimum coverage of Two Million Dollars ($2,000,000) per occurrence/Three Million Dollars ($3,000,000) general aggregate, (ii) fire damage legal liability insurance and personal/advertising injury insurance (which shall not be subject to the contractual liability exclusion), each in the minimum amount of One Million Dollars ($1,000,000), (iii) medical payments insurance in the minimum amount of Ten Thousand Dollars ($10,000), (iv) worker’s compensation insurance in statutory amounts, and (v) if Tenant operates owned, leased or non-owned vehicles on the Property, comprehensive automobile liability insurance with a minimum coverage of $1,000,000 per occurrence/Two Million Dollars ($2,000,000) general aggregate.

(b) Insurance Certificates . Tenant shall furnish to Landlord, on or before the Commencement Date and thereafter prior to the expiration of each policy, an original certificate of insurance issued by the insurance carrier of each policy of insurance carried by Tenant pursuant to this Section. The certificates shall expressly provide that the policies shall not be cancelable or subject to reduction of coverage or otherwise be subject to modification except after thirty (30) days’ prior written notice to the parties named as insureds. Landlord, its successors and assigns, and any nominee of Landlord holding any interest in the Premises, including, without limitation, Landlord’s members, Landlord’s property manager, Landlord’s parking operator, and the holder of any fee or leasehold mortgage, shall be named as an additional insured under each policy of insurance maintained by Tenant pursuant to this Lease.

 

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The policies and certificates shall further provide that the coverage shall be primary, and that any coverage carried by Landlord shall be secondary and noncontributory with respect to Tenant’s policy.

Section 13. Indemnification.

Tenant waives all claims against Landlord for damage to any property or injury or death of any person on the Premises arising at any time and from any cause except to the extent resulting from the gross negligence or willful misconduct of Landlord. Tenant shall indemnify and hold Landlord harmless from and defend Landlord against all claims, liability, damage, or loss arising out of any injury or death of any person or damage to or destruction of property to the extent attributable to the action or inaction of Tenant, its agents, contractors, or employees, except to the extent resulting from the gross negligence or willful misconduct of Landlord or its agents, contractors, or employees. Tenant shall also hold Landlord harmless from any liability, cost, or expense arising from Tenant’s use or storage on the property of any hazardous or toxic substance. These indemnity obligations shall include reasonable attorney fees, investigation costs, and all other reasonable costs incurred by the indemnified party from the first notice that any claim or demand is to be made or may be made. The provisions of this Section shall survive the termination of this Lease for any event occurring prior to the termination.

Section 14. Compliance with Legal Requirements.

(a) At Tenant’s sole cost, Tenant shall promptly comply with all laws and governmental rules now or later in force; with the requirements of any board of fire underwriters or other similar body now or in the future constituted; with any direction or occupancy certificate issued by public officers (“Legal Requirements”), insofar as they relate to (i) the use, or occupancy of the Premises or (ii) to Alterations undertaken by Tenant, except that Tenant shall not be responsible for (a) structural changes or changes to the electrical, mechanical, or plumbing systems of the Building in connection with the Tenant Improvements constructed in accordance with Exhibit B and (b) work necessitated by defects in the construction of the Building. Landlord shall comply in a timely manner with all Legal Requirements that are not Tenant’s responsibility under this Section to th


 
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