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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
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Page |
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SECTION 1.
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DEFINITIONS |
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2 |
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SECTION 2.
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PREMISES |
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5 |
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SECTION 3.
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TERM;
CONDITION OF PREMISES |
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5 |
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SECTION 4.
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RENTAL |
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6 |
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SECTION 5.
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ESCALATION RENT |
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7 |
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SECTION 6.
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USE AND
ACCESS TO PREMISES |
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8 |
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SECTION 7.
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SERVICES |
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9 |
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SECTION 8.
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ALTERATIONS |
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10 |
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SECTION 9.
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REPAIRS;
LANDLORD’S RESERVATION OF RIGHTS |
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10 |
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SECTION 10.
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DAMAGE OR
DESTRUCTION |
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11 |
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SECTION 11.
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SUBROGATION |
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12 |
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SECTION 12.
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INSURANCE |
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12 |
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SECTION 13.
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INDEMNIFICATION |
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13 |
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SECTION 14.
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COMPLIANCE WITH LEGAL REQUIREMENTS |
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13 |
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SECTION 15.
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ASSIGNMENT AND SUBLETTING |
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14 |
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SECTION 16.
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RULES AND
REGULATIONS |
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15 |
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SECTION 17.
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ENTRY BY
LANDLORD |
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16 |
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SECTION 18.
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EVENTS OF
DEFAULT |
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16 |
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SECTION 19.
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TERMINATION UPON DEFAULT |
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17 |
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SECTION 20.
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EMINENT
DOMAIN |
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18 |
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SECTION 21.
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ESTOPPEL
CERTIFICATE |
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18 |
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SECTION 22.
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SURRENDER
OF PREMISES; HOLDING OVER |
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18 |
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SECTION 23.
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SECURITY
DEPOSIT |
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19 |
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SECTION 24.
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LANDLORD’S LIABILITY |
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20 |
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SECTION 25.
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BROKERS |
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20 |
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SECTION 26.
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SMOKING |
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20 |
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SECTION 27.
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ENTIRE
AGREEMENT |
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20 |
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SECTION 28.
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ILLEGALITY OR UNENFORCEABILITY OF PORTION OF LEASE |
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21 |
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SECTION 29.
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GOVERNING
LAW |
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21 |
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SECTION 30.
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QUIET
ENJOYMENT |
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21 |
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SECTION 31.
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SIGNAGE |
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21 |
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SECTION 32.
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SUBORDINATION |
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21 |
-i-
TABLE OF CONTENTS
(cont.)
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Page |
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SECTION 33.
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ATTORNEYS
FEES |
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21 |
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SECTION 34.
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RELOCATION OF TENANT |
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22 |
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SECTION 35.
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NOTICES |
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22 |
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SECTION 36.
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TENANT
AUTHORITY |
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23 |
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SECTION 37.
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EXHIBITS |
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23 |
Exhibit A—Legal
Description
Exhibit B—Work
Letter
Exhibit C—Commencement
Date Agreement
Exhibit D—Rules and
Regulations
-ii-
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
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| Date: |
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As of July 19, 2006 |
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| Landlord: |
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HAMMS BUILDING ASSOCIATES, a California Limited
Partnership |
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| Tenant: |
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DIGITAL RIGHTS AGENCY, a California limited liability
company |
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| Premises: |
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That portion of the 3rd floor designated on Exhibit A
and known as Suite 305. |
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| Rentable
Area of Premises: |
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3,039 rentable square feet |
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| Estimated
Commencement Date: |
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Later of August 1, 2006, or substantial completion of the
Landlord’s Work as described in Exhibit B
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| Termination
Date: |
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The last day of the 50th calendar month following the
Commencement Date which is estimated to be September 30,
2010 |
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| Base Rent |
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Months
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Monthly
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Annual
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1-2 |
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0 |
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3-14 |
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$5,318.25 |
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$63,819.00 |
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15-26 |
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$5,571.50 |
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$66,858.00 |
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27-38 |
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$5,824.75 |
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$69,897.00 |
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39-50 |
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$6,078.00 |
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$72,936.00 |
1
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Upon Lease
execution, Tenant shall pay the third month’s rent in the
amount of $5,318.25 to Landlord. |
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| Base
Year: |
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Calendar
Year 2006 |
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| Security
Deposit: |
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Upon Lease
execution, Tenant shall pay the Security Deposit in the amount of
$10,636.50 to Landlord. |
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| Tenant’s Percentage Share Of Operating Expenses
Escalations and Tenant’s Percentage Share of Property Tax
Escalations: |
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1.67% |
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| Parking |
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One
space |
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| Exhibits: |
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Exhibit A
Description of
Premises
Exhibit B
Work
Letter
Exhibit C
Commencement Date
Agreement
Exhibit D
Rules and
Regulations
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| Tenant’s Address for Notice: |
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1550 Bryant Street, Suite 305
San Francisco, California
94103
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Attention:
President |
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| Landlord’s Address for Notice: |
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Hamms Building Associates
1550 Bryant Street, Suite 825
San Francisco, California
94103
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| Tenant’s Broker: |
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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.
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______ [Initials of
landlord]
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______ [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
7
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
11
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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