EXHIBIT 10.20
BASIC LEASE INFORMATION
OFFICE NET
LEASE DATE: October 27, 1999
TENANT: InsWeb Corporation, a Delaware
corporation
TENANT'S NOTICE ADDRESS: 901 Marshall Street
Redwood City, CA 94063
Attn: InsWeb Corporate General
Counsel
Attn: Sheryl Dodsworth, Senior
Vice President, Finance &
Administration
With a copy to:
959 Skyway Road
San Carlos, California 94070
Attn: Facilities Manager
TENANT'S BILLING ADDRESS: 901 Marshall Street
Redwood City, CA 94063
TENANT CONTACT: Sheryl Dodsworth, PHONE NUMBERS: 650-298-9100
Senior Vice President, 650-817-0115
Finance & Administration
FAX NUMBER: 650-817-0355
LANDLORD: Spieker Properties, L.P., a
California limited partnership
LANDLORD'S NOTICE ADDRESS: 555 Twin Dolphin Drive,
Suite 110
Redwood City, CA 94065
With a copy to:
950 Tower Lane, Suite 120
Foster City, CA 94404
LANDLORD'S REMITTANCE ADDRESS: Spieker Properties LP
Department 12541
PO Box 45587
San Francisco, CA 94145-0587
PROJECT DESCRIPTION: That certain real property,
which real property includes
the land, commonly known as
Skyway Landing, and located
at 959 Skyway Road, San
Carlos, California, which
includes two (2) three-story
office buildings (Building A
and Building B).
BUILDING DESCRIPTIONS: That certain portion of the
Project, commonly known as
Building A, Skyway Landing,
located at 959 Skyway Road,
San Carlos, California,
consisting of a three-story
building with approximately
one hundred sixteen thousand
seventeen (116,017) rentable
square ("BUILDING A"), and
that certain portion of the
Project, commonly known as
Building B, Skyway Landing,
located at 999 Skyway Road,
San Carlos, California,
consisting of a three-story
building with approximately
one hundred twenty one
thousand one hundred seventy
one (121,171) rentable
square feet ("BUILDING B").
PREMISES: The entire third (3rd) floor
of Building A consisting of
approximately thirty-nine
thousand four hundred
seventy-three (39,473)
rentable square feet, as
depicted on EXHIBIT B
attached hereto (the
"BUILDING A PREMISES") and
the entirety of Building B
consisting of approximately
one hundred twenty-one
thousand one hundred seventy
one (121,171) rentable
square feet as depicted on
EXHIBIT B attached hereto
(the "BUILDING B PREMISES").
The Building A Premises
together with the Building B
Premises in the aggregate
consists of approximately
one hundred sixty thousand
six hundred forty four
(160,644) rentable square
feet.
PERMITTED USE: General office and
administration, sales,
development, marketing of
software and the transaction
of e-commerce and services
directly
related thereto.
OCCUPANCY DENSITY: 5 persons per 1,000 rentable
square feet.
PARKING DENSITY AND PARKING CHARGE: 3.3 parking stalls per 1,000
rentable square feet,
including handicap, visitor,
and reserved stalls, for a
total of 545 total parking
spaces; $0 per space / per
month.
SCHEDULED TERM COMMENCEMENT DATE: See Paragraph 39.C hereof.
SCHEDULED LENGTH OF TERM: One hundred forty-four (144)
months following the
Building B Term Commencement
Date (as defined in
Paragraph 39.C).
SCHEDULED TERM EXPIRATION DATE: August 31, 2012
RENT:
BASE RENT: $128,287.25 per month
(subject to adjustment as
provided in Paragraph 39.A
hereof).
ESTIMATED FIRST YEAR OPERATING EXPENSES: $28,815.29 per month
SECURITY DEPOSIT: Nine Million Five Hundred
Thousand and No/100 Dollars
($9,500,000.00) Letter of
Credit delivered in
accordance with the terms of
Paragraph 39.B (subject to
adjustment as provided in
Paragraphs 39.B and 19
hereof), and a cash security
deposit in an amount equal
to Two Hundred Fifty
Thousand and No/100 Dollars
($250,000.00).
TENANT'S PROPORTIONATE SHARE:
OF BUILDING: Building A: 34%
Building B: 100%
OF PROJECT: 67%
The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective information above and shall be construed to
incorporate all of the terms provided under the particular Lease paragraph
pertaining to such information. In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.
LANDLORD TENANT
Spieker Properties, L.P., InsWeb Corporation
a California limited partnership a Delaware corporation
By: Spieker Properties, Inc., By: /s/ Sheryl Dodsworth
a Maryland corporation, ---------------------
its general partner Sheryl Dodsworth
Its: Senior Vice President,
Finance and
Administration
By: /s/ James M. Corroon
By: /s/ Nancy B. Gille ---------------------
------------------ James M. Corroon
Nancy B. Gille Its: Vice Chairman
Its: Vice President
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TABLE OF CONTENTS
PAGE
Basic Lease Information......................................................................................1
Table of Contents............................................................................................2
1. Premises.................................................................................................1
2. Possession and Lease Commencement........................................................................1
3. Term.....................................................................................................1
4. Use......................................................................................................1
5. Rules and Regulations....................................................................................1
6. Rent.....................................................................................................1
7. Operating Expenses.......................................................................................1
8. Insurance and Indemnification............................................................................1
9. Waiver of Subrogation....................................................................................1
10. Landlord's Repairs and Maintenance.......................................................................1
11. Tenant's Repairs and Maintenance.........................................................................1
12. Alterations..............................................................................................1
13. Signs....................................................................................................1
14. Inspection/Posting Notices...............................................................................1
15. Services and Utilities...................................................................................1
16. Subordination............................................................................................1
17. Financial Statements.....................................................................................1
18. Estoppel Certificate.....................................................................................1
19. Security Deposit.........................................................................................1
20. Limitation of Tenant's Remedies..........................................................................1
21. Assignment and Subletting................................................................................1
22. Authority of Tenant......................................................................................1
23. Condemnation.............................................................................................1
24. Casualty Damage..........................................................................................1
25. Holding Over.............................................................................................1
26. Default..................................................................................................1
27. Liens....................................................................................................1
28. Substitution.............................................................................................1
29. Transfers by Landlord....................................................................................1
30. Right of Landlord to Perform Tenant's Covenants..........................................................1
31. Waiver...................................................................................................1
32. Notices..................................................................................................1
33. Attorney's Fees..........................................................................................1
34. Successors and Assigns...................................................................................1
35. Force Majeure............................................................................................1
36. Surrender of Premises....................................................................................1
37. Parking..................................................................................................1
38. Miscellaneous............................................................................................1
39. Additional Provisions....................................................................................1
40. Jury Trial Waiver........................................................................................1
Signatures...............................................................................................1
Exhibits:
Exhibit A................................................................................Rules and Regulations
Exhibit B............................................................................................Site Plan
Exhibit C...............................................................Tenant Improvements and Specifications
Exhibit D .............................................................................................Signage
Exhibit E ....................................................................................Generator Spaces
Exhibit F .....................................................................................Expansion Space
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LEASE
THIS LEASE is made as of the 27th day of October 1999, by and between Spieker
Properties, L.P., a California limited partnership (hereinafter called
"LANDLORD"), and InsWeb Corporation, a Delaware corporation (hereinafter called
"TENANT").
1. PREMISES
Landlord leases to Tenant and Tenant leases from Landlord, upon the terms
and conditions hereinafter set forth, those premises outlined in red on EXHIBIT
B and described in the Basic Lease Information. The Building A Premises and the
Building B Premises, each as described in the Basic Lease Information and
Paragraph 39.C hereof, shall sometimes be referred to herein, collectively, as
the "PREMISES". The Premises shall be all or part of the Building A and Building
B (collectively, the "BUILDING") and of a project (the "PROJECT"), which may
consist of more than one building and additional facilities, as described in the
Basic Lease Information. The Building and Project are outlined in blue and green
respectively on EXHIBIT B. Landlord and Tenant acknowledge that physical changes
may occur from time to time in the Premises, Building or Project, and that the
number of buildings and additional facilities which constitute the Project may
change from time to time, which may result in an adjustment in Tenant's
Proportionate Share, as defined in the Basic Lease Information, as provided in
Paragraph 7.A; provided, however, that any such physical changes shall not
materially and adversely affect Tenant's Permitted Use (as defined herein) of
the Premises, Building or Project. Landlord shall provide prior notice to Tenant
prior to making any such physical changes. Landlord hereby represents to Tenant
that Landlord is vested in title to the Project and represents further that
Landlord has commenced construction of the Building in the Project in accordance
with EXHIBIT C, attached hereto.
2. POSSESSION AND LEASE COMMENCEMENT
A. INTENTIONALLY OMITTED.
B. CONSTRUCTION OF IMPROVEMENTS. If this Lease pertains to a Building to be
constructed or improvements to be constructed within a Building, the provisions
of this Paragraph 2.B. shall apply in lieu of the provisions of Paragraph 2.A.
above and the term commencement dates ("TERM COMMENCEMENT DATE") applicable to
the Building A Premises and the Building B Premises, respectively, shall be the
dates described in Paragraph 39.C hereof. Landlord shall deliver possession of
the Premises to Tenant as follows: (i) Building A Premises on or before July 1,
2000; and (ii) the Building B Premises on or before March 1, 2001. Tenant may
terminate this Lease by delivering written notice to Landlord on or before March
15, 2001 if Landlord has not (i) substantially completed the Building A Premises
Tenant Improvements (as defined in EXHIBIT C) to be constructed by Landlord as
described in EXHIBIT C to this Lease and completed the Base Building Work in the
Building B Premises to an extent which is sufficiently complete to permit access
by Tenant as described in Paragraph 39.E hereof, both by March 1, 2001; (ii)
Tenant has given Landlord at least twenty (20) days' prior written notice
("TENANT'S TERMINATION NOTICE PERIOD") of Landlord's failure to do so, except
for punchlist items, and except for delays caused by Tenant or other third
parties (including delays caused by the contractor or anyone else performing
services on behalf of Tenant) or by events beyond Landlord's control and other
force majeure events, including, but not limited to, strikes, material
shortages, delays of governmental agencies and Acts of God, which delays will
not be cause for termination hereunder; and (iii) Landlord has not, as of the
expiration of Tenant's Termination Notice Period, substantially completed the
Premises and delivered possession of the Premises to Tenant. In the event of
such termination, Landlord shall return any Security Deposit to Tenant as well
as any other sums paid hereunder by Tenant to Landlord. All obligations of
Tenant and Landlord under this Lease shall thereafter terminate and no party
shall have any further obligations under this Lease. If for any reason Landlord
cannot deliver possession of the Premises to Tenant as provided herein, Landlord
shall not be subject to any liability therefor, nor shall Landlord be in default
hereunder nor shall such failure affect the validity of this Lease, and Tenant
agrees to accept possession of the Premises at such time as such improvements to
be constructed by Landlord have been substantially completed, except as
expressly provided in this Paragraph 2.B. Tenant shall not be liable for any
Rent for any period prior to the Term Commencement Date (but without affecting
any obligations of Tenant under any improvement agreement appended to this
Lease). Substantial completion of the Building A Premises Tenant Improvements
and the Building B Premises Tenant Improvements respectively shall be as defined
in Exhibit C, as such definition is provided with respect to each of the
Building A Premises and the Building B Premises. Substantial completion shall
have occurred notwithstanding Tenant's submission of a punchlist to Landlord,
which Tenant shall submit, if at all, within ten (10) business days following
the Building A Premises Term Commencement Date with respect to the Building A
Premises and within fifteen (15) business days following the Building B Premises
Term Commencement Date with respect to the Building B Premises, or otherwise in
accordance with any improvement agreement appended to this Lease. Upon
Landlord's request, Tenant shall promptly execute and return to Landlord a
"Start-Up Letter" in which Tenant shall agree, among other things, to acceptance
of the Premises and to the determination of the Term Commencement Date, in
accordance with the terms of this Lease, but Tenant's failure or refusal to do
so shall not negate Tenant's acceptance of the Premises or affect determination
of the Term Commencement Date.
C. BASE BUILDING WORK PUNCHLIST.
(1) Within five (5) days following the date Landlord delivers written
notice of substantial completion of the Base Building Work located in the
Building A Premises, Tenant shall notify Landlord of certain dates occurring
within twenty (20) days after Landlord's delivery of such notice during which
period Tenant is available to jointly inspect the Building A Premises with
Landlord. Upon selecting a mutually acceptable time and date, Tenant and
Landlord and their respective agents shall conduct an inspection of the Building
A Premises and shall together develop a punchlist of items, if any, of the Base
Building Work located in the Building A Premises that is not complete or that
requires corrections. Landlord shall proceed diligently to remedy such items at
Landlord's cost and expense provided such items are part of the Building A
Premises Base Building Work to be constructed by Landlord in accordance with
Schedule 1 of EXHIBIT C hereof, are otherwise consistent with Landlord's
obligations under this Lease and are not a necessary result of Tenant's intended
use. Substantial completion shall not be delayed notwithstanding any such
punchlist. In the event Tenant fails to so notify Landlord, Tenant shall be
deemed to accept the Building A Premises "as is" with respect to the Base
Building Work located therein and to have waived any punchlist items with
respect thereto.
(2) Within five (5) days following the date Landlord delivers written
notice of substantial completion of the Base Building Work located in the
Building B Premises, Tenant shall notify Landlord of certain dates occurring
within twenty (20) days after Landlord's delivery of such notice during which
period Tenant is available to jointly inspect the Building B Premises with
Landlord. Upon selecting a mutually acceptable time and date, Tenant and
Landlord and their respective agents shall conduct an inspection of the Building
B Premises and shall together develop a punchlist of items, if any, of the Base
Building Work located in the Building B Premises that is not complete or that
requires corrections. Landlord shall proceed diligently to remedy such items at
Landlord's cost and expense provided such items are part of the Building B
Premises Base Building Work to be constructed by Landlord in accordance with
Schedule 1 of EXHIBIT C hereof, are otherwise consistent with Landlord's
obligations under this Lease and are not a necessary result of Tenant's intended
use. Substantial completion shall not be delayed notwithstanding any such
punchlist. In the event Tenant fails to so notify Landlord, Tenant
4
shall be deemed to accept the Building B Premises "as is" with respect to the
Base Building Work located therein and to have waived any punchlist items with
respect thereto.
3. TERM
The term of this Lease (the "TERM") shall commence on the Term Commencement
Date and continue in full force and effect for the number of months specified as
the Length of Term in the Basic Lease Information or until this Lease is
terminated as otherwise provided herein. If the Term Commencement Date is a date
other than the first day of the calendar month, the Term shall be the number of
months of the Length of Term in addition to the remainder of the calendar month
following the Term Commencement Date.
4. USE
A. GENERAL. Tenant shall use the Premises for the permitted use specified
in the Basic Lease Information ("PERMITTED USE") and for no other use or
purpose. Tenant shall make reasonable efforts to control Tenant's employees,
agents, customers, visitors, invitees, licensees, contractors, assignees and
subtenants (collectively, "TENANT'S PARTIES") in such a manner that Tenant and
Tenant's Parties cumulatively do not exceed the occupant density (the "OCCUPANCY
DENSITY") or the parking density (the "PARKING DENSITY") specified in the Basic
Lease Information at any time. So long as Tenant is occupying the Premises,
Tenant and Tenant's Parties shall have the nonexclusive right to use, in common
with other parties occupying the Building or Project, the parking areas,
driveways and other common areas of the Building and Project, subject to the
terms of this Lease and such rules and regulations as Landlord may from time to
time prescribe. Landlord reserves the right, without notice or liability to
Tenant, and without the same constituting an actual or constructive eviction, to
alter or modify the common areas from time to time, including the location and
configuration thereof, and the amenities and facilities which Landlord may
determine to provide from time to time, provided that any such alteration or
modification of the common areas shall not materially and adversely interfere
with Tenant's Permitted Use hereunder.
B. LIMITATIONS. Tenant shall not permit any odors, smoke, dust, gas,
substances, noise or vibrations to emanate from the Premises or from any portion
of the common areas as a result of Tenant's or any Tenant's Party's use thereof,
nor take any action which would constitute a nuisance or would disturb, obstruct
or endanger any other tenants or occupants of the Building or Project or
elsewhere, or interfere with their use of their respective premises or common
areas. Storage outside the Premises of materials, vehicles or any other items is
prohibited. Tenant shall not use or allow the Premises to be used for any
immoral, improper or unlawful purpose, nor shall Tenant cause or maintain or
permit any nuisance in, on or about the Premises. Tenant shall not commit or
suffer the commission of any waste in, on or about the Premises. Tenant shall
not allow any sale by auction upon the Premises, or place any loads upon the
floors, walls or ceilings which could endanger the structure, or place any
harmful substances in the drainage system of the Building or Project. No waste,
materials or refuse shall be dumped upon or permitted to remain outside the
Premises. Landlord shall not be responsible to Tenant for the non-compliance by
any other tenant or occupant of the Building or Project with any of the
above-referenced rules or any other terms or provisions of such tenant's or
occupant's lease or other contract.
C. COMPLIANCE WITH REGULATIONS. Tenant shall at its sole cost and expense
strictly comply with all existing or future applicable municipal, state and
federal and other governmental statutes, rules, requirements, regulations, laws
and ordinances, including zoning ordinances and regulations, and covenants,
easements and restrictions of record governing and relating to the use,
occupancy or possession of the Premises, to Tenant's use of the common areas, or
to the use, storage, generation or disposal of Hazardous Materials (hereinafter
defined) (collectively "REGULATIONS"). Landlord shall be responsible for
complying with Regulations (and the ADA to the extent expressly provided in this
Lease) pertaining to the common areas of the Project prior to and except to the
extent arising out of Tenant's occupancy or use of the Premises or common areas
or construction of any Tenant Improvements or Alterations made by or on behalf
of Tenant, whether by Landlord or otherwise and whether performed before or
after the Term Commencement Date, or installation of any equipment, fixtures,
furniture or other personal property in or about the Premises; provided,
however; that Landlord may treat costs of such compliance as an Operating
Expense in accordance with the terms of Paragraph 7 hereof and to the extent
expressly provided below in this Paragraph 4.C. Tenant shall at its sole cost
and expense obtain any and all licenses or permits necessary for Tenant's use of
the Premises. Tenant shall at its sole cost and expense promptly comply with the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted. Tenant shall not do or permit anything to be done in, on,
under or about the Project or bring or keep anything which will in any way
increase the rate of any insurance upon the Premises, Building or Project or
upon any contents therein or cause a cancellation of said insurance or otherwise
affect said insurance in any manner. Tenant's obligations pursuant to the
foregoing indemnity shall survive the expiration or earlier termination of this
Lease. Tenant shall have the sole responsibility for complying, at Tenant's
cost, with any and all provisions of the Americans with Disabilities Act of
1990, as it has been and may later be amended ("ADA"), (i) with respect to each
of the Building A Premises and the Building B Premises; and (ii) with respect to
the common areas of the Project where in the case of this clause (ii) such
compliance has been brought about by: (A) any of the Building A Premises Tenant
Improvements or Alterations to the Building A Premises and the Building B
Premises (to the extent any such compliance item arises after the date Landlord
delivers possession of the Building B Premises to Tenant), or to the common
areas made by or on behalf of Tenant, whether by Landlord or otherwise, and
performed after the Building A Premises Term Commencement Date and delivery of
possession of the Building B Premises to Tenant; (B) requirements of Tenant's
employees, or any changes to Tenant's use of the Premises; or (C) any
architectural barriers caused by Tenant's installation of any equipment,
fixtures, furniture, or other personal property in or about the Premises (items
(i) and (ii) collectively, "TENANT'S ADA RESPONSIBILITIES"). Tenant shall
indemnify, defend and hold Landlord, its agents and employees harmless from and
against any and all claims, damages, or liabilities (including, without
limitation, reasonable attorneys' fees and costs) arising directly or indirectly
from Tenant's failure to satisfy any of Tenant's ADA Responsibilities and/or any
Regulation (except to the extent such compliance with Regulations is expressly
made a Landlord responsibility hereunder). Landlord shall indemnify, defend and
hold Tenant, its agents and employees harmless from and against any and all
claims, damages or liabilities arising directly or indirectly from Landlord's
failure to comply with any obligations of a landlord under the ADA, other than
such claims, damages or liabilities arising from Tenant's failure to satisfy any
of Tenant's ADA Responsibilities; provided, however, that Landlord may treat
costs of ADA compliance with respect to the common areas of the Project to the
extent such compliance item arises after the date Landlord delivers possession
of the Building A Premises and the Building B Premises as an Operating Expense
in accordance with Paragraph 7 hereof. In the event that during the Term hereof,
or any extension thereto, a governmental agency or other entity with appropriate
jurisdiction requires work to be performed to comply with either the ADA,
regardless of whether the costs thereof shall be deemed an Operating Expense or
attributable to the account of Tenant or another tenant in the Project, Landlord
shall perform all such work that is of a structural nature, is located in the
common areas of the Project or is visible form the exterior of the Building.
Landlord shall, at Tenant's written request, perform such nonstructural
compliance work in the Premises on Tenant's behalf. Landlord represents that, as
of the dates Landlord delivers possession of the Building A Premises and the
Building B Premises, respectively, to Tenant, to the best of Landlord's actual
knowledge, the Base Building Work and the Building A Premises Tenant
Improvements shall comply in all material respects with each of: (x) the ADA,
and (y) Regulations, as the ADA and Regulations have each been interpreted in
San Mateo County and as each of the ADA and Regulations pertain to each of the
Base Building Work and the Building A Premises Tenant Improvements. Any costs
incurred by Landlord to comply with ADA and Regulations solely as described in
the foregoing sentence shall not be an Operating Expense as defined herein.
D. HAZARDOUS MATERIALS. As used in this Lease, "HAZARDOUS MATERIALS" shall
include, but not be limited to, hazardous, toxic and radioactive materials and
those substances defined as "hazardous substances," "hazardous materials,"
"hazardous wastes," "toxic substances," or other similar designations in any
Regulation. Tenant shall not cause, or allow any of Tenant's Parties to cause,
any
5
Hazardous Materials to be handled, used, generated, stored, released or disposed
of in, on, under or about the Premises, the Building or the Project or
surrounding land or environment in violation of any Regulations. Tenant must
obtain Landlord's written consent prior to the introduction of any Hazardous
Materials onto the Project. Notwithstanding the foregoing, Tenant may handle,
store, use and dispose of products containing small quantities of Hazardous
Materials for "general office purposes" (such as toner for copiers) to the
extent customary and necessary for the Permitted Use of the Premises; provided
that Tenant shall always handle, store, use, and dispose of any such Hazardous
Materials in a safe and lawful manner and never allow such Hazardous Materials
to contaminate the Premises, Building, or Project or surrounding land or
environment. Tenant shall immediately notify Landlord in writing of any
Hazardous Materials' contamination of any portion of the Project of which Tenant
becomes aware, whether or not caused by Tenant. Landlord shall have the right at
all reasonable times to inspect the Premises and to conduct tests and
investigations to determine whether Tenant is in compliance with the foregoing
provisions, the costs of all such inspections, tests and investigations to be
borne by Landlord unless Landlord has reasonable cause to believe Tenant or any
of Tenant's Parties has violated this Paragraph 4.D or any Regulation, in which
event, such costs shall be borne solely by Tenant. Tenant shall indemnify,
defend (by counsel reasonably acceptable to Landlord), protect and hold Landlord
harmless from and against any and all claims, liabilities, losses, costs, loss
of rents, liens, damages, injuries or expenses (including attorneys' and
consultants' fees and court costs), demands, causes of action, or judgments
directly or indirectly arising out of or related to the use, generation,
storage, release, or disposal of Hazardous Materials by Tenant or any of
Tenant's Parties in, on, under or about the Premises, the Building or the
Project or surrounding land or environment, which indemnity shall include,
without limitation, damages for personal or bodily injury, property damage,
damage to the environment or natural resources occurring on or off the Premises,
losses attributable to diminution in value or adverse effects on marketability,
the cost of any investigation, monitoring, government oversight, repair,
removal, remediation, restoration, abatement, and disposal, and the preparation
of any closure or other required plans, whether such action is required or
necessary prior to or following the expiration or earlier termination of this
Lease. Neither the consent by Landlord to the use, generation, storage, release
or disposal of Hazardous Materials nor the strict compliance by Tenant with all
laws pertaining to Hazardous Materials shall excuse Tenant from Tenant's
obligation of indemnification pursuant to this Paragraph 4.D. Tenant's
obligations pursuant to the foregoing indemnity shall survive the expiration or
earlier termination of this Lease. Landlord shall indemnify, defend and hold
Tenant harmless from and against any and all claims, judgments, damages,
penalties, fines, costs, liabilities or losses, including without limitation
reasonable attorneys' fees and costs, arising out of any Hazardous Material in,
on or about the Project or the Premises which was created, handled, placed,
stored, used, transported or disposed of prior to the dates Landlord delivers
possession of the Building A Premises and the Building B Premises, respectively,
excluding, however, any Hazardous Material whose presence was caused by Tenant
or any Tenant's Parties. Landlord's obligations pursuant to the foregoing
indemnity shall survive the expiration or earlier termination of this Lease.
5. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the building rules and
regulations attached hereto as EXHIBIT A and any other reasonable rules and
regulations and any modifications or additions thereto which Landlord may from
time to time prescribe in writing for the purpose of maintaining the proper
care, cleanliness, safety, traffic flow and general order of the Premises or the
Building or Project. Tenant shall cause Tenant's Parties to comply with such
rules and regulations. Landlord shall apply such rules and regulations in a
nondiscriminatory manner Landlord shall not be responsible to Tenant for the
non-compliance by any other tenant or occupant of the Building or Project with
any of such rules and regulations, any other tenant's or occupant's lease or any
Regulations.
6. RENT
A. BASE RENT. Tenant shall pay to Landlord and Landlord shall receive,
without notice or demand throughout the Term, Base Rent as specified in the
Basic Lease Information, payable in monthly installments in advance on or before
the first day of each calendar month, in lawful money of the United States,
without deduction or offset whatsoever, at the Remittance Address specified in
the Basic Lease Information or to such other place as Landlord may from time to
time designate in writing. Base Rent for the first full month of the Term shall
be paid by Tenant upon Tenant's execution of this Lease. If the obligation for
payment of Base Rent commences on a day other than the first day of a month,
then Base Rent shall be prorated and the prorated installment shall be paid on
the first day of the calendar month next succeeding the Term Commencement Date.
The Base Rent payable by Tenant hereunder is subject to adjustment as provided
elsewhere in this Lease, as applicable. As used herein, the term "Base Rent"
shall mean the Base Rent specified in the Basic Lease Information as it may be
so adjusted from time to time.
B. ADDITIONAL RENT. All monies other than Base Rent required to be paid by
Tenant hereunder, including, but not limited to, Tenant's Proportionate Share of
Operating Expenses, as specified in Paragraph 7 of this Lease, charges to be
paid by Tenant under Paragraph 15, the interest and late charge described in
Paragraphs 26.C. and D., and any monies spent by Landlord pursuant to Paragraph
30, shall be considered additional rent ("ADDITIONAL RENT"). "RENT" shall mean
Base Rent and Additional Rent.
7. OPERATING EXPENSES
A. OPERATING EXPENSES. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share of
the Building and/or Project (as applicable), as defined in the Basic Lease
Information, of Operating Expenses (defined below) in the manner set forth
below. Tenant shall pay the applicable Tenant's Proportionate Share of such
Operating Expenses. Landlord and Tenant acknowledge that if the number of
buildings which constitute the Project increases or decreases, or if physical
changes are made to the Premises, Building or Project or the configuration of
any thereof, Landlord may at its discretion reasonably adjust Tenant's
Proportionate Share of the Building or Project to reflect the change. Landlord
shall operate and maintain the Building and the Project in a manner consistent
with Landlord's operation and management of other buildings and projects owned
by Spieker Properties, L.P. in the mid-Peninsula geographical area, or if
Spieker Properties, L.P. does not own any buildings or projects in the
mid-Peninsula geographic area, in a manner consistent with similar office
buildings and projects located in such geographic area. In the event that
Spieker Properties, L.P., or an affiliate thereof, is not the Landlord under
this Lease, the Landlord under this Lease shall operate the Building and the
Project in a first-class manner consistent with other first-class buildings and
projects in the mid-Peninsula geographic area. Landlord's determination of
Tenant's Proportionate Share of the Building and of the Project shall be
conclusive so long as it is reasonably and consistently applied. "OPERATING
EXPENSES" shall mean all expenses and costs of every kind and nature which
Landlord shall pay or become obligated to pay, because of or in connection with
the ownership, management, maintenance, repair, preservation, replacement and
operation of the Building or Project and its supporting facilities and such
additional facilities now and in subsequent years as may be reasonably
determined by Landlord to be necessary or desirable to the Building and/or
Project (as determined in a reasonable manner) other than those expenses and
costs which are specifically attributable to Tenant or which are expressly made
the financial responsibility of Landlord or specific tenants of the Building or
Project pursuant to this Lease. Operating Expenses shall include, but are not
limited to, the following:
(1) TAXES. All real property taxes and assessments, possessory interest
taxes, sales taxes, personal property taxes, business or license taxes
or fees, gross receipts taxes, service payments in lieu of such taxes
or fees, annual or periodic license or use fees, excises, transit
charges, and other impositions, general and special, ordinary and
extraordinary, unforeseen as well as foreseen, of any kind (including
fees "in-lieu" of any such tax or assessment) which are now or
hereafter assessed, levied, charged, confirmed, or imposed by any
public authority upon the Building or Project, its operations or the
Rent (or any portion or
6
component thereof), or any tax, assessment or fee imposed in
substitution, partially or totally, of any of the above. Operating
Expenses shall also include any taxes, assessments, reassessments, or
other fees or impositions with respect to the development, leasing,
management, maintenance, alteration, repair, use or occupancy of the
Premises, Building or Project or any portion thereof, including,
without limitation, by or for Tenant, and all increases therein or
reassessments thereof whether the increases or reassessments result
from increased rate and/or valuation (whether upon a transfer of the
Building or Project or any portion thereof or any interest therein or
for any other reason). Operating Expenses shall not include inheritance
or estate taxes imposed upon or assessed against the interest of any
person in the Project, or taxes computed upon the basis of the net
income of any owners of any interest in the Project. If it shall not be
lawful for Tenant to reimburse Landlord for all or any part of such
taxes, the monthly rental payable to Landlord under this Lease shall be
revised to net Landlord the same net rental after imposition of any
such taxes by Landlord as would have been payable to Landlord prior to
the payment of any such taxes.
(2) INSURANCE. All insurance premiums and costs, including, but not
limited to, any deductible amounts, premiums and other costs of
insurance incurred by Landlord, including for the insurance coverage
set forth in Paragraph 8.A. herein. Notwithstanding the foregoing, in
the event an earthquake event which affects the Premises, the Building
or the Project occurs, insurance deductibles due in connection with
earthquake insurance covering such event shall only be passed through
as an Operating Expense at one time up to an amount equal to Two
Hundred Fifty Thousand Dollars ($250,000.00) and any amounts in excess
shall be amortized over the useful life of the repairs and restoration
made in connection with such earthquake event as such useful is
reasonably determined by Landlord and in accordance with generally
accepted accounting principles.
(3) COMMON AREA MAINTENANCE.
(a) Repairs, replacements, and general maintenance of and for
the Building and Project and public and common areas and
facilities of and comprising the Building and Project,
including, but not limited to, the roof and roof membrane,
windows, elevators, restrooms, conference rooms, if any,
health club facilities, if any, lobbies, mezzanines,
balconies, mechanical rooms, building exteriors, alarm
systems, pest extermination, landscaped areas, parking and
service areas, driveways, sidewalks, loading areas, fire
sprinkler systems, sanitary and storm sewer lines, utility
services, heating/ventilation/air conditioning systems,
electrical, mechanical or other systems, telephone equipment
and wiring servicing, plumbing, lighting, and any other items
or areas which affect the operation or appearance of the
Building or Project, which determination shall be at
Landlord's discretion, except for: those items expressly made
the financial responsibility of Landlord pursuant to Paragraph
10 hereof; those items to the extent paid for by the proceeds
of insurance; and those items attributable solely or jointly
to specific tenants of the Building or Project.
(b) Repairs, replacements, and general maintenance shall
include the cost of any capital improvements made to or
capital assets acquired for the Project or Building that in
Landlord's discretion may reduce any other Operating Expenses,
including present or future repair work, are reasonably
necessary for the health and safety of the occupants of the
Building or Project, or are required to comply with any
Regulation, such costs or allocable portions thereof to be
amortized over the useful life of such improvement as Landlord
shall reasonably determine, substantially in accordance with
generally accepted accounting principles, together with
interest on the unamortized balance at the publicly announced
"prime rate" charged by Wells Fargo Bank, N.A. (San Francisco)
or its successor at the time such improvements or capital
assets are constructed or acquired, plus two (2) percentage
points, or in the absence of such prime rate, then at the U.S.
Treasury six-month market note (or bond, if so designated)
rate as published by any national financial publication
selected by Landlord, plus four (4) percentage points, but in
no event more than the maximum rate permitted by law. Any
significant capital items to be replaced during the last
twenty-four (24) months of the initial Term shall be treated
in accordance with the terms of this Paragraph 7 or shall be
shared between Landlord and Tenant in a manner to allocate the
anticipated benefits of such items as reasonably determined by
Landlord, which ever is less to Tenant.
(c) Payment under or for any easement, license, permit,
operating agreement, declaration, restrictive covenant or
instrument relating to the Building or Project; provided,
however, that such costs shall not include any costs
associated with airplane hangers on the Project.
(d) All expenses and rental related to services and costs of
supplies, materials and equipment used in operating, managing
and maintaining the Premises, Building and Project, the
equipment therein and the adjacent sidewalks, driveways,
parking and service areas, including, without limitation,
expenses related to service agreements regarding security,
fire and other alarm systems, janitorial services, window
cleaning, elevator maintenance, Building exterior maintenance,
landscaping and expenses related to the administration,
management and operation of the Project, including without
limitation salaries, wages and benefits for employees or
independent contractors to the extent directly involved in the
operation and management of the Building or Project and
management office rent for office space occupied by employees
or independent contractors to the extent directly involved in
the operation and management of the Building or Project.
(e) The cost of supplying any services and utilities which
benefit all or a portion of the Premises, Building or Project,
including without limitation services and utilities provided
pursuant to Paragraph 15 hereof; provided, however, that
Tenant may contract directly with Pacific Gas & Electric
Company for such services and utilities with respect to the
Building B Premises, and in such event, the costs of such
services and utilities shall be excluded from the computation
of the management fee described in subparagraph (g) below.
(f) Legal expenses and the cost of audits by certified public
accountants; provided, however, that legal expenses chargeable
as Operating Expenses shall not include the cost of
negotiating leases, collecting rents, evicting tenants nor
shall it include costs incurred in legal proceedings with or
against any tenant or to enforce the provisions of any lease.
(g) A management and accounting cost recovery fee not to
exceed three percent (3%) during the first forty-eight months
following the Building B Premises Term Commencement Date and
four percent (4%) for the balance of the initial Term of this
Lease, each of the sum of the Project's base rents and
Operating Expenses (other than such management and accounting
fee).
(h) Repairs, replacements, and general maintenance shall
include the cost of any remediation of or repair due to the
use of any common Hazardous Materials, such as office and
janitorial supplies and materials used in connection with the
systems and equipment which operate the Building and the
Project, with such Hazardous Materials used in customary
quantities in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation
of the Building or Project and its supporting facilities and
such additional facilities now and in subsequent years as may
be determined by Landlord to be necessary or desirable to the
Building and/or Project (as determined in a reasonable
manner).
7
If the rentable area of the Building and/or Project is not fully occupied during
any fiscal year of the Term as determined by Landlord, an adjustment shall be
made in Landlord's discretion in computing the Operating Expenses for such year
so that Tenant pays an equitable portion of all variable items (e.g., utilities,
janitorial services and other component expenses that are affected by variations
in occupancy levels) of Operating Expenses, as reasonably determined by
Landlord; provided, however, that in no event shall Landlord be entitled to
collect in excess of one hundred percent (100%) of the total Operating Expenses
from all of the tenants in the Building or Project, as the case may be.
Operating Expenses shall not include the cost of providing tenant improvements
or other specific costs incurred for the account of, separately billed to and
paid by specific tenants of the Building or Project, the initial construction
cost of the Building, or debt service on any mortgage or deed of trust recorded
with respect to the Project other than pursuant to Paragraph 7.A.(3)(b) above.
Notwithstanding anything herein to the contrary, in any instance wherein
Landlord, in Landlord's reasonable discretion, deems Tenant to be responsible
for any amounts greater than Tenant's Proportionate Share, Landlord shall have
the right to allocate costs in any manner Landlord deems appropriate. Landlord
shall enforce the foregoing sentence in a nondiscriminatory manner with respect
to all tenants of the Building in accordance with their respective leases.
In addition, notwithstanding anything in the definition of Operating Expenses in
this Lease to the contrary, Operating Expenses shall not include the following,
except to the extent specifically provided:
(i) Any ground lease rental;
(ii) Costs of capital improvements, replacements or equipment and
any depreciation or amortization expenses thereon, except to
the extent included in Operating Expenses in Paragraph 7.A of
this Lease;
(iii) Rentals for items (except when needed in connection with
normal repairs and maintenance of permanent systems) which if
purchased, rather than rented, would constitute a capital
improvement which is specifically excluded in clause (ii)
above (excluding, however, equipment not affixed to the
Building or Project which is used in providing janitorial or
similar services);
(iv) Costs incurred by Landlord for the repair of damage to or
rebuilding of the Building or Project, to the extent that
Landlord is reimbursed by insurance proceeds;
(v) Costs, including permit, license and inspection costs,
incurred with respect to the installation of tenant or other
occupant improvements made for tenants or other occupants in
the Building or the Project or incurred in renovating or
otherwise improving, decorating, painting or redecorating
vacant space for or the premises of other tenants or other
occupants of the Building;
(vi) Marketing costs, including leasing commissions, attorneys'
fees in connection with the negotiation and preparation or
enforcement of letters, deal memos, letters of intent, leases,
subleases and/or assignments, space planning costs, and other
costs and expenses incurred in connection with lease, sublease
and/or assignment negotiations and transactions with present
or prospective tenants or other occupants of the Building or
the Project;
(vii) Costs incurred by Landlord due to the violation by Landlord of
the terms and conditions of any lease of space in the Building
or the Project or any costs incurred by Landlord in connection
with disputes with other tenants of the Building or Project;
(viii) Except to the extent included in Operating Expenses in
Paragraph 7.A(3) above, interest, principal, points and fees
on debt or amortization payments on any mortgage or deed of
trust or any other debt instrument encumbering the Building or
Project or the land on which the Building or Project is
situated;
(ix) Except for making repairs or keeping permanent systems in
operation while repairs are being made, rentals and other
related expenses incurred in leasing air conditioning systems,
elevators or other equipment ordinarily considered to be of a
capital nature, except equipment not affixed to the Building
or Project which is used in providing janitorial or similar
services;
(x) Advertising and promotional expenditures (except for retail
property promotions);
(xi) Costs incurred in connection with upgrading the Building or
Project to comply with disability, life, fire and safety codes
in effect prior to the issuance of the temporary certificate
of occupancy for the Building;
(xii) Interest, fines or penalties incurred as a result of
Landlord's failure to make payments when due unless such
failure is commercially reasonable under the circumstances;
(xiii) Costs arising from Landlord's charitable or political
contributions;
(xiv) Costs for acquisition of sculpture, paintings or other objects
of art in common areas;
(xv) The depreciation of the Building and other real property
structures in the Project;
(xvi) Costs to correct defects in construction and design materials
or workmanship in the Building or Project during the
construction warranty period applicable to the Project;
(xvii) The costs of a full roof replacement during the initial Term
of this Lease;
(xviii) After hours and excess or special utilities or services
provided to other tenants of the Project and not to Tenant;
(xix) The costs of repairs and maintenance of the structural
soundness of the roof, the foundation and the exterior and
interior walls of the Building A Premises and the Building B
Premises as such costs are expressly made Landlord's
responsibility in Paragraph 10 hereof;
(xx) The costs of services provided to the Building or Project
charged by an affiliate of Landlord to the extent such costs
are above then-current market rates for such services as
reasonably determined by Landlord;
8
(xxi) Except as expressly provided herein, the cost incurred to
treat, survey, clean, contain, abate, remove or otherwise
remedy Hazardous Materials in, on or about the Building or
Project due to another tenant's default under its lease or due
to an act of Landlord or Landlord's agents, employees or
invitees;
(xxii) Landlord's general corporate overhead and general
administrative expenses not related to the operation of the
Building or the Project, except as specifically set forth in
Paragraph 7.A of this Lease; and
(xxiii) Any bad debt loss, rent loss or reserves for bad debts or rent
loss, or reserves for equipment or capital replacement.
The above enumeration of services and facilities shall not be deemed to impose
an obligation on Landlord to make available or provide such services or
facilities except to the extent if any that Landlord has specifically agreed
elsewhere in this Lease to make the same available or provide the same. Without
limiting the generality of the foregoing, Tenant acknowledges and agrees that it
shall be responsible for providing adequate security for its use of the
Premises, the Building and the Project and that Landlord shall have no
obligation or liability with respect thereto, except to the extent if any that
Landlord has specifically agreed elsewhere in this Lease to provide the same.
B. PAYMENT OF ESTIMATED OPERATING EXPENSES. "ESTIMATED OPERATING EXPENSES" for
any particular year shall mean Landlord's estimate of the Operating Expenses for
such fiscal year made with respect to such fiscal year as hereinafter provided.
Landlord shall have the right from time to time to revise its fiscal year and
interim accounting periods so long as the periods as so revised are reconciled
with prior periods in a reasonable manner. During the last month of each fiscal
year during the Term, or as soon thereafter as practicable, Landlord shall give
Tenant written notice of the Estimated Operating Expenses for the ensuing fiscal
year. Tenant shall pay Tenant's Proportionate Share of the Estimated Operating
Expenses with installments of Base Rent for the fiscal year to which the
Estimated Operating Expenses applies in monthly installments on the first day of
each calendar month during such year, in advance. Such payment shall be
construed to be Additional Rent for all purposes hereunder. If at any time
during the course of the fiscal year, Landlord determines that Operating
Expenses are projected to vary from the then Estimated Operating Expenses by
more than five percent (5%), Landlord may, by written notice to Tenant, revise
the Estimated Operating Expenses for the balance of such fiscal year, and
Tenant's monthly installments for the remainder of such year shall be adjusted
so that by the end of such fiscal year Tenant has paid to Landlord Tenant's
Proportionate Share of the revised Estimated Operating Expenses for such year,
such revised installment amounts to be Additional Rent for all purposes
hereunder.
C. COMPUTATION OF OPERATING EXPENSE ADJUSTMENT. "OPERATING EXPENSE ADJUSTMENT"
shall mean the difference between Estimated Operating Expenses and actual
Operating Expenses for any fiscal year determined as hereinafter provided.
Within ninety (90) days after the end of each fiscal year, or as soon thereafter
as practicable, Landlord shall deliver to Tenant a statement of actual Operating
Expenses for the fiscal year just ended, accompanied by a computation of
Operating Expense Adjustment. If such statement shows that Tenant's payment
based upon Estimated Operating Expenses is less than Tenant's Proportionate
Share of Operating Expenses, then Tenant shall pay to Landlord the difference
within thirty (30) days after receipt of such statement, such payment to
constitute Additional Rent for all purposes hereunder. If such statement shows
that Tenant's payments of Estimated Operating Expenses exceed Tenant's
Proportionate Share of Operating Expenses, then (provided that Tenant is not in
default under this Lease) Landlord shall pay to Tenant the difference within
thirty (30) days after delivery of such statement to Tenant. If this Lease has
been terminated or the Term hereof has expired prior to the date of such
statement, then the Operating Expense Adjustment shall be paid by the
appropriate party within thirty (30) days after the date of delivery of the
statement. Should this Lease commence or terminate at any time other than the
first day of the fiscal year, Tenant's Proportionate Share of the Operating
Expense Adjustment shall be prorated based on a month of 30 days and the number
of calendar months during such fiscal year that this Lease is in effect.
Notwithstanding anything to the contrary contained in Paragraph 7.A or 7.B,
Landlord's failure to provide any notices or statements within the time periods
specified in those paragraphs shall in no way excuse Tenant from its obligation
to pay Tenant's Proportionate Share of Operating Expenses.
D. NET LEASE. This shall be a triple net Lease and Base Rent shall be paid to
Landlord absolutely net of all costs and expenses, except as specifically
provided to the contrary in this Lease. The provisions for payment of Operating
Expenses and the Operating Expense Adjustment are intended to pass on to Tenant
and reimburse Landlord for all costs and expenses of the nature described in
Paragraph 7.A. incurred in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building
and/or Project and its supporting facilities and such additional facilities now
and in subsequent years as may be determined by Landlord to be necessary to the
Building and/or Project.
E. TENANT AUDIT. If Tenant shall dispute the amount set forth in any statement
provided by Landlord under Paragraph 7.B. or 7.C. above, Tenant shall have the
right, not later than sixty (60) days following receipt of such statement and
upon the condition that Tenant shall first deposit with Landlord the full amount
in dispute, to cause Landlord's books and records with respect to Operating
Expenses for such fiscal year to be audited by certified public accountants
selected by Tenant and subject to Landlord's reasonable right of approval. The
Operating Expense Adjustment shall be appropriately adjusted on the basis of
such audit. If such audit discloses a liability for a refund in excess of six
percent (6%) of Tenant's Proportionate Share of the Operating Expenses
previously reported, the cost of such audit shall be borne by Landlord;
otherwise the cost of such audit shall be paid by Tenant. If Tenant shall not
request an audit in accordance with the provisions of this Paragraph 7.E. within
sixty (60) days after receipt of Landlord's statement provided pursuant to
Paragraph 7.B. or 7.C., such statement shall be final and binding for all
purposes hereof.
8. INSURANCE AND INDEMNIFICATION
A. LANDLORD'S INSURANCE. All insurance maintained by Landlord shall be for the
sole benefit of Landlord and under Landlord's sole control.
(1) PROPERTY INSURANCE. Landlord agrees to maintain property insurance
insuring the Building against damage or destruction due to risk
including fire, vandalism, and malicious mischief in an amount not less
than the replacement cost thereof, in the form and with deductibles and
endorsements as selected by Landlord. At its election, Landlord may
instead (but shall have no obligation to) obtain "All Risk" coverage,
and may also obtain earthquake, pollution, and/or flood insurance in
amounts selected by Landlord.
(2) OPTIONAL INSURANCE. Landlord, at Landlord's option, may also (but
shall have no obligation to) carry insurance against loss of rent, in
an amount equal to the amount of Base Rent and Additional Rent that
Landlord could be required to abate to all Building tenants in the
event of condemnation or casualty damage for a period of twelve (12)
months. Landlord may also (but shall have no obligation to) carry such
other insurance as Landlord may deem prudent or advisable, including,
without limitation, liability insurance in such amounts and on such
terms as Landlord shall determine. Landlord shall not be obligated to
insure, and shall have no responsibility whatsoever for any damage to,
any furniture, machinery, goods, inventory or supplies, or other
personal property or fixtures which Tenant may keep or maintain in the
Premises, or any leasehold improvements, additions or alterations
within the Premises.
9
B. TENANT'S INSURANCE.
(1) PROPERTY INSURANCE. Tenant shall procure at Tenant's sole cost and
expense and keep in effect from the date of this Lease and at all times
until the end of the Term, insurance on all personal property and
fixtures of Tenant and all improvements, additions or alterations made
by or for Tenant to the Premises on an "All Risk" basis, insuring such
property for the full replacement value of such property. Tenant's
property insurance shall also cover the Generator, as described in
Paragraph 39.D.
(2) LIABILITY INSURANCE. Tenant shall procure at Tenant's sole cost and
expense and keep in effect from the date of this Lease and at all times
until the end of the Term Commercial General Liability insurance
covering bodily injury and property damage liability occurring in or
about the Premises or arising out of the use and occupancy of the
Premises and the Project, and any part of either, and any areas
adjacent thereto, and the business operated by Tenant or by any other
occupant of the Premises, but such occupants shall not include any
other tenants of the Project except to the extent that such other
tenant is Tenant's invitee. Such insurance shall include contractual
liability insurance coverage insuring all of Tenant's indemnity
obligations under this Lease. Such coverage shall have a minimum
combined single limit of liability of at least Two Million Dollars
($2,000,000.00), and a minimum general aggregate limit of Three Million
Dollars ($3,000,000.00), with an "Additional Insured - Managers or
Lessors of Premises Endorsement." All such policies shall be written to
apply to all bodily injury (including death), property damage or loss,
personal and advertising injury, occurring during the policy term,
shall be endorsed to add Landlord and any party holding an interest to
which this Lease may be subordinated as an additional insured, and
shall provide that such coverage shall be "PRIMARY" and
non-contributing with any insurance maintained by Landlord, which shall
be excess insurance only. Such coverage shall also contain endorsements
including employees as additional insureds if not covered by Tenant's
Commercial General Liability Insurance. All such insurance shall
provide for the severability of interests of insureds; and shall be
written on an "OCCURRENCE" basis, which shall afford coverage for all
claims based on acts, omissions, injury and damage, which occurred or
arose (or the onset of which occurred or arose) in whole or in part
during the policy period.
(3) WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE. Tenant
shall carry Workers' Compensation Insurance as required by applicable
California state law or other applicable Regulation, throughout the
Term at Tenant's sole cost and expense. Tenant shall also carry
Employers' Liability Insurance in amounts not less than One Million
Dollars ($1,000,000) each accident for bodily injury by accident; One
Million Dollars ($1,000,000) policy limit for bodily injury by disease;
and One Million Dollars ($1,000,000) each employee for bodily injury by
disease, throughout the Term at Tenant's sole cost and expense.
(4) GENERAL INSURANCE REQUIREMENTS. All coverages described in this
Paragraph 8.B. shall be endorsed to (i) provide Landlord with thirty
(30) days' notice of cancellation (for reasons other than failure to
pay an associated premium) or change in any material term and ten (10)
days' notice of cancellation due to failure to pay the associated
premium; and (ii) waive all rights of subrogation by the insurance
carrier against Landlord. If at any time during the Term the amount or
coverage of insurance which Tenant is required to carry under this
Paragraph 8.B. is, in Landlord's reasonable judgment, materially less
than the amount or type of insurance coverage typically carried by
owners or tenants of properties located in the general area in which
the Premises are located which are similar to and operated for similar
purposes as the Premises or if Tenant's use of the Premises should
change with or without Landlord's consent, Landlord shall have the
right to require Tenant to increase the amount or change the types of
insurance coverage required under this Paragraph 8.B. All insurance
policies required to be carried by Tenant under this Lease shall be
written by companies rated A X or better in "Best's Insurance Guide"
and authorized to do business in the State of California. In any event
deductible amounts under all insurance policies required to be carried
by Tenant under this Lease shall not exceed Five Thousand Dollars
($5,000.00) per occurrence. Tenant shall deliver to Landlord on or
before the Term Commencement Date, and thereafter at least thirty (30)
days before the expiration dates of the expired policies, certified
copies of Tenant's insurance policies, or a certificate evidencing the
same issued by the insurer thereunder; and, if Tenant shall fail to
procure such insurance, or to deliver such policies or certificates,
Landlord may, at Landlord's option and in addition to Landlord's other
remedies in the event of a default by Tenant hereunder, procure the
same for the account of Tenant, and the cost thereof shall be paid to
Landlord as Additional Rent.
C. TENANT INDEMNIFICATION. Tenant shall indemnify, defend by counsel
mutually acceptable to Landlord, Tenant and Tenant's insurer, protect
and hold Landlord harmless from and against any and all claims,
liabilities, losses, costs, loss of rents, liens, damages, injuries or
expenses, including reasonable attorneys' and consultants' fees and
court costs, demands, causes of action, or judgments, directly or
indirectly arising out of or related to: (1) claims of injury to or
death of persons or damage to property occurring or resulting directly
or indirectly from the use or occupancy of the Premises, Building or
Project by Tenant or Tenant's Parties, or from activities or failures
to act of Tenant or Tenant's Parties; (2) claims arising from work or
labor performed, or for materials or supplies furnished to or at the
request or for the account of Tenant in connection with performance of
any work done for the account of Tenant within the Premises or Project;
(3) claims arising from any breach or default on the part of Tenant in
the performance of any covenant contained in this Lease; and (4) claims
arising from the negligence or intentional acts or omissions of Tenant
or Tenant's Parties. The foregoing indemnity by Tenant shall not be
applicable to claims to the extent arising from the gross negligence or
willful misconduct of Landlord or Landlord's agents, employees or
invitees. The provisions of this Paragraph shall survive the expiration
or earlier termination of this Lease.
D. LANDLORD INDEMNIFICATION. Landlord shall indemnify, defend by counsel
mutually acceptable to Tenant, Landlord and Landlord's insurer, protect and hold
Tenant harmless from and against any and all claims, liabilities, losses, costs,
damages, injuries or expenses, including reasonable attorneys' and consultants'
fees and court costs, demands, causes of action, or judgments arising out of or
relating to the gross negligence or willful misconduct of Landlord or Landlord's
agents, employees or invitees. Notwithstanding the foregoing or subparagraph 8.C
above, or anything to the contrary contained in this Lease, Landlord shall in no
event be liable to Tenant and Tenant hereby waives all claims against Landlord
for any injury or damage to any person or property in or about the Premises,
Building or Project, including without limitation the common areas, whether
caused by theft, fire, rain or water leakage of any character from the roof,
walls, plumbing, sprinklers, pipes, basement or any other portion of the
Premises, Building or Project, or caused by gas, fire, oil or electricity in, on
or about the Premises, Building or Project, or from any other systems except in
each case to the extent caused by the gross negligence or willful misconduct of
Landlord, or Landlord's agents, employees or invitees, or by acts of God
(including without limitation flood or earthquake), acts of a public enemy,
riot, strike, insurrection, war, court order, requisition or order of
governmental body or authority or from any other cause whatsoever, or for any
damage or inconvenience which may arise through repair, subject to and except as
expressly otherwise provided in Paragraph 9 or 10 of this Lease. In addition,
Landlord shall in no event be liable for (i) injury to Tenant's business or any
loss of income or profit therefrom or from consequential damages, or (ii) sums
up to the amount of insurance proceeds received by Tenant. The foregoing
indemnity by Landlord shall not be applicable to claims to the extent arising
from the negligence or willful misconduct of Tenant or Tenant's Parties. The
foregoing indemnity by Landlord shall survive the expiration or earlier
termination of this Lease.
9. WAIVER OF SUBROGATION
To the extent permitted by law and without affecting the coverage provided
by insurance to be maintained hereunder or any other rights or remedies,
Landlord and Tenant each waive any right to recover against the other for: (a)
damages for injury to or death of
10
persons; (b) damages to property, including personal property; (c) damages to
the Premises or any part thereof; and (d) claims arising by reason of the
foregoing due to hazards covered by insurance maintained or required to be
maintained pursuant to this Lease to the extent of proceeds recovered therefrom,
or proceeds which would have been recoverable therefrom in the case of the
failure of any party to maintain any insurance coverage required to be
maintained by such party pursuant to this Lease. This provision is intended to
waive fully, any rights and/or claims arising by reason of the foregoing, but
only to the extent that any of the foregoing damages and/or claims referred to
above are covered or would be covered, and only to the extent of such coverage,
by insurance actually carried or required to be maintained pursuant to this
Lease by either Landlord or Tenant. This provision is also intended to waive
fully, and for the benefit of each party, any rights and/or claims which might
give rise to a right of subrogation on any insurance carrier. Subject to all
qualifications of this Paragraph 9, Landlord waives its rights as specified in
this Paragraph 9 with respect to any subtenant that it has approved pursuant to
Paragraph 21 but only in exchange for the written waiver of such rights to be
given by such subtenant to Landlord upon such subtenant taking possession of the
Premises or a portion thereof. Each party shall cause each insurance policy
obtained by it to provide that the insurance company waives all right of
recovery by way of subrogation against either party in connection with any
damage covered by any policy.
10. LANDLORD'S REPAIRS AND MAINTENANCE
Landlord shall at Landlord's expense maintain in good repair, reasonable
wear and tear excepted, the structural soundness of the roof and foundations,
and the structural soundness of the exterior and interior load-bearing walls of
the Building. The term "exterior walls" as used herein shall not include
windows, glass or plate glass, doors, special store fronts or office entries.
Landlord shall maintain in good and working condition the building systems,
landscaping, hardscaping and parking areas, each as described in Paragraph
7.A.3(a) hereof, which costs may be treated as an Operating Expense in
accordance with Paragraph 7. Any damage caused by or repairs necessitated by any
negligence or act of Tenant or Tenant's Parties may be repaired by Landlord at
Landlord's option and Tenant's expense. Tenant shall immediately give Landlord
written notice of any defect or need of repairs in such components of the
Building for which Landlord is responsible, after which Landlord shall have a
reasonable opportunity and the right to enter the Premises at all reasonable
times to repair same. Landlord's liability with respect to any defects, repairs,
or maintenance for which Landlord is responsible under any of the provisions of
this Lease shall be limited to the cost of such repairs or maintenance, and
there shall be no abatement of rent and no liability of Landlord by reason of
any injury to or interference with Tenant's business arising from the making of
repairs, alterations or improvements in or to any portion of the Premises, the
Building or the Project or to fixtures, appurtenances or equipment in the
Building, except as provided in Paragraph 24. Except for the structural frame
and foundation, Tenant may have the right to make repairs for any repairs or
maintenance for which Landlord is responsible and for which Tenant has submitted
written notice of same, and Landlord has not determined to repair and/or begun
such repair within thirty (30) days after receipt of such notice or such shorter
time as shall be reasonable in the event of an emergency (which shall be
situations of risk of personal injury or death, significant property damage to
Tenant's personal property or property damage to the Premises or the Building or
Project, or in the event work in connection with the compliance with Regulations
is immediately required); provided however, that if such damage is of such a
nature that it cannot be repaired with such thirty (30) day period, then the
period shall be extended (except in case of emergency as aforesaid) so long as a
reasonable course of action is commenced within such thirty (30) day period and
is thereafter diligently prosecuted to completion. In the event that Tenant so
performs any repairs, Landlord shall reimburse the actual and reasonable cost
thereof to Tenant within thirty (30) days after Landlord's receipt of written
demand therefor accompanied by documentary evidence of such costs, except in the
case of a dispute between the parties regarding the existence of a breach by
Landlord as described in this Paragraph 10, in which event the parties shall
submit such dispute to arbitration as herein described. Base Rent and Additional
Rent shall not be diminished during the period of notice or repair. In the event
that any dispute regarding the existence of a breach by Landlord of this
paragraph cannot be resolved by the parties within a reasonable period of time,
Landlord and Tenant shall submit such dispute to arbitration in accordance with
Paragraph 39.F hereof. Notwithstanding the right of Tenant under this paragraph
or Paragraph 11 to make repairs, should such repair or other maintenance as
undertaken by Tenant affect any operation or part of the Building in an adverse
manner so that Landlord shall have to correct such effect, Tenant shall be
solely liable and responsible for Landlord's cost of returning the Building or
system or operation to proper condition. Subject to punchlist items, by taking
possession of the Premises, Tenant accepts them "as is," as being in good order,
condition and repair and the condition in which Landlord is obligated to deliver
them and suitable for the Permitted Use and Tenant's intended operations in the
Premises, whether or not any notice of acceptance is given.
11. TENANT'S REPAIRS AND MAINTENANCE
Tenant shall at all times during the Term at Tenant's expense maintain all
parts of the Premises and such portions of the Building as are within the
exclusive control of Tenant (except to the extent such repair and maintenance
obligations are express obligations of Landlord as described in Paragraph 10
hereof) in a first-class, good, clean and secure condition and promptly make all
necessary repairs and replacements, as reasonably determined by Landlord, with
materials and workmanship of the generally equivalent character, kind and
quality as the original. Notwithstanding anything to the contrary contained
herein, Tenant shall, at its expense, promptly repair any damage to the Premises
or the Building or Project resulting from or caused by any negligence or act of
Tenant or Tenant's Parties.
12. ALTERATIONS
A. Tenant shall not make, or allow to be made, any alterations, physical
additions, improvements or partitions, including without limitation the
attachment of any fixtures or equipment, in, about or to the Premises
("ALTERATIONS") without obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld with respect to proposed Alterations
which: (a) comply with all applicable Regulations; (b) are, in Landlord's
opinion, compatible with the Building or the Project and its mechanical,
plumbing, electrical, heating/ventilation/air conditioning systems, and will not
cause the Building or Project or such systems to be required to be modified to
comply with any Regulations (including, without limitation, the Americans With
Disabilities Act); and (c) will not interfere with the use and occupancy of any
other portion of the Building or Project by any other tenant or its invitees.
Specifically, but without limiting the generality of the foregoing, Landlord
shall have the right of written consent for all plans and specifications for the
proposed Alterations, construction means and methods, all appropriate permits
and licenses, any contractor or subcontractor to be employed on the work of
Alterations, and the time for performance of such work, and may impose rules and
regulations for contractors and subcontractors performing such work. Tenant
shall also supply to Landlord any documents and information reasonably requested
by Landlord in connection with Landlord's consideration of a request for
approval hereunder. Notwithstanding the foregoing, Tenant shall have the right,
without consent of, but upon at least ten (10) business days' prior written
notice (as provided under Paragraph 12.B below) to, Landlord, to make
non-structural, cosmetic Alterations within the interior of the Premises (and
which are not visible from the outside of the Premises), which do not impair the
value of the Building, and which cost, in the aggregate, less than Fifty
Thousand and No/100 Dollars ($50,000.00) in any twelve (12) month period during
the Term of this Lease a "PERMITTED ALTERATION"), provided that such Alterations
shall nevertheless be subject to all of the remaining requirements of this
Paragraph 12, including without limitation, subparagraphs (a) through (c) above
and payment of the administration fee referred to in this Paragraph 12.A, other
than the requirement of Landlord's prior consent. In addition, all Alterations
shall be performed by duly licensed contractors or subcontractors reasonably
acceptable to Landlord, proof of insurance shall be submitted to Landlord as
required under Paragraph 8.B above, and Landlord reserves the right to impose
reasonable rules and regulations for contractors and subcontractors. Tenant
shall, if requested by Landlord, promptly furnish Landlord with complete
as-built plans and specifications for any Alterations performed by Tenant to the
Premises, at Tenant's sole cost and expense. Tenant shall cause all Alterations
to be accomplished in a first-class, good and workmanlike manner, and to comply
with all applicable Regulations and Paragraph 27 hereof. Tenant shall at
Tenant's sole expense, perform any additional work required under applicable
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Regulations due to the Alterations hereunder. No review or consent by Landlord
of or to any proposed Alteration or additional work shall constitute a waiver of
Tenant's obligations under this Paragraph 12, nor constitute any warranty or
representation that the same complies with all applicable Regulations, for which
Tenant shall at all times be solely responsible. Tenant shall reimburse Landlord
for all costs which Landlord may incur in connection with granting approval to
Tenant for any such Alterations, including any actual and reasonable costs or
expenses which Landlord may incur in electing to have outside architects and
engineers review said plans and specifications, and shall pay Landlord as
Additional Rent hereunder an administration fee not to exceed ten percent (10%)
of the cost of the Alterations, which amount shall be negotiated in good faith
by the parties at the time Landlord consents to Tenant's request, or in the
event of a Permitted Alteration, at the time Tenant informs Landlord of such
Permitted Alteration. All such Alterations shall remain the property of Tenant
until the expiration or earlier termination of this Lease, at which time they
shall be and become the property of Landlord; provided, however, that Landlord
may, at Landlord's option, require that Tenant, at Tenant's expense, remove any
or all Alterations made by Tenant and restore the Premises by the expiration or
earlier termination of this Lease, to their condition existing prior to the
construction of any such Alterations. All such removals and restoration shall be
accomplished in a first-class and good and workmanlike manner so as not to cause
any damage to the Premises or Project whatsoever. If Tenant fails to remove such
Alterations or Tenant's trade fixtures or furniture or other personal property,
Landlord may keep and use them or remove any of them and cause them to be stored
or sold in accordance with applicable law, at Tenant's sole expense. In addition
to and wholly apart from Tenant's obligation to pay Tenant's Proportionate Share
of Operating Expenses, Tenant shall be responsible for and shall pay prior to
delinquency any taxes or governmental service fees, possessory interest taxes,
fees or charges in lieu of any such taxes, capital levies, or other charges
imposed upon, levied with respect to or assessed against its fixtures or
personal property, on the value of Alterations within the Premises, and on
Tenant's interest pursuant to this Lease, or any increase in any of the
foregoing based on such Alterations. To the extent that any such taxes are not
separately assessed or billed to Tenant, Tenant shall pay the amount thereof as
invoiced to Tenant by Landlord.
In addition, at Landlord's election and notwithstanding the foregoing, however,
Tenant shall pay to Landlord the cost of removing any such Alterations
(excluding those which Tenant shall not be required to remove as provided in
Paragraph 12.C below) and restoring the Premises to their original condition
such cost to include a reasonable charge for Landlord's overhead and profit as
provided above, and such amount may be deducted from the Security Deposit or any
other sums or amounts held by Landlord under this Lease.
B. In compliance with Paragraph 27 hereof, at least ten (10) business days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to permit
Landlord to post and record a notice of non-responsibility. Upon substantial
completion of construction, if the law so provides, Tenant shall cause a timely
notice of completion to be recorded in the office of the recorder of the county
in which the Building is located.
C. Notwithstanding anything to the contrary contained in Paragraph 12.A, at the
time Landlord gives its consent for any Alterations after the initial tenant
improvements, Tenant shall also be notified whether or not Landlord will require
that such Alterations be removed upon the expiration or earlier termination of
this Lease. If Landlord fails to so notify Tenant, it shall be assumed that
Landlord will NOT require their removal.
13. SIGNS
Tenant shall not place, install, affix, paint or maintain any signs, notices,
graphics or banners whatsoever or any window decor which is visible in or from
public view or corridors, the common areas or the exterior of the Premises or
the Building, in or on any exterior window or window fronting upon any common
areas or service area without Landlord's prior written approval which Landlord
shall have the right to withhold in its absolute and sole discretion; provided
that Tenant's name shall be included in any Building-standard door and directory
signage, if any, in accordance with Landlord's Building signage program,
including without limitation, payment by Tenant of any cost for maintaining such
signage, which fee shall constitute Additional Rent hereunder. Any installation
of signs, notices, graphics or banners on or about the Premises or Project
approved by Landlord shall be subject to any Regulations and to any other
requirements imposed by Landlord. Tenant shall remove all such signs or graphics
by the expiration or any earlier termination of this Lease or by Tenant's
vacation of the Premises. Such installations and removals shall be made in such
manner as to avoid injury to or defacement of the Premises, Building or Project
and any other improvements contained therein, and Tenant shall repair any injury
or defacement including without limitation discoloration caused by such
installation or removal. Any signage rights granted by Landlord to Tenant shall
be exclusive to Tenant and such rights shall not be assigned, subleased or
otherwise conveyed without the prior written approval of Landlord of which
Landlord shall have the right to withhold in its absolute and sole discretion.
Tenant shall be entitled to one (1) temporary sign to be located on the Building
A monument as determined by Landlord. Such sign will be designed, constructed
and installed at Tenant's sole cost and expense. All signs shall be subject to
Landlord's approval, which Landlord shall have the right to withhold in its
absolute and sole discretion, and approval of any public authorities having
jurisdiction. Tenant shall be responsible to maintain the sign in its original
condition. Tenant's temporary sign shall at all times remain the property of
Tenant and, upon written request by Landlord after Tenant's occupancy of the
Building B Premises, Tenant must remove such temporary sign. Tenant shall repair
any damage caused in the removal of its temporary Building A monument sign.
Tenant's signage rights under this Paragraph are personal to the original Tenant
named in this Lease and shall not inure to the benefit of any assignees or
subtenants. Notwithstanding anything contained in this Paragraph 13 to the
contrary, Tenant shall be entitled to three (3) signs to be located as follows
(a) one (1) sign on the precast concrete panel above the third floor window line
at the southwest corner of the most southern facade of Building B; and (b) one
(1) sign on the precast concrete panel above the third floor window line at the
northwest corner of the most western facade of Building B; and (c) one (1)
monument sign for Building B, each as depicted on EXHIBIT D attached hereto.
Such signage right is personal to Tenant and subject to the following terms and
conditions:
1. Tenant shall submit plans and drawings for such signage to the
City of San Carlos and to any other public authorities having
jurisdiction and shall obtain written approval from each such
jurisdiction prior to installation, and shall fully comply
with all applicable Regulations
2. Tenant shall, at Tenant's sole cost and expense, design,
construct and install such signage.
3. All signs shall be subject to Landlord's prior written
approval, which Landlord shall have the right to withhold in
its absolute and sole discretion.
4. Tenant shall maintain its signage in good condition and
repair, and all costs of maintenance and repair shall be borne
by Tenant. Maintenance shall include, without limitation,
cleaning and, if such signage is illuminated, relamping at
reasonable intervals. Tenant shall be responsible for any
electrical energy used in connection with its signs.
5. At Landlord's option, Tenant's signage rights granted hereby
may be revoked and terminated upon occurrence of any of the
following events:
(a) Tenant shall be in material default, as defined in
paragraph 26 as determined by Landlord in its sole
discretion, and shall not have cured said default for a
period of ninety (90) days.
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(b) Except with respect to Permitted Transfers described in
Paragraph 21.A(3) hereof, Tenant shall assign this Lease
or sublet any portion of the Premises without Landlord's
prior written consent in accordance with Paragraph 21,
or Tenant occupies less than sixty-five percent (65%) of
the Premises in Building B.
(c) This Lease shall terminate or otherwise no longer be in
effect.
6. Upon the expiration or earlier termination of this Lease or at
such other time that Tenant's signage rights are terminated
pursuant to the terms hereof, Landlord shall cause Tenant's
signage to be removed from the Building and the Building to be
repaired and restored to the condition which existed prior to
the installation of Tenant's signage (including, if necessary,
the replacement of any precast concrete panels), all at the
sole cost and expense of Tenant and otherwise in accordance
with Paragraph 36 of this Lease, without further notice from
Landlord notwithstanding anything to the contrary contained in
this Lease. Tenant shall pay all costs and expenses for such
removal and restoration within thirty (30) days following
delivery of an invoice therefor.
14. INSPECTION/POSTING NOTICES
After reasonable notice, except in emergencies where no such notice shall be
required, Landlord and Landlord's agents and representatives, shall have the
right to enter the Premises to inspect the same, to clean, to perform such work
as may be permitted or required hereunder, to make repairs, improvements or
alterations to the Premises, Building or Project or to other tenant spaces
therein, to deal with emergencies, to post such notices as may be permitted or
required by law to prevent the perfection of liens against Landlord's interest
in the Project or to exhibit the Premises to prospective tenants, purchasers,
encumbrancers or to others, or for any other purpose as Landlord may deem
necessary or desirable; provided, however, that Landlord shall use reasonable
efforts not to unreasonably interfere with Tenant's business operations. Tenant
shall not be entitled to any abatement of Rent by reason of the exercise of any
such right of entry, except to the extent Landlord receives insurance proceeds.
Tenant waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises, and any other loss occasioned thereby. Landlord shall at all times
have and retain a key with which to unlock all of the doors in, upon and about
the Premises, excluding Tenant's vaults and safes or special security areas
(designated in advance), and Landlord shall have the right to use any and all
means which Landlord may deem necessary or proper to open said doors in an
emergency, in order to obtain entry to any portion of the Premises, and any
entry to the Premises or portions thereof obtained by Landlord by any of said
means, or otherwise, shall not be construed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or an eviction, actual or constructive, of
Tenant from the Premises or any portions thereof. At any time within six (6)
months prior to the expiration of the Term or following any earlier termination
of this Lease or agreement to terminate this Lease, Landlord shall have the
right to erect on the Premises, Building and/or Project a suitable sign
indicating that the Premises are available for lease.
15. SERVICES AND UTILITIES
A. Subject to the provisions elsewhere herein contained, Landlord shall furnish
to the Premises during ordinary business hours of generally recognized business
days, to be determined by Landlord (but exclusive, in any event, of Saturdays,
Sundays and legal holidays), water for lavatory and drinking purposes and
electricity, heat and air conditioning as usually furnished or supplied for use
of the Premises for reasonable and normal office use as of the date Tenant takes
possession of the Premises as determined by Landlord (but not including
above-standard or continuous cooling for excessive heat-generating machines,
excess lighting or equipment), janitorial services during the times and in the
manner that such services are, in Landlord's judgment, customarily furnished in
comparable office buildings in the immediate market area, and elevator service.
Subject to Paragraph 7.A hereof, Landlord shall make available to the Premises
twenty-four (24) hours per day, seven (7) days per week, electric current as
required for operation of the Premises for the Permitted Use for normal lighting
and office business machines and water to the Premises for drinking and lavatory
purposes in such amounts as required for the comfortable use of the Premises.
Provided Tenant is not in material default beyond any applicable cure period,
Landlord shall provide additional or after-hours electricity, heating or air
conditioning as provided herein. With respect to the Building A Premises, any
such after-hours use of such utilities or other services will be made available
and will be billed as an after-hours Rent assessment. After-hours use may be
metered by Landlord with a bypass timer located on the applicable floors of
Building A or through establishment of a recognized monthly after-hours
assessment based upon Landlord's estimate of Tenant's usage. Such costs will be
payable by Tenant to Landlord within thirty (30) days after demand as Additional
Rent. The minimum amount of after-hours usage shall be two (2) hours, and the
cost thereof shall not exceed Twenty-Five Dollars ($ 25.00) per hour per floor
of the Building A Premises during the initial year of the Lease Term, subject to
adjustment thereafter to reflect increases in the cost of such utilities or
services. Tenant is hereby authorized to contract directly with Pacific Gas &
Electric Company with respect only to the Building B Premises, Tenant agrees at
all times to cooperate fully with Landlord and to abide by all of the
regulations and requirements which Landlord may prescribe for the proper
functioning and protection of electrical, heating, ventilating and air
conditioning systems. Wherever heat-generating machines, excess lighting or
equipment are used in the Premises which affect the temperature otherwise
maintained by the air conditioning system, Landlord reserves the right to
install supplementary air conditioning units in the Premises and the cost
thereof, including the cost of installation and the cost of operation and
maintenance thereof, shall be paid by Tenant to Landlord upon demand by
Landlord. Tenant acknowledges and agrees that Tenant's use of the Building A
Premises after ordinary business hours and outside of generally recognized
business days (generally recognized business days shall not include Saturdays,
Sundays, and legal holidays) imposes additional burden on Building A's
janitorial services, fluorescent light tubes, HVAC and electrical service, and
other common area utilities and services.
B. Tenant shall not without written consent of Landlord use any apparatus,
equipment or device in the Premises, including without limitation, computers,
electronic data processing machines, copying machines, and other machines, using
excess lighting or using electric current, water, or any other resource in
excess of or which will in any way increase the amount of electricity, water, or
any other resource being furnished or supplied for the use of the Premises for
reasonable and normal office use, and the Permitted Use, in each case as of the
date Tenant takes possession of the Premises as determined by Landlord, or which
will require additions or alterations to or interfere with the Building power
distribution systems; nor connect with electric current, except through existing
electrical outlets in the Premises or water pipes, any apparatus, equipment or
device for the purpose of using electrical current, water, or any other
resource. If Tenant shall require water or electric current or any other
resource in excess of that being furnished or supplied for the use of the
Premises as of the date Tenant takes possession of the Premises as determined by
Landlord, Tenant shall first procure the written consent of Landlord which
Landlord may refuse, to the use thereof, and Landlord may cause a special meter
to be installed in the Premises so as to measure the amount of water, electric
current or other resource consumed for any such other use. Tenant shall pay
directly to Landlord as an addition to and separate from payment of Operating
Expenses the cost of all such additional resources, energy, utility service and
meters (and of installation, maintenance and repair thereof and of any
additional circuits or other equipment necessary to furnish such additional
resources, energy, utility or service). Landlord may add to the separate or
metered charge a recovery of additional expense incurred in keeping account of
the excess water, electric current or other resource so consumed. Landlord shall
not be liable for any damages directly or indirectly resulting from nor shall
the Rent or any monies owed Landlord under this Lease herein reserved be abated
by reason of: (a) the installation, use or interruption of use of any equipment
used in connection with the furnishing of any such utilities or services, or any
change in the character or means of supplying or providing any such utilities or
services or any supplier thereof; (b) the failure to furnish or delay in
furnishing any such utilities or services when such failure or delay is caused
by acts of God or the elements, labor disturbances of any character, or any
other accidents or other conditions beyond the reasonable control of Landlord or
because of any interruption of
13
service due to Tenant's use of water, electric current or other resource in
excess of that being supplied or furnished for the use of the Premises as of the
date Tenant takes possession of the Premises; (c) the inadequacy, limitation,
curtailment, rationing or restriction on use of water, electricity, gas or any
other form of energy or any other service or utility whatsoever serving the
Premises or Project, whether by Regulation or otherwise; or (d) the partial or
total unavailability of any such utilities or services to the Premises or the
Building, whether by Regulation or otherwise; nor shall any such occurrence
constitute an actual or constructive eviction of Tenant. Landlord shall further
have no obligation to protect or preserve any apparatus, equipment or device
installed by Tenant in the Premises, including without limitation by providing
additional or after-hours heating or air conditioning, except as otherwise
provided in this Lease. Landlord shall be entitled to cooperate voluntarily and
in a reasonable manner with the efforts of national, state or local governmental
agencies or utility suppliers in reducing energy or other resource consumption.
The obligation to make services available hereunder shall be subject to the
limitations of any such voluntary, reasonable program. Notwithstanding the
foregoing, if Tenant is prevented from using, and does not use, all or part of
the Premises (the "AFFECTED AREA") as a result of a Essential Services
Interruption Event as defined below, and the remaining portions of the Premises
are not reasonably sufficient to allow Tenant to conduct its business in the
Premises and if this Essential Services Interruption Event continues for three
(3) consecutive business days after Landlord's receipt of notice from Tenant of
the Essential Services Interruption Event (the "ELIGIBILITY PERIOD"), the Rent
payable under this Lease shall be abated after the expiration of the Eligibility
Period for such time that Tenant continues to be prevented from using, and does
not use, the Affected Area in the proportion that the rentable area of the
Affected Area bears to the total rentable area of the Premises to the extent
that Landlord receives insurance proceeds. If, however, Tenant reoccupies any
portion of the Premises during this period, the Rent allocable to this
reoccupied portion (based on the proportion that the rentable area of the
reoccupied portion of the Premises bears to the total rentable area of the
Premises) shall be payable by Tenant from the date on which Tenant reoccupies
this portion of the Premises. A "ESSENTIAL SERVICES INTERRUPTION EVENT" shall
mean the failure of or interruption in essential services required to be
supplied by Landlord to the Premises during ordinary business hours (7:00 a.m.
to 6:00 p.m.) of generally recognized business days which occurs solely as a
result of Landlord's or Landlord's agents', employees' or invitees', active
negligence or willful misconduct. In the event of a stoppage or interruption of
services, Landlord shall diligently attempt to resume such services as promptly
as practicable. In addition, Landlord reserves the right to change the supplier
or provider of any such utility or service from time to time. Tenant shall have
no right to contract with or otherwise obtain any electrical or other such
service for or with respect to the Premises or Tenant's operations therein from
any supplier or provider of any such service. Tenant shall cooperate with
Landlord and any supplier or provider of such services designated by Landlord
from time to time to facilitate the delivery of such services to Tenant at the
Premises and to the Building and Project, including without limitation allowing
Landlord and Landlord's suppliers or providers, and their respective agents and
contractors, reasonable access to the Premises for the purpose of installing,
maintaining, repairing, replacing or upgrading such service or any equipment or
machinery associated therewith.
C. Tenant shall pay, within thirty (30) days after demand, for all utilities
furnished to the Building A Premises, or if not separately billed to or metered
to Tenant, Tenant's Proportionate Share of all charges jointly serving the
Project in accordance with Paragraph 7. All sums payable under this Paragraph 15
shall constitute Additional Rent hereunder.
16. SUBORDINATION
Without the necessity of any additional document being executed by Tenant for
the purpose of effecting a subordination, this Lease shall be and is hereby
declared to be subject and subordinate at all times to: (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises and Project are situated, or
both; and (b) any mortgage or deed of trust which may now exist or be placed
upon the Building, the Project and/or the land upon which the Premises or the
Project are situated, or said ground leases or underlying leases, or Landlord's
interest or estate in any of said items which is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. If any ground lease or underlying lease terminates for any
reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest to
Landlord provided that Tenant shall not be disturbed in its possession under
this Lease by such successor in interest so long as Tenant is not in default
under this Lease. Within ten (10) days after request by Landlord, Tenant shall
execute and deliver any additional documents evidencing Tenant's attornment or
the subordination of this Lease with respect to any such ground leases or
underlying leases or any such mortgage or deed of trust, in the form requested
by Landlord or by any ground landlord, mortgagee, or beneficiary under a deed of
trust, subject to such nondisturbance requirement. If requested in writing by
Tenant, Landlord shall use commercially reasonable efforts to obtain a
subordination, nondisturbance and attornment agreement for the benefit of Tenant
reflecting the foregoing from any ground landlord, mortgagee or beneficiary, at
Tenant's expense, subject to such other terms and conditions as the ground
landlord, mortgagee or beneficiary may require.
17. FINANCIAL STATEMENTS
At the request of Landlord from time to time, Tenant shall provide to Landlord
Tenant's and any guarantor's audited current financial statements or other
information discussing financial worth of Tenant and any guarantor, which
Landlord shall use solely for purposes of this Lease and in connection with the
ownership, management, financing and disposition of the Project. So long as
Tenant is a publicly traded company as described in Paragraph 21.C below,
Tenant's quarterly and annual published financial statements shall satisfy the
requirements of this Paragraph 17.
18. ESTOPPEL CERTIFICATE
Tenant agrees from time to time, within ten (10) business days after request of
Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this Lease is in full force and effect, that this Lease
has not been modified (or stating all modifications, written or oral, to this
Lease), the date to which Rent has been paid, the unexpired portion of this
Lease, that there are no current defaults by Landlord or Tenant under this Lease
(or specifying any such defaults), that the leasehold estate granted by this
Lease is the sole interest of Tenant in the Premises and/or the land at which
the Premises are situated, and such other matters pertaining to this Lease as
may be reasonably requested by Landlord or any mortgagee, beneficiary, purchaser
or prospective purchaser of the Building or Project or any interest therein.
Failure by Tenant to execute and deliver such certificate shall constitute an
acceptance of the Premises and acknowledgment by Tenant that the statements
included are true and correct without exception. Tenant agrees that if Tenant
fails to execute and deliver such certificate within such ten (10) day period,
Landlord may execute and deliver such certificate on Tenant's behalf and that
such certificate shall be binding on Tenant. Landlord and Tenant intend that any
statement delivered pursuant to this Paragraph may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of the Building or
Project or any interest therein. The parties agree that Tenant's obligation to
furnish such estoppel certificates in a timely fashion is a material inducement
for Landlord's execution of this Lease, and shall be an event of default
(without any cure period that might be provided under Paragraph 26.A(3) of this
Lease) if Tenant fails to fully comply or makes any material misstatement in any
such certificate.
19. SECURITY DEPOSIT
Tenant agrees to deposit with Landlord upon execution of this Lease, a cash
security deposit as stated in the Basic Lease Information and the security
described in Paragraph 39.B at the times and in the amounts described in such
paragraph (the "SECURITY DEPOSIT"), which sum shall be held and owned by
Landlord, without obligation to pay interest, as security for the performance of
Tenant's covenants and obligations under this Lease. The Security Deposit is not
an advance rental deposit or a measure of damages incurred by Landlord in case
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of Tenant's default. Upon the occurrence of any event of default by Tenant,
Landlord may from time to time, without prejudice to any other remedy provided
herein or by law, use such fund as a credit to the extent necessary to credit
against any arrears of Rent or other payments due to Landlord hereunder, and any
other damage, injury, expense or liability caused by such event of default, and
Tenant shall pay to Landlord, on demand, the amount so applied in order to
restore the Security Deposit to its original amount. Although the Security
Deposit shall be deemed the property of Landlord, any remaining balance of such
deposit shall be returned by Landlord to Tenant at such time after termination
of this Lease that all of Tenant's obligations under this Lease have been
fulfilled, reduced by such amounts as may be required by Landlord to remedy
defaults on the part of Tenant in the payment of Rent or other obligations of
Tenant under this Lease, to repair damage to the Premises, Building or Project
caused by Tenant or any Tenant's Parties and to clean the Premises. Landlord may
use and commingle the Security Deposit with other funds of Landlord.
20. LIMITATION OF TENANT'S REMEDIES
The obligations and liability of Landlord to Tenant for any default by Landlord
under the terms of this Lease are not personal obligations of Landlord or of the
individual or other partners of Landlord or its or their partners, directors,
officers, or shareholders, and Tenant agrees to look solely to Landlord's
interest in the Project for the recovery of any amount from Landlord, and shall
not look to other assets of Landlord nor seek recourse against the assets of the
individual or other partners of Landlord or its or their partners, directors,
officers or shareholders. Any lien obtained to enforce any such judgment and any
levy of execution thereon shall be subject and subordinate to any lien, mortgage
or deed of trust on the Project. Under no circumstances shall Tenant have the
right to offset against or recoup Rent or other payments due and to become due
to Landlord hereunder except as expressly provided in this Lease, which Rent and
other payments shall be absolutely due and payable hereunder in accordance with
the terms hereof.
21. ASSIGNMENT AND SUBLETTING
A. (1) GENERAL. This Lease has been negotiated to be and is granted as an
accommodation to Tenant. Accordingly, this Lease is personal to Tenant,
and Tenant's rights granted hereunder do not include the right to
assign this Lease or sublease the Premises, or to receive any excess,
either in installments or lump sum, over the Rent which is expressly
reserved by Landlord as hereinafter provided, except as otherwise
expressly hereinafter provided. Tenant shall not assign or pledge this
Lease or sublet the Premises or any part thereof, whether voluntarily
or by operation of law, or permit the use or occupancy of the Premises
or any part thereof by anyone other than Tenant, or suffer or permit
any such assignment, pledge, subleasing or occupancy, without
Landlord's prior written consent except as provided herein. If Tenant
desires to assign this Lease or sublet any or all of the Premises,
Tenant shall give Landlord written notice (the "TRANSFER NOTICE") at
least thirty (30) days prior to the anticipated effective date of the
proposed assignment or sublease, which shall contain all of the
information reasonably requested by Landlord to address Landlord's
decision criteria specified hereinafter. Landlord shall then have a
period of twenty (20) days following receipt of the Transfer Notice to
notify Tenant in writing that Landlord elects either: (i) to terminate
this Lease as to the space so affected as of the date so requested by
Tenant; or (ii) to consent to the proposed assignment or sublease,
subject, however, to Landlord's prior written consent of the proposed
assignee or subtenant and of any related documents or agreements
associated with the assignment or sublease. If Landlord should fail to
notify Tenant in writing of such election within said period, Landlord
shall be deemed to have waived option (i) above, but written consent by
Landlord of the proposed assignee or subtenant shall still be required.
If Landlord does not exercise option (i) above, Landlord's consent to a
proposed assignment or sublease shall not be unreasonably withheld.
Consent to any assignment or subletting shall not constitute consent to
any subsequent transaction to which this Paragraph 21 applies.
Notwithstanding the foregoing, Landlord hereby waives its right to
recapture all or a portion of the Premises, as such right is described
in clause (i) above, in the following circumstance only: (X) Such
proposed sublease shall commence during the first thirty-six (36)
months of the Term of this Lease, and (Y) the term of such proposed
sublease shall expire before the expiration of the forty-second (42nd)
month following the Building A Premsies Term Commencement Date and no
extension options shall be granted in such sublease. In the event both
clauses (X) and (Y) above are met to Landlord's sole satisfaction, the
terms of Paragraph 21.B below shall apply provided, however, with
respect to the division of bonus rent, Tenant shall be entitled to
one-hundred percent (100%) thereof.
(2) CONDITIONS OF LANDLORD'S CONSENT. Without limiting the other instances
in which it may be reasonable for Landlord to withhold Landlord's
consent to an assignment or subletting, Landlord and Tenant acknowledge
that it shall be reasonable for Landlord to withhold Landlord's consent
in the following instances: if the proposed assignee does not agree to
be bound by and assume the obligations of Tenant under this Lease in
form and substance satisfactory to Landlord; the use of the Premises by
such proposed assignee or subtenant would not be a Permitted Use or
would violate any exclusivity or other arrangement which Landlord has
with any other tenant or occupant or any Regulation or would increase
the Occupancy Density or Parking Density of the Building or Project, or
would otherwise result in an undesirable tenant mix for the Project as
determined by Landlord; the proposed assignee or subtenant is not of
sound financial condition as determined by Landlord in Landlord's
reasonable discretion; the proposed assignee or subtenant is a
governmental agency; the proposed assignee or subtenant does not have a
good reputation as a tenant of property or a good business reputation;
the proposed assignee or subtenant is a person with whom Landlord is
negotiating to lease space in the Project or is a present tenant of the
Project; the assignment or subletting would entail any Alterations
which would lessen the value of the leasehold improvements in the
Premises or use of any Hazardous Materials or other noxious use or use
which may disturb other tenants of the Project; or Tenant is in default
of any material obligation of Tenant under this Lease, or Tenant has
defaulted under this Lease on three (3) or more occasions during any
twelve (12) months preceding the date that Tenant shall request
consent. Failure by or refusal of Landlord to consent to a proposed
assignee or subtenant shall not cause a termination of this Lease. Upon
a termination under Paragraph 21.A.(1)(i), Landlord may lease the
Premises to any party, including parties with whom Tenant has
negotiated an assignment or sublease, without incurring any liability
to Tenant. At the option of Landlord, a surrender and termination of
this Lease shall operate as an assignment to Landlord of some or all
subleases or subtenancies. Landlord shall exercise this option by
giving notice of that assignment to such subtenants on or before the
effective date of the surrender and termination. In connection with
each request for assignment or subletting, Tenant shall pay to Landlord
Landlord's standard fee for approving such requests, which amount shall
not exceed One Thousand Five Hundred and No/100 Dollars ($1,500.00), as
well as all costs incurred by Landlord or any mortgagee or ground
lessor in approving each such request and effecting any such transfer,
including, without limitation, reasonable attorneys' fees.
(3) PERMITTED TRANSFERS. An "Affiliate" means any entity that (i) controls,
is controlled by, or is under common control with Tenant (ii) results
from the transfer of all or substantially all of Tenant's assets or
stock, or (iii) results from the merger or consolidation of Tenant with
another entity. "Control," as used in the previous sentence, means the
direct or indirect ownership of more than fifty percent (50%) of the
voting securities of an entity or possession of the right to vote more
than fifty percent (50%) of the voting interest in the ordinary
direction of the entity's affairs. Notwithstanding anything to the
contrary contained in this Lease, Landlord's consent is not required
for any assignment of this Lease or sublease of all or a portion of the
Premises to an Affiliate so long as the following conditions are met (a
"PERMITTED TRANSFER"): (a) at least ten (10) business days before any
such assignment or sublease, Landlord receives written notice of such
assignment or sublease (as well as any documents or information
reasonably requested by Landlord regarding the proposed intended
transfer and the transferee); (b) Tenant is not then and has not been
in material default under this Lease; (c) if the transfer is an
assignment or any other transfer to an Affiliate
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other than a sublease, the intended assignee assumes in writing all of
Tenant's obligations under this Lease relating to the Premises in form
satisfactory to Landlord or, if the transfer is a sublease, the
intended sublessee accepts the sublease in form satisfactory to
Landlord; (d) the intended transferee has a tangible net worth, as
evidenced by financial statements delivered to Landlord and certified
by an independent certified public accountant in accordance with
generally accepted accounting principles that are consistently applied,
at least equal to an amount that would allow such proposed transferee
to meet all of Tenant's obligations under the this Lease for the
remainder of the Term, as such amount is determined by Landlord in its
sole discretion; (e) the Premises shall continue to be operated solely
for the use specified in the Basic Lease Information; and (f) Tenant
shall pay to Landlord Landlord's standard fee for approving assignments
and subleases and all costs reasonably incurred by Landlord or any
mortgagee or ground lessor for such assignment or subletting,
including, without limitation, reasonable attorneys' fees. No transfer
to an Affiliate in accordance with this subparagraph shall relieve
Tenant named herein of any obligation under this Lease or alter the
primary liability of Tenant named herein for the payment of Rent or for
the performance of any other obligation to be performed by Tenant,
including the obligations contained in Paragraph 25 with respect to any
Affiliate.
B. BONUS RENT. Subject to Paragraph 21.A (1) above, Any Rent or other
consideration realized by Tenant under any such sublease or assignment in excess
of the Rent payable hereunder (excluding consideration for the use of Tenant's
telephone system, furniture or other services or equipment provided by Tenant to
the proposed sublessee during the term of the proposed sublease, provided that
such exclusions are made in good faith and are not above the market value for
such equipment and/or services, as such market value is reasonably determined by
Landlord and Tenant), after amortization of a reasonable brokerage commission
and the reasonable, actual out of pocket costs of tenant improvements made
solely in connection with the sublease or assignment and incurred by Tenant,
shall be divided and paid, ten percent (10%) to Tenant, ninety percent (90%) to
Landlord. In any subletting or assignment undertaken by Tenant, Tenant shall
diligently seek to obtain the maximum rental amount available in the marketplace
for comparable space available for primary leasing.
C. CORPORATION. If Tenant is a corporation, a transfer of corporate shares by
sale, assignment, bequest, inheritance, operation of law or other disposition
(including such a transfer to or by a receiver or trustee in federal or state
bankruptcy, insolvency or other proceedings) resulting in a change in the
present control of such corporation or any of its parent corporations by the
person or persons owning a majority of said corporate shares, shall constitute
an assignment for purposes of this Lease. Notwithstanding anything to the
contrary in this Lease, the transfer of outstanding capital stock or other
listed equity interests, or the purchase of outstanding capital stock or other
listed equity interests, or the purchase of equity interests issued in an
initial public offering of stock, by persons or parties other than "insiders"
within the meaning of the Securities Exchange Act of 1934, as amended, through
the "over-the-counter" market or any recognized national or international
securities exchange shall not be included in determining whether control has
been transferred.
D. UNINCORPORATED ENTITY. If Tenant is a partnership, joint venture,
unincorporated limited liability company or other unincorporated business form,
a transfer of the interest of persons, firms or entities responsible for
managerial control of Tenant by sale, assignment, bequest, inheritance,
operation of law or other disposition, so as to result in a change in the
present control of said entity and/or of the underlying beneficial interests of
said entity and/or a change in the identity of the persons responsible for the
general credit obligations of said entity shall constitute an assignment for all
purposes of this Lease.
E. LIABILITY. No assignment or subletting by Tenant, permitted or otherwise,
shall relieve Tenant of any obligation under this Lease or alter the primary
liability of the Tenant named herein for the payment of Rent or for the
performance of any other obligations to be performed by Tenant, including
obligations contained in Paragraph 25 with respect to any assignee or subtenant.
Landlord may collect rent or other amounts or any portion thereof from any
assignee, subtenant, or other occupant of the Premises, permitted or otherwise,
and apply the net rent collected to the Rent payable hereunder, but no such
collection shall be deemed to be a waiver of this Paragraph 21, or the
acceptance of the assignee, subtenant or occupant as tenant, or a release of
Tenant from the further performance by Tenant of the obligations of Tenant under
this Lease. Any assignment or subletting which conflicts with the provisions
hereof shall be void.
22. AUTHORITY
Landlord represents and warrants that it has full right and authority to enter
into this Lease and to perform all of Landlord's obligations hereunder and that
all persons signing this Lease on its behalf are authorized to do. Tenant and
the person or persons, if any, signing on behalf of Tenant, jointly and
severally represent and warrant that Tenant has full right and authority to
enter into this Lease, and to perform all of Tenant's obligations hereunder, and
that all persons signing this Lease on its behalf are authorized to do so.
23. CONDEMNATION
A. CONDEMNATION RESULTING IN TERMINATION. If the whole or any substantial part
of the Premises should be taken or condemned for any public use under any
Regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would prevent or materially interfere with the Permitted
Use of the Premises, either party shall have the right to terminate this Lease
at its option. If any material portion of the Building or Project is taken or
condemned for any public use under any Regulation, or by right of eminent
domain, or by private purchase in lieu thereof, Landlord may terminate this
Lease at its option. In either of such events, the Rent shall be abated during
the unexpired portion of this Lease, effective when the physical taking of said
Premises shall have occurred.
B. CONDEMNATION NOT RESULTING IN TERMINATION. If a portion of the Project of
which the Premises are a part should be taken or condemned for any public use
under any Regulation, or by right of eminent domain, or by private purchase in
lieu thereof, and the taking prevents or materially interferes with the
Permitted Use of the Premises, and this Lease is not terminated as provided in
Paragraph 23.A. above, the Rent payable hereunder during the unexpired portion
of this Lease shall be reduced, beginning on the date when the physical taking
shall have occurred, to such amount as may be fair and reasonable under all of
the circumstances, but only after giving Landlord credit for all sums received
or to be received by Tenant by the condemning authority. Notwithstanding
anything to the contrary contained in this Paragraph, if the temporary use or
occupancy of any part of the Premises shall be taken or appropriated under power
of eminent domain during the Term, this Lease shall be and remain unaffected by
such taking or appropriation and Tenant shall continue to pay in full all Rent
payable hereunder by Tenant during the Term; in the event of any such temporary
appropriation or taking, Tenant shall be entitled to receive that portion of any
award which represents compensation for the use of or occupancy of the Premises
during the Term, and Landlord shall be entitled to receive that portion of any
award which represents the cost of restoration of the Premises and the use and
occupancy of the Premises.
C. AWARD. Landlord shall be entitled to (and Tenant shall assign to Landlord)
any and all payment, income, rent, award or any interest therein whatsoever
which may be paid or made in connection with such taking or conveyance and
Tenant shall have no claim against Landlord or otherwise for any sums paid by
virtue of such proceedings, whether or not attributable to the value of any
unexpired portion of this Lease, except as expressly provided in this Lease.
Notwithstanding the foregoing, any compensation specifically and separately
awarded Tenant for Tenant's personal property, Tenant Improvements to the extent
paid for by Tenant, moving costs and "good will" (to the extent such award is
expressly made to Tenant by the appropriate authority and does not in any way
reduce Landlord's award), shall be and remain the property of Tenant.
16
D. WAIVER OF CCP Section 1265.130. Each party waives the provisions of
California Civil Code Procedure Section 1265.130 allowing either party to
petition the superior court to terminate this Lease as a result of a partial
taking.
24. CASUALTY DAMAGE
A. GENERAL. If the Premises or Building should be damaged or destroyed by fire,
tornado, or other casualty (collectively, "CASUALTY"), Tenant shall give
immediate written notice thereof to Landlord. Within thirty (30) days after
Landlord's receipt of such notice, Landlord shall notify Tenant whether in
Landlord's estimation material restoration of the Premises can reasonably be
made within two hundred seventy (270) days from the date Landlord becomes aware
of such destruction. Landlord's determination shall be binding on Tenant.
B. WITHIN 270 DAYS. If the Premises or Building should be damaged by Casualty to
such extent that material restoration can in Landlord's estimation be reasonably
completed within two hundred seventy (270) days after the date Landlord becomes
aware of destruction, this Lease shall not terminate. Provided that insurance
proceeds are received by Landlord to fully repair the damage, Landlord shall
proceed to rebuild and repair the Premises in the manner determined by Landlord,
except that Landlord shall not be required to rebuild, repair or replace any
part of the Alterations (excluding the initial Tenant Improvements) which may
have been placed on or about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage, the Rent payable
hereunder during the period in which they are untenantable shall be abated
proportionately.
C. GREATER THAN 270 DAYS. If the Premises or Building should be damaged by
Casualty to such extent that rebuilding or repairs cannot in Landlord's
estimation be reasonably completed within two hundred seventy (270) days after
the date Landlord becomes aware of damage, and such damage materially and
adversely interferes with the conduct of Tenant's business in the Premises, then
either party shall have the right to cancel this Lease by giving the other party
written notice within ten (10) days from the date of Landlord's notice that
material restoration of the Premises cannot be made within such two hundred
seventy (270) day period or notice that Landlord has elected not to rebuild or
repair the Premises. Said cancellation shall be effective thirty (30) days from
the first day that either party gives its notice to cancel. If neither party
elects to so cancel this Lease, Landlord shall proceed to rebuild and repair the
Premises diligently and in the manner determined by Landlord, except that
Landlord shall not be required to rebuild, repair or replace any part of any
Alterations which may have been placed on or about the Premises by Tenant. If
the Premises are untenantable in whole or in part following such damage, the
Rent payable hereunder during the period in which they are untenantable shall be
abated proportionately. Notwithstanding the above, Landlord shall not be
required to rebuild, repair or replace any part of any Alterations which may
have been placed, on or about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage, the Rent payable
hereunder during the period in which they are untenantable shall be abated
proportionately. If the parties hereto do not terminate this Lease as provided
in this paragraph, Landlord shall commence repairs and restoration of the
Premises diligently and in the manner determined by Landlord.
D. TENANT'S FAULT. Notwithstanding anything herein to the contrary, if the
Premises or any other portion of the Building are damaged by Casualty resulting
from the fault, negligence, or breach of this Lease by Tenant or any of Tenant's
Parties, Base Rent and Additional Rent shall not be diminished during the repair
of such damage and Tenant shall be liable to Landlord for the cost and expense
of the repair and restoration of the Building caused thereby to the extent such
cost and expense is not covered by insurance proceeds; provided that Tenant
shall not be liable for that portion of the repair costs for which Landlord was
obligated under the terms of this Lease to carry insurance but failed to carry
such insurance.
E. INSURANCE PROCEEDS. Notwithstanding anything herein to the contrary, and
provided that Landlord carries the insurance coverages expressly required under
the terms of this Lease with respect to the that portion of the Premises or
Building which is damaged or destroyed, if the Premises or Building are damaged
or destroyed and are not fully covered by the insurance proceeds received by
Landlord or if the holder of any indebtedness secured by a mortgage or deed of
trust covering the Premises requires that the insurance proceeds be applied to
such indebtedness, then in either case Landlord shall have the right to
terminate this Lease by delivering written notice of termination to Tenant
within thirty (30) days after the date of notice to Landlord that said damage or
destruction is not fully covered by insurance or such requirement is made by any
such holder, as the case may be, whereupon this Lease shall terminate. For
purposes of this Paragraph 24, insurance proceeds shall include deductible
amounts associated therewith, provided, however, that such amounts may be deemed
Operating Expenses in accordance with Paragraph 7 hereof.
F. WAIVER. This Paragraph 24 shall be Tenant's sole and exclusive remedy in the
event of damage or destruction to the Premises or the Building. As a material
inducement to Landlord entering into this Lease, Tenant hereby waives any rights
it may have under Sections 1932, 1933(4), 1941 or 1942 of the Civil Code of
California with respect to any destruction of the Premises, Landlord's
obligation for tenantability of the Premises and Tenant's right to make repairs
and deduct the expenses of such repairs, or under any similar law, statute or
ordinance now or hereafter in effect.
G. TENANT'S PERSONAL PROPERTY. In the event of any damage or destruction of the
Premises or the Building, under no circumstances shall Landlord be required to
repair any injury or damage to, or make any repairs to or replacements of,
Tenant's personal property.
25. HOLDING OVER
Unless Landlord expressly consents in writing to Tenant's holding over, Tenant
shall be unlawfully and illegally in possession of the Premises, whether or not
Landlord accepts any rent from Tenant or any other person while Tenant remains
in possession of the Premises without Landlord's written consent. If Tenant
shall retain possession of the Premises or any portion thereof without
Landlord's consent following the expiration of this Lease or sooner termination
for any reason, then Tenant shall pay to Landlord for each day of such retention
the amount of any damages suffered by Landlord due to Tenant's holding over,
plus the greater of the following: (i) one-hundred fifty percent (150%) of the
amount of daily rental plus Operating Expenses as of the last month prior to the
date of expiration or earlier termination, or (ii) one-hundred fifty percent
(150%) of the fair rental value of the Premises as reasonably determined by
Landlord. Tenant shall also indemnify, defend, protect and hold Landlord
harmless from any loss, liability or cost, including consequential and
incidental damages and reasonable attorneys' fees, incurred by Landlord
resulting from delay by Tenant in surrendering the Premises, including, without
limitation, any claims made by the succeeding tenant founded on such delay.
Acceptance of Rent by Landlord following expiration or earlier termination of
this Lease, or following demand by Landlord for possession of the Premises,
shall not constitute a renewal of this Lease, and nothing contained in this
Paragraph 25 shall waive Landlord's right of reentry or any other right.
Additionally, if upon expiration or earlier termination of this Lease, or
following demand by Landlord for possession of the Premises, Tenant has not
fulfilled its obligation with respect to repairs and cleanup of the Premises or
any other Tenant obligations as set forth in this Lease, then Landlord shall
have the right to perform any such obligations as it deems necessary at Tenant's
sole cost and expense, and any time required by Landlord to complete such
obligations shall be considered a period of holding over and the terms of this
Paragraph 25 shall apply. The provisions of this Paragraph 25 shall survive any
expiration or earlier termination of this Lease.
26. DEFAULT
A. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute an
event of default on the part of Tenant:
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(1) ABANDONMENT. Abandonment or vacation of the Premises for a
continuous period in excess of thirty (30) days. Tenant waives any
right to notice Tenant may have under Section 1951.3 of the Civil Code
of the State of California, the terms of this Paragraph 26.A. being
deemed such notice to Tenant as required by said Section 1951.3.
(2) NONPAYMENT OF RENT. Failure to pay any installment of Rent or any
other amount due and payable hereunder when said payment is due, such
failure continuing for three (3) days after written notice of such
failure, as to which time is of the essence, provided that Landlord
shall not be required to provide such notice more than once during the
twelve (12) month period commencing with the date of such notice. The
second failure to pay any such amount when such payment is due during
such 12-month period shall be an event of default hereunder without
notice. Such notice period shall run concurrently with, rather than
supplement, any statutory notice period required under Code of Civil
Procedure Section 1161 or any similar or successor statute.
(3) OTHER OBLIGATIONS. Failure to perform any obligation, agreement or
covenant under this Lease other than those matters specified in
subparagraphs (1) and (2) of this Paragraph 26.A., such failure
continuing for thirty (30) days after written notice of such failure,
as to which time is of the essence. Notwithstanding anything to the
contrary contained in this Lease, the following shall constitute an
event of default under this Paragraph 26.A(3) without any such notice
or lapse of time: (i) failure to provide an estoppel certificate when
and as required under Paragraph 18 hereof; (ii) failure to maintain
insurance required under Paragraph 8 hereof; (iii) failure to vacate
the Premises upon the expiration or earlier termination of this Lease;
(iv) failure to comply with any obligation under this Lease pertaining
to Hazardous Materials; (v) any other matter provided for in another
subparagraph of this Paragraph 26.A or for which another time limit is
provided elsewhere in this Lease, including without limitation, under
Exhibit C to this Lease.
(4) GENERAL ASSIGNMENT. A general assignment by Tenant for the benefit
of creditors.
(5) BANKRUPTCY. The filing of any voluntary petition in bankruptcy by
Tenant, or the filing of an involuntary petition by Tenant's creditors,
which involuntary petition remains undischarged for a period of sixty
(60) days. If under applicable law, the trustee in bankruptcy or Tenant
has the right to affirm this Lease and continue to perform the
obligations of Tenant hereunder, such trustee or Tenant shall, in such
time period as may be permitted by the bankruptcy court having
jurisdiction, cure all defaults of Tenant hereunder outstanding as of
the date of the affirmance of this Lease and provide to Landlord such
adequate assurances as may be necessary to ensure Landlord of the
continued performance of Tenant's obligations under this Lease.
(6) RECEIVERSHIP. The employment of a receiver to take possession of
substantially all of Tenant's assets or Tenant's leasehold of the
Premises, if such appointment remains undismissed or undischarged for a
period of thirty (30) days after the order therefor.
(7) ATTACHMENT. The attachment, execution or other judicial seizure of
all or substantially all of Tenant's assets or Tenant's leasehold of
the Premises, if such attachment or other seizure remains undismissed
or undischarged for a period of thirty (30) days after the levy
thereof.
(8) INSOLVENCY. The admission by Tenant in writing of its inability to
pay its debts as they become due.
B. REMEDIES UPON DEFAULT.
(1) TERMINATION. In the event of the occurrence of any event of
default, Landlord shall have the right to give a written termination
notice to Tenant, and on the date specified in such notice, Tenant's
right to possession shall terminate, and this Lease shall terminate
unless on or before such date all Rent in arrears and all costs and
expenses incurred by or on behalf of Landlord hereunder shall have been
paid by Tenant and all other events of default of this Lease by Tenant
at the time existing shall have been fully remedied to the satisfaction
of Landlord. At any time after such termination, Landlord may recover
possession of the Premises or any part thereof and expel and remove
therefrom Tenant and any other person occupying the same, including any
subtenant or subtenants notwithstanding Landlord's consent to any
sublease, by any lawful means, and again repossess and enjoy the
Premises without prejudice to any of the remedies that Landlord may
have under this Lease, or at law or equity by any reason of Tenant's
default or of such termination. Landlord hereby reserves the right, but
shall not have the obligation, to recognize the continued possession of
any subtenant. The delivery or surrender to Landlord by or on behalf of
Tenant of keys, entry codes, or other means to bypass security at the
Premises shall not terminate this Lease.
(2) CONTINUATION AFTER DEFAULT. Even though an event of default may
have occurred, this Lease shall continue in effect for so long as
Landlord does not terminate Tenant's right to possession under
Paragraph 26.B.(1) hereof, and Landlord may enforce all of Landlord's
rights and remedies under this Lease and at law or in equity, including
without limitation, the right to recover Rent as it becomes due, and
Landlord, without terminating this Lease, may exercise all of the
rights and remedies of a landlord under Section 1951.4 of the Civil
Code of the State of California or any successor code section. Acts of
maintenance, preservation or efforts to lease the Premises or the
appointment of a receiver under application of Landlord to protect
Landlord's interest under this Lease or other entry by Landlord upon
the Premises shall not constitute an election to terminate Tenant's
right to possession.
(3) INTENTIONALLY OMITTED.
C. DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant to the
provisions of Paragraph 26.B.(1) hereof, Landlord shall have the rights and
remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State
of California, or any successor code sections. Upon such termination, in
addition to any other rights and remedies to which Landlord may be entitled
under applicable law or at equity, Landlord shall be entitled to recover from
Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts
which had been earned at the time of termination, (2) the worth at the time of
award of the amount by which the unpaid Rent and other amounts that would have
been earned after the date of termination until the time of award exceeds the
amount of such Rent loss that Tenant proves could have been reasonably avoided;
(3) the worth at the time of award of the amount by which the unpaid Rent and
other amounts for the balance of the Term after the time of award exceeds the
amount of such Rent loss that the Tenant proves could be reasonably avoided; and
(4) any other amount and court costs necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or which, in the ordinary course of things, would be likely to
result therefrom. The "worth at the time of award" as used in (1) and (2) above
shall be computed at the Applicable Interest Rate (defined below). The "worth at
the time of award" as used in (3) above shall be computed by discounting such
amount at the Federal Discount Rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%). If this Lease provides for any
periods during the Term during which Tenant is not required to pay Base Rent or
if Tenant otherwise receives a Rent concession, then upon the occurrence of an
event of default, Tenant shall owe to Landlord the full amount of such Base Rent
or value of such Rent concession, plus interest at the Applicable Interest Rate,
calculated from the date that such Base Rent or Rent concession would have been
payable.
D. LATE CHARGE. In addition to its other remedies, Landlord shall have the right
without notice or demand to add to the amount of any payment required to be made
by Tenant hereunder, and which is not paid and received by Landlord on or before
the first day of each
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calendar month, an amount equal to three percent (3%) of the delinquency for
each month or portion thereof that the delinquency remains outstanding to
compensate Landlord for the loss of the use of the amount not paid and the
administrative costs caused by the delinquency, the parties agreeing that
Landlord's damage by virtue of such delinquencies would be extremely difficult
and impracticable to compute and the amount stated herein represents a
reasonable estimate thereof; provided, however, that one (1) time during any
twelve (12) month period of the Term, Landlord shall provide to Tenant verbal or
written notice, at Landlord's election, of Tenant's failure to pay an amount
owed and the late fee described herein shall not apply for a period of three (3)
business days following Landlord's delivery of such notice. Any waiver by
Landlord of any late charges or failure to claim the same shall not constitute a
waiver of other late charges or any other remedies available to Landlord.
E. INTEREST. Interest shall accrue on all sums not paid when due hereunder at
the lesser of eighteen percent (18%) per annum or the maximum interest rate
allowed by law ("APPLICABLE INTEREST RATE") from the due date until paid.
F. REMEDIES CUMULATIVE. All rights, privileges and elections or remedies of the
parties are cumulative and not alternative, to the extent permitted by law and
except as otherwise provided herein.
G. PRESUMPTION. With respect to this Paragraph 26 (Default), except as otherwise
expressly stated, with respect to any consent, determination or estimation of
Landlord required or allowed or requested of Landlord, Landlord's consent,
determination or estimation shall be given or made solely by Landlord in
Landlord's good faith opinion, whether or not objectively reasonable.
27. LIENS
Tenant shall at all times keep the Premises and the Project free from liens
arising out of or related to work or services performed, materials or supplies
furnished or obligations incurred by or on behalf of Tenant or in connection
with work made, suffered or done by or on behalf of Tenant in or on the Premises
or Project. If Tenant shall not, within ten (10) days following the imposition
of any such lien, cause the same to be released of record by payment or posting
of a proper bond, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but not the obligation, to cause the same
to be released by such means as Landlord shall deem proper, including payment of
the claim giving rise to such lien. All sums paid by Landlord on behalf of
Tenant and all expenses incurred by Landlord in connection therefor shall be
payable to Landlord by Tenant on demand with interest at the Applicable Interest
Rate as Additional Rent. Landlord shall have the right at all times to post and
keep posted on the Premises any notices permitted or required by law, or which
Landlord shall deem proper, for the protection of Landlord, the Premises, the
Project and any other party having an interest therein, from mechanics' and
materialmen's liens, and Tenant shall give Landlord not less than ten (10)
business days prior written notice of the commencement of any work in the
Premises or Project which could lawfully give rise to a claim for mechanics' or
materialmen's liens to permit Landlord to post and record a timely notice of
non-responsibility, as Landlord may elect to proceed or as the law may from time
to time provide, for which purpose, if Landlord shall so determine, Landlord may
enter the Premises. Tenant shall not remove any such notice posted by Landlord
without Landlord's consent, and in any event not before completion of the work
which could lawfully give rise to a claim for mechanics' or materialmen's liens.
28. SUBSTITUTION
Intentionally Omitted.
29. TRANSFERS BY LANDLORD
In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
Landlord from any liability upon any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, to the extent required to be
performed after the passing of title to Landlord's successor-in-interest;
provided, however, that such release shall be effective only upon Landlord's
actual delivery of the LOC (defined herein) to any such successor, and written
notice by Landlord to Tenant of such delivery, and only to the extent that such
successor assumes, expressly or by operation of law, Landlord's obligations
hereunder. In such event, Tenant agrees to look solely to the responsibility of
the successor-in-interest of Landlord under this Lease with respect to the
performance of the covenants and duties of "Landlord" to be performed after the
passing of title to Landlord's successor-in-interest. This Lease shall not be
affected by any such sale and Tenant agrees to attorn to the purchaser or
assignee. Landlord's successor(s)-in-interest shall not have liability to Tenant
with respect to the failure to perform any of the obligations of "Landlord," to
the extent required to be performed prior to the date such
successor(s)-in-interest became the owner of the Building.
30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS
All covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any abatement of Rent. Except with respect to Hazardous Materials and
Tenant's obligations in Paragraph 4.D hereof, If Tenant shall fail to pay any
sum of money, other than Base Rent, required to be paid by Tenant hereunder or
shall fail to perform any other act on Tenant's part to be performed hereunder,
including Tenant's obligations under Paragraph 11 hereof, and such failure shall
continue for thirty (30) days after written notice thereof by Landlord, in
addition to the other rights and remedies of Landlord, Landlord may make any
such payment and perform any such act on Tenant's part. In the case of an
emergency (which shall be situations of risk of personal injury or death,
significant property damage to Tenant's personal property or property damage to
the Premises or the Building or Project, or in the event work in connection with
the compliance with Regulations is immediately required), no prior notification
by Landlord shall be required. Landlord may take such actions without any
obligation and without releasing Tenant from any of Tenant's obligations. All
sums so paid by Landlord and all incidental costs incurred by Landlord and
interest thereon at the Applicable Interest Rate, from the date of payment by
Landlord, shall be paid to Landlord on demand as Additional Rent.
31. WAIVER
If either Landlord or Tenant waives the performance of any term, covenant or
condition contained in this Lease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition contained herein, or constitute a course of dealing contrary to the
expressed terms of this Lease. The acceptance of Rent by Landlord shall not
constitute a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, regardless of Landlord's knowledge of such preceding
breach at the time Landlord accepted such Rent. Failure by Landlord to enforce
any of the terms, covenants or conditions of this Lease for any length of time
shall not be deemed to waive or decrease the right of Landlord to insist
thereafter upon strict performance by Tenant. Waiver by Landlord of any term,
covenant or condition contained in this Lease may only be made by a written
document signed by Landlord, based upon full knowledge of the circumstances.
32. NOTICES
Each provision of this Lease or of any applicable governmental laws, ordinances,
regulations and other requirements with reference to sending, mailing, or
delivery of any notice or the making of any payment by Landlord or Tenant to the
other shall be deemed to be complied with when and if the following steps are
taken:
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A. RENT. All Rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at Landlord's Remittance Address set
forth in the Basic Lease Information, or at such other address as Landlord may
specify from time to time by written notice delivered in accordance herewith.
Tenant's obligation to pay Rent and any other amounts to Landlord under the
terms of this Lease shall not be deemed satisfied until such Rent and other
amounts have been actually received by Landlord.
B. OTHER. All notices, demands, consents and approvals which may or are required
to be given by either party to the other hereunder shall be in writing and
either personally delivered, sent by commercial overnight courier, mailed,
certified or registered, postage prepaid or sent by facsimile with confirmed
receipt (and with an original sent by commercial overnight courier), and in each
case addressed to the party to be notified at the Notice Address for such party
as specified in the Basic Lease Information or to such other place as the party
to be notified may from time to time designate by at least fifteen (15) days
notice to the notifying party. Notices shall be deemed served upon receipt or
refusal to accept delivery.
C. REQUIRED NOTICES. Tenant shall immediately notify Landlord in writing of any
notice of a violation or a potential or alleged violation of any Regulation that
relates to the Premises or the Project, or of any inquiry, investigation,
enforcement or other action that is instituted or threatened by any governmental
or regulatory agency against Tenant or any other occupant of the Premises, or
any claim that is instituted or threatened by any third party that relates to
the Premises or the Project.
33. ATTORNEYS' FEES
If Landlord places the enforcement of this Lease, or any part thereof, or the
collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Tenant shall pay to
Landlord, upon demand, Landlord's reasonable attorneys' fees and court costs,
whether incurred without trial, at trial, appeal or review. In any action which
Landlord or Tenant brings to enforce its respective rights hereunder, the
unsuccessful party shall pay all costs incurred by the prevailing party
including reasonable attorneys' fees, to be fixed by the court, and said costs
and attorneys' fees shall be a part of the judgment in said action.
34. SUCCESSORS AND ASSIGNS
This Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and inure to the benefit of
Tenant, its successors, and to the extent assignment is approved by Landlord as
provided hereunder, Tenant's assigns.
35. FORCE MAJEURE
Subject to any express statements to the contrary contained in EXHIBIT C hereof,
if performance by a party of any portion of this Lease is made impossible by any
prevention, delay, or stoppage caused by strikes, lockouts, labor disputes, acts
of God, inability to obtain services, labor, or materials or reasonable
substitutes for those items, government actions, civil commotions, fire or other
casualty, or other causes beyond the reasonable control of the party obligated
to perform, performance by that party for a period equal to the period of that
prevention, delay, or stoppage is excused. Tenant's obligation to pay Rent,
however, is not excused by this Paragraph 35.
36. SURRENDER OF PREMISES
Tenant shall, upon expiration or sooner termination of this Lease, surrender the
Premises to Landlord in the same condition as existed on the date Tenant
originally took possession thereof, reasonable wear and tear excepted,
including, but not limited to, all holes in walls repaired and all floors broom
cleaned and free of any Tenant-introduced marking or painting, all to the
reasonable satisfaction of Landlord. Tenant shall remove all of its debris from
the Project. At or before the time of surrender, Tenant shall comply with the
terms of Paragraph 12.A. hereof with respect to Alterations to the Premises and
all other matters addressed in such Paragraph. If the Premises are not so
surrendered at the expiration or sooner termination of this Lease, the
provisions of Paragraph 25 hereof shall apply. All keys to the Premises or any
part thereof shall be surrendered to Landlord upon expiration or sooner
termination of the Term. Tenant shall give written notice to Landlord at least
thirty (30) days prior to vacating the Premises and shall meet with Landlord for
a joint inspection of the Premises for the purpose of confirming Tenant's
obligations with respect to the surrender of the Premises at the time of
vacating, but nothing contained herein shall be construed as an extension of the
Term or as a consent by Landlord to any holding over by Tenant. In the event of
Tenant's failure to give such notice or participate in such joint inspection,
Landlord's inspection at or after Tenant's vacating the Premises shall
conclusively be deemed correct for purposes of determining Tenant's
responsibility for repairs and restoration. Any delay caused by Tenant's failure
to carry out its obligations under this Paragraph 36 beyond the term hereof,
shall constitute unlawful and illegal possession of Premises under Paragraph 25
hereof.
37. PARKING
So long as Tenant is occupying the Premises, Tenant and Tenant's Parties
shall have the right to use up to the number of parking spaces, if any,
specified in the Basic Lease Information on an unreserved, nonexclusive, first
come, first served basis, for passenger-size automobiles, in the parking areas
in the Project designated from time to time by Landlord for use in common by
tenants of the Building.
Tenant may request additional parking spaces from time to time and if
Landlord in its sole discretion agrees to make such additional spaces available
for use by Tenant, such spaces shall be provided on a month-to-month unreserved
and nonexclusive basis (unless otherwise agreed in writing by Landlord), and
shall otherwise be subject to such terms and conditions as Landlord may require.
Tenant shall at all times comply and shall make reasonable efforts to cause
all Tenant's Parties and visitors to comply with all Regulations and any rules
and regulations established from time to time by Landlord relating to parking at
the Project, including any keycard, sticker or other identification or entrance
system, and hours of operation, as applicable.
Landlord shall have no liability for any damage to property or other items
located in the parking areas of the Project, nor for any personal injuries or
death arising out of the use of parking areas in the Project by Tenant or any
Tenant's Parties. Without limiting the foregoing, if Landlord arranges for the
parking areas to be operated by an independent contractor not affiliated with
Landlord, Tenant acknowledges that Landlord shall have no liability for claims
arising through acts or omissions of such independent contractor. In all events,
Tenant agrees to look first to its insurance carrier and to require that
Tenant's Parties look first to their respective insurance carriers for payment
of any losses sustained in connection with any use of the parking areas.
Landlord reserves the right to assign specific spaces, and to reserve
spaces for visitors, small cars, disabled persons or for other tenants or
guests, and Tenant shall not park and shall not allow Tenant's Parties to park
in any such assigned or reserved spaces. Landlord also reserves the right to
alter, modify, relocate or close all or any portion of the parking areas in
order to make repairs or perform maintenance service, or to restripe or renovate
the parking areas, or if required by casualty, condemnation, act of God,
Regulations or for any other reason deemed reasonable by Landlord, provided that
such repairs or maintenance does not materially and adversely affect Tenant's
parking privileges expressly granted in this Lease on a long-term or permanent
basis and provided further that Landlord cannot provide reasonable alternative
parking to Tenant.
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38. MISCELLANEOUS
A. GENERAL. The term "Tenant" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their respective successors, executors,
administrators and permitted assigns, according to the context hereof.
B. TIME. Time is of the essence regarding this Lease and all of its provisions.
C. CHOICE OF LAW. This Lease shall in all respects be governed by the laws of
the State of California.
D. ENTIRE AGREEMENT. This Lease, together with its Exhibits, addenda and
attachments and the Basic Lease Information, contains all the agreements of the
parties hereto and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its Exhibits, addenda and
attachments and the Basic Lease Information.
E. MODIFICATION. This Lease may not be modified except by a written instrument
signed by the parties hereto. Tenant accepts the area of the Premises as
specified in the Basic Lease Information as the approximate area of the Premises
for all purposes under this Lease, and acknowledges and agrees that no other
definition of the area (rentable, usable or otherwise) of the Premises shall
apply. Tenant shall in no event be entitled to a recalculation of the square
footage of the Premises, rentable, usable or otherwise, and no recalculation, if
made, irrespective of its purpose, shall reduce Tenant's obligations under this
Lease in any manner, including without limitation the amount of Base Rent
payable by Tenant or Tenant's Proportionate Share of the Building and of the
Project.
F. SEVERABILITY. If, for any reason whatsoever, any of the provisions hereof
shall be unenforceable or ineffective, all of the other provisions shall be and
remain in full force and effect.
G. RECORDATION. Tenant shall not record this Lease or a short form memorandum
hereof.
H. EXAMINATION OF LEASE. Submission of this Lease to Tenant does not constitute
an option or offer to lease and this Lease is not effective otherwise until
execution and delivery by both Landlord and Tenant.
I. ACCORD AND SATISFACTION. No payment by Tenant of a lesser amount than the
total Rent due nor any endorsement on any check or letter accompanying any check
or payment of Rent shall be deemed an accord and satisfaction of full payment of
Rent, and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies. All offers by
or on behalf of Tenant of accord and satisfaction are hereby rejected in
advance.
J. EASEMENTS. Landlord may grant easements on the Project and dedicate for
public use portions of the Project without Tenant's consent; provided that no
such grant or dedication shall materially interfere with Tenant's Permitted Use
of the Premises. Upon Landlord's request, Tenant shall execute, acknowledge and
deliver to Landlord documents, instruments, maps and plats necessary to
effectuate Tenant's covenants hereunder.
K. DRAFTING AND DETERMINATION PRESUMPTION. The parties acknowledge that this
Lease has been agreed to by both the parties, that both Landlord and Tenant have
consulted with attorneys with respect to the terms of this Lease and that no
presumption shall be created against Landlord because Landlord drafted this
Lease. If Landlord fails to respond to any request for its consent within the
time period, if any, specified in this Lease, Landlord shall be deemed to have
disapproved such request.
L. EXHIBITS. The Basic Lease Information, and the Exhibits, addenda and
attachments attached hereto are hereby incorporated herein by this reference and
made a part of this Lease as though fully set forth herein.
M. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light, air
or view by any structure which may be erected on lands adjacent to or in the
vicinity of the Building shall in no way affect this Lease or impose any
liability on Landlord.
N. NO THIRD PARTY BENEFIT. This Lease is a contract between Landlord and Tenant
and nothing herein is intended to create any third party benefit.
O. QUIET ENJOYMENT. Upon payment by Tenant of the Rent, and upon the observance
and performance of all of the other covenants, terms and conditions on Tenant's
part to be observed and performed, Tenant shall peaceably and quietly hold and
enjoy the Premises for the term hereby demised without hindrance or interruption
by Landlord or any other person or persons lawfully or equitably claiming by,
through or under Landlord, subject, nevertheless, to all of the other terms and
conditions of this Lease. Landlord shall not be liable for any hindrance,
interruption, interference or disturbance by other tenants or third persons, nor
shall Tenant be released from any obligations under this Lease because of such
hindrance, interruption, interference or disturbance.
P. COUNTERPARTS. This Lease may be executed in any number of counterparts, each
of which shall be deemed an original.
Q. MULTIPLE PARTIES. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.
R. PRORATIONS. Any Rent or other amounts payable to Landlord by Tenant hereunder
for any fractional month shall be prorated based on a month of 30 days. As used
herein, the term "fiscal year" shall mean the calendar year or such other fiscal
year as Landlord may deem appropriate.
39. ADDITIONAL PROVISIONS
A. RENT.
Subject to the provisions of Paragraph 2.B. and this Paragraph 39, Base Rent,
net of Operating Expenses per Paragraph 7 of this Lease, for the Premises shall
be as follows:
For the period commencing upon the Building $128,287.25 per month plus
A Premises Term Commencement Date through operating expenses per Paragraph
the day preceding the Building B Premises 7 of this Lease. Operating
Term Commencement Date: Expenses for calendar year 2000
are estimated to be $28,815.29
per month.
From the Building B Premises Term $522,093.00 per month plus
Commencement Date though the end of the operating expenses per Paragraph
7 of this Lease. Operating
Expenses for calendar year 2000
are estimated to be $117,270.12
per month.
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twelfth month thereafter:
Month 13 through Month 24: $538,094.00 per month plus
operating expenses per Paragraph
7 of this Lease
Month 25: through Month 36: $554,585.00 per month plus
operating expenses per Paragraph
7 of this Lease.
Month 37 through Month 48: $571,582.00 per month plus
operating expenses per Paragraph
7 of this Lease.
Month 49 through Month 60: $589,099.00 per month plus
operating expenses per Paragraph
7 of this Lease.
Month 61 through Month 72: $607,153.00 per month plus
operating expenses per Paragraph
7 of this Lease.
Month 73 through Month 84: $625,761.00 per month plus
operating expenses per Paragraph
7 of this Lease.
Month 84 through Month 96: $644,939.00 per month plus
operating expenses per Paragraph
7 of this Lease.
Month 97 through Month 108: $664,705.00 per month plus
operating expenses per Paragraph
7 of this Lease
Month 109 through Month 120: $685,076.00 per month plus
operating expenses per Paragraph
7 of this Lease.
Month 121 through Month 132: $706,072.00 per month plus
operating expenses per Paragraph
7 of this Lease.
Month 133 through Month 144: $727,711.00 per month plus
operating expenses per Paragraph
7 of this Lease.
B. LETTER OF CREDIT.
(1) DELIVERY OF LETTER OF CREDIT. In addition to depositing the
cash security deposit described in the Basic Lease Information
with Landlord, Tenant shall, within ten (10) business days
following Tenant's execution of this Lease, deliver to
Landlord and cause to be in effect during the Lease Term an
unconditional, irrevocable letter of credit ("LOC") in the
amount equal to Five Million and No/100 Dollars, which amount
shall, by the express terms of the LOC, automatically increase
to an amount equal to Nine Million Five Hundred Thousand
Dollars on May 1, 2000 (the "LOC AMOUNT") (Landlord's
construction schedule currently reflects timing such that the
structural steel of Building B may be erected by May 1, 2000,
subject to Tenant Delays (as defined in Exhibit C) and other
conditions expressly provided in Exhibit C; provided, however,
that no reference to such schedule shall appear in the
language of the LOC document and the completion of the
erection of the structural steel of Building B shall in no
event be deemed or interpreted to be a condition precedent to
the automatic increase in the LOC Amount to Nine Million Five
Hundred Thousand Dollars on May 1, 2000). The initial term of
the LOC shall be four (4) years and shall thereafter renew
automatically from year to year through the date which is
thirty (30) days after expiration of this Lease or any
extension hereto. The express terms of the LOC shall provide
that the issuing bank shall notify Landlord in writing at
least sixty (60) days in advance in the event that such
issuing bank shall not automatically renew the LOC as
described above and Landlord shall then be entitled to draw on
the LOC as provided herein. The LOC shall be in a form
acceptable to Landlord and shall be issued by an LOC bank
selected by Tenant and acceptable to Landlord. An LOC bank is
a bank that accepts deposits, maintains accounts, has a local
office that will negotiate a letter of credit, and the
deposits of which are insured by the Federal Deposit Insurance
Corporation. Tenant shall pay all expenses, points, or fees
incurred by Tenant in obtaining the LOC. The LOC shall not be
mortgaged, assigned or encumbered in any manner whatsoever by
Tenant without the prior written consent of Landlord. Tenant
acknowledges that Landlord has the right to transfer or
mortgage its interest in the Project, the Building and in this
Lease and Tenant agrees that in the event of any such transfer
or mortgage, Landlord shall have the right to transfer or
assign the LOC and/or the LOC Security Deposit (as defined
below) to the transferee or mortgagee, and in the event of
such transfer, Tenant shall look solely to such transferee or
mortgagee for the return of the LOC and/or the LOC Security
Deposit. Landlord shall be responsible for a reasonable and
actual standard transfer fee of the issuing bank charged in
connection with such transfer.
(2) REPLACEMENT OF LETTER OF CREDIT. Tenant may, from time to
time, replace any existing LOC with a new LOC if the new LOC
(a) becomes effective at least thirty (30) days before
expiration of the LOC that it replaces; (b) is in the required
LOC amount; (c) is issued by an LOC bank acceptable to
Landlord; and (d) otherwise complies with the requirements of
this Paragraph 39.
(3) LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT. Landlord shall
hold the LOC as security for the performance of Tenant's
obligations under this Lease. If, after notice and failure to
cure within any applicable period provided in this Lease,
Tenant defaults on any provision of this Lease, Landlord may,
without prejudice to any other remedy it has, and after
Landlord first applies the cash security described in the
Basic Lease Information to any such Tenant default, draw on
that portion of the LOC necessary to (a) pay Rent or other sum
in default; (b) pay or reimburse Landlord for any amount that
Landlord may spend or become obligated to spend in exercising
Landlord's rights under Paragraph 30 (Right of Landlord to
Perform Tenant's Covenant); and/or (c) compensate Landlord for
any expense, loss, or damage that Landlord may suffer because
of Tenant's default. If Tenant fails to renew or replace the
LOC at least thirty (30) days before its expiration, Landlord
may, without prejudice to any other remedy it has, draw on the
entire amount of the LOC.
(4) LOC SECURITY DEPOSIT. Any amount of the LOC that is drawn on
by Landlord but not applied by Landlord shall be held by
Landlord as a security deposit (the "LOC SECURITY DEPOSIT") in
accordance with Paragraph 19 of this Lease.
(5) RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT. If
Landlord draws on any portion of the LOC and/or applies all or
any portion of such draw, Tenant shall, within five (5)
business days after demand by Landlord, either (a) deposit
cash with Landlord in an amount that, when added to the amount
remaining under the LOC and the amount of any LOC Security
Deposit, shall equal the LOC Amount then required under this
Paragraph 39; or (b) reinstate the LOC to the full LOC Amount.
(6) REDUCTION OF LETTER OF CREDIT. The LOC Amount may be reduced
at the times and to the corresponding amounts specified in
this Paragraph 39.D(6) if each of the following conditions is
satisfied to Landlord's satisfaction in each case: (i) Tenant
is not and has not been in material default under the terms of
this Lease beyond any applicable cure period, (ii) Tenant
provides to Landlord ten (10) days prior written notice of any
such reduction; (iii) the LOC provides that the issuing bank
shall notify Landlord in writing at least five (5) business
days prior to any such
22
reduction, and (iv) each of the conditions precedent described
in clauses 1. through 6., inclusive, is satisfied to
Landlord's satisfaction:
1. At any time after the end of the thirty-sixth (36th)
month following the Building B Premises Term
Commencement Date, the LOC Amount may be reduced to
an amount equal to Eight Million and No/100 Dollars
($8,000,000.00) if the following conditions precedent
are satisfied to Landlord's satisfaction: (i) Tenant
has a tangible net worth in excess of Fifty Million
and No/100 Dollars ($50,000,000.00), which amount
shall be determined by Landlord to its satisfaction
prior to any reduction in the LOC Amount, and in
connection with such determination, Tenant shall
deliver to Landlord for review Tenant's financial
statements prepared in accordance with generally
accepted accounting principles and audited by a
nationally recognized public accounting firm
reasonably acceptable to Landlord, and any other
financial information reasonably requested by
Landlord ("TENANT'S FINANCIAL INFORMATION"); and (ii)
Tenant's Financial Information reflects four (4)
consecutive calendar quarters of profitability, as
determined by Landlord, during the time period
immediately preceding Tenant's request for reduction
in the LOC Amount.
2. At any time after the end of the forty-eighth (48th)
month following the Building B Premises Term
Commencement Date, the LOC Amount may be reduced to
an amount equal to Seven Million and No/100 Dollars
($7,000,000.00) if the following conditions precedent
are satisfied to Landlord's satisfaction: (i) Tenant
has a tangible net worth in excess of Fifty Million
and No/100 Dollars ($50,000,000.00) as reflected in
Tenant's Financial Information, which amount shall be
determined by Landlord to its satisfaction prior to
any reduction in the LOC Amount; and (ii) Tenant's
Financial Information reflects profitability for the
period which occurs during the twelve (12) calendar
months prior to the reduction in the LOC Amount
described in this subparagraph, as such profitability
is determined by Landlord, during the time period
immediately preceding Tenant's request for reduction
in the LOC Amount.
3. If: (i) Tenant has a tangible net worth in excess of
Seventy-Five Million and No/100 Dollars
($75,000,000.00) as reflected in Tenant's Financial
Information, which amount shall be determined by
Landlord to its satisfaction prior to any reduction
in the LOC Amount; and (ii) Tenant's Financial
Information reflects profitability for the period
which occurs during the twelve (12) calendar months
prior to the reduction in the LOC Amount described in
this subparagraph, as such profitability is
determined by Landlord, during the time period
immediately preceding Tenant's request for reduction
in the LOC Amount, then the following reductions in
the LOC Amount may be made in accordance with the
terms of this Paragraph 39.B:
a. At any time after the end of the sixtieth
(60th) month following the Building B
Premises Term Commencement Date, the LOC
Amount may be reduced to an amount equal to
Six Million and No/100 Dollars
($6,000,000.00);
b. At any time after the end of the
seventy-second (72nd) month following the
Building B Premises Term Commencement Date,
the LOC Amount may be reduced to an amount
equal to Five Million and No/100 Dollars
($5,000,000.00);
c. At any time after the end of the
eighty-fourth (84th) month following the
Building B Premises Term Commencement Date,
the LOC Amount may be reduced to an amount
equal to Four Million and No/100 Dollars
($4,000,000.00);
d. At any time after the end of the
ninety-sixth (96th) month following the
Building B Premises Term Commencement Date,
the LOC Amount may be reduced to an amount
equal to Three Million and No/100 Dollars
($3,000,000.00).
In the event that any of the above described reductions to the
LOC is made and, subsequently, Tenant fails to meet the
corresponding profitability and net worth condition precedent
for a period of thirty (30) days following delivery by
Landlord of written notice of any such failure, Tenant shall
within forty-eight (48) hours, increase the face amount of the
LOC to an amount equal to the LOC Amount existing prior to
such reduction.
(7) SURETY BOND. Subject to Landlord's prior written approval
(which may be withheld in Landlord's sole discretion), Tenant
may provide a surety bond (a "SURETY BOND") in form and
substance acceptable to Landlord for a portion of the LOC
Amount, as such portion is determined by Landlord in its sole
discretion In the event Landlord accepts a Surety Bond as
provided in this Paragraph 39.B(7), any reduction in the LOC
Amount as provided herein shall first be made to the Surety
Bond and the reduction amount remaining, if any, shall then be
made to the LOC. If Tenant provides to Landlord a Surety Bond
in accordance with this paragraph, Landlord may, at any time,
require Tenant to replace such Surety Bond with a LOC as
provided herein.
C. SCHEDULED TERM COMMENCEMENT DATE:
(1) For the portion of the Premises depicted on EXHIBIT B (the "BUILDING A
PREMISES") consisting of approximately 39,473 rentable square feet, the
Scheduled Term Commencement Date (the "BUILDING A TERM COMMENCEMENT
DATE") shall be the earlier of (1) March 1, 2000, subject to extension
for delays in Landlord's construction of the Building A Premises Tenant
Improvements or Base Building Work caused by force majeure as defined
in Paragraph 35 hereof (ii) the date on which the Building A Premises
Tenant Improvements described in EXHIBIT C are substantially complete
as defined in Exhibit C, or (iii) the date Tenant commences business
operations in the Building A Premises, as evidenced by, among other
things, the presence in the Building A Premises of business files and,
during normal business hours, employees (excluding employees or other
agents of Tenant installing and testing Tenant's equipment, furniture
and fixtures).
(2) For the portion of the Premises depicted on EXHIBIT B (the "BUILDING B
PREMISES") consisting of approximately 121,171 rentable square feet,
the Scheduled Term Commencement Date (the "BUILDING B TERM COMMENCEMENT
DATE") shall be the earlier of (1) September 1, 2000 (as such date may
be adjusted pursuant to Paragraph C.5.1 of Exhibit C attached hereto),
(ii) the date on which the Building B Premises Tenant Improvements
described in EXHIBIT C are substantially complete as defined in Exhibit
C, or (iii) the date Tenant commences business operations in the
Building B Premises, as evidenced by, among other
23
things, the presence in the Building B Premises of business files and,
during normal business hours, employees (excluding employees or other
agents of Tenant installing and testing Tenant's equipment, furniture
and fixtures).
D. GENERATOR.
(1) Tenant shall, at Tenant's sole cost and expense, install a generator
with a self-contained above-ground fuel tank (the "GENERATOR") on the
area specifically designated on EXHIBIT E and, if necessary, as
determined by Landlord in its reasonable discretion, any parking spaces
(the "SPACES") which Spaces shall be selected by Landlord in Landlord's
sole discretion; provided, however, that, in Landlord's sole
determination, such installation of the Generator is feasible with
respect to, among other things, available location, weight and size of
the Generator. Prior to Landlord's selection of the Spaces, Tenant
shall provide Landlord with a detailed written statement describing the
specifications of the Generator for Landlord's approval, which approval
may be withheld in Landlord's sole discretion. Provided that, pursuant
to the terms of this Lease, Tenant does install the Generator, the
Generator shall remain the property of Tenant for its own exclusive
use; provided, however, that Tenant, at Tenant's expense, shall remove
the Generator and restore the Spaces by the expiration or earlier
termination of this Lease, to its condition existing prior to the
installation of the Generator and in a manner consistent with the terms
of this Lease.
(3) Tenant shall at all times during the Term at Tenant's expense maintain
all parts of the Generator and such portions of the Spaces as are
within the exclusive control of Tenant in a good, clean and working
condition and promptly make all necessary repairs and replacements, as
reasonably determined by Landlord, with materials and workmanship of
the same character, kind and quality as the original. Notwithstanding
anything to the contrary contained herein, Tenant shall, at its
expense, promptly repair any damage to the Generator or the Spaces
resulting from or caused by any negligence or act of Tenant or Tenant's
Parties.
(4) The terms of Paragraph 4D hereof (Hazardous Materials), and Tenant's
obligations thereunder, shall apply to the Spaces and the Generator and
the use thereof.
E. EARLY ACCESS. Provided that Tenant does not interfere with the
construction of the Base Building Work, and in accordance with this
Paragraph 39.E, Tenant shall have the right to access the Building B
Premises upon the sufficient completion of the Base Building Work (as
described below) during normal business hours after reasonable prior
notice to Landlord for purposes of constructing the Building B Premises
Tenant Improvements in accordance with EXHIBIT C hereto (as the
timeline for such construction and installation is described below),
with all terms and conditions of this Lease in full force and effect,
excluding payment of Rent and Operating Expenses. Any interference by
Tenant or any of Tenant's Parties with the construction of the Base
Building Work shall constitute a Tenant Delay as defined in EXHIBIT C
(which Tenant Delay shall apply to each of the Building A Premises and
the Building B Premises). The Base Building Work shall be sufficiently
complete to permit access by Tenant to the Premises and commencement of
construction of Building B Premises Tenant Improvements on a minimum of
one floor of the Building B Premises on or before June 1, 2000 and the
entire Building B Premises on or before July 1, 2000; provided,
however, that in the event that Devcon is not the general contractor
for the Building B Premises Tenant Improvements, the dates previously
stated in this sentence shall be July 1, 2000 and August 1, 2000,
respectively. Access to the Building B Premises shall be based upon the
criteria described below for sufficient completion. The Base Building
Work will be completed simultaneously with the construction of Building
B Premises Tenant Improvements. Sufficient completion of the Building B
Premises Base Building Work shall be defined as follows: (i) the
permanent roof, or a watertight temporary roof, complete so that a
watertight condition is continuously maintained; (ii) permanent curtain
wall, perimeter insulation and sheet rock and glass complete or a
watertight temporary enclosure complete so that a watertight condition
is continuously maintained; (iii) base building core walls complete;
(iv) mechanical, electrical, plumbing and sprinkler riser work
sufficiently complete to permit connection of tenant improvements; (v)
the base building sprinkler loop and ductwork sufficiently complete to
permit connection of applicable Tenant Improvements; and (vi) floor
slab complete and broom clean.
F. ARBITRATION DISPUTES.
(1) The parties agree that any and all disputes, claims or controversies arising
out of or relating to Paragraph 10 of this Lease, except for issues arising in
connection with the payment of Rent and all other matters entitled to
"fast-track" adjudication including, but not limited to, eviction, that are not
resolved by their mutual agreement shall be submitted to final and binding
arbitration before JAMS/ENDISPUTE, or its successor, pursuant to the United
States Arbitration Act, 9 U.S.C. Sec. 1 et seq. Either party may commence the
arbitration process called for in this Paragraph 39.F by filing a written demand
for arbitration with JAMS/ENDISPUTE with a copy to the other party. The
arbitration will be conducted in San Mateo County, California, and in accordance
with the provisions of JAMS/ENDISPUTE's Streamlined Arbitration Rules and
Procedures in effect at the time of filing the demand for arbitration. The
parties will cooperate with JAMS/ENDISPUTE and with one another in selecting an
arbitrator from JAMS/ENDISPUTE's panel of neutrals, and in scheduling the
arbitration proceedings. The parties covenant that they will participate in the
proceedings in good faith, and that they will share equally in its costs,
including, without limitation, the arbitrator's fees, provided that each party
shall bear its own attorneys' fees in connection with any arbitration. The
provisions of this Paragraph may be enforced by any Court of competent
jurisdiction, and, in the event that the arbitration process continues through
and including a final determination of liability in accordance with this
provision, the prevailing party shall be entitled to an award of all costs, fees
and expenses, including reasonable attorneys' fees, to be paid by the party
against whom enforcement is ordered.
(2) NOTICE: By initialing the space below you are agreeing to have all disputes,
claims or controversies arising out of or relating to Paragraph 10 of the Lease,
except for issues arising in connection with the payment of Rent and all other
matters entitled to "fast-track" adjudication including, but not limited to,
eviction, decided by neutral arbitration, and you are giving up any rights you
might possess to have those matters litigated in a court or jury trial. By
initialing in the space below you are giving up your judicial rights to
discovery and appeal except to the extent that they are specifically provided
for under this Paragraph 39.F. If you refuse to submit to arbitration after
agreeing to this provision, you may be compelled to arbitrate under federal or
state law. Your agreement to this arbitration provision is voluntary.
We have read and understand the foregoing and agree to
submission of all disputes, claims or controversies arising
out of or related to Paragraph 10 of this Lease, except for
issues arising in connection with the payment of Rent and all
other matters entitled to "fast-track" adjudication including,
but not limited to, eviction, to neutral arbitration in
accordance with this Paragraph 39E.
----------- -----------
Landlord Tenant
(G) RIGHT OF FIRST OFFER. After the initial leasing of the entire Building,
and provided Tenant is not, and has not been, in material default of
any terms and conditions of this Lease, Tenant shall have a recurring
right of first offer to lease the first and second
24
floor of Building A, approximately eighty thousand (80,000) square feet
(the "EXPANSION SPACE"), as shown on EXHIBIT F at such time as such
Expansion Space is made available for lease by Landlord and as such
Expansion Space is vacated by the prior tenant. Upon notification by
Landlord in writing of the availability of the Expansion Space and the
terms and conditions on which Landlord is willing to lease such
Expansion Space to Tenant, Tenant shall have five (5) business days to
notify Landlord in writing of Tenant's desire to exercise Tenant's
right of first offer on the terms and conditions. In the event Tenant
fails to give Landlord notice of Tenant's election to lease such
Expansion Space within such time period, Tenant shall have no further
right, title or interest in such Expansion Space with respect to such
particular notification by Landlord. If, on the other hand, Tenant
exercises its right of first offer in the manner prescribed, Tenant
shall immediately deliver to Landlord payment for the first month's
rent for such Expansion Space (in the same manner as provided for in
this Lease), and the lease for such Expansion Space shall be
consummated without delay in accordance with the terms and conditions
set forth in Landlord's notice. Notwithstanding anything to the
contrary herein contained, Tenant's right to the Expansion Space shall
be conditioned upon the following: (i) at the time Tenant agrees to
accept the Expansion Space and at the time of the commencement of the
term for the Expansion Space, Tenant shall be in possession of and
occupying seventy-five percent (75%) of the Premises for the conduct of
its business therein and the same shall not be occupied by any
assignee, subtenant or licensee and, provided further, that the option
for additional space shall be applicable hereunder only if the
Expansion Space will actually be occupied by Tenant and (ii) the
agreement of acceptance shall constitute a representation by Tenant to
Landlord, effective as of the date of the agreement of acceptance and
as of the date of commencement of the lease for the Expansion Space,
that Tenant does not intend to assign the lease for the Expansion
Space, in whole or in part or sublet for a period greater than
twenty-four (24) months all or any portion of the Premises, the
election to expand being for the purpose of utilizing the Expansion
Space for Tenant's purposes in the conduct of Tenant's business
therein.
40. JURY TRIAL WAIVER
EACH PARTY HERETO (WHICH INCLUDES ANY ASSIGNEE, SUCCESSOR HEIR OR PERSONAL
REPRESENTATIVE OF A PARTY) SHALL NOT SEEK A JURY TRIAL, HEREBY WAIVES TRIAL BY
JURY, AND HEREBY FURTHER WAIVES ANY OBJECTION TO VENUE IN THE COUNTY IN WHICH
THE BUILDING IS LOCATED, AND AGREES AND CONSENTS TO PERSONAL JURISDICTION OF THE
COURTS OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IN ANY ACTION OR
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER ON ANY
MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY
STATUTE, EMERGENCY OR OTHERWISE, WHETHER ANY OF THE FOREGOING IS BASED ON THIS
LEASE OR ON TORT LAW. EACH PARTY REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO
CONSULT WITH LEGAL COUNSEL CONCERNING THE EFFECT OF THIS PARAGRAPH 40. THE
PROVISIONS OF THIS PARAGRAPH 40 SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and the year first above written.
LANDLORD
Spieker Properties, L.P.,
a California limited partnership
By: Spieker Properties, Inc.,
a Maryland corporation,
its general partner
By: /s/ Nancy B. Gille
------------------
Nancy B. Gille
Its: Vice President
Date: 10/27/99
--------
TENANT
InsWeb Corporation
A Delaware corporation
By: /s/ Sheryl Dodsworth
--------------------
Sheryl Dodsworth,
Its: Senior Vice President, Finance &
Administration
Date: 10/27/99
--------
By: /s/ James M. Corroon
--------------------
James M. Corroon,
Its: Vice Chairman
Date: 10/27/99
--------
25
EXHIBIT A
RULES AND REGULATIONS
1. Driveways, sidewalks, halls, passages, exits, entrances, elevators,
escalators and stairways shall not be obstructed by tenants or used by
tenants for any purpose other than for ingress to and egress from their
respective premises. The driveways, sidewalks, halls, passages, exits,
entrances, elevators and stairways are not for the use of the general
public and Landlord shall in all cases retain the right to control and
prevent access thereto by all persons whose presence, in the judgment of
Landlord, shall be prejudicial to the safety, character, reputation and
interests of the Building, the Project and its tenants, provided that
nothing herein contained shall be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course of such
tenant's business unless such persons are engaged in illegal activities. No
tenant, and no employees or invitees of any tenant, shall go upon the roof
of any Building, except as authorized by Landlord. No tenant, and no
employees or invitees of any tenant shall move any common area furniture
without Landlord's consent.
2. No sign, placard, banner, picture, name, advertisement or notice, visible
from the exterior of the Premises or the Building or the common areas of
the Building shall be inscribed, painted, affixed, installed or otherwise
displayed by Tenant either on its Premises or any part of the Building or
Project without the prior written consent of Landlord in Landlord's sole
and absolute discretion. Landlord shall have the right to remove any such
sign, placard, banner, picture, name, advertisement, or notice without
notice to and at the expense of Tenant, which were installed or displayed
in violation of this rule. If Landlord shall have given such consent to
Tenant at any time, whether before or after the execution of Tenant's
Lease, such consent shall in no way operate as a waiver or release of any
of the provisions hereof or of the Lease, and shall be deemed to relate
only to the particular sign, placard, banner, picture, name, advertisement
or notice so consented to by Landlord and shall not be construed as
dispensing with the necessity of obtaining the specific written consent of
Landlord with respect to any other such sign, placard, banner, picture,
name, advertisement or notice.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person or
vendor approved by Landlord and shall be removed by Tenant at the time of
vacancy at Tenant's expense.
3. The directory of the Building or Project will be provided exclusively for
the display of the name and location of tenants only and Landlord reserves
the right to charge for the use thereof and to exclude any other names
therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung or
placed in, or used in connection with, any window or door on the Premises
without the prior written consent of Landlord. In any event with the prior
written consent of Landlord, all such items shall be installed inboard of
Landlord's standard window covering and shall in no way be visible from the
exterior of the Building. All electrical ceiling fixtures hung in offices
or spaces along the perimeter of the Building must be fluorescent or of a
quality, type, design, and bulb color approved by Landlord. No articles
shall be placed or kept on the window sills so as to be visible from the
exterior of the Building. No articles shall be placed against glass
partitions or doors which Landlord considers unsightly from outside
Tenant's Premises.
5. Landlord reserves the right to exclude from the Building and the Project,
between the hours of 6 p.m. and 8 a.m. and at all hours on Saturdays,
Sundays and legal holidays, all persons who are not tenants or their
accompanied guests in the Building. Each tenant shall be responsible for
all persons for whom it allows to enter the Building or the Project and
shall be liable to Landlord for all acts of such persons.
Landlord and its agents shall not be liable for damages for any error
concerning the admission to, or exclusion from, the Building or the Project
of any person.
During the continuance of any invasion, mob, riot, public excitement or
other circumstance rendering such action advisable in Landlord's opinion,
Landlord reserves the right (but shall not be obligated) to prevent access
to the Building and the Project during the continuance of that event by any
means it considers appropriate for the safety of tenants and protection of
the Building, property in the Building and the Project.
6. All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord. Except with the written
consent of Landlord, no person or persons other than those approved by
Landlord shall be permitted to enter the Building for the purpose of
cleaning the same. Tenant shall not cause any unnecessary labor by reason
of Tenant's carelessness or indifference in the preservation of good order
and cleanliness of its Premises. Landlord shall in no way be responsible to
Tenant for any loss of property on the Premises, however occurring, or for
any damage done to Tenant's property by the janitor or any other employee
or any other person.
7. Tenant shall see that all doors of its Premises are closed and securely
locked and must observe strict care and caution that all water faucets or
water apparatus, coffee pots or other heat-generating devices are entirely
shut off before Tenant or its employees leave the Premises, and that all
utilities shall likewise be carefully shut off, so as to prevent waste or
damage. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or Project or by Landlord for
noncompliance with this rule. On multiple-tenancy floors, all tenants shall
keep the door or doors to the Building corridors closed at all times except
for ingress and egress.
8. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord. As more specifically provided in Tenant's lease
of the Premises, Tenant shall not waste electricity, water or
air-conditioning and agrees to cooperate fully with Landlord to assure the
most effective operation of the Building's heating and air-conditioning,
and shall refrain from attempting to adjust any controls other than room
thermostats installed for Tenant's use.
9. Landlord will furnish Tenant free of charge with two keys to each door in
the Premises. Landlord may make a reasonable charge for any additional
keys, and Tenant shall not make or have made additional keys. Tenant shall
not alter any lock or access device or install a new or additional lock or
access device or bolt on any door of its Premises, without the prior
written consent of Landlord. If Landlord shall give its consent, Tenant
shall in each case furnish Landlord with a key for any such lock. Tenant,
upon the termination of its tenancy, shall deliver to Landlord the keys for
all doors which have been furnished to Tenant, and in the event of loss of
any keys so furnished, shall pay Landlord therefor.
10. The restrooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown into them. The
expense of any breakage, stoppage, or damage resulting from violation of
this rule shall be borne by the tenant who, or whose employees or invitees,
shall have caused the breakage, stoppage, or damage.
26
11. Tenant shall not use or keep in or on the Premises, the Building or the
Project any kerosene, gasoline, or inflammable or combustible fluid or
material.
12. Tenant shall not use, keep or permit to be used or kept in its Premises any
foul or noxious gas or substance. Tenant shall not allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors and/or vibrations
or interfere in any way with other tenants or those having business
therein, nor shall any animals or birds be brought or kept in or about the
Premises, the Building, or the Project.
13. No cooking shall be done or permitted by any tenant on the Premises, except
that use by the tenant of Underwriters' Laboratory (UL) approved equipment,
refrigerators and microwave ovens may be used in the Premises for the
preparation of coffee, tea, hot chocolate and similar beverages, storing
and heating food for tenants and their employees shall be permitted. All
uses must be in accordance with all applicable federal, state and city
laws, codes, ordinances, rules and regulations and the Lease.
Notwithstanding the foregoing, subject to Landlord's reasonable
approval,Tenant shall have the right to install kitchen cooking facilities
in the Building B Premises.
14. Except with the prior written consent of Landlord, Tenant shall not sell,
or permit the sale, at retail, of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise in or on the Premises,
nor shall Tenant carry on, or permit or allow any employee or other person
to carry on, the business of stenography, typewriting or any similar
business in or from the Premises for the service or accommodation of
occupants of any other portion of the Building, nor shall the Premises be
used for the storage of merchandise or for manufacturing of any kind, or
the business of a public barber shop, beauty parlor, nor shall the Premises
be used for any illegal, improper, immoral or objectionable purpose, or any
business or activity other than that specifically provided for in such
Tenant's Lease. Tenant shall not accept hairstyling, barbering, shoeshine,
nail, massage or similar services in the Premises or common areas except as
authorized by Landlord.
15. If Tenant requires telegraphic, telephonic, telecommunications, data
processing, burglar alarm or similar services, it shall first obtain, and
comply with, Landlord's instructions in their installation. The cost of
purchasing, installation and maintenance of such services shall be borne
solely by Tenant.
16. Landlord will direct electricians as to where and how telephone, telegraph
and electrical wires are to be introduced or installed. No boring or
cutting for wires will be allowed without the prior written consent of
Landlord. The location of burglar alarms, telephones, call boxes and other
office equipment affixed to the Premises shall be subject to the prior
written approval of Landlord.
17. Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or any other device on the exterior walls or the roof of the
Building, without Landlord's consent. Tenant shall not interfere with radio
or television broadcasting or reception from or in the Building, the
Project or elsewhere.
18. Tenant shall not mark, or drive nails, screws or drill into the partitions,
woodwork or drywall or in any way deface the Premises or any part thereof
without Landlord's consent. Tenant may install nails and screws in areas of
the Premises that have been identified for those purposes to Landlord by
Tenant at the time those walls or partitions were installed in the
Premises. Tenant shall not lay linoleum, tile, carpet or any other floor
covering so that the same shall be affixed to the floor of its Premises in
any manner except as approved in writing by Landlord. The expense of
repairing any damage resulting from a violation of this rule or the removal
of any floor covering shall be borne by the tenant by whom, or by whose
contractors, employees or invitees, the damage shall have been caused.
19. No furniture, freight, equipment, materials, supplies, packages,
merchandise or other property will be received in the Building or carried
up or down the elevators except between such hours and in such elevators as
shall be designated by Landlord.
Tenant shall not place a load upon any floor of its Premises which exceeds
the load per square foot which such floor was designed to carry or which is
allowed by law. Landlord shall have the right to prescribe the weight, size
and position of all safes, furniture or other heavy equipment brought into
the Building. Safes or other heavy objects shall, if considered necessary
by Landlord, stand on wood strips of such thickness as determined by
Landlord to be necessary to properly distribute the weight thereof.
Landlord will not be responsible for loss of or damage to any such safe,
equipment or property from any cause, and all damage done to the Building
by moving or maintaining any such safe, equipment or other property shall
be repaired at the expense of Tenant.
Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building
or to any space therein to such a degree as to be objectionable to Landlord
or to any tenants in the Building shall be placed and maintained by Tenant,
at Tenant's expense, on vibration eliminators or other devices sufficient
to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord.
20. Tenant shall not install, maintain or operate upon its Premises any vending
machine without the written consent of Landlord.
21. There shall not be used in any space, or in the public areas of the Project
either by Tenant or others, any hand trucks except those equipped with
rubber tires and side guards or such other material handling equipment as
Landlord may approve. Tenants using hand trucks shall be required to use
the freight elevator, or such elevator as Landlord shall designate. No
other vehicles of any kind shall be brought by Tenant into or kept in or
about its Premises.
22. Each tenant shall store all its trash and garbage within the interior of
the Premises. Tenant shall not place in the trash boxes or receptacles any
personal trash or any material that may not or cannot be disposed of in the
ordinary and customary manner of removing and disposing of trash and
garbage in the city, without violation of any law or ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only
through entry-ways and elevators provided for such purposes and at such
times as Landlord shall designate. If the Building has implemented a
building-wide recycling program for tenants, Tenant shall use good faith
efforts to participate in said program.
23. Canvassing, soliciting, distribution of handbills or any other written
material and peddling in the Building and the Project are prohibited and
each tenant shall cooperate to prevent the same. No tenant shall make
room-to-room solicitation of business from other tenants in the Building or
the Project, without the written consent of Landlord.
24. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building and
the Project. Landlord shall reimburse Tenant for any actual costs
reasonably incurred by Tenant as a result of such change.
25. Landlord reserves the right to exclude or expel from the Project any person
who, in Landlord's judgment, is under the influence of alcohol or drugs or
who commits any act in violation of any of these Rules and Regulations.
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26. Without the prior written consent of Landlord, Tenant shall not use the
name of the Building or the Project or any photograph or other likeness of
the Building or the Project in connection with, or in promoting or
advertising, Tenant's business except that Tenant may include the
Building's or Project's name in Tenant's address.
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27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
28. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.
29. The requirements of Tenant will be attended to only upon appropriate
application at the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside of
their regular duties unless under special instructions from Landlord, and
no employees of Landlord will admit any person (tenant or otherwise) to any
office without specific instructions from Landlord.
30. Landlord reserves the right to designate the use of the parking spaces on
the Project. Tenant or Tenant's guests shall park between designated
parking lines only, and shall not occupy two parking spaces with one car.
Parking spaces shall be for passenger vehicles only; no boats, trucks,
trailers, recreational vehicles or other types of vehicles may be parked in
the parking areas (except that trucks may be loaded and unloaded in
designated loading areas). Vehicles in violation of the above shall be
subject to tow-away, at vehicle owner's expense. Vehicles parked on the
Project overnight without prior written consent of the Landlord shall be
deemed abandoned and shall be subject to tow-away at vehicle owner's
expense. No tenant of the Building shall park in visitor or reserved
parking areas. Any tenant found parking in such designated visitor or
reserved parking areas or unauthorized areas shall be subject to tow-away
at vehicle owner's expense. The parking areas shall not be used to provide
car wash, oil changes, detailing, automotive repair or other services
unless otherwise approved or furnished by Landlord. Tenant will from time
to time, upon the request of Landlord, supply Landlord with a list of
license plate numbers of vehicles owned or operated by its employees or
agents.
31. No smoking of any kind shall be permitted anywhere within the Building,
including, without limitation, the Premises and those areas immediately
adjacent to the entrances and exits to the Building, or any other area as
Landlord elects. Smoking in the Project is only permitted in smoking areas
identified by Landlord, which may be relocated from time to time.
32. If the Building furnishes common area conferences rooms for tenant usage,
Landlord shall have the right to control each tenant's usage of the
conference rooms, including limiting tenant usage so that the rooms are
equally available to all tenants in the Building. Any common area amenities
or facilities shall be provided from time to time at Landlord's discretion.
33. Tenant shall not swap or exchange building keys or cardkeys with other
employees or tenants in the Building or the Project.
34. Tenant shall endeavor to cause the observance of all of the foregoing Rules
and Regulations by Tenant's employees, agents, clients, customers, invitees
and guests.
35. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify, alter or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of any premises in the
Project.
36. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of
any other tenant or tenants, nor prevent Landlord from thereafter enforcing
any such Rules and Regulations against any or all tenants of the Building.
37. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety
and security, for care and cleanliness of the Building and the Project and
for the preservation of good order therein. Tenant agrees to abide by all
such Rules and Regulations herein stated and any additional rules and
regulations which are adopted.
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EXHIBIT B
SITE PLAN
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EXHIBIT C
LEASE IMPROVEMENT AGREEMENT
This Lease Improvement Agreement ("IMPROVEMENT AGREEMENT")
sets forth the terms and conditions relating to construction of the initial
tenant improvements described in each of the Building A Premises Plans (as
defined herein) to be prepared and approved as provided below (the "BUILDING A
PREMISES TENANT IMPROVEMENTS") in the Building A Premises and the Building B
Premises Plans (as defined herein) to be prepared and approved as provided below
(the "BUILDING B PREMISES TENANT IMPROVEMENTS", and together with the Building A
Tenant Improvements, collectively, the "TENANT IMPROVEMENTS". Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Lease (the "LEASE") to which this Improvement Agreement is attached and forms a
part.
A. THE PREMISES.
1. BASE BUILDING WORK. Landlord acknowledges that it has commenced, and
agrees to diligently pursue to completion at Landlord's sole cost,
construction of the Building and base portion of the Building, and parking,
landscaping and other elements (the "BASE BUILDING WORK") each as
identified on, and substantially in accordance with, the permit set of
plans and specifications described on SCHEDULE 1 to this EXHIBIT C, subject
to normal construction deviations, and subject to and in accordance with
Regulations. Schedule 1 has previously been approved by the City of San
Carlos and was made available to Tenant for review prior to the execution
of the Lease.
2. SPECIFICATIONS FOR STANDARD TENANT IMPROVEMENTS.
2.1. Specifications of standard building components which will
comprise and be used in the construction of the Tenant Improvements
("STANDARDS") are set forth in SCHEDULE 2 to this EXHIBIT C. As used
herein, "STANDARDS" or "BUILDING STANDARDS" shall mean the standards for a
particular item selected from time to time by Landlord for the Building,
including those set forth on SCHEDULE 2 of this EXHIBIT C, or such other
standards of equal or better quality as may be mutually agreed between
Landlord and Tenant in writing.
2.2. No deviations from the Standards are permitted, except as
requested by Tenant and approved by Landlord in the Building A Premises
Plans and/or the Building B Premises Plans, as the case may be. Tenant
shall pay all costs and expenses associated with any deviation from
Building Standards. Landlord reserves the right to require restoration to
the Building Standards, those specialized improvements and/or those
improvements that are not consistent with the overall Building Standards
and systems.
2.3. Tenant shall provide to Landlord the names and qualifications
of any consulting engineers or design build contractors that Tenant or
Space Planner (as defined herein) shall employ to design the Building A
Premises Space Plan, the Building A Premises Plans, the Building B
Premises Space Plan and the Building B Premises Plans.
3. MISCELLANEOUS. A default under this Improvement Agreement shall
constitute a default under the Lease, and the parties shall be entitled to
all rights and remedies under the Lease in the event of a default hereunder
by the other party (notwithstanding that the Term thereof has not
commenced).
B. THE BUILDING A PREMISES.
1. BUILDING A PREMISES PLANS AND SPECIFICATIONS.
1.1. Tenant shall retain the services of DES Architects/Engineers (the
"SPACE PLANNER") to prepare a detailed space plan (the "BUILDING A PREMISES
SPACE PLAN") mutually satisfactory to Landlord and Tenant for the construction
of the Building A Premises Tenant Improvements in the Building A Premises. The
Building A Premises Space Plan shall include floor and furniture plans
(including partial and full height partitions, flooring, case work, doors, and
sidelites). Landlord shall approve or disapprove the Building A Premises Space
Plan and any proposed revisions thereto in writing within five (5) business days
after receipt thereof, which approval shall not be unreasonably withheld. In the
event that Tenant fails to deliver an approved Building A Premises Space Plan on
or before November 8, 1999, such failure shall constitute a Tenant Delay
hereunder.
1.2. Based on the approved Building A Premises Space Plan, Tenant shall
cause the Space Planner to prepare detailed plans, specifications and working
drawings for the construction of the Building A Premises Tenant Improvements
(the "BUILDING A PREMISES PLANS"). Tenant has commenced and shall continue to
diligently pursue the preparation of the Building A Premises Plans. Landlord
shall approve or disapprove the Building A Premises Plans and any proposed
revisions thereto, including the estimated cost of the Building A Premises
Tenant Improvements, in writing within three (3) business days after receipt
thereof. If Landlord fails to approve or disapprove the Building A Premises
Space Plan or Building A Premises Plans or any revisions thereto within the time
limits specified herein, Landlord shall be deemed to have approved the same.
Tenant shall cause the final Building A Premises Plans and the cost estimate to
be prepared and approved no later than December 22, 1999. In the event Tenant
fails to prepare and approve the final Building A Premises Plans and the cost
estimate on or before December 22, 1999, such failure shall constitute a Tenant
Delay hereunder.
1.3. In connection with the development of the Building A Premises
Plans, on or before November 23, 1999, Tenant shall cause the Space Planner, in
cooperation with Landlord and Landlord's contractor, to identify and to approve
in writing all long-lead items and shall provide to Landlord a written list of
such items. For purposes of this Improvement Agreement, long-lead items shall be
construction materials and equipment essential for the timely completion of the
Building A Premises Tenant Improvements, including, but not limited to, carpet,
light fixtures, supplemental HVAC and special finishes. In the event Tenant
fails to deliver such written list to Landlord on or before November 23, 1999,
such failure shall constitute a Tenant Delay hereunder.
1.4. Notwithstanding the foregoing, Tenant shall cause the Space
Planner to deliver to Landlord on or before December 22, 1999 plans,
specifications and working drawings for the construction of the Building A
Premises Tenant Improvements which are sufficiently complete to enable the City
of San Carlos to issue any required permits.
1.5. Notwithstanding Landlord's review and approval of the Building A
Premises Space Plan and the Building A Premises Plans and any revisions thereto,
Landlord shall have no responsibility or liability whatsoever for any errors or
omissions contained in the Building A Premises Space Plan or Building A Premises
Plans, or to verify dimensions or conditions, or for the quality, design or
compliance with applicable Regulation of any improvements described therein or
constructed in accordance therewith. Landlord hereby assigns to Tenant all
warranties and guarantees by the contractor who constructs the Building A
Premises Tenant Improvements relating to the Building A Premises Tenant
Improvements, and Tenant hereby waives all claims against Landlord relating to,
or arising out of the design of the Building A Premises Tenant Improvements.
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2. CONSTRUCTION OF BUILDING A PREMISES TENANT IMPROVEMENTS.
2.1. Upon Landlord's approval of the Building A Premises Plans
including the estimate of the cost of the Building A Premises Tenant
Improvements, Landlord shall cause its contractor to proceed to secure a
building permit and commence construction of the Building A Premises Tenant
Improvements provided that Tenant shall cooperate with Landlord in executing
permit applications and performing other actions reasonably necessary to enable
Landlord to obtain any required permits or certificates of occupancy. Landlord
shall make commercially reasonable efforts to cause its contractor to complete
the Building A Premises Tenant Improvements as soon as is reasonably
practicable.
2.2. Without limiting the provisions of Paragraph 35 of the Lease,
Landlord shall not be liable for any direct or indirect damages suffered by
Tenant as a result of delays in construction beyond Landlord's reasonable
control, including, but not limited to, delays due to strikes or unavailability
of materials or labor, or delays caused by Tenant (including delays by the Space
Planner, Tenant's contractor or anyone else performing services on behalf of
Tenant).
2.3. If any work is to be performed on the Building A Premises by
Tenant or Tenant's contractor or agents:
(a) Such work shall proceed upon Landlord's written
approval of Tenant's contractor, public liability and property
damage insurance carried by Tenant's contractor, and detailed
plans and specifications for such work, shall be at Tenant's
sole cost and expense and shall further be subject to the
provisions of Paragraphs 12 and 27 of the Lease.
(b) All work shall be done in conformity with a valid
building permit when required, a copy of which shall be
furnished to Landlord before such work is commenced, and in
any case, all such work shall be performed in accordance with
all applicable Regulations. Notwithstanding any failure by
Landlord to object to any such work, Landlord shall have no
responsibility for Tenant's failure to comply with all
applicable Regulations.
(c) If required by Landlord or any lender of Landlord,
all work by Tenant or Tenant's contractor or agents shall be
done with union labor in accordance with all union labor
agreements applicable to the trades being employed.
(d) All work by Tenant or Tenant's contractor or agents
shall be scheduled through Landlord.
(e) Tenant or Tenant's contractor or agents shall
arrange for necessary utility, hoisting and elevator service
with Landlord's contractor and shall pay such reasonable
charges, if any, for such services as may be charged by
Tenant's or Landlord's contractor.
(f) Tenant's entry to the Building A Premises for any
purpose, including, without limitation, inspection or
performance of Tenant construction by Tenant's agents, prior
to the date Tenant's obligation to pay rent commences shall be
subject to all the terms and conditions of the Lease except
the payment of Rent with respect to the Building A Premises.
Tenant's entry shall mean entry by Tenant, its officers,
contractors, licensees, agents, servants, employees, guests,
invitees, or visitors.
(g) Tenant shall promptly reimburse Landlord upon demand
for any reasonable expense actually incurred by the Landlord
by reason of faulty work done by Tenant or its contractors or
by reason of any delays caused by such work, or by reason of
inadequate clean-up.
3. BUILDING A PREMISES TENANT IMPROVEMENT COST.
3.1. The cost of the Building A Premises Tenant Improvements (as such
costs are approved by Tenant as provided herein, except to the extent that any
costs in connection with the Building A Premises Tenant Improvements are
required for compliance with any Regulation) shall be paid for by Tenant,
including, without limitation, the cost of: Standards; space plans and studies;
architectural and engineering fees; permits, approvals and other governmental
fees; labor, material, equipment and supplies; construction fees and other
amounts payable to contractors or subcontractors; taxes; filing and recording
fees; premiums for insurance and bonds; attorneys' fees; and all other costs
expended or to be expended in the construction of the Building A Premises Tenant
Improvements; and an administration fee of ten percent (10%) of the total cost
of the Building A Premises Tenant Improvements Allowance.
3.2. Provided Tenant is not in material default under the Lease,
including this Improvement Agreement, Landlord shall contribute a one-time
tenant improvement allowance not to exceed One Million Eighty-Five Thousand Five
Hundred Seven and 50/100 Dollars ($1,085,507.50) ("BUILDING A PREMISES TENANT
IMPROVEMENT ALLOWANCE") to be credited by Landlord toward the cost of the
initial Building A Premises Tenant Improvements as provided herein. No credit
shall be given to Tenant if the cost of the Building A Premises Tenant
Improvements is less than the Building A Premises Tenant Improvement Allowance.
3.3. On or before 5:00 p.m. on the 14th day of January, 2000, Landlord
shall deliver to Tenant a construction budget in connection with the Building A
Premises Tenant Improvements which budget shall be a stipulated sum contract
(the "BUDGET") for Tenant's review and approval, which approval shall not be
unreasonably withheld, conditioned or delayed. Landlord shall enter into a
contract with Landlord's contractor on the basis of such approved Budget;
provided, however, the Budget shall be subject to change orders as provided
herein. Tenant shall either approve or disapprove the Budget in writing within
five (5) business days following the date of Landlord's delivery of the Budget.
In the event that Tenant fails to so approve or disapprove the Budget within
such time period, Tenant shall be deemed to have approved the Budget. In the
event Tenant disapproves of the Budget, Tenant shall describe in its written
objection letter those particular line items to which Tenant objects, detailed
reasons supporting such objection and a suggested remedy. If such objections are
reasonable, Landlord shall revise the Budget accordingly and shall resubmit the
Budget to Tenant for its review and approval as provided in this paragraph.
Notwithstanding the foregoing, Tenant hereby acknowledges and agrees that
Landlord shall not be required to submit the Building A Premises Tenant
Improvement work to a competitive bidding process and that Landlord shall not be
required to use the lowest costs of labor and/or materials available in the
market but shall instead be entitled, in Landlord's sole discretion, to
consider, among other things, the quality of the work and materials of
contractors, the contractors' availability and timing for the construction and
the competitive pricing of labor and materials as determined by Landlord by
referencing Landlord's prior experience through competitive bidding to
contractors in the geographic market in which Building A is located.
Notwithstanding the foregoing, in the event that Tenant objects to a Budget, any
delay caused in connection with such objection shall not be deemed a Landlord
Delay hereunder.
3.4. If the cost of the Building A Premises Tenant Improvements
increases after Tenant's approval of the Building A Premises Plans and the
Budget due to the requirements of any governmental agency or applicable
Regulation, Tenant's proportionate share pursuant to paragraph B.3.5(a) hereof
shall be adjusted accordingly.
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3.5. The costs and expenses associated with the Tenant Improvements
shall be paid as follows:
(a) Disbursement of Building A Premises Tenant Improvement
Allowance. On or before the twenty-fifth (25th) day of the calendar
month, during construction of the Building A Premises Tenant
Improvements (or such other date as Landlord may designate),
Landlord shall deliver to Tenant a request for payment of Landlord's
contractor. Such request shall include a schedule, by trade, of
percentage of completion of the Building A Premises Tenant
Improvements, detailing the portion of the work completed and the
portion not completed. Within ten (10) business days of receipt of
such request, Tenant shall deliver a check made payable (or transfer
funds electronically) to Landlord in payment of Tenant's
proportionate share of such request for payment. For purposes of
this Paragraph B.3.5(a), Tenant's proportionate share is defined as
that portion of such request for payment that is in proportion to
the excess costs (the costs in excess of the Building A Premises
Tenant Improvement Allowance), as such excess costs may from time to
time increase as provided herein, as a percentage of the total cost
of the Building A Premises Tenant Improvements. Tenant acknowledges
that it is responsible for all costs of the Building A Premises
Tenant Improvements in excess of the Building A Premises Tenant
Improvement Allowance, except to the extent that excess costs over
the Building A Premises Tenant Improvement Allowance are incurred
solely in connection with material deviations in the Base Building
Work performed by Landlord or Landlord's agents, in the Building A
Premises from the plans and specifications set forth in Schedule 1,
attached hereto.
(b) Other Terms. Landlord shall only be obligated to make
disbursements from the Building A Premises Tenant Improvement
Allowance in accordance with the terms of this Agreement.
3.6. If Tenant requests any change(s) in the Building A Premises Plans after
approval of the estimate of the cost of the Building A Premises Tenant
Improvements and any such requested changes are approved by Landlord in writing
in Landlord's reasonable discretion, Landlord shall advise Tenant promptly of
any cost increases or decreases and/or delays such approved change(s) will cause
in the construction of the Building A Premises Tenant Improvements. Tenant shall
approve or disapprove any or all such change(s) within three (3) business days
after notice from Landlord of such cost increases and/or delays. To the extent
Tenant disapproves any such cost increase and/or delay attributable thereto,
Landlord shall have the right, in its sole discretion, to disapprove Tenant's
request for any changes to the approved Building A Premises Plans. If the cost
of the Building A Premises Tenant Improvements increases due to any changes in
the Building A Premises Plan(s) requested by Tenant, Tenant shall pay the amount
of such increase and Tenant's proportionate share as defined in Paragraph
B.3.5(a) above shall be adjusted accordingly.
4. COMPLETION OF THE BUILDING A PREMISES TENANT IMPROVEMENTS AND BUILDING A
PREMISES RENTAL COMMENCEMENT DATE.
4.1. Tenant's obligation to pay Rent under the Lease with respect to
the Building A Premises shall commence on the applicable date described in
Paragraph 2 and Paragraphs 39.C and 39.E of the Lease. However:
(a) If Tenant delays in preparing or approving the Building A
Premises Space Plans or the Building A Premises Plans, or fails to
approve the estimate of the cost of the Building A Premises Tenant
Improvements or any other matter requiring Tenant's approval, or to
pay Tenant's proportionate share of the excess cost of Building A
Premises Tenant Improvements as provided herein, in each case within
the time limits specified herein; or
(b) If the construction period is extended because Tenant
requests any changes in construction, or modifies the approved
Building A Premises Plans or if the same do not comply with
applicable Regulations; or
(c) If Landlord is otherwise delayed in the construction of
the Building A Premises Tenant Improvements for any act or omission
of or breach by Tenant or anyone performing services on behalf of
Tenant or on account of any work performed on the Building A
Premises by Tenant or Tenant's contractors or agents,
then the date that the Premises shall be deemed substantially complete for
purposes of rent commencement as described in Paragraph 2 and Paragraphs 39.C
and 39.E of the Lease shall be deemed to be accelerated by the total number of
days of Tenant delays described in (a) through (c) above (each, a "TENANT
DELAY"), calculated in accordance with the provisions of Paragraph 4.2 below.
4.2. If the Building A Premises Term Commencement Date has not
commenced on or before March 1, 2000 and substantial completion of the Building
A Premises Tenant Improvements has been delayed on account of any Tenant Delays,
then upon actual substantial completion of the Tenant Improvements (as defined
in Paragraph 2 of the Lease), Landlord shall notify Tenant in writing of the
date substantial completion of the Tenant Improvements would have occurred but
for such Tenant Delays, and such date shall thereafter be deemed to be the
Building A Premises Term Commencement Date for all purposes under the Lease.
Tenant shall pay to Landlord, within three (3) business days after receipt of
such written notice (which notice shall include a summary of Tenant Delays), the
per diem Base Rent times the number of days between the date the Building A
Premises Term Commencement Date would have otherwise occurred but for the Tenant
Delays (as determined by the Space Planner or Landlord's contractor), and the
date of actual substantial completion of the Building A Premises Tenant
Improvements.
4.3. Promptly after substantial completion of the Building A Premises
Tenant Improvements, Landlord shall give notice to Tenant and Tenant shall
conduct an inspection of the Building A Premises with a representative of
Landlord and develop with such representative of Landlord a punchlist of items
of the Building A Premises Tenant Improvements that are not complete or that
require corrections. Upon receipt of such punchlist, Landlord shall proceed
diligently to remedy such items provided such items are part of the Building A
Premises Tenant Improvements to be constructed by Landlord hereunder and are
otherwise consistent with Landlord's obligations under this Improvement
Agreement and provided Tenant has fully paid Landlord for the cost of the
Building A Tenant Improvements exceeding the Building A Tenant Improvement
Allowance in accordance with the terms of this Improvement Agreement.
Substantial completion shall not be delayed notwithstanding delivery of any such
punchlist.
4.4. For purposes of the Lease and this Improvement Agreement,
"SUBSTANTIAL COMPLETION," with respect to the Building A Premises, shall have
occurred when Landlord's architect and Tenant's architect state in writing that
each of the following factors have been substantially fulfilled: (a) the
Building A Premises Tenant Improvements are substantially complete in accordance
with the approved Building A Premises Plans, the material terms of the Lease and
this Improvement Agreement and (b) the City of San Carlos confirms that Landlord
has met the material requirements for a temporary certificate of occupancy with
respect to the Building B Premises.
C. BUILDING B PREMISES.
1. BUILDING B PREMISES PLANS AND SPECIFICATIONS.
1.1 Tenant shall retain the services of Space Planner to prepare a
detailed space plan (the "BUILDING B PREMISES SPACE PLAN") mutually
satisfactory to Landlord and Tenant for the construction of the Building B
Premises Tenant Improvements in the Building B Premises. Tenant shall
submit the Building B Premises Space Plan and any proposed revisions
thereto to Landlord for
33
Landlord's approval. The Building B Premises Space Plan shall include
floor and furniture plans (including partial and full height partitions,
flooring, case work, doors, and sidelites). Landlord shall approve or
disapprove the Building B Premises Space Plan and any proposed revisions
thereto in writing within five (5) business days after receipt thereof,
which approval shall not be unreasonably withheld.
1.2 Based on the approved Building B Premises Space Plan, Tenant
shall cause the Space Planner to prepare detailed plans, specifications
and working drawings mutually satisfactory to Landlord and Tenant for the
construction of the Building B Premises Tenant Improvements (the "BUILDING
B PREMISES PLANS"). Tenant shall diligently pursue the preparation of the
Building B Premises Plans. Tenant shall submit to Landlord for approval
the Building B Premises Plans and any proposed revisions thereto,
including the estimated cost of the Building B Premises Tenant
Improvements. Landlord shall respond with its approval or disapproval of
the Building B Premises Plans within eight (8) business days after
Landlord's receipt thereof. All necessary revisions to the Building B
Premises Space Plan and the Building B Premises Plans shall be made within
ten (10) business days after Landlord's response thereto. This procedure
shall be repeated until Landlord ultimately approves the Building B
Premises Space Plan and Building B Premises Plans.
1.3 Tenant shall be responsible for ensuring that the Building B
Premises Plans are compatible with the design, construction and equipment
of Building B, comply with applicable Regulations and the Standards
(defined herein), and contain all such information as may be required to
show locations, types and requirements for all heat loads, people loads,
floor loads, power and plumbing, regular and special HVAC needs, telephone
communications, telephone and electrical outlets, lighting, light fixtures
and related power, and electrical and telephone switches, B.T.U.
calculations, electrical requirements and special receptacle requirements.
The Building B Premises Plans shall also include mechanical, electrical,
plumbing, structural and engineering drawings mutually satisfactory to
Landlord and Tenant which shall be prepared by Space Planner or Space
Planner or Tenant's consulting engineers or design build contractors.
Notwithstanding Landlord's review and approval of the Building B Premises
Space Plan and the Building B Premises Plans and any revisions thereto,
Landlord shall have no responsibility or liability whatsoever for any
errors or omissions contained in the Building B Premises Space Plan or
Building B Premises Plans or any revisions thereto, or to verify
dimensions or conditions, or for the quality, design or compliance with
applicable Regulations of any improvements described therein or
constructed in accordance therewith. Tenant hereby waives all claims
against Landlord relating to, or arising out of the design or construction
of, the Building B Premises Tenant Improvements.
1.4 Landlord may approve or disapprove the Building B Premises Space
Plan or Building B Premises Plans or any proposed revision thereto
submitted to Landlord in Landlord's reasonable discretion. Landlord shall
approve or disapprove any Building B Premises Plans or proposed revisions
thereto submitted to Landlord for Landlord's approval within eight (8)
business days after Landlord's receipt thereof. Landlord shall not be
deemed to have approved the Building B Premises Space Plan, the Building B
Premises Plans, or any proposed revisions thereto, unless approved by
Landlord in writing and if Landlord has not approved in writing any
Building B Premises Space Plan, Building B Premises Plans, or proposed
revisions thereto submitted to Landlord within ten (10) business days
after Landlord's receipt thereof, Landlord shall be deemed to have
disapproved the same.
2. CONSTRUCTION OF BUILDING B PREMISES TENANT IMPROVEMENTS.
2.1 Within ten (10) days after Tenant's and Landlord's approval of
the Building B Premises Plans including the estimate of the cost of the
Building B Premises Tenant Improvements, Tenant shall cause the contractor
to proceed to secure a building permit and commence construction of the
Building B Premises Tenant Improvements provided that the Building has in
Landlord's discretion reached the stage of construction where it is
appropriate to commence construction of the Building B Premises Tenant
Improvements in the Building B Premises.
2.2 Tenant shall be responsible for obtaining all governmental
approvals to the full extent necessary for the construction and
installation of the Building B Premises Tenant Improvements and for
Tenant's occupancy of the Building B Premises, in compliance with all
applicable Regulations (except with respect to Regulations applicable
solely to Landlord's construction of the Base Building Work located in the
Building B Premises). Tenant shall employ DevCon as the contractor or such
other contractor or contractors as shall be approved by Landlord in
writing to construct the Building B Premises Tenant Improvements in
conformance with the approved Building B Premises Space Plan and Building
B Premises Plans. The construction contracts between Tenant and the
approved contractor shall be subject to Landlord's prior reasonable
approval and shall provide for progress payments. The contractor(s) shall
be duly licensed and Landlord's approval of the contractor(s) shall be
conditioned, among other things, upon the contractor's reputation for
quality of work, timeliness of performance, integrity and Landlord's prior
experience with such contractor.
2.3 Without limiting the provisions of Paragraph 35 of the Lease,
Landlord shall not be liable for any direct or indirect damages suffered
by Tenant as a result of delays in construction beyond Landlord's
reasonable control, including, but not limited to, delays due to strikes
or unavailability of materials or labor, or delays caused by Tenant
(including delays by the Space Planner, the contractor or anyone else
performing services on behalf of Landlord or Tenant).
2.4 All work to be performed on the Building B Premises by Tenant or
Tenant's contractor or agents shall be subject to the following
conditions:
(a) Such work shall proceed upon Landlord's written approval of
Tenant's contractor, and public liability and property damage insurance carried
by Tenant's contractor, and shall further be subject to the provisions of
Paragraphs 12 and 27 of the Lease.
(b) All work shall be done in conformity with a valid building
permit when required, a copy of which shall be furnished to Landlord before such
work is commenced, and in any case, all such work shall be performed in a good
and workmanlike and first-class manner, and in accordance with all applicable
Regulations and the requirements and standards of any insurance underwriting
board, inspection bureau or insurance carrier insuring the Building B Premises
pursuant to the Lease. Notwithstanding any failure by Landlord to object to any
such work, Landlord shall have no responsibility for Tenant's failure to comply
with all applicable Regulations. Tenant shall be responsible for ensuring that
construction and installation of the Building B Premises Tenant Improvements
will not affect the structural integrity of Building B.
(c) If required by Landlord or any lender of Landlord, all work
by Tenant or Tenant's contractor shall be done with union labor in accordance
with all union labor agreements applicable to the trades being employed.
(d) Landlord or Landlord's agents shall have the right to
inspect the construction of the Building B Premises Tenant Improvements by
Tenant during the progress thereof. If Landlord shall give notice of faulty
construction or any other deviation from the approved Building B Premises Space
Plan or Building B Premises Plans, as such faulty construction is reasonably
determined by Landlord, Tenant shall cause its contractor to make corrections
promptly. However, neither the privilege herein granted to Landlord to make such
inspections, nor the making of such inspections by Landlord, shall operate as a
waiver of any
34
right of Landlord to require good and workmanlike construction and improvements
erected in accordance with the approved Building B Premises Space Plan or
Building B Premises Plans.
(e) Tenant shall make reasonable efforts to cause its contractor
to complete the Building B Premises Tenant Improvements as soon as reasonably
possible.
(f) Tenant's construction of the Building B Premises Tenant
Improvements shall comply with the following: (i) the Building B Premises
Tenant Improvements shall be constructed in strict accordance with the
approved Building B Premises Space Plan or Building B Premises Plans; (ii)
Tenant and its contractor shall submit schedules of all work relating to the
Building B Premises Tenant Improvements to Landlord for Landlord's approval
within two (2) business days following the selection of the contractor and
the approval of the Building B Premises Plans. Landlord shall within five (5)
business days after receipt thereof inform Tenant of any changes which are
necessary and TENANT SHALL ENDEAVOR TO CAUSE Tenant's contractor TO adhere to
such corrected schedule; and (iii) Tenant shall abide by all rules made by
Landlord with respect to the use of freight, loading dock, and service
elevators, storage of materials, coordination of work with the contractors of
other tenants, and any other matter in connection with this Improvement
Agreement, including, without limitation, the construction of the Building B
Premises Tenant Improvements.
(g) Tenant or Tenant's contractor or agents shall arrange for
necessary utility, hoisting and elevator service with Landlord's contractor and
shall pay such reasonable charges for such services, IF ANY, as may be charged
by Tenant's or Landlord's contractor.
(h) Tenant's entry to the Building B Premises for any purpose,
including, without limitation, inspection or performance of Tenant construction
by Tenant's agents, prior to the date Tenant's obligation to pay rent commences
shall be subject to all the terms and conditions of the Lease except the payment
of Rent with respect to the Building B Premises. Tenant's entry shall mean entry
by Tenant, its officers, contractors, licensees, agents, servants, employees,
guests, invitees, or visitors.
(i) Tenant shall promptly reimburse Landlord upon demand for any
reasonable expense actually incurred by the Landlord by reason of faulty work
done by Tenant or its contractors or by reason of any delays caused by such
work, or by reason of inadequate clean-up.
(j) Except to the extent caused by Landlord's gross
negligence or willful misconduct, Tenant hereby indemnifies and holds
Landlord harmless with respect to any and all costs, losses, damages,
injuries and liabilities relating in any way to any act or omission of Tenant
or Tenant's contractor or agents, or anyone directly or indirectly employed
by any of them, in connection with the Building B Premises Tenant
Improvements and any breach of Tenant's obligations under this Improvement
Agreement, or in connection with Tenant's non-payment of any amount arising
out of the Building B Premises Tenant Improvements as such amounts are due
from Tenant as expressly provided herein. Such indemnity by Tenant, as set
forth above, shall also apply with respect to any and all costs, losses,
damages, injuries, and liabilities related in any way to Landlord's
performance OF any ministerial acts reasonably necessary (i) to permit Tenant
to complete the Building B Premises Tenant Improvements, and (ii) to enable
Tenant to obtain any building permit or certificate of occupancy for the
Building B Premises.
(k) Tenant's contractor and the subcontractors utilized by
Tenant's contractor shall guarantee to Tenant and for the benefit of Landlord
that the portion of the Building B Premises Tenant Improvements for which it is
responsible shall be free from any defects in workmanship and materials for a
period of not less than one (1) year from the date of completion thereof. Each
of Tenant's contractor and the subcontractors utilized by Tenant's contractor
shall be responsible for the replacement or repair, without additional charge,
of all work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the
work performed by such contractor of subcontractors and (ii) the Building B
Premises Term Commencement Date. The correction of such work shall include,
without additional charge, all additional expenses and damages incurred in
connection with such removal or replacement of all or any part of the Building B
Premises Tenant Improvements, and/or Building B and/or common areas that may be
damaged or disturbed thereby. All such warranties or guarantees as to materials
or workmanship of or with respect to the Building B Premises Tenant Improvements
shall be contained in the construction contract or subcontract and shall be
written such that such guarantees or warranties shall inure to the benefit of
both Landlord and Tenant, as their respective interests may appear, and can be
directly enforced by either. Tenant covenants to give to Landlord any assignment
or other assurances which may be necessary to effect such rights of direct
enforcement.
(l) Commencing upon Landlord's delivery of the Building B
Premises to Tenant, Tenant shall hold weekly meetings at a reasonable time with
the Space Planner and the contractor regarding the progress of the preparation
of the Building B Premises Plans and the construction of the Building B Premises
Tenant Improvements, which meetings shall be held at a location designated by
Tenant, and Landlord and/or its agents shall receive prior notice of, and shall
have the right to attend, all such meetings, and upon Landlord's request,
certain of Tenant's contractors shall attend such meetings. One such meeting
each month shall include the review of contractor's current request for payment.
2.5 Tenant and Tenant's contractors and all other parties performing
work on the Premises on Tenant's behalf shall comply with the each of the
Building rules and regulations as described in the Lease and with the contractor
rules and regulations, attached hereto as SCHEDULE 3. Tenant shall be liable for
any violation of the Building or the contractor rules and regulations by
Tenant's contractors or any other party performing work on the Premises on
Tenant's behalf.
3. BUILDING B PREMISES TENANT IMPROVEMENT COST.
3.1 The cost of the Building B Premises Tenant Improvements shall be
paid for by Tenant, including, without limitation, the cost of: Standards;
space plans and studies; architectural and engineering fees; permits,
approvals and other governmental fees; labor, material, equipment and
supplies; construction fees and other amounts payable to contractors or
subcontractors; taxes; taxes; filing and recording fees; premiums for
insurance and bonds; attorneys' fees; and all other costs expended or to
be expended in the construction of the Building B Premises Tenant
Improvements; and an administration fee payable to Landlord of six percent
(6%) of the total cost of the Building B Premises Tenant Improvements
Allowance.
3.2 Provided Tenant is not in material default under the Lease,
including this Improvement Agreement, Landlord shall contribute a one-time
tenant improvement allowance not to exceed Three Million Three Hundred
Thirty-Two Thousand Two Hundred Two and 50/100 Dollars ($3,332,202.50)
("BUILDING B PREMISES TENANT IMPROVEMENT ALLOWANCE") toward the cost of
the initial Building B Premises Tenant Improvements. Provided Tenant is
not then in default under the Lease, including this Improvement Agreement,
during the construction of the Tenant Improvements, Landlord shall make
monthly disbursements of the Building B Premises Tenant Improvement
Allowance for the benefit of Tenant in connection with the costs and
expenses associated with the Building B Premises Tenant Improvements and
shall authorize the release of monies for the benefit of Tenant as
follows:
(a) Monthly Disbursements. On or before the twenty-first (21st) day
of the calendar month, during the construction of the Tenant Improvements
(or such other date as Landlord may designate in writing), Tenant shall
deliver to Landlord: (i) a request
35
for payment of Tenant's contractor, which request shall be approved by
Tenant, showing the schedule, by trade, of percentage of completion of the
Building B Premises Tenant Improvements, detailing the portion of the work
completed and the portion not completed; (ii) invoices from any
subcontractor, laborer, materialmen, supplier and any other party which
performed work on Tenant's behalf pursuant to this Exhibit C, including,
but not limited to, labor rendered and materials delivered to the Building
B Premises; (iii) executed conditional mechanic's lien releases from all
of the parties submitting invoices with respect to the work performed and
for which payment is requested to be made, which releases shall comply
with the appropriate provisions of California Civil Code 3262(d); (iv)
executed unconditional mechanic's lien releases from all of the parties
with respect to work performed and included on prior pay requests, which
releases shall comply with the appropriate provisions of California Civil
Code; and (v) all other information reasonably requested by Landlord.
Tenant's request for payment shall be deemed Tenant's acceptance and
approval of the specific work furnished and or the materials actually
supplied as set forth in Tenant's payment request. Within ten (10)
business days thereafter, Landlord shall deliver a check (or transfer
funds electronically) to Tenant made jointly payable to Tenant's
contractor and Tenant in payment of the lesser of (A) Landlord's
proportionate share of the amount of such request for payment by Tenant's
contractor, as set forth in this paragraph, less a ten percent (10%)
retention (the aggregate amount of such retentions to be known as the
"FINAL RETENTION"), and (B) the balance of any remaining available portion
of the Building B Premises Tenant Improvement Allowance (not including the
Final Retention), provided Landlord does not dispute any request for
payment based upon noncompliance with the Plans and or Standards, or due
to any substandard work, or for any other reasonable cause. For purposes
of this Improvement Agreement, Landlord's proportionate share shall be the
product of the following: (X) the amount of the Building B Premises Tenant
Improvement Allowance over total cost of the Building B Premises Tenant
Improvements, as such total cost may from time to time increase as
provided herein, multiplied by (Y) the total amount approved by Landlord
in Tenant's written request for payment as described above. Landlord's
payment of such amounts shall not be deemed Landlord's approval or
acceptance of the work furnished or materials supplied as set forth in
Tenant's payment request.
(b) Final Retention. Subject to the provisions of this Exhibit C, a
check for the Final Retention payable jointly to Tenant's contractor and
Tenant shall be delivered by Landlord to Tenant following the completion
of the construction of the Building B Premises Tenant Improvements and
expiration of the time for filing of any mechanics' liens claimed or which
might be filed on account of any work ordered by Tenant or its contractor
or any subcontractor; provided that (A) Tenant delivers to Landlord
properly executed and unconditional mechanics lien releases in compliance
with both California Civil Code Section 3262(d)(2) and with Section
3262(d)(3) or Section 3262(d)(4) (which mechanics' lien releases shall be
executed by the subcontractors, labor suppliers and materialmen in
addition to Tenant's contractor), and all appropriate bills and supporting
documentation for the work ordered by Tenant or its contractor or any
subcontractor, (B) Landlord has determined that no substantial work exists
which adversely affects the mechanical, electrical, plumbing, heating,
ventilating and air conditioning, life-safety or other systems of the
Building or Project, the structure or exterior appearance of the Building
or Project, and (C) Space Planner and Tenant's contractor deliver to
Landlord a certificate of completion, in a form reasonably acceptable to
Landlord certifying that the construction of the Building B Premises
Tenant Improvements has been substantially completed.
(c) Other Terms. Landlord shall only be obligated to make
disbursements from the Building B Premises Tenant Improvement Allowance in
accordance with the terms of this Agreement.
3.3 If the cost of the Building B Premises Tenant Improvements
increases after the Tenant's approval of the Building B Premises Plans due
to the requirements of any governmental agency or applicable Regulation,
Landlord's proportionate share pursuant to paragraph C3.2.(a) above shall
be adjusted accordingly.
3.4 If Tenant requests any change(s) in the Building B Premises
Plans after approval of the estimate of the cost of the Building B
Premises Tenant Improvements and any such requested changes are approved
by Landlord in writing in Landlord's reasonable discretion, Landlord's
proportionate share pursuant to paragraph C3.2.(a) above shall adjust
accordingly.
4. BUILDING B PREMISES INSURANCE REQUIREMENTS.
4.1 All of Tenant's contractors shall carry worker's compensation
insurance covering all of their respective employees, and shall also carry
public liability insurance, including property damage, all with limits, in
form and with companies as are required to be carried by Tenant as set
forth in Paragraph 8 of the Lease.
4.2 Tenant or Tenant's contractor shall carry "Builder's Risk"
insurance in an amount approved by Landlord covering the construction of
the Building B Premises Tenant Improvements, and such other insurance as
Landlord may require, it being understood and agreed that the Building B
Premises Tenant Improvements shall be insured by Tenant pursuant to
Paragraph 8 of the Lease immediately upon completion thereof. Such
insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord including, but not
limited to, the requirement that all of Tenant's contractors shall carry
general liability and Products and Completed Operation coverage insurance,
each in amounts not less than $500,000 per incident, $1,000,000 in
aggregate, and in form and with companies as are required to be carried by
Tenant as set forth in Paragraph 8 of the Lease.
4.3 Certificates for all insurance carried pursuant to this
Improvement Agreement must comply with the requirements of Paragraph 8 of
the Lease and shall be delivered to Landlord before the commencement of
construction of the Building B Premises Tenant Improvements and before the
contractor's equipment is moved onto the site. In the event the Building B
Premises Tenant Improvements are damaged by any cause during the course of
the construction thereof, Tenant shall immediately repair the same at
Tenant's sole cost and expense. Tenant's contractors shall maintain all of
the foregoing insurance coverage in force until the Building B Premises
Tenant Improvements are fully completed and accepted by Landlord, except
for any Product and Completed Operation Coverage insurance required by
Landlord, which is to be maintained for ten (10) years following
completion of the work and acceptance by Landlord and Tenant. All policies
carried under this Paragraph C.4.3 shall insure Landlord and Tenant, as
their interests may appear, as well as the contractors. All insurance
maintained by Tenant's contractors shall preclude subrogation claims by
the insurer against anyone insured thereunder. Such insurance shall
provide that it is primary insurance as respects the owner and that any
other insurance maintained by owner is excess and noncontributing with the
insurance required hereunder. Landlord may, in its discretion, require
Tenant or Tenant's contractor to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of the Building B Premises
Tenant Improvements and naming Landlord as a co-obligee.
5. BUILDING B PREMISES COMPLETION AND BUILDING B PREMISES RENTAL COMMENCEMENT
DATE.
5.1 Tenant's obligation to pay an increase in Rent as described in
Paragraph 39.A of the Lease shall commence on the Building B Premises Term
Commencement Date described in Paragraph 39.C of the Lease,
notwithstanding anything to the contrary contained in Paragraph 2 of the
Lease. However, except as otherwise provided herein, Landlord Delays (as
defined below) shall extend the Building B Premises Term Commencement
Date, but only in the event that substantial completion of the Building B
Premises Tenant Improvements is actually delayed beyond September 1, 2000,
despite Tenant's reasonable efforts to adapt and compensate for such
delays. In addition, no Landlord Delays shall be deemed to have occurred
unless Tenant has provided notice, in
36
compliance with the Lease, to Landlord specifying that a delay shall be
deemed to have occurred because of actions, inactions or circumstances
specified in the notice in reasonable detail. If such actions, inactions or
circumstances are not cured by Landlord within one (1) business day after
receipt of such notice ("COUNT DATE"), and if such actions, inaction or
circumstances otherwise qualify as a Landlord Delay, then a Landlord Delay
shall be deemed to have occurred commencing as of the Count Date. The
Building B Premises Term Commencement Date shall be extended by one day for
each day from the Count Date that a Landlord Delay has occurred, as
calculated as provided above. The term "Landlord Delays," as such term may
be used in this Improvement Agreement, shall mean any actual delays in the
completion of the Building B Premises Tenant Improvements which are due to
any act or omission of Landlord, its agents or contractors. Landlord Delays
shall include: (i) delays in the giving of authorizations or approvals by
Landlord beyond the periods provided in this Improvement Agreement, (ii)
delays due to the acts or failures to act, of Landlord, its agents or
contractors, where such acts or failures to act actually result in a delay
OF the completion of the Tenant Improvements beyond September 1, 2000,
provided that Tenant acts in a commercially reasonable manner to mitigate
any such delay, and (iii) delays due to the unreasonable interference of
Landlord, its agents or contractors with the completion of the Tenant
Improvements. Notwithstanding anything to the contrary contained in this
Improvement Agreement or in the Lease, if a Landlord Delay does occur but
the Building B Premises is substantially complete on or before September 1,
2000, then the Building B Premises Term Commencement Date shall not be
extended and shall be the date described in Paragraph 39.C(2) of the Lease.
In the event a Landlord Delay shall not occur, then the Building B Premises
Term Commencement Date shall be the date described in Paragraph 39.C of the
Lease.
5.2 Within ten (10) days after completion of construction of the
Building B Premises Tenant Improvements, Tenant shall cause a Notice of
Completion to be recorded in the office of the Recorder of the county in
which Building B is located in accordance with Section 3093 of the Civil
Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails
to do so, Landlord may execute and file the same on behalf of Tenant as
Tenant's agent for such purpose, at Tenant's sole cost and expense. At the
conclusion of construction, (i) Tenant shall cause the Space Planner and
the contractor (i) to update the approved Building B Premises Plans as
necessary to reflect all changes made to the approved Building B Premises
Plans during the course of construction, (ii) to certify to the best of
their knowledge that the "record-set" of as-built drawings are true and
correct, which certification shall survive the expiration or termination
of the Lease, and (c) to deliver to Landlord two (2) sets of copies of
such record set of "as-built" drawings on CAD within ninety (90) days
following issuance of a certificate of occupancy for the Building B
Premises, and (iii) Tenant shall deliver to Landlord a copy of all
warranties, guarantees, and operating manuals and information relating to
the improvements, equipment, and systems in the Building B Premises.
5.3 For purposes of the Lease and this Improvement Agreement,
"SUBSTANTIAL COMPLETION," with respect to the Building B Premises, shall
have occurred when Landlord's architect and Tenant's architect state in
writing that the Building B Premises Tenant Improvements are substantially
complete in accordance with the terms of the Lease and this Improvement
Agreement.
37
SCHEDULE 1
TO EXHIBIT C
BASE BUILDING WORK
The Base Building Work is defined as that work which is identified on the
contract documents listed below, which are incorporated into Landlord's Contract
for Construction Services with Devcon Construction, and including any changes,
revisions and modifications that may have been made to such contract documents
before, during or after construction of the Base Building.
SPECIFICATIONS, titled "Skyway Landing" by B.H. Bocook Architect, Inc., dated
December 21, 1998.
DRAWINGS, titled "Skyway Landing" by B.H. Bocook Architect, Inc., as follow:
Drawing/Dated Drawing/Dated Drawing/Dated
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-0.0 /March 19, 1999 A-4.1B /March 19, 1999 E0.0 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-0.1 /December 18, 1998 A-4.2B /March 19, 1999 E0.1 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-0.2 /December 18, 1998 A-4.3B /March 19, 1999 E-1.0 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-0.3 /December 18, 1998 A-5.1 /December 18, 1998 E-1.1 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-0.4A /December 18, 1998 A-6.1A /December 18, 1998 E-1.2 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-0.4B /December 18, 1998 A-6.2A /October 9, 1998 E-2.1.1A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-1.1 /April 9, 1999 A-6.3A /October 9, 1998 E-2.1.2A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-1.2 /April 9, 1999 A-6.1B /December 18, 1998 E-2.2.1A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-1.3 /April 9, 1999 A-6.2B /October 9, 1998 E-2.2.2A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.1 /April 9, 1999 A-6.3B /October 9, 1998 E-2.3.1A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.2 /April 9, 1999 A-7.1A /December 18, 1998 E-2.3.2A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.3 /April 9, 1999 A-7.2A /December 18, 1998 E-3.1.1A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.4 /April 9, 1999 A-7.3A /December 18, 1998 E-3.1.2A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.5 /April 9, 1999 A-7.4A /December 18, 1998 E-3.2.1A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.6 /April 9, 1999 A-7.1B /December 18, 1998 E-3.2.2A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.7 /April 9, 1999 A-7.2B /December 18, 1998 E-3.3.1A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.8 /April 9, 1999 A-7.3B /December 18, 1998 E-3.3.2A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.9 /April 9, 1999 A-7.4B /April 27, 1999 E-3.4A /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-2.10 /April 9, 1999 A-7.5 /March 19, 1999 E-4.0 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.1 /April 9, 1999 A-8.1 /December 18, 1998 E-5.0 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.2 /April 9, 1999 A-8.2 /April 27, 1999 E-5.1 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.3 /April 9, 1999 A-8.3 /December 18, 1998 E-6.0 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.4 /April 9, 1999 A-9.1 /December 18, 1998 E-6.1 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.5 /April 9, 1999 S-1.1 /March 19, 1999 E-6.2 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.6 /April 9, 1999 S-1.2 /January 7, 1999 E-6.3 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.7 /April 9, 1999 S-1.3 /October 9, 1998 P-0.1 /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.8 /April 9, 1999 S-2.1 /March 19, 1999 P-2.1-A /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3. /April 9, 1999 S-2.1A /April 26, 1999 P-2.2-A /October 9, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.10 /April 9, 1999 S-2.1B /October 9, 1998 P-2.3-A /October 9, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
C-3.11 /April 9, 1999 S-2.1BA /October 9, 1998 P-2.4-A /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-1.1 /March 19, 1999 S-2.2 /April 26, 1999 P-3.1-A /October 9, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-1.2 /April 27, 1999 S-2.2B /October 9, 1998 P-4.1-A /October 9, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.1A /March 19, 1999 S-2.3 /April 26, 1999 P-4.2-A /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.2A /March 19, 1999 S-2.3B /October 9, 1998 P-2.1-B /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.3A /March 19, 1999 S-2.4 /April 26, 1999 P-2.2-B /October 9, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.4A /March 19, 1999 S-2.4B /October 9, 1998 P-2.3-B /October 9, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.5A /March 19, 1999 S-2.5 /December 18, 1998 P-2.4-B /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.6A /October 9, 1998 S-2.5B /October 9, 1998 P-3.1-B /October 9, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.1B /March 19, 1999 S-3.1 /April 26, 1999 P-4.1-B /October 9, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.2B /March 19, 1999 S-3.2 /April 26, 1999 P-4.2-B /October 9, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.3B /March 19, 1999 S-4.1 /March 19, 1999 F-1.1 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.4B /March 19, 1999 S-4.2 /March 19, 1999 F-1.2 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.5B /March 19, 1999 S-5.1 /March 19, 1999 F-2.1 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-2.6B /October 9, 1998 S-5.2 /December 18, 1998 F-2.2 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.1A /December 18, 1998 S-5.3 /December 18, 1998 F-3.0 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.2A /December 18, 1998 S-5.4 /October 9, 1998 F-4.0 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.1B /January 21, 1999 S-5.5 /March 19, 1999 F-4.1 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.2B /October 9, 1998 S-5.6 /April 26, 1999 L-1 /April 3, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.3 /October 9, 1998 S-5.7 /April 26, 1999 L-2 /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.4 /October 9, 1998 S-7.1 /December 18, 1998 L-3 /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.5 /December 18, 1998 S-8.1 /December 18, 1998 L-4 /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.5A /December 18, 1998 M-1 /April 26, 1999 L-5 /April 9, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.6Ae /December 18, 1998 M-2A /March 19, 1999 L-6 /December 18, 1998
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.6As /December 18, 1998 M-3A /March 19, 1999 L-0 (Levee/Wetland) /January 21, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.5B /December 18, 1998 M-4A /March 19, 1999 L-1 (Levee/Wetland) /January 21, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.5Be /December 18, 1998 M-5A /March 19, 1999 L-2 (Levee/Wetland) /January 21, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-3.6Bs /October 9, 1998 M-6A /March 19, 1999 A8-1 /June 10, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-4.1A /March 19, 1999 M-7 /March 19, 1999 A8-2 /June 10, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-4.2A /March 19, 1999 M-8 /March 19, 1999 A8-3 /June 10, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
A-4.3A /March 19, 1999 ME-1 /March 19, 1999
- ------------------------------------------ ----------------------------------------- ------------------------------------------
38
SCHEDULE 2
TO EXHIBIT C
BUILDING STANDARDS
39
SCHEDULE 3
TO EXHIBIT C
GENERAL REQUIREMENTS FOR BUILDING CONSTRUCTION WORK
- --------------------------------------------------------------------------------
INTENT
The intent of these General Requirements is to communicate Spieker Properties
general performance expectations and requirements of contractors performing work
in our projects. While these requirements may not cover all specific project
requirements, or may not apply to all projects, they are intended to communicate
a basic overall methodology for doing construction work in Spieker Properties
projects.
PRELIMINARY
1. All work performed shall be performed by union signatory general contractor
utilizing all union labor and must comply with all applicable rules,
regulations, and codes of the building, city, state, and federal
governmental agencies having jurisdiction. The General Contractor will file
drawings and secure all required permits prior to beginning work, unless
circumstances require earlier construction commencement, as directed by the
Owner's architect. All construction within the leased premises shall
conform to applicable sections of California Title 24 Standards and the
American with Disabilities Act (ADA).
2. All work shall be performed during regular business hours (7:00 A.M. - 6:00
P.M.), Monday through Friday, with the exception of work types listed
below. All building system operations will be maintained in normal
operation, and will not be adversely impacted by construction work, unless
specifically authorized by a Project Management representative. The
contractor shall communicate requests to the Management Office 24 hours in
advance of any required interruption of any building services.
EXCEPTIONS - The following work is required to be performed on an
overtime or off-hours basis : core drilling, nailing of tackless carpet
stripping, spray painting of any lacquer or other volatile or odor
creating substances, and any type of concrete chipping. Any scheduling
requests for these types of off-hours work must be approved and
authorized by the Management Office prior to performance any of work.
3. All contractors must supply Certificate(s) of Insurance naming Spieker
Properties, L.P. as additionally insured prior to the start of any
construction. Insurance certificates and copies of permits, as required,
must be provided to Project Management prior to the commencement of any
work.
4. Contractors representative will meet with Project Management representative
prior to beginning contracted work, to review the scope of construction
work, construction methods, these general requirements, any additional
project specific requirements, and any potential impact to the satisfactory
on-going operation of building services.
5. The contractor will coordinate proper parking locations for construction
personnel with Project Management prior to starting construction, to avoid
impacting our tenants parking availability.
PROJECT AREA ACCESS
1. Access to project buildings, parking structures, suites, etc. will be
coordinated in advance with Project Office. No installed access control or
security system will be over ridden or bypassed for any reason, or at any
time. All construction personnel will be limited to those areas for which
they have been given specific access.
2. Access to all electrical closets, telephone closets, mechanical rooms, and
suites must be coordinated in advance through the Project Office.
Electrical, telephone, and other equipment rooms will be kept closed and
locked when they are not physically occupied.
DURING WORK PERFORMANCE
1. Upon the start of construction, the contractor will provide walk-off mats
at all entrances to the construction area(s) from stairwells (if used) and
entrances to all elevators.
2. Contractors shall maintain cleanliness throughout; do not clutter or block
hallways, exits, elevator lobby, electrical or telephone rooms. Building
fire rated doors will not be propped open, removed, or their door closures
disconnected. Nor will elevator doors be propped or jammed open to prevent
the automatic function of it's timed door actuators. CONTRACTORS ARE
REQUIRED TO UTILIZE THE FREIGHT ELEVATOR ONLY! Where a freight elevator is
not available, Project Management will designate the appropriate elevator
for contractor use. Where available, elevator protective pads will be used
whenever moving materials or equipment in the elevator. Contractors are
responsible for all damage they cause and clean-up.
3. Building electrical closets will not, AT ANY TIME, OR FOR ANY REASON, be
utilized for the storage of any construction project materials or trash, as
such storage constitutes a violation of prevailing fire codes.
4. All material deliveries, and debris removal, must be made as expeditiously
as possible so as to not have these vehicles blocking accesses to / from
the building. The contractor, at contractor expense must remove all
construction debris from the building. Building trash dumpsters are not to
be utilized for the disposal of construction project debris, as these are
provided for tenant use. As may be required, Contractor will make
arrangements for delivery of a debris box for his use. The Project Office
will approve an appropriate location for the debris box while it is on the
project. Delivery or removal of large amounts of material is to be done
after normal business hours with 24-hr. prior approval of the Project
Manager.
40
5. The contractor is responsible for taking the following precautions / steps
to protect the satisfactory on-going operation of all building systems and
tenant operations :
- Covering HVAC supply and return duct openings to protect from
construction dirt / dust being spread to other areas of the
building or into the HVAC equipment / system. This can be
accomplished by sealing off, covering with filtering media, or
other Project Management approved method.
- Coordinate with Project Manager prior to construction to have
fire sprinkler systems isolated, smoke detectors disabled, or
alarm systems de-activated for periods as may be necessary.
Contractor will protect those smoke detectors or fire
sprinkler heads left installed in the area, after disabling,
by covering them with plastic bags during construction.
- Where electrical components or circuits are removed,
contractor will ensure full compliance with OSHA required
lockout / tagout procedures to prevent personal injuries or
system outages.
- Develop the best isolation possible of the construction area
to contain any dirt, dust, noise or other potential tenant
impact which may be generated by demo, construction work and
clean-up.
6. Any damage to any project area including but not limited to, parking areas,
doors, freight elevators, and carpets will be reported to the Project
Office and repaired by the contractor immediately. Spieker Properties
reserves the right to remedy any damage at the Contractors expense if the
damage is not repaired in a timely manner.
7. No powder-actuated guns are to be used without the specific prior
authorization of the Project Management Office.
8. No foreign substances are to be poured down any restroom floor drains, or
into other restroom fixtures.
9. All firewall and floor penetrations shall be sleeved and sealed in
accordance with applicable fire code, using only approved, UL listed, fire
stop materials. All firestop installations must be reviewed and approved by
the Project Manager prior to closing the associated area of work.
10. All electrical panel and circuit breaker labeling will be performed in
accordance with acceptable industry methods, or as may be directed by
Project Management.
11. Contractor will notify the Management Office at least 48 hours in advance
of construction completion. A walk-through and punch list will be developed
for each job.
12. Smoking is prohibited in all buildings, and parking garages, at all times.
13. The Contractor is responsible for ensuring, on an on-going basis, that
common areas, work space, and construction use restrooms are thoroughly
cleaned upon completion of work, including trash and material disposal,
removal of all noise and dust shielding materials installed at beginning of
project, windows cleaned, etc.
14. THE PROJECT OFFICE IS TO BE NOTIFIED IMMEDIATELY SHOULD ANY EMERGENCY
DEVELOP, ANY BUILDING SYSTEM OR OPERATION BE IMPACTED, OR ANY ASPECT OF THE
CONSTRUCTION EFFORT IMPACT ANY TENANT.
SAFETY / COMPLIANCE
1. General Contractor is responsible for ensuring jobsite safety compliance.
This includes the work force as well as anyone entering the construction
area. Protective barricades will be placed as required to ensure general
area safety. Material Safety Data Sheets (MSDS) for all materials to be
used on the jobsite must be provided to the Project Manager for review
prior to bringing the materials into the project. The contractor will
further ensure that a copy of each MSDS is available at the jobsite
whenever a specific material is in use.
2. No welding, burning, or cutting with an open flame will be performed
without prior notification to the Project Office so that appropriate
actions may be taken with fire alarm systems and fire sprinkler systems.
Appropriate fire extinguishers will be immediately available at all times.
3. The contractor is responsible for ensuring that all of their
sub-contractors are aware, and in compliance, with these general
requirements.
MATERIALS
1. The contractor shall contact the Management Office at the start of
construction for instructions on building keying, specific hardware and
other standards, as may be applicable, unless this coordination is
accomplished through hardware submittals. All permanent keying will be
provided through the Management Office.
2. All HVAC, electrical, plumbing, fire alarm system, fire sprinkler, building
control and lighting components installed will be of Building Standard
manufacture, unless noted as otherwise on the approved plans and
specifications. This includes but is not limited to thermostats, controls,
diffusers, lighting fixtures, switches, lamps, relays, smoke detectors,
fire sprinkler heads, sprinkler flow switches, manual pull stations,
indicator horns / strobes, etc.
PROJECT COMPLETION
1. Upon completion of project, contractor will perform a full air balance of
any installed or modified HVAC systems, providing one copy of each air
balance report to the Management Office.
2. Upon completion of project, a completed test report (witnessed by a Fire
Department representative as required) will be provided to the Project
Management Office for all fire sprinkler or fire alarm systems having been
impacted by any aspect of the construction work.
41
3. Upon completion of construction, one (1) set of as-built prints, and one
(1) set of as-built sepias, are to be provided to the Management Office.
4. Contractor will ensure that specific submittals, manufacturers operation
and maintenance manuals, and applicable manufacturers cut sheets are
delivered to the Project Office for ALL equipment or components installed
in the course of their work. This includes, but is not limited to,
mechanical equipment, fire alarm system components, fire sprinkler system
components, HVAC system equipment or components, lighting system
components, electrical distribution or control components, and any sensing
or monitoring components.
5. Upon completion of construction clean inside of all perimeter windows and
the interior of all lighting fixtures and louvers. Thoroughly clean all
work areas, common areas where impacted, construction use restrooms, and
freight elevators. Coordinate construction clean-up schedule with
Management Office.
BUILDING CONTACT LIST
Any questions or concerns should be directed to :
PROJECT DIRECTOR - ________________
BUILDING MANAGERS - ________________
CUSTOMER SERV. REP. - ________________
BUILDING ENGINEER - ________________
MANAGEMENT OFFICE - (___) __________
MANAGEMENT OFFICE FAX - (___) __________
42