90 NEW MONTGOMERY STREET
SAN FRANCISCO, CALIFORNIA
OFFICE LEASE
LANDLORD: THE CANADA LIFE ASSURANCE COMPANY
TENANT: FORECROSS CORPORATION
TABLE OF CONTENTS
PAGE
1. Parties ...................................................... 1
2. Premises ..................................................... 1
3. Term ......................................................... 1
4. Possession ................................................... 2
5. Rent ......................................................... 2
6. Security Deposit ............................................. 3
7. Tenant's Share Of Expenses And Taxes ......................... 4
8. Use .......................................................... 7
9. Compliance With Law .......................................... 8
10. Alterations ................................................. 8
11. Repairs ..................................................... 10
12. Liens ....................................................... 11
13. Assignment And Subletting ................................... 11
14. Indemnification ............................................. 13
15. Subrogation ................................................. 14
16. Insurance ................................................... 14
17. Services And Utilities ...................................... 15
18. Taxes On Tenant's Personal Property ......................... 17
19. Rules And Regulations ....................................... 17
20. Holding Over ................................................ 18
21. Entry By Landlord ........................................... 18
22. Damage And Destruction ...................................... 19
23. Default ..................................................... 20
24. Remedies In Default ......................................... 21
25. Eminent Domain .............................................. 22
26. Estoppel Certificate ........................................ 23
27. Authority Of Tenant ......................................... 24
28. Brokers ..................................................... 24
29. Default By Landlord ......................................... 24
30. Landlord's Option To Relocate Tenant ........................ 24
31. Renewal Option .............................................. 25
32. Expansion Option ............................................ 26
33. General Provisions .......................................... 27
EXHIBIT LIST
Exhibit A Description of the Premises
Exhibit B Index of Defined Terms
Exhibit C Expense Exclusions
Exhibit D Rules and Regulations
90 MONTGOMERY STREET
OFFICE LEASE
BASIC LEASE INFORMATION
Section I Date: November _, 1996
Section I Landlord: The Canada Life Assurance
Company
Address: 90 New Montgomery Street
Suite 1201
San Francisco, CA 94105
Contact: Ann McNee
Telephone: (415) 777-0952
Section 1 Tenant: Forecross Corporation
Address: 90 New Montgomery Street
Suite 700
San Francisco, CA 94105
Contact: Kim Jones
Telephone: (415) 543-1515
Section 2 Rentable Area of Premises: 6,181
Section 2 Rentable Area of Building: 113,605
Section 2 Rentable Area of
Office Space in Building: 110,326
Section 2 Load Factor: 1.1616
Section 2 Floor(s): Seventh
Section 2 Suite(s): 700
Section 3 Commencement Date: January 1, 1997
Section 3 Expiration Date: December 31, 2001
Section 5 Base Rent:
Base Rent Per
Rentable
Monthly,
Lease Years Square Foot
Installments
----------- -----------
- ------------
Years 1-3 $24.00 $12,362.00
(rent for first
month of lease
term waived)
Years 4 and 5 $25.00 $12,877.08
Section 6 Security Deposit: $12,877.08
Section 7 Base Year: 1997
Section 7 Tenant's Tax
Share: 5.44%
Section 7 Tenant's
Expense Share: 5.60%
Section 8 Permitted Use
Other than as
General Office
Space: None
Section 16 Tenant's
Minimum
General Liability
Insurance: $1,000.000
Section 28 Brokers: CAC Group Inc.
Exhibits Attached: A, B, C and D
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 specified information set forth above and shall be
construed to incorporate all of the terms provided under the particular section
of this Lease pertaining to such information. In the event of a conflict between
any Basic Lease Information and the remainder of this Lease, the remainder of
this Lease shall control.
90 NEW MONTGOMERY STREET
OFFICE LEASE
1. PARTIES
This Lease, dated for reference purposes only as of the date set forth on
the first line of the Basic Lease Information, is made by and between Landlord
and Tenant specified in the Basic Lease Information.
2. PREMISES
Landlord leases to Tenant and Tenant leases from Landlord that certain
space outlined in the floor plan(s) attached as Exhibit A, together with the
improvements now or hereafter located therein (the "Premises"), upon and subject
to the conditions set forth in this Lease. Landlord and Tenant agree that, for
purposes of this Lease, the Premises shall be deemed to have a Rentable Area
equal to the square footage specified in the Basic Lease Information. As used in
this Lease, the "Rentable Area" of the Premises shall be equal to the "Usable
Area" of the Premises ("usable area" shall be computed in accordance with the
American Standard Method of Measuring Floor Area in Office Buildings, ANSI
Z65.1-1980, published by the Building Owners and Managers Association)
multiplied by the load factor set forth in the Basic Lease Information. The
Premises are situated in that certain office building (the "Building") commonly
known as 90 New Montgomery Street, San Francisco, California, in the suite(s),
if any, and on the floor(s) specified in the Basic Lease Information. As used in
this Lease, the term "Building" includes the land upon which such office
building stands and the land and improvements surrounding such office building
and designated from time to time by Landlord as land or Common Areas (as defined
below) appurtenant to such office building, together with utilities, facilities,
drives, walkways and other amenities appurtenant to or servicing such office
building. The Rentable Areas of the Building and of the office space in the
Building are set forth in the Basic Lease Information. An index of all defined
terms used herein is set forth in attached Exhibit B.
3. TERM
The Premises are leased for a term (the "Term") to commence and end on the
dates respectively specified in the Basic Lease Information, unless the Term
shall sooner terminate as provided in this Lease. The dates upon which the Term
shall commence and terminate pursuant to this Section are called the
"Commencement Date" and the "Expiration Date," respectively.
4. POSSESSION
(a) By the Commencement Date, Landlord shall (i) demolish the existing
partitions in the Premises shown on Exhibit A, (ii) repaint the Premises with
Building-standard paint and replace the carpet base therein, (iii) upgrade the
electrical panel on the seventh (7th) floor of the Building to provide
electrical circuits sufficient for Tenant's current use of the Premises, and
(iv) recarpet Suite 707 with Building-standard carpet (collectively, the
"Leasehold Improvement Work"). Landlord shall pay the cost of the Leasehold
Improvement Work up to a maximum expenditure of Sixteen Thousand Ninety Dollars
($l6,090)("Landlord's Maximum Contribution"). If the cost of the Leasehold
Improvement Work shall exceed Landlord's Maximum Contribution, then Tenant shall
pay the excess costs to Landlord upon demand and, if requested by Landlord,
prior to the commencement of the Leasehold Improvement Work. Notwithstanding the
foregoing, Landlord and Tenant shall each pay fifty percent (50%) of the cost of
upgrading the electrical panel pursuant to clause (iii) above irrespective of
whether the cost of the Leasehold Improvement Work exceeds Landlords's Maximum
Contribution, provided that the portion of such cost paid by Landlord shall be
debited against Landlord's Maximum Contribution.
(b) If, for any reason whatsoever, Landlord fails to substantially complete
the Leasehold Improvement Work by the Commencement Date, this Lease shall remain
in full force and effect, and Landlord shall have no liability to Tenant for any
loss or damage resulting from such failure, provided, however, that (i) Base
Rent under Subsection 5(a) and Additional Charges under Section 7 of this Lease
shall be abated for the period between the Commencement Date and the date on
which Landlord substantially completes the Leasehold Improvement Work, and (ii)
until Landlord has so substantially completed the Leasehold Improvement Work,
Tenant shall continue to pay Base Rent and Additional Charges in accordance with
the terms of the Original Lease (as hereinafter defined).
(c) The purpose of attached Exhibit A is only to show the approximate
location of the Premises in the Building, and such Exhibit is not meant to
constitute an agreement as to the construction or Rentable Area of the Premises,
as to the specific location of elements of the Common Areas, or as to the
specific location of the access ways to the Premises or the Building. Landlord
reserves the right, at any time and from time to time, to make alterations or
additions to, to construct other improvements in, and to alter the dimensions
and appearance of the Building and the Common Areas, provided that Landlord
shall have no right to alter the Premises during the Term.
5. RENT
(a) Beginning on the first day of the second month following the
Commencement Date, Tenant shall pay to Landlord as annual minimum rent for the
Premises the sum specified in the Basic Lease Information as "Base Rent." Base
Rent shall be payable in U.S. dollars on the first
day of the Term and on or before the first day of each and every successive
calendar month thereafter. In the event the Term commences on a day other than
the first day of a calendar month, then the monthly Base Rent for such
fractional month shall be prorated on a daily basis based upon a thirty (30) day
calendar month. Base Rent shall be paid to Landlord, without any demand and
without any deduction or offset whatsoever, in lawful money of the United States
of America at the address for Landlord specified in the Basic Lease Information,
or to such other person or at such other place as Landlord may from time to time
designate by notice to Tenant.
(b) Tenant shall pay to Landlord as additional charges all fees, costs,
expenses, charges and other amounts required to be paid by Tenant under this
Lease other than Base Rent ("Additional Charges"). Additional Charges shall be
payable to Landlord at the place where the Base Rent is payable. Landlord shall
have the same remedies for a default in the payment of Additional Charges as for
a default in the payment of Base Rent. The terms "Base Rent" and "Additional
Charges" are sometimes collectively referred to herein as "Rent."
(c) If more than one (1) time during any twelve (12) consecutive month
period Tenant shall fail to pay to Landlord any Rent within two (2) business
days after the date on which such Rent is due and payable, then for each such
additional failure to pay any Rent, Tenant shall pay to Landlord a late payment
charge equal to four percent (4%) of the unpaid amount of such Rent, to
compensate Landlord for Landlord's additional administrative and other costs
resulting from each such additional failure by Tenant. This late payment charge
shall be paid to Landlord as Additional Charges together with the unpaid amount
of such Rent. Any payment of Rent to Landlord following service upon Tenant of a
three (3) day notice to pay Rent or quit shall be in the form of cash or a
certified or cashier's check.
6. SECURITY DEPOSIT
Tenant has deposited with Landlord the sum (if any) specified in the Basic
Lease Information as the "Security Deposit." The Security Deposit shall be held
by Landlord as security for the full and faithful performance by Tenant of all
the provisions of this Lease. If Tenant defaults with respect to any provision
of this Lease, including, without limitation, provisions relating to the payment
of Rent, Landlord may, but shall not be required to, use, apply or retain all or
any part of the Security Deposit for the payment of any Rent or as compensation
to Landlord for any other loss or damage that Landlord may suffer by reason of
Tenant's default. If any portion of the Security Deposit is so used, applied or
retained, Tenant shall, within five (5) days after demand from Landlord, deposit
with Landlord funds sufficient to restore the Security Deposit to its original
amount. Landlord shall not be required to keep the Security Deposit separate
from Landlord's general funds, no trust relationship shall be created between
Landlord and Tenant with respect to the Security Deposit, and Tenant shall not
be entitled to interest on the Security Deposit. If Tenant shall fully and
faithfully perform
every provision of this Lease, the remaining balance, if any, of the Security
Deposit shall be returned to Tenant (or at Landlord's option, to the last
assignee of Tenant's interest hereunder) within thirty (30) days after the
Expiration Date. In the event of termination of Landlord's interest in this
Lease, Landlord may transfer the Security Deposit to Landlord's successor in
interest and upon such transfer, Landlord shall be relieved of any and all
liability for or obligation with respect to the Security Deposit. Tenant shall
look solely to such successor in interest of Landlord for return of the
remaining balance, if any, of the Security Deposit. Tenant waives the provisions
of California Civil Code Section 1950.7(c) limiting Landlord's right to apply
the Security Deposit to remedy certain specified defaults only.
7. TENANT'S SHARE OF EXPENSES AND TAXES
(a) During the Term, Tenant shall pay to Landlord as Additional Charges
(i) Tenant's Expense Share (as defined below) of the total dollar
increase, if any, in Expenses (as defined below) attributable to
each Computation Year (as defined below) over Base Expenses (as
defined below) and
(ii) Tenant's Tax Share (as defined below) of the total dollar
increase, if any, in Taxes (as defined below) attributable to
each Computation Year over Base Taxes (as defined below).
(b) During the last month of the Base Year and each Computation Year or as
soon thereafter as practicable, Landlord shall give to Tenant notice of
Landlord's estimate of the total amounts that will be payable by Tenant under
Subsection 7(a) for the following Computation Year. On or before the first day
of each month during the following Computation Year, Tenant shall pay to
Landlord one-twelfth (1/12) of such estimated amounts, provided that if Landlord
fails to give such notice in the last month of the prior Computation Year then
Tenant shall continue to pay on the basis of the prior Computation Year's
estimate until the first day of the calendar month next succeeding the date when
such notice is given by Landlord. If at any time or times Landlord determines
that the amounts payable under Subsection 7(a) for the current Computation Year
will vary from Landlord's estimate given to Tenant, Landlord, by notice to
Tenant, may revise the estimate for such Computation Year, and subsequent
payments by Tenant for such Computation Year shall be based upon such revised
estimate.
(c) Following the end of each Computation Year, Landlord shall deliver to
Tenant a statement of amounts payable under Subsection 7(a) for such Computation
Year, prepared by Landlord and audited by an independent accounting firm
designated by Landlord. If such statement shows an amount owing by Tenant that
is less than the payments for such Computation Year previously made by Tenant,
and if no Event of Default (as defined below) is outstanding at the time such
statement is delivered, Landlord shall credit such amount to the next payments
of Rent falling due under this Lease or, if the Term has expired, shall refund
such amount to Tenant. If such statement shows an amount owing by Tenant that is
more than the payments for such Computation
4
Year previously made by Tenant, Tenant shall pay the deficiency to Landlord
within thirty (30) days after delivery of such statement. The obligations
of Landlord and Tenant under this Subsection 7(c) shall survive the
Expiration Date, and, if the Expiration Date is a day other than the last
day of a Computation Year, the adjustment in Rent pursuant to this Section 7
for the Computation Year in which the Expiration Date occurs shall be
prorated in the proportion that the number of days in such Computation Year
preceding the Expiration Date bears to 365.
(d) As used in this Lease, the following terms shall have the
meanings specified:
(i) "Expenses" shall mean (A) all costs of management, operation,
maintenance and repair of the Building, including, without
limitation, costs for janitorial, maintenance, security and other
service contracts; charges for electricity, heat, ventilation,
air conditioning, light, power, water, sewer and waste disposal
and other utilities; charges or fees for utility connections and
equipment; costs for materials, supplies, equipment and tools;
costs for maintenance and repairs; insurance premiums and
license, permit and inspection fees; depreciation on personal
property; the fair market rental value of Landlord's and the
property manager's offices in the Building; that portion of
wages, salaries, employee benefits and payroll costs of personnel
engaged in the management, operation and maintenance of the
Building attributable to such personnel in connection with the
management, operation and maintenance of the Building; fees,
charges and other costs for management, consulting, legal,
accounting and other services performed by any independent
contractors engaged by Landlord or for any such services
performed by Landlord in connection with the Building; and any
other reasonable expenses incurred by Landlord which, under
generally accepted accounting principles, would be considered an
operating or maintenance expense of the Building; and (B) the
cost of any capital improvements made to the Building after its
construction, which capital improvements lead to a reduction in
other Expenses, or made to the Building after the date of this
Lease as a result of governmental orders, ordinances, codes,
rules and regulations that were inapplicable to the Building at
the time permits for its construction were obtained, such cost to
be amortized over the useful life of such capital improvements in
accordance with generally accepted accounting principles,
together with interest on the unamortized balance at a rate equal
to the lesser of (1) the rate of interest publicly announced by
Bank of America NT&SA in San Francisco, California, as its
"reference rate" (or any successor interest rate), plus two
percent (2%), which rate on the unamortized balance shall be
adjusted as of the effective date of any change in such reference
(or successor) rate, or (2) the highest rate permitted by law.
Notwithstanding the foregoing, Expenses shall exclude Taxes and
any costs set forth in attached Exhibit C. In the event the
Rentable Area of the office space in the Building is less than
ninety-five percent (95%) occupied during the Base Year or any
Computation Year, Expenses for the Base Year and each such
Computation Year shall be determined by adjusting the actual
costs under clauses (A) and (B) above for the Base Year and each
such Computation Year upward to equal Landlord's reasonable
estimate of the costs that would have been incurred under clauses
(A) and (B) if ninety-five percent (95%) of the total Rentable
Area
5
of the office space in the Building had been fully occupied for
the entire Base Year and each such Computation Year. The
determination of Expenses shall be made by Landlord, shall be
audited by Landlord's independent public accounting firm as
provided in Section 7(c) and shall be final and binding on
Tenant, provided that Tenant shall have a reasonable opportunity
to review such determination prior to the time at which it
becomes final and binding.
(ii) "Taxes" shall mean all taxes, assessments and charges levied upon
or with respect to the Building (including, without limitation,
the Common Areas and all leasehold improvement work), any
personal property of Landlord used in the operation of the
Building, or Landlord's interest in the Building or in such
personal property. Taxes shall include, without limitation, all
general real property taxes and general and special assessments,
transit charges, housing fund assessments, service payments in
lieu of taxes and any tax, fee or excise on the act of entering
into this Lease or any other lease of space in the Building, on
the use or occupancy of all or any part of the Building, on the
rent payable under this Lease or any other lease of space in the
Building or on or in connection with the business of renting
space in the Building, that are now or hereafter levied or
assessed against Landlord by the United States of America, the
State of California, or any political subdivision, public
corporation, district or other political or public entity, and
shall also include any other tax, fee or excise, however
described, that may be levied or assessed as a substitute for, or
as an addition to, in full or in part, any other Taxes, whether
or not now customary or within the contemplation of the parties.
Taxes also shall include all reasonable legal, accounting,
consulting or other fees, costs and disbursements incurred in
connection with proceedings to contest, determine or reduce
Taxes. Taxes shall not include franchise, transfer, estate or
inheritance taxes, or income taxes measured by the net income of
Landlord from all sources, unless, due to a change in the method
of taxation, any of these taxes are levied or assessed against
Landlord as a substitute for, or as an addition to, in full or in
part, any other tax that would otherwise constitute a Tax.
(iii)"Base Year" shall mean the calendar year specified in the Basic
Lease Information.
(iv) "Base Expenses" shall mean the amount of Expenses for the Base
Year.
(v) "Base Taxes" shall mean the amount of Taxes for the Base Year,
provided, however, that if the Building is assessed on less than
a fully completed basis for the Base Year, then Base Taxes shall
mean the amount of Taxes that would have been payable with
respect to the Building for the Base Year if the Building had
been assessed on a fully completed basis for the Base Year, as
reasonably determined by Landlord.
(vi) "Tenant's Expense Share" shall mean the percentage figure so
specified in the Basic Lease Information. This percentage figure
has been obtained by dividing the Rentable Area of the Premises
by the total Rentable Area of the office space in the
6
Building. In the event Tenant's Expense Share is changed during a
Computation Year by reason of a change in the Rentable Area of
the Premises or the office space in the Building, Tenant's
Expense Share shall thereafter mean the percentage figure
obtained by dividing the new Rentable Area, if any, of the
Premises by the new total Rentable Area, if any, of the office
space in the Building.
(vii)"Tenant's Tax Share" shall mean the percentage figure so
specified in the Basic Lease Information. This percentage figure
has been obtained by dividing the Rentable Area of the Premises
by the total Rentable Area of the Building. In the event Tenant's
Tax Share is changed during a Computation Year by reason of a
change in the Rentable Area of the Premises or the Building,
Tenant's Tax Share shall thereafter mean the percentage figure
obtained by dividing the new Rentable Area, if any, of the
Premises by the new total Rentable Area, if any, of the Building.
(viii) "Computation Year" shall mean each twelve (12) consecutive
month period commencing January 1 of each year during the Term
following the Base Year, provided that Landlord, upon notice to
Tenant, may change the Computation Year from time to time to any
other twelve (12) consecutive month period, and, in the event of
any such change, Tenant's Expense Share of Expenses over Base
Expenses and Tenant's Tax Share of Taxes over Base Taxes shall be
equitably adjusted for the Computation Years involved in any such
change.
8. USE
(a) Tenant shall use and continuously occupy the Premises for general
office purposes and any other purpose specified in the Basic Lease Information
and shall not use the Premises, or permit the Premises to be used, for any other
purpose.
(b) Tenant shall take no action, nor permit any action to be taken, in or
about the Premises that will in any way increase the existing rate of or affect
any fire or other insurance upon the Building or any of its contents, or cause
cancellation of any insurance policy covering all or any part of the Building or
any of its contents. Tenant shall take no action, nor permit any action to be
taken, in or about the Premises that will in any way injure, annoy, obstruct or
interfere with the rights of other tenants or occupants of the Building nor use
or allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor cause, maintain or permit any nuisance in, on or
about the Premises. Tenant shall neither commit nor suffer to be committed any
waste in, on or about the Premises.
(c) Tenant shall have a non-exclusive right to use the Common Areas,
provided, however, that Tenant's use of the Common Areas shall be subject to
such rules and regulations as Landlord shall make from time to time. The manner
and expense of maintaining, repairing and operating the Common Areas shall be at
the sole discretion of Landlord. As used in this Lease, the term "Common Areas"
shall mean the Building's pedestrian sidewalks, truckways, loading docks,
hallways, lobby, corridors, delivery
7
areas, elevators, escalators and stairs outside of the leased areas, public
bathrooms and comfort stations, and all other areas or improvements that from
time to time may be provided by Landlord for the convenience and use of the
tenants of the Building and their respective sub-tenants, agents, employees,
customers and invitees and any other licensees of Landlord. Landlord reserves
the right, from time to time, to utilize portions of the Common Areas for
entertainment, art shows, displays, product shows, the leasing of kiosks or
any other uses that Landlord deems reasonable.
(d) Tenant shall have access to the Premises 24-hours a day, 7-days a week.
9. COMPLIANCE WITH LAW
Tenant shall neither use, nor permit the use of, the Premises in any way
that will conflict with any law, statute, ordinance or governmental rule or
regulation now in force or hereafter enacted or promulgated (collectively,
"Laws"). At its sole expense, Tenant shall promptly comply with all Laws, and
with the requirements of any board of fire insurance underwriters or other
similar body now or hereafter constituted, relating to or affecting the
condition, use or occupancy of the Premises, provided that nothing in this
Section 9 shall obligate Tenant to alter or make improvements to the Premises
except for alterations or improvements required to comply with any Laws or
requirements due to the use of the Premises by Tenant.
10. ALTERATIONS
(a) Tenant shall neither make nor permit to be made any alterations,
additions or improvements to all or any part of the Premises, or attach any
fixtures or equipment to the Premises (collectively, "Alterations"), without
Landlord's prior approval, which approval shall not be unreasonably withheld. If
Tenant desires that any Alterations be made, Tenant shall give notice to
Landlord of the nature and estimated cost of such Alterations. Within three (3)
business days after Landlord's receipt of such notice, Landlord shall give
notice to Tenant stating whether Landlord requires Tenant to provide Landlord
with detailed plans and specifications for the proposed Alterations.
(b) If Landlord requires Tenant to provide detailed plans and
specifications, the following procedures shall be followed: Tenant, at Tenant's
expense, shall have reasonably detailed plans and specifications for the
proposed Alterations prepared at Tenant's sole expense by a licensed architect
or space planner. Landlord shall approve or disapprove the proposed Alterations
within ten (10) business days after delivery of such plans and specifications to
Landlord. Failure of Landlord to respond within such ten (10) business day
period shall be deemed to be approval by Landlord of the proposed Alterations.
If Landlord disapproves the proposed Alterations, Landlord shall specify in
reasonable detail its reasons for such disapproval and the changes required in
order to secure its approval. In the event Landlord disapproves the proposed
Alterations, Tenant may revise the plans and specifications as necessary to
secure Landlord's approval or may elect to forego the proposed Alterations. If
Tenant elects to revise the plans and
8
specifications. Landlord shall have a period of ten (10) business days following
submission of such revised plans and specifications to approve or disapprove the
proposed Alterations as provided above. If Landlord disapproves such revised
plans and specifications, the same procedure shall be followed as to further
revisions until Landlord's approval is given or is deemed to be given or until
Tenant elects to forego the proposed Alterations.
(c) If Landlord does not require Tenant to have detailed plans and
specifications prepared for the proposed Alterations pursuant to Subsection
10(b), then Landlord shall approve or disapprove the proposed Alterations within
five (5) business days of receipt of Tenant's initial notice of the nature and
estimated costs of the proposed Alterations pursuant to Subsection 10(a).
Failure of Landlord to respond within such five (5) business day period shall be
deemed to be approval by Landlord of the proposed Alterations.
(d) As a condition of approving the proposed Alterations, Landlord may
require Tenant to agree to remove all or any part of such Alterations no later
than the Expiration Date and to reimburse Landlord for any reasonable expenses
incurred by Landlord in reviewing the plans and specifications, including,
without limitation, the reasonable costs of any outside consultants retained by
Landlord for such purpose.
(e) If Landlord approves the proposed Alterations, the Alterations shall be
made in accordance with the detailed plans and specifications approved by
Landlord or, if no plans or specifications were required, in accordance with
Tenant's notice to Landlord under Section 10(a) and with any other reasonable
requirements imposed by Landlord. The Alterations shall be performed by Landlord
or, at Landlord's option, by a contractor selected by Tenant and reasonably
approved by Landlord. In either event, subject to Subsection 10(f), all
Alterations shall be made at Tenant's sole expense, and Tenant shall reimburse
Landlord for all expenses incurred by Landlord with respect to such Alterations,
including, without limitation, a reasonable charge for Landlord's overhead if
such Alterations are made by Landlord, or a reasonable charge for Landlord's
cost of inspecting the Alterations prior to and upon their completion if such
Alterations are made by Tenant's contractor. Tenant shall reimburse Landlord for
all such expenses within ten (10) days after receipt of any invoice from
Landlord. If Tenant's approved contractor constructs or installs the
Alterations, Tenant shall provide Landlord with copies of all required permits
and other governmental approvals for such Alterations, and Landlord shall have
the right from time to time to inspect such Alterations prior to or after their
completion. All Alterations shall immediately become Landlord's property and
shall remain in the Premises at the end of the Term without compensation to
Tenant, unless Landlord conditioned its approval of such Alterations on Tenant's
agreement to remove them, in which event Tenant shall by the Expiration Date
remove such Alterations and restore the Premises to their condition prior to the
installation of such Alterations.
9
(f) Landlord shall provide Tenant with an allowance (the "Alterations
Allowance") of Twenty Five Thousand Dollars ($25,000) to be applied toward the
cost of Alterations made by, Tenant in the Premises pursuant to this Section 10,
provided, however, that such Alterations Allowance shall be available only to
pay actual construction costs and the costs of computer and telephone cabling
installed within the Premises (the "Approved Alterations"). Landlord shall make
disbursements of the Alterations Allowance to Tenant from time to time following
the completion of Approved Alterations and the delivery to Landlord of invoices,
lien releases and other documentation satisfactory to Landlord evidencing the
payment in full of the cost of such Approved Alterations. Notwithstanding
anything, herein to the contrary. Landlord shall have no obligation to make
disbursements of the Alterations Allowance after December 31, 1999, and any
portion of the Alterations Allowance that remains undisbursed as of such date
shall be deemed forfeited by and shall no longer be available to Tenant.
11. REPAIRS
(a) By occupying the Premises, Tenant accepts the Premises as being in the
condition in which Landlord is obligated to deliver the Premises under the terms
of this Lease, subject to Landlord's timely completion of the punchlist items
identified by Landlord and Tenant during their inspection of the Premises prior
to Tenant's occupancy pursuant to Subsection 4(a). At all times during the Term,
and at Tenant's sole expense, Tenant shall keep all of the Premises in good
condition and repair, except for ordinary wear and tear or damage by fire,
earthquake, act of God or the elements. Tenant waives all rights to make repairs
at the expense of Landlord or in lieu of such repairs to vacate the Premises as
provided by California Civil Code Sections 1941 and 1942 or any other Laws now
or hereafter in effect. Tenant shall at the end of the Term surrender the
Premises to Landlord in the same condition as when received, except for ordinary
wear and tear, damage by fire, earthquake, act of God or the elements, and
Alterations approved by Landlord. Landlord shall have no obligation and has made
no promise to alter, remodel, improve, repair, decorate or paint all or any part
of the Premises, except as specifically set forth in the Work Agreement and
Section 11 (b). Furthermore, Landlord has made no representations to Tenant
regarding the condition of the Premises or the Building, except as specifically
set forth in this Lease.
(b) Notwithstanding the provisions of Section 11 (a), Landlord shall repair
and maintain the structural portions of the Building, including the interior
walls, roof, basic plumbing, heating, air conditioning, ventilation and
electrical systems, installed or furnished by Landlord, unless the necessity for
such maintenance and repair is in any way caused by the negligence or
intentional misconduct of, or failure to observe or perform any provision of
this Lease by, Tenant, or Tenant's agents, servants, contractors, employees or
invitees, in which case Tenant shall pay to Landlord the reasonable cost of such
maintenance and repair. Landlord shall not be liable for any failure to make any
such repair or to perform any such maintenance unless Landlord receives notice
of the need for such repair or maintenance from Tenant and fails to make such
repair or perform
10
such maintenance within a reasonable period of time following such notice by
Tenant. Rent shall not abate nor shall Landlord be liable as a result of any
injury to or interference with Tenant's business arising from the making of any
repair, or the performance of any maintenance, in or to any portion of the
Building or the Premises.
12. LIENS
Tenant shall keep the Premises and the Building free from any liens arising
out of any act or omission of Tenant, including, without limitation, any work
performed, materials furnished or obligations incurred by Tenant. Landlord shall
have the right to post and keep posted on the Premises any notices that may be
provided by law or that Landlord may deem to be proper for the protection of
Landlord, the Premises and the Building from such liens. Tenant shall give to
Landlord at least ten (10) days' prior notice of the date of commencement of any
Alterations on the Premises in order to permit the posting of such notices by
Landlord. Landlord may require, in Landlords's sole discretion, that Tenant, at
Tenant's sole expense, provide to Landlord a lien and completion bond in form
and substance satisfactory to Landlord in an amount equal to one hundred fifty
percent (150%) of the total estimated cost of any Alterations, to insure
Landlord against any liability for mechanics' and materialmen's liens and to
insure completion of work.
13. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not directly or indirectly, voluntarily or by operation of
law, sell, assign, encumber, pledge or otherwise transfer or hypothecate all of
its interest in or rights with respect to the Premises or Tenant's leasehold
estate hereunder (collectively, "Assignment"), or permit all or any portion of
the Premises to be occupied by anyone other than Tenant, sublet all or any
portion of the Premises or transfer a portion of Tenant's interest in or rights
with respect to Tenant's leasehold estate hereunder (collectively, "Sublease"),
without Landlord's prior consent in each instance.
(b) If Tenant desires at any time to enter into an Assignment of this Lease
or a Sublease of all or any portion of the Premises, Tenant shall first give
notice to Landlord of such desire, which notice shall contain (i) the name and
address of the proposed assignee, subtenant or occupant, (ii) the nature of the
proposed assignee's, subtenant's or occupant's business to be carried on in the
Premises, (iii) the terms and provisions of the proposed Assignment or Sublease
and (iv) such financial information as Landlord may reasonably request
concerning the proposed assignee, subtenant or occupant.
(c) At any time within thirty (30) days after Landlord's receipt of the
notice specified in Subsection 13(b), Landlord may by notice to Tenant elect to
(i) terminate this Lease as to the portion (including all) of the Premises that
is specified in Tenant's notice, with a proportionate abatement in Base Rent
payable by Tenant, (ii) consent to the Sublease or Assignment, or (iii)
disapprove the Sublease or Assignment; provided, however, that if Landlord
elects not to exercise the option set forth in clause (i), Landlord
11
shall not unreasonably withhold its consent to the Assignment or Sublease. As a
condition for granting its consent to any Assignment or Sublease, however,
Landlord may require that Tenant agree to pay to Landlord one-half of the amount
by which all sums payable to Tenant in connection with such Assignment or
Sublease exceed Rent payable by Tenant to Landlord hereunder (or a proportionate
amount of such Rent representing the portion of the Premises subject to a
Sublease if less than the entire Premises are subject to a Sublease). If
Landlord consents to the Sublease or Assignment within such thirty (30) day
period, Tenant may within ninety (90) days after Landlord's consent, but not
later than the expiration of such ninety (90) days, enter into such Assignment
or Sublease upon the terms and conditions set forth in the notice furnished by
Tenant to Landlord pursuant to Subsection 13(b).
(d) No consent by Landlord to any Assignment or Sublease by Tenant shall
relieve Tenant of any obligation to be performed by Tenant under this Lease,
whether arising before or after such Assignment or Sublease. The consent by
Landlord to any Assignment or Sublease shall not relieve Tenant from the
obligation to obtain Landlord's express consent to any other Assignment or
Sublease. Any Assignment or Sublease that fails to comply with this Section 13
shall be void and, at the option of Landlord, shall constitute an Event of
Default by Tenant under this Lease. The acceptance of Rent by Landlord from a
proposed assignee or subleasee shall not constitute the consent to such
Assignment or Sublease by Landlord.
(e) Any sale or other transfer, including, without limitation, one by
consolidation, merger or reorganization, of a majority of the voting stock of
Tenant (or of any guarantor of Tenant's obligations under this Lease), if Tenant
(or such guarantor) is a corporation, or any sale or other transfer of a
majority of the partnership interests in Tenant (or of any guarantor of Tenant's
obligations under this Lease), if Tenant (or such guarantor) is a partnership,
shall be an Assignment for purposes of this Section 13, except that transfers
which result in the formation of a new company controlled by the same principals
as the transferring company will not be an Assignment.
(f) Each assignee, sublease or other transferee, other than Landlord, shall
assume all obligations of Tenant under this Lease and shall be and remain liable
jointly and severally with Tenant for the payment of Rent, and for the
performance of all the provisions of this Lease; provided, however, that the
assignee, sublease or other transferee shall be liable to Landlord for rent and
additional charges only in the amount set forth in the Assignment or Sublease.
No Assignment shall be binding on Landlord unless the assignee or Tenant shall
deliver to Landlord a counterpart of the Assignment and an instrument in
recordable form that contains a covenant of assumption by the assignee
satisfactory in substance and form to Landlord, consistent with the requirements
of this Subsection 13(f), but the failure or refusal of the assignee to execute
such instrument of assumption shall not release or discharge the assignee from
its liability as set forth above.
12
(g) In the event of any Assignment or Sublease by Tenant or in the event
Tenant requests Landlord's approval of any Assignment or Sublease, Tenant shall
pay Landlords's reasonable attorneys' fees, costs and disbursements incurred in
connection therewith.
14. INDEMNIFICATION
(a) If Tenant shall default in the performance of its obligations under
this Lease, Landlord, at any time thereafter and without notice, may remedy such
default for Tenant's account and at Tenant's expense, without thereby waiving
any other rights or remedies of Landlord with respect to such default.
(b) Tenant agrees to indemnify Landlord against and hold Landlord harmless
from any and all loss, cost, liability, damage and expense, including, without
limitation, penalties, fines and reasonable attorneys' fees, incurred in
connection with or arising from any cause whatsoever in, on or about the
Premises, except to the extent caused by the negligence or intentional
misconduct of Landlord, including, without limitation, (i) any failure by Tenant
to observe or perform any of the provisions of this Lease, (ii) the use or
occupancy or manner of use or occupancy of the Premises by Tenant or any person
claiming through or under Tenant, (iii) the condition of the Premises or any
occurrence or happening in or on the Premises from any cause whatsoever, or (iv)
any negligence or intentional misconduct, whether prior to, during or after the
Term, of Tenant or any person claiming through or under Tenant, or of the
contractors, agents, servants, employees, visitors or licensees of Tenant or any
such person, in, on or about the Premises or the Building. Tenant further agrees
to indemnify Landlord, Landlord's agents, and the lessor or lessors under all
ground or underlying leases, against and hold them harmless from any and all
loss, cost, liability, damage and expense, including, without limitation,
reasonable attorneys' fees, incurred in connection with or arising from any
claims of any persons by reason of injury to persons or damage to property
occasioned by any event referred to in the preceding sentence. (c) Except as
specifically provided to the contrary in this Lease, Tenant shall pay to
Landlord, within ten (10) business days after delivery by Landlord to Tenant of
bills or statements therefor: (i) sums equal to all expenditures made and
monetary obligations incurred by Landlord including, without limitation,
expenditures made and obligations incurred for reasonable attorneys' fees, in
connection with the remedying of any default by Tenant for Tenant's account
pursuant to the provisions of Subsection 14(a); (ii) sums equal to all losses,
costs, liabilities, damages and expenses referred to in Subsection 14(b); and
(iii) sums equal to all expenditures made and monetary obligations incurred by
Landlord, including, without limitation, expenditures made and obligations
incurred for reasonable attorneys' fees, in collecting or attempting to collect
Rent.
(d) Tenant waives all claims against Landlord for damage to any property or
for injury or death of any person in, upon or about the Premises or the Building
arising at any
13
time and from any cause other than solely by reason of the negligence or
intentional misconduct Landlord or its employees or contractors.
(e) Tenant's obligations under this Section 14 shall survive the expiration
or sooner termination of the Term.
15. SUBROGATION
Landlord and Tenant each shall obtain from their insurers a waiver of all
rights of subrogation that the insurer of one party might have against the other
party under all policies of insurance maintained by either at any time during
the Term insuring or covering the Building or Premises or any improvements,
fixtures, equipment, furnishings or other property, including, without
limitation, salable goods, merchandise, and inventory, if any, in, on or about
the Premises.
16. INSURANCE
(a) Tenant agrees to carry and keep in force during the Term, at Tenant's
sole expense, the following types of insurance:
(i) Public Liability and Property Damage. Comprehensive general
liability insurance, including contractual liability, with a
minimum combined single limit of liability equal to the amount
set forth in the Basic Lease Information, insuring against any
and all liability for property damage and for injury to or death
of persons occurring in, on or about the Premises or arising out
of the maintenance, use or occupancy of the Premises. All such
comprehensive general liability insurance shall specifically
insure the performance by Tenant of its indemnity obligations
under Section 14(b) with respect to liability for injury to or
death of persons and for damage to property.
(ii) Workers' Compensation and Employers' Liability. Workers '
compensation and employers' liability insurance covering
employees for California Workers' Compensation benefits,
including employers' liability with limits for each accident in
an amount reasonably required by Landlord.
(iii)Tenant's Property. Insurance covering any and all fixtures,
equipment, furnishings and personal property of Tenant from time
to time in, on or about the Premises, providing protection
against all perils included within a standard "all risk form"
insurance policy, together with insurance against sprinkler
damage, vandalism, and malicious mischief. Such insurance shall
be in an amount not less than the full replacement cost of the
property insured without deduction for depreciation.
(iv) Policy Form. All policies of insurance provided for in this
Section 16 shall be issued by insurance companies with a general
policyholders' rating of not less than A and a financial rating
of XIII as rated in the most current available "Best's Insurance
Reports," and qualified to do business in the State of
California; and, except for
14
workers' compensation and employers' liability, all such policies
shall name Landlord, and such other persons and entities as
Landlord specifies from time to time, as additional insureds.
Executed copies or certificates of all such policies of insurance
shall be delivered to Landlord at least ten (10) days prior to
the delivery of possession of the Premises to Tenant, and
thereafter copies or certificates of all renewals of such
policies of insurance within five (5) days prior to the
expiration of the term of each such policy. All comprehensive
general liability insurance policies shall contain a provision
that Landlord, although named as an insured, shall nevertheless
be entitled to recovery under such policies for any loss
occasioned to Landlord, its agents and employees by reason of the
negligence or willful act of Tenant. As often as any such policy
shall expire or terminate, renewal or additional policies shall
be procured and maintained by Tenant in like manner and to like
extent. All such policies of insurance shall provide that the
companies writing such policies shall give to Landlord thirty
(30) days' prior written notice (i) of any cancellation or lapse
of the policies or (ii) of the effective date of any reduction in
the amounts of insurance. All public liability, property damage
and other casualty policies shall be written as primary policies,
not contributing with and not in excess of coverage that Landlord
may carry.
(b) Landlord agrees to carry and keep in force during the Term, at
Landlord's sole expense, property insurance covering the Building and fixtures
therein in an amount reasonably determined by Landlord.
17. SERVICES AND UTILITIES
(a) Subject to the rules and regulations of the Building, Landlord agrees
to furnish to the Premises and the Building the following services and
utilities:
(i) Heating, ventilation, and air conditioning ("HVAC") shall be
provided to the Premises between the hours of 8:00 a.m. and 6:00
p.m., Monday through Friday, except for generally recognized
business holidays in San Francisco, California (such hours during
these days shall be referred to herein as "Standard Building
Hours"), in such amounts as are necessary for the comfortable use
and occupancy of the Premises as general office space, as
reasonably determined by Landlord. Additionally, upon reasonable
advance notice from Tenant, Landlord shall provide the Premises
with HVAC during other than Standard Building Hours, provided,
however, that Tenant shall separately reimburse Landlord for
Landlords's cost of providing such HVAC to the Premises during
other than Standard Building Hours.
(ii) Electricity for lighting and fractional horsepower office
equipment shall be provided to the Premises twenty-four (24)
hours per day, every day of the year, in such amounts as are
necessary for the use and occupancy of the Premises as general
office space, as reasonably determined by Landlord, provided,
however, that if Tenant requests HVAC during hours other than
Standard Building Hours, or if Tenant otherwise regularly uses
electricity during other than Standard Business Hours, Landlord
shall have the right
15
to require Tenant to pay to Landlord as Additional Charges the
cost of Tenant's additional electricity usage during such hours,
as reasonably estimated by a utility company or by Landlord's
electrical engineer.
(iii)Janitorial service shall be provided to the Premises during
other than Standard Building Hours, at a level that is sufficient
for the use and occupancy of the Premises as general office
space, as reasonably determined by Landlord, but including trash
disposal, cleaning of all restrooms once on all normal business
days, and periodic washing of the inside and outside Building
windows.
(iv) Cold water for a coffee pot, water for reasonable drinking and
lavatory use shall be provided to the Premises and/or the floor
on which the Premises are located twenty-four (24) hours per day,
every day.
(v) Landlord shall provide services and utilities to the Building,
including the Common Areas, as necessary to operate and maintain
the Building in a manner substantially equivalent to the manner
in which comparable office buildings in San Francisco,
California, are operated and maintained.
(vi) Landlord shall provide security services for the Building that,
in Landlord's judgment, are required for the reasonable safety of
Tenant's property and employees.
(b) Landlord shall not be liable for, and Tenant shall not be entitled to
any abatement of Rent or Additional Charges by reason of, (i) the inadequacy,
stoppage, interruption, or discontinuance of any of the services or utilities in
Subsection 17(a) above when caused by accident, breakage, repair, maintenance,
strike, lockout or other labor disturbance or labor dispute of any character, or
by any other cause, similar or dissimilar, beyond the reasonable control of
Landlord or (ii) the limitation, curtailment, rationing or restriction on use of
water, electricity, gas or any other utility provided to the Premises or the
Building by any public utility company or governmental agency, provided that any
such service or utility affected as described in clause (i) or (ii) above shall
be restored by Landlord as soon as reasonably possible.
(c) Without the prior consent of Landlord, as provided below, Tenant shall
not install or use any equipment or machines in the Premises, including, without
limitation, computers, data processing machines, punch card machines, and
equipment or machines using in excess of 120 volts, that will in any way cause
Tenant to use electricity in the Premises in excess of the amount of electricity
that is commonly used by other tenants of the Building for the use and occupancy
of their respective premises as general office space. If Tenant desires to
install and use in the Premises any such equipment or machines that will cause
Tenant to use electricity in excess of the amount that is commonly used by other
tenants of the Building for the use and occupancy of their respective premises
as general office space, Tenant shall first procure the consent of Landlord to
the installation and use of such equipment or machines, which consent shall
16
not be unreasonably withheld. If such consent is granted by Landlord, Landlord
shall have the right to cause an electrical current submeter to be installed in
the Premises, so as to measure the amount of electricity consumed for any such
use. Promptly upon demand by Landlord, Tenant shall reimburse Landlord, as
Additional Charges, for the cost of any such submeter, including, without
limitation, the cost of its installation, maintenance and repair, and for the
cost of all electricity consumed as shown by such submeter, at the rate charged
for such service by the local public utility furnishing the same, plus any
additional expense incurred by Landlord in keeping account of the electricity so
consumed. If separately submetered, the cost of electricity shall be excluded
from the calculation of Expenses for the purpose of computing Tenant's Share of
Expenses, except that the cost of electricity used in or with respect to the
Common Areas, as reasonably determined by Landlord, shall be included in such
calculation. If Landlord elects not to install a separate electric current
submeter, the cost of the electricity used by Tenant in excess of the amount
that is commonly used by other tenants of the Building for the use and occupancy
of their respective premises as general office space shall be established by an
estimate made by a utility company or, at Landlord's option, by an electrical
engineer selected by Landlord and reasonably approved by Tenant and shall be
paid to Landlord monthly as Additional Charges together with the Rent.
18. TAXES ON TENANT'S PERSONAL PROPERTY
Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed during the Term upon Tenant's equipment, furniture, trade fixtures and
other personal property located in, on or about the Premises. In the event any
or all of Tenant's equipment, furniture, fixtures and other personal property
shall be assessed and taxed with the Building, Tenant shall pay to Landlord as
Additional Charges the taxes so levied with respect to such personal property
within ten (10) business days after delivery to Tenant by Landlord of a
statement setting forth the amount of such taxes applicable to Tenant's
property.
19. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the rules and regulations
for the Building that are attached as Exhibit D. Landlord reserves the right
from time to time to make reasonable additions to and modifications of such
rules and regulations. Any such additions and modifications shall be binding on
Tenant upon delivery of a copy of them to Tenant. Landlord shall not be
responsible to Tenant for the nonperformance of any such rules and regulations
by any other tenants or occupants of the Building, provided that Landlord shall
not discriminate among tenants or occupants of the Building in administering
such rules and regulations. No rule or regulation shall conflict with any term
of this Lease and if any such conflict should arise the terms of this Lease
shall control.
17
20. HOLDING OVER
Any holding over by Tenant after the Expiration Date with the prior consent
of Landlord shall be construed to be a tenancy from month to month on all of the
terms, covenants and conditions herein specified but, unless otherwise agreed
upon in writing by Landlord and Tenant, at a monthly Base Rent equal to one
hundred fifty percent (150%) of the monthly Base Rent in effect immediately
prior to the Expiration Date. Acceptance by Landlord of Rent after the
Expiration Date without Landlord's prior consent to Tenant's holding over shall
not constitute a consent by Landlord to any such tenancy from month to month or
result in any other tenancy or any renewal of the Term. The provisions of this
Section 20 are in addition to, and do not affect, Landlord's right of re-entry
or other rights hereunder or provided by law, including, without limitation, the
right to recover damages for any period when Tenant holds over without
Landlord's prior consent.
21. ENTRY BY LANDLORD
Landlord reserves, and shall at all times have, the right to enter the
Premises to inspect the Premises; to supply janitorial service and any other
service to be provided by Landlord hereunder; to read any meters; to show the
Premises to prospective purchasers, lenders or tenants; to determine whether
Tenant is in compliance with all of its obligations hereunder; to post notices
of nonresponsibility; to erect scaffolding and other necessary structures in or
through the Premises where reasonably required by the character of the work to
be performed; to alter, repair and improve the Building, the Premises or any
part of either; to make additions to and build additional floors on the
Building; to alter, repair, or improve the size, arrangement or location of
entrances or passageways, doors and doorways, electrical, plumbing, heating,
ventilating and air conditioning equipment and systems, corridors, elevators,
stairs and toilets, and all other facilities serving the Building, wherever
located, and whether or not such alterations, repairs or improvements are
required by any governmental agency, entity, ordinance, rule or regulation; to
construct other buildings or improvements on land adjacent to the Building; and
to change the use of all or any part of the Building, other than the Premises,
provided that Landlord shall use reasonable efforts to minimize any interference
with Tenant's use and enjoyment of the Premises caused by any such entry. The
exercise by Landlord of any of the foregoing rights shall not be deemed an
actual or constructive eviction of Tenant, shall not result in any liability of
Landlord to Tenant except for the normal negligence or willful misconduct of
Landlord in the exercise of such rights and shall not entitle Tenant to any
reduction of Rent; provided, however, that in the event that the exercise by
Landlord of any of the foregoing rights shall result in a permanent actual
decrease in the rentable area of the Premises, then the Rent shall be reduced in
proportion to such decrease. 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 by
such entry. For each of the foregoing purposes, Landlord shall at all times have
and retain a key with which to unlock all of the
18
doors in, on and about the Premises (excluding doors to Tenant's vaults, safes
and similar areas designated in writing by Tenant in advance). Landlord shall
have the right to use any and all means that Landlord may deem proper to open
such doors in an emergency in order to obtain entry to the Premises, and any
entry to the Premises obtained by Landlord by any of such means, or otherwise,
shall not under any circumstances be construed or deemed to be a forcible or
unlawful entry into or a detainer of the Premises or an eviction, actual or
constructive, of Tenant from all or any, portion of the Premises.
22. DAMAGE AND DESTRUCTION
(a) If the Premises or the Building is damaged by fire, earthquake, act of
God, the elements or other casualty, Landlord shall promptly, but in no event
later than thirty (30) days following the occurrence of such damage, give notice
to Tenant stating the number of days, in Landlord's reasonable judgment, that
will be necessary to repair such damage. If such damage can substantially be
repaired within two hundred seventy (270) days after the damage occurred,
Landlord shall commence to repair such damage promptly and shall complete such
repairs as soon as reasonably possible thereafter, subject to the provisions of
this Section 22. During the making of such repairs by Landlord, this Lease shall
remain in full force and effect, except that if the damage is not the result of
the negligence or intentional misconduct of Tenant, its agents, contractors,
employees or invitees, Tenant shall be entitled to an abatement of Base Rent,
while such repair is being made, in the proportion that the Rentable Area of the
Premises rendered unusable by such damage bears to the total Rentable Area of
the Premises. If such damage cannot substantially be repaired within two hundred
seventy (270) days after the damage, as evidenced by a statement from Landlord's
architect or general contractor to such effect, Landlord and Tenant shall each
have the option, exercisable at any time within thirty (30) days after
Landlord's notice to Tenant as provided above, to terminate this Lease. This
option to terminate shall be exercised, if at all, by Landlord or Tenant giving
notice to the other party within such thirty (30) day period of its election to
terminate this Lease, with such termination to be effective as of a date
specified in such notice no later than thirty (30) days after the giving of such
notice to the other party. If both parties elect to terminate this Lease, the
termination date shall be the date specified in Landlord's notice. If either
Landlord or Tenant elects to terminate this Lease by giving such notice of
termination to the other party, this Lease and all interest of Tenant in the
Premises shall terminate on the date specified in such notice, and the Rent,
proportionately abated as provided above, shall be paid up to the date of such
termination, with Landlord refunding to Tenant any Rent previously paid for any
period of time subsequent to such date. If neither party elects to terminate
this Lease as provided above, Landlord promptly shall repair such damage, with
this Lease continuing in full force and effect, but with the Base Rent
proportionately abated as provided above. If Landlord is required to repair the
Premises or the Building under this Section 22, Landlord shall repair at its
cost any injury or damage to the Building and the leasehold improvements in the
Premises, and Tenant shall be responsible for and shall repair at its sole cost
all trade fixtures, equipment, furniture and other property of Tenant in the
Premises. Tenant waives any right to terminate this
19
Lease under Sections 1932(2) and 1933(4) of the California Civil Code, or under
any similar Laws now or hereafter in effect. Tenant shall not be entitled to any
compensation or damages from Landlord for damage to any of Tenant's trade
fixtures, personal property or equipment, for loss of use of all or any part of
the Premises, for any damage to Tenant's business or profits, or for any
disturbance to Tenant caused by any casualty or the restoration of the Premises
following such casualty.
(b) Notwithstanding the provisions of Subsection 22(a) above, Landlord also
shall have the option to terminate this Lease, exercisable by notice to Tenant
within thirty (30) days of damage or destruction to the Premises or Building, in
each of the following instances:
(i) If more than fifty percent (50%) of the Rentable Area of the
Building is destroyed, regardless of whether the Premises are
damaged.
(ii) If the Premises are substantially damaged or destroyed during the
last twelve (12) months of the Term.
(iii)If the uninsured cost of repairing any damage or destruction
(excluding the amount of any applicable deductible, in the case
of an insured loss) exceeds ten percent (10%) of the full
replacement cost of the Building, including, without limitation,
all leasehold improvements therein.
23. DEFAULT
The occurrence of any one or more of the following events shall constitute
a default and breach of this Lease by Tenant (an "Event of Default"):
(a) The vacation or abandonment of the Premises by Tenant for a period of
five (5) days or longer.
(b) The failure of Tenant to pay any installment of Rent within five (5)
business days after such installment is due.
(c) The failure by Tenant to observe or perform any of the provisions of
this Lease to be observed or performed by Tenant, other than the failure
described in Subsection 23(b), where such failure shall continue for a period of
fifteen (15) days after notice of such failure by Landlord to Tenant; provided,
however, that if the nature of Tenant's default is such that more than fifteen
(15) days are reasonably required for its cure, then Tenant shall not be deemed
to be in default if Tenant commences such cure within such fifteen (15) day
period and thereafter diligently prosecutes such cure to completion.
(d) The making by Tenant of any general assignment or general arrangement
for the benefit of creditors; or the filing of any action by or against Tenant
under any
20
insolvency, bankruptcy, reorganization, moratorium or other debtor relief
statute, whether now or hereafter existing (unless, in the case of such action
taken against Tenant, the action is dismissed within sixty (60) days); or the
appointment of a trustee or a receiver to take possession of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within thirty (30) days after
such taking; or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within ten (10)
days; or the admission by Tenant in writing of its inability to pay its debts as
they become due.
24. REMEDIES IN DEFAULT
Upon the occurrence of any Event of Default, Landlord may at any time
thereafter, with or without notice or demand, without limitation on Landlord's
exercise of any right or remedy that Landlord may have by reason of such Event
of Default, and in addition to any other right or remedy Landlord may have at
law or in equity:
(a) Terminate this Lease and recover damages as provided by Section 1951.2
of the California Civil Code, including, but not limited to, recovery of the
worth at the time of award of the amount by which the unpaid Rent for the
balance of the Term after the time of award exceeds the amount of rental loss
for the same period that Tenant proves could have been reasonably avoided, as
computed pursuant to subsection (b) of Section 1951.2;
(b) Continue this Lease in effect and enforce all of Landlord's rights and
remedies under this Lease, as provided by Section 1951.4 of the California Civil
Code, including, without limitation, the right to recover Rent as it becomes
due, for so long as Landlord does not terminate Tenant's right to possession;
acts of maintenance or preservation by Landlord, efforts by Landlord to relet or
sublet the Premises, or the appointment of a receiver upon Landlord's initiative
to protect its interest under this Lease shall not constitute a termination of
Tenant's right to possession;
(c) Sublet all or any part of the Premises for such term or terms (which
may extend beyond the Term), at such rent and on such other terms as Landlord in
its sole discretion may deem advisable, with the right to make alterations and
repairs to the Premises, all as attorney-in-fact for Tenant pursuant to
Subsection 24(f);
(d) Enter the Premises and remove therefrom all persons and property, store
such property in a public warehouse or elsewhere at the cost of and for the
account of Tenant, and sell such property and apply the proceeds therefrom
pursuant to applicable California law, all as attorney-in-fact for Tenant
pursuant to Subsection 24(f); and
(e) Take all steps necessary or appropriate to have a receiver appointed
for Tenant to take possession of the Premises, to apply any rental collected
from the Premises and to exercise all other rights and remedies granted to
Landlord as attorney-in-fact for Tenant pursuant to Subsection 24(f).
21
Additionally. Landlord shall have the following rights, powers, and
remedies:
(f) For all purposes set forth in Subsections 24(c) through 24(e), Tenant
irrevocably appoints and constitutes Landlord as attorney-in-fact for Tenant,
with power of substitution. No taking possession of the Premises by Landlord, as
attorney-in-fact for Tenant, shall be construed as an election on Landlord's
part to terminate this Lease unless a written notice of such election is given
to Tenant. Notwithstanding any subletting by Landlord without termination under
Subsection 24(c), Landlord may at any time thereafter elect to terminate this
Lease for any previous Event of Default.
(g) In the case of any Event of Default in the payment of Rent, Landlord
shall receive interest on all unpaid Rent at a rate equal to the lesser of (i)
the rate of interest publicly announced by Bank of America NT&SA in San
Francisco, California, as its "reference rate" (or any successor interest rate),
plus five percent (5%), which rate on unpaid Rent shall be adjusted as of the
effective date of any change in such reference (or successor) rate, or (ii) the
highest rate permitted by law.
25. EMINENT DOMAIN
(a) If all of the Premises are condemned or taken in any manner for public
or quasi-public use, including, but not limited to, a conveyance or assignment
in lieu of a condemnation or taking, this Lease shall automatically terminate as
of the earlier of the date of the vesting of title or the date of dispossession
of Tenant as a result of such condemnation or taking. If a portion of the
Premises is so condemned or taken, this Lease shall automatically terminate, as
to the portion of the Premises so condemned or taken, as of the earlier of the
date of the vesting of title or the date of dispossession of Tenant as a result
of such condemnation or taking. If a portion of the Building is condemned or
taken so as to require, in the reasonable judgment of Landlord, a substantial
alteration or reconstruction of the remaining portions of the Building, this
Lease may be terminated by Landlord, as of the earlier of the date of the
vesting of title or the date of dispossession of Tenant as a result of such
condemnation or taking, by notice to Tenant within sixty (60) days following
notice to Landlord of the date on which such vesting or dispossession will
occur. If a material portion of the Premises is condemned or taken so as to
render the remaining portion unusable by Tenant, in Tenant's reasonable
judgment, this Lease may be terminated by Tenant, as of the earlier of the date
of the vesting of title or the date of dispossession of Tenant as a result of
such condemnation or taking, by notice to Landlord within sixty (60) days
following notice to Tenant of the date on which such vesting or dispossession
will occur.
(b) Landlord shall be entitled to the entire award in any condemnation
proceeding or other proceeding for taking for public or quasi-public use,
including, without limitation, any award made for the value of the leasehold
estate created by this Lease. No award for any partial or entire taking shall be
apportioned, and Tenant assigns to Landlord any award that may be made in such
condemnation or taking, together with any
22
and all rights of Tenant now or hereafter arising in or to such award; provided.
however, that nothing contained herein shall be deemed to give Landlord any
interest in, or to require Tenant to assign to Landlord, any award made to
Tenant specifically for its relocation expenses, the taking of personal property
and fixtures belonging to Tenant, or the interruption of or damage to Tenant's
business.
(c) In the event of a partial condemnation or taking that does not result
in a termination of this Lease as to the entire Premises, Base Rent shall abate
in proportion to the portion of the Premises taken by such condemnation or
taking.
(d) If all or any portion of the Premises is condemned or taken for public
or quasi-public use for a limited period of time, this Lease shall remain in
full force and effect and Tenant shall continue to observe all of the terms,
conditions and covenants of this Lease; provided, however, that Base Rent shall
abate during such limited period in proportion to the portion of the Premises
that is rendered untenantable and unusable as a result of such condemnation or
taking. Landlord shall be entitled to receive the entire award made in
connection with any such temporary condemnation or taking.
(e) Tenant waives and releases any right to terminate this Lease under
Sections 1265.120 and 1265.130 of the California Code of Civil Procedure, or
under any similar Laws now or hereafter in effect.
26. ESTOPPEL CERTIFICATE
At any time and from time to time, and no later than ten (10) days after
notice from Landlord, Tenant shall promptly execute, acknowledge and deliver to
Landlord, and, at Landlord's request, to any prospective purchaser, ground
lessor, or mortgagee, a certificate certifying (a) that Tenant has accepted the
Premises (or, if Tenant has not done so, that Tenant has not accepted the
Premises and specifying the reasons for not accepting them); (b) the
Commencement and Expiration Dates; (c) that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that this Lease is in
full force and effect as modified and stating the date and nature of each
modification); (d) the dates, if any, to which Rent has been paid; (e) whether
or not there are then existing any defenses against the enforcement of any of
the obligations of Tenant under this Lease (and, if so, specifying such
defenses); (f) whether or not there are then existing any defaults by Landlord
in the performance of its obligations under this Lease (and, if so, specifying
such defaults); and (g) such other matters as may be reasonably requested by
Landlord. Any such certificate may be relied upon by Landlord and by any
prospective purchaser, ground lessor or mortgagee considering the purchase of or
a loan on all or any part of the Building or any interest therein. If Tenant
fails to deliver any such certificate within ten (10) days of receipt, Tenant
agrees and acknowledges that Landlord, and any prospective purchaser, ground
lessor, or mortgagee, may rely on all information set forth in such certificate
as true and correct. Tenant shall indemnify Landlord against and hold Landlord
harmless from all costs, damages, expenses, liabilities and fees, including,
23
without limitation, reasonable attorneys' fees and any consequential damages or
lost profits, arising from or in any way related to or connected with Tenant's
failure to deliver any such certificate within the time specified in this
Section 26.
27. AUTHORITY OF TENANT
If Tenant is a corporation or partnership, each individual executing, this
Lease on behalf of Tenant represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of Tenant, that Tenant is a duly
authorized and existing entity, that Tenant has qualified and is qualified to do
business in California, that Tenant has full right and authority to enter into
this Lease, and that this Lease is binding upon such corporation or partnership
in accordance with the terms of this Lease. Upon Landlord's request, Tenant
shall provide Landlord with evidence reasonably satisfactory to Landlord
confirming the foregoing representations and warranties.
28. BROKERS
Tenant warrants that it has had no dealings with any real estate broker or
agent in connection with the negotiation of this Lease, excepting only the
brokers specified in the Basic Lease Information, and Tenant knows of no other
real estate broker or agent who is entitled to a commission in connection with
this Lease. Tenant agrees to indemnity Landlord against and hold Landlord
harmless from any and all claims, demands, losses, liabilities, lawsuits,
judgments, costs and expenses (including reasonable attorneys' fees) with
respect to any leasing commission or equivalent compensation alleged to be owing
on account of Tenant's dealings with any real estate broker or agent other than
as specified in the Basic Lease Information.
29. DEFAULT BY LANDLORD
Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time, but in no event later
than thirty (30) days after notice by Tenant to Landlord specifying the nature
of the obligation Landlord has failed to perform; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for performance, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes such performance to completion.
30. LANDLORD'S OPTION TO RELOCATE TENANT
Landlord and Tenant agree that at any time after Tenant's execution of this
Lease, Landlord shall have the right, upon providing Tenant at least thirty (30)
days' prior notice, to provide Tenant with space on a higher floor with a
comparable view in the Building of approximately the same size and quality as
the Premises (including a comparable level of tenant improvements completed at
Landlord's cost) and to move Tenant to such new space. Landlord shall arrange
for moving Tenant and shall pay the costs of actually
24
moving Tenant to such new space and incidental costs associated therewith (to
include, but not limited to, telephone installation and computer cabling). In
the event Landlord moves Tenant to such new space, this Lease and each and all
of its terms, covenants and conditions shall remain in full force and effect and
thereupon be deemed applicable to such new space, except that a revised floor
plan shall become part of this Lease and shall reflect the location of the new
space. If Tenant refuses to permit Landlord to move Tenant to such new space at
the end of such thirty (30) day period, Landlord shall have the right to
terminate this Lease by notice given to Tenant within ten (10) days following
the end of such thirty (30) day period, which termination shall be effective one
hundred twenty (120) days after the date of the original notice of relocation by
Landlord. Landlord will provide Tenant with thirty (30) days advance notice of
the actual date of relocation and will accomplish relocation without disruption
to Tenant's normal business operation.
31. RENEWAL OPTION
Tenant shall have one (1) option (the "Renewal Option") to extend the Term
for a period of five (5) years beyond the Expiration Date (the "Renewal Term").
The Renewal Option shall be effective only if an Event of Default is not then
occurring under this Lease, nor is any event then occurring which with the
giving of notice or the passage of time, or both, would constitute an Event of
Default hereunder, either at the time of exercise of the Renewal Option or the
time of commencement of the Renewal Term. The Renewal Option must be exercised,
if at all, by written notice from Tenant to Landlord given not more than twelve
(12) months nor less than nine (9) months prior to the expiration of the initial
Term. Any such notice given by Tenant to Landlord shall be irrevocable. If
Tenant fails to exercise the Renewal Option in a timely manner as provided for
above, the Renewal Option shall be void. The Renewal Term shall be upon the same
terms and conditions as the initial Term, except that (i) the annual Base Rent
during the Renewal Term shall be equal to the prevailing market rate for space
in the San Francisco Financial District comparable to the Premises in size,
condition, quality and type at the commencement of the Renewal Term, and (ii)
there shall be no further renewal option. As used herein, the term "prevailing
market rate" shall mean the base annual rental for such comparable space, taking
into account any additional rental and all other payments and escalations
payable hereunder and by tenants under leases of such comparable space. If
Tenant disputes Landlord's determination of the prevailing market rate, Tenant
shall so notify the Landlord within ten (1O) days following Landlord's notice to
Tenant of the prevailing market rate and such dispute shall be resolved as
follows:
(a) Within thirty (30) days following Tenant's notice to Landlord of
Tenant's dispute of Landlord's determination of the prevailing market rate,
Landlord and Tenant shall meet no less than two (2) times, at a mutually
agreeable time and place, to attempt to resolve any such disagreement.
25
(b) If within this thirty (30) day period Landlord and Tenant cannot reach
agreement as to the prevailing market rate, they shall each select one appraiser
to determine the prevailing market rate. Each such appraiser shall arrive at a
determination of the prevailing market rate and submit his conclusions to
Landlord and Tenant within thirty (3O) days of the expiration of the thirty (30)
day consultation period described in paragraph (a) above.
(c) If only one appraisal is submitted within the requisite time period, it
shall be deemed to be the prevailing market rate. If both appraisals are
submitted within such time period, and if the two appraisals so submitted differ
by less than ten (10) percent of the higher of the two, the average of the two
shall be the prevailing market rate. If the two appraisals differ by more than
ten (1O) percent of the higher of the two, then the two appraisers shall
immediately select a third appraiser who will within thirty (30) days of his
selection make a determination of the prevailing market rate and submit such
determination to Landlord and Tenant. This third appraisal will then be averaged
with the closer of the two previous appraisals and the result shall be the
prevailing market rate.
All appraisers specified pursuant hereto shall be licensed real estate
brokers in the State of California with not less than five (5) years' experience
appraising office properties in the San Francisco Financial District. Each party
shall pay the cost of the appraiser selected by such party and one-half (1/2) of
the cost of the third appraiser plus one-half (1/2) of any other costs incurred
in connection with the appraisal.
32. EXPANSION OPTION
Tenant shall have one (1) option (the "Expansion Option") to lease Suite
720 in the Building (the "Expansion Premises"), comprising approximately 1,708
rentable square feet, upon the expiration or sooner termination of the existing
lease covering the Expansion Premises (the "Existing Lease"). Subject to the
terms of the immediately succeeding sentence, Tenant shall exercise the
Expansion Option by written notice (the "Expansion Exercise Notice") to Landlord
given not later than July 1, 1999 and shall commence occupancy in the Expansion
Premises on a date specified by Landlord, which date shall be on or about
February 1, 2000. Notwithstanding the foregoing, in the event that for any
reason the Existing Lease shall terminate prior to its stated expiration date,
then Landlord shall notify Tenant of such occurrence and of the revised date the
Expansion Premises shall be available for occupancy by Tenant, whereupon Tenant
shall have a period of fifteen ( 15) days after its receipt of such notice to
deliver the Expansion Exercise Notice to Landlord. The Expansion Option shall be
effective only if an Event of Default is not occurring under this Lease, nor is
any event occurring which with the giving of notice or the passage of time, or
both, would constitute an Event of Default hereunder, either at the time of
exercise of the Expansion Option or the time of commencement of this Lease with
respect to the Expansion Premises. Any Expansion Exercise Notice given by Tenant
to Landlord shall be irrevocable. If Tenant fails to exercise the Expansion
Option in a timely manner as provided for above, the Expansion
26
Option shall be void. In the event Tenant exercises the Expansion Option as
provided herein, then Landlord and Tenant shall promptly execute an amendment to
this Lease adding the Expansion Premises to the premises demised hereby, except
that (i) the annual Base Rent for the Expansion Premises shall be equal to the
prevailing market rate for space in the San Francisco Financial District
comparable to the Expansion Premises in size, condition, quality and type at the
commencement of Tenant's occupancy of the Expansion Premises (as determined in
accordance with Section 31 above), (ii) Tenant's lease of the Expansion Premises
shall expire on the Expiration Date of this Lease, (iii) the Base Year for
Expenses and Taxes attributable to the Expansion Premises shall be the calendar
year in which Tenant's lease of the Expansion Premises commences, (iv) Tenant's
Expense Share and Tenant's Tax Share shall be increased proportionately, and (v)
Landlord shall provide Tenant with a tenant improvement allowance of Eight
Thousand Five Hundred Dollars ($8,500.00) for improvements in the Expansion
Premises.
33. GENERAL PROVISIONS
(a) Termination of Original Lease. Concurrently with the commencement of
the Term and the delivery of possession of the Premises to Tenant, the Office
Lease by and between Landlord and Tenant, dated as of February 12, 1988, shall
terminate and shall be of no further force or effect.
(b) Waiver. The waiver by Landlord or Tenant of the other party's failure
to perform or observe any provision of this Lease shall not be deemed to be a
continuing waiver of such provision or a waiver of any subsequent failure of
Landlord or Tenant to perform or observe the same or any other such provision,
and no custom or practice that may develop between the parties during the Term
shall be deemed a waiver of, or shall in any way affect, the right of Landlord
or Tenant to insist upon performance and observance by the other party in strict
accordance with the terms of this Lease. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding
failure of Tenant to perform or observe any provision of this Lease, other than
the failure of Tenant to pay the particular Rent so accepted, irrespective of
any knowledge on the part of Landlord of such preceding failure of Tenant at the
time of acceptance of such Rent.
(c) Notices. Any bills, statements, notices, demands, requests or other
communications given or required to be given under this Lease shall be effective
only if rendered or given in writing, sent by registered, certified, or express
mail or delivered personally, (i) to Tenant (A) at Tenant's address set forth in
the Basic Lease Information, if sent prior to Tenant's taking possession of the
Premises, (B) at Tenant's address at the Building, if sent subsequent to
Tenant's taking possession of the Premises, or (C) at any place where Tenant or
any agent or employee of Tenant may be found, if sent subsequent to Tenant's
vacating, deserting, abandoning or surrendering the Premises; (ii) to Landlord
at Landlord's address set forth in the Basic Lease Information; or (iii) to
Tenant or
27
Landlord at such other address as either party may designate as its new address
for such purpose by notice given to the other in accordance with the provisions
of this Subsection 33(c). If Tenant is notified of the identity and address of
Landlord's mortgagee or underlying lessor, Tenant shall give to such mortgagee
or ground or underlying lessor notice of any default by Landlord under the terms
of this Lease, in writing sent by registered or certified mail, and such
mortgagee or ground or underlying lessor shall be given a reasonable opportunity
to cure such default prior to Tenant's exercising any remedy available to
Tenant.
(d) Examination of Lease. Submission of this instrument to Tenant for its
execution does not constitute a reservation or option for a lease, and this
instrument is not and shall not be deemed to be effective as a lease or
otherwise until its execution and delivery by both Landlord and Tenant.
(e) Captions. The captions of this Lease are for convenience of reference
only and shall have no effect upon the construction or interpretation of any
provision of this Lease.
(f) Definitions. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. Words used in the neuter gender
include the masculine and feminine. If Landlord or Tenant is more than one
entity, the obligations under this Lease imposed on Landlord or Tenant shall be
joint and several.
(g) Time. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
(h) Successors and Assigns. The terms, covenants and conditions contained
in this Lease shall bind and inure to the benefit of Landlord and Tenant and,
except as otherwise provided herein, their personal representatives, successors
and assigns; provided, however, that upon the sale, assignment or transfer by
Landlord named herein (or by any subsequent Landlord) of its interest in the
Building as owner or lessor, including any transfer by operation of law,
Landlord named herein (or any subsequent Landlord) shall be relieved from all
subsequent obligations and liabilities under this Lease, and all obligations and
liabilities subsequent to such sale, assignment or transfer (but not any
obligations or liabilities that have accrued prior to the date of such sale,
assignment or transfer) shall be binding upon the grantee, assignee or
transferee of such interest, and any such grantee, assignee or transferee, by
accepting such interest, shall be deemed to have assumed such subsequent
obligations and liabilities. A lease of the entire Building to a person other
than for such person's occupancy shall be deemed a transfer within the meaning
of this Subsection 33(h). Tenant agrees to execute any and all documents deemed
necessary or appropriate by Landlord to evidence the foregoing.
(i) Recordation. Tenant shall not record this Lease or a short form
memorandum of this Lease without the prior consent of Landlord.
28
(j) Quiet Possession. Upon Tenant's paying the Rent reserved hereunder and
observing and performing all of the provisions of this Lease, Tenant shall have
quiet possession of the Premises for the entire Term, subject to all the
provisions of this Lease.
(k) Prior Agreements. This Lease contains all of the agreements of Landlord
and Tenant with respect to all matters covered or mentioned in this Lease, and
no prior agreements or understandings pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be amended or added to
except by an agreement in writing signed by the parties or their successors in
interest. Tenant acknowledges that in executing and delivering this Lease,
Tenant is not relying on any verbal or written understanding, promise or
representation outside the scope of this Lease and not described or referred to
herein.
(l) Attorneys' Fees. In the event of any action or proceeding brought by
either party against the other under this Lease, the prevailing party shall be
entitled to recover all costs and expenses, including, without limitation, its
attorneys' fees, for such action or proceeding in such amount as the court or
arbitrator may adjudge reasonable. The prevailing party shall be determined by
the court or arbitrator based upon an assessment of which party's major
arguments made or positions taken in the action or proceeding could fairly be
said to have prevailed over the other party's major arguments or positions on
major disputed issues in the court's or arbitrator's decision. If Landlord is
named as a defendant in any suit brought against Tenant in connection with or in
any way arising out of this Lease or Tenant's use or occupancy of the Premises,
Tenant shall pay Landlord's costs and expenses, including, without limitation,
reasonable attorneys' fees, incurred in such suit.
(m) Subordination; Attornment. Without the necessity of any additional
document being executed by Tenant for the purpose of effecting a subordination,
this Lease shall be subject and subordinate at all times to (i) all ground
leases or underlying leases that may now exist or hereafter be executed
affecting the Building or the land upon which the Building is situated, or both,
and (ii the lien of any mortgage or deed of trust that may now exist or
hereafter be executed in any amount for which the Building, the land upon which
the Building is situated, any ground leases or underlying leases of the Building
or such land, or Landlord's interest or estate in any of such items is specified
as security, provided that the lessees under such ground or underlying leases,
and the mortgagees or beneficiaries named in such mortgages or deeds of trust,
shall agree to recognize the interest of Tenant under this Lease in the event of
foreclosure, if Tenant is not then in default. Notwithstanding the foregoing,
Landlord shall have the right to subordinate or cause to be subordinated to this
Lease any such ground leases or underlying leases or any such liens. In the
event that 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, at the option
of such successor in interest. Tenant covenants and agrees to execute and
deliver, upon
29
demand by Landlord and in the form requested by Landlord, any additional
documents evidencing the priority or subordination of this Lease with respect to
any such ground lease or underling lease or the lien of any such mortgage or
deed of trust.
(n) Names. Tenant shall not use the name of the Building or of the
development in which the Building is situated for any purpose other than as an
address of the business to be conducted by Tenant in the Premises.
(o) Severability. Any provision of this Lease that shall prove to be
invalid, void, illegal or unenforceable shall in no way affect, impair or
invalidate any other provisions of this Lease, and such other provisions and
this Lease shall remain in full force and effect.
(p) Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies or
elections at law or in equity.
(q) Choice of Law. This Lease shall be governed by and construed in
accordance with the Laws of the State of California.
(r) Signs and Building Name. Tenant shall not place any sign upon the
Premises or Building without Landlord's prior consent. All signs to which
Landlord so consents and which are placed by Tenant upon or in the Premises
shall comply in all respects with size, design, lettering and material
guidelines established by Landlord for the Building. Landlord reserves the right
to change or alter such guidelines at such times and for such tenants as
Landlord may determine in its sole discretion. The name of the Building may be
changed from time to time in Landlord's sole discretion.
(s) No Merger. The voluntary or other surrender of this Lease by Tenant, or
a mutual cancellation of this Lease by Landlord and Tenant, shall not constitute
a merger of Tenant's estate and Landlord's estate, and, at the option of
Landlord, shall either (i) terminate any or all existing subleases or
subtenancies or (ii) operate as an assignment to Landlord of any or all such
subleases or subtenancies.
(t) Light and Air. Tenant covenants and agrees that no diminution or
shutting off of light, air or view that may result from the erection of any
structure (whether or not by Landlord) on property adjacent to the Building, and
no closing or shutting off of any windows in the Premises or the Building as a
result of the erection of any such structure, shall in any way affect this
Lease, entitle Tenant to any reduction of Rent hereunder or result in any
liability of Landlord to Tenant, of any type or nature whatsoever.
(u) Confidentiality. Tenant shall not disclose the terms of this Lease to
any unrelated third party except as required in the normal course of Tenant's
business (e.g., if necessary to obtain financing).
30
(v) Landlord's Review. The review, approval, inspection or examination by
Landlord of any item to be reviewed, approved, inspected or examined by Landlord
under the terms of this Lease or the attached exhibits shall not constitute the
assumption of any responsibility by Landlord for either the accuracy or the
sufficiency of any such item or the quality or suitability of such item for its
intended use. Any such review, approval, inspection or examination by Landlord
is for the sole purpose of protecting Landlord's interests in the Building and
under this Lease, and no third parties, including, without limitation, Tenant or
any person or entity claiming through or under Tenant, or the contractors,
agents, servants, employees, visitors or licensees of Tenant or any such person
or entity, shall have any rights arising out of any such review, approval,
inspection or examination.
LANDLORD: THE CANADA LIFE ASSURANCE
COMPANY
By:
------------------------------
Its:
-----------------------------
TENANT: FORECROSS CORPORATION,
a California corporation
By: /s/ Kim O. Jones
------------------------------
Its: President
------------------------------
31
90 NEW MONTGOMERY STREET
OFFICE LEASE EXHIBIT A
FLOOR PLANS CONSISTING OF 1 PAGE
EXHIBIT A
[ - FLOOR PLAN - ]
90 NEW MONTGOMERY
90 NEW MONTGOMERY STREET
OFFICE LEASE
EXHIBIT B
INDEX OF DEFINED TERMS
DEFINITIONS SECTION OR
EXHIBIT
Additional Charges...................................... 5(b)
Advance Rent............................................ 5(c)
Alterations............................................. 10(a)
Alterations Allowance................................... 10(f)
Approved Alterations.................................... 10(f)
Assignment.............................................. 13(a)
Base Expenses........................................... 7(d)(iv)
Base Rent............................................... 5(a)
Base Taxes.............................................. 7(d)(v)
Base Year............................................... 7(d)(iii)
Basic Lease Information................................. 1
Building................................................ 2
Commencement Date....................................... 3
Common Areas............................................ 8(c)
Computation Year........................................ 7(d)(viii)
B-1
DEFINITIONS SECTION OR
EXHIBIT
Event of Default.......................................... 23
Expenses.................................................. 7(d)(i)
Expiration Date........................................... 3
HVAC...................................................... 17(a)
Landlord.................................................. 1
Laws...................................................... 9
Lease..................................................... 1
Premises.................................................. 2
Rent...................................................... 5(b)
Rentable Area............................................. 2
Security Deposit.......................................... 6
Standard Building Hours................................... 17(a)
Sublease.................................................. 13(a)
Taxes..................................................... 7(d)(ii)
Tenant.................................................... 1
Tenant's Expense Share.................................... 7(d)(vi)
Tenant's Tax Share........................................ 7(d)(vii)
Usable Area............................................... 2
B-2
90 NEW MONTGOMERY STREET
OFFICE LEASE
EXHIBIT C
EXPENSE EXCLUSIONS
Notwithstanding the provisions of Section 7(d)(i), no costs or expenses
incurred for the following shall be included in Expenses:
(a) Leasing commissions, attorneys' fees, and other expenses incurred in
connection with negotiations with prospective tenants.
(b) Costs (including permit, license and inspection fees) incurred in
improving, renovating, or decorating space for new tenants or existing tenants
who are extending the terms of their respective tenancies.
(c) Costs of any services or utilities sold or provided to tenants to the
extent Landlord is separately reimbursed for such costs by such tenants as an
Additional Charge over and above the base rent, as the same may be escalated,
payable under the lease with such tenant.
(d) Costs of the Building to the extent Landlord is reimbursed for such
costs by the retail tenants of the Building.
(e) Depreciation and amortization on the Building, except as otherwise
provided in clause (B) of Section 7(d)(i) of the Lease.
(f) Interest on debt or amortization payments on any mortgages or deeds of
trust.
90 NEW MONTGONIERY STREET
OFFICE LEASE
EXHIBIT D
RULES AND REGULATIONS
1. No sign, placard. picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building without the written consent of Landlord first had and
obtained, and Landlord shall have the right to remove any such sign, placard,
picture, advertisement, name or notice without notice to and at the expense of
Tenant.
All approved signs or lettering on doors shall be printed, painted, affixed
or inscribed at the expense of Tenant by a person approved of by Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly from
outside the Premises; provided, however, that Landlord may furnish and install a
Building standard window covering for all exterior windows. Tenant shall not
without prior written consent of Landlord cover or otherwise sunscreen any
window.
2. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by any of the tenants or used by them for any
purpose other than for ingress to and egress from their respective Premises.
3. Tenant shall not alter any lock or install any new or additional locks
to any bolts on any doors or windows of the Premises.
4. The toilet rooms, 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 therein, and the
expense of any breakage, stoppage or damage resulting from the violation of this
rule shall be borne by the Tenant who, or whose employees or invitees, shall
have caused it.
5. Tenant shall not overload the floor of the Premises or in any way deface
the Premises.
6. No furniture, freight or equipment of any kind shall be brought into the
Building without prior notice to Landlord, and all moving of the same into or
out of the Building shall be done at such time and in such manner as Landlord
shall designate. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy equipment brought into the Building and
also the times and manner of moving the same in and out of the Building. Safes
or other heavy objects shall, if considered necessary by Landlord, stand on
supports of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for
D-1
loss of or damage to any such safe or property from any cause, and all damage
done to the Building by moving or maintaining any such safe or other property
shall be repaired at the expense of Tenant.
7. Tenant shall not use, keep, or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to the Landlord or their
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 other tenants or birds be brought in or kept in or about
the Premises or the Building.
8. No cooking shall be done or permitted by any Tenant on the Premises,
except for microwave cooking and hot water beverage service of the kind
typically permitted in the general office space of buildings in San Francisco
comparable to the Building, nor shall the Premises be used for the storage of
merchandise, for washing clothes, for lodging, or for any improper,
objectionable or immoral purposes.
9. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline or inflammable or combustible fluid or material, or use any
method of heating or air conditioning other than that supplied by Landlord, if
any.
10. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires will be
allowed without the consent of the Landlord. The location of telephones, call
boxes, and other office equipment affixed to the Premises shall be subject to
the approval of Landlord.
11. On Saturdays, Sundays, and legal holidays, and on other days between
the hours of 6:00 P.M. and 8:00 A.M. the following day, access to the Building,
or to the halls, corridors, elevators or stairways in the Building, or to the
Premises may be refused unless the person seeking access is known to the person
or employee of the Building in charge and has a pass or is properly identified.
The Landlord shall in no case be liable for damages for any error with regard to
the admission to or exclusion from the Building of any person. In case of
invasion, mob, riot, public excitement, or other commotion, the Landlord
reserves the right to prevent access to the Building during the continuance of
the same by closing of the doors or otherwise, for the safety of the tenants and
protection both of property in the Building and of the Building.
12. Landlord reserves the right to exclude or expel from the Building any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
the rules and regulations of the Building.
13. No vending machines or machines of any description shall be installed,
maintained or operated upon the Premises without the written consent of the
Landlord, which shall not be unreasonably withheld.
14. Tenant shall not disturb, solicit, or canvas any occupant of the
Building and shall cooperate to prevent same.
D-2
15. Without the written consent of Landlord, Tenant shall not use the name
of the Building in connection with or in promoting or advertising the business
of Tenant except as Tenant's address.
16. Landlord shall have the right to control and operate the public
portions of the Building, and the public facilities and heating, as well as
facilities furnished for the common use of the tenants, in such manner as
Landlord deems best for the benefit of the tenants generally.
17. All entrance doors in the Premises shall be left locked when the
Premises are not in use, and all doors opening to public corridors shall be kept
closed except for normal ingress to and egress from the Premises.
D-3