120 MONTGOMERY
SAN FRANCISCO, CALIFORNIA
OFFICE LEASE AGREEMENT
BETWEEN
120 MONTGOMERY ASSOCIATES, LLC, a California limited liability company
("LANDLORD")
AND
PLM FINANCIAL SERVICES INC., a Delaware corporation
("TENANT")
i
TABLE OF CONTENTS
I. Basic Lease Information................................................1
II. Lease Grant............................................................2
III. Adjustment of Commencement Date; Possession............................3
IV. Rent...................................................................3
V. Compliance with Laws; Use..............................................7
VI. Security Deposit.......................................................7
VII. Services to be Furnished by Landlord...................................7
VIII. Leasehold Improvements.................................................8
IX. Repairs and Alterations................................................8
X. Use of Electrical Services by Tenant..................................10
XI. Entry by Landlord.....................................................10
XII. Assignment and Subletting.............................................10
XIII. Liens.................................................................12
XIV. Indemnity and Waiver of Claims........................................12
XV. Insurance.............................................................12
XVI. Subrogation...........................................................13
XVII. Casualty Damage.......................................................13
XVIII. Condemnation..........................................................14
XIX. Events of Default.....................................................14
XX. Remedies..............................................................15
XXI. Limitation of Liability...............................................16
XXII. No Waiver.............................................................16
XXIII. Quiet Enjoyment.......................................................16
XXIV. Relocation............................................................17
XXV. Holding Over..........................................................17
XXVI. Subordination to Mortgages; Estoppel Certificate......................17
XXVII. Attorneys' Fees.......................................................18
XXVIII. Notice................................................................18
XXIX. Excepted Rights.......................................................18
XXX. Surrender of Premises.................................................18
XXXI. Miscellaneous.........................................................18
XXXII. Entire Agreement......................................................20
1
OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT (the "Lease") is made and entered into as
of the ____ day of ___________, 2001, by and between 120 MONTGOMERY ASSOCIATES,
LLC, a California limited liability company ("Landlord") and PLM FINANCIAL
SERVICES, INC., a Delaware corporation ("Tenant").
I. Basic Lease Information.
A. "Building" shall mean the building located at 120 Montgomery
Street, San Francisco, California, commonly known as 120
Montgomery.
B. "Rentable Square Footage of the Building" is deemed to be
422,059 square feet.
C. "Premises" shall mean the area shown on Exhibit A to this
Lease. The Premises are located on floor 13 and known as suite
number 1350. The "Rentable Square Footage of the Premises" is
deemed to be 3,563 square feet. If the Premises include one or
more floors in their entirety, all corridors and restroom
facilities located on such full floor(s) shall be considered
part of the Premises. Landlord and Tenant stipulate and agree
that the Rentable Square Footage of the Building and the
Rentable Square Footage of the Premises are correct and shall
not be remeasured.
D. "Base Rent":
------------------------ ---------------------------- ------------------------ ---------------------
Annual Rate Annual Monthly
Period Per Square Foot Base Rent Base Rent
------------------------ ---------------------------- ------------------------ ---------------------
------------------------ ---------------------------- ------------------------ ---------------------
5/19/01-5/31/01 $60.00 $213,780.00 $3,562.98
($593.83 per
diem x 6 days)
------------------------ ---------------------------- ------------------------ ---------------------
------------------------ ---------------------------- ------------------------ ---------------------
6/1/01-5/31/04 $60.00 $213,780.00 $17,815.00
------------------------ ---------------------------- ------------------------ ---------------------
------------------------ ---------------------------- ------------------------ ---------------------
6/1/04-6/27/04 $60.00 $213,780.00 $16,033.41
($593.83 per
diem x 27 days)
------------------------ ---------------------------- ------------------------ ---------------------
Notwithstanding the above schedule of Base Rent to the
contrary, as long as Tenant is not in default, Tenant shall be
entitled to (i) an abatement of 7 days of Base Rent in the
amount of $4,156.81 (the "Abated Base Rent") for the period
commencing on May 19, 2001 and ending on May 25, 2001 (the
"Abatement Period"). The payment by Tenant of the Abated Base
Rent, in the event of a default shall not limit or affect any
of Landlord's other rights, pursuant to this Lease or at law
or in equity. Only Base Rent shall be abated during the
Abatement Period and all other Additional Rent and other costs
and charges specified in this Lease shall remain as due and
payable pursuant to the provisions of this Lease.
E. "Tenant's Pro Rata Share": 0.8442%.
F. "Base Year" for Taxes: 2001 ; "Base Year" for Expenses: 2001.
G. "Term": A period of 36 months and 27 days. The Term shall
commence on May 19, 2001 (the "Commencement Date") and, unless
terminated early in accordance with this Lease, end on June
27, 2004 (the "Termination Date"). However, if Landlord is
required to Substantially Complete (defined in Section III.A)
any Landlord Work (defined in Section I.O.) prior to the
Commencement Date under the terms of a Work Letter (defined in
Section I.O): (1) the date set forth in the prior sentence as
the "Commencement Date" shall instead be defined as the
"Target Commencement Date" by which date Landlord will use
reasonable efforts to Substantially Complete the Landlord
Work; and (2) the actual "Commencement Date" shall be the date
on which the Landlord Work is Substantially Complete, as
determined by Section III.A. In such circumstances, the
Termination Date will instead be the last day of the Term as
determined based upon the actual Commencement Date. Landlord's
failure to Substantially Complete the Landlord Work by the
Target Commencement Date shall not be a default by Landlord or
otherwise render Landlord liable for damages. Promptly after
the determination of the Commencement Date, Landlord and
Tenant shall enter into a commencement letter agreement in the
form attached as Exhibit C.
H. Tenant allowance(s): None.
I. "Security Deposit": $35,630.00.
J. "Guarantor(s)": As of the date of this Lease, there are no
Guarantor(s).
K. "Broker(s)": GVA Beitler.
L. "Permitted Use": General office use.
M. "Notice Addresses":
Tenant:
On and after the Commencement Date, notices shall be sent to
Tenant at the Premises. Prior to the Commencement Date,
notices shall be sent to Tenant at the following address:
PLM Financial Services, Inc.
120 Montgomery Street
Suite 1350
San Francisco, CA 94104
Phone #: ______________________
Fax #: ________________________
Landlord: With a copy to:
120 Montgomery Associates, LLC Equity Office Properties Trust
c/o Equity Office Properties Trust Two North Riverside Plaza
120 Montgomery Street Suite 2100
Suite 1280 Chicago, Illinois 60606
San Francisco, California 94104 Attention: Regional Counsel - San
Attention: Building Manager Francisco Region
Rent (defined in Section IV.A) is payable to the order of Equity
Office Properties at the following address: EOPMC of
California, Inc., as Agent for 120 Montgomery Associates, LLC,
File 73349, P.O. Box 60000, San Francisco, California
94161-3349.
N. "Business Day(s)" are Monday through Friday of each week,
exclusive of New Year's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day ("Holidays").
Landlord may designate additional Holidays, provided that the
additional Holidays are commonly recognized by other office
buildings in the area where the Building is located.
O. "Landlord Work" means the work, if any, that Landlord is
obligated to perform in the Premises pursuant to a separate
work letter agreement (the "Work Letter"), if any, attached as
Exhibit D. If a Work Letter is not attached to this Lease or
if an attached Work Letter does not require Landlord to
perform any work, the occurrence of the Commencement Date
shall not be conditioned upon the performance of work by
Landlord and, accordingly, Section III.A. shall not be
applicable to the determination of the Commencement Date.
P. "Law(s)" means all applicable statutes, codes, ordinances,
orders, rules and regulations of any municipal or governmental
entity.
Q. "Normal Business Hours" for the Building are 6:00 A.M. to 6:00
P.M. on Business Days.
R. "Property" means the Building and the parcel(s) of land on
which it is located and, at Landlord's discretion, the
Building garage and other improvements serving the Building,
if any, and the parcel(s) of land on which they are located.
II. Lease Grant.
Landlord leases the Premises to Tenant and Tenant leases the Premises
from Landlord, together with the right in common with others to use any portions
of the Property that are designated by Landlord for the common use of tenants
and others, such as sidewalks, unreserved parking areas, common corridors,
elevator foyers, restrooms, vending areas and lobby areas (the "Common Areas").
III. Adjustment of Commencement Date; Possession.
A. The Landlord Work shall be deemed to be "Substantially
Complete" on the date that all Landlord Work has been
performed, other than any details of construction, mechanical
adjustment or any other similar matter, the noncompletion of
which does not materially interfere with Tenant's use of the
Premises. However, if Landlord is delayed in the performance
of the Landlord Work as a result of any Tenant Delay(s)
(defined below), the Landlord Work shall be deemed to be
Substantially Complete on the date that Landlord could
reasonably have been expected to Substantially Complete the
Landlord Work absent any Tenant Delay. "Tenant Delay" means
any act or omission of Tenant or its agents, employees,
vendors or contractors that actually delays the Substantial
Completion of the Landlord Work, including, without
limitation: (1) Tenant's failure to furnish information or
approvals within any time period specified in this Lease,
including the failure to prepare or approve preliminary or
final plans by any applicable due date; (2) Tenant's selection
of equipment or materials that have long lead times after
first being informed by Landlord that the selection may result
in a delay; (3) changes requested or made by Tenant to
previously approved plans and specifications; (4) performance
of work in the Premises by Tenant or Tenant's contractor(s)
during the performance of the Landlord Work; or (5) if the
performance of any portion of the Landlord Work depends on the
prior or simultaneous performance of work by Tenant, a delay
by Tenant or Tenant's contractor(s) in the completion of such
work.
B. Subject to Landlord's obligation, if any, to perform Landlord
Work and Landlord's obligations under Section IX.B., the
Premises are accepted by Tenant in "as is" condition and
configuration. By taking possession of the Premises, Tenant
agrees that the Premises are in good order and satisfactory
condition, and that there are no representations or warranties
by Landlord regarding the condition of the Premises or the
Building. If Landlord is delayed delivering possession of the
Premises or any other space due to the holdover or unlawful
possession of such space by any party, Landlord shall use
reasonable efforts to obtain possession of the space. If
Landlord is not required to Substantially Complete Landlord
Work before the Commencement Date, the Commencement Date shall
be postponed until the date Landlord delivers possession of
the Premises to Tenant free from occupancy by any party, and
the Termination Date, at the option of Landlord, may be
postponed by an equal number of days. If Landlord is required
to Substantially Complete Landlord Work before the
Commencement Date, the Commencement Date and Termination Date
shall be determined by Section I.G.
C. If Tenant takes possession of the Premises before the
Commencement Date, such possession shall be subject to the
terms and conditions of this Lease and Tenant shall pay Rent
(defined in Section IV.A.) to Landlord for each day of
possession before the Commencement Date. However, except for
the cost of services requested by Tenant (e.g. freight
elevator usage), Tenant shall not be required to pay Rent for
any days of possession before the Commencement Date during
which Tenant, with the approval of Landlord, is in possession
of the Premises for the sole purpose of performing
improvements or installing furniture, equipment or other
personal property.
IV. Rent.
A. PAYMENTS. As consideration for this Lease, Tenant shall pay
Landlord, without any setoff or deduction, the total amount of
Base Rent and Additional Rent due for the Term. "Additional
Rent" means all sums (exclusive of Base Rent) that Tenant is
required to pay Landlord. Additional Rent and Base Rent are
sometimes collectively referred to as "Rent". Tenant shall pay
and be liable for all rental, sales and use taxes (but
excluding income taxes), if any, imposed upon or measured by
Rent under applicable Law. Base Rent and recurring monthly
charges of Additional Rent shall be due and payable in advance
on the first day of each calendar month without notice or
demand, provided that the installment of Base Rent for the
first full calendar month of the Term shall be payable upon
the execution of this Lease by Tenant. All other items of Rent
shall be due and payable by Tenant on or before 30 days after
billing by Landlord. All payments of Rent shall be by good and
sufficient check or by other means (such as automatic debit or
electronic transfer) acceptable to Landlord. If Tenant fails
to pay any item or installment of Rent when due, Tenant shall
pay Landlord an administration fee equal to 5% of the past due
Rent, provided that Tenant shall be entitled to a grace period
of 5 days after notice for the first 2 late payments of Rent
in a given calendar year. If the Term commences on a day other
than the first day of a calendar month or terminates on a day
other than the last day of a calendar month, the monthly Base
Rent and Tenant's Pro Rata Share of any Tax Excess (defined in
Section IV.B.) or Expense Excess (defined in Section IV.B.)
for the month shall be prorated based on the number of days in
such calendar month. Landlord's acceptance of less than the
correct amount of Rent shall be considered a payment on
account of the earliest Rent due. No endorsement or statement
on a check or letter accompanying a check or payment shall be
considered an accord and satisfaction, and either party may
accept the check or payment without prejudice to that party's
right to recover the balance or pursue other available
remedies. Tenant's covenant to pay Rent is independent of
every other covenant in this Lease.
B. EXPENSE EXCESS AND TAX EXCESS. Tenant shall pay Tenant's Pro
Rata Share of the amount, if any, by which Expenses (defined
in Section IV.C.) for each calendar year during the Term
exceed Expenses for the Base Year (the "Expense Excess") and
also the amount, if any, by which Taxes (defined in Section
IV.D.) for each calendar year during the Term exceed Taxes for
the Base Year (the "Tax Excess"). If Expenses and/or Taxes in
any calendar year decrease below the amount of Expenses and/or
Taxes for the Base Year, Tenant's Pro Rata Share of Expenses
and/or Taxes, as the case may be, for that calendar year shall
be $0. Landlord shall provide Tenant with a good faith
estimate of the Expense Excess and of the Tax Excess for each
calendar year during the Term. On or before the first day of
each month, Tenant shall pay to Landlord a monthly installment
equal to one-twelfth of Tenant's Pro Rata Share of Landlord's
estimate of the Expense Excess and one-twelfth of Tenant's Pro
Rata Share of Landlord's estimate of the Tax Excess. If
Landlord determines that its good faith estimate of the
Expense Excess or of the Tax Excess was incorrect by a
material amount, Landlord may provide Tenant with a revised
estimate. After its receipt of the revised estimate, Tenant's
monthly payments shall be based upon the revised estimate. If
Landlord does not provide Tenant with an estimate of the
Expense Excess or of the Tax Excess by January 1 of a calendar
year, Tenant shall continue to pay monthly installments based
on the previous year's estimate(s) until Landlord provides
Tenant with the new estimate. Upon delivery of the new
estimate, an adjustment shall be made for any month for which
Tenant paid monthly installments based on the previous year's
estimate(s). Tenant shall pay Landlord the amount of any
underpayment within 30 days after receipt of the new estimate.
Any overpayment shall be refunded to Tenant within 30 days or
credited against the next due future installment(s) of
Additional Rent.
As soon as is practical following the end of each calendar
year, Landlord shall furnish Tenant with a statement of the
actual Expenses and Expense Excess and the actual Taxes and
Tax Excess for the prior calendar year. If the estimated
Expense Excess and/or estimated Tax Excess for the prior
calendar year is more than the actual Expense Excess and/or
actual Tax Excess, as the case may be, for the prior calendar
year, Landlord shall apply any overpayment by Tenant against
Additional Rent due or next becoming due, provided if the Term
expires before the determination of the overpayment, Landlord
shall refund any overpayment to Tenant after first deducting
the amount of Rent due. If the estimated Expense Excess and/or
estimated Tax Excess for the prior calendar year is less than
the actual Expense Excess and/or actual Tax Excess, as the
case may be, for such prior year, Tenant shall pay Landlord,
within 30 days after its receipt of the statement of Expenses
and/or Taxes, any underpayment for the prior calendar year.
C. EXPENSES DEFINED. "Expenses" means all costs and expenses
incurred in each calendar year in connection with operating,
maintaining, repairing, and managing the Building and the
Property, including, but not limited to:
1. Labor costs, including, wages, salaries, social security and
employment taxes, medical and other types of insurance,
uniforms, training, and retirement and pension plans.
2. Management fees, the cost of equipping and maintaining a
management office, accounting and bookkeeping services,
legal fees not attributable to leasing or collection
activity, and other administrative costs. Landlord, by
itself or through an affiliate, shall have the right to
directly perform or provide any services under this Lease
(including management services), provided that the cost of
any such services shall not exceed the cost that would have
been incurred had Landlord entered into an arms-length
contract for such services with an unaffiliated entity of
comparable skill and experience.
3. The cost of services, including amounts paid to service
providers and the rental and purchase cost of parts,
supplies, tools and equipment.
4. Premiums and deductibles paid by Landlord for insurance,
including workers compensation, fire and extended coverage,
earthquake, general liability, rental loss, elevator, boiler
and other insurance customarily carried from time to time by
owners of comparable office buildings.
5. Electrical Costs (defined below) and charges for water, gas,
steam and sewer, but excluding those charges for which
Landlord is reimbursed by tenants. "Electrical Costs" means:
(a) charges paid by Landlord for electricity; (b) costs
incurred in connection with an energy management program for
the Property; and (c) if and to the extent permitted by Law,
a fee for the services provided by Landlord in connection
with the selection of utility companies and the negotiation
and administration of contracts for electricity, provided
that such fee shall not exceed 50% of any savings obtained
by Landlord. Electrical Costs shall be adjusted as follows:
(i) amounts received by Landlord as reimbursement for above
standard electrical consumption shall be deducted from
Electrical Costs, as well as any rebates or other
consideration received from any broker, producer or supplier
of electricity, if any, shall be deducted from Electrical
Costs (provided that such rebates or other consideration may
be included, if applicable, in the calculation of the
savings obtained by Landlord for purposes of determining the
fee payable to Landlord); (ii) the cost of electricity
incurred to provide overtime HVAC to specific tenants (as
reasonably estimated by Landlord) shall be deducted from
Electrical Costs; and (iii) if Tenant is billed directly for
the cost of building standard electricity to the Premises as
a separate charge in addition to Base Rent, the cost of
electricity to individual tenant spaces in the Building
shall be deducted from Electrical Costs.
6. The amortized cost of capital improvements (as distinguished
from replacement parts or components installed in the
ordinary course of business) made to the Property which are:
(a) performed primarily to reduce operating expense costs or
otherwise improve the operating efficiency of the Property;
or (b) required to comply with any Laws that are enacted, or
first interpreted to apply to the Property, after the date
of this Lease. The cost of capital improvements shall be
amortized by Landlord over the lesser of the Payback Period
(defined below) or 5 years. The amortized cost of capital
improvements may, at Landlord's option, include actual or
imputed interest at the rate that Landlord would reasonably
be required to pay to finance the cost of the capital
improvement. "Payback Period" means the reasonably estimated
period of time that it takes for the cost savings resulting
from a capital improvement to equal the total cost of the
capital improvement.
If Landlord incurs Expenses for the Property together with one
or more other buildings or properties, whether pursuant to a
reciprocal easement agreement, common area agreement or
otherwise, the shared costs and expenses shall be equitably
prorated and apportioned between the Property and the other
buildings or properties. Expenses shall not include: the
cost of capital improvements (except as set forth above);
depreciation; interest (except as provided above for the
amortization of capital improvements); principal payments of
mortgage and other non-operating debts of Landlord; the cost
of repairs or other work to the extent Landlord is
reimbursed by insurance or condemnation proceeds; costs in
connection with leasing space in the Building, including
brokerage commissions; lease concessions, including rental
abatements and construction allowances, granted to specific
tenants; costs incurred in connection with the sale,
financing or refinancing of the Building; fines, interest
and penalties incurred due to the late payment of Taxes
(defined in Section IV.D) or Expenses; organizational
expenses associated with the creation and operation of the
entity which constitutes Landlord; or any penalties or
damages that Landlord pays to Tenant under this Lease or to
other tenants in the Building under their respective leases.
If the Building is not at least 100% occupied during any
calendar year or if Landlord is not supplying services to at
least 100% of the total Rentable Square Footage of the
Building at any time during a calendar year, Expenses shall,
at Landlord's option, be determined as if the Building had
been 100% occupied and Landlord had been supplying services
to 100% of the Rentable Square Footage of the Building
during that calendar year. If Tenant pays for its Pro Rata
Share of Expenses based on increases over a "Base Year" and
Expenses for a calendar year are determined as provided in
the prior sentence, Expenses for the Base Year shall also be
determined as if the Building had been 100% occupied and
Landlord had been supplying services to 100% of the Rentable
Square Footage of the Building. The extrapolation of
Expenses under this Section shall be performed by
appropriately adjusting the cost of those components of
Expenses that are impacted by changes in the occupancy of
the Building.
D. TAXES DEFINED. "Taxes" shall mean: (1) all real estate taxes
and other assessments on the Building and/or Property,
including, but not limited to, assessments for special
improvement districts and building improvement districts,
taxes and assessments levied in substitution or
supplementation in whole or in part of any such taxes and
assessments and the Property's share of any real estate
taxes and assessments under any reciprocal easement
agreement, common area agreement or similar agreement as to
the Property; (2) all personal property taxes for property
that is owned by Landlord and used in connection with the
operation, maintenance and repair of the Property; and (3)
all costs and fees incurred in connection with seeking
reductions in any tax liabilities described in (1) and (2),
including, without limitation, any costs incurred by
Landlord for compliance, review and appeal of tax
liabilities. Without limitation, Taxes shall not include any
income, capital levy, franchise, capital stock, gift, estate
or inheritance tax. If an assessment is payable in
installments, Taxes for the year shall include the amount of
the installment and any interest due and payable during that
year. For all other real estate taxes, Taxes for that year
shall, at Landlord's election, include either the amount
accrued, assessed or otherwise imposed for the year or the
amount due and payable for that year, provided that
Landlord's election shall be applied consistently throughout
the Term. If a change in Taxes is obtained for any year of
the Term during which Tenant paid Tenant's Pro Rata Share of
any Tax Excess, then Taxes for that year will be
retroactively adjusted and Landlord shall provide Tenant
with a credit, if any, based on the adjustment. Likewise, if
a change is obtained for Taxes for the Base Year, Taxes for
the Base Year shall be restated and the Tax Excess for all
subsequent years shall be recomputed. Tenant shall pay
Landlord the amount of Tenant's Pro Rata Share of any such
increase in the Tax Excess within 30 days after Tenant's
receipt of a statement from Landlord.
E. AUDIT RIGHTS. Tenant may, within 90 days after receiving
Landlord's statement of Expenses, give Landlord written
notice ("Review Notice") that Tenant intends to review
Landlord's records of the Expenses for that calendar year.
Within a reasonable time after receipt of the Review Notice,
Landlord shall make all pertinent records available for
inspection that are reasonably necessary for Tenant to
conduct its review. If any records are maintained at a
location other than the office of the Building, Tenant may
either inspect the records at such other location or pay for
the reasonable cost of copying and shipping the records. If
Tenant retains an agent to review Landlord's records, the
agent must be with a licensed CPA firm. Tenant shall be
solely responsible for all costs, expenses and fees incurred
for the audit. Within 60 days after the records are made
available to Tenant, Tenant shall have the right to give
Landlord written notice (an "Objection Notice") stating in
reasonable detail any objection to Landlord's statement of
Expenses for that year. If Tenant fails to give Landlord an
Objection Notice within the 60 day period or fails to
provide Landlord with a Review Notice within the 90 day
period described above, Tenant shall be deemed to have
approved Landlord's statement of Expenses and shall be
barred from raising any claims regarding the Expenses for
that year. If Tenant provides Landlord with a timely
Objection Notice, Landlord and Tenant shall work together in
good faith to resolve any issues raised in Tenant's
Objection Notice. If Landlord and Tenant determine that
Expenses for the calendar year are less than reported,
Landlord shall provide Tenant with a credit against the next
installment of Rent in the amount of the overpayment by
Tenant. Likewise, if Landlord and Tenant determine that
Expenses for the calendar year are greater than reported,
Tenant shall pay Landlord the amount of any underpayment
within 30 days. The records obtained by Tenant shall be
treated as confidential. In no event shall Tenant be
permitted to examine Landlord's records or to dispute any
statement of Expenses unless Tenant has paid and continues
to pay all Rent when due.
V. Compliance with Laws; Use.
The Premises shall be used only for the Permitted Use and for no other
use whatsoever except with the prior written consent of Landlord. Tenant shall
not use or permit the use of the Premises for any purpose which is illegal,
dangerous to persons or property or which, in Landlord's reasonable opinion,
unreasonably disturbs any other tenants of the Building or interferes with the
operation of the Building. Tenant shall comply with all Laws, including the
Americans with Disabilities Act, regarding the operation of Tenant's business
and the use, condition, configuration and occupancy of the Premises. Except to
the extent properly included in Expenses, Landlord shall be responsible for the
cost of correcting any violations of Title III of the Americans with
Disabilities Act (ADA) with respect to the Common Areas of the Building.
Notwithstanding the foregoing, Landlord shall have the right to contest any
alleged violation in good faith, including, without limitation, the right to
apply for and obtain a waiver or deferment of compliance, the right to assert
any and all defenses allowed by Law and the right to appeal any decisions,
judgments or rulings to the fullest extent permitted by Law. Landlord, after the
exhaustion of any and all rights to appeal or contest, will make all repairs,
additions, alterations or improvements necessary to comply with the terms of any
final order or judgment. Tenant, within 10 days after receipt, shall provide
Landlord with copies of any notices it receives regarding a violation or alleged
violation of any Laws. Tenant shall comply with the rules and regulations of the
Building attached as Exhibit B and such other reasonable rules and regulations
adopted by Landlord from time to time. Tenant shall also cause its agents,
contractors, subcontractors, employees, customers, and subtenants to comply with
all rules and regulations. Landlord shall not knowingly discriminate against
Tenant in Landlord's enforcement of the rules and regulations. In the event of a
conflict between any rules and regulations enacted after the date hereof and the
lease, this Lease shall control.
VI. Security Deposit.
The Security Deposit shall be delivered to Landlord upon the execution
of this Lease by Tenant and shall be held by Landlord without liability for
interest (unless required by Law) as security for the performance of Tenant's
obligations. The Security Deposit is not an advance payment of Rent or a measure
of Tenant's liability for damages. Landlord may, from time to time, without
prejudice to any other remedy, use all or a portion of the Security Deposit to
satisfy past due Rent or to cure any uncured default by Tenant. If Landlord uses
the Security Deposit, Tenant shall on demand restore the Security Deposit to its
original amount. Landlord shall return any unapplied portion of the Security
Deposit to Tenant within 45 days after the later to occur of: (1) the
determination of Tenant's Pro Rata Share of any Tax Excess and Expense Excess
for the final year of the Term; (2) the date Tenant surrenders possession of the
Premises to Landlord in accordance with this Lease; or (3) the Termination Date.
If Landlord transfers its interest in the Premises, Landlord may assign the
Security Deposit to the transferee and, following the assignment, Landlord shall
have no further liability for the return of the Security Deposit. Landlord shall
not be required to keep the Security Deposit separate from its other accounts.
Tenant hereby waives the provisions of Section 1950.7 of the California Civil
Code, or any similar or successor Laws now or hereinafter in effect.
VII. Services to be Furnished by Landlord.
A. Landlord agrees to furnish Tenant with the following services:
(1) Water service for use in the lavatories on each floor on
which the Premises are located; (2) Heat and air conditioning in
season during Normal Business Hours, at such temperatures and in
such amounts as are standard for comparable Class A office
buildings or as required by governmental authority. Tenant, upon
such advance notice as is reasonably required by Landlord, shall
have the right to receive HVAC service during hours other than
Normal Business Hours. Tenant shall pay Landlord the standard
charge for the additional service as reasonably determined by
Landlord from time to time; (3) Maintenance and repair of the
Property as described in Section IX.B.; (4) Janitor service on
Business Days. If Tenant's use, floor covering or other
improvements require special services in excess of the standard
services for the Building, Tenant shall pay the additional cost
attributable to the special services; (5) Elevator service; (6)
Electricity to the Premises for general office use, in accordance
with and subject to the terms and conditions in Article X; and
(7) such other services as Landlord reasonably determines are
necessary or appropriate for the Property.
B. Landlord's failure to furnish, or any interruption or termination
of, services due to the application of Laws, the failure of any
equipment, the performance of repairs, improvements or
alterations, or the occurrence of any event or cause beyond the
reasonable control of Landlord (a "Service Failure") shall not
render Landlord liable to Tenant, constitute a constructive
eviction of Tenant, give rise to an abatement of Rent, nor
relieve Tenant from the obligation to fulfill any covenant or
agreement. However, if the Premises, or a material portion of the
Premises, is made untenantable for a period in excess of 3
consecutive Business Days as a result of the Service Failure,
then Tenant, as its sole remedy, shall be entitled to receive an
abatement of Rent payable hereunder during the period beginning
on the 4th consecutive Business Day of the Service Failure and
ending on the day the service has been restored. If the entire
Premises has not been rendered untenantable by the Service
Failure, the amount of abatement that Tenant is entitled to
receive shall be prorated based upon the percentage of the
Premises rendered untenantable and not used by Tenant. In no
event, however, shall Landlord be liable to Tenant for any loss
or damage, including the theft of Tenant's Property (defined in
Article XV), arising out of or in connection with the failure of
any security services, personnel or equipment.
VIII. Leasehold Improvements.
All improvements to the Premises (collectively, "Leasehold
Improvements") shall be owned by Landlord and shall remain upon the Premises
without compensation to Tenant. However, Landlord, by written notice to Tenant
within 30 days prior to the Termination Date, may require Tenant to remove, at
Tenant's expense: (1) Cable (defined in Section IX.A) installed by or for the
exclusive benefit of Tenant and located in the Premises or other portions of the
Building; and (2) any Leasehold Improvements that are performed by or for the
benefit of Tenant and, in Landlord's reasonable judgment, are of a nature that
would require removal and repair costs that are materially in excess of the
removal and repair costs associated with standard office improvements
(collectively referred to as "Required Removables"). Without limitation, it is
agreed that Required Removables include internal stairways, raised floors,
personal baths and showers, vaults, rolling file systems and structural
alterations and modifications of any type. The Required Removables designated by
Landlord shall be removed by Tenant before the Termination Date, provided that
upon prior written notice to Landlord, Tenant may remain in the Premises for up
to 5 days after the Termination Date for the sole purpose of removing the
Required Removables. Tenant's possession of the Premises shall be subject to all
of the terms and conditions of this Lease, including the obligation to pay Rent
on a per diem basis at the rate in effect for the last month of the Term. Tenant
shall repair damage caused by the installation or removal of Required
Removables. If Tenant fails to remove any Required Removables or perform related
repairs in a timely manner, Landlord, at Tenant's expense, may remove and
dispose of the Required Removables and perform the required repairs. Tenant,
within 30 days after receipt of an invoice, shall reimburse Landlord for the
reasonable costs incurred by Landlord. Notwithstanding the foregoing, Tenant, at
the time it requests approval for a proposed Alteration (defined in Section
IX.C), may request in writing that Landlord advise Tenant whether the Alteration
or any portion of the Alteration will be designated as a Required Removable.
Within 10 days after receipt of Tenant's request, Landlord shall advise Tenant
in writing as to which portions of the Alteration, if any, will be considered to
be Required Removables.
IX. Repairs and Alterations.
A. Tenant's Repair Obligations. Tenant shall, at its sole cost and
expense, promptly perform all maintenance and repairs to the
Premises that are not Landlord's express responsibility under
this Lease, and shall keep the Premises in good condition and
repair, reasonable wear and tear excepted. Tenant's repair
obligations include, without limitation, repairs to: (1) floor
covering; (2) interior partitions; (3) doors; (4) the interior
side of demising walls; (5) electronic, phone and data cabling
and related equipment (collectively, "Cable") that is installed
by or for the exclusive benefit of Tenant and located in the
Premises or other portions of the Building; (6) supplemental air
conditioning units, private showers and kitchens, including hot
water heaters, plumbing, and similar facilities serving Tenant
exclusively; and (7) Alterations performed by contractors
retained by Tenant, including related HVAC balancing. All work
shall be performed in accordance with the rules and procedures
described in Section IX.C. below. If Tenant fails to make any
repairs to the Premises for more than 15 days after notice from
Landlord (although notice shall not be required if there is an
emergency), Landlord may make the repairs, and Tenant shall pay
the reasonable cost of the repairs to Landlord within 30 days
after receipt of an invoice, together with an administrative
charge in an amount equal to 10% of the cost of the repairs.
B. Landlord's Repair Obligations. Landlord shall keep and maintain
in good repair and working order and make repairs to and perform
maintenance upon: (1) structural elements of the Building; (2)
mechanical (including HVAC), electrical, plumbing and fire/life
safety systems serving the Building in general; (3) Common Areas;
(4) the roof of the Building; (5) exterior windows of the
Building; and (6) elevators serving the Building. Landlord shall
promptly make repairs (considering the nature and urgency of the
repair) for which Landlord is responsible. Tenant hereby waives
any and all rights under and benefits of subsection 1 of Section
1932, and Sections 1941 and 1942 of the California Civil Code, or
any similar or successor Laws now or hereinafter in effect.
C. Alterations. Tenant shall not make alterations, additions or
improvements to the Premises or install any Cable in the Premises
or other portions of the Building (collectively referred to as
"Alterations") without first obtaining the written consent of
Landlord in each instance, which consent shall not be
unreasonably withheld or delayed. However, Landlord's consent
shall not be required for any Alteration that satisfies all of
the following criteria (a "Cosmetic Alteration"): (1) is of a
cosmetic nature such as painting, wallpapering, hanging pictures
and installing carpeting; (2) is not visible from the exterior of
the Premises or Building; (3) will not affect the systems or
structure of the Building; and (4) does not require work to be
performed inside the walls or above the ceiling of the Premises.
However, even though consent is not required, the performance of
Cosmetic Alterations shall be subject to all the other provisions
of this Section IX.C. Prior to starting work, Tenant shall
furnish Landlord with plans and specifications reasonably
acceptable to Landlord; names of contractors reasonably
acceptable to Landlord (provided that Landlord may designate
specific contractors with respect to Building systems); copies of
contracts; necessary permits and approvals; evidence of
contractor's and subcontractor's insurance in amounts reasonably
required by Landlord; and any security for performance that is
reasonably required by Landlord. Changes to the plans and
specifications must also be submitted to Landlord for its
approval. Alterations shall be constructed in a good and
workmanlike manner using materials of a quality that is at least
equal to the quality designated by Landlord as the minimum
standard for the Building. Landlord may designate reasonable
rules, regulations and procedures for the performance of work in
the Building and, to the extent reasonably necessary to avoid
disruption to the occupants of the Building, shall have the right
to designate the time when Alterations may be performed. Tenant
shall reimburse Landlord within 30 days after receipt of an
invoice for sums paid by Landlord for third party examination of
Tenant's plans for non-Cosmetic Alterations. In addition, within
30 days after receipt of an invoice from Landlord, Tenant shall
pay Landlord a fee for Landlord's oversight and coordination of
any non-Cosmetic Alterations equal to 10% of the cost of the
non-Cosmetic Alterations. Upon completion, Tenant shall furnish
"as-built" plans (except for Cosmetic Alterations), completion
affidavits, full and final waivers of lien in recordable form,
and receipted bills covering all labor and materials. Tenant
shall assure that the Alterations comply with all insurance
requirements and Laws. Landlord's approval of an Alteration shall
not be a representation by Landlord that the Alteration complies
with applicable Laws or will be adequate for Tenant's use.
X. Use of Electrical Services by Tenant.
A. Electricity used by Tenant in the Premises shall, at Landlord's
option, be paid for by Tenant either: (1) through inclusion in
Expenses (except as provided in Section X.B. for excess usage);
(2) by a separate charge payable by Tenant to Landlord within 30
days after billing by Landlord; or (3) by separate charge billed
by the applicable utility company and payable directly by Tenant.
Electrical service to the Premises may be furnished by one or
more companies providing electrical generation, transmission and
distribution services, and the cost of electricity may consist of
several different components or separate charges for such
services, such as generation, distribution and stranded cost
charges. Landlord shall have the exclusive right to select any
company providing electrical service to the Premises, to
aggregate the electrical service for the Property and Premises
with other buildings, to purchase electricity through a broker
and/or buyers group and to change the providers and manner of
purchasing electricity. Landlord shall be entitled to receive a
fee (if permitted by Law) for the selection of utility companies
and the negotiation and administration of contracts for
electricity, provided that the amount of such fee shall not
exceed 50% of any savings obtained by Landlord.
B. Tenant's use of electrical service shall not exceed, either in
voltage, rated capacity, use beyond Normal Business Hours or
overall load, that which Landlord determines to be standard for
the Building. If Tenant requests permission to consume excess
electrical service, Landlord may refuse to consent or may
condition consent upon conditions that Landlord reasonably elects
(including, without limitation, the installation of utility
service upgrades, meters, submeters, air handlers or cooling
units), and the additional usage (to the extent permitted by
Law), installation and maintenance costs shall be paid by Tenant.
Landlord shall have the right to separately meter electrical
usage for the Premises and to measure electrical usage by survey
or other commonly accepted methods.
XI. Entry by Landlord.
Landlord, its agents, contractors and representatives may enter the
Premises to inspect or show the Premises, to clean and make repairs, alterations
or additions to the Premises, and to conduct or facilitate repairs, alterations
or additions to any portion of the Building, including other tenants' premises.
Except in emergencies or to provide janitorial and other Building services after
Normal Business Hours, Landlord shall provide Tenant with reasonable prior
notice of entry into the Premises, which may be given orally. If reasonably
necessary for the protection and safety of Tenant and its employees, Landlord
shall have the right to temporarily close all or a portion of the Premises to
perform repairs, alterations and additions. However, except in emergencies,
Landlord will not close the Premises if the work can reasonably be completed on
weekends and after Normal Business Hours. Entry by Landlord shall not constitute
constructive eviction or entitle Tenant to an abatement or reduction of Rent.
XII. Assignment and Subletting.
A. Except in connection with a Permitted Transfer (defined in
Section XII.E. below), Tenant shall not assign, sublease,
transfer or encumber any interest in this Lease or allow any
third party to use any portion of the Premises (collectively or
individually, a "Transfer") without the prior written consent of
Landlord, which consent shall not be unreasonably withheld if
Landlord does not elect to exercise its termination rights under
Section XII.B below. Without limitation, it is agreed that
Landlord's consent shall not be considered unreasonably withheld
if: (1) the proposed transferee's financial condition does not
meet the criteria Landlord uses to select Building tenants having
similar leasehold obligations; (2) the proposed transferee's
business is not suitable for the Building considering the
business of the other tenants and the Building's prestige, or
would result in a violation of another tenant's rights; (3) the
proposed transferee is a governmental agency or occupant of the
Building or Property; (4) Tenant is in default after the
expiration of the notice and cure periods in this Lease; or (5)
any portion of the Building or Premises would likely become
subject to additional or different Laws as a consequence of the
proposed Transfer. Tenant shall not be entitled to receive
monetary damages based upon a claim that Landlord unreasonably
withheld its consent to a proposed Transfer and Tenant's sole
remedy shall be an action to enforce any such provision through
specific performance or declaratory judgment. Tenant hereby
waives the provisions of Section 1995.310 of the California Civil
Code, or any similar or successor Laws, now or hereinafter in
effect, and all other remedies, including, without limitation,
any right at law or equity to terminate this Lease, on its own
behalf and, to the extent permitted under all applicable Laws, on
behalf of the proposed transferee. Any attempted Transfer in
violation of this Article shall, at Landlord's option, be void.
Consent by Landlord to one or more Transfer(s) shall not operate
as a waiver of Landlord's rights to approve any subsequent
Transfers. In no event shall any Transfer or Permitted Transfer
release or relieve Tenant from any obligation under this Lease.
B. As part of its request for Landlord's consent to a Transfer,
Tenant shall provide Landlord with financial statements for the
proposed transferee, a complete copy of the proposed assignment,
sublease and other contractual documents and such other
information as Landlord may reasonably request. Landlord shall,
by written notice to Tenant within 30 days of its receipt of the
required information and documentation, either: (1) consent to
the Transfer by the execution of a consent agreement in a form
reasonably designated by Landlord or reasonably refuse to consent
to the Transfer in writing; or (2) exercise its right to
terminate this Lease with respect to the portion of the Premises
that Tenant is proposing to assign or sublet. Any such
termination shall be effective on the proposed effective date of
the Transfer for which Tenant requested consent. Tenant shall pay
Landlord a review fee of $750.00 for Landlord's review of any
Permitted Transfer or requested Transfer, provided if Landlord's
actual reasonable costs and expenses (including reasonable
attorney's fees) exceed $750.00, Tenant shall reimburse Landlord
for its actual reasonable costs and expenses in lieu of a fixed
review fee.
C. Tenant shall pay Landlord 65% of all rent and other consideration
which Tenant receives as a result of a Transfer that is in excess
of the Rent payable to Landlord for the portion of the Premises
and Term covered by the Transfer. Tenant shall pay Landlord for
Landlord's share of any excess within 30 days after Tenant's
receipt of such excess consideration. Tenant may deduct from the
excess all reasonable and customary expenses directly incurred by
Tenant attributable to the Transfer (other than Landlord's review
fee), including brokerage fees, legal fees and construction
costs. If Tenant is in Monetary Default (defined in Section
XIX.A. below), Landlord may require that all sublease payments be
made directly to Landlord, in which case Tenant shall receive a
credit against Rent in the amount of any payments received (less
Landlord's share of any excess).
D. Except as provided below with respect to a Permitted Transfer, if
Tenant is a corporation, limited liability company, partnership,
or similar entity, and if the entity which owns or controls a
majority of the voting shares/rights at any time changes for any
reason (including but not limited to a merger, consolidation or
reorganization), such change of ownership or control shall
constitute a Transfer. The foregoing shall not apply so long as
Tenant is an entity whose outstanding stock is listed on a
recognized security exchange, or if at least 80% of its voting
stock is owned by another entity, the voting stock of which is so
listed.
E. Notwithstanding anything to the contrary contained herein or in
Section XIII.D., Tenant may assign its entire interest under this
Lease or sublet the Premises to a wholly owned corporation,
partnership or other legal entity or affiliate, subsidiary or
parent of Tenant or to any successor to Tenant by purchase,
merger, consolidation or reorganization (hereinafter,
collectively, referred to as "Permitted Transfer") without the
consent of Landlord, provided: (i) Tenant is not in default under
this Lease; (ii) if such proposed transferee is a successor to
Tenant by purchase, merger, consolidation or reorganization, the
continuing or surviving entity shall own all or substantially all
of the assets of Tenant and shall have a net worth which is at
least equal to the greater of Tenant's net worth at the date of
this Lease or Tenant's net worth at the date of the Transfer;
(iii) such proposed transferee operates the business in the
Premises for the Permitted Use and no other purpose; and (iv) in
no event shall any Permitted Transfer release or relieve Tenant
from any of its obligations under this Lease. Tenant shall give
Landlord written notice at least 30 days prior to the effective
date of such Permitted Transfer. As used herein: (a) "parent"
shall mean a company which owns a majority of Tenant's voting
equity; (b) "subsidiary" shall mean an entity wholly owned by
Tenant or at least 51% of whose voting equity is owned by Tenant;
and (c) "affiliate" shall mean an entity controlled, controlling
or under common control with Tenant. Notwithstanding the
foregoing, sale of the shares of equity of any affiliate or
subsidiary to which this Lease has been assigned or transferred
other than to another parent, subsidiary or affiliate of the
original Tenant named hereunder shall be deemed to be an
assignment requiring the consent of Landlord hereunder.
XIII. Liens.
Tenant shall not permit mechanic's or other liens to be placed upon the
Property, Premises or Tenant's leasehold interest in connection with any work or
service done or purportedly done by or for benefit of Tenant. If a lien is so
placed, Tenant shall, within 10 days of notice from Landlord of the filing of
the lien, fully discharge the lien by settling the claim which resulted in the
lien or by bonding or insuring over the lien in the manner prescribed by the
applicable lien Law. If Tenant fails to discharge the lien, then, in addition to
any other right or remedy of Landlord, Landlord may bond or insure over the lien
or otherwise discharge the lien. Tenant shall reimburse Landlord for any amount
paid by Landlord to bond or insure over the lien or discharge the lien,
including, without limitation, reasonable attorneys' fees (if and to the extent
permitted by Law) within 30 days after receipt of an invoice from Landlord.
XIV. Indemnity and Waiver of Claims.
A. Except to the extent caused by the negligence or willful
misconduct of Landlord or any Landlord Related Parties (defined
below), Tenant shall indemnify, defend and hold Landlord, its
trustees, members, principals, beneficiaries, partners, officers,
directors, employees, Mortgagee(s) (defined in Article XXVI) and
agents ("Landlord Related Parties") harmless against and from all
liabilities, obligations, damages, penalties, claims, actions,
costs, charges and expenses, including, without limitation,
reasonable attorneys' fees and other professional fees (if and to
the extent permitted by Law), which may be imposed upon, incurred
by or asserted against Landlord or any of the Landlord Related
Parties and arising out of or in connection with any damage or
injury occurring in the Premises or any acts or omissions
(including violations of Law) of Tenant, the Tenant Related
Parties (defined below) or any of Tenant's transferees,
contractors or licensees.
B. Except to the extent caused by the negligence or willful
misconduct of Tenant or any Tenant Related Parties (defined
below), Landlord shall indemnify, defend and hold Tenant, its
trustees, members, principals, beneficiaries, partners, officers,
directors, employees and agents ("Tenant Related Parties")
harmless against and from all liabilities, obligations, damages,
penalties, claims, actions, costs, charges and expenses,
including, without limitation, reasonable attorneys' fees and
other professional fees (if and to the extent permitted by Law),
which may be imposed upon, incurred by or asserted against Tenant
or any of the Tenant Related Parties and arising out of or in
connection with the acts or omissions (including violations of
Law) of Landlord, the Landlord Related Parties or any of
Landlord's contractors.
C. Landlord and the Landlord Related Parties shall not be liable
for, and Tenant waives, all claims for loss or damage to Tenant's
business or loss, theft or damage to Tenant's Property or the
property of any person claiming by, through or under Tenant
resulting from: (1) wind or weather; (2) the failure of any
sprinkler, heating or air-conditioning equipment, any electric
wiring or any gas, water or steam pipes; (3) the backing up of
any sewer pipe or downspout; (4) the bursting, leaking or running
of any tank, water closet, drain or other pipe; (5) water, snow
or ice upon or coming through the roof, skylight, stairs,
doorways, windows, walks or any other place upon or near the
Building; (6) any act or omission of any party other than
Landlord or Landlord Related Parties; and (7) any causes not
reasonably within the control of Landlord. Tenant shall insure
itself against such losses under Article XV below.
XV. Insurance.
Tenant shall carry and maintain the following insurance ("Tenant's
Insurance"), at its sole cost and expense: (1) Commercial General Liability
Insurance applicable to the Premises and its appurtenances providing, on an
occurrence basis, a minimum combined single limit of $2,000,000.00; (2) All Risk
Property/Business Interruption Insurance, including flood and earthquake,
written at replacement cost value and with a replacement cost endorsement
covering all of Tenant's trade fixtures, equipment, furniture and other personal
property within the Premises ("Tenant's Property"); (3) Workers' Compensation
Insurance as required by the state in which the Premises is located and in
amounts as may be required by applicable statute; and (4) Employers Liability
Coverage of at least $1,000,000.00 per occurrence. Any company writing any of
Tenant's Insurance shall have an A.M. Best rating of not less than A-VIII. All
Commercial General Liability Insurance policies shall name Tenant as a named
insured and Landlord (or any successor), Equity Office Properties Trust, a
Maryland real estate investment trust, EOP Operating Limited Partnership, a
Delaware limited partnership, and their respective members, principals,
beneficiaries, partners, officers, directors, employees, and agents, and other
designees of Landlord as the interest of such designees shall appear, as
additional insureds. All policies of Tenant's Insurance shall contain
endorsements that the insurer(s) shall give Landlord and its designees at least
30 days' advance written notice of any change, cancellation, termination or
lapse of insurance. Tenant shall provide Landlord with a certificate of
insurance evidencing Tenant's Insurance prior to the earlier to occur of the
Commencement Date or the date Tenant is provided with possession of the Premises
for any reason, and upon renewals at least 15 days prior to the expiration of
the insurance coverage. So long as the same is available at commercially
reasonable rates, Landlord shall maintain so called All Risk property insurance
on the Building at replacement cost value, as reasonably estimated by Landlord.
Except as specifically provided to the contrary, the limits of either party's'
insurance shall not limit such party's liability under this Lease.
XVI. Subrogation.
Notwithstanding anything in this Lease to the contrary, Landlord and
Tenant hereby waive and shall cause their respective insurance carriers to waive
any and all rights of recovery, claim, action or causes of action against the
other and their respective trustees, principals, beneficiaries, partners,
officers, directors, agents, and employees, for any loss or damage that may
occur to Landlord or Tenant or any party claiming by, through or under Landlord
or Tenant, as the case may be, with respect to Tenant's Property, the Building,
the Premises, any additions or improvements to the Building or Premises, or any
contents thereof, including all rights of recovery, claims, actions or causes of
action arising out of the negligence of Landlord or any Landlord Related Parties
or the negligence of Tenant or any Tenant Related Parties, which loss or damage
is (or would have been, had the insurance required by this Lease been carried)
covered by insurance.
XVII. Casualty Damage.
A. If all or any part of the Premises is damaged by fire or other
casualty, Tenant shall immediately notify Landlord in writing.
During any period of time that all or a material portion of the
Premises is rendered untenantable as a result of a fire or other
casualty, the Rent shall abate for the portion of the Premises
that is untenantable and not used by Tenant. Landlord shall have
the right to terminate this Lease if: (1) the Building shall be
damaged so that, in Landlord's reasonable judgment, substantial
alteration or reconstruction of the Building shall be required
(whether or not the Premises has been damaged); (2) Landlord is
not permitted by Law to rebuild the Building in substantially the
same form as existed before the fire or casualty; (3) the
Premises have been materially damaged and there is less than 2
years of the Term remaining on the date of the casualty; (4) any
Mortgagee requires that the insurance proceeds be applied to the
payment of the mortgage debt; or (5) a material uninsured loss to
the Building occurs. Landlord may exercise its right to terminate
this Lease by notifying Tenant in writing within 90 days after
the date of the casualty. If Landlord does not terminate this
Lease, Landlord shall commence and proceed with reasonable
diligence to repair and restore the Building and the Leasehold
Improvements (excluding any Alterations that were performed by
Tenant in violation of this Lease). However, in no event shall
Landlord be required to spend more than the insurance proceeds
received by Landlord. Landlord shall not be liable for any loss
or damage to Tenant's Property or to the business of Tenant
resulting in any way from the fire or other casualty or from the
repair and restoration of the damage. Landlord and Tenant hereby
waive the provisions of any Law relating to the matters addressed
in this Article, and agree that their respective rights for
damage to or destruction of the Premises shall be those
specifically provided in this Lease.
B. If all or any portion of the Premises shall be made untenantable
by fire or other casualty, Landlord shall, with reasonable
promptness, cause an architect or general contractor selected by
Landlord to provide Landlord and Tenant with a written estimate
of the amount of time required to substantially complete the
repair and restoration of the Premises and make the Premises
tenantable again, using standard working methods ("Completion
Estimate"). If the Completion Estimate indicates that the
Premises cannot be made tenantable within 270 days from the date
the repair and restoration is started, then regardless of
anything in Section XVII.A above to the contrary, either party
shall have the right to terminate this Lease by giving written
notice to the other of such election within 10 days after receipt
of the Completion Estimate. Tenant, however, shall not have the
right to terminate this Lease if the fire or casualty was caused
by the negligence or intentional misconduct of Tenant, Tenant
Related Parties or any of Tenant's transferees, contractors or
licensees.
C. The provisions of this Lease, including this Article XVII,
constitute an express agreement between Landlord and Tenant with
respect to any and all damage to, or destruction of, all or any
part of the Premises or the Property, and any Laws, including,
without limitation, Sections 1932(2) and 1933(4) of the
California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express
agreement between the parties, and any other Laws now or
hereinafter in effect, shall have no application to this Lease or
any damage or destruction to all or any part of the Premises or
the Property.
XVIII. Condemnation.
Either party may terminate this Lease if the whole or any material part
of the Premises shall be taken or condemned for any public or quasi-public use
under Law, by eminent domain or private purchase in lieu thereof (a "Taking").
Landlord shall also have the right to terminate this Lease if there is a Taking
of any portion of the Building or Property which would leave the remainder of
the Building unsuitable for use as an office building in a manner comparable to
the Building's use prior to the Taking. In order to exercise its right to
terminate the Lease, Landlord or Tenant, as the case may be, must provide
written notice of termination to the other within 45 days after the terminating
party first receives notice of the Taking. Any such termination shall be
effective as of the date the physical taking of the Premises or the portion of
the Building or Property occurs. If this Lease is not terminated, the Rentable
Square Footage of the Building, the Rentable Square Footage of the Premises and
Tenant's Pro Rata Share shall, if applicable, be appropriately adjusted. In
addition, Rent for any portion of the Premises taken or condemned shall be
abated during the unexpired Term of this Lease effective when the physical
taking of the portion of the Premises occurs. All compensation awarded for a
Taking, or sale proceeds, shall be the property of Landlord, any right to
receive compensation or proceeds being expressly waived by Tenant. However,
Tenant may file a separate claim at its sole cost and expense for Tenant's
Property and Tenant's reasonable relocation expenses, provided the filing of the
claim does not diminish the award which would otherwise be receivable by
Landlord. Tenant hereby waives any and all rights it might otherwise have
pursuant to Section 1265.130 of the California Code of Civil Procedure, or any
similar or successor Laws.
XIX. Events of Default.
Tenant shall be considered to be in default of this Lease upon the
occurrence of any of the following events of default:
A. Tenant's failure to pay when due all or any portion of the Rent,
if the failure continues for 3 days after written notice to
Tenant ("Monetary Default").
B. Tenant's failure (other than a Monetary Default) to comply with
any term, provision or covenant of this Lease, if the failure is
not cured within 10 days after written notice to Tenant. However,
if Tenant's failure to comply cannot reasonably be cured within
10 days, Tenant shall be allowed additional time (not to exceed
60 days) as is reasonably necessary to cure the failure so long
as: (1) Tenant commences to cure the failure within 10 days, and
(2) Tenant diligently pursues a course of action that will cure
the failure and bring Tenant back into compliance with the Lease.
However, if Tenant's failure to comply creates a hazardous
condition, the failure must be cured immediately upon notice to
Tenant. In addition, if Landlord provides Tenant with notice of
Tenant's failure to comply with any particular term, provision or
covenant of the Lease on 3 occasions during any 12 month period,
Tenant's subsequent violation of such term, provision or covenant
shall, at Landlord's option, be an incurable event of default by
Tenant.
C. Tenant or any Guarantor becomes insolvent, makes a transfer in
fraud of creditors or makes an assignment for the benefit of
creditors, or admits in writing its inability to pay its debts
when due.
D. The leasehold estate is taken by process or operation of Law.
E In the case of any ground floor or retail Tenant, Tenant does not
take possession of, or abandons or vacates all or any portion of
the Premises.
F. Tenant is in default beyond any notice and cure period under any
other lease or agreement with Landlord, including, without
limitation, any lease or agreement for parking.
XX. Remedies.
A. Upon the occurrence of any event or events of default under this
Lease, whether enumerated in Article XIX or not, Landlord shall
have the option to pursue any one or more of the following
remedies without any notice (except as expressly prescribed
herein) or demand whatsoever (and without limiting the generality
of the foregoing, Tenant hereby specifically waives notice and
demand for payment of Rent or other obligations and waives any
and all other notices or demand requirements imposed by
applicable law):
1. Terminate this Lease and Tenant's right to possession of the
Premises and recover from Tenant an award of damages equal
to the sum of the following:
(a) The Worth at the Time of Award of the unpaid
Rent which had been earned at the time of
termination;
(b) The Worth at the Time of Award of the amount
by which the unpaid Rent which would have
been earned after termination until the time
of award exceeds the amount of such Rent
loss that Tenant affirmatively proves could
have been reasonably avoided;
(c) 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 such Rent loss that Tenant
affirmatively proves could be reasonably
avoided;
(d) Any other amount necessary to compensate
Landlord for all the detriment either
proximately caused by Tenant's failure to
perform Tenant's obligations under this
Lease or which in the ordinary course of
things would be likely to result therefrom;
and
(e) All such other amounts in addition to or in
lieu of the foregoing as may be permitted
from time to time under applicable law.
The "Worth at the Time of Award" of the amounts
referred to in parts (a) and (b) above, shall be
computed by allowing interest at the lesser of a per
annum rate equal to: (i) the greatest per annum rate
of interest permitted from time to time under
applicable law, or (ii) the Prime Rate plus five
percent (5%). For purposes hereof, the "Prime Rate"
shall be the per annum interest rate publicly
announced as its prime or base rate by a federally
insured bank selected by Landlord in the State of
California. The "Worth at the Time of Award" of the
amount referred to in part (c), above, shall be
computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%);
2. Employ the remedy described in California Civil Code
ss. 1951.4 (Landlord may continue this Lease in
effect after Tenant's breach and abandonment and
recover Rent as it becomes due, if Tenant has the
right to sublet or assign, subject only to reasonable
limitations); or
3. Notwithstanding Landlord's exercise of the remedy
described in California Civil Code ss. 1951.4 in
respect of an event or events of default, at such
time thereafter as Landlord may elect in writing, to
terminate this Lease and Tenant's right to possession
of the Premises and recover an award of damages as
provided above in Paragraph XX.A.1.
B. The subsequent acceptance of Rent hereunder by Landlord shall
not be deemed to be a waiver of any preceding breach by Tenant
of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular Rent so accepted,
regardless of Landlord's knowledge of such preceding breach at
the time of acceptance of such Rent. No waiver by Landlord of
any breach hereof shall be effective unless such waiver is in
writing and signed by Landlord.
C. TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION
3275 OF THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (c)
AND 1179 OF THE CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY
AND ALL OTHER LAWS AND RULES OF LAW FROM TIME TO TIME IN
EFFECT DURING THE LEASE TERM PROVIDING THAT TENANT SHALL HAVE
ANY RIGHT TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING
ITS TERMINATION BY REASON OF TENANT'S BREACH. LANDLORD AND
TENANT HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY
EVICTION OR FORCIBLE ENTRY AND DETAINER ACTION OR SIMILAR
PROCEEDING BASED UPON, OR RELATED TO THE SUBJECT MATTER OF
THIS LEASE.
D. No right or remedy herein conferred upon or reserved to
Landlord is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given
hereunder or now or hereafter existing by agreement,
applicable law or in equity. In addition to other remedies
provided in this Lease, Landlord shall be entitled, to the
extent permitted by applicable law, to injunctive relief, or
to a decree compelling performance of any of the covenants,
agreements, conditions or provisions of this Lease, or to any
other remedy allowed to Landlord at law or in equity.
Forbearance by Landlord to enforce one or more of the remedies
herein provided upon an event of default shall not be deemed
or construed to constitute a waiver of such default.
E. This Article XX shall be enforceable to the maximum extent
such enforcement is not prohibited by applicable law, and the
unenforceability of any portion thereof shall not thereby
render unenforceable any other portion.
XXI. Limitation of Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) TO TENANT SHALL BE LIMITED
TO THE INTEREST OF LANDLORD IN THE PROPERTY. TENANT SHALL LOOK SOLELY TO
LANDLORD'S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD
AGAINST LANDLORD. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE
PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY. BEFORE FILING SUIT FOR AN
ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S)
(DEFINED IN ARTICLE XXVI BELOW) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES
(DEFINED IN ARTICLE XXVI BELOW) ON THE PROPERTY, BUILDING OR PREMISES, NOTICE
AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.
XXII. No Waiver.
Either party's failure to declare a default immediately upon its
occurrence, or delay in taking action for a default shall not constitute a
waiver of the default, nor shall it constitute an estoppel. Either party's
failure to enforce its rights for a default shall not constitute a waiver of its
rights regarding any subsequent default. Receipt by Landlord of Tenant's keys to
the Premises shall not constitute an acceptance or surrender of the Premises.
XXIII. Quiet Enjoyment.
Tenant shall, and may peacefully have, hold and enjoy the Premises,
subject to the terms of this Lease, provided Tenant pays the Rent and fully
performs all of its covenants and agreements. This covenant and all other
covenants of Landlord shall be binding upon Landlord and its successors only
during its or their respective periods of ownership of the Building, and shall
not be a personal covenant of Landlord or the Landlord Related Parties.
XXIV. Relocation.
Landlord, at its expense, at any time before or during the Term, may
relocate Tenant from the Premises to reasonably comparable space ("Relocation
Space") within the Building or adjacent buildings within the same project upon
60 days' prior written notice to Tenant. From and after the date of the
relocation, "Premises" shall refer to the Relocation Space into which Tenant has
been moved and the Base Rent and Tenant's Pro Rata Share shall be adjusted based
on the rentable square footage of the Relocation Space. Landlord shall pay
Tenant's reasonable costs for moving Tenant's furniture and equipment and
printing and distributing notices to Tenant's customers of Tenant's change of
address and one month's supply of stationery showing the new address.
XXV. Holding Over.
Except for any permitted occupancy by Tenant under Article VIII, if
Tenant fails to surrender the Premises at the expiration or earlier termination
of this Lease, occupancy of the Premises after the termination or expiration
shall be that of a tenancy at sufferance. Tenant's occupancy of the Premises
during the holdover shall be subject to all the terms and provisions of this
Lease and Tenant shall pay an amount (on a per month basis without reduction for
partial months during the holdover) equal to 150% of the greater of: (1) the sum
of the Base Rent and Additional Rent due for the period immediately preceding
the holdover; or (2) the fair market gross rental for the Premises as reasonably
determined by Landlord. No holdover by Tenant or payment by Tenant after the
expiration or early termination of this Lease shall be construed to extend the
Term or prevent Landlord from immediate recovery of possession of the Premises
by summary proceedings or otherwise. In addition to the payment of the amounts
provided above, if Landlord is unable to deliver possession of the Premises to a
new tenant, or to perform improvements for a new tenant, as a result of Tenant's
holdover and Tenant fails to vacate the Premises within 15 days after Landlord
notifies Tenant of Landlord's inability to deliver possession, or perform
improvements, Tenant shall be liable to Landlord for all damages, including,
without limitation, consequential damages, that Landlord suffers from the
holdover.
XXVI. Subordination to Mortgages; Estoppel Certificate.
Tenant accepts this Lease subject and subordinate to any mortgage(s),
deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising
upon the Premises, the Building or the Property, and to renewals, modifications,
refinancings and extensions thereof (collectively referred to as a "Mortgage").
The party having the benefit of a Mortgage shall be referred to as a
"Mortgagee". This clause shall be self-operative, but upon request from a
Mortgagee, Tenant shall execute a commercially reasonable subordination
agreement in favor of the Mortgagee. In lieu of having the Mortgage be superior
to this Lease, a Mortgagee shall have the right at any time to subordinate its
Mortgage to this Lease. If requested by a successor-in-interest to all or a part
of Landlord's interest in the Lease, Tenant shall, without charge, attorn to the
successor-in-interest. Landlord and Tenant shall each, within 10 days after
receipt of a written request from the other, execute and deliver an estoppel
certificate to those parties as are reasonably requested by the other (including
a Mortgagee or prospective purchaser). The estoppel certificate shall include a
statement certifying that this Lease is unmodified (except as identified in the
estoppel certificate) and in full force and effect, describing the dates to
which Rent and other charges have been paid, representing that, to such party's
actual knowledge, there is no default (or stating the nature of the alleged
default) and indicating other matters with respect to the Lease that may
reasonably be requested. Notwithstanding the foregoing, upon written request by
Tenant, Landlord will use reasonable efforts to obtain a non-disturbance
subordination and attornment agreement from Landlord's then current Mortgagee on
such Mortgagee's then current standard form of agreement. "Reasonable efforts"
of Landlord shall not require Landlord to incur any cost, expense or liability
to obtain such agreement, it being agreed that Tenant shall be responsible for
any fee or review costs charged by the Mortgagee. Upon request of Landlord,
Tenant will execute the Mortgagee's form of non-disturbance, subordination and
attornment agreement and return the same to Landlord for execution by the
Mortgagee, Landlord's failure to obtain a non-disturbance, subordination and
attornment agreement for Tenant shall have no effect on the rights, obligations
and liabilities of Landlord and Tenant or be considered to be a default by
Landlord hereunder.
XXVII. Attorneys' Fees.
If either party institutes a suit against the other for violation of or
to enforce any covenant or condition of this Lease, or if either party
intervenes in any suit in which the other is a party to enforce or protect its
interest or rights, the prevailing party shall be entitled to all of its costs
and expenses, including, without limitation, reasonable attorneys' fees.
XXVIII. Notice.
If a demand, request, approval, consent or notice (collectively
referred to as a "notice") shall or may be given to either party by the other,
the notice shall be in writing and delivered by hand or sent by registered or
certified mail with return receipt requested, or sent by overnight or same day
courier service at the party's respective Notice Address(es) set forth in
Article I, except that if Tenant has vacated the Premises (or if the Notice
Address for Tenant is other than the Premises, and Tenant has vacated such
address) without providing Landlord a new Notice Address, Landlord may serve
notice in any manner described in this Article or in any other manner permitted
by Law. Each notice shall be deemed to have been received or given on the
earlier to occur of actual delivery or the date on which delivery is refused,
or, if Tenant has vacated the Premises or the other Notice Address of Tenant
without providing a new Notice Address, 3 days after notice is deposited in the
U.S. mail or with a courier service in the manner described above. Either party
may, at any time, change its Notice Address by giving the other party written
notice of the new address in the manner described in this Article.
XXIX. Excepted Rights.
This Lease does not grant any rights to light or air over or about the
Building. Landlord excepts and reserves exclusively to itself the use of: (1)
roofs, (2) telephone, electrical and janitorial closets, (3) equipment rooms,
Building risers or similar areas that are used by Landlord for the provision of
Building services, (4) rights to the land and improvements below the floor of
the Premises, (5) the improvements and air rights above the Premises, (6) the
improvements and air rights outside the demising walls of the Premises, and (7)
the areas within the Premises used for the installation of utility lines and
other installations serving occupants of the Building. Landlord has the right to
change the Building's name or address. Landlord also has the right to make such
other changes to the Property and Building as Landlord deems appropriate,
provided the changes do not materially affect Tenant's ability to use the
Premises for the Permitted Use. Landlord shall also have the right (but not the
obligation) to temporarily close the Building if Landlord reasonably determines
that there is an imminent danger of significant damage to the Building or of
personal injury to Landlord's employees or the occupants of the Building. The
circumstances under which Landlord may temporarily close the Building shall
include, without limitation, electrical interruptions, hurricanes and civil
disturbances. A closure of the Building under such circumstances shall not
constitute a constructive eviction nor entitle Tenant to an abatement or
reduction of Rent.
XXX. Surrender of Premises.
At the expiration or earlier termination of this Lease or Tenant's
right of possession, Tenant shall remove Tenant's Property (defined in Article
XV) from the Premises, and quit and surrender the Premises to Landlord, broom
clean, and in good order, condition and repair, ordinary wear and tear and
damage by condemnation or other casualty for which Landlord is required to make
repairs hereunder excepted. Tenant shall also be required to remove the Required
Removables in accordance with Article VIII. If Tenant fails to remove any of
Tenant's Property within 2 days after the termination of this Lease or of
Tenant's right to possession, Landlord, at Tenant's sole cost and expense, shall
be entitled (but not obligated) to remove and store Tenant's Property. Landlord
shall not be responsible for the value, preservation or safekeeping of Tenant's
Property. Tenant shall pay Landlord, upon demand, the expenses and storage
charges incurred for Tenant's Property. In addition, if Tenant fails to remove
Tenant's Property from the Premises or storage, as the case may be, within 30
days after written notice, Landlord may deem all or any part of Tenant's
Property to be abandoned, and title to Tenant's Property shall be deemed to be
immediately vested in Landlord.
XXXI. Miscellaneous.
A. This Lease and the rights and obligations of the parties shall
be interpreted, construed and enforced in accordance with the
Laws of the State of California and Landlord and Tenant hereby
irrevocably consent to the jurisdiction and proper venue of
such state. If any term or provision of this Lease shall to
any extent be invalid or unenforceable, the remainder of this
Lease shall not be affected, and each provision of this Lease
shall be valid and enforced to the fullest extent permitted by
Law. The headings and titles to the Articles and Sections of
this Lease are for convenience only and shall have no effect
on the interpretation of any part of the Lease.
B. Tenant shall not record this Lease or any memorandum without
Landlord's prior written consent.
C. Landlord and Tenant hereby waive any right to trial by jury in
any proceeding based upon a breach of this Lease.
D. Whenever a period of time is prescribed for the taking of an
action by Landlord or Tenant, the period of time for the
performance of such action shall be extended by the number of
days that the performance is actually delayed due to strikes,
acts of God, shortages of labor or materials, war, civil
disturbances and other causes beyond the reasonable control of
the performing party ("Force Majeure"). However, events of
Force Majeure shall not extend any period of time for the
payment of Rent or other sums payable by either party or any
period of time for the written exercise of an option or right
by either party.
E. Landlord shall have the right to transfer and assign, in whole
or in part, all of its rights and obligations under this Lease
and in the Building and/or Property referred to herein, and
upon such transfer Landlord shall be released from any further
obligations hereunder, and Tenant agrees to look solely to the
successor in interest of Landlord for the performance of such
obligations.
F. Tenant represents that it has dealt directly with and only
with the Broker as a broker in connection with this Lease.
Tenant shall indemnify and hold Landlord and the Landlord
Related Parties harmless from all claims of any other brokers
claiming to have represented Tenant in connection with this
Lease. Landlord agrees to indemnify and hold Tenant and the
Tenant Related Parties harmless from all claims of any brokers
claiming to have represented Landlord in connection with this
Lease.
G. Tenant covenants, warrants and represents that: (1) each
individual executing, attesting and/or delivering this Lease
on behalf of Tenant is authorized to do so on behalf of
Tenant; (2) this Lease is binding upon Tenant; and (3) Tenant
is duly organized and legally existing in the state of its
organization and is qualified to do business in the State of
California. If there is more than one Tenant, or if Tenant is
comprised of more than one party or entity, the obligations
imposed upon Tenant shall be joint and several obligations of
all the parties and entities. Notices, payments and agreements
given or made by, with or to any one person or entity shall be
deemed to have been given or made by, with and to all of them.
H. Time is of the essence with respect to Tenant's exercise of
any expansion, renewal or extension rights granted to Tenant.
This Lease shall create only the relationship of landlord and
tenant between the parties, and not a partnership, joint
venture or any other relationship. This Lease and the
covenants and conditions in this Lease shall inure only to the
benefit of and be binding only upon Landlord and Tenant and
their permitted successors and assigns.
I. The expiration of the Term, whether by lapse of time or
otherwise, shall not relieve either party of any obligations
which accrued prior to or which may continue to accrue after
the expiration or early termination of this Lease. Without
limiting the scope of the prior sentence, it is agreed that
Tenant's obligations under Sections IV.A, IV.B., VIII, XIV,
XX, XXV and XXX shall survive the expiration or early
termination of this Lease.
J. Landlord has delivered a copy of this Lease to Tenant for
Tenant's review only, and the delivery of it does not
constitute an offer to Tenant or an option. This Lease shall
not be effective against any party hereto until an original
copy of this Lease has been signed by such party.
K. All understandings and agreements previously made between the
parties are superseded by this Lease, and neither party is
relying upon any warranty, statement or representation not
contained in this Lease. This Lease may be modified only by a
written agreement signed by Landlord and Tenant.
L. Tenant, within 15 days after request, shall provide Landlord
with a current financial statement and such other information
as Landlord may reasonably request in order to create a
"business profile" of Tenant and determine Tenant's ability to
fulfill its obligations under this Lease. Landlord, however,
shall not require Tenant to provide such information unless
Landlord is requested to produce the information in connection
with a proposed financing or sale of the Building. Upon
written request by Tenant, Landlord shall enter into a
commercially reasonable confidentiality agreement covering any
confidential information that is disclosed by Tenant.
M. Tenant acknowledges that Tenant has received the asbestos
notification letter attached as Exhibit F hereto pursuant to
California Health and Safety Code Sections 25915 et. seq. (as
amended from time to time, the "Connelly Act"), disclosing the
existence of asbestos in the Building. As part of Tenant's
obligations under this Lease, Tenant agrees to comply with the
Connelly Act, including providing copies of Landlord's
asbestos notification letter to all of Tenant's "employees"
and "owners", as those terms are defined in the Connelly Act.
XXXII. Entire Agreement.
This Lease and the following exhibits and attachments constitute the
entire agreement between the parties and supersede all prior agreements and
understandings related to the Premises, including all lease proposals, letters
of intent and other documents: Exhibit A (Outline and Location of Premises),
Exhibit B (Rules and Regulations), Exhibit C (Commencement Letter), Exhibit D
(Work Letter Agreement) and Exhibit E (Asbestos Notification).
Landlord and Tenant have executed this Lease as of the day and year
first above written.
LANDLORD:
120 MONTGOMERY ASSOCIATES, LLC, a California limited liability company
By: Cornerstone Holdings, LLC, a Delaware limited liability
company, its managing member
By: EOP Operating Limited Partnership, a Delaware
limited partnership, its sole member
By: Equity Office Properties Trust, a Maryland
real estate investment trust, its general
partner
By: _______________________
Name: _______________________
Title: _______________________
TENANT:
PLM FINANCIAL SERVICES, INC a Delaware corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
By: _____________________________
Name: _____________________________
Title: _____________________________
A-1
EXHIBIT A
OUTLINE AND LOCATION OF PREMISES
This Exhibit is attached to and made a part of the Lease dated as of
the _____ day of _____________, 2001, by and between 120 MONTGOMERY ASSOCIATES,
LLC, a California limited liability company ("Landlord") and PLM FINANCIAL
SERVICES, INC., a Delaware corporation ("Tenant") for space in the Building
located at 120 Montgomery Street, San Francisco, California.
B-3
EXHIBIT B
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply, where applicable, to
the Premises, the Building, the parking garage (if any), the Property and the
appurtenances. Capitalized terms have the same meaning as defined in the Lease.
1. Sidewalks, doorways, vestibules, halls, stairways and other similar
areas shall not be obstructed by Tenant or used by Tenant for any
purpose other than ingress and egress to and from the Premises. No
rubbish, litter, trash, or material shall be placed, emptied, or thrown
in those areas. At no time shall Tenant permit Tenant's employees to
loiter in Common Areas or elsewhere about the Building or Property.
2. Plumbing fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable
material shall be thrown or placed in the fixtures or appliances.
Damage resulting to fixtures or appliances by Tenant, its agents,
employees or invitees, shall be paid for by Tenant, and Landlord shall
not be responsible for the damage.
3. No signs, advertisements or notices shall be painted or affixed to
windows, doors or other parts of the Building, except those of such
color, size, style and in such places as are first approved in writing
by Landlord. All tenant identification and suite numbers at the
entrance to the Premises shall be installed by Landlord, at Tenant's
cost and expense, using the standard graphics for the Building. Except
in connection with the hanging of lightweight pictures and wall
decorations, no nails, hooks or screws shall be inserted into any part
of the Premises or Building except by the Building maintenance
personnel.
4. Landlord will provide and maintain in the first floor (main lobby) of
the Building an alphabetical directory board or other directory device
listing tenants, and no other directory shall be permitted unless
previously consented to by Landlord in writing.
5. Tenant shall not place any lock(s) on any door in the Premises or
Building without Landlord's prior written consent and Landlord shall
have the right to retain at all times and to use keys to all locks
within and into the Premises. A reasonable number of keys to the locks
on the entry doors in the Premises shall be furnished by Landlord to
Tenant at Tenant's cost, and Tenant shall not make any duplicate keys.
All keys shall be returned to Landlord at the expiration or early
termination of this Lease.
6. All contractors, contractor's representatives and installation
technicians performing work in the Building shall be subject to
Landlord's prior approval and shall be required to comply with
Landlord's standard rules, regulations, policies and procedures, which
may be revised from time to time.
7. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by Tenant of merchandise or materials requiring the
use of elevators, stairways, lobby areas or loading dock areas, shall
be restricted to hours designated by Landlord. Tenant shall obtain
Landlord's prior approval by providing a detailed listing of the
activity. If approved by Landlord, the activity shall be under the
supervision of Landlord and performed in the manner required by
Landlord. Tenant shall assume all risk for damage to articles moved and
injury to any persons resulting from the activity. If equipment,
property, or personnel of Landlord or of any other party is damaged or
injured as a result of or in connection with the activity, Tenant shall
be solely liable for any resulting damage or loss.
8. Landlord shall have the right to approve the weight, size, or location
of heavy equipment or articles in and about the Premises. Damage to the
Building by the installation, maintenance, operation, existence or
removal of Tenant's Property shall be repaired at Tenant's sole
expense.
9. Corridor doors, when not in use, shall be kept closed.
10. Tenant shall not: (1) make or permit any improper, objectionable or
unpleasant noises or odors in the Building, or otherwise interfere in
any way with other tenants or persons having business with them; (2)
solicit business or distribute, or cause to be distributed, in any
portion of the Building, handbills, promotional materials or other
advertising; or (3) conduct or permit other activities in the Building
that might, in Landlord's sole opinion, constitute a nuisance.
11. No animals, except those assisting handicapped persons, shall be
brought into the Building or kept in or about the Premises.
12. No inflammable, explosive or dangerous fluids or substances shall be
used or kept by Tenant in the Premises, Building or about the Property.
Tenant shall not, without Landlord's prior written consent, use, store,
install, spill, remove, release or dispose of, within or about the
Premises or any other portion of the Property, any asbestos-containing
materials or any solid, liquid or gaseous material now or subsequently
considered toxic or hazardous under the provisions of 42 U.S.C. Section
9601 et seq. or any other applicable environmental Law which may now or
later be in effect. Tenant shall comply with all Laws pertaining to and
governing the use of these materials by Tenant, and shall remain solely
liable for the costs of abatement and removal.
13. Tenant shall not use or occupy the Premises in any manner or for any
purpose which might injure the reputation or impair the present or
future value of the Premises or the Building. Tenant shall not use, or
permit any part of the Premises to be used, for lodging, sleeping or
for any illegal purpose.
14. Tenant shall not take any action which would violate Landlord's labor
contracts or which would cause a work stoppage, picketing, labor
disruption or dispute, or interfere with Landlord's or any other
tenant's or occupant's business or with the rights and privileges of
any person lawfully in the Building ("Labor Disruption"). Tenant shall
take the actions necessary to resolve the Labor Disruption, and shall
have pickets removed and, at the request of Landlord, immediately
terminate any work in the Premises that gave rise to the Labor
Disruption, until Landlord gives its written consent for the work to
resume. Tenant shall have no claim for damages against Landlord or any
of the Landlord Related Parties, nor shall the Commencement Date of the
Term be extended as a result of the above actions.
15. Tenant shall not install, operate or maintain in the Premises or in any
other area of the Building, electrical equipment that would overload
the electrical system beyond its capacity for proper, efficient and
safe operation as determined solely by Landlord. Tenant shall not
furnish cooling or heating to the Premises, including, without
limitation, the use of electronic or gas heating devices, without
Landlord's prior written consent. Tenant shall not use more than its
proportionate share of telephone lines and other telecommunication
facilities available to service the Building.
16. Tenant shall not operate or permit to be operated a coin or token
operated vending machine or similar device (including, without
limitation, telephones, lockers, toilets, scales, amusement devices and
machines for sale of beverages, foods, candy, cigarettes and other
goods), except for machines for the exclusive use of Tenant's
employees, and then only if the operation does not violate the lease of
any other tenant in the Building.
17. Bicycles and other vehicles are not permitted inside the Building or on
the walkways outside the Building, except in areas designated by
Landlord.
18. Landlord may from time to time adopt systems and procedures for the
security and safety of the Building, its occupants, entry, use and
contents. Tenant, its agents, employees, contractors, guests and
invitees shall comply with Landlord's systems and procedures.
19. Landlord shall have the right to prohibit the use of the name of the
Building or any other publicity by Tenant that in Landlord's sole
opinion may impair the reputation of the Building or its desirability.
Upon written notice from Landlord, Tenant shall refrain from and
discontinue such publicity immediately.
20. Tenant shall not canvass, solicit or peddle in or about the Building or
the Property.
21. Neither Tenant nor its agents, employees, contractors, guests or
invitees shall smoke or permit smoking in the Common Areas, unless the
Common Areas have been declared a designated smoking area by Landlord,
nor shall the above parties allow smoke from the Premises to emanate
into the Common Areas or any other part of the Building. Landlord shall
have the right to designate the Building (including the Premises) as a
non-smoking building.
22. Landlord shall have the right to designate and approve standard window
coverings for the Premises and to establish rules to assure that the
Building presents a uniform exterior appearance. Tenant shall ensure,
to the extent reasonably practicable, that window coverings are closed
on windows in the Premises while they are exposed to the direct rays of
the sun.
23. Deliveries to and from the Premises shall be made only at the times, in
the areas and through the entrances and exits designated by Landlord.
Tenant shall not make deliveries to or from the Premises in a manner
that might interfere with the use by any other tenant of its premises
or of the Common Areas, any pedestrian use, or any use which is
inconsistent with good business practice.
24. The work of cleaning personnel shall not be hindered by Tenant after
5:30 P.M., and cleaning work may be done at any time when the offices
are vacant. Windows, doors and fixtures may be cleaned at any time.
Tenant shall provide adequate waste and rubbish receptacles to prevent
unreasonable hardship to the cleaning service.
C-1
EXHIBIT C
COMMENCEMENT LETTER
(EXAMPLE)
Date ______________________
Tenant PLM FINANCIAL SERVICES, INC.
Address ______________________
Re: Commencement Letter with respect to that certain Lease dated as of the
_____ day of __________, 2001, by and between 120 MONTGOMERY
ASSOCIATES, LLC, a California limited liability company, as Landlord,
and PLM FINANCIAL SERVICES, INC., a Delaware corporation, as Tenant,
for 3,563 rentable square feet on the 13th floor of the Building
located at 120 Montgomery Street, San Francisco, California.
Dear __________________:
In accordance with the terms and conditions of the above referenced
Lease, Tenant accepts possession of the Premises and agrees:
1. The Commencement Date of the Lease is _______________________;
2. The Termination Date of the Lease is ________________________.
Please acknowledge your acceptance of possession and agreement to the
terms set forth above by signing all 3 counterparts of this Commencement Letter
in the space provided and returning 2 fully executed counterparts to my
attention.
Sincerely,
- -----------------------------------
Property Manager
Agreed and Accepted:
Tenant: PLM FINANCIAL SERVICES, INC.
By: ______________________
Name: ______________________
Title: ______________________
Date: ______________________
D-2
EXHIBIT D
WORK LETTER
This Exhibit is attached to and made a part of the Lease dated as of
the _____ day of _____________, 2001, by and between 120 MONTGOMERY ASSOCIATES,
LLC, a California limited liability company ("Landlord") and PLM FINANCIAL
SERVICES, INC., a Delaware corporation ("Tenant") for space in the Building
located at 120 Montgomery Street, San Francisco, California.
As used in this Workletter, the "Premises" shall be deemed to mean the Premises,
as initially defined in the attached Lease.
1. Landlord, at its sole cost and expense (subject to the terms and
provisions of Section 2 below) shall perform improvements to the
Premises in accordance with the following work list (the "Worklist")
using Building standard methods, materials and finishes. The
improvements to be performed in accordance with the Worklist are
hereinafter referred to as the "Landlord Work". Landlord shall enter
into a direct contract for the Landlord Work with a general contractor
selected by Landlord. In addition, Landlord shall have the right to
select and/or approve of any subcontractors used in connection with the
Landlord Work.
WORK LIST
(a) Landlord shall paint Premises with building standard methods and
materials; and (b) Landlord shall steam clean the carpet in the
Premises with building standard methods.
2. All other work and upgrades, subject to Landlord's approval, shall be
at Tenant's sole cost and expense, plus any applicable state sales or
use tax thereon, payable upon demand as Additional Rent. Tenant shall
be responsible for any Tenant Delay in completion of the Premises
resulting from any such other work and upgrades requested or performed
by Tenant.
3. Landlord's supervision or performance of any work for or on behalf of
Tenant shall not be deemed to be a representation by Landlord that such
work complies with applicable insurance requirements, building codes,
ordinances, laws or regulations or that the improvements constructed
will be adequate for Tenant's use.
4. This Exhibit shall not be deemed applicable to any additional space
added to the Premises at any time or from time to time, whether by any
options under the Lease or otherwise, or to any portion of the original
Premises or any additions to the Premises in the event of a renewal or
extension of the original Term of the Lease, whether by any options
under the Lease or otherwise, unless expressly so provided in the Lease
or any amendment or supplement to the Lease.
Landlord and Tenant have executed this exhibit as of the day and year
first above written.
LANDLORD:
120 MONTGOMERY ASSOCIATES, LLC, a California limited liability company
By: Cornerstone Holdings, LLC, a Delaware limited liability
company, its managing member
By: EOP Operating Limited Partnership, a Delaware
limited partnership, its sole member
By: Equity Office Properties Trust, a Maryland
real estate investment trust, its general
partner
By: _______________________
Name: _______________________
Title: _______________________
TENANT:
PLM FINANCIAL SERVICES, INC., a Delaware corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
By: _____________________________
Name: _____________________________
Title: _____________________________
F-2
EXHIBIT E
ASBESTOS NOTIFICATION
This Exhibit is attached to and made a part of the Lease dated as of
the _____ day of _____________, 2001, by and between 120 MONTGOMERY ASSOCIATES,
LLC, a California limited liability company ("Landlord") and PLM FINANCIAL
SERVICES, INC., a Delaware ("Tenant") for space in the Building located at 120
Montgomery Street, San Francisco, California.
In accordance with California law (Health & Safety Code Section 25915), we are
writing to provide you with information concerning the presence of
asbestos-containing construction materials ("ACM") in your building. This notice
describes the location of these materials and requests your assistance in
following proper handling procedures and in reporting any deterioration in the
condition of these materials that you may notice.
In 1987, Versar Inc., a professional asbestos consultant, was retained to
determine whether ACM was present in the Building. the survey was completed in
May 1987 and concluded that asbestos was present in fireproofing sprayed on the
structural steel, and in some of the floor and ceiling tiles, acoustical
plaster, pipe insulation, cooling tower panels, and equipment insulation located
in the Building.
The Versar Study concluded that sprayed-on structural steel fireproofing
containing some asbestos was present on the first floor of the Building. Some
ACM was also present in insulation around pipes and ducts and on the exterior of
equipment in the mechanical areas of the Building. Outside of the mechanical
equipment areas, most pipes and ducts are concealed within shafts, wet columns
and sub-ceilings. Only insulated water pipes and the insulated fire system pipe
are found outside of shafts and only the latter is accessible to the general
Building population. Finally, some of the floor tiles contain asbestos and there
may be some ceiling tiles and some plaster and lath on core ceilings that might
be considered ACM. The removal of ACM identified on the 1st, 16th, 21st, 5th and
7th floors has been completed.
Because any alterations in the Building could disturb ACM and possibly release
asbestos fibers into the air, the inhalation of which could present a health
hazard, we must require that you contact the Building Management Office at (415)
981-5127, for detailed asbestos handling procedures and to obtain our approval
prior to beginning such projects. This includes major alterations, but might
also include such activities as drilling holes, installing electrical,
telecommunication or computer lines, sanding floors, or removing ceiling tiles.
In many cases, such activities will not affect asbestos materials, but you must
check with us in advance, just in case. In addition, please contact the Building
Management Office if you notice any deterioration in the condition of the ACM.
It is common knowledge that exposure to asbestos may cause development of
certain diseases, including cancer and lung disease. However, because we are not
physicians, scientists or industrial hygienists, we have no special knowledge of
the health impact of exposure to the asbestos located in the Building. If you
have any concerns about the health effects of asbestos exposure, we urge you to
contact the State or Federal Occupational Safety and Health Administration, the
California State Department of Health Services or the San Francisco County
Department of Health Services for more information.
The results of all of our existing asbestos surveys, test results and monitoring
data, including descriptions of the laboratory testing methods employed, are
available for your review and photocopying in the Building Management Office,
Suite 1280, during regular working hours upon request. If you would like to see
these materials, please make an appointment with the building manager at (415)
981-5127, at least two working days in advance. Because we are not experts in
the area of asbestos testing and abatement, we make no warranties as to the
contents of the consultants' reports or the methods employed by the consultants
or the accuracy of the survey or test results or any other matters.
Please be aware that you will be responsible for complying with all legal
requirements for notifying your own employees, contractors, subtenants and
agents, if any, of the information contained in this notice.
IN WITNESS WHEREOF, Landlord and Tenant have executed this exhibit as
of the day and year first above written.
LANDLORD:
120 MONTGOMERY ASSOCIATES, LLC, a California limited liability company
By: Cornerstone Holdings, LLC, a Delaware limited liability
company, its managing member
By: EOP Operating Limited Partnership, a Delaware
limited partnership, its sole member
By: Equity Office Properties Trust, a Maryland
real estate investment trust, its general
partner
By: _______________________
Name: _______________________
Title: _______________________
TENANT:
PLM FINANCIAL SERVICES, INC., a Delaware corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
By: _____________________________
Name: _____________________________
Title: _____________________________