Exhibit 10.11
OFFICE BUILDING LEASE
Regency Center
San Rafael, California
OFFICE BUILDING LEASE
TABLE OF CONTENTS
Page
1. PARTIES...................................................................1
2. PREMISES..................................................................1
3. TERM; OPTION TO EXTEND....................................................1
4. POSSESSION................................................................2
5. RENT; RENT ESCALATIONS....................................................3
6. SECURITY DEPOSIT..........................................................3
7. OPERATING EXPENSE ADJUSTMENTS.............................................3
8. USE.......................................................................5
9. COMPLIANCE WITH LAW; HAZARDOUS SUBSTANCES.................................5
10. ALTERATIONS AND ADDITIONS................................................6
11. REPAIRS..................................................................6
12. LIENS....................................................................7
13. ASSIGNMENT AND SUBLETTING................................................7
14. HOLD HARMLESS............................................................8
15. SUBROGATION..............................................................8
16. INSURANCE................................................................8
17. SERVICES AND UTILITIES...................................................9
18. PROPERTY TAXES..........................................................10
19. RULES AND REGULATIONS...................................................10
20. HOLDING OVER............................................................10
21. ENTRY BY LANDLORD.......................................................10
22. RECONSTRUCTION..........................................................11
23. DEFAULT.................................................................11
24. REMEDIES IN DEFAULT.....................................................12
25. EMINENT DOMAIN..........................................................12
26. ESTOPPEL CERTIFICATE....................................................13
27. PARKING.................................................................13
28. COMMUNICATIONS INSTALLATION.............................................13
29. AUTHORITY OF PARTIES; LIMITATION........................................13
30. GENERAL PROVISIONS......................................................13
31. BROKERS.................................................................15
32. RIGHT OF FIRST OFFER....................................................15
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OFFICE BUILDING LEASE
1. PARTIES. This Lease, dated for reference purposes only June ___,
2001, is made by and between The Joseph and Eda Pell Revocable Trust (herein
called "Landlord") and Fair, Isaac and Company, Incorporated, a Delaware
corporation (herein called "Tenant").
2. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord that certain office space (herein called the "Premises") indicated
on Exhibits "A-1," "A-2" and "A-3" attached hereto and incorporated herein by
this reference, comprising a portion of the first floor, the entire second floor
and a portion of the third floor of that certain building commonly known as
Regency Center, located at 100 Smith Ranch Road, San Rafael, California (the
"Building"). For purposes of this Lease, the Building includes all exterior
common areas, including the parking facilities serving the Building. For the
purposes of this Lease, the Premises are agreed to contain 74,456 rentable
square feet (11,875; 35,261 and 27,320 for the portions of the Premises located
on the first, second and third floors, respectively) and 68,174 usable square
feet (10,642; 33,140 and 27,392 for the portions of the Premises located on the
first, second and third floors, respectively).
This Lease is subject to the terms, covenants and conditions
herein set forth and Tenant covenants as a material part of the consideration
for this Lease to keep and perform each and all of said terms, covenants and
conditions and that this Lease is made upon the condition of said performance.
3. TERM; OPTION TO EXTEND.
A. The term of this Lease shall be for a period of ten (10)
years and three (3) months, commencing on December 1, 2001 ("Term Commencement
Date"), and shall expire on the last day of February, 2012 (the "Term Expiration
Date").
B. Provided this Lease is then in effect and Tenant is then
occupying the entirety of the Premises, Landlord grants to Tenant the option to
extend the term of this Lease as to all or such lesser portion of the Premises
as may be designated in Tenant's exercise notice (provided that (1) all portions
of the Premises so retained by Tenant shall constitute a contiguous unit of
space, (2) Tenant shall release all of the space on a given floor before
releasing space on another floor, (3) the space so released on a floor Tenant
intends to continue to occupy shall be of a commercially reasonable size and
configuration, and (4) Tenant shall be responsible, at its sole cost, for the
construction of any necessary demising walls, corridors and fire separations)
for one (1) five- (5-) year period commencing March 1, 2012 upon each and all of
the following terms and conditions:
(i) Tenant gives to Landlord and Landlord receives
notice of the exercise of the option to extend this Lease for such additional
term no later than twelve (12) months prior to the time that the option term
would commence if the option were exercised, time being of the essence. If said
notification of the exercise of such option is not so given and received, such
option shall automatically expire.
(ii) At the time said written notification of
exercise of such option is given and received, or at the time such option term
is to commence, Tenant shall not be in default under any of the material
obligations of this Lease to be performed by Tenant and this Lease shall not
have previously terminated nor terminated prior to the commencement of the
option term.
(iii) All of the terms and conditions of this Lease,
except where specifically modified by this option, shall apply.
(iv) the monthly rent for each month of the option
term shall be calculated as follows:
The rent payable by Tenant during the option term
shall be the "Fair Market Rental Value" of the Premises (as defined below) at
the commencement date of the option term. There shall be an annual increase in
the rent during the option term in an amount equal to four percent (4%) per
annum. Anything herein to the contrary notwithstanding, if the rent in effect
for the Premises for the month of February, 2012 (the "Final Base Rent") is
higher
than the Fair Market Rental Value for the Premises at the commencement of the
option term, then the rent for the Premises for the option term shall be the
lesser of: (i) the Final Base Rent, and (ii) one hundred five percent (105%) of
the Fair Market Rental Value. If Landlord and Tenant cannot agree on the Fair
Market Rental Value of the Premises for the first year of the option term within
forty-five (45) days after the Tenant has notified Landlord of its exercise of
the option, Landlord and Tenant shall each select, within forty-five (45) days
of such notification, an appraiser who must be a qualified M.A.I. appraiser to
determine said Fair Market Rental Value. If one party fails to so designate an
appraiser within the time required, the determination of Fair Market Rental
Value of the one appraiser who has been designated by the other party hereto
within the time required shall be binding upon both parties. The appraisers
shall submit their determinations of Fair Market Rental Value to both parties
within thirty (30) days after their selection. If the difference between the two
determinations is ten percent (10%) or less of the higher appraisal, then the
average between the two determinations shall be the Fair Market Rental Value of
the Premises. If said difference is greater than ten percent (10%), then the two
appraisers shall within twenty (20) days of the date that the later submittal is
submitted to the parties designate a third appraiser who must also be a
qualified M.A.I. appraiser. The sole responsibility of the third appraiser will
be to determine which of the determinations made by the first two (2) appraisers
is most accurate. The third appraiser shall have no right to propose a middle
ground or any modification of either of the determinations made by the first two
appraisers. The third appraiser's choice shall be submitted to the parties
within thirty (30) days after his or her selection. Such determination shall
bind both of the parties and shall establish the Fair Market Rental Value of the
Premises. Each party shall pay for their own appraiser and shall pay an equal
share of the fees and expenses of the third appraiser.
Fair Market Rental Value for purpose of this Lease
shall mean the then prevailing rent for premises comparable in size, quality,
and orientation to the Premises, located in buildings comparable in size to, and
in the general vicinity of, the Building in which the Premises are located,
leased on terms comparable to the terms contained in this Lease.
4. POSSESSION.
A. Tenant is presently in possession of the Premises under the
terms of three (3) existing Office Building Leases, dated as of July 1, 1993 (as
amended) with respect to the third floor (the "Third Floor Lease"), July 10,
1993 (as amended) with respect to the second floor (the "Second Floor Lease")
and October 11, 1993 (as amended) with respect to the first floor (the "First
Floor Lease," and collectively with the Second Floor Lease and the Third Floor
Lease, the "Prior Leases"), and, on the Term Commencement Date, Tenant shall
remain in possession of the Premises in their then "As Is" condition pursuant to
the terms and provisions of this Lease, which shall supersede the Prior Leases
in their entirety as of the Term Commencement Date (except for Section 7 (with
respect to the right to reconcile Direct Expenses with respect to the on-account
payments made by Tenant through November 30, 2000); Section 12 (with respect to
Tenant's obligation to remove any mechanics liens resulting from work performed,
materials furnished or obligations incurred by Tenant prior to November 30,
2001); Section 14 (with respect to any indemnity claims); Section 18 (with
respect to Tenant's obligation to pay any personal property taxes accruing prior
to December 1, 2001) and Section 29 (with respect to attorneys' fees relating to
matters surviving termination of the Prior Leases) of the Prior Leases which
expressly survive the Expiration Dates thereof); provided that Landlord shall
make available to Tenant an amount not to exceed Sixty-Seven Thousand Nine
Hundred Seventy-Five Dollars ($67,975.00) (the "Allowance"), to be used by
Tenant in connection with the repainting and recarpeting of the western portion
of the Premises located on the third floor. Landlord shall fund the Allowance,
at any time prior to July 1, 2003, within thirty (30) days of receipt of paid
invoices or other reasonable documentary evidence indicating the amounts
incurred by Tenant in performing such work.
B. On the Term Expiration Date or upon earlier termination of
this Lease, Tenant shall deliver to Landlord possession of the Premises or
portion thereof together with all improvements, alterations or additions thereto
in substantially the same condition as received or first installed, reasonable
wear and tear excepted. Tenant may, upon the termination of this Lease, remove
its trade fixtures and personal property, repairing any damage caused by such
removal.
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5. RENT; RENT ESCALATIONS.
A. Tenant agrees to pay to Landlord as rental for the
Premises, each month during the term, without prior notice or demand, an amount
equal to Two Hundred Sixty Thousand Five Hundred Ninety-Six and 00/100 Dollars
($260,596.00) (the "Base Rent"). The Base Rent shall be payable on or before the
first day of the first full calendar month of the term hereof and a like sum on
or before the first day of each and every successive calendar month thereafter
during the term hereof, except that the first month's Base Rent shall be paid
upon mutual execution of this Lease. Base Rent for any period during the term
which is for less than one (1) month shall be a prorated portion of the monthly
installment herein, based upon a thirty (30) day month. Base Rent shall be paid
to Landlord without deduction or offset in lawful money of the United States of
America, which shall be legal tender at the time of payment, at 100 Smith Ranch
Road, Suite 325, San Rafael, California 94903, or to such other place as
Landlord may from time to time designate in writing.
The Base Rent for the Premises shall be adjusted as
of the first anniversary of the Term Commencement Date and on each annual
anniversary thereafter by an amount equal to one hundred four percent (104%) of
the Base Rent payable during the prior twelve (12) month period.
6. SECURITY DEPOSIT.
As of the date of this Lease, Landlord is presently holding,
pursuant to the terms of the Prior Leases, security deposits (the "Deposit")
aggregating One Hundred Eight Thousand Seven Hundred Sixteen Dollars
($108,716.00). Concurrently with Tenant's execution and delivery of this Lease,
Tenant shall deliver to Landlord an amount equal to Ninety-One Thousand Two
Hundred Eighty-Four Dollars ($91,284.00) in order to bring the aggregate balance
of the Deposit to Two Hundred Thousand Dollars ($200,000.00). From and after the
Term Commencement Date, the Deposit shall be held by Landlord as security for
the faithful performance by Tenant of all the terms, covenants, and conditions
of this Lease to be kept and performed by Tenant during the term hereof. If
Tenant defaults with respect to any provision of this Lease including, but not
limited to, the provisions relating to the payment of rent, Landlord may (but
shall not be required to) use, apply or retain all or any part of this Deposit
for the payment of any rent or any other sum in default, or for the payment of
any reasonable amount which Landlord may spend or become obligated to spend by
reason of Tenant's default to compensate Landlord for any other loss or damage
which Landlord may suffer by reason of Tenant's default. If any portion of said
Deposit is so used or applied, Tenant shall, within five (5) days after written
demand therefor, deposit cash with Landlord in an amount sufficient to restore
the Deposit to its original amount and Tenant's failure to do so shall be a
material breach of this Lease. Landlord shall not be required to keep this
Deposit separate from its general fund and Tenant shall not be entitled to
interest on such Deposit. If Tenant shall fully and faithfully perform every
provision of this Lease to be performed by it, the Deposit or any balance
thereof shall be returned to Tenant (or, at Landlord's option, to the last
assignee of Tenant's interest hereunder) at the expiration of the Lease term. In
the event of termination of Landlord's interest in this Lease, Landlord shall
transfer said Deposit to Landlord's successor in interest.
7. OPERATING EXPENSE ADJUSTMENTS. For the purposes of this Article, the
following terms are defined as follows:
Base Year The Base Year shall be 2002.
Comparison Year Each calendar year of the term after
the Base Year.
Direct Expenses All direct costs of operation and
maintenance, as determined by
standard accounting practices,
including the following costs by way
of illustration, but not be limited
to: real property taxes and
assessments; rent taxes, gross
receipt taxes, (whether assessed
against the Landlord or assessed
against the Tenant and collected by
the Landlord, or both); water and
sewer charges; insurance premiums;
utilities; janitorial services;
labor; costs incurred in the
management of the Building; air
conditioning & heating; elevator
maintenance; supplies; materials;
equipment and
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tools; and maintenance, costs and
upkeep of all parking and common
areas. ("Direct Expenses" shall not
include depreciation on the Building
of which the Premises are a part or
equipment therein, loan payments,
executive salaries, real estate
broker's commissions or the cost of
electricity provided to the Premises
and to space leased by other tenants
of the Building in excess of Eleven
Cents ($.11) per usable square foot
per month.)
If the Direct Expenses paid or incurred by the Landlord for
the Comparison Year on account of the operation or maintenance of the Building
of which the Premises are a part are in excess of the Direct Expenses paid or
incurred for the Base Year, then the Tenant shall pay seventy-one and 582/1000
percent (71.582%) of the increase. This percentage is that portion of the total
rentable area of the Building occupied by the Tenant hereunder. Landlord shall
endeavor to give to Tenant on or before the first day of March of each year
following the respective Comparison Year a statement of the increase in rent
payable by Tenant hereunder, but failure by Landlord to give such statement by
said date shall not constitute a waiver by Landlord of its right to require an
increase in rent. Upon receipt of the statement for the first Comparison Year,
Tenant shall pay in full the total amount of the increase due for the first
Comparison Year and, in addition for the then current year, the amount of any
such increase shall be used as an estimate for said current year and this amount
shall be divided into twelve (12) equal monthly installments and Tenant shall
pay to Landlord, concurrently with the regular monthly rent payment next due
following the receipt of such statement, an amount equal to one (1) monthly
installment multiplied by the number of months from January in the calendar year
in which said statement is submitted to the month of such payment, both months
inclusive. Subsequent installments shall be payable concurrently with the
regular monthly rent payments for the balance of that calendar year and shall
continue until the next Comparison Year's statement is rendered. If the next or
any succeeding Comparison Year results in a greater increase in Direct Expenses,
then upon receipt of a statement from Landlord, Tenant shall pay a lump sum
equal to such total increase in Direct Expenses over the Base Year, less the
total of the monthly installments to be paid for the next year, following said
Comparison Year, shall be adjusted to reflect such increase. If in any
Comparison Year the Tenant's share of Direct Expenses be less than the preceding
year, then upon receipt of Landlord's statement, any overpayment made by Tenant
on the monthly installment basis provided above shall be credited towards the
next monthly rent falling due and the estimated monthly installments of Direct
Expenses to be paid shall be adjusted to reflect such lower Direct Expenses for
the most recent Comparison Year.
Although the term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant's share of Direct
Expenses for the year in which this Lease terminates, Tenant shall immediately
pay any increase due over the estimated expenses paid and conversely any
overpayment made in the event said expenses decrease shall be immediately
rebated by Landlord to Tenant.
Notwithstanding anything contained in this Article to the
contrary, the rent payable by Tenant hereunder shall in no event be less than
the rent specified in Article 5 above.
During the term of this Lease (including any renewals of
extensions thereof), the management costs for the Building shall not exceed
three percent (3%) of Landlord's gross rental income for the Building.
Landlord shall keep full, accurate, and separate books of
account and records covering all Direct Expenses, which books of accounts and
records shall accurately reflect total Direct Expenses, and Landlord's billings
to Tenant for Direct Expense Adjustments.
Tenant shall have the right to protest any charge to Tenant by
Landlord for Direct Expense Adjustments, provided that said protest is made
within thirty (30) days after receipt of Landlord's notice of such charge. In
the event that Tenant shall protest, Tenant shall be entitled to audit
Landlord's books of account, records, and other pertinent data regarding Direct
Expenses. The audit shall be limited to the determination of direct Expenses and
charges to Tenant for Direct Expense Adjustments and shall be conducted during
normal business hours. If the audit shows that there has been an overpayment by
Tenant, the overpayment shall be immediately due and repayable by Landlord to
Tenant.
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Anything in this Lease to the contrary notwithstanding, Tenant
shall pay its share of increases in real estate taxes within ten (10) days after
Landlord furnishes copies of invoices marked "Paid" for such taxes, which
invoices may be furnished to Tenant no more often than semi-annually.
8. USE. Tenant shall use the Premises for general office purposes and
shall not use or permit the Premises to be used for any other purposes without
the prior written consent of Landlord. General office purposes shall be defined
for purposes of this Lease to include computer rooms of any size required by
Tenant. Tenant shall not do or permit anything to be done in or about the
Premises nor bring or keep anything therein which will in any way increase the
existing rate of or affect any fire or other insurance upon the Building or any
of its contents, or cause cancellation of any insurance policy covering said
Building or any part thereof or any of its contents. Tenant shall not do or
permit anything to be done in or about the Premises which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Building on injure or annoy them or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises. Tenant shall not
commit or suffer to be committed any waste in or upon the Premises.
9. COMPLIANCE WITH LAW; HAZARDOUS SUBSTANCES.
A. Tenant shall not use the Premises or permit anything to be
done in or about the Premises which will in any way conflict with any law,
statute, ordinance or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances and governmental rules now
in force or which may hereafter be in force, and with the requirements of any
board of fire insurance underwriters or other similar bodies now or hereafter
constituted, relating to, or affecting the condition, use or occupancy of the
Premises, excluding changes not related to or affected by Tenant's improvements
or acts. The judgment of any court of competent jurisdiction or the admission of
Tenant in any action against Tenant, whether Landlord be a party thereto or not,
that Tenant has violated any law, statute, ordinance or governmental rule,
regulation or requirement, shall be conclusive of that fact as between the
Landlord and Tenant.
B. Tenant shall not cause or permit the escape, disposal or
release of any biologically or chemically active or other hazardous substances
or materials (a "Release"). Tenant shall not allow the storage or use of such
substances or materials in any manner not sanctioned by law or by the highest
standards prevailing in the industry for the storage and use of such substances
or materials, nor allow to be brought into the Building any such materials or
substances except to use in the ordinary course of Tenant's business, and then
only after written notice is given to Landlord of the identity of such
substances or materials. If any lender or governmental agency requires testing
to ascertain whether there has been any Release, then the reasonable costs
thereof shall be reimbursed by Tenant to Landlord upon demand as additional
charges if it is determined that the Release was caused by Tenant or its
employees, agents or contractors. In addition Tenant shall execute affidavits,
representations and the like from time to time at Landlord's reasonable request
concerning Tenant's best knowledge and belief regarding the presence of
hazardous substances or materials on the Premises. In all events, Tenant shall
indemnify Landlord, its agents and employees from and against any and all
clean-up costs and expenses, losses, damages, claims, or liability for any
damage to any property or injury, illness or death of any person from any
Release on the Premises occurring while Tenant is in possession, or elsewhere if
caused by Tenant or persons acting under Tenant. The covenants contained herein
shall survive the expiration or earlier termination of this Lease. California
Health and Safety Code Section 25359.7(b) requires any tenant of real property
who knows, or has reasonable cause to believe, that any release of a hazardous
substance has come to be located on or beneath such real property to give
written notice of such condition to the owner. Tenant shall comply with the
requirements of Section 25359.7(b) and any successor statute thereto and with
all other statutes, laws, ordinances, rules, regulations and orders of
governmental authorities with respect to hazardous substances.
10. ALTERATIONS AND ADDITIONS. Tenant shall not make or suffer to be
made any alterations, additions or improvements to or of the Premises or any
part thereof without the written consent of Landlord first had and obtained. Any
alterations, additions or improvements to or of said Premises including, but not
limited to, wallcovering, paneling, air conditioning units
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and built-in cabinet work, but excepting movable furniture and trade fixtures,
shall on the expiration of the term become a part of the realty and belong to
the Landlord and shall be surrendered with the Premises. In the event Landlord
consents to the making of any alterations, additions or improvements to the
Premises by Tenant, the same shall be made by Tenant at Tenant's sole cost and
expense, and any contractor or persons, selected by the Tenant to make the same
must first be approved in writing by the Landlord. Such approval shall not be
unreasonably withheld. Upon the expiration or sooner termination of the term
hereof, Tenant shall, upon written demand by Landlord, which shall be given at
the time Landlord approves the tenant improvement work, at Tenant's sole cost
and expense, forthwith and with all due diligence, remove any alterations,
additions, or improvements made by Tenant, designated by Landlord to be removed,
and Tenant shall, forthwith and with all due diligence at its sole cost and
expense, repair any damage to the Premises caused by such removal.
11. REPAIRS.
A. By taking possession of the Premises, Tenant shall be
deemed to have accepted the Premises as being in good, sanitary order, condition
and repair. Tenant shall, at Tenant's sole cost and expense, keep the Premises
and every part thereof in good condition and repair. Tenant shall upon the
expiration or sooner termination of this Lease hereof surrender the Premises to
the Landlord in good condition, ordinary wear and tear and damage from causes
beyond the reasonable control of Tenant excepted. Except as specifically
provided in this Lease, Landlord shall have no obligation whatsoever to alter,
remodel, improve, repair, decorate or paint the Premises or any part thereof
once the initial tenant improvements are completed and the parties hereto affirm
that Landlord has made no representations to Tenant respecting the condition of
the Premises or the Building except as specifically herein set forth.
B. Notwithstanding the provisions of Section 11.A. above,
Landlord shall promptly and adequately repair and maintain the structural
portions of the Building, including the basic plumbing, air conditioning,
heating and electrical systems installed or furnished by Landlord unless such
maintenance and repairs are caused in part or in whole by the act, neglect,
fault or omission of any duty by the Tenant, its agents, servants, employees or
invitees, in which case Tenant shall pay to Landlord the reasonable cost of such
maintenance and repairs. Landlord shall not be liable for any failure to make
any such repairs or to perform any maintenance unless such failure shall persist
for an unreasonable time after written notice of the need of such repairs or
maintenance is given to Landlord by Tenant. Except as provided in Article 22
hereof, there shall be no abatement of rent and no liability of Landlord by
reason of any injury to or interference with Tenant's business arising from the
making of any repairs, alterations or improvements in or to any portion of the
Building or the Premises, or in or to fixtures, appurtenances and equipment
therein. Tenant waives the right to make repairs at Landlord's expense under any
law, statute or ordinance now or hereafter in effect, (including the provisions
of California Civil Code Sections 1941 and 1942 and any successor sections or
statutes of a similar nature); provided, however, if Landlord fails to perform
any repair work required of Landlord with respect to the Premises pursuant to
this Section 11B, within thirty (30) days after Landlord receives Tenant's
written notice of the need for such repair (or such period of time in excess of
thirty (30) days as is reasonably necessary based upon the nature of the
required work), then Tenant shall be permitted to make such repairs, using
contractors reasonably approved by Landlord, provided (i) Tenant first gives
Landlord an additional two (2) business days prior written notice indicating
that Tenant intends to undertake such repair, and (ii) Landlord fails to
commence such repair within such two (2) business day period. If Tenant performs
any repair as permitted under this Section 11B, Landlord agrees to reimburse
Tenant for the reasonable, actual and documented costs of such repair performed
by Tenant, but without any offset rights against rent or any other amounts
payable by Tenant under this Lease. Any repair work done by Tenant shall be done
in accordance with the provisions of this Lease, including without limitation,
Article 12, keeping the Premises free from liens.
12. LIENS. Tenant shall keep the Premises and the real property in
which the Premises are situated free from any liens arising out of any work
performed, materials furnished or obligations incurred by Tenant. Landlord may
require, at Landlord's sole option, that Tenant shall provide to Landlord, at
Tenant's sole cost and expense, a lien and completion bond in an amount equal to
one and one-half (1 1/2 ) times any and all estimated cost of any improvements,
additions or alteration in the Premises to insure Landlord against any liability
for mechanics' and materialmen's liens and to insure completion of the work.
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13. ASSIGNMENT AND SUBLETTING.
A. Tenant shall not either voluntarily or by operation of law,
assign, transfer, mortgage, pledge, or encumber this Lease or any interest
therein, and shall not sublet the Premises or any part thereof, or any right or
privilege appurtenant thereto, or suffer any other person (the employees,
agents, servants and invitees of Tenant excepted) to occupy or use the Premises
or any portion thereof, without the written consent of Landlord first had and
obtained, which consent shall not be unreasonably withheld. In the event Tenant
desires to assign this Lease or any interest therein or sublet all or part of
the Premises, Tenant shall give Landlord written notice thereof, which notice
shall include (i) the name of the proposed assignee, subtenant or occupant
("Transferee"), (ii) reasonable financial information regarding the Transferee,
(iii) a description of the Transferee's business to be carried on in the
Premises, and (iv) the terms of the assignment or sublease and a description of
the portion of the Premises to be affected. Tenant shall also provide Landlord
such additional information regarding the Transferee or the proposed assignment
or sublease as Landlord may reasonably request.
B. Notwithstanding the foregoing, Tenant shall have the right
to assign or sublet the Premises, or a portion thereof, to a wholly owned
affiliated company or subsidiary, without the Landlord's consent. Tenant shall
be required, however, to give written notice to Landlord in advance of such
assignment or sublet and to prepare assignment or sublet agreements on forms
that are reasonably satisfactory to Landlord. In no event shall such assignment
or sublet release Tenant from its obligations under the terms of this Lease.
C. Consent to one assignment, subletting, occupation or use by
any other person shall not be deemed to a consent to any subsequent assignment,
subletting, occupation or use by another person. Any assignment or subletting
without such consent shall be void, and shall, at the option of the Landlord,
constitute a default under this Lease.
D. In the event Tenant desires to assign this Lease or sublet
the Premises for a period in excess of five (5) years (or, if there are less
than five (5) years remaining in the term, for the entire remaining term of this
Lease), Landlord shall have the option, in Landlord's sole and absolute
discretion, exercisable by giving notice to Tenant at any time within twenty
(20) days after Landlord's receipt of Tenant's notice to assign or sublet, to
terminate this Lease as to the portion of the Premises which Tenant desires to
assign or sublease (the "Space") as of the date on which Tenant desires to do
so, in which event Tenant shall be relieved of all further obligations hereunder
as to such Space as of the date of Landlord's notice.
E. In the event Landlord consents to an assignment or
subletting, fifty percent (50%) of any sums or other economic consideration
received by Tenant as a result of such assignment or subletting (except
reasonable leasing commissions and rental or other payments received which are
attributable to the amortization of the cost of tenant improvements made to the
Space by Tenant, at Tenant's cost) whether denominated rent or otherwise, which
exceed in the aggregate the total sums which Tenant is obligated to pay Landlord
under this Lease (prorated as to any sublease to reflect obligations allocable
to that portion of the Premises subject to such sublease) shall be payable to
Landlord as additional rent under this Lease, without affecting or reducing any
other obligation of Tenant hereunder. Tenant shall deliver to Landlord a
statement within thirty (30) days after the end of each calendar year in which
any part of the Term occurs specifying as to such calendar year, and within
thirty (30) days after the expiration or earlier termination of the Term,
specifying with respect to the elapsed portion of the calendar year in which
such expiration or termination occurs, each sublease and assignment in effect
during the period covered by such statement and, (i) the date of its execution
and delivery, the number of square feet of the rentable area demised thereby,
and the term thereof; and (ii) a computation showing the amounts (if any) paid
and payable by Tenant to Landlord pursuant to this Section 13E with respect to
such sublease or assignment.
14. HOLD HARMLESS.
A. Tenant shall indemnify and hold harmless Landlord against
and from any and all claims arising from Tenant's use of Premises for the
conduct of its business or from any activity, work or other thing done,
permitted or suffered by the Tenant in or about the Premises, and shall further
indemnify and hold harmless Landlord against and from any and all claims arising
from any breach or default in the performance of any obligation on Tenant's part
to be performed under the terms of this Lease, or arising from any act or
negligence of the tenant, or
7
any officer, agent, employee, guest or invitee of Tenant, and from and against
all cost, attorney's fees, expenses and liabilities incurred in or about any
such claim or any action or proceeding brought thereon and in any case, action
or proceeding brought against Landlord by reason of any such claim. Tenant upon
notice from Landlord shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord. Tenant as a material part of the
consideration to Landlord hereby assumes all risk of damage to property or
injury to persons, in, upon or about the Premises, from any cause other than
Landlord's negligence or willful act, and Tenant hereby waives all claims in
respect thereof against Landlord.
B. Landlord or its agents shall not be liable for any damage
to property entrusted to employees of the Building, nor for loss or damage to
any property by theft or otherwise, nor for any injury to or damage to persons
or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak dampness or any other cause
whatsoever, unless caused by or due to the negligence or willful acts of
Landlord, its agents, servant or employees. Landlord or its agents shall not be
liable for interference with the light or other incorporeal hereditaments, less
of business by Tenant, nor shall Landlord be liable for any latent defect in the
Premises or in the Building. Tenant shall give prompt notice to Landlord in case
of fire or accidents in the Premises or in the Building or of defects therein or
in the fixtures or equipment.
15. SUBROGATION. Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss insured by fire,
extended coverage and other property insurance policies existing for the benefit
of the respective parties. Each party shall obtain any special endorsements, if
required by their insurer to evidence compliance with the aforementioned waiver.
16. INSURANCE. (a) Tenant shall, at Tenant's expense, obtain and keep
in force during the term of this Lease, (1) a policy of commercial general
liability insurance insuring Landlord and Tenant against any liability arising
out of the ownership, use, occupancy or maintenance of the Premises and all
areas appurtenant thereto with a minimum combined single limit of bodily injury,
personal injury and property damage coverage of Two Million Dollars
($2,000,000), (2) workers compensation insurance as required by law, and (3)
Special Form insurance on Tenant's personal property, equipment, furniture and
fixtures. The limit of said insurance shall not, however, limit the liability of
the Tenant hereunder. Tenant may carry said insurance under a blanket policy,
providing, however, said insurance by Tenant shall have a Landlord as Additional
Insured endorsement attached thereto. If Tenant shall fail to procure and
maintain said insurance, Landlord may, but shall not be required to, procure and
maintain same, but at the expense of Tenant.
All the insurance required under this Lease shall:
A. Be issued by insurance companies authorized to do business
in the State of California, with a financial rating of at least an A++XV status
as rated in the most recent edition of Best's Insurance Reports.
B. Be issued as a primary policy.
C. Contain an endorsement requiring thirty (30) days' written
notice from the insurance company to both parties and to Landlord's lender
before cancellation or change in the coverage, scope, or amount of any policy.
Each policy, and a certificate of the policy, together with
evidence of payment of premiums, shall be deposited with Landlord at the
commencement of the term, and on renewal of the policy not less than twenty (20)
days before expiration of the term of the policy.
(b) Landlord, at its cost (subject to the terms of
Section 4.7), shall maintain (a) commercial general liability insurance,
including contractual liability coverage, with a minimum combined single limit
of bodily injury, personal injury and property damage coverage of Two Million
Dollars ($2,000,000.00), insuring against all liability of Landlord and its
authorized representatives arising out of or in connection with Landlord's
ownership of the Building; and (b) Special Form insurance providing coverage for
repair or replacement of the Building core and shell and all tenant improvements
in amounts no less extensive than the scope of casualty insurance carried by
owners of similar first-class office
8
buildings in Marin County California. Landlord may satisfy its obligations with
respect to the insurance it is required to maintain hereunder by means of
"blanket" and "excess liability" insurance policies.
17. SERVICES AND UTILITIES.
A. Provided that Tenant is not in default hereunder, Landlord
agrees to furnish to the Premises five- (5-) day per week janitorial service.
Landlord shall also maintain and keep lighted, heated and air conditioned during
reasonable hours of generally recognized business days, the common entries,
common corridors, common stairs and toilet rooms in the Building of which
Premises are a part. Landlord shall not be liable for, and Tenant shall not be
entitled to, any reduction of rental by reason of Landlord's failure to furnish
any of the foregoing when such failure is caused by accident, breakage, repairs,
strikes, lockouts or other labor disturbances or labor disputes of any
character, or by any other cause, similar or dissimilar, beyond the reasonable
control of Landlord. Landlord shall not be liable under any circumstances for a
loss of or injury to property, however occurring, through or in connection with
or incidental to failure to furnish any of the foregoing. Landlord shall use its
commercially reasonable efforts to operate the Building in a manner reasonably
intended to maximize operating efficiency and economy to a standard consistent
with other comparable office buildings in Marin County.
B. Tenant shall have twenty-four- (24-) hour per day, seven-
(7-) day per week access to its Premises.
C. Landlord shall provide Tenant a monthly allowance of $.11
per usable square foot in the Premises (that is, $1,306.25; $878.71 and
$3,005.20 for the portions of the Premises located on the first, second and
third floors of the Building, respectively) for Tenant's electrical service.
This allowance is included in the Base Rent as defined in Article 5 of this
Lease. Landlord and Tenant recognize that Tenant's electrical service shall cost
in excess of Eleven Cents ($.11) per usable square foot per month due to
Tenant's heavy electrical and air conditioning requirements, and Tenant shall
pay any such excess costs for electrical service.
D. The hours of operation of the heating and air conditioning
system for the Building are as follows:
Monday through Friday: 7:00 a.m. to 6:00 p.m.
Saturdays: 8:00 a.m. to 3:00 p.m.
E. In the event Tenant requires the operation of the heating
and air conditioning system beyond the normal hours of operation for the
Building, Tenant shall notify the Building manager in advance of the required
extended hour usage, and the Building manager shall program the heating and air
conditioning system to operate during the time period requested by Tenant.
F. In the event Tenant shall request that an override
mechanism be installed during the term of this Lease, an override mechanism
shall be installed on the heating and air conditioning system which services the
Premises. The cost of this mechanism shall be paid by the Tenant at the time of
the installation. This mechanism shall allow Tenant to have control of the
heating and air conditioning system for the Premises in hours other than the
normal Building hours.
Along with the override mechanism, an hourly meter shall be
attached to the override mechanism which shall measure Tenant's use of the
heating and air conditioning system beyond the normal Building hours. On a
monthly basis, Landlord shall charge Tenant for this usage by multiplying the
number of hours used by the per hour charge for operating the heating and air
conditioning system which shall be determined by Landlord's electrical engineer
and heating and air conditioning contractor.
18. PROPERTY TAXES. Tenant shall pay, or cause to be paid, before
delinquency, any and all taxes levied or assessed and which become payable
during the term hereof upon all Tenant's leasehold improvements, equipment,
furniture, fixtures and personal property located in the Premises; except that
which has been paid for by Landlord, and is the standard of the Building. In the
event any or all of the Tenant's leasehold improvements, equipment, furniture,
fixtures and personal property shall be assessed and taxed with the Building,
Tenant shall pay to
9
Landlord its share of such taxes within ten (10) days after delivery to Tenant
by Landlord of a statement in writing setting forth the amount of such taxes
applicable to Tenant's property.
19. RULES AND REGULATIONS. Tenant shall faithfully observe and comply
with the reasonable rules and regulations for the Building that Landlord shall
from time to time promulgate. A copy of the current Rules and Regulations for
the Building is attached hereto as Exhibit B. Landlord reserves the right from
time to time to make all reasonable modifications to said rules. The additions
and modifications to those rules shall be binding upon Tenant upon delivery of a
copy of them to Tenant. Landlord shall not be responsible for the nonperformance
of any said rules by any other tenants or occupants. The rules and regulations
shall be applied equally to all tenants occupying the Building.
20. HOLDING OVER. If Tenant remains in possession after the expiration
or sooner termination of this Lease, all of the terms, covenants and agreements
hereof shall continue to apply and bind Tenant so long as Tenant remains in
possession insofar as the same are applicable, except that if Tenant remains in
possession without Landlord's written consent (regardless of whether Landlord
accepts rent payments in a lesser amount during such holdover period), the Base
Rent shall be one hundred twenty-five percent (125%) of the Base Rent payable
for the last month of the term, prorated on a daily basis for each day that
Tenant remains in possession, and Tenant shall indemnify Landlord against any
and all claims, losses and liabilities for damages resulting from failure to
surrender possession, including, without limitation, any claims made by any
succeeding tenant. If Tenant remains in possession with Landlord's written
consent, such tenancy shall be from month to month, terminable by either party
on not less than thirty (30) days' written notice.
21. ENTRY BY LANDLORD. Landlord reserves and shall at any and all times
and upon not less than twenty-four (24) hours prior telephone notice except in
case of emergency, have the right to enter the Premises, inspect the same,
supply janitorial service and any other service to be provided by Landlord to
Tenant hereunder, to submit said Premises to prospective purchasers or tenants,
to post notices of non-responsibility, and to alter, improve or repair the
Premises and any portion of the Building of which the Premises are a part that
Landlord may deem necessary or desirable, without abatement of rent and may for
that purpose erect scaffolding and other necessary structures where reasonably
required by the character of the work to be performed, always providing that the
entrance to the Premises shall not be blocked thereby, and further providing
that the business of the Tenant shall not be interfered with unreasonably.
Tenant hereby waives any claim for damages or for any injury or inconvenience to
or interference with Tenant's business any loss of occupancy or quiet enjoyment
of the Premises, and any other loss occasioned thereby. For each of the
aforesaid purposes, Landlord shall at all times have and retain a key with which
to unlock all of the doors in, upon and about the Premises, excluding Tenant's
vaults, safes and files, and specific, secured, sensitive and confidential
offices and Landlord shall have the right to use any and all means which
Landlord may deem proper to open said doors in any emergency, in order to obtain
entry to the Premises without liability to Tenant except for any failure to
exercise due care for Tenant's property. Any entry to the Premises obtained by
Landlord by any of said means, or otherwise shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction of Tenant from the Premises or any portion thereof.
22. RECONSTRUCTION.
A. In the event the Premises or the Building of which the
Premises are a part are damaged by fire or other perils covered by Special Form
insurance, Landlord agrees to forthwith repair the same (which repairs shall
include damage to the Building core and shell and all tenant improvements), and
this Lease shall remain in full force and effect, except that Tenant shall be
entitled to a proportionate reduction of the rent while such repairs are being
made, such proportionate reduction to be based upon the extent to which the
making of such repairs shall materially interfere with the business carried on
by Tenant in the Premises. If the damage is due to the fault or neglect of
Tenant or its employees, there shall be no abatement of rent.
B. In the event the Premises or the Building of which the
Premises are a part are damaged as a result of any cause other than the perils
covered by fire or extended coverage insurance, then Landlord shall forthwith
repair the same provided the extent of the destruction be less than thirty-three
(33%) of the then full replacement cost of the Premises or the Building of which
the Premises are a part. In the event the destruction of the Premises or the
Building is to
10
an extent greater than thirty-three (33%) of the full replacement cost, then
Landlord shall have the option (1) to repair or restore such damage, this Lease
continuing in full force and effect, but the rent to be proportionately reduced
as hereinabove in this Article provided; or (2) give notice to Tenant at any
time within sixty (60) days after such damage terminating this Lease as of the
date specified in such notice, which date shall be no less than thirty (30) and
no more than sixty (60) days after the giving of such notice. In the event of
giving such notice, this Lease shall expire and all interest of the Tenant in
the Premises shall terminate on the date so specified in such notice and the
Rent, reduced by a proportionate amount, based upon the extent, if any, to which
such damage materially interfered with the business carried on by the Tenant in
the Premises, shall be paid up to date of such termination.
C. Notwithstanding anything to the contrary contained in this
Article 22, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore any damage to the Premises resulting from any casualty
covered under this Article 22 which occurs during the last twelve (12) months of
the term of this Lease or any extension thereof.
D. Tenant shall repair any injury or damage by fire or other
cause, and make any repairs to or replacements of Tenant's trade fixtures,
equipment, furniture or personal property. Landlord shall have no obligation to
make any such repairs or replacements.
E. Except for abatement of rent as provided above, the Tenant
shall not be entitled to any compensation or damages from Landlord for loss of
the use of the whole or any part of the Premises, Tenant's personal property or
any inconvenience or annoyance occasioned by such damage, repair, reconstruction
or restoration.
23. DEFAULT. The occurrence of any or more of the following events
shall constitute a default and breach of this Lease by Tenant:
A. The vacating or abandonment of the Premises by Tenant,
except in cases when Tenant is current with all rental payments.
B. The failure by Tenant to make any payment of rent or any
other payment required to be made by Tenant hereunder, as and when due, where
such failure shall continue for a period of ten (10) days after written notice
thereof by Landlord to Tenant.
C. The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
the Tenant, other than described in Sections 23.A. and 23.B. above, where such
failure shall continue for a period of thirty (30) days after written notice
thereof by Landlord to Tenant; provided, however, that if the nature of Tenant's
default is such that more than thirty (30) days are reasonably required for its
cure, then Tenant shall not be deemed to be in default if Tenant commences such
cure within said thirty (30) day period and thereafter diligently prosecutes
such cure to completion.
D. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors, or the filing by or against Tenant of
a petition to have Tenant adjudged a bankrupt, or a petition or reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days); or
the appointment of a trustee or a receiver to take possession of substantially
all of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within thirty (30) days; or
the attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interests in this Lease,
where such seizure is not discharged in thirty (30) days.
24. REMEDIES IN DEFAULT. In the event of a default by Tenant, Landlord,
at any time thereafter, may give a written termination notice to Tenant, and on
the date specified in such notice (which shall be not less than three (3) days
after the giving of such notice), Tenant's right to possession shall terminate
and this Lease shall terminate, unless on or before such date all sums
identified in such three (3) day notice have been paid by Tenant and all other
breaches of this Lease by Tenant at the time existing shall have been fully
remedied to the satisfaction of Landlord. If Landlord terminates this Lease
pursuant to the provisions of this Section, Landlord shall have all the rights
and remedies of a landlord provided by Section 1951.2 of the California Civil
Code or any successor code section. Upon such termination, in addition to any
other rights and remedies to which Landlord may be entitled under applicable
law, Landlord may recover
11
from Tenant: (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 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 of this
Lease after the time of award exceeds the amount of such rent loss that Tenant
proves could be reasonably avoided; and (d) any other reasonable amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom. The "worth at the
time of award" of the amounts referred to in clauses (a) and (b) above shall be
computed by allowing interest at the lesser of (i) twelve percent (12%) per
annum, or (ii) the highest rate permitted by applicable law. The worth at the
time of award of the amount referred to in clause (c) above shall be computed by
discounting such amount at a rate equal to the discount rate of the Federal
Reserve Board of San Francisco at the time of award plus one percent (1%). If
Tenant has breached this Lease and abandoned the Premises, Landlord may elect to
exercise its rights pursuant to California Civil Code Section 1951.4 and to
continue this Lease in effect for so long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all its rights and
remedies under this Lease, including the right to recover the rent as it becomes
due under this Lease. Acts of maintenance or preservation or efforts to relet
the Premises or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease shall not constitute a termination
of Tenant's right to possession. No act of either party or its authorized
representatives shall constitute acceptance of a surrender of the Premises
unless that intent is specifically acknowledged in a writing signed by both
parties.
25. EMINENT DOMAIN. If more than twenty-five (25%) percent of the
Premises shall be taken or appropriated by any public or quasi-public authority
under the power of eminent domain, either party hereto shall have the right, at
its option, to terminate this Lease, and Landlord shall be entitled to any and
all income, rent, award or any interest therein whatsoever which may be paid or
made in connection with such public or quasi-public use or purpose, and Tenant
shall have no claim against Landlord for the value of any unexpired term of this
Lease. If either less than or more than twenty-five (25%) percent of the
Premises is taken, and neither party elects to terminate as herein provided, the
rental thereafter to be paid shall be equitably reduced. If any part of the
Building other than the Premises may be so taken or appropriated, Landlord shall
have the right at its option to terminate this Lease and shall be entitled to
the entire award as above provided. Notwithstanding the foregoing, Tenant shall
be entitled to that portion of any condemnation award made specifically on
account of Tenant's relocation expenses, increased rental costs, improvements
contracted at Tenant's expense or disruption of Tenant's business.
26. ESTOPPEL CERTIFICATE. At any time and from time to time, but in no
event on less than ten (10) days prior written request by Landlord, Tenant shall
execute, acknowledge and deliver to Landlord, promptly upon request, a
certificate certifying: (a) that Tenant has accepted the Premises (or, if Tenant
has not done so, that Tenant has not accepted the Premises, and specifying the
reasons therefor); (b) the commencement and expiration dates of this Lease; (c)
whether there are then existing any defaults by Landlord in the performance of
its obligations under this Lease (and, if so, specifying the same); (d) that
this Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect, as modified, and
stating the date and nature of each modification); (e) the capacity of the
person executing such certificate, and that such person is duly authorized to
execute the same on behalf of Tenant; (f) the date, if any, to which rent and
other sums payable hereunder have been paid; (g) that no notice has been
received by Tenant of any default which has not been cured, except as to
defaults specified in the certificate; (h) the amount of any security deposit
and prepaid rent; and (i) such other matters as may be reasonably requested by
Landlord. Any such certificate may be relied upon by any prospective purchaser,
mortgagee or beneficiary under any deed of trust affecting the Building or any
part thereof.
27. PARKING. Tenant shall have the right to use, in common with other
tenants or occupants of the Building, the parking facilities of the Building.
28. COMMUNICATIONS INSTALLATION. Tenant has installed certain
communications equipment on the roof of the Building. On or before the Term
Expiration Date or earlier termination of this Lease, Tenant, at Tenant's sole
cost and expense, shall remove such
12
communications equipment and shall, forthwith and with all due diligence, repair
any damage to the Premises or the Building caused by such removal.
29. AUTHORITY OF PARTIES; LIMITATION.
A. Authority. Each individual executing this Lease on behalf
of either party represents and warrants that he or she is duly authorized to
execute and deliver this Lease on behalf of such party.
B. Limitation of Liability. It is understood and agreed that
any recovery made upon any claim by Tenant against Landlord shall be limited
solely to Landlord's ownership interest of Landlord in the Building, and
furthermore, Tenant expressly waives any and all rights to proceed against the
other assets of Landlord, or against any trustee, employee, partner,
shareholder, director or agent of Landlord. Nothing in this Lease imposes any
obligation on Tenant to be responsible or liable for, and Landlord releases
Tenant from any liability for, consequential damages suffered by Landlord.
30. GENERAL PROVISIONS.
A. Plats and Riders. Clauses, plats and riders, if any, signed
by the Landlord and the Tenant and endorsed on or affixed to this Lease are by
this reference made a part hereof.
B. Waiver. The waiver by Landlord of any term, covenant or
condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition on any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptances 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 the Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of the acceptance of
such rent.
C. Notices. All notices and demands which may or are to be
required or permitted to be given by either party to the other hereunder shall
be in writing. All notices and demands by the Landlord to the Tenant shall be
sent by United States Mail, postage prepaid, addressed to the Tenant at 200
Smith Ranch Road, San Rafael, California 94903, Attention: General Counsel, or
to such other places as Tenant may from time to time designate in a notice to
the Landlord. All notices and demands by the Tenant to the Landlord shall be
sent by United States Mail, postage prepaid, addressed to the Landlord at 100
Smith Ranch Road, Suite 325, San Rafael, California 94903, or to such other
person or place as the Landlord may from time to time designate in a notice to
the Tenant.
D. Joint Obligation. If there be more than one Tenant the
obligations hereunder imposed upon Tenants shall be joint and several.
E. Marginal Headings. The marginal headings and titles to the
Articles of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
F. Time. Except with respect to the delivery of the Premises
to Tenant, time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
G. Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
H. Recordation. Neither Landlord nor Tenant shall record this
Lease or a short form memorandum hereof without the prior written consent of the
other party.
I. Quiet Possession. Upon Tenant paying the rent reserved
hereunder and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant shall
have quiet possession of the Premises for the entire term hereof, subject to all
the provisions of this Lease.
J. Hazardous Materials. Landlord hereby represents that, to
the best of Landlord's actual knowledge, there are no hazardous or toxic
materials on the real property on
13
which the Building and Regency I are located, nor, to the best of Landlord's
actual knowledge, have any hazardous or toxic materials been removed from such
real property. Notwithstanding the foregoing, Tenant has been advised and is
aware that property adjacent to the Building has previously been used as a
sanitary landfill.
K. Late Charges. Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or of a sum due from Tenant shall not be
received by Landlord or Landlord's designee within ten (10) days after said
amount is past due, then Tenant shall pay to Landlord a late charge equal to
five (5%) percent of such overdue amount. The parties hereby agree that such
late charges represent a fair and reasonable estimate of the cost that Landlord
will incur by reason of the late payment by Tenant. Acceptance of such late
charges by Landlord shall in no event constitute a waiver of Tenant's default
with respect to such overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies granted hereunder.
L. Prior Agreements. This Lease contains all of the agreements
of the parties hereto with respect to any matter covered or mentioned in this
Lease, and no prior agreements or understanding pertaining to any such matters
shall be effective for any purpose. No provision of this Lease may be amended or
added to except by an agreement in writing signed by the parties hereto or their
respective successors in interest. This Lease shall not be effective or binding
on any party until fully executed by both parties hereto.
M. Inability to Perform. This Lease and the obligations of the
Tenant hereunder shall not be affected or impaired because the Landlord is
unable to fulfill any of its obligations hereunder or is delayed in doing so, if
such inability or delay is caused by reason of strike, labor troubles, acts of
God, or any other cause beyond the reasonable control of the Landlord.
N. Attorneys' Fees. In the event of any action or proceeding
brought by either party against the other under this Lease the prevailing party
shall be entitled to recover all costs and expenses including the fees of its
attorneys in such action or proceeding in such amount as the court may adjudge
reasonable as attorneys' fees.
O. Sale of Premises by Landlord. In the event of any sale of
the Building, Landlord shall be and is hereby entirely freed and relieved of all
liability under any and all of its covenants and obligations contained in or
derived from this Lease arising out of any act, occurrence or omission occurring
after the consummation of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser to have assumed and agreed to carry out any and all of the
covenants and obligations of the Landlord under this Lease.
P. Subordination and Attornment. Upon request of the Landlord,
Tenant will in writing subordinate its rights hereunder to the lien of any first
mortgage or deed of trust to any bank, insurance company or other lending
institution, now or hereafter in force against the real property and Building of
which the Premises are a part, and upon any buildings hereafter placed upon the
real property of which the Premises are a part, and to all advances made or
hereafter to be made upon the security thereof. Notwithstanding such
subordination, neither Tenant's right to quiet possession of the Premises nor
this Lease shall be disturbed or affected if Tenant is not in default hereunder
and so long as Tenant shall pay the rent and observe and perform all of the
provisions of this Lease, unless this Lease is otherwise terminated pursuant to
its terms.
Q. Foreclosure. In the event any proceedings are brought for
foreclosure, or in the event of the exercise of power of sale under any mortgage
or deed of trust made by the Landlord covering the Premises, the Tenant shall
attorn to the purchaser upon any such foreclosure or sale and recognize such
purchaser as the Landlord under this Lease.
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R. Name. Tenant shall not use the name of the Building or of
the development in which the Building is situated and is a part for any purpose
other than as an address of the business to be conducted by the Tenant in the
Premises.
S. Separability. Any provision of this Lease which shall prove
to be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof and such other provision shall remain in full force and
effect.
T. Cumulative Remedies. No remedy or election hereunder shall
be deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
U. Choice of Law. This Lease shall be governed by the laws of
the State of California.
V. Signs and Auctions. Tenant shall not place any sign upon
the Premises or the Building or conduct any auction thereon without Landlord's
prior written consent, provided, however, that Landlord hereby approves all
identifying signage in place at the Building as of the date of this Lease.
W. Operating Policies. During the Term of this Lease, Landlord
shall operate and maintain the Building in a manner reasonably consistent with
first-class office buildings located in Marin County.
31. BROKERS. Tenant warrants that it has had no dealings with any real
estate brokers or agents in connection with the negotiation of this Lease and
Tenant knows no real estate broker or agent who is entitled to a commission in
connection with this Lease.
32. RIGHT OF FIRST OFFER.
A. Exercise of Right.
(i) If at any time any space in the Building
(excluding the Premises) is Available (as hereinafter defined), or Landlord
reasonably believes the same is to become Available (any such space being
hereinafter referred to as the "Expansion Space"), Landlord shall deliver notice
thereof to Tenant (each an "Expansion Notice") setting forth a description of
such Expansion Space, the rentable square footage of such Expansion Space,
Landlord's determination of the Expansion Space Fair Market Value (as
hereinafter defined) for such Expansion Space and the date Landlord anticipates
that such Expansion Space will become available for leasing (the "Anticipated
Expansion Space Commencement Date"). Provided all of the conditions precedent
set forth in Section 32A(iii) are satisfied by Tenant, Tenant shall have the
option (each an "Expansion Option"), exercisable by Tenant delivering
irrevocable notice to Landlord (each an "Acceptance Notice") within fifteen (15)
business days following Landlord's delivery of the applicable Expansion Notice,
time being of the essence, to lease the Expansion Space that is the subject of
such Expansion Notice. An Expansion Option may be exercised only with respect to
all of the Expansion Space that is the subject of an Expansion Notice. If Tenant
fails to timely give an Acceptance Notice, Tenant shall be deemed to have
rejected Landlord's offer to lease the applicable Expansion Space and Landlord
shall have no further obligation and Tenant shall have no further rights with
respect to such Expansion Space during the Term.
(ii) (a) "Available" shall mean that at the time in
question (x) no party leases or occupies the applicable Expansion Space, whether
pursuant to a lease or other agreement, and (y) no party holds any option or
right to lease or occupy the applicable Expansion Space, or to renew its lease
or right of occupancy thereof. So long as a tenant or other occupant leases or
occupies the applicable Expansion Space, Landlord shall be free to extend any
such tenancy or occupancy, whether or not pursuant to a lease or other
agreement, and such space shall not be deemed to be Available. In no event shall
Landlord be liable to Tenant for any failure by any then existing tenant or
occupant to vacate any Expansion Space. From and after the date hereof, Landlord
shall not grant any rights to any tenant or other occupant of the Building with
respect to any Expansion Space unless such rights are subordinate to the rights
granted Tenant hereunder, except (1) to tenants or other occupants leasing or
occupying the applicable Expansion Space as of the date hereof, or (2) to new
tenants or occupants of the applicable Expansion Space after Landlord shall have
offered such Expansion Space to Tenant pursuant to this Section 32. Nothing set
forth in this Section 32 shall be deemed to limit
15
Landlord's right to keep space in the Building vacant if Landlord elects, in its
sole discretion, to do so, and such vacant space shall not be deemed to be
Available.
(b) "Expansion Space Fair Market Value"
shall mean, with respect to each Expansion Space, the fair market annual rental
value of such Expansion Space at the commencement of the leasing of such
Expansion Space for a term commencing on the applicable Expansion Space
Commencement Date (as hereinafter defined) and ending on the Expiration Date, as
reasonably determined by Landlord based on comparable space in comparable
buildings, including all of Landlord's services provided for in this Lease and
with (x) such Expansion Space considered as vacant and in the "as is" condition
which same shall be in on the applicable Expansion Space Commencement Date, and
(y) the Base Year being the calendar year commencing on the January 1st
immediately preceding the applicable Expansion Space Commencement. The
calculation of Expansion Space Fair Market Value shall also be adjusted to take
into account that Landlord will grant to Tenant an improvement allowance of Five
Dollars ($5.00) per usable square foot of the Expansion Space.
(iii) Tenant shall have no right to exercise an
Expansion Option unless all of the following conditions have been satisfied on
the date the applicable Acceptance Notice is delivered and on the applicable
Expansion Space Commencement Date:
(a) no default shall have occurred and be
continuing; and
(b) the Tenant named herein (i.e., First,
Isaac and Company, Incorporated) shall not have assigned this Lease and shall be
in occupancy of at least ninety percent (90%) of the rentable area of the
Premises.
(iv) Effective as of the date on which Landlord
delivers to Tenant vacant possession of an Expansion Space for which Tenant
shall have exercised an Expansion Option (with respect to each such Expansion
Space, the "Expansion Space Commencement Date"), the applicable Expansion Space
shall become part of the Premises upon all of the terms and conditions of this
Lease, except:
(a) Base Rent shall be increased by the
Expansion Space Fair Market Value for the applicable Expansion Space as
determined in accordance with this Section 32.
(b) Tenant shall pay all additional rent
payable under this Lease with respect to the applicable Expansion Space, except
that: (x) the Base Year shall be the calendar year commencing on the January 1st
immediately preceding the applicable Expansion Space Commencement Date, and (y)
Tenant's proportionate share of increases in Direct Expenses and Taxes shall be
adjusted to reflect the rentable square footage of such Expansion Space set
forth in the applicable Expansion Notice.
(c) The rentable square footage of the
Expansion Space shall be as set forth in the applicable Expansion Notice (which
the parties agree shall be the rentable square footage of such Expansion Space
for all purposes of this Lease).
(d) The applicable Expansion Space shall be
delivered in its "as is" condition, and Landlord shall not be obligated to
perform any work with respect thereto or make any contribution to Tenant to
prepare such Expansion Space for Tenant's occupancy, other than an amount equal
to Five Dollars ($5.00) per usable square foot.
(e) The applicable Expansion Space shall be
added to and be deemed to be part of the Premises for all purposes of this
Lease.
(v) Landlord shall use commercially reasonable
efforts to obtain and deliver to Tenant vacant possession of each Expansion
Space for which Tenant has delivered an Acceptance Notice by the applicable
Anticipated Expansion Space Commencement Date; including, but not limited,
initiating legal action against such tenant. Notwithstanding anything set forth
in this Section 32 to the contrary, if Landlord fails to tender the Expansion
Space to Tenant within one hundred twenty (120) days after the proposed
Expansion Space Commencement Date, then Tenant shall have the right to revoke
its exercise of the Expansion Space option within thirty (30) days following the
expiration of such one hundred twenty (120) day period.
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(vi) Landlord and Tenant, at either party's request,
shall promptly execute and exchange an appropriate agreement evidencing the
leasing of each Expansion Space and the terms thereof in a form reasonably
satisfactory to both parties, but no such agreement shall be necessary in order
to make the provisions hereof effective.
B. Arbitration. If Tenant shall dispute Landlord's
determination of the Expansion Space Fair Market Value for any Expansion Space,
Tenant shall give notice of such dispute in the Acceptance Notice for such
Expansion Space. If within ten (10) business days following Landlord's receipt
of the Acceptance Notice Landlord and Tenant are unable to resolve their
disagreement concerning the determination of the Expansion Space Fair Market
Value, then such dispute shall be determined by a single arbitrator appointed in
accordance with the American Arbitration Association Commercial Arbitration
Rules who shall be appointed by the parties within ten (10) business days
following the expiration of the foregoing ten (10) business day period. The
arbitrator shall be impartial and shall have not less than ten (10) years'
experience in the County of Marin in a calling related to the leasing of
commercial office space in office buildings comparable to the Building, and the
fees of the arbitrator shall be shared by Landlord and Tenant. Within thirty
(30) days following the appointment of the arbitrator, Landlord and Tenant shall
attend a hearing before the arbitrator at which each party shall submit a report
setting forth its determination of the Expansion Space Fair Market Value for the
applicable Expansion Space, together with such information on comparable rentals
and such other evidence as such party shall deem relevant. The arbitrator shall,
within thirty (30) days following such hearing and submission of evidence,
render his or her decision by selecting the determination of the Expansion Space
Fair Market Value submitted by either Landlord or Tenant which, in the judgment
of the arbitrator, most nearly reflects the Expansion Space Fair Market Value
for the applicable Expansion Space. The arbitrator shall have no power or
authority to select any Expansion Space Fair Market Value other than an
Expansion Space Fair Market Value submitted by Landlord or Tenant or to modify
any of the terms and provisions of this Lease, and the decision of the
arbitrator shall be final and binding upon Landlord and Tenant. Prior to the
determination of the arbitrator, Tenant shall pay Fixed Rent on account of the
applicable Expansion Space in an amount equal to Landlord's determination of the
Expansion Space Fair Market Value for the applicable Expansion Space, and
following the arbitrator's final determination, the amount of any overpayment or
underpayment shall be adjusted between the parties.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the
dates set forth below and this Lease shall be effective on the later of such
dates.
The Joseph and Eda Pell Revocable Trust Fair, Isaac and Company, Incorporated,
a Delaware corporation
By: /s/ Joseph Pell By: /s/ Henk J. Evenhuis
------------------------- ---------------------------
Joseph Pell
Its: Trustee Its: CFO
---------------------------
By: /s/ Eda Pell Date: June 1, 2001
-------------------------
Eda Pell
Its: Trustee
Date: June 13, 2001
17
EXHIBIT A-1
FIRST FLOOR PREMISES
EXHIBIT A-2
SECOND FLOOR PREMISES
EXHIBIT A-3
THIRD FLOOR PREMISES
EXHIBIT B
RULES AND REGULATIONS
1. No sign, notice, picture, advertisement, name or placard shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building without the written consent of the Landlord first had and
obtained and Landlord shall have the right to remove any such sign, placard,
picture, advertisement, name or notice without notice to and at the expense of
Tenant. All approved signs or lettering on doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door, partition or wall which may appear unsightly from
outside the Premises; provided, however, that Landlord may furnish and install a
Building standard window covering at all exterior windows. Tenant shall not
without prior written consent, which consent shall not be unreasonably withheld,
of Landlord cause or otherwise sunscreen any window.
2. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by any of the tenants or used by them for any
purpose other than for ingress and egress from their respective Premises.
3. Tenant shall not alter any lock or install any new or additional
locks without permission of Landlord, whose consent shall not be unreasonably
withheld, or any bolts on any doors or windows of the Premises.
4. The toilet rooms, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein and the expense
of any breakage, stoppage, damage resulting from the violation of this rule
shall be borne by the Tenant who, or whose employees or invitees shall have
caused it.
5. Tenant shall not overload the floor of the Premises or in any way
deface the Premises or any part thereof.
6. No furniture, freight or equipment of any kind shall be brought into
the Building without the prior notice to Landlord and all moving of the same
into or out of the Building shall be done at such time and in such manner as
Landlord shall designate. Notwithstanding the above, Tenant shall have the right
to move furniture, freight or equipment into and out of the Building without
prior notice to Landlord, provided that such moves do not involve exclusive use
of an elevator for an extended period of time, nor does the move interfere with
the operation of other tenants in the Building. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy equipment
brought into the Building and also the times and manner of moving the same in
and out of the Building. Safes or other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to
properly distribute the weight. Landlord will not be responsible for loss of or
damage to any such safe or properly from any cause and all damage done to the
Building by moving or maintaining any such safe or other property shall be
repaired at the expense of the Tenant.
7. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to the Landlord or other
occupants of the Building by reason of noise, odors and/or vibrations, or
interfere in any way with other tenants or those having business therein, nor
shall any animals or birds be brought in or kept in or about the Premises or the
Building.
8. No cooking, except for microwave and coffee machines, shall be done
or permitted by any Tenant on the Premises, nor shall the Premises be used for
the storage of merchandise, for washing clothes, for lodging, or for any
improper, objectionable or immoral purposes.
9. Tenant shall not use or keep in the Premises of the Building any
kerosene, gasoline or inflammable or combustible fluid or material, or use any
method of heating or air conditioning other than that supplied by Landlord.
10. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires will be
allowed without the consent of the Landlord, which consent shall not be
unreasonably withheld. The location of telephones, call boxes and other office
equipment affixed to the Premises shall be subject to the approval of Landlord,
which consent shall not be unreasonably withheld.
11. On Saturdays, Sundays and legal holidays, and on other days between
the hours of 6:00 p.m. and 8:00 a.m. the following day, access to the Building,
or to the halls, corridors, elevators or stairways in the Building, or to the
Premises may be refused unless the person seeking access is known to the person
or employee of the Building in charge and has a pass or is properly identified.
The Landlord shall in no case be liable for damages for any error with regard to
the admission to or exclusion from the Building of any person. In case of
invasion, mob, riot, public excitement, or other commotion, the Landlord
reserves the right to prevent access to the Building during the continuance of
the same by closing of the doors or otherwise, for the safety of the tenants and
protection of property in the Building and the Building.
12. Landlord reserves the right to exclude or expel from the Building
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of the rules and regulations of the Building.
13. No vending machine or machines of any description shall be
installed, maintained or operated upon the Premises without the written consent
of the Landlord, which consent shall not be unreasonably withheld.
14. Landlord shall have the right, exercisable without notice and
without liability to Tenant, to change the name and street address of the
Building of which the Premises are a part.
15. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate to prevent same.
16. Without the written consent of Landlord, Tenant shall not use the
name of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
17. Landlord shall have the right to control and operate the public
portions of the Building, and the public facilities, and heating and air
conditioning, as well as facilities furnished for the common use of the tenants,
in such manner as it deems best for the benefit of the tenants generally.
18. All entrance doors in the Premises shall be left locked when the
Premises are not in use, and all doors opening to public corridors shall be kept
closed except for normal ingress and egress from the Premises.
19. Landlord shall have the right to enter into, and Tenant shall
comply with the terms of, such reciprocal easement and/or parking agreements
with owners of adjoining properties as Landlord shall deem appropriate for the
benefit of the Building.
2