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EXHIBIT 10.9
LEASE
This Lease, which includes the preceding Summary of Basic Lease
Information (the "Summary") attached hereto and incorporated herein by this
reference (the Lease and Summary to be known sometimes collectively hereafter as
the "Lease"), dated as of the date set forth in Section 1 of the Summary, is
made by and between JONATHAN PARKER, a married man as his sole and separate
property; THOMAS M. MONAHAN, a married man as his sole and separate property;
HAROLD PARKER PROPERTIES, L.P., a California limited partnership; and HAROLD A.
PARKER, TRUSTEE, and GERTRUD V. PARKER, TRUSTEE of the HAROLD A. PARKER COMPANY
TRUST dated May 11, 1988; all as Tenants in Common (collectively, "Landlord"),
and E-GREETINGS NETWORK, a California corporation ("Tenant").
1. REAL PROPERTY, BUILDING AND PREMISES Upon and subject to the terms, covenants
and conditions hereinafter set forth in this Lease, Landlord hereby leases to
Tenant and Tenant hereby leases from Landlord the premises set forth in Section
6 of the Summary (the "Premises"), which Premises are located in and are a part
of that certain building (the "Building") located at 149 New Montgomery Street,
San Francisco, California. The Building, any outside plaza areas, the land and
other improvements surrounding the Building which are designated from time to
time by Landlord as "Common Areas," as that term is defined below, appurtenant
to or servicing the Building, and the land upon which any of the foregoing are
situated, are herein sometimes collectively referred to as the "Real Property."
Tenant shall have the non-exclusive right to use and enjoy in common with other
tenants in the Building those portions of the Real Property which are provided
for use in common by Tenant and any other tenants of the Real Property (the
"Common Areas"). Subject to Landlord's reasonable rules and regulations and
access control procedures, Tenant shall have the right of access to the Premises
twenty-four (24) hours per day, seven (7) days per week during the "Lease Term,"
as that term is defined in Article 2 of this Lease. Except as specifically set
forth in this Lease and in the Tenant Work Letter attached hereto as Exhibit B,
Landlord shall not be obligated to provide or pay for any improvement work or
services related to the improvement of the Premises. Tenant also acknowledges
that Landlord has made no representation or warranty regarding the condition of
the Premises or the Building except as specifically set forth in this Lease and
the Tenant Work Letter. Landlord hereby represents and warrants that the
renovation work done on the Building has included or will include refurbishment
of the mechanical systems in the Building, installation of two (2) new
elevators, new restrooms, new heating, ventilation and air conditioning and
electrical systems, pursuant to Section 1.1. of the Tenant Work Letter and a
renovated or new roof.
2. LEASE TERM The terms and provisions of this Lease shall be effective as of
the date of this Lease except for the provisions of this Lease relating to the
payment of Rent. The term of this Lease (the "Lease Term") shall be as set forth
in Section 7.1 of the Summary and shall commence on the date (the "Lease
Commencement Date") set forth in Section 7.2 of the Summary (subject to the
terms of the Tenant Work Letter) and shall terminate on the date (the "Lease
Expiration Date") set forth in Section 7.3 of the Summary, unless sooner
terminated or extended as hereinafter provided. At any time during the Lease
Term, Landlord may deliver to Tenant a notice of Lease Term dates in the form as
set forth in Exhibit C, attached hereto, which notice Tenant shall execute and
return to Landlord within five (5) days of receipt thereof. Notwithstanding the
foregoing, if Landlord has not delivered the Base Building to Tenant, as
provided in Section 1.1 of the Tenant Work Letter, by March 1, 2000 (the
"Outside Date"), then Tenant shall have the right to terminate this Lease upon
thirty (30) days prior written notice to Landlord.
3. BASE RENT Tenant shall pay, without notice or demand, except as otherwise set
forth in this Lease, to Landlord at its office in the Building, in lawful money
of the United States of America, base rent ("Base Rent") as set forth in Section
8 of the Summary, payable in equal monthly installments as set forth in Section
8 of the Summary in advance on or before the first day of each month during the
Lease Term, without any setoff or deduction whatsoever, except as otherwise set
forth in this Lease. The Base Rent for the first full month of the Lease Term,
which occurs after the expiration of any free rent period, shall be paid at the
time of Tenant's execution of this Lease. If any rental payment date (including
the Lease Commencement Date) falls on a day of the month other than the first
day of such month or if any rental payment is for a period which is shorter than
one month, then the rental for any such fractional month shall be a
proportionate amount of a full calendar month's rental. All other payments or
adjustments required to be made under the terms of this Lease that require
proration on a time basis shall be prorated on the same basis. Notwithstanding
the foregoing, to the extent that Tenant is conducting business in only a
portion of the Premises before September 1, 1999, Tenant shall only be obligated
to pay Base Rent on that portion of the Premises which Tenant is so using,
determined on a floor by floor basis, in the amount of Thirty-Eight and 50/100
Dollars per rentable square foot per year of each floor of the Premises Tenant
is so using.
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4. ADDITIONAL RENT
4.1 Additional Rent. In addition to paying the Base Rent specified in
Article 3 of this Lease, Tenant shall pay as additional rent (i) Tenant's Share
of the annual Operating Expenses, which are in excess of Operating Expenses
incurred in the "Operating Expense Base Year," as that term is defined in
Section 4.2.1 of this Lease, and (ii) Tenant's Share of the annual Tax Expenses,
which are in excess of Tax Expenses incurred in the "Tax Base Year," as that
term is defined in Section 4.2.2 of this Lease. Such additional rent, together
with any and all other amounts payable by Tenant to Landlord pursuant to the
terms of this Lease, shall be hereinafter collectively referred to as the
"Additional Rent." The Base Rent and Additional Rent are herein collectively
referred to as the "Rent." Without limitation on other obligations of Tenant
which shall survive the expiration of the Lease Term, the obligations of Tenant
to pay the Additional Rent provided for in this Article 4 shall survive the
expiration of the Lease Term.
4.2 Definitions. As used in this Article 4, the following terms shall
have the meanings hereinafter set forth:
4.2.1 "Operating Expense Base Year" shall be the period set forth in
Section 9.1 of the Summary.
4.2.2 "Tax Base Year" shall be the period set forth in Section 9.2
of the Summary.
4.2.3 "Expense Year" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires, provided that Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and in the event of any such change, Tenant's Share of Operating
Expenses and Tax Expenses shall be equitably adjusted for any Expense Year
involved in any such change.
4.2.4 "Operating Expenses" shall mean all expenses, costs and
amounts of every kind and nature which Landlord shall pay during any Expense
Year because of or in connection with the ownership, management, maintenance,
repair, replacement, restoration or operation of the Real Property, including,
without limitation, any amounts paid for (i) the cost of supplying all utilities
to the Common Areas, the cost of operating, maintaining, repairing, renovating
and managing the utility systems serving the Building, mechanical systems,
sanitary and storm drainage systems, and any escalator and/or elevator systems,
and the cost of supplies and equipment and maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections and the cost of contesting the validity or applicability of any
governmental enactments which may affect Operating Expenses, and the costs
incurred in connection with the implementation and operation of a transportation
system management program or similar program; (iii) the cost of insurance
carried by Landlord, in such amounts as Landlord may reasonably determine or as
may be required by any mortgagees or the lessor of any underlying or ground
lease affecting the Real Property and/or the Building; (iv) the cost of
landscaping, relamping, and all supplies, tools, equipment and materials used in
the operation, repair and maintenance of the Building; (v) fees, charges and
other costs, including consulting fees, legal fees and accounting fees, of all
contractors engaged by Landlord or otherwise reasonably incurred by Landlord in
connection with the management, operation, maintenance and repair of the
Building and Real Property; (vi) any equipment rental agreements or management
agreements (including the cost of any management fee and the fair rental value
of any office space provided thereunder); (vii) wages, salaries and other
compensation and benefits of all persons engaged in the operation, management,
maintenance or security of the Building, and employer's Social Security taxes,
unemployment taxes or insurance, and any other taxes which may be levied on such
wages, salaries, compensation and benefits; provided, that if any employees of
Landlord provide services for more than one building of Landlord, then a
prorated portion of such employees' wages, benefits and taxes shall be included
in Operating Expenses based on the portion of their working time devoted to the
Building; (viii) payments under any easement, license, operating agreement,
declaration, restrictive covenant, underlying or ground lease (excluding rent),
or instrument pertaining to the sharing of costs by the Building; (ix)
operation, repair, maintenance and replacement of all "Systems and Equipment,"
as that term is defined in Section 4.2.6 of this Lease, and components thereof;
(x) the cost of janitorial service to the Common Areas, alarm and security
service, window cleaning, trash removal from the Common Areas, replacement of
wall and floor coverings, ceiling tiles and fixtures in lobbies, corridors,
restrooms and other common or public areas or facilities, maintenance and
replacement of curbs and walkways, repair to roofs and re-roofing; (xi)
amortization (including interest on the unamortized cost) of the cost of
acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Building and Real Property; and (xii) the cost of
any capital improvements or other costs (I) which are intended as a labor-saving
device or to effect other economies in the operation or maintenance of the
Building, (II) made to the Building that are required under any governmental law
or
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regulation not in effect as of the date of this Lease, or (III) which are
reasonably determined by Landlord to be in the best interest of the Building
and/or Real Property; provided, however, that if any such cost described in (I),
(II) or (III), above, is a capital expenditure, such cost shall be amortized
(including interest on the unamortized cost) over its useful life as Landlord
shall reasonably determine. If Landlord is not furnishing any particular work or
service (the cost of which, if performed by Landlord, would be included in
Operating Expenses) to a tenant who has undertaken to perform such work or
service in lieu of the performance thereof by Landlord, Operating Expenses shall
be deemed to be increased by an amount equal to the additional Operating
Expenses which would reasonably have been incurred during such period by
Landlord if it had at its own expense furnished such work or service to such
tenant. If the Building is not at least ninety-five percent (95%) occupied
during all or a portion of any Expense Year, Landlord shall make an appropriate
adjustment to the variable components of Operating Expenses for such year or
applicable portion thereof, employing sound accounting and management
principles, to determine the amount of Operating Expenses that would have been
paid had the Building been at least ninety-five percent (95%) occupied; and the
amount so determined shall be deemed to have been the amount of Operating
Expenses for such year, or applicable portion thereof. Landlord shall have the
right, from time to time, to equitably allocate some or all of the Operating
Expenses among different tenants of the Building (the "Cost Pools"). Such Cost
Pools may include, but shall not be limited to, the office space tenants of the
Building and the retail space tenants of the Building. Notwithstanding anything
to the contrary set forth in this Article 4, when calculating Operating Expenses
for any Expense Year, including the Operating Expense Base Year, Operating
Expenses shall exclude market-wide labor-rate increases due to extraordinary
circumstances, including, but not limited to, boycotts and strikes, and utility
rate increases due to extraordinary circumstances including, but not limited to,
conservation surcharges, boycotts, embargoes or other shortages. Notwithstanding
the foregoing, the following charges are expressly excluded from Operating
Expenses: (a) costs of leasing incurred with respect to a specific tenant of the
Building or costs of procuring new tenants for the Building (including leasing
commissions and attorney's fees), (b) costs of renovating, painting and/or
decorating the premises of any new tenant or vacated by any prior tenant, (c)
compensation of personnel above the grade of Building Manager, (d) except for
any deductibles payable by Landlord, costs of repair to the Building or Premises
where the costs of such repairs are reimbursed by insurance (or which would be
reimbursable under insurance which Landlord is required to maintain under this
Lease), (e) costs of utilities, services, and other items that exclusively
benefit particular tenants of the Building, except to the extent such costs are
recoverable from such tenants and are credited to Operating Expenses upon
Landlord's receipt of payment therefor, (f) Building depreciation, (g) interest
on debt or rental under any ground lease, (h) capital expenditures except as
permitted above, (i) costs incurred to correct defects in the initial
construction or current renovation of the Building, (j) late charges or other
penalties, including tax penalties, incurred as a result of Landlord's gross
negligence or inability or unwillingness to make payments when due, except to
the extent caused by Tenant's failure to timely make any payment in accordance
with the terms of this Lease, (k) costs resulting directly from the gross
negligence or willful misconduct of Landlord, its employees, agents or
contractors, (l) advertising and promotional expenses, (m) Landlord's charitable
or political contributions, and (n) Tax Expenses.
4.2.5 "Tax Expenses" shall mean all federal, state, county, or
local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary
(including, without limitation, real estate taxes, general and special
assessments, special assessment district payments, transit taxes, leasehold
taxes or taxes based upon the receipt of rent, including gross receipts or sales
taxes applicable to the receipt of rent, unless required to be paid by Tenant,
personal property taxes imposed upon the fixtures, machinery, equipment,
apparatus, systems and equipment, appurtenances, furniture and other personal
property used in connection with the Building), which Landlord shall pay because
of or in connection with the ownership, leasing and operation of the Real
Property or Landlord's interest therein. Tax Expenses shall include, without
limitation: (i) any tax on Landlord's rent, right to rent or other income from
the Real Property or as against Landlord's business of leasing any of the Real
Property; (ii) any assessment, tax, fee, levy or charge in addition to, or in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants. It is the intention of
Tenant and Landlord that all such new and increased assessments, taxes, fees,
levies, and charges and all similar assessments, taxes, fees, levies and charges
be included within the definition of Tax Expenses for purposes of this Lease;
(iii) any assessment, tax, fee, levy, or charge allocable to or measured by the
area of the Premises or the rent payable hereunder, including, without
limitation, any gross income tax with respect to the receipt of such rent, or
upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or
any portion thereof; and (iv) any assessment, tax, fee, levy or charge, upon
this transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises.
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Notwithstanding the foregoing, Tax Expenses shall not include any fines,
penalties or interest charged to Landlord; or franchise, estate or income taxes
of Landlord.
4.2.6 "Tenant's Share" shall mean the percentage set forth in
Section 9.3 of the Summary.
4.3 Calculation and Payment of Additional Rent.
4.3.1 Calculation of Excess and Underage. If for any Expense Year
ending or commencing within the Lease Term, (i) Tenant's Share of Operating
Expenses for such Expense Year exceeds Tenant's Share of Operating Expenses for
the Operating Expense Base Year and/or (ii) Tenant's Share of Tax Expenses for
such Expense Year exceeds Tenant's Share of Tax Expenses for the Tax Base Year,
then Tenant shall pay to Landlord, in the manner set forth in Section 4.3.2
below, and as Additional Rent, an amount equal to the excess (the "Excess").
4.3.2 Statement of Actual Operating Expenses and Tax Expenses and
Payment by Tenant. Following the end of each Expense Year, Landlord shall give
to Tenant a statement (the "Statement") which Statement shall state the actual
Operating Expenses and Tax Expenses incurred or accrued for such preceding
Expense Year, and which shall indicate the amount, if any, of any Excess or
underage. Upon receipt of the Statement for each Expense Year ending during the
Lease Term, if an Excess is present, Tenant shall pay, with its next installment
of Base Rent, the full amount of the Excess for such Expense Year, less the
amounts, if any, paid during such Expense Year as "Estimated Excess," as that
term is defined in Section 4.3.3 below. Even though the Lease Term has expired
and Tenant has vacated the Premises, when the final determination is made of
Tenant's Share of the Operating Expenses and the Tax Expenses for the Expense
Year in which this Lease terminates, if an Excess is present, Tenant shall,
within thirty (30) days of receipt of a Statement setting forth the Excess, pay
to Landlord an amount as calculated pursuant to the provisions of Section 4.3.1
of this Lease. The provisions of this Section 4.3.2 shall survive the expiration
or earlier termination of the Lease Term.
4.3.3 Statement of Estimated Operating Expenses and Tax Expenses.
Landlord, at Landlord's option, may elect to give Tenant a yearly expense
estimate statement (the "Estimate Statement") which Estimate Statement shall set
forth Landlord's reasonable estimate (the "Estimate") of what the total amount
of Operating Expenses and Tax Expenses for the then-current Expense Year shall
be and the estimated Excess (the "Estimated Excess") as calculated by comparing
Tenant's Share of Operating Expenses, which shall be based upon the Estimate, to
Tenant's Share of Operating Expenses for the Operating Expense Base Year and
comparing Tenant's Share of Tax Expenses, which shall be based upon the
Estimate, to Tenant's Share of Tax Expenses for the Tax Base Year. The failure
of Landlord to timely furnish the Estimate Statement for any Expense Year shall
not preclude Landlord from enforcing its rights to collect any Estimated Excess
under this Article 4. If pursuant to the Estimate Statement an Estimated Excess
is calculated for the then-current Expense Year, Tenant shall pay, with its next
installment of Base Rent, a fraction of the Estimated Excess for the
then-current Expense Year (reduced by any amounts paid pursuant to the last
sentence of this Section 4.3.3). Such fraction shall have as its numerator the
number of months which have elapsed in such current Expense Year to the month of
such payment, both months inclusive, and shall have twelve (12) as its
denominator. Until a new Estimate Statement is furnished, Tenant shall pay
monthly, with the monthly Base Rent installments, an amount equal to one-twelfth
(1/12) of the total Estimated Excess set forth in the previous Estimate
Statement delivered by Landlord to Tenant.
4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible.
Tenant shall reimburse Landlord upon demand for any and all taxes or assessments
required to be paid by Landlord (except to the extent included in Tax Expenses
by Landlord), excluding state, local and federal personal or corporate income
taxes measured by the net income of Landlord from all sources and estate and
inheritance taxes, whether or not now customary or within the contemplation of
the parties hereto, when:
4.4.1 Said taxes are measured by or reasonably attributable to
the cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the cost
or value of such leasehold improvements exceeds the Tenant Improvement
Allowance, as defined in Section 2.1 of the Tenant Work Letter,
4.4.2 Said taxes are assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Real Property;
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4.4.3 Said taxes are assessed upon this transaction or any
document to which Tenant is a party creating or transferring an interest or an
estate in the Premises; or
4.4.4 Said assessments are levied or assessed upon the Real
Property or any part thereof or upon Landlord and/or by any governmental
authority or entity, and relate to the construction, operation, management, use,
alteration or repair of mass transit improvements.
4.5 Landlord's Books and Records. Within forty-five (45) days after
receipt of a Statement by Tenant, if Tenant disputes the amount of Additional
Rent set forth in the Statement, an independent certified public accountant
(which accountant shall be a member of a nationally recognized accounting firm),
designated by Tenant, may, after reasonable notice to Landlord and at reasonable
times, inspect Landlord's records with respect to the applicable Expense Year at
Landlord's offices, provided that Tenant is not then in default, past the
expiration of any applicable cure period, under this Lease, and provided further
that Tenant has paid all amounts required to be paid under the Statement. If
after such inspection, Tenant still disputes such Additional Rent, a
certification as to the proper amount shall be made, at Tenant's expense, by an
independent certified public accountant selected by Landlord, which
certification shall be final and conclusive on Landlord and Tenant; provided,
however, that if such certification demonstrates that Landlord overstated total
Operating Expenses for the applicable Expense Year by more than seven percent
(7%), then Landlord shall pay the costs associated with such certification. If
it is determined pursuant to this Section 4.5 that an error has been made in the
Statement, Tenant's sole remedy shall be for the parties to make such
appropriate payments or reimbursements, as the case may be, to each other as are
determined to be owing, provided that any reimbursements payable by Landlord to
Tenant may, at Landlord's option, instead be credited against the Base Rent next
coming due under this Lease unless the Lease Term has expired, in which event
Landlord shall refund the appropriate amount to Tenant. Tenant shall keep any
information gained from its review of Landlord's records confidential and shall
not disclose such information to any other party, except as required by law.
5. USE OF PREMISES Tenant shall use the Premises only for the purpose as set
forth in Section 10 of the Summary (the "Permitted Use") and for no other use or
purpose, unless first approved in writing by Landlord, which approval Landlord
may withhold in its sole discretion. Tenant agrees that it shall not use, or
permit any person to use, the Premises or any part thereof for any use or
purpose contrary to the provisions of the Rules and Regulations set forth in
Exhibit D, attached hereto, or in violation of the laws of the United States of
America, the State of California, or the ordinances, regulations or requirements
of any local, municipal or county governing body or other lawful authorities
having jurisdiction over the Building. Tenant shall not use or allow another
person or entity to use any part of the Premises for the storage, use,
treatment, manufacture or sale of hazardous materials or hazardous substances
(as defined under applicable laws), except for the use in compliance with all
applicable laws and regulations of small quantities of hazardous materials of
the type commonly found in ordinary office supplies and equipment.
6. SERVICES AND UTILITIES
6.1 Standard Tenant Services. Landlord shall provide the following
services and utilities twenty-four (24) hours per day on every day during the
Lease Term, unless otherwise stated below.
6.1.1 Landlord shall at all times provide heating and air
conditioning ("HVAC"), as provided in Section 1.1 of the Tenant Work Letter.
6.1.2 Landlord shall at all times provide electricity to the
Premises for lighting and power, as provided in Section 1.1 of the Tenant Work
Letter. Landlord shall also provide (i) city water for use in connection with
any plumbing fixtures now or hereafter installed in the Premises and the
Building in accordance with this Lease, and (ii) nonexclusive automatic
passenger elevator service at all times.
6.1.3 Tenant shall pay to Landlord, upon billing, the cost of all
utilities provided to the Premises, based on submeters or separate meters,
including the cost for utilties to run the elevators.
6.2 Tenant's Responsibility. Tenant shall arrange for regular janitorial
service to the Premises and the lobbies of the Building, at Tenant's sole
expense.
6.3 Interruption of Use. Tenant agrees that Landlord shall not be liable
for damages, by abatement of rent or otherwise, for failure to furnish or delay
in furnishing any service (including telephone and telecommunication
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services), or for any diminution in the quality or quantity thereof, when such
failure or delay or diminution is occasioned, in whole or in part, by repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, or other fuel at the Building after
reasonable effort to do so, by any accident or casualty whatsoever, by act or
default of Tenant or other parties, or by any other cause beyond Landlord's
reasonable control; and such failures or delays or diminution shall never be
deemed to constitute an eviction or disturbance of Tenant's use and possession
of the Premises or relieve Tenant from paying rent or performing any of its
obligations under this Lease. Furthermore, Landlord shall not be liable under
any circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any services or utilities. Notwithstanding anything to the
contrary contained in this Section 6.3, to the extent any failure to furnish or
delay in furnishing any service is caused by the gross negligence or willful
misconduct of Landlord, its agents, employees or contractors, Tenant shall be
entitled to an abatement of Rent if and to the extent such failure or delay
prevents Tenant from using all or a portion of the Premises (and Tenant in fact
does not use the Premises or such portion thereof), and if such failure or delay
continues for more than ten (10) consecutive days. Rent shall so abate, in
proportion to the percentage of the Premises rendered unusable by Tenant (and in
fact not used), retroactively to the first (1st) day of such failure or delay
and shall continue thereafter until such failure or delay is remedied.
6.4 Access. Except as specifically set forth in this Lease, Tenant shall
have access to the Premises twenty-four (24) hours per day, three hundred
sixty-five (365) days per year.
7. REPAIRS Tenant shall, at Tenant's own expense, keep the Premises, including
all improvements, equipment that exclusively services the Premises, fixtures and
furnishings therein, in good order, repair and condition at all times during the
Lease Term, ordinary wear and tear excepted. In addition, Tenant shall, at
Tenant's own expense but under the supervision and subject to the prior approval
of Landlord, and within any reasonable period of time specified by Landlord,
promptly and adequately repair all damage to the Premises and replace or repair
all damaged or broken fixtures and appurtenances; provided however, that, at
Landlord's option, or if Tenant fails to make such repairs, Landlord may, but
need not, make such repairs and replacements, and Tenant shall pay Landlord the
cost thereof, including a percentage of the cost thereof (to be uniformly
established for the Building) sufficient to reimburse Landlord for all overhead,
general conditions, fees and other costs or expenses arising from Landlord's
involvement with such repairs and replacements forthwith upon being billed for
same. Landlord may, but shall not be required to, enter the Premises at all
reasonable times to make such repairs, alterations, improvements and additions
to the Premises or to the Building or to any equipment located in the Building
as Landlord shall desire or deem necessary or as Landlord may be required to do
by governmental or quasi-governmental authority or court order or decree.
Notwithstanding the foregoing, Landlord shall be responsible for maintaining in
good order, repair and condition the Common Areas, the exterior walls,
foundation and roof of the Building, the structural portions of the Building,
and the systems and equipment of the Building installed by Landlord pursuant to
Sections 1.1.1, 1.1.2, 1.1.7 and 1.1.8 of the Tenant Work Letter and the
elevators, except to the extent that such repairs are required due to the
negligence or willful misconduct of Tenant; provided, however, that if such
repairs are due to the negligence or willful misconduct of Tenant, Landlord
shall nevertheless make such repairs at Tenant's expense. Tenant hereby waives
and releases its right to make repairs at Landlord's expense under Subsection 1
of Section 1932 and Sections 1941 and 1942 of the California Civil Code, or
under any similar law, statute, or ordinance now or hereafter in effect.
8. ADDITIONS AND ALTERATIONS
8.1 Landlord's Consent to Alterations. Tenant may not make any
improvements, alterations, additions or changes to the Premises (collectively,
the "Alterations") without first procuring the prior written consent of Landlord
to such Alterations, which consent shall be requested by Tenant not less than
thirty (30) days prior to the commencement thereof, and which consent shall not
be unreasonably withheld or delayed by Landlord. The construction of the initial
improvements to the Premises shall be governed by the terms of the Tenant Work
Letter attached hereto as Exhibit B, and not the terms of this Article 8.
Notwithstanding the foregoing, Tenant shall have the right without Landlord's
prior consent to make Alterations costing, in aggregate, less than Ten Thousand
Dollars ($10,000) in any twelve-month period; provided that such Alterations do
not affect the Building's structure or systems and equipment, and provided
further that Tenant provides Landlord with prior written notice at least ten
(10) days before commencing such work (the "Alteration Notice").
8.2 Manner of Construction. Landlord may impose, as a condition of its
consent to all Alterations or repairs of the Premises or about the Premises,
such requirements as Landlord in its sole discretion may deem desirable,
including, but not limited to, the requirement that Tenant shall, at Tenant's
expense, remove such
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Alterations upon the expiration or any early termination of the Lease Term,
and/or the requirement that Tenant utilize for such purposes only contractors,
materials, mechanics and materialmen reasonably approved by Landlord. All work
with respect to any Alterations must be done in a good and workmanlike manner in
compliance with all applicable laws and with Landlord's construction rules and
regulations, and diligently prosecuted to completion to the end that the
Premises shall at all times be a complete unit except during the period of work.
In performing the work of any such Alterations, Tenant shall have the work
performed in such manner as not to obstruct access to the Building or the common
areas for any other tenant of the Building, and as not to obstruct the business
of Landlord or other tenants in the Building, or interfere with the labor force
working in the Building. In the event that Tenant makes any Alterations, Tenant
agrees to carry "Builder's All Risk" insurance in an amount approved by Landlord
covering the construction of such Alterations, and such other insurance as
Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternative form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee. Upon completion of any Alterations, Tenant agrees to cause a Notice
of Completion to be recorded in the office of the Recorder of the county in
which the Building is located in accordance with Section 3093 of the Civil Code
of the State of California or any successor statute, and Tenant shall deliver to
the Building management office a reproducible copy of the "as built" drawings of
the Alterations.
8.3 Payment for Improvements. In the event Tenant orders any Alteration
or repair work directly from Landlord, the charges for such work shall be deemed
Additional Rent under this Lease, payable upon billing therefor, either
periodically during construction or upon the substantial completion of such
work, at Landlord's option. Upon completion of such work, Tenant shall deliver
to Landlord, if payment is made directly to contractors, evidence of payment,
contractors' affidavits and full and final waivers of all liens for labor,
services or materials. Whether or not Tenant orders any work directly from
Landlord, Tenant shall pay to Landlord a percentage of the cost of such work
(such percentage, which shall vary depending upon whether or not Tenant orders
the work directly from Landlord, to be established on a uniform basis for the
Building) sufficient to compensate Landlord for all overhead, general
conditions, fees and other costs and expenses arising from Landlord's
involvement with such work.
8.4 Landlord's Property. All Alterations, improvements, fixtures and/or
permanently affixed equipment which may be installed or placed in or about the
Premises, and all signs installed in, on or about the Premises, from time to
time, shall be at the sole cost of Tenant and shall be and become the property
of Landlord. Furthermore, as a condition to Landlord's approval of any
Alteration, Landlord may, by written notice to Tenant at the time Landlord so
approves the Alteration, require Tenant at Tenant's expense to remove such
Alteration, and to repair any damage to the Premises and Building caused by such
removal, upon expiration of the Lease Term or upon any earlier termination of
this Lease. If Tenant fails to complete such removal and/or to repair any damage
caused by the removal of any Alterations, Landlord may do so and may charge the
cost thereof to Tenant. Tenant hereby indemnifies and holds Landlord harmless
from any liability, cost, obligation, expense or claim of lien in any manner
relating to the installation, placement, removal or financing of any such
Alterations, improvements, fixtures and/or equipment in, on or about the
Premises.
9. COVENANT AGAINST LIENS Tenant has no authority or power to cause or permit
any lien or encumbrance of any kind whatsoever, whether created by act of
Tenant, operation of law or otherwise, to attach to or be placed upon the Real
Property, Building or Premises, and any and all liens and encumbrances created
by Tenant shall attach to Tenant's interest only. Landlord shall have the right
at all times to post and keep posted on the Premises any notice which it deems
necessary for protection from such liens. Tenant covenants and agrees not to
suffer or permit any lien of mechanics or materialmen or others to be placed
against the Real Property, the Building or the Premises with respect to work or
services claimed to have been performed for or materials claimed to have been
furnished to Tenant or the Premises, and, in case of any such lien attaching or
notice of any lien, Tenant covenants and agrees to cause it to be immediately
released and removed of record. Notwithstanding anything to the contrary set
forth in this Lease, in the event that such lien is not released and removed on
or before the date notice of such lien is delivered by Landlord to Tenant,
Landlord, at its sole option, may immediately take all action necessary to
release and remove such lien, without any duty to investigate the validity
thereof, and all sums, costs and expenses, including reasonable attorneys' fees
and costs, incurred by Landlord in connection with such lien shall be deemed
Additional Rent under this Lease and shall immediately be due and payable by
Tenant.
10. INSURANCE
10.1 Indemnification and Waiver. To the extent not prohibited by law,
Landlord, its partners and their respective officers, agents, servants,
employees, and independent contractors (collectively, "Landlord Parties") shall
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not be liable for any damage either to person or property or resulting from the
loss of use thereof, which damage is sustained by Tenant or by other persons
claiming through Tenant. Tenant shall indemnify, defend, protect, and hold
harmless Landlord Parties from any and all loss, cost, damage, expense and
liability (including without limitation court costs and reasonable attorneys'
fees) incurred in connection with or arising from any cause in, on or about the
Premises during Tenant's occupancy of the Premises, including during
construction of the Tenant Improvements, as defined in the Tenant Work Letter,
provided that the terms of the foregoing indemnity shall not apply to the gross
negligence or willful misconduct of Landlord. Landlord shall indemnify, defend,
protect and hold harmless Tenant, its officers, contractors, agents and
employees, from any and all loss, cost, damage, expense and liability (including
without limitation court costs and reasonable attorneys' fees) to the extent
incurred in connection with or arising from the gross negligence or willful
misconduct of Landlord, its agents, employees or contractors. The provisions of
this Section 10.1 shall survive the expiration or sooner termination of this
Lease with respect to any claims or liability occurring prior to such expiration
or termination.
10.2 Tenant's Compliance with Landlord's Fire and Casualty Insurance.
Tenant shall, at Tenant's expense, comply as to the Premises with all insurance
company requirements pertaining to the use of the Premises. If Tenant's conduct
or use of the Premises causes any increase in the premium for such insurance
policies, then Tenant shall reimburse Landlord for any such increase. Tenant, at
Tenant's expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board
of Fire Underwriters) and with any similar body.
10.3 Tenant's Insurance. Tenant shall maintain Commercial General
Liability Insurance covering the insured against claims of bodily injury,
personal injury and property damage arising out of Tenant's operations, assumed
liabilities or use of the Premises, including a Broad Form Commercial General
Liability endorsement covering the insuring provisions of this Lease and the
performance by Tenant of the indemnity agreements set forth in Section 10.1 of
this Lease, for limits of liability not less than $2,000,000.00 for each
occurrence and $2,000,000.00 annual aggregate, with 0% Insured's participation.
In addition, Tenant shall carry Physical Damage Insurance covering (i) all
office furniture, trade fixtures, office equipment, merchandise and all other
items of Tenant's property on the Premises installed by, for, or at the expense
of Tenant, and (ii) all other improvements, alterations and additions to the
Premises, including any improvements, alterations or additions installed at
Tenant's request above the ceiling of the Premises or below the floor of the
Premises, but only to the extent that the cost of the same is in excess of the
Tenant Improvement Allowance. Such insurance shall be written on an "all risks"
of physical loss or damage basis, for the full replacement cost value new
without deduction for depreciation of the covered items and in amounts that meet
any co-insurance clauses of the policies of insurance and shall include a
vandalism and malicious mischief endorsement, sprinkler leakage coverage and
earthquake sprinkler leakage coverage.
10.4 Form of Policies. The minimum limits of policies of insurance
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. Such insurance shall (i) name Landlord, and any other
party it so specifies, as an additional insured; (ii) specifically cover the
liability assumed by Tenant under this Lease, including, but not limited to,
Tenant's obligations under Section 10.1 of this Lease; (iii) be issued by an
insurance company having a rating of not less than A-VIII in Best's Insurance
Guide or which is otherwise acceptable to Landlord and licensed to do business
in the state in which the Building is located; (iv) be primary insurance as to
all claims thereunder and provide that any insurance carried by Landlord is
excess and is non-contributing with any insurance requirement of Tenant; (v)
provide that said insurance shall not be canceled or coverage changed unless
thirty (30) days' prior written notice shall have been given to Landlord and any
mortgagee or ground or underlying lessor of Landlord. Tenant shall deliver said
policy or policies or certificates thereof to Landlord on or before the Lease
Commencement Date and at least thirty (30) days before the expiration dates
thereof. In the event Tenant shall fail to procure such insurance, or to deliver
such policies or certificate, Landlord may, at its option, procure such policies
for the account of Tenant, and the cost thereof shall be paid to Landlord as
Additional Rent within five (5) days after delivery to Tenant of bills therefor.
10.5 Subrogation. Landlord and Tenant agree to have their respective
insurance companies issuing property damage insurance waive any rights of
subrogation that such companies may have against Landlord or Tenant, as the case
may be, so long as the insurance carried by Landlord and Tenant, respectively,
is not invalidated thereby. As long as such waivers of subrogation are contained
in their respective insurance policies, Landlord and Tenant hereby waive any
right that either may have against the other on account of any loss or damage to
their respective property to the extent such loss or damage is insurable under
policies of insurance for fire and all risk coverage, theft, public liability,
or other similar insurance.
10.6 Additional Insurance Obligations. Tenant shall carry and maintain
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to
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this Article 10, and such other reasonable types of insurance coverage and in
such reasonable amounts covering the Premises and Tenant's operations therein,
as may be reasonably requested by Landlord.
10.7 Landlord's Insurance. Landlord shall maintain commercial property
insurance on the Real Property. Such insurance shall be maintained with an
insurance company in good standing in the state where the Real Property is
located, in amounts determined by Landlord or required by any holder of a
mortgage or other security instrument or the lessor of any ground lease, but at
least in such amounts and with such coverage as is typical for buildings of a
similar type and use in the downtown/media gulch area of San Francisco,
California.
11. DAMAGE AND DESTRUCTION
11.1 Repair of Damage to Premises by Landlord. If the Premises or any
common areas of the Building serving or providing access to the Premises shall
be damaged by fire or other casualty, Landlord shall promptly and diligently,
subject to reasonable delays for insurance adjustment or other matters beyond
Landlord's reasonable control, and subject to all other terms of this Article
11, restore the base, shell and core of the Premises and such common areas. Such
restoration shall be to substantially the same condition of the base, shell and
core of the Premises and common areas prior to the casualty, except for
modifications required by zoning and building codes and other laws or by the
holder of a mortgage on the Building, or the lessor of a ground or underlying
lease with respect to the Real Property and/or the Building, or any other
modifications to the common areas deemed desirable by Landlord, provided access
to the Premises and any common restrooms serving the Premises shall not be
materially impaired. Notwithstanding any other provision of this Lease, upon the
occurrence of any damage to the Premises, Tenant shall assign to Landlord (or to
any party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant's insurance carried under Section 10.3 of this Lease (other than Tenant's
personal property), and Landlord shall repair any injury or damage to the Tenant
Improvements installed in the Premises and shall return such Tenant Improvements
to their original condition; provided that if the cost of such repair by
Landlord exceeds the amount of insurance proceeds received by Landlord from
Tenant's insurance carrier, as assigned by Tenant, the cost of such repairs
shall be paid by Tenant to Landlord prior to Landlord's repair of the damage. In
connection with such repairs and replacements, Tenant shall, prior to the
commencement of construction, submit to Landlord, for Landlord's review and
approval, all plans, specifications and working drawings relating thereto, and
Landlord shall select the contractors to perform such improvement work. Landlord
shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant's business resulting in any way from such damage
or the repair thereof; provided however, that if such fire or other casualty
shall have damaged the Premises or common areas necessary to Tenant's occupancy,
and if such damage is not the result of the willful misconduct of Tenant or
Tenant's employees, contractors, licensees, or invitees, Landlord shall allow
Tenant a proportionate abatement of Rent, during the time and to the extent the
Premises are unfit for occupancy for the purposes permitted under this Lease,
and not occupied by Tenant as a result thereof. Notwithstanding anything to the
contrary contained herein, if (i) Landlord fails to deliver to Tenant a written
estimate within forty-five (45) days from the date of discovery of the damage
that the repairs required to be made are reasonably estimated to take more no
more than one hundred eighty (180) days from such date of discovery to complete,
or (ii) the repairs have not been completed (aside from minor, punch-list items)
within one hundred eighty (180) days from the date of discovery of the damage,
then, in either such event, Tenant may elect to terminate this Lease, by
notifying Landlord in writing of such termination (a) within thirty (30) days of
receipt of Landlord's estimate (or the lapse of the 45-day response period, as
applicable); or (b) within thirty (30) days after the lapse of the 180-day
repair period (unless the repairs have been completed by the date of Tenant's
termination notice, in which event the termination shall be void). In such
event, this Lease shall terminate as of the date of Tenant's termination notice,
and the respective rights and obligations of the parties shall be as specified
in the final sentence of Section 11.2 below. Landlord agrees to use commercially
reasonable efforts to timely discover damage to the Premises or the Building
caused by fire or other casualty.
11.2 Landlord's Option to Repair. Notwithstanding the terms of Section
11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises and/or Building and instead terminate this Lease by notifying Tenant in
writing of such termination within forty-five (45) days after the date of
discovery of such damage, such notice to include a termination date giving
Tenant ninety (90) days to vacate the Premises, but Landlord may so elect only
if the Building shall be damaged by fire or other casualty or cause, whether or
not the Premises are affected, and one or more of the following conditions is
present: (i) repairs cannot reasonably be completed within one hundred eighty
(180) days of the date of discovery of damage (when such repairs are made
without the payment of overtime or other premiums); (ii) the holder of any
mortgage on the Building or ground or underlying lessor with respect to the Real
Property and/or the Building shall require that the insurance proceeds or any
portion thereof be used to retire the mortgage debt, or shall terminate the
ground or underlying lease, as the case may be; or (iii) the damage is not fully
covered, except for deductible amounts, by Landlord's insurance policies, where
such uncovered damage would cost more than One Hundred Thousand Dollars
($100,000) to repair. In addition, in the event that the
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Premises or the Building is destroyed or damaged to any substantial extent
during the last twelve (12) months of the Lease Term, then notwithstanding
anything contained in this Article 11, Landlord shall have the option to
terminate this Lease by giving written notice to Tenant of the exercise of such
option within thirty (30) days after the date of such damage or destruction, in
which event this Lease shall cease and terminate as of the date of such notice.
Upon any such termination of this Lease pursuant to this Section 11.2, Tenant
shall pay the Base Rent and Additional Rent, properly apportioned up to such
date of termination, and both parties hereto shall thereafter be freed and
discharged of all further obligations hereunder, except as provided for in
provisions of this Lease which by their terms survive the expiration or earlier
termination of the Lease Term.
11.3 Waiver of Statutory Provisions. The provisions of this Lease,
including this Article 11, 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, the Building or any other portion of the Real Property, and any
statute or regulation of the state in which the Building is located, 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 statute
or regulation, now or hereafter in effect, shall have no application to this
Lease or any damage or destruction to all or any part of the Premises, the
Building or any other portion of the Real Property.
12. NONWAIVER No waiver of any provision of this Lease shall be implied by (i)
any failure of either party to insist in any instance on the strict keeping,
observance or performance of any covenant or agreement contained in this Lease
or exercise any election contained in this Lease, or (ii) any failure of either
party to enforce any remedy on account of the violation of such provision, even
if such violation shall continue or be repeated subsequently. Any waiver by
either party of any provision of this Lease may only be in writing, and no
express waiver shall affect any provision other than the one specified in such
waiver and that one only for the time and in the manner specifically stated.
13. CONDEMNATION If the whole or any part of the Premises or Building shall be
taken by power of eminent domain or condemned by any competent authority for any
public or quasi-public use or purpose, or if any adjacent property or street
shall be so taken or condemned, or reconfigured or vacated by such authority in
such manner as to require the use, reconstruction or remodeling of any part of
the Premises or Building, or if Landlord shall grant a deed or other instrument
in lieu of such taking by eminent domain or condemnation, Landlord shall have
the option to terminate this Lease upon ninety (90) days' notice, provided such
notice is given no later than one hundred eighty (180) days after the date of
such taking, condemnation, reconfiguration, vacation, deed or other instrument.
If more than twenty-five percent (25%) of the rentable square feet of the
Premises is taken, or if access to or Tenant's use of the Premises is
substantially impaired, Tenant shall have the option to terminate this Lease
upon ninety (90) days' notice, provided such notice is given no later than one
hundred eighty (180) days after the date of such taking. Landlord shall be
entitled to receive the entire award or payment in connection therewith, except
that Tenant shall have the right to file any separate claim available to Tenant
for any taking of Tenant's personal property and fixtures belonging to Tenant
and removable by Tenant upon expiration of the Lease Term pursuant to the terms
of this Lease, and for moving expenses, so long as such claim does not diminish
the award available to Landlord, its ground lessor with respect to the Real
Property or its mortgagee, and such claim is payable separately to Tenant. All
Rent shall be apportioned as of the date of such termination, or the date of
such taking, whichever shall first occur. If any part of the Premises shall be
taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Tenant hereby waives any and all rights it might
otherwise have pursuant to Section 1265.130 of the California Code of Civil
Procedure.
14. ASSIGNMENT AND SUBLETTING
14.1 Transfers. Except as provided in Section 14.7 below, Tenant shall
not, without the prior written consent of Landlord which consent shall not be
unreasonably withheld or delayed, assign, mortgage, pledge, encumber or
otherwise transfer, this Lease or any interest hereunder, permit any assignment
or other such foregoing transfer of this Lease or any interest hereunder by
operation of law, or sublet the Premises or any part thereof (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "Transferee"). To request Landlord's consent to any
Transfer, Tenant shall notify Landlord in writing, which notice (the "Transfer
Notice") shall include (i) the proposed effective date of the Transfer, which
shall not be less than forty-five (45) days after the date of delivery of the
Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the "Subject Space"), (iii) all of the terms of the proposed
Transfer and the consideration therefor, including a calculation of the
"Transfer Premium," as that term is defined in Section 14.3 below, in connection
with such Transfer, the name and address of the proposed Transferee, and a copy
of all existing and/or proposed documentation pertaining to the
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proposed Transfer, including all existing operative documents to be executed to
evidence such Transfer or the agreements incidental or related to such Transfer,
and (iv) current financial statements of the proposed Transferee certified by an
officer, partner or owner thereof, and any other information required by
Landlord, which will enable Landlord to determine the financial responsibility,
character, and reputation of the proposed Transferee, nature of such
Transferee's business and proposed use of the Subject Space, and such other
information as Landlord may reasonably require. Any Transfer made without
Landlord's prior written consent shall, at Landlord's option, be null, void and
of no effect, and shall, at Landlord's option, constitute a default by Tenant
under this Lease. Whether or not Landlord shall grant consent, Tenant shall pay
Landlord's review and processing fees, as well as any reasonable legal fees
incurred by Landlord, within thirty (30) days after written request by Landlord.
14.2 Landlord's Consent. Landlord shall respond to a Transfer request
within fifteen (15) business days following receipt of the Transfer Notice
(including all items specified in clauses (i) through (iv) of Section 14.1
above). Landlord shall not unreasonably withhold its consent to any proposed
Transfer of the Subject Space to the Transferee on the terms specified in the
Transfer Notice. The parties hereby agree that it shall be reasonable under this
Lease and under any applicable law for Landlord to withhold consent to any
proposed Transfer where one or more of the following apply, without limitation
as to other reasonable grounds for withholding consent:
14.2.1 The Transferee is of a character or reputation or engaged
in a business which is not consistent with the quality of the Building;
14.2.2 The Transferee intends to use the Subject Space for
purposes which are not permitted under this Lease;
14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;
14.2.4 The Transferee is not a party of reasonable financial
worth and/or financial stability in light of the responsibilities involved under
the Lease which are assumed pursuant to the terms of the Transfer on the date
consent is requested; or
14.2.5 The proposed Transfer would cause Landlord to be in
violation of another lease or agreement to which Landlord is a party, or would
give an occupant of the Building a right to cancel its lease;
14.2.6 The terms of the proposed Transfer will allow the
Transferee to exercise a right of renewal, right of expansion, right of first
offer, or other similar right held by Tenant (or will allow the Transferee to
occupy space leased by Tenant pursuant to any such right);
14.2.7 Either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (i) occupies space in the Building at the
time of the request for consent, (ii) is negotiating with Landlord to lease
space in the Building at such time, or (iii) has negotiated with Landlord during
the twelve (12)-month period immediately preceding the Transfer Notice.
If Landlord consents to any Transfer pursuant to the terms of this
Section 14.2 (and does not exercise any recapture rights Landlord may have under
Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant
to Landlord pursuant to Section 14.1 of this Lease. Notwithstanding the
foregoing, Landlord hereby approves Tessera Enterprise Systems, a Massachusetts
corporation, and Brigade Solutions, Inc., a California corporation, as
Transferees; provided, however, that the applicable sublease is executed by or
before January 1, 2000.
14.3 Transfer Premium. If Landlord consents to a Transfer, as a
condition thereto which the parties hereby agree is reasonable, Tenant shall pay
to Landlord seventy-five percent (75%) of any "Transfer Premium," as that term
is defined in this Section 14.3, received by Tenant from such Transferee.
"Transfer Premium" shall mean all rent, additional rent or other consideration
payable by such Transferee in excess of the Rent and Additional Rent payable by
Tenant under this Lease on a per rentable square foot basis if less than all of
the Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (i) any changes, alterations and improvements to the Premises in
connection with the Transfer, and (ii) attorneys' fees and brokerage commissions
in connection with the Transfer. "Transfer Premium" shall also include, but not
be limited to, key money and bonus money paid by
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Transferee to Tenant in connection with such Transfer, and any payment in excess
of fair market value for services rendered by Tenant to Transferee or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
Transferee in connection with such Transfer. Notwithstanding the foregoing, no
Transfer Premium shall be due in connection with any Transfer to an Affiliate
pursuant to Section 14.7 below.
14.4 Landlord's Option as to Subject Space. Notwithstanding anything to
the contrary contained in this Article 14, if Tenant desires to sublease or
assign the entire Premises (other than pursuant to Section 14.7 below), then
Landlord shall have the option, by giving written notice to Tenant within
fifteen (15) business days after receipt of any Transfer Notice (including all
items specified in clauses (i) through (iv) of Section 14.1 above), to recapture
the Subject Space. Such recapture notice shall cancel and terminate this Lease
with respect to the Subject Space as of the effective date of the proposed
Transfer.
14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the
terms and conditions of this Lease shall in no way be deemed to have been waived
or modified, (ii) such consent shall not be deemed consent to any further
Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, (iv) Tenant shall furnish upon Landlord's request a complete
statement, certified by an independent certified public accountant, or Tenant's
chief financial officer, setting forth in detail the computation of any Transfer
Premium Tenant has derived and shall derive from such Transfer, and (v) no
Transfer relating to this Lease or agreement entered into with respect thereto,
whether with or without Landlord's consent, shall relieve Tenant or any
guarantor of the Lease from liability under this Lease. Landlord or its
authorized representatives shall have the right at all reasonable times to audit
the books, records and papers of Tenant relating to any Transfer, and shall have
the right to make copies thereof. If the Transfer Premium respecting any
Transfer shall be found understated, Tenant shall, within thirty (30) days after
demand, pay the deficiency and Landlord's costs of such audit, and if
understated by more than ten percent (10%), Landlord shall have the right to
cancel this Lease upon thirty (30) days' notice to Tenant.
14.6 Additional Transfers. Except as provided in Section 14.7 below, for
purposes of this Lease, the term "Transfer" shall also include (i) if Tenant is
a partnership, the withdrawal or change, voluntary, involuntary or by operation
of law, of twenty-five percent (25%) or more of the partners, or transfer of
twenty-five percent or more of partnership interests, within a twelve (12)-month
period, or the dissolution of the partnership without immediate reconstitution
thereof, and (ii) if Tenant is a closely held corporation (i.e., whose stock is
not publicly held and not traded through an exchange or over the counter), (A)
the dissolution, merger, consolidation or other reorganization of Tenant, (B)
the sale or other transfer of more than an aggregate of twenty-five percent
(25%) of the voting shares of Tenant (other than to immediate family members by
reason of gift or death), within a twelve (12)-month period, or (C) the sale,
mortgage, hypothecation or pledge of more than an aggregate of twenty-five
percent (25%) of the value of the unencumbered assets of Tenant within a twelve
(12) month period.
14.7 Non-Transfers. Notwithstanding anything to the contrary contained
in this Article 14, an assignment of this Lease or subletting by Tenant of all
or a portion of the Premises to (i) a parent or subsidiary of Tenant, or (ii)
any person or entity which controls, is controlled by or under common control
with Tenant, or (iii) any entity which purchases all or substantially all of the
assets or stock of Tenant, or (iv) any entity into which Tenant is merged or
consolidated or which merges into Tenant (all such persons or entities described
in (i), (ii), (iii) and (iv) being sometimes hereinafter referred to as
"Affiliates"), shall not require Landlord's consent and shall not be deemed a
Transfer under this Article 14, provided that (a) any such Affiliate was not
formed as a subterfuge to avoid the obligations of this Article 14; (b) Tenant
gives Landlord at least thirty (30) days' prior written notice of any such
assignment or sublease to an Affiliate; (c) the successor of Tenant has, as of
the effective date of any such assignment or sublease, a tangible net worth,
computed in accordance with generally accepted accounting principles (but
excluding goodwill as an asset), which is equal to or greater than the net worth
of Tenant as of the date of execution of this Lease; (d) any such assignment or
sublease shall be subject and subordinate to all of the terms and provisions of
this Lease, and such Affiliate shall assume, in a written document reasonably
satisfactory to Landlord and, if commercially practicable, delivered to Landlord
upon or prior to the effective date of such assignment or sublease (but, in any
event, delivered to Landlord no later than thirty (30) days following the
effective date of such assignment or sublease), all the obligations of Tenant
under this Lease; and (e) Tenant and any guarantor shall remain fully liable for
all obligations to be performed by Tenant under this Lease. The sale of stock
pursuant to a public offering shall not constitute a Transfer under this Section
14.
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15. OWNERSHIP AND REMOVAL OF TRADE FIXTURES
15.1 Surrender of Premises. No act or thing done by Landlord or any
agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in a writing signed by Landlord. The
delivery of keys to the Premises to Landlord or any agent or employee of
Landlord shall not constitute a surrender of the Premises or effect a
termination of this Lease, whether or not the keys are thereafter retained by
Landlord, and notwithstanding such delivery Tenant shall be entitled to the
return of such keys at any reasonable time upon request until this Lease shall
have been properly terminated.
15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15 and Section 8.4 above, quit and surrender
possession of the Premises to Landlord in as good order and condition as when
Tenant took possession and as thereafter improved by Landlord and/or Tenant,
reasonable wear and tear and damage by casualty excepted. Upon such expiration
or termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, and such items of furniture,
equipment, free-standing cabinet work, and other articles of personal property
owned by Tenant or installed or placed by Tenant at its expense in the Premises,
and such similar articles of any other persons claiming under Tenant, as
Landlord may, in its sole discretion, require to be removed, and Tenant shall
repair at its own expense all damage to the Premises and Building resulting from
such removal.
16. HOLDING OVER If Tenant holds over after the expiration of the Lease Term
hereof, with or without the express or implied consent of Landlord, such tenancy
shall be from month-to-month only, and shall not constitute a renewal hereof or
an extension for any further term, and in such case Base Rent shall be payable
at a monthly rate equal to one hundred fifty percent (150%) of the Base Rent
applicable during the last rental period of the Lease Term under this Lease.
Such month-to-month tenancy shall be subject to every other term, covenant and
agreement contained herein. Nothing contained in this Article 16 shall be
construed as consent by Landlord to any holding over by Tenant, and Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon the expiration or other
termination of this Lease. The provisions of this Article 16 shall not be deemed
to limit or constitute a waiver of any other rights or remedies of Landlord
provided herein or at law. If Tenant fails to surrender the Premises upon the
termination or expiration of this Lease, in addition to any other liabilities to
Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold
Landlord harmless from all loss, costs (including reasonable attorneys' fees)
and liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender, and any lost profits to Landlord resulting
therefrom.
17. ESTOPPEL CERTIFICATES Within ten (10) business days following a request in
writing by Landlord, Tenant shall execute and deliver to Landlord an estoppel
certificate, which, as submitted by Landlord, shall be substantially in the form
of Exhibit E, attached hereto (or such other form as may be required by any
prospective mortgagee or purchaser of the Real Property, or any portion
thereof), indicating therein any exceptions thereto that may exist at that time,
and shall also contain any other information reasonably requested by Landlord or
Landlord's mortgagee or prospective mortgagee. Tenant shall execute and deliver
whatever other instruments may be reasonably required for such purposes. Failure
of Tenant to timely execute and deliver such estoppel certificate or other
instruments shall constitute an acceptance of the Premises and an acknowledgment
by Tenant that statements included in the estoppel certificate are true and
correct, without exception. Within ten (10) business days following a request in
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writing by Tenant, Landlord shall execute and deliver to Tenant an estoppel
certificate in a form reasonably acceptable to Landlord.
18. SUBORDINATION This Lease is subject and subordinate to all present and
future ground or underlying leases of the Real Property and to the lien of any
mortgages or trust deeds, now or hereafter in force against the Real Property
and the Building, if any, and to all renewals, extensions, modifications,
consolidations and replacements thereof, and to all advances made or hereafter
to be made upon the security of such mortgages or trust deeds, unless the
holders of such mortgages or trust deeds, or the lessors under such ground lease
or underlying leases, require in writing that this Lease be superior thereto.
Notwithstanding the foregoing, the subordination of this Lease to any mortgage,
trust deed or other encumbrance or any ground or underlying lease is subject to
Tenant's receipt of a commercially reasonable non-disturbance agreement from the
holder of such mortgage or other instrument or such ground or underlying lease
in a form reasonably satisfactory to Tenant. Tenant covenants and agrees in the
event any proceedings are brought for the foreclosure of any such mortgage, or
if any ground or underlying lease is terminated, to attorn, without any
deductions or set-offs whatsoever, to the purchaser upon any such foreclosure
sale, or to the lessor of such ground or underlying lease, as the case may be,
if so requested to do so by such purchaser or lessor, and to recognize such
purchaser or lessor as the lessor under this Lease, provided that such purchaser
or lessor agrees that Tenant's use and possession of the Premises pursuant to
the terms of this Lease shall not be disturbed so long as Tenant is not in
default under this Lease. Tenant shall, within ten (10) business days of request
by Landlord, execute such further instruments or assurances as Landlord may
reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases or
underlying leases. Tenant hereby irrevocably authorizes Landlord to execute and
deliver in the name of Tenant any such instrument or instruments if Tenant fails
to do so, provided that such authorization shall in no way relieve Tenant from
the obligation of executing such instruments of subordination or superiority.
Tenant waives the provisions of any current or future statute, rule or law which
may give or purport to give Tenant any right or election to terminate or
otherwise adversely affect this Lease and the obligations of the Tenant
hereunder in the event of any foreclosure proceeding or sale. Within sixty (60)
days after the Lease Commencement Date, Landlord shall provide to Tenant a
commercially reasonable non-disturbance agreement from the holder of the then
existing deed of trust on the Real Property, provided that Tenant executes such
subordination, non-disturbance and attornment agreement as may be required by
such lender.
19. DEFAULTS; REMEDIES
19.1 Events of Default. The occurrence of any of the following shall
constitute a default under this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due; provided,
however, that Tenant shall have a grace period of three (3) days from the date
of receipt of written notice from Landlord within which to cure any failure in
the payment of Rent, except that Landlord shall not be required to provide such
notice, and such 3-day grace period shall not apply, more than twice during any
twelve (12) month period;
19.1.2 Any failure by Tenant to respond to Landlord's request
under Article 17 or 18 within the time permitted therein for such response; or
19.1.3 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written notice
thereof from Landlord to Tenant; provided however, that any such notice shall be
in lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 or any similar or successor law; and provided
further that if the nature of such default is such that the same cannot
reasonably be cured within a thirty (30)-day period, Tenant shall not be deemed
to be in default if it diligently commences such cure within such period and
thereafter diligently proceeds to rectify and cure said default as soon as
possible; or
19.1.4 Abandonment (for a period in excess of thirty (30) days),
vacation or surrender of the Premises by Tenant.
19.2 Remedies Upon Default. Upon the occurrence of any event of default
by Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity, the option to pursue any one or more of the
following remedies, each and all of which shall be cumulative and nonexclusive,
without any notice or demand whatsoever.
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19.2.1 Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the
Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor; and Landlord may recover from Tenant the following: (i) the
worth at the time of award of any unpaid rent which has been earned at the time
of such termination; plus (ii) 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 rental loss that Tenant proves could
have been reasonably avoided; plus (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the Lease Term after the time
of award exceeds the amount of such rental loss that Tenant proves could have
been reasonably avoided; plus (iv) any other 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, specifically including but not limited to,
brokerage commissions and advertising expenses incurred, expenses of remodeling
the Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and (v)
at Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Paragraphs 19.2.1(i)
and (ii), above, the "worth at the time of award" shall be computed by allowing
interest at the rate set forth in Article 25 of this Lease, but in no case
greater than the maximum amount of such interest permitted by law. As used in
Paragraph 19.2.1(iii) above, the "worth at the time of award" 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%).
19.2.2 Landlord shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has the
right to sublet or assign, subject only to reasonable limitations). Accordingly,
if Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
19.3 Sublessees of Tenant. Whether or not Landlord elects to terminate
this Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
19.4 Waiver of Default. No waiver by Landlord or Tenant of any violation
or breach of any of the terms, provisions and covenants herein contained shall
be deemed or construed to constitute a waiver of any other or later violation or
breach of the same or any other of the terms, provisions, and covenants herein
contained. Forbearance by Landlord in enforcement of 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. The acceptance of any Rent hereunder by
Landlord following the occurrence of any default, whether or not known to
Landlord, shall not be deemed a waiver of any such default, except only a
default in the payment of the Rent so accepted.
19.5 Landlord Default. Any failure by Landlord to observe or perform any
provision, covenant or condition of this Lease to be observed or performed by
Landlord, where such failure continues for thirty (30) days after written notice
thereof from Tenant to Landlord, shall constitute a default under this Lease by
Landlord; provided, however, if the nature of such default is such that the same
cannot reasonably be cured within a thirty (30) day period, Landlord shall not
be deemed to be in default if it diligently commences such cure within such
period and thereafter diligently proceeds to rectify and cure said default as
soon as possible.
20. FORCE MAJEURE Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, inability to obtain services, labor, or materials
or reasonable substitutes therefor, governmental actions, civil commotions, fire
or other casualty, and other causes beyond the reasonable control of the party
obligated to perform, except with respect to the obligations imposed with regard
to Rent and other charges to be paid by Tenant
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pursuant to this Lease (collectively, the "Force Majeure"), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.
21. LETTER OF CREDIT Within fifteen (15) business days after execution of this
Lease by both Landlord and Tenant, Tenant shall deliver to Landlord an
irrevocable standby letter of credit in the amount of Two Million Dollars
($2,000,000.00) (the "Letter of Credit") as security for the faithful
performance by Tenant of its obligations under this Lease. The Letter of Credit
shall be upon the terms and subject to the following provisions of this Section
21.
21.1 Application of Letter of Credit. If Tenant fails to pay Rent or
other charges due hereunder (and such failure constitutes a default under this
Lease), or otherwise defaults with respect to any provision of this Lease, in
addition to any other rights held by Landlord, Landlord may draw upon and apply
such portion of the Letter of Credit as is necessary to satisfy the payment of
any Rent or other charge in default, or for the payment of any other sum to
which Landlord may become obligated by reason of Tenant's default, or to
compensate Landlord for any loss or damage which Landlord may suffer thereby. If
any portion of the Letter of Credit is so applied, Tenant shall, within fifteen
(15) business days after written demand therefor, provide a replacement or
supplemental letter of credit to bring the face amount of the then available
letter of credit to its then required amount, and Tenant's failure to do so
shall be a non-curable default under this Lease.
21.2 Terms of Letter of Credit. The Letter of Credit shall commence
within fifteen (15) business days of the date of execution of this Lease and
Tenant shall renew the Letter of Credit from time to time through the Lease
Term, at least thirty (30) days prior to the expiration thereof and deliver to
Landlord a new Letter of Credit or an endorsement to the Letter of Credit and
any other evidence required by Landlord that the Letter of Credit has been
renewed. If Tenant has not provided to Landlord evidence of such renewal thirty
(30) days prior to the expiration thereof, then Landlord shall have the right to
draw on the Letter of Credit pursuant to this Section 21 and hold such amount as
a security deposit, pursuant to Section 22 below. The Letter of Credit shall be
(i) issued by a bank reasonably approved by Landlord ("Bank") and "callable" by
Landlord through a branch office of the Bank located in San Francisco,
California, and (ii) in a form containing the required provisions set forth in
Sections 21.2.1 through 21.2.4 below. The premium or purchase price of, or any
other Bank fees associated with, such Letter of Credit shall be paid by Tenant.
The Letter of Credit shall, without limiting the foregoing, provide that:
21.2.1 Such Letter of Credit shall expressly permit partial draws
and shall be transferable, irrevocable and unconditional, so that Landlord, or
its successor(s) in interest, may at any time "call" for any portion of the then
uncalled upon amount thereof without regard to and without the Bank inquiring as
to the right or lack of right of the holder of the Letter of Credit to effect
such calls or the existence or lack of existence of any defenses by Tenant with
respect thereto;
21.2.2 Landlord agrees not to draw upon the Letter of Credit
unless Landlord claims default by Tenant under the Lease after giving notice
thereof to Tenant in accordance with the terms of this Lease and the expiration
of any applicable cure period set forth in this Lease, and if Landlord does
effect such a "draw," such "draw" amount shall be such amount (partial or full)
as necessary to compensate Landlord for such default.
21.2.3 Any failure or delay of Landlord to "draw" any portion of
the Letter of Credit shall not act as a waiver of Landlord's right to do so at
any time thereafter or constitute a waiver of any default with respect to the
Lease.
21.2.4 Tenant agrees not to interfere in any way with payment to
Landlord of the proceeds of the Letter of Credit, either prior to or following a
"draw" by Landlord of any portion of the Letter of Credit, regardless of whether
any dispute exists between Tenant and Landlord as to Landlord's right to "draw"
from the Letter of Credit. No condition or term of this Lease shall be deemed to
render the Letter of Credit conditional upon this Lease or to justify the issuer
of the Letter of Credit in failing to honor a draw upon such Letter of Credit in
a timely manner. In the event Landlord is determined through any dispute
resolution procedure agreed upon by the parties or by a court of competent
jurisdiction to have improperly drawn on the Letter of Credit, then Tenant shall
be entitled to receive a prompt refund of such amount from Landlord. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code, and
all other provisions of law, now or hereafter in force, which provide that
Landlord may claim from a security deposit (including the Letter of Credit) only
those sums reasonably necessary to remedy defaults in the payment of rent, to
repair damage caused by Tenant or to clean the Premises, it being agreed that
Landlord may, in addition, claim those sums reasonably necessary to compensate
Landlord for any other loss or
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damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or
any officer, employee, agent or invitee of Tenant.
21.3 Reduction of Letter of Credit. Notwithstanding the foregoing,
commencing on the second (2nd) anniversary of the Lease Commencement Date and on
each anniversary of the Lease Commencement Date thereafter through and including
the fifth (5th) anniversary of the Lease Commencement Date, Tenant shall have
the right to have the amount of the Letter of Credit reduced by One Hundred
Thousand Dollars ($100,000.00), provided that Tenant is not in default under the
terms of this Lease at the time of the applicable reduction. Commencing on the
sixth (6th) anniversary of the Lease Commencement Date and on each anniversary
of the Lease Commencement Date thereafter, Tenant shall have the right to have
the amount of the Letter of Credit reduced by Two Hundred Thousand Dollars
($200,000.00), provided that Tenant is not in default under the terms of this
Lease at the time of the applicable reduction.
21.4 Termination of Letter of Credit. Notwithstanding the foregoing, in
the event that Tenant has a net worth of at least Fifty Million Dollars
($50,000,000.00), then Tenant shall have the right to have the Letter of Credit
terminated, provided that Tenant is not in default under the terms of this Lease
at the time of such termination. If at any time thereafter Tenant's net worth
drops below Twenty-Five Million Dollars ($25,000,000.00), Tenant shall be
required to deliver to Landlord a new Letter of Credit in the amount of Two
Million Dollars ($2,000,000.00), to be held or applied by Landlord in accordance
with the provisions of this Section 21. As used in this Section 21.4, the "net
worth" of Tenant shall not include the value, if any, of this Lease.
22. SECURITY DEPOSIT Concurrent with Tenant's execution of this Lease, Tenant
shall deposit with Landlord a security deposit (the "Security Deposit") in the
amount set forth in Section 11 of the Summary. The Security 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 Lease Term. If Tenant defaults with respect to any provisions
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 the Security Deposit for the payment of any Rent or
any other sum in default, or for the payment of any amount that Landlord may
spend or become obligated to spend by reason of Tenant's default, or to
compensate Landlord for any other loss or damage that Landlord may suffer by
reason of Tenant's default. If any portion of the Security Deposit is so used or
applied, Tenant shall, within ten (10) business days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount, and Tenant's failure to do so shall be
a default under this Lease. If Tenant shall fully and faithfully perform every
provision of this Lease to be performed by it, the Security Deposit, or any
balance thereof, shall be returned to Tenant, or, at Landlord's option, to the
last assignee of Tenant's interest hereunder, within sixty (60) days following
the expiration of the Lease Term. Tenant shall not be entitled to any interest
on the Security Deposit.
23. SIGNS
23.1 In General. Tenant shall be entitled, at its sole cost and expense,
to the following signage: (a) identification signage outside of the Building in
the form of a plaque at the ground floor entry to the Building, (ii) a prominent
exterior sign in keeping with the scope and scale of the Building on the face of
the Building. (iii) signage in the main lobby, and (iv) signage at the entrance
to Premises. The location, quality, design, style, lighting and size of such
signage shall be consistent with any applicable governmental codes or
regulations and shall be subject to Landlord's prior written approval, not to be
unreasonably withheld. Upon the expiration or earlier termination of this Lease,
Tenant shall be responsible, at its sole cost and expense, for the removal of
such signage and the repair of all damage to the Building caused by such
removal.
23.2 Prohibited Signage and Other Items. Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
individually approved by Landlord may be removed without notice by Landlord at
the sole expense of Tenant. Except as expressly provided in this Section 23,
Tenant may not install any signs on the exterior or roof of the Building or the
common areas of the Building or the Real Property Any signs, window coverings,
or blinds (even if the same are located behind the Landlord approved window
coverings for the Building), or other items visible from the exterior of the
Premises or Building are subject to the prior written approval of Landlord, not
to be unreasonably withheld.
23.3 Building Directory. A building directory will be located in the
lobby of the Building. Tenant shall have the right, at Landlord's cost and
expense, to a certain number of name strips pursuant to the Landlord's Building
standard signage program to be displayed under Tenant's entry in such directory.
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24. COMPLIANCE WITH LAW Tenant shall not do anything or suffer anything to be
done in or about the Premises which will in any way conflict with any law,
statute, ordinance or other governmental rule, regulation or requirement now in
force or which may hereafter be enacted or promulgated. At its sole cost and
expense, Tenant shall promptly comply with all such governmental measures, other
than the making of structural changes or changes to the Building's life safety
system. Should any standard or regulation now or hereafter be imposed on
Landlord or Tenant by a state, federal or local governmental body charged with
the establishment, regulation and enforcement of occupational, health or safety
standards for employers, employees, landlords or tenants, then Tenant agrees, at
its sole cost and expense, to comply promptly with such standards or
regulations. The judgment of any court of competent jurisdiction or the
admission of Tenant in any judicial action, regardless of whether Landlord is a
party thereto, that Tenant has violated any of said governmental measures, shall
be conclusive of that fact as between Landlord and Tenant.
25. LATE CHARGES If any installment of Rent or any other sum due from Tenant
shall not be received by Landlord or Landlord's designee within five (5) days
after said amount is due, or if any check delivered to Landlord by Tenant shall
be returned for insufficient funds, then Tenant shall pay to Landlord a late
charge equal to five percent (5%) of the amount due. In addition to the late
charge, in the event any check is returned for insufficient funds, Tenant shall
pay to Landlord, as additional rent, the sum of $25.00. The late charge shall be
deemed Additional Rent and the right to require it shall be in addition to all
of Landlord's other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord's remedies in any
manner. In addition to the late charge described above, any Rent or other
amounts owing hereunder which are not paid when due shall thereafter bear
interest until paid at a rate equal to ten percent (10%) per annum, provided
that in no case shall such rate be higher than the highest rate permitted by
applicable law. In the event that more than one (1) check of Tenant is returned
for insufficient funds in any twelve (12) month period, Landlord shall have the
right to require that any or all subsequent payments by Tenant to Landlord be in
the form of cash, money order, cashier's or certified check drawn on an
institution acceptable to Landlord, notwithstanding any prior practice of
accepting payments in any different form.
26. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
26.1 Landlord's Cure. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction of Rent. If Tenant shall fail to
perform any of its obligations under this Lease, within a reasonable time after
such performance is required by the terms of this Lease, Landlord may, but shall
not be obligated to, after reasonable prior notice to Tenant, make any such
payment or perform any such act on Tenant's part without waiving its right based
upon any default of Tenant and without releasing Tenant from any obligations
hereunder.
26.2 Tenant's Reimbursement. Except as may be specifically provided to
the contrary in this Lease, Tenant shall pay to Landlord, within fifteen (15)
days after delivery by Landlord to Tenant of statements therefor: (i) sums equal
to expenditures reasonably made and obligations incurred by Landlord in
connection with the remedying by Landlord of Tenant's defaults pursuant to the
provisions of Section 26.1; (ii) sums equal to all losses, costs, liabilities,
damages and expenses referred to in Article 10 of this Lease; and (iii) sums
equal to all expenditures made and obligations incurred by Landlord in
collecting or attempting to collect the Rent or in enforcing or attempting to
enforce any rights of Landlord under this Lease or pursuant to law, including,
without limitation, all legal fees and other amounts so expended. Tenant's
obligations under this Section 26.2 shall survive the expiration or sooner
termination of the Lease Term.
27. ENTRY BY LANDLORD Landlord reserves the right at all reasonable times and
upon reasonable notice to the Tenant to enter the Premises to (i) inspect them;
(ii) show the Premises to prospective purchasers, mortgagees or tenants, or to
the ground or underlying lessors; (iii) post notices of nonresponsibility; or
(iv) alter, improve or repair the Premises or the Building if necessary to
comply with current building codes or other applicable laws, or for structural
alterations, repairs or improvements to the Building. Notwithstanding anything
to the contrary contained in this Article 27, Landlord may enter the Premises at
any time to (A) perform services required of Landlord; (B) take possession due
to any default by Tenant under this Lease in the manner provided herein; and (C)
perform any covenants of Tenant which Tenant fails to perform. Any such entries
shall be without the abatement of Rent and shall include the right to take such
reasonable steps as required to accomplish the stated purposes. Tenant hereby
waives any claims for damages or for any injuries or inconvenience to or
interference with Tenant's business, lost profits, any loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned thereby. For each
of the above purposes, Landlord shall at all times have a key with which to
unlock all the doors in the Premises. In an emergency, Landlord shall have the
right to use any means that Landlord may deem proper to open the doors in and to
the Premises. Any entry into the Premises in the manner hereinbefore described
shall not be deemed to be a
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forcible or unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises.
28. MISCELLANEOUS PROVISIONS
28.1 Binding Effect. Each of the provisions of this Lease shall extend
to and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Article 14 of this Lease.
28.2 No Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Building, the same shall
be without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.
28.3 Modification of Lease. Should any current or prospective mortgagee
or ground lessor for the Building require a modification or modifications of
this Lease, which modification or modifications will not cause any increased
cost or expense to Tenant or in any other way materially and adversely change
the rights and obligations of Tenant hereunder, then and in such event, Tenant
agrees that this Lease may be so modified and agrees to execute whatever
documents are required therefor and deliver the same to Landlord within ten (10)
business days following the request therefor. Should Landlord or any such
current or prospective mortgagee or ground lessor require execution of a short
form of Lease for recording, containing, among other customary provisions, the
names of the parties, a description of the Premises and the Lease Term, Tenant
agrees to execute such short form of Lease and to deliver the same to Landlord
within ten (10) days following the request therefor.
28.4 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
has the right to transfer all or any portion of its interest in the Real
Property and Building and in this Lease, and Tenant agrees that in the event of
any such transfer, Landlord shall automatically be released from all liability
under this Lease accruing after the date of such transfer and Tenant agrees to
look solely to such transferee for the performance of Landlord's obligations
hereunder after the date of transfer. The liability of any transferee of
Landlord shall be limited to the interest of such transferee in the Real
Property and Building and such transferee shall be without personal liability
under this Lease, and Tenant hereby expressly waives and releases such personal
liability on behalf of itself and all persons claiming by, through or under
Tenant. Tenant further acknowledges that Landlord may assign its interest in
this Lease to a mortgage lender as additional security and agrees that such an
assignment shall not release Landlord from its obligations hereunder and that
Tenant shall continue to look to Landlord for the performance of its obligations
hereunder.
28.5 Prohibition Against Recording. Except as provided in Section 28.3
of this Lease, neither this Lease, nor any memorandum, affidavit or other
writing with respect thereto, shall be recorded by Tenant or by anyone acting
through, under or on behalf of Tenant, and the recording thereof in violation of
this provision shall make this Lease null and void at Landlord's election.
28.6 Relationship of Parties. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
28.7 Application of Payments. Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
28.8 Time of Essence. Time is of the essence of this Lease and each of
its provisions.
28.9 Partial Invalidity. If any term, provision or condition contained
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected
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thereby, and each and every other term, provision and condition of this Lease
shall be valid and enforceable to the fullest extent possible permitted by law.
28.10 No Warranty. In executing and delivering this Lease, Tenant has
not relied on any representation, including, but not limited to, any
representation whatsoever as to the amount of any item comprising Additional
Rent or the amount of the Additional Rent in the aggregate or that Landlord is
furnishing the same services to other tenants, at all, on the same level or on
the same basis, or any warranty or any statement of Landlord which is not set
forth herein or in one or more of the exhibits attached hereto.
28.11 Entire Agreement. It is understood and acknowledged that there are
no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease.
28.12 Right to Lease. Landlord reserves the absolute right to effect
such other tenancies in the Building as Landlord in the exercise of its sole
business judgment shall determine to best promote the interests of the Building.
Tenant does not rely on the fact, nor does Landlord represent, that any specific
tenant or type or number of tenants shall, during the Lease Term, occupy any
space in the Building.
28.13 Waiver of Redemption by Tenant. Tenant hereby waives for Tenant
and for all those claiming under Tenant all right now or hereafter existing to
redeem by order or judgment of any court or by any legal process or writ,
Tenant's right of occupancy of the Premises after any termination of this Lease.
28.14 Notices. All notices, demands, statements or communications
(collectively, "Notices") given or required to be given by either party to the
other hereunder shall be in writing, shall be sent by United States certified or
registered mail, postage prepaid, return receipt requested, or delivered
personally (i) to Tenant at the appropriate address set forth in Section 5 of
the Summary, or to such other place as Tenant may from time to time designate in
a Notice to Landlord; or (ii) to Landlord at the addresses set forth in Section
3 of the Summary, or to such other firm or to such other place as Landlord may
from time to time designate in a Notice to Tenant. Any Notice will be deemed
given on the date it is mailed as provided in this Section 28.19 or upon the
date personal delivery is made. If Tenant is notified of the identity and
address of Landlord's mortgagee or ground or underlying lessor, Tenant shall
give to such mortgagee or ground or underlying lessor written notice of any
default by Landlord under the terms of this Lease by registered or certified
mail, and such mortgagee or ground or underlying lessor shall be given a
reasonable opportunity to cure such default prior to Tenant's exercising any
remedy available to Tenant.
28.15 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to an amount which is equal to the interest of Landlord in the Building, and
neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant.
28.16 Joint and Several. If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.
28.17 Authority. If Tenant is a corporation or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in the state in which the Building is located and that Tenant has full
right and authority to execute and deliver this Lease and that each person
signing on behalf of Tenant is authorized to do so. The undersigned Landlord
signatories, by their execution hereof, each hereby represents and warrants to
Tenant that Landlord has full right and authority to execute and deliver this
Lease and that each person signing on behalf of Landlord is authorized to do so.
28.18 Attorneys' Fees. If either party commences litigation against the
other for the specific performance of this Lease, for damages for the breach
hereof or otherwise for enforcement of any remedy hereunder, the parties hereto
agree to and hereby do waive any right to a trial by jury and, in the event of
any such commencement of litigation, the prevailing party shall be entitled to
recover from the other party such costs and reasonable attorneys'
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fees as may have been incurred, including any and all costs incurred in
enforcing, perfecting and executing such judgment.
28.19 Governing Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California.
28.20 Submission of Lease. Submission of this instrument for examination
or signature by Tenant does not constitute a reservation of or an option for
lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
28.21 Brokers. Landlord and Tenant hereby warrant to each other that
they have had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, and that they know of no other real estate
broker or agent who is entitled to a commission in connection with this Lease,
excepting only the real estate brokers or agents specified in Section 13 of the
Summary (the "Brokers"). Each party agrees to indemnify and defend the other
party against and hold the other party harmless from any and all claims,
demands, losses, liabilities, lawsuits, judgments, and costs and expenses
(including without limitation reasonable attorneys' fees) with respect to any
leasing commission or equivalent compensation alleged to be owing on account of
the indemnifying party's dealings with any real estate broker or agent, other
than the Brokers.
28.22 Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.
28.23 Building Name and Signage. Landlord shall have the right at any
time to change the name of the Building and to install, affix and maintain any
and all signs on the exterior and on the interior of the Building as Landlord
may, in Landlord's sole discretion, desire.
28.24 Transportation Management. Tenant shall fully comply with all
present or future programs intended to manage parking, transportation or traffic
in and around the Building, and in connection therewith, Tenant shall take
responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities.
28.25 Hazardous Material. As used herein, the term "Hazardous Material"
means any hazardous or toxic substance, material or waste (including, without
limitation, asbestos-containing material) which is or becomes regulated by any
local governmental authority, the state in which the Building is located or the
United States Government. Tenant acknowledges that Landlord may incur costs (A)
for complying with laws, codes, regulations or ordinances relating to Hazardous
Material, or (B) otherwise in connection with Hazardous Material. Tenant agrees
that the costs incurred by Landlord with respect to, or in connection with,
complying with laws, codes, regulations or ordinances relating to Hazardous
Material shall be an Operating Expense (but only to the extent permitted
pursuant to the terms of Section 4.2.4 above), unless the cost of such
compliance, as between Landlord and Tenant, is made the responsibility of Tenant
under this Lease.
28.26 Confidentiality. Tenant acknowledges that the content of this
Lease and any related documents are confidential information. Tenant shall keep
such confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants.
28.27 Landlord Renovations. It is specifically understood and agreed
that Landlord has no obligation and has made no promises to alter, remodel,
improve, renovate, repair or decorate the Premises, Building, or any part
thereof and that no representations respecting the condition of the Premises or
the Building have been made by Landlord to Tenant except as specifically set
forth herein or in the Tenant Work Letter. However, Tenant acknowledges that
Landlord is currently renovating or may during the Lease Term renovate, improve,
alter, or modify (collectively, the "Renovations") the Building, Premises,
and/or Real Property, including without limitation the common areas, systems and
equipment, roof, and structural portions of the same. In connection with such
Renovations, Landlord may, among other things, erect scaffolding or other
necessary structures in the Building, limit or eliminate access to portions of
the Real Property, including portions of the common areas, or perform work in
the
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Building, which work may create noise, dust or leave debris in the Building.
Tenant hereby agrees that such Renovations and Landlord's actions in connection
with such Renovations shall in no way constitute a constructive eviction of
Tenant nor entitle Tenant to any abatement of Rent. Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant's business arising from the Renovations,
nor shall Tenant be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises or of Tenant's personal
property or improvements resulting from the Renovations or Landlord's actions in
connection with such Renovations, or for any inconvenience or annoyance
occasioned by such Renovations or Landlord's actions in connection with such
Renovations unless due to the gross negligence or willful misconduct of Landlord
or any party under Landlord's direction and control. Notwithstanding the
foregoing, Landlord agrees to use all commercially reasonable efforts to
minimize any disruption to Tenant's use and occupancy of the Premises caused by
Landlord's activities, and at all times, to the fullest extent possible, to
maintain the main entrances, lobbies and elevators of the Building, and access
to the Premises, clear of construction and other work materials, and without
noise, dust and debris.
28.28 Asbestos Disclosures. Tenant specifically acknowledges that Tenant
has been advised that asbestos-containing materials were used in the initial
construction of the Building, and may have been used in connection with various
additions and improvements made thereafter from time to time. Landlord shall
comply with applicable laws, from time to time in effect, which require the
abatement, removal, encapsulation or other remediation of Hazardous Material in
the Building. The cost of such compliance by Landlord shall be includable in
Operating Expenses only to the extent permitted pursuant to the terms of Section
4.2.4, above.
28.29 Landlord Liability. None of the shareholders, partners, directors
or officers of Landlord (collectively, the "Landlord Parties") shall be liable
for the performance of Landlord's obligations under this Lease. Tenant shall
look solely to Landlord to enforce Landlord's obligations hereunder and shall
not seek any damages against any of the Landlord Parties. The liability of
Landlord for Landlord's obligations under this Lease shall not exceed and shall
be limited to Landlord's interest in the Real Property and Tenant shall not look
to the property or assets of any of the Landlord Parties in seeking either to
enforce Landlord's obligations under this Lease or to satisfy a judgment for
Landlord's failure to perform such obligations.
28.30 Landlord's Consent. Whenever Landlord's consent or approval is
required under this Lease or the Tenant Work Letter, such consent or approval
shall be in writing.
28.31 Early Occupancy. Tenant's early occupancy of the Premises for any
purpose shall be subject to all the terms and conditions of this Lease, other
than the obligation to pay Base Rent, subject to Section 3 of this Lease, and
utilities.
29. OPTION TERM
29.1 Option Right. So long as Tenant has not subleased more than one (1)
floor of the Premises to another tenant, Landlord hereby grants the originally
named Tenant herein (or any Affiliate to whom this Lease has been assigned
pursuant to Section 14.7 above (a "Permitted Assignee")), one (1) option to
extend the Lease Term for a period of five (5) years (the "Option Term"), which
option shall be exercisable only by written notice delivered by Tenant to
Landlord as provided below, provided that, as of the date of delivery of such
notice, Tenant is not in default under this Lease and Tenant has not previously
been in default under this Lease more than once in the prior twenty-four (24)
months. Upon the proper exercise of such option to extend, and provided that, as
of the end of the initial Lease Term, Tenant is not in default under this Lease
and Tenant has not previously been in default under this Lease more than once in
the prior twenty-four (24) months, the Lease Term, as it applies to the
Premises, shall be extended for a period of five (5) years. The rights contained
in this Section 29 shall be personal to Tenant or a Permitted Assignee and may
only be exercised by Tenant or a Permitted Assignee (and not any other assignee,
sublessee or other transferee of Tenant's interest in this Lease) if Tenant or
such Permitted Assignee occupies at least four (4) floors of the Premises.
29.2 Option Rent. The rent payable by Tenant during the Option Term (the
"Option Rent") shall be equal to rent at which tenants, as of the commencement
of the Option Term, will be leasing non-sublease space comparable in size,
location and quality to the Premises taking into consideration seismic braced,
exposed brick and timber construction with air-conditioning and operable windows
for a comparable term and the fact that the Premises are in a building with
single-tenant identity, which comparable space is located in other comparable
mid-rise office buildings in the downtown/media gulch area of San Francisco,
California (making appropriate adjustments for otherwise comparable buildings
that do not have all of the foregoing characteristics); provided, however, that
in no
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event will Option Rent be less than the Base Rent payable by Tenant for the last
year of the initial term of the Lease. All other terms and conditions of the
Lease shall apply throughout the Option Term; however, any obligation of
Landlord to construct tenant improvements or provide an allowance (if
applicable) shall not apply during the Option Term and Tenant shall, in no
event, have the option to extend the Lease Term beyond the Option Term described
in Section 29.1 above.
29.3 Exercise of Option. The option contained in this Section 29 shall
be exercised by Tenant, if at all, and only in the following manner: (i) Tenant
shall deliver written notice to Landlord not more than three hundred (300) days
nor less than two hundred seventy (270) days prior to the expiration of the
initial Lease Term, stating that Tenant is exercising its option; (ii) Landlord,
after receipt of Tenant's notice, shall deliver notice (the "Option Rent
Notice") to Tenant not less than two hundred ten (210) days prior to the
expiration of the initial Lease Term, setting forth the Option Rent; and (iii)
if Tenant wishes to object to the Option Rent, Tenant shall, on or before the
earlier of (A) the date occurring one hundred eighty prior to the expiration of
the initial Lease Term, and (B) the date occurring thirty (30) days after
Tenant's receipt of the Option Rent Notice deliver written notice thereof to
Landlord, in which case the parties shall follow the procedure, and the Option
Rent shall be determined, as set forth in Section 29.4 below.
29.4 Determination of Option Rent. In the event Tenant timely and
appropriately objects to the Option Rent, Landlord and Tenant shall attempt to
agree upon the Option Rent using their best good-faith efforts. If Landlord and
Tenant fail to reach agreement within ten (10) days following Tenant's objection
to the Option Rent, (the "Outside Agreement Date"), then each party shall make a
separate determination of the Option Rent, as the case may be, within five (5)
days, and such determinations shall be submitted to arbitration in accordance
with Sections 29.4.1 through 29.4.7 below.
29.4.1 Landlord and Tenant shall each appoint one arbitrator who
shall by profession be a real estate broker or appraiser who shall have been
active over the five (5) year period ending on the date of such appointment in
the leasing (or appraisal, as the case may be) of commercial mid-rise properties
in the San Francisco area. The determination of the arbitrators shall be limited
solely to the issue area of whether Landlord's or Tenant's submitted Option
Rent, is the closest to the actual Option Rent as determined by the arbitrators,
taking into account the requirements of Section 29.2 above. Each such arbitrator
shall be appointed within fifteen (15) days after the applicable Outside
Agreement Date.
29.4.2 The two arbitrators so appointed shall within ten (10)
days of the date of the appointment of the last appointed arbitrator agree upon
and appoint a third arbitrator who shall be qualified under the same criteria
set forth hereinabove for qualification of the initial two arbitrators.
29.4.3 The three arbitrators shall within thirty (30) days of the
appointment of the third arbitrator reach a decision as to whether the parties
shall use Landlord's or Tenant's submitted Option Rent, and shall notify
Landlord and Tenant thereof.
29.4.4 The decision of the majority of the three arbitrators
shall be binding upon Landlord and Tenant.
29.4.5 If either Landlord or Tenant fails to appoint an
arbitrator within fifteen (15) days after the applicable Outside Agreement Date,
the arbitrator appointed by one of them shall reach a decision, notify Landlord
and Tenant thereof, and such arbitrator's decision shall be binding upon
Landlord and Tenant.
29.4.6 If the two arbitrators fail to agree upon and appoint a
third arbitrator, or both parties fail to appoint an arbitrator, then the
appointment of the third arbitrator or any arbitrator shall be dismissed and the
matter to be decided shall be forthwith submitted to arbitration under the
provisions of the American Arbitration Association, but subject to the
instruction set forth in this Section 29.4.
29.4.7 The cost of arbitration shall be paid by the
non-prevailing party.
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
"Landlord":
--------------------------------------
JONATHAN PARKER
--------------------------------------
THOMAS M. MONAHAN
HAROLD PARKER PROPERTIES, a California
limited partnership
By:
-----------------------------------
Name
-------------------------------
Its:
-------------------------------
--------------------------------------
HAROLD A. PARKER, as trustee for the HAROLD
A. PARKER COMPANY TRUST dated May 11, 1988
--------------------------------------
GERTRUD V. PARKER, as trustee for the HAROLD
A. PARKER COMPANY TRUST dated May 11, 1988
"Tenant":
E-GREETINGS NETWORK,
a California corporation
By:
-----------------------------------
Its:
-------------------------------
By:
-----------------------------------
Its:
-------------------------------
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EXHIBIT A
149 NEW MONTGOMERY
OUTLINE OF PREMISES
[SEE ATTACHED]
EXHIBIT A-Page 1
26
EXHIBIT B
149 NEW MONTGOMERY
TENANT WORK LETTER
This Tenant Work Letter (this "Tenant Work Letter"), which is attached
as Exhibit B to that certain Lease (the "Lease") dated April 13, 1999, between
JONATHAN PARKER, a married man as his sole and separate property; THOMAS M.
MONAHAN, a married man as his sole and separate property; HAROLD PARKER
PROPERTIES, L.P., a California limited partnership; and HAROLD A. PARKER,
TRUSTEE, and GERTRUD V. PARKER, TRUSTEE, of the HAROLD A. PARKER COMPANY TRUST
dated May 11, 1988; all as Tenants in Common, (collectively, "Landlord"), and
E-GREETINGS NETWORK, a California corporation ("Tenant"), sets forth the terms
and conditions relating to the construction of the tenant improvements in the
Premises. This Tenant Work Letter is essentially organized chronologically and
addresses the issues of the construction of the Premises, in sequence, as such
issues will arise during the actual construction of the Premises.
SECTION 1
DELIVERY OF THE PREMISES
1.1 Base Building as Constructed by Landlord. At such time as Tenant
shall have delivered to Landlord the Security Deposit, pursuant to Section 22 of
the Lease, and the Letter of Credit, pursuant to Section 21 of the Lease,
Landlord shall deliver the Premises to Tenant, and Tenant shall accept the
Premises from Landlord in their then existing, "as-is" condition, subject to
Landlord's obligations hereunder, for the purposes of Tenant's construction of
the Tenant Improvements pursuant to this Work Letter. Landlord agrees to use
commercially reasonable efforts to complete the following items by September 1,
1999:
1.1.1 Electrical utilities are provided at the individual floors
of the Building, with a main tenant electrical panel providing a single 400 amp
service. Secondary raceways and distribution wiring for power and lighting shall
be paid for by Tenant.
1.1.2 Installation of a base building sprinkler system, including
sprinkler heads for minimum coverage as required by code. Additional costs for
sprinkler relocation due to tenant reflected ceiling design shall be paid for by
Tenant.
1.1.3 New men's and women's restrooms on each floor of the
Premises, which shall be in compliance with the Americans with Disabilities Act
(the "ADA").
1.1.4 All interior perimeter brick walls shall be sandblasted.
1.1.5 The ceiling shall be sheetrocked and firetaped only within
the Premises and finish painted within the core corridor and lobby.
1.1.6 All core walls shall be sheetrocked, taped and painted at
the core side and firetaped only on the Tenant side.
1.1.7 All life safety systems required by code within the core
area shall be provided by Landlord.
1.1.8 Landlord shall provide the heating and cooling condenser
water service stubbed to each floor of the Building. The Tenant heating,
ventilating and air-conditioning ("HVAC") system shall be a heat pump system.
The exact distribution of the system shall be designed and paid for by Tenant
(including the cost of heat pumps) as part of the Tenant Improvements, as
defined in Section 2.1 below.
1.2 Exterior Painting. Landlord agrees to consult with Tenant concerning
the painting scheme for the exterior of the Building, provided that Landlord
shall retain the right to make the final decision.
EXHIBIT B- Page 1
27
SECTION 2
TENANT IMPROVEMENTS
2.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time
tenant improvement allowance (the "Tenant Improvement Allowance") in the amount
of $35.00 per rentable square foot of the Premises for the costs relating to the
initial design and construction of Tenant's improvements, which are permanently
affixed to the Premises (the "Tenant Improvements"). In no event shall Landlord
be obligated to make disbursements pursuant to this Tenant Work Letter in a
total amount which exceeds the Tenant Improvement Allowance.
2.2 Disbursement of the Tenant Improvement Allowance.
2.2.1 Tenant Improvement Allowance Items. Except as otherwise set
forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord only for the following items and costs (collectively the
"Tenant Improvement Allowance Items"):
2.2.1.1 Payment of the fees of the "Architect" and the
"Engineers," as those terms are defined in Section 3.1 of this Tenant Work
Letter, which fees shall, notwithstanding anything to the contrary contained in
this Tenant Work Letter, not exceed an aggregate amount equal to $3.50 per
usable square foot of the Premises, and payment of the reasonable fees incurred
by Landlord and Landlord's consultants in connection with the review of the
"Construction Drawings," as that term is defined in Section 3.1 of this Tenant
Work Letter;
2.2.1.2 The payment of plan check, permit and license fees
relating to construction of the Tenant Improvements;
2.2.1.3 The cost of construction of the Tenant
Improvements, including, without limitation, testing and inspection costs,
hoisting and trash removal costs, and contractors' fees and general conditions;
2.2.1.4 The cost of any changes in the Base Building when
such changes are required by the Construction Drawings (including if such
changes are due to the fact that such work is prepared on an unoccupied basis),
such cost to include all direct architectural and/or engineering fees and
expenses incurred in connection therewith;
2.2.1.5 The cost of any changes to the Construction
Drawings or Tenant Improvements required by all applicable building codes (the
"Code");
2.2.1.6 The cost of the "Coordination Fee," as that term
is defined in Section 4.2.2 of this Tenant Work Letter; and
2.2.1.7 Sales and use taxes and Title 24 fees.
2.2.2 Disbursement of Tenant Improvement Allowance. During the
construction of the Tenant Improvements, Landlord shall make monthly
disbursements of the Tenant Improvement Allowance for Tenant Improvement
Allowance Items for the benefit of Tenant and shall authorize the release of
monies for the benefit of Tenant as follows.
2.2.2.1 Monthly Disbursements. On or before the day of
each calendar month, as determined by Landlord, during the construction of the
Tenant Improvements (or such other date as Landlord may designate), Tenant shall
deliver to Landlord: (i) a request for payment to Contractor, as that term is
defined in Section 4.1 below, approved by Tenant, in a form to be provided by
Landlord, showing the schedule, by trade, of percentage of completion of the
Tenant Improvements in the Premises, detailing the portion of the work completed
and the portion not completed; (ii) invoices from all of "Tenant's Agents," as
that term is defined in Section 4.1.2 of this Tenant Work Letter, for labor
rendered and materials delivered to the Premises; (iii) executed mechanic's lien
releases from all of Tenant's Agents which shall comply with the appropriate
provisions, as reasonably determined by Landlord, of California Civil Code
Section 3262(d); and (iv) all other information reasonably requested by
Landlord. Tenant's request for payment shall be deemed Tenant's acceptance and
approval of the work furnished
EXHIBIT B - Page 2
28
and/or the materials supplied as set forth in Tenant's payment request.
Thereafter, Landlord shall deliver a check to Tenant made jointly payable to
Contractor and Tenant in payment of the lesser of: (A) the amounts so requested
by Tenant, as set forth in this Section 2.2.2.1, above, less a ten percent (10%)
retention (the aggregate amount of such retentions to be known as the "Final
Retention"), except there shall be no retention to the extent the relevant
contract already provides for a retention, and (B) the balance of any remaining
available portion of the Tenant Improvement Allowance (not including the Final
Retention), provided that Landlord does not dispute any request for payment
based on non-compliance of any work with the "Approved Working Drawings," as
that term is defined in Section 3.4 of this Tenant Work Letter, below, or due to
any substandard work, or for any other reason. Landlord's payment of such
amounts shall not be deemed Landlord's approval or acceptance of the work
furnished or materials supplied as set forth in Tenant's payment request.
2.2.2.2 Final Retention. Subject to the provisions of this
Tenant Work Letter, a check for the Final Retention payable jointly to Tenant
and Contractor shall be delivered by Landlord to Tenant following the completion
of construction of the Premises, provided that (i) Tenant delivers to Landlord
properly executed mechanics lien releases in compliance with both California
Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or Section
3262(d)(4), (ii) Landlord has determined that no substandard work exists which
adversely affects the mechanical, electrical, plumbing, heating, ventilating and
air conditioning, life-safety or other systems of the Building, the curtain wall
of the Building, the structure or exterior appearance of the Building, or any
other tenant's use of such other tenant's leased premises in the Building and
(iii) Architect delivers to Landlord a certificate, in a form reasonably
acceptable to Landlord, certifying that the construction of the Tenant
Improvements in the Premises has been substantially completed.
2.2.2.3 Other Terms. Landlord shall only be obligated to
make disbursements from the Tenant Improvement Allowance to the extent costs are
incurred by Tenant for Tenant Improvement Allowance Items. All Tenant
Improvement Allowance Items for which the Tenant Improvement Allowance has been
made available shall be deemed Landlord's property under the terms of this
Lease.
SECTION 3
CONSTRUCTION DRAWINGS
3.1 Selection of Architect/Construction Drawings. Tenant shall retain
Hooks Design (the "Architect") to prepare the "Construction Drawings," as that
term is defined in this Section 3.1. Tenant shall retain the engineering
consultants, as reasonably approved by Landlord, (the "Engineers") to prepare
all plans and engineering working drawings relating to the structural,
mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the
Premises, which work is not part of the Base Building. The plans and drawings to
be prepared by Architect and the Engineers hereunder shall be known collectively
as the "Construction Drawings." All Construction Drawings shall comply with the
drawing format and specifications determined by Landlord, and shall be subject
to Landlord's approval. Tenant and Architect shall verify, in the field, the
dimensions and conditions as shown on the relevant portions of the base building
plans, and Tenant and Architect shall be solely responsible for the same, and
Landlord shall have no responsibility in connection therewith. Landlord's review
of the Construction Drawings as set forth in this Section 3, shall be for its
sole purpose and shall not imply Landlord's review of the same, or obligate
Landlord to review the same, for quality, design, Code compliance or other like
matters. Accordingly, notwithstanding that any Construction Drawings are
reviewed by Landlord or its space planner, architect, engineers and consultants,
and notwithstanding any advice or assistance which may be rendered to Tenant by
Landlord or Landlord's space planner, architect, engineers, and consultants,
Landlord shall have no liability whatsoever in connection therewith and shall
not be responsible for any omissions or errors contained in the Construction
Drawings, and Tenant's waiver and indemnity set forth in this Lease shall
specifically apply to the Construction Drawings.
3.2 Final Space Plan. Tenant shall supply Landlord with two (2) copies
signed by Tenant of its final space plan for the Premises before any
architectural working drawings or engineering drawings have been commenced. The
final space plan (the "Final Space Plan") shall include a layout and designation
of all offices, rooms and other partitioning, their intended use, and equipment
to be contained therein. Landlord may request clarification or more specific
drawings for special use items not included in the Final Space Plan. Landlord
shall advise Tenant within five (5) business days after Landlord's receipt of
the Final Space Plan for the Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall promptly cause
the Final Space Plan to be revised to correct any deficiencies or other matters
Landlord may reasonably require.
EXHIBIT B - Page 3
29
3.3 Final Working Drawings. After the Final Space Plan has been approved
by Landlord, Tenant shall supply the Engineers with a complete listing of
standard and non-standard equipment and specifications, including, without
limitation, B.T.U. calculations, electrical requirements and special electrical
receptacle requirements for the Premises, to enable the Engineers and the
Architect to complete the "Final Working Drawings" (as that term is defined
below) in the manner as set forth below. Upon the approval of the Final Space
Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the
Engineers to complete the architectural and engineering drawings for the
Premises, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the "Final Working Drawings") and shall submit
the same to Landlord for Landlord's approval. Tenant shall supply Landlord with
two (2) copies signed by Tenant of such Final Working Drawings. Landlord shall
advise Tenant within five (5) business days after Landlord's receipt of the
Final Working Drawings for the Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall immediately
revise the Final Working Drawings in accordance with such review and any
disapproval of Landlord in connection therewith.
3.4 Approved Working Drawings. The Final Working Drawings shall be
approved by Landlord (the "Approved Working Drawings") prior to the commencement
of construction of the Premises by Tenant. After approval by Landlord of the
Final Working Drawings, Tenant may submit the same to the appropriate municipal
authorities for all applicable building permits. Tenant hereby agrees that
neither Landlord nor Landlord's consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the Premises and that
obtaining the same shall be Tenant's responsibility; provided, however, that
Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent may not be unreasonably withheld.
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
4.1 Tenant's Selection of Contractors.
4.1.1 The Contractor. Tenant shall retain Morse Diesel as the
general contractor to construct the Tenant Improvements ("Contractor").
4.1.2 Tenant's Agents. All subcontractors, laborers, materialmen,
and suppliers used by Tenant (such subcontractors, laborers, materialmen, and
suppliers, and the Contractor to be known collectively as "Tenant's Agents")
must be approved in writing by Landlord, which approval shall not be
unreasonably withheld or delayed. If Landlord does not approve any of Tenant's
proposed subcontractors, laborers, materialmen or suppliers, Tenant shall submit
other proposed subcontractors, laborers, materialmen or suppliers for Landlord's
written approval.
4.2 Construction of Tenant Improvements by Tenant's Agents.
4.2.1 Construction Contract; Cost Budget. Tenant shall submit the
construction contract (the "Contract") to Landlord for its approval, which
approval shall not be unreasonably withheld or delayed. Prior to the
commencement of the construction of the Tenant Improvements, and after Tenant
has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord
with a detailed breakdown, by trade, of the final costs to be incurred or which
have been incurred, as set forth more particularly in Sections 2.2.1.1 through
2.2.1.8 of this Tenant Work Letter, above, in connection with the design and
construction of the Tenant Improvements to be performed by or at the direction
of Tenant or the Contractor, which costs form a basis for the amount of the
Contract (the "Final Costs"). Prior to the commencement of construction of the
Tenant Improvements, Tenant shall supply Landlord with cash in an amount (the
"Over-Allowance Amount") equal to the difference between the amount of the Final
Costs and the amount of the Tenant Improvement Allowance (less any portion
thereof already disbursed by Landlord, or in the process of being disbursed by
Landlord, on or before the commencement of construction of the Tenant
Improvements). The Over-Allowance Amount shall be disbursed by Landlord prior to
the disbursement of any of the then remaining portion of the Tenant Improvement
Allowance, and such disbursement shall be pursuant to the same procedure as the
Tenant Improvement Allowance. In the event that, after the Final Costs have been
delivered by
EXHIBIT B - Page 4
30
Tenant to Landlord, the costs relating to the design and construction of the
Tenant Improvements shall change, any additional costs necessary to such design
and construction in excess of the Final Costs, shall be paid by Tenant to
Landlord immediately as an addition to the Over-Allowance Amount or at
Landlord's option, Tenant shall make payments for such additional costs out of
its own funds, but Tenant shall continue to provide Landlord with the documents
described in Sections 2.2.2.1 (i), (ii), (iii) and (iv) of this Tenant Work
Letter, above, for Landlord's approval, prior to Tenant paying such costs.
4.2.2 Tenant's Agents.
4.2.2.1 Landlord's General Conditions for Tenant, Tenant's
Agents and Tenant Improvement Work. Tenant's and Tenant's Agent's construction
of the Tenant Improvements shall comply with the following: (i) the Tenant
Improvements shall be constructed in strict accordance with the Approved Working
Drawings; (ii) Tenant's Agents shall submit schedules of all work relating to
the Tenant's Improvements to Contractor and Contractor shall, within five (5)
business days of receipt thereof, inform Tenant's Agents of any changes which
are necessary thereto, and Tenant's Agents shall adhere to such corrected
schedule; and (iii) Tenant shall abide by all rules made by Landlord's Building
manager with respect to the use of freight, loading dock and service elevators,
storage of materials, coordination of work with the contractors of other
tenants, and any other matter in connection with this Tenant Work Letter,
including, without limitation, the construction of the Tenant Improvements.
Tenant shall pay a logistical coordination fee (the "Coordination Fee") to
Landlord in the amount of Fifty Thousand Dollars ($50,000), which Coordination
Fee shall be for services relating to the coordination of the construction of
the Tenant Improvements.
4.2.2.2 Indemnity. Tenant's indemnity of Landlord as set
forth in this Lease shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to any act or omission of
Tenant or Tenant's Agents, or anyone directly or indirectly employed by any of
them, or in connection with Tenant's non-payment of any amount arising out of
the Tenant Improvements and/or Tenant's disapproval of all or any portion of any
request for payment. Such indemnity by Tenant, as set forth in this Lease, shall
also apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to Landlord's performance of any ministerial acts
reasonably necessary (i) to permit Tenant to complete the Tenant Improvements,
and (ii) to enable Tenant to obtain any building permit or certificate of
occupancy for the Premises.
4.2.2.3 Requirements of Tenant's Agents. Each of Tenant's
Agents shall guarantee to Tenant and for the benefit of Landlord that the
portion of the Tenant Improvements for which it is responsible shall be free
from any defects in workmanship and materials for a period of not less than one
(1) year from the date of completion thereof. Tenant and each of Tenant's Agents
shall be responsible for the replacement or repair, without additional charge,
of all work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the
work performed by such contractor or subcontractors and (ii) the Lease
Commencement Date. The correction of such work shall include, without additional
charge, all additional expenses and damages incurred in connection with such
removal or replacement of all or any part of the Tenant Improvements, and/or the
Building and/or common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with respect to
the Tenant Improvements shall be contained in the Contract or subcontract and
shall be written such that such guarantees or warranties shall inure to the
benefit of both Landlord and Tenant, as their respective interests may appear,
and can be directly enforced by either. Tenant covenants to give to Landlord any
assignment or other assurances which may be necessary to effect such right of
direct enforcement.
4.2.2.4 Insurance Requirements.
4.2.2.4.1 General Coverages. Tenant and all of Tenant's
Agents shall carry worker's compensation insurance covering all of their
respective employees, and shall also carry public liability insurance, including
property damage, all with limits, in form and with companies as are required to
be carried by Tenant as set forth in this Lease.
4.2.2.4.2 Special Coverages. Tenant shall carry "Builder's
All Risk" insurance in an amount approved by Landlord covering the construction
of the Tenant Improvements, and such other insurance as Landlord may require, it
being understood and agreed that the Tenant Improvements shall be insured by
Tenant pursuant to this Lease immediately upon completion thereof. Such
insurance shall be in amounts and shall include
EXHIBIT B - PAGE 5
31
such extended coverage endorsements as may be reasonably required by Landlord
including, but not limited to, the requirement that Tenant and all of Tenant's
Agents shall carry excess liability and Products and Completed Operation
Coverage insurance, each in amounts not less than $500,000 per incident,
$1,000,000 in aggregate, and in form and with companies as are required to be
carried by Tenant as set forth in this Lease.
4.2.2.4.3 General Terms. Certificates for all insurance
carried pursuant to this Section 4.2.2.4 shall be delivered to Landlord before
the commencement of construction of the Tenant Improvements and before the
Contractor's equipment is moved onto the site. All such policies of insurance
must contain a provision that the company writing said policy will give Landlord
thirty (30) days prior written notice of any cancellation or lapse of the
effective date or any reduction in the amounts of such insurance. In the event
that the Tenant Improvements are damaged by any cause during the course of the
construction thereof, Tenant shall immediately repair the same at Tenant's sole
cost and expense. Tenant and Tenant's Agents shall maintain all of the foregoing
insurance coverage in force until the Tenant Improvements are fully completed
and accepted by Landlord, except for any Products and Completed Operation
Coverage insurance required by Landlord, which is to be maintained for ten (10)
years following completion of the work and acceptance by Landlord and Tenant.
All policies carried under this Section 4.2.2.4 shall insure Landlord and
Tenant, as their interests may appear, as well as Contractor and other Tenant's
Agents. All insurance, except Workers' Compensation, maintained by Tenant and
Tenant's Agents shall preclude subrogation claims by the insurer against anyone
insured thereunder. Such insurance shall provide that it is primary insurance as
respects the owner and that any other insurance maintained by owner is excess
and noncontributing with the insurance required hereunder. The requirements for
the foregoing insurance shall not derogate from the provisions for
indemnification of Landlord by Tenant under Section 4.2.2.2 of this Tenant Work
Letter.
4.2.3 Governmental Compliance. The Tenant Improvements shall
comply in all respects with the following: (i) the Code and other state,
federal, city or quasi-governmental laws, codes, ordinances and regulations, as
each may apply according to the rulings of the controlling public official,
agent or other person; (ii) applicable standards of the American Insurance
Association (formerly, the National Board of Fire Underwriters) and the National
Electrical Code; and (iii) building material manufacturer's specifications.
4.2.4 Inspection by Landlord. Landlord shall have the right to
inspect the Tenant Improvements at all times, provided however, that Landlord's
failure to inspect the Tenant Improvements shall in no event constitute a waiver
of any of Landlord's rights hereunder nor shall Landlord's inspection of the
Tenant Improvements constitute Landlord's approval of the same. Should Landlord
disapprove any portion of the Tenant Improvements, Landlord shall notify Tenant
in writing of such disapproval and shall specify the items disapproved. Any
defects or deviations in, and/or disapproval by Landlord of, the Tenant
Improvements shall be rectified by Tenant at no expense to Landlord, provided
however, that in the event Landlord determines that a defect or deviation exists
or disapproves of any matter in connection with any portion of the Tenant
Improvements and such defect, deviation or matter might adversely affect the
mechanical, electrical, plumbing, heating, ventilating and air conditioning or
life-safety systems of the Building, the structure or exterior appearance of the
Building or any other tenant's use of such other tenant's leased premises,
Landlord may, take such action as Landlord deems necessary, at Tenant's expense
and without incurring any liability on Landlord's part, to correct any such
defect, deviation and/or matter, including, without limitation, causing the
cessation of performance of the construction of the Tenant Improvements until
such time as the defect, deviation and/or matter is corrected to Landlord's
satisfaction.
4.2.5 Meetings. Commencing upon the execution of this Lease,
Tenant shall hold weekly meetings at a reasonable time, with the Architect and
the Contractor regarding the progress of the preparation of Construction
Drawings and the construction of the Tenant Improvements, which meetings shall
be held at a location designated by Landlord, and Landlord and/or its agents
shall receive prior notice of, and shall have the right to attend, all such
meetings, and, upon Landlord's request, certain of Tenant's Agents shall attend
such meetings. In addition, minutes shall be taken at all such meetings, a copy
of which minutes shall be promptly delivered to Landlord. One such meeting each
month shall include the review of Contractor's current request for payment.
4.2.6 Interference. Tenant, hereby acknowledges that Landlord
shall be performing certain construction work in the Building during
construction of the Tenant Improvements. Tenant and Tenant's Agents shall not
interfere with Landlord, its contractor or any of Landlord's agents during the
construction of the Tenant Improvements.
EXHIBIT B - Page 6
32
4.3 Notice of Completion; Copy of Record Set of Plans. Within ten (10)
days after completion of construction of the Tenant Improvements, Tenant shall
cause a Notice of Completion to be recorded in the office of the Recorder of the
county in which the Building is located in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do
so, Landlord may execute and file the same on behalf of Tenant as Tenant's agent
for such purpose, at Tenant's sole cost and expense. At the conclusion of
construction, (i) Tenant shall cause the Architect and Contractor (A) to update
the Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings during the course of construction, (B) to certify to
the best of their knowledge that the "record-set" of as-built drawings are true
and correct, which certification shall survive the expiration or termination of
this Lease, and (C) to deliver to Landlord two (2) sets of copies of such record
set of drawings within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy of
all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.
SECTION 5
MISCELLANEOUS
5.1 Tenant's Representative. Tenant has designated Deva Berman as its
sole representative with respect to the matters set forth in this Tenant Work
Letter, who shall have full authority and responsibility to act on behalf of the
Tenant as required in this Tenant Work Letter.
5.2 Landlord's Representative. Landlord has designated Thomas M. Monahan
as its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
5.3 Time of the Essence in This Tenant Work Letter. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. If any item requiring approval is timely disapproved by Landlord,
the procedure for preparation of the document and approval thereof shall be
repeated until the document is approved by Landlord.
5.4 Tenant's Lease Default. Notwithstanding any provision to the
contrary contained in this Lease, if an event of default as described in the
Lease or this Tenant Work Letter has occurred at any time on or before the
Substantial Completion of the Premises, then (i) in addition to all other rights
and remedies granted to Landlord pursuant to this Lease, Landlord shall have the
right to withhold payment of all or any portion of the Tenant Improvement
Allowance and/or Landlord may cause Contractor to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such work stoppage), and (ii)
all other obligations of Landlord under the terms of this Tenant Work Letter
shall be forgiven until such time as such default is cured pursuant to the terms
of this Lease (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such inaction by Landlord).
5.5 Landlord Delays. The Lease Commencement Date shall occur as provided
in Section 2 of the Lease, unless the "substantial completion of the Tenant
Improvements," as that term is defined hereinbelow, are delayed beyond the Lease
Commencement Date because of a "Landlord Delay." In the event a Landlord Delay
occurs and such delay actually delays the substantial completion of the Tenant
Improvements beyond September 1, 1999, then the Lease Commencement Date shall be
delayed one (1) day for every day of Landlord Delay. As used herein, "Landlord
Delay" shall mean actual delays to the extent resulting from the acts or
omissions of Landlord including, but not limited to, (a) failure of Landlord to
approve or disapprove any Construction Drawings or other items within the time
periods provided in this Tenant Work Letter; (b) material interference by
Landlord, its agents or contractors with the completion of the Tenant
Improvements and which objectively preclude construction of tenant improvements
in the Building by any person, which interference relates to access by Tenant,
its agents and contractors to the Building or any Building facilities (including
loading docks and freight elevators) or service (including temporary power and
parking areas as provided herein) during normal construction hours, or the use
thereof during normal construction hours; and (c) delays due to the acts or
failures to act of Landlord, its agents or contractors with respect to payment
of the Tenant Improvements. As used in this Section 5.5, "substantial completion
of the Tenant Improvements" shall mean completion of construction of the Tenant
Improvements in the Premises pursuant to the Construction Drawings with the
exception of minor details of construction installation,
EXHIBIT B - Page 7
33
decoration, or mechanical adjustments and punchlist items as certified to by the
Tenant's project manager and/or the architect who prepared the Construction
Drawings. In the event that an event occurs after the Lease Commencement Date
but prior to the substantial completion of the Tenant Improvements, which would
otherwise have constituted a Landlord Delay had it occurred prior to the Lease
Commencement Date, the Lease Commencement Date shall be retroactively delayed
one (1) day for each such day of actual Landlord Delay. If Tenant contends that
a Landlord Delay has occurred, Tenant shall notify Landlord in writing (the
"Delay Notice") of such event and if such event is determined to constitute a
Landlord Delay, the Landlord Delay shall be deemed to have occurred commencing
as of the date of Landlord's receipt of the Delay Notice, except that Tenant
shall not be required to provide a Delay Notice based on the failure of Landlord
to approve or disapprove the Construction Drawings within the required
applicable time period.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Tenant Work
Letter to be executed the day and date first above written.
"Landlord":
----------------------------------------------
JONATHAN PARKER
----------------------------------------------
THOMAS M. MONAHAN
HAROLD PARKER PROPERTIES, a California
limited partnership
By:
---------------------------------
Name:
---------------------------------
Its:
---------------------------------
----------------------------------------------
HAROLD A. PARKER, as trustee for the HAROLD A.
PARKER COMPANY TRUST dated May 11, 1988
----------------------------------------------
GERTRUD V. PARKER, as trustee for the
HAROLD A. PARKER COMPANY TRUST dated May 11,
1988
"Tenant":
E-GREETINGS NETWORK,
a California corporation
By:
---------------------------------
Its:
---------------------------------
By:
---------------------------------
Its:
---------------------------------
EXHIBIT B - Page 8
34
EXHIBIT C
149 NEW MONTGOMERY
NOTICE OF LEASE TERM DATES
To:
--------------------------
--------------------------
--------------------------
Re: Office Lease dated April 13, 1999, between JONATHAN PARKER, a
married man as his sole and separate property; THOMAS M. MONAHAN,
a married man as his sole and separate property; HAROLD PARKER
PROPERTIES, L.P., a California limited partnership; and HAROLD A.
PARKER, TRUSTEE, AND GERTRUD V. PARKER, TRUSTEE of the HAROLD A.
PARKER COMPANY TRUST dated May 11, 1988; all as Tenants in Common
("Landlord"), and E-GREETINGS NETWORK, a California
corporation,("Tenant") concerning the 2nd, 3rd, 4th, 5th and 6th
floors of the Office Building located at 149 New Montgomery
Street, San Francisco, California.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:
1. That the Premises are Ready for Occupancy, and that the Lease Term
shall commence as of ________________ for a term of _______________ ending on
_______________.
2. That in accordance with the Lease, Rent commenced to accrue on
_______________________.
3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.
4. Rent is due and payable in advance on the first day of each and every
month during the Lease Term. Your rent checks should be made payable to
____________________________________ at____________________________.
5. The exact number of rentable square feet within the Premises is
_______ square feet.
EXHIBIT C - Page 1
35
6. Tenant's Share as adjusted based upon the exact number of rentable
square feet within the Premises is _______%.
"Landlord":
------------------------------------------
JONATHAN PARKER
------------------------------------------
THOMAS M. MONAHAN
------------------------------------------
HAROLD PARKER PROPERTIES,
a California limited partnership
By:
---------------------------------
Name:
------------------------------
Its:
------------------------------
-------------------------------------------
HAROLD A. PARKER, as trustee for the HAROLD A.
PARKER COMPANY TRUST, dated May 11, 1988
-------------------------------------------
GERTRUD V. PARKER, as trustee for the HAROLD A.
PARKER COMPANY TRUST, dated May 11, 1988
Agreed to and Accepted as
of _____________, 19__.
"Tenant":
E-GREETINGS NETWORK,
a California corporation
By:
------------------------
Its:
--------------------
EXHIBIT C - Page 2
36
EXHIBIT D
149 NEW MONTGOMERY
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Building.
1. Tenant shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the Premises without obtaining
Landlord's prior written consent. Tenant shall bear the cost of any lock changes
or repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord.
2. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises, unless electrical
hold backs have been installed.
3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register when so doing. Access to the Building may be
refused unless the person seeking access has proper identification or has a
previously arranged pass for access to the Building. The Landlord and his agents
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, Landlord reserves the right to
prevent access to the Building during the continuance of same by any means it
deems appropriate for the safety and protection of life and property.
4. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy property brought into the Building. Safes
and 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
property in any case. All damage done to any part of the Building, its contents,
occupants or visitors by moving or maintaining any such safe or other property
shall be the sole responsibility of Tenant and any expense of said damage or
injury shall be borne by Tenant.
5. Whenever Tenant brings into the Building (or moves between floors)
any furniture or bulky freight, packages, supplies, equipment or merchandise in
the Building, Tenant shall install such padding or take such other actions or
prescribe such procedures as are appropriate to protect against damage to the
elevators or other parts of the Building.
6. Landlord shall have the right to control and operate the public
portions of the Building, the public facilities, the heating and air
conditioning, and any other facilities furnished for the common use of tenants,
in such manner as is customary for comparable buildings in the vicinity of the
Building.
7. The requirements of Tenant will be attended to only upon application
at the Office of the Building or at such office location designated by Landlord.
Employees of Landlord shall not perform any work or do anything outside their
regular duties unless under special instructions from Landlord.
8. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate with Landlord or Landlord's agents to prevent same.
9. 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. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose employees or agents, shall have caused it.
EXHIBIT D - Page 1
37
10. Tenant shall not overload the floor of the Premises, nor mark, drive
nails or screws, or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof without Landlord's consent first had and
obtained.
11. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines of any description other
than fractional horsepower office machines shall be installed, maintained or
operated upon the Premises without the written consent of Landlord.
12. Tenant shall not use or keep in or on the Premises or the Building
any kerosene, gasoline or other inflammable or combustible fluid or material.
13. Tenant shall not use any method of heating or air conditioning other
than that which may be supplied by Landlord, without the prior written consent
of Landlord.
14. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors, or vibrations, or
interfere in any way with other Tenants or those having business therein.
15. Tenant shall not bring into or keep within the Building or the
Premises any animals (except for one (1) dog per floor), birds, or vehicles
(other than bicycles).
16. No cooking shall be done or permitted by any tenant on the Premises,
nor shall the Premises be used for the storage of merchandise, for lodging or
for any improper, objectionable or immoral purposes. Notwithstanding the
foregoing, Underwriters' laboratory-approved equipment and microwave ovens may
be used in the Premises for heating food and brewing coffee, tea, hot chocolate
and similar beverages, provided that such use is in accordance with all
applicable federal, state and city laws, codes, ordinances, rules and
regulations, and does not cause odors which are objectionable to Landlord and
other Tenants.
17. Landlord will approve where and how telephone and telegraph wires
are to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone, call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.
18. 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 these Rules and Regulations.
19. Tenant, its employees and agents shall not loiter in the entrances
or corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or
elevators, and shall use the same only as a means of ingress and egress for the
Premises.
20. Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in the city
in which the Building is located without violation of any law or ordinance
governing such disposal. All trash, garbage and refuse disposal shall be made
only through entry-ways and elevators provided for such purposes at such times
as Landlord shall designate.
21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed, when the Premises are not
occupied.
23. Landlord may waive any one or more of these Rules and Regulations
for the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and
EXHIBIT D - Page 2
38
Regulations in favor of any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules or Regulations against any or all tenants of
the Building.
24. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises without the prior written
consent of Landlord. All electrical ceiling fixtures hung in offices or spaces
along the perimeter of the Building must be fluorescent and/or of a quality,
type, design and bulb color approved by Landlord.
25. The sashes, sash doors, skylights, windows, and doors that reflect
or admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
26. The washing and/or detailing of or, the installation of windshields,
radios, telephones in or general work on, automobiles shall not be allowed on
the Real Property.
27. Food vendors shall be allowed in the Building upon receipt of a
written request from the Tenant. The food vendor shall service only the tenants
that have a written request on file in the Building Management Office. Under no
circumstance shall the food vendor display their products in a public or common
area including corridors and elevator lobbies. Any failure to comply with this
rule shall result in immediate permanent withdrawal of the vendor from the
Building.
28. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
29. Tenant shall comply with any non-smoking ordinance adopted by any
applicable governmental authority.
30. Landlord reserves the right at any time to change or rescind any one
or more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises
and Building, and for the preservation of good order therein, as well as for the
convenience of other occupants and tenants therein. Landlord shall not be
responsible to Tenant or to any other person for the nonobservance of the Rules
and Regulations by another tenant or other person. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.
EXHIBIT D - Page 3
39
EXHIBIT E
149 NEW MONTGOMERY
FORM OF TENANT'S ESTOPPEL CERTIFICATE
The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of April 13, 1999 and between JONATHAN PARKER, a
married man as his sole and separate property; THOMAS M. MONAHAN, a married man
as his sole and separate property; HAROLD PARKER PROPERTIES, L.P., a California
limited partnership; and HAROLD A. PARKER, TRUSTEE, AND GERTRUD V. PARKER,
TRUSTEE of the HAROLD A. PARKER COMPANY TRUST dated May 11, 1988; all as Tenants
in Common , collectively as Landlord, and the undersigned as Tenant, for
Premises on the 2nd, 3rd, 4th, 5th and 6th floors of the Office Building located
at 149 New Montgomery Street, San Francisco, California, certifies as follows:
1. Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in Exhibit
A represent the entire agreement between the parties as to the Premises.
2. The undersigned has commenced occupancy of the Premises described in
the Lease, currently occupies the Premises, and the Lease Term commenced on
_________.
3. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
4. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
_______________________________________________________________________________
_______________________________________________________________________________
______________________.
5. Tenant shall not modify the documents contained in Exhibit A or
prepay any amounts owing under the Lease to Landlord in excess of thirty (30)
days without the prior written consent of Landlord's mortgagee.
6. Base Rent became payable on _______________.
7. The Lease Term expires on _________________.
8. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and, to Tenant's knowledge,
Landlord is not in default thereunder.
9. No rental has been paid in advance and no security has been deposited
with Landlord except as provided in the Lease.
10. As of the date hereof, there are no existing defenses or offsets
that the undersigned has, which preclude enforcement of the Lease by Landlord.
11. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through _________________. The current monthly installment of Base Rent is
$__________.
12. The undersigned acknowledges that this Estoppel Certificate may be
delivered to Landlord's prospective mortgagee, or a prospective purchaser, and
acknowledges that it recognizes that if same is done, said mortgagee,
prospective mortgagee, or prospective purchaser will be relying upon the
statements contained herein in making the loan or acquiring the property of
which the Premises are a part, and in accepting an assignment of the Lease as
collateral security, and that receipt by it of this certificate is a condition
of making of the loan or acquisition of such property.
EXHIBIT E
40
13. If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate on behalf of Tenant hereby represents and warrants
that Tenant is a duly formed and existing entity qualified to do business in the
state in which the Building is located and that Tenant has full right and
authority to execute and deliver this Estoppel Certificate and that each person
signing on behalf of Tenant is authorized to do so.
Executed at __________________ on the _____ day of ______________,
19___.
"Tenant":
E-GREETINGS NETWORK,
a California corporation
By:
-------------------------------
Its:
-------------------------------
By:
-------------------------------
Its:
-------------------------------
EXHIBIT E
41
LEASE
149 NEW MONTGOMERY
JONATHAN PARKER, a married man as his sole and separate property;
THOMAS M. MONAHAN, a married man as his sole and separate property;
HAROLD PARKER PROPERTIES, L.P., a California limited partnership; and
HAROLD A. PARKER, TRUSTEE, and GERTRUD V. PARKER, TRUSTEE, of the
HAROLD A. PARKER COMPANY TRUST dated May 11, 1988;
all as Tenants in Common,
as Landlord,
and
E-GREETINGS NETWORK,
a California corporation,
as Tenant.
42
PROJECT NAME
SUMMARY OF BASIC LEASE INFORMATION
The undersigned hereby agree to the following terms of this Summary of
Basic Lease Information (the "Summary"). This Summary is hereby incorporated
into and made a part of the attached Lease (this Summary and the Lease to be
known collectively as the "Lease") which pertains to the building which is
located at 149 New Montgomery Street, San Francisco, California (the
"Building"). Each reference in the Lease to any term of this Summary shall have
the meaning as set forth in this Summary for such term. In the event of a
conflict between the terms of this Summary and the Lease, the terms of the Lease
shall prevail. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning as set forth in the Lease.
TERMS OF LEASE
(References are to
the Lease) DESCRIPTION
---------- -----------
1. Date: April 13, 1999
2. Landlord: JONATHAN PARKER, a married man as his sole and separate
property; THOMAS M. MONAHAN, a married man as his sole
and separate property; HAROLD PARKER PROPERTIES, L.P., a
California limited partnership; and HAROLD A. PARKER,
TRUSTEE, AND GERTRUD V. PARKER, TRUSTEE, of the HAROLD A.
PARKER COMPANY TRUST dated May 11, 1988; all as Tenants
in Common
3. Address of Landlord c/o Monahan Parker, Inc.
(Article 28.14): 1101 Fifth Avenue, Suite 150
San Rafael, CA 94901
Attention: Jonathan Parker
and
Allen, Matkins, Leck, Gamble & Mallory LLP
333 Bush Street, Suite 1700
San Francisco, California 94104
Attention: Nancy Lundeen, Esq.
4. Tenant: E-greetings Network, a California corporation
5. Address of Tenant 149 New Montgomery Street
(Article 28.14): San Francisco, California 94105
Attention: Facilities Manager
with a copy to:
Howard Rice Nemerovski Canady Falk & Rabkin
Three Embarcadero Center, Seventh Floor
San Francisco, California 94111-4065
Attention: Kenneth A. Neale, Esq.
(i)
43
6. Premises (Article 1): Approximately 56,249 rentable square feet of space
located on the 2nd, 3rd, 4th, 5th and 6th floors of the
Building, as set forth on Exhibit A attached hereto. For
purposes of this Lease, the rentable
square footage for each floor of the
Premises is as follows:
2nd Floor 10,519.50
3rd Floor 10,728.75
4th Floor 10,740.25
5th Floor 10,798.00
6th Floor 10,798.00
7. Term (Article 2).
7.1 Lease Term: Ten (10) years.
7.2 Lease Commencement Date The earlier of (i) the date upon which
Tenant first commence to conduct
business in the Premises, or (ii)
September 1, 1999, subject to Landlord
Delays, as defined in Section 5.5 of the
Tenant Work Letter, attached hereto as
Exhibit B.
7.3 Lease Expiration Date The last day of the month in which the
10th anniversary of the Lease
Commencement Date occurs.
8. Base Rent (Article 3):
Monthly
Year of Lease Installment
Term of Base Rent
---- ------------
1-10 $180,465.54
9. Additional Rent (Article 4).
9.1 Operating Expense Calendar year 1999.
Base Year:
9.2 Tax Base Year: Tax year 1999-2000
9.3 Tenant's Share: 82.45%
10. Use (Article 5): General office use.
11. Security Deposit $180,465.54, plus a Letter of Credit pursuant to
(Article 21): Article 21 of the Lease.
12. Brokers (Section 28.21): CB Richard Ellis, Inc. for Landlord and Colliers
International for Tenant
(ii)
44
INDEX
ARTICLE SUBJECT MATTER PAGE
1. REAL PROPERTY, BUILDING AND PREMISES.................................................1
2. LEASE TERM...........................................................................1
3. BASE RENT............................................................................1
4. ADDITIONAL RENT......................................................................2
5. USE OF PREMISES......................................................................5
6. SERVICES AND UTILITIES...............................................................5
7. REPAIRS..............................................................................6
8. ADDITIONS AND ALTERATIONS............................................................6
9. COVENANT AGAINST LIENS...............................................................7
10. INSURANCE...........................................................................7
11. DAMAGE AND DESTRUCTION..............................................................9
12. NONWAIVER..........................................................................10
13. CONDEMNATION.......................................................................10
14. ASSIGNMENT AND SUBLETTING..........................................................10
15. OWNERSHIP AND REMOVAL OF TRADE FIXTURES............................................13
16. HOLDING OVER.......................................................................13
17. ESTOPPEL CERTIFICATES..............................................................13
18. SUBORDINATION......................................................................14
19. DEFAULTS; REMEDIES.................................................................14
20. FORCE MAJEURE......................................................................15
21. LETTER OF CREDIT...................................................................16
22. SECURITY DEPOSIT...................................................................17
23. SIGNS..............................................................................17
24. COMPLIANCE WITH LAW................................................................18
25. LATE CHARGES.......................................................................18
26. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT...............................18
27. ENTRY BY LANDLORD..................................................................18
28. MISCELLANEOUS PROVISIONS...........................................................19
29. OPTION TERM........................................................................22
EXHIBITS
A OUTLINE OF PREMISES
B TENANT WORK LETTER
C NOTICE OF LEASE TERM DATES
D RULES AND REGULATIONS
E ESTOPPEL CERTIFICATE
(iii)