Exhibit 10.6
Office Lease
Dated February 5, 1998
Between the Registrant
and Ahdi Nashashibi
TABLE OF CONTENTS
Page
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1. Premises............................................................. 3
2. Term................................................................. 3
3. Rent, Additional Charges and Security Deposit........................ 4
4. Tenant Share of Increased Costs...................................... 5
5. Construction In the Premises......................................... 5
6. Use and Compliance with Law.......................................... 5
7. Alterations and Additions............................................ 6
8. Repairs.............................................................. 6
9. Liens................................................................ 6
10. Subordination and Attornment......................................... 7
11. Inability to Perform................................................. 8
12. Damage or Destruction................................................ 8
13. Eminent Domain....................................................... 9
14. Assignment and Subletting............................................ 10
15. Services and Utilities............................................... 11
16. Default and Remedies................................................. 12
17. Indemnity, Insurance and Subrogation................................. 15
18. Entry by Landlord.................................................... 17
19. Notices.............................................................. 17
20. No Waiver............................................................ 18
21. Estoppel Certificates................................................ 18
22. Rules and Regulations................................................ 19
23. Tax on Tenant's Personal Property.................................... 19
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24. Authority............................................................ 19
25. Miscellaneous........................................................ 19
Exhibit A............................................................ 22
Exhibit B............................................................ 23
Exhibit C............................................................ 24
Exhibit D............................................................ 25
Exhibit E............................................................ 28
Addendum 1-7......................................................... 30
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818 MISSION STREET
OFFICE LEASE
Basic Lease Information
Lease Date: February 5, 1998
Landlord: Ahdi Nashashibi
Address of Landlord: 99 Magellen
San Francisco, CA 94116
Tenant: Andromedia, Inc.
a California corporation
Address of Tenant:
Building: 818 Mission Street
San Francisco, CA 94105
Section 1.1 Floor(s) and or Suite(s): Second & Third Floors, Suites 200 & 300
Rentable Area of Premises: Approximately 11,000 rentable square feet
Approximately 5,500 rentable square feet
per floor
Section 2.1 Commencement Date: May 1, 1998
Expiration Date: April 30, 2003
Section 3.1 Monthly Rent: Months 1-36 $16,500.00 per month
Months 37-60 $18,333.33 per month
See Exhibit B
Section 3.2 Advance Rent: $100,000.00
Section 3.5 Security Deposit: $100,000.00 Letter of Credit -See Exhibit F
Section 4.1(a) Tenant's Percentage Share: 40%
Section 4.1(b) Base Year: 1998
Section 5.1 Tenants Share of Improvement Costs: See Exhibit C
Section 17.2 Insurance: $2,000,000.00
Section 26.14 Broker: Walker Emerald, Inc.
Cushman Realty Corporation
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Exhibits Attached: Exhibit A - Floor Plans
Exhibit B - Monthly Premises Rent
Exhibit C - Tenant Improvements
Exhibit D - Rules and Regulations
Exhibit E - Option to Extend Term: One (1) five (5) year term,
Nine (9)months advance notice, Fair Market Value, not
less than last years rental
Exhibit F - Security Deposit/Letter of Credit
Addenda Attached: Addendum 1: 1-7
The foregoing Basic Lease Information is hereby incorporated into and made a
part of this Lease. Each reference in this Lease to any of the Basic Lease
Information shall mean the respective Information herein above set forth and
shall be construed to incorporate all of the terms provided under the particular
Lease section pertaining to such information. In the event of any conflict
between any Basic Lease Information and the Lease, the latter shall control.
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STANDARD OFFICE LEASE
THIS LEASE is made and entered into this 5th day of February, 1998 by and
between Ahdi Nashashibi, an individual (herein called "Landlord"), and
Andromedia, Inc., a California corporation (herein called "Tenant").
W I T N E S S E T H:
Landlord and Tenant hereby covenant and agree as follows:
1. Premises
1.1 Upon and subject to the terms, covenants, and conditions hereinafter
set forth, Landlord leases to Tenant, and Tenant hires from Landlord, those
premises (herein called the "Premises") in the building commonly known as 818
Mission Street (the "Building"), comprising the area substantially as shown on
the floor plan or plans that have been initialed by Landlord and Tenant and are
attached hereto as Exhibit A. The Premises contain the rentable area specified
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in the Basic Lease information and are located on the floor(s) of the Building
that is (are) specified in the Basic Lease Information. The Building contains
five occupied floors ("Floors 1-5") plus a basement floor of storage and
auxiliary use. The Building, the land upon which the Building stands, together
with utilities, facilities, drives, walkways and other amenities appurtenant to
or servicing the Building, are herein sometimes collectively called the "Real
Property."
1.2 The purpose of attached Exhibit A is to show the approximate location
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of the Premises in the Building only, and such Exhibit is not meant to
constitute an agreement as to the construction of the Premises, the rentable
area thereof, or the specific location of the common areas or the elements
thereof or of the access ways to the Premises or the Building.
2. Term
2.1 The Premises are leased for a term (herein called the "Term") which
commences on the "Commencement Date" and terminates on the "Expiration Date,"
which dates are collectively specified in the Basic Lease Information, unless
the Term shall sooner terminate as hereinafter provided. Notwithstanding the
foregoing, if Landlord, for any reason whatsoever, is unable to deliver
possession of the Premises to Tenant on or prior to the Commencement Date set
forth in the Basic Lease Information, this Lease shall not be void or voidable,
nor shall Landlord be liable to Tenant for any loss or damage resulting
therefrom, but in that event, Rent and Additional Charges (as defined in Article
3) shall be abated for the period of time between the Commencement Date set
forth in the Basic Lease Information and the time when Landlord can deliver
possession as provided in Section 5.1 below. No delay in delivery of possession
shall operate to extend the Expiration Date beyond the date specified in the
Basic Lease Information.
2.2 In the event that Tenant takes occupancy of the Premises prior to the
Commencement Date, Tenant's obligations, including the obligation to pay rent,
under this Lease shall commence upon such occupancy, and shall continue until
the Expiration Date.
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2.3 Notwithstanding anything to the contrary herein contained, in the
event that possession of the Premises has not been delivered to Tenant within
one hundred eighty (180) days after the Commencement Date, then this Lease shall
be automatically terminated without any further act of either party hereto and
both parties hereto shall be released from all obligations hereunder.
3. Rent, Additional Charges and Security Deposit
3.1 Tenant shall pay to Landlord during the Term the monthly rent
specified in Exhibit B (referred to herein as "Rent"), which sums shall be
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payable by Tenant on or before the first day of each month, in advance, at the
address specified for Landlord in the Basic Lease Information, or such other
place as Landlord shall designate, without any prior demand therefor and without
any deductions or set off whatsoever. If the Commencement Date should occur on
a day other than the first day of a calendar month, or the Expiration Date
should occur on a day other than the last day of a calendar month, then the
rental for such fractional month shall be prorated upon a daily basis based upon
a thirty (30) day calendar month.
3.2 Upon the execution hereof, Tenant shall pay to Landlord the sum of
"Advance Rent" specified in the Basic Lease Information. Such Advance Rent
shall be applied to the first Rent due pursuant to Section 3.1.
3.3 Tenant shall pay to Landlord all charges and other amounts specified
in this Lease (herein called "Additional Charges"), including, without
limitation, any increase in the Rent resulting from the provisions of Article 4
hereof. All such amounts and charges shall be payable to Landlord at the place
where the Rent is payable. Landlord shall have the same remedies for a default
in the payment of Additional Charges as for a default in the payment of Rent.
3.4 If Tenant shall fail to pay any Rent or Additional Charges within ten
(10) days after the date same are due and payable, such unpaid amounts shall be
subject to a late payment charge equal to five percent (5%) of such unpaid
amounts in each instance to cover Landlord's additional administrative costs
resulting from Tenant's failure. Such late payment charge shall be paid to
Landlord together with such unpaid amounts. Any payment to Landlord following
the service upon Tenant of a three (3) day notice to pay Rent or quit shall be
in the form of a certified or cashier's check.
3.5 By execution of this Lease, Landlord acknowledges receipt of Tenant's
security deposit (the "Security Deposit") in the amount set forth in the Basic
Lease Information. The Security Deposit shall be held by Landlord as security
for Tenant's faithful performance of all terms, covenants and conditions of this
Lease. Tenant agrees that Landlord may, without waiving any of Landlords other
rights and remedies under this Lease upon the occurrence of any of the events of
default described in Article 16 hereof, apply the Security Deposit to remedy any
failure by Tenant to repair or maintain the Premises or to perform any other
terms, covenants or conditions contained herein. If Tenant has kept and
performed all terms, covenants and conditions of this Lease during the Term,
Landlord will within thirty (30) days following the termination hereof return
said sum to Tenant or the last permitted assignee of Tenant's interest
hereunder. Should Landlord use any portion of the Security Deposit to cure any
default by Tenant hereunder, Tenant shall within five (5)
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days after written demand therefor deposit cash with Landlord sufficient to
restore the Security Deposit to its original-amount. Landlord shall not be
required to keep the Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest thereon.
4. Tenant Share of Increased Costs SEE ADDENDUM 2
5. Construction In the Premises
5.1 Prior to the Commencement Date, Landlord will substantially complete
work in the Premises as set forth in Exhibit C attached hereto and made a pan
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hereof (such work being herein called "Tenant Improvements"). Substantial
completion and delivery of possession of the Premises to Tenant shall be deemed
to have occurred when Landlord delivers to Tenant (1) a Certificate of
Substantial Completion furnished by Landlord's architect; and (ii) a temporary
certificate of occupancy or similar governmental approval. It is agreed that by
occupying the Premises, Tenant acknowledges that the Premises are in the
condition called for hereunder, subject to normal punch list items specified by
Tenant to Landlord in writing within ten (10) days after the date of such
occupancy. The cost of Tenant Improvements shall be paid by Landlord and Tenant
as set forth in Exhibit C. SEE ADDENDUM 3.
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5.2 Landlord reserves the right, at any time and from time to time, to
make alterations, additions, repairs or improvements to or in or to decrease the
size or area of all or any part of the Building, the fixtures and equipment
therein and the arcades, plazas, and walkways outside the Building, including
without limitation the heating, ventilating, air conditioning, plumbing,
electrical, fire protection, life safety, security, and other mechanical,
electrical, and communications systems of the Building (herein called the
"Building Systems"), and the common areas in all other parts of the Building,
and to change the arrangement and/or location of entrances or passageways, doors
and doorways, corridors, elevators, stairs, toilets, and other public parts of
the Building; provided, however, that any such alterations or additions shall
not materially diminish the quality or quantity of services being provided to
the Premises or adversely affect the functional utilization of the Premises.
6. Use and Compliance with Law
6.1 Tenant shall use the Premises for general office purposes and shall
not use or permit the Premises to be used for any other purpose without the
prior written consent of Landlord. Tenant shall not do or permit anything to be
done in or about the Premises nor bring or keep anything therein which will in
any way increase the existing rate of or affect any fire or other insurance upon
the Building or any of its contents, or cause cancellation of any insurance
policy covering said Building or any part thereof of any of its contents.
Tenant shall not do Or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of other tenants or
occupants of the Building or injure or annoy them or use or allow the Premises
to be used for any improper, immoral, unlawful or objectionable purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or about the
Premises. Tenant shall not commit or suffer to be committed any waste in or
upon the Premises.
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6.2 Tenant, at Tenant's cost and expense, shall comply with (a) all laws,
orders, regulations, and directions of federal, state, county and municipal
authorities that impose any duty upon Landlord or Tenant with respect to the
Premises or the use or occupancy thereof, and (b) all reciprocal casement
agreements and declarations of conditions, covenants, and restrictions that are
recorded against and affect the Building or the Premises; provided, however,
that Tenant shall not be required to make any structural alterations in order to
comply unless such alterations shall be necessitated or occasioned, in whole or
in part, by the acts, omissions or negligence of Tenant or any person claiming
through or under Tenant, or any of their servants, employees, contractors,
agents, visitors or licensees. Any work or installations made or performed by
or on behalf of Tenant or any person claiming through or under Tenant pursuant
to die provisions of this Article 6 shall be made in conformity with, and
subject to the provisions of Section 9.2 hereof.
7. Alterations and Additions SEE ADDENDUM 4.
8. Repairs
8.1 Tenant shall, at all times during the Term hereof and at Tenant's sole
cost and expense, keep the Premises and every part thereof in good condition and
repair. Tenant hereby waves all rights to make repairs at the expense of
Landlord or in lieu thereof to vacate the Premises as provided by California
Civil Code Sections 1941 and 1942 or any other law, statute or ordinance now or
hereafter in effect. Tenant shall at the end of the term hereof surrender to
Landlord the Premises and all Alterations in the same condition as when
received, ordinary wear and tear and damage by fire, earthquake, act of God or
the elements excepted. Landlord has no obligation and has made no promise to
alter, remodel, improve, repair, decorate or paint the Premises or any part
thereof, except as specifically set forth elsewhere in this Lease.
8.2 Landlord shall repair and maintain the structural portions of the
Building, including the plumbing, heating, air conditioning, ventilating and
electrical systems, installed or furnished by Landlord, unless the necessity for
such maintenance and repairs is in any way caused by the act, neglect, fault or
omission of any duty by Tenant, its agents, servants, employees or invitees, in
which case Tenant shall pay to Landlord the reasonable cost of such maintenance
and repairs. Landlord shall not be liable for any failure to make any such
repairs or to perform any maintenance unless Landlord receives written notice of
the need for such repairs or maintenance from and fails to make such repairs or
perform such maintenance for reasonable period of time following such notice by
Tenant. There shall be no abatement of rent and no liability of Landlord by
reason of any injury to or interference with Tenant's business arising from the
making of any repairs, alterations or improvements in or to any portion of the
Building or the Premises or in or to fixtures, appurtenances and/or equipment
therein.
9. Liens
9.1 Tenant shall keep the Premises free from any liens arising out of any
work performed, material furnished, or obligations incurred by or for Tenant or
any person or entity claiming through or under Tenant. In the event that Tenant
shall not, within ten (10) days after the imposition of any such lien, cause the
same to be released of record by payment or posting of a proper bond, Landlord
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shall have, in addition to all other remedies provided herein and by law, the
right but not the obligation to cause the same to be released by such means as
it shall deem proper, including payment of the claim giving rise to such lien.
All such sums paid by Landlord and all expenses incurred by it in connection
therewith shall be considered Additional Charges and shall be payable to it by
Tenant on demand. Landlord shall have the right at all times to post and keep
posted on the Premises any notices permitted or required by law, or that
Landlord shall deem proper, for the protection of Landlord, the Premises, the
Building, and any other party having an interest therein, from mechanic's and
materialmen's liens, and Tenant shall give to Landlord at least ten (10)
business days' prior notice of commencement of any construction on the Premises.
10. Subordination and Attornment
10.1 Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, Tenant agrees that this
Lease shall be subject and subordinate at all times to (a) all ground leases or
underlying leases that may now exist or hereafter be executed affecting the
Building or the Real Property or both, and (b) the lien of any mortgage or deed
of trust that may now exist or hereafter be executed in any amount for which the
Building, the Real Property, ground leases or underlying leases, or Landlord's
interest or estate in any of said items is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. In the event that any ground lease or underlying lease
terminates for any reason or any mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason, Tenant shall,
notwithstanding any subordination of any ground lease, underlying lease or lien
to this Lease, attorn to and become the Tenant of the successor in interest to
Landlord; provided that such successor in interest shall recognize all of
Tenant's rights hereunder. Tenant covenants and agrees to execute and deliver,
upon demand by Landlord and in the form reasonably requested by Landlord, any
additional documents evidencing the priority or subordination of this Lease with
respect to any such ground leases or underlying leases or the lien of any such
mortgage or deed of trust.
10.2 Nondisturbance. Landlord shall use its best efforts to obtain from
the holder of any encumbrance heretofore or hereafter placed against the
Premises or the Building a nondisturbance agreement in recordable form,
providing that in the event of any foreclosure, sale under a power of sale,
ground or master lease termination, or transfer in lieu of any of the foregoing,
or the exercise of any other remedy under any such Encumbrance:
(a) Tenant's use, possession, and enjoyment of the Premises shall not be
disturbed and this Lease shall continue in full force and effect as long as
Tenant is not in default; and
(b) This Lease shall automatically become a lease directly between any
successor to Landlord's interest, as landlord, and Tenant, as if that successor
were the landlord originally named in the Lease.
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11. Inability to Perform
11.1 If Landlord is unable to perform, or is delayed in performing, any
construction, installations, decorations, repairs, alterations, additions or
improvements, under this Lease, or is unable to fulfill or is delayed in
fulfilling any of Landlord's other obligations under this Lease, Including the
furnishing of utilities or other services pursuant to Article 15, by reason of
acts of God, governmental actions, accidents, breakage, repairs, strikes,
lockouts, other labor disputes, limitation, curtailment, rationing or
restrictions on the use of utilities or materials, or any other reason beyond
Landlord's reasonable control, then no such in-ability or delay by Landlord
shall constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of Rent or Additional Charges, or
relieve Tenant from any of its obligations under this Lease, or impose any
liability upon Landlord or its agents by reason of inconvenience, annoyance,
interruption, injury or loss to or interference with Tenant's business or use
and occupancy or quiet enjoyment of the Premises or any loss or damage
occasioned thereby. Provided however, that the foregoing shall not be deemed to
extend the time at which tenant, pursuant to any express provisions of this
lease, is entitled to an abatement of rent or to terminate this lease. Tenant
hereby waives and releases any right to terminate this Lease under Section
1932(l) of the California Civil Code or under any similar law, statute or
ordinance now or hereafter in effect.
12. Damage or Destruction
12.1 If (i) the Premises are damaged by fire or other casualty for which
insurance coverage is available to Landlord, (ii) insurance proceeds in an
amount sufficient to repair such casualty are made available to Landlord and
(iii) in Landlord's judgement such repairs can be completed within one hundred
eighty (180) days after the date of such damage, then Landlord shall repair such
damage, and this Lease shall remain in full force and effect except that Tenant
shall be entitled to a reduction of Rent and Additional Charges while such
repairs are being made in the proportion that the rentable area of the Premises
tendered untenantable (as pertains to Tenants specific business for particular)
by such damage bears to the total rentable area of the Premises. Within thirty
(30) days after the date of such damage, Landlord shall notify Tenant whether or
not such repairs can be completed within one hundred eighty (180) days after the
date of such damage, and Landlord's determination shall be binding on Tenant.
If (x) such damage is caused by an uninsured casualty, or (y) such damage is
caused by and uninsured casualty for which insurance proceeds sufficient to
repair such damage are not made available to Landlord and/or (z) such repairs
cannot be made within one hundred eighty (180) days after the date of such
damage, in Landlord's judgement as determined above, then, in any such event,
Landlord shall have the option either to (a) notify Tenant of Landlord's
intention to repair such damage and diligently prosecute such repairs to
completion, in which event this Lease shall continue in full force and effect
and the rent and Additional Charges shall be reduced as provided herein, or (b)
notify Tenant of Landlord's election to terminate this Lease by giving such
notice of termination on the date specified in such notice, and the Rent and
Additional Charges, proportionately reduced as provided above, shall be paid up
to the date of such termination, with Landlord refunding to Tenant any Rent and
Additional Charges previously paid for any period of time subsequent to such
date. If Landlord elects or is required to repair the Premises or the Building
pursuant to this Article 12, the repairs to be made by Landlord shall not
include, and
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Landlord shall not be required to repair or replace any fixtures, equipment, for
loss or use of all or any part of the Premises, for any damage to Tenant's
business or profits, or for any disturbance to Tenant caused by any casualty or
the restoration of the Premises following such casualty. A total destruction of
the Building shall automatically terminate this Lease.
12.2 The provisions of this Lease, including this Article 12, constitute an
express agreement between Landlord and Tenant with respect to any and all damage
to, or destruction of, all or any part of the Premises or the Building, and any
statute or regulation of the State of California, 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 or the Building.
13. Eminent Domain
13.1 If all or any part of the Premises is condemned or taken in any manner
for public or quasi-public use, including, but not limited to, a conveyance or
assignment in lieu of a condemnation or taking, this Lease shall terminate as to
the part so taken on the earlier to occur of the date of the vesting of title or
the date of dispossession of Tenant as a result of such condemnation or taking,
and either Landlord or Tenant shall have the right to terminate this Lease as to
the balance of the Premises by written notice to the other party within thirty
(30) days if the portion of the Premises taken shall be of such extent and
nature as to render the balance of the Premises untenantable and unusable by
Tenant if any part of the Building other than the Premises is condemned or
otherwise taken so as to require in the opinion of Landlord, a substantial
alteration or reconstruction of the remaining portions thereof, this Lease may
be terminated by Landlord, as of the earlier of the date of the vesting of
title, or the date of dispossession as a result of such condemnation or taking,
by written notice to Tenant within sixty (60) days following notice to Landlord
of the date on which said vesting or dispossession will occur. If the Lease is
not so terminated, Landlord shall proceed to repair and reconstruct the
remaining portion of the Building to the extent insurance and condemnation
proceeds are available to do so.
13.2 Landlord shall be entitled to the entire award in any condemnation
proceeding or other proceeding, including, without limitation, any award made
for the value of the leasehold estate created by this Lease. No award for any
partial or entire taking shall be apportioned, and Tenant hereby assigns to
Landlord any award that may be made in such condemnation or other taking,
together with any and all rights of Tenant now or hereafter arising in or to
same or any part thereof, provided, however, that nothing contained herein shall
be deemed to give Landlord any interest in or to require Tenant to assign to
Landlord any award made to Tenant specifically for its relocation expenses or
the taking of personal property and fixtures belonging to Tenant.
13.3 In the event of a partial condemnation or other taking that does not
result in a termination of this Lease as to the entire Premises, the Rent and
Additional Charges shall abate in the proportion that the rentable area of the
Premises taken by such condemnation or other taking bears to the total rentable
area of the Premises.
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13.4 If all or any portion of the Premises is condemned or otherwise taken
for public or quasi-public use for a limited period of time not to exceed 180
days, this Lease shall remain in full force and effect and Tenant shall continue
to perform all of the terms, conditions and covenants of this Lease; provided,
however, that the Rent and Additional Charges shall abate during such limited
period in the proportion that the rentable area of the Premises rendered
untenantable and unusable as a result of such condemnation or other taking bears
to the total rentable area of the Premises. Landlord shall be entitled to
receive the entire award made in connection with any such temporary condemnation
or other taking.
13.5 Tenant hereby waives and releases any right to terminate this Lease
under Sections 1265.120 and 1265,130 of the California Code of Civil Procedure,
or under any similar law, statute or ordinance now or hereafter in effect.
14. Assignment and Subletting
14.1 Tenant shall not sell, assign, encumber, pledge or otherwise transfer
or hypothecate all of its interest in or rights with respect to the Premises or
Tenant's leasehold estate hereunder (collectively, "Assignment"), or permit all
or any portion of the Premises to be occupied by anyone other than Tenant or
sublet all or any portion of the Premises or transfer a portion of its interest
in or rights with respect to Tenant's leasehold estate hereunder (collectively,
"Sublease") without Landlord's prior written consent in each instance, which
consent shall not be unreasonably withheld.
14.2 If Tenant desires at any time enter into an Assignment of this Lease
or a Sublease of the Premises or any portion thereof, it shall first give
written notice to Landlord of its desire to do so, which notice shall contain
(a) the name of the proposed assignee, subtenant or occupant, (b) the nature of
the proposed assignee's, subtenant's or occupant's business to be carried on in
the Premises, (c) the terms and provisions of the proposed Assignment or
Sublease and (d) such financial information as Landlord may reasonably request
concerning the proposed assignee, subtenant or occupant. At any time within
fifteen (15) days after Landlord's receipt of the notice specified in this
Section 14.2, Landlord may by written notice to Tenant either consent to the
Sublease or Assignment or disapprove die Sublease or Assignment. As a condition
for granting its consent to any Assignment or Sublease, Tenant shall pay to
Landlord one hundred percent (100%) of the amount by which all sums payable to
Tenant in connection with such Assignment or Sublease (after deducting leasing
commissions, tenant improvement costs and similar expenses payable in connection
with such Assignment or Sublease) exceed the Rent and Additional Charges payable
by Tenant to Landlord hereunder (or a proportionate amount thereof representing
the portion of the Premises subject to a Sublease if less than the entire
Premises is subject to a Sublease).
14.3 No consent by Landlord to any Assignment or Sublease by Tenant shall
relieve Tenant of any obligation to be performed by Tenant under this Lease,
whether arising before or after the Assignment or Sublease. The consent by
Landlord to any Assignment or Sublease shall not relieve Tenant from the
obligation to obtain Landlord's express written consent to any other Assignment
or Sublease. Any Assignment or Sublease that is not in compliance with this
Article 14 shall be void and, at the option of Landlord, shall constitute a
material default by Tenant under this
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Lease. The acceptance of Rent or Additional Charges by Landlord from a proposed
assignee or sublessee shall not constitute the consent to such Assignment or
Sublease by Landlord.
14.4 Any sale or other transfer of Tenant's stock, including by
consolidation, merger or reorganization, of a majority of the voting stock of
Tenant, if Tenant is a corporation, or any sale or other transfer of a majority
of the partnership interests in Tenant, if Tenant is a partnership, shall not be
deemed an Assignment for purposes of this Article 14 provided that the net worth
of Transferee is equal to or greater than that of Tenant following such
transfer. In no event shall only public offering, private offering, or sale of
Tenant's stock over a public exchange constitute an Assignment under this lease.
14.5 Each assignee, sublessee, or other transferee, other than Landlord,
shall assume, a14.5, all obligations of Tenant under this Lease and shall be and
remain liable jointly and severally with Tenant for the payment of Rent and
Additional Charges, and for the performance of all the terms, c agreements
herein contained on Tenant's part to be performed for the Term; provided,
however, that the assignee, sublessee, mortgagee, pledgee or other transferee
shall be liable to Landlord for rent only in the amount set forth in the
Assignment or Sublease. No Assignment shall be binding on Landlord unless the
assignee of Tenant shall deliver to Landlord a counterpart of the Assignment and
an instrument in recordable form that contains a covenant of assumption by the
assignee satisfactory in substance and form to Landlord, consistent with the
requirements of this Section 14.5, but the failure or refusal of the assignee to
execute such instrument of assumption shall not release or discharge the
assignee from its liability as set forth above.
14.6 In the event Tenant shall assign this Lease or sublet the Premises or
shall request the consent of Landlord to any assignment or subletting, then
Tenant shall pay Landlord's reasonable attorney's fees incurred in connection
therewith.
15. Services and Utilities
15.1 Landlord shall furnish to the Building during the period from 8:00
a.m. to 6:00 p.m., Monday through Friday, except for New Year's Day,
Washington's Birthday, Memorial Day, Independence Day, Labor Day, Thanksgiving,
Christmas and such other holidays as are generally recognized in San Francisco
(such time periods exclusive of holidays being referred to herein as "Normal
Business Hours"), (a) heating, air conditioning and ventilation in amounts
required for the use and occupancy of the Premises for general office purposes,
(b) elevator service, (c) electric current in amounts required for normal office
lighting and for normal fractional horsepower office machines, and (d) water for
lavatory and drinking purposes. It is understood that elevator service,
electric current and water will be available at all times, subject to Sections
15.2,15.3 and 15.4 hereof. Landlord shall wash all exterior windows not less
than twice per year.
15.2 Tenant shall contract and pay for all utilities and janitorial
services for the Premises including, but not limited to, heating, air
conditioning, ventilation and lighting.
15.3 In the event any governmental entity promulgates or revises any
statute, ordinance or building, fire or other code or imposes mandatory or
voluntary controls or guidelines on Landlord or
11
the Building or any part thereof, relating to the use or conservation of energy,
water, gas, light or electricity, or the reduction of automobile or other
emissions, or the provision of any other utility or service provided with
respect to this Lease, or in the event Landlord is required or elects to make
alterations to the Building in order to comply with such mandatory or voluntary
controls or guidelines, Landlord may, in its sole discretion, comply with such
mandatory or voluntary controls or guidelines or make such alterations to the
Building. Such compliance and the making of such alterations shall in no event
entitle Tenant to any damages, relieve Tenant of the obligation to pay the full
Rent and Additional Charges reserved hereunder or constitute or be construed as
a constructive or other eviction of Tenant.
15.4 Without the prior written consent of Landlord, which Landlord may
refuse in its sole discretion, Tenant shall not (i) use any apparatus or device
in the Premises, including, without limitation, electronic data processing
machines, punch card machines and machines using current in excess of 110 volts,
which will in any way increase the amount of electricity or water usually
furnished or supplied for use of the Premises as general office space, or (ii)
connect any apparatus, machine or device with electric current except through
existing electrical outlets in the Premises. If Tenant shall utilize electric
current in excess of that usually supplied for use of the Premises as general
office space, Landlord shall have the right to install an electric current meter
in the Premises to measure the amount of electric current consumed on the
Premises. The cost of any such meter and separate conduit, wiring or panel
requirements and the installation, maintenance and repair thereof shall be paid
for by Tenant, and Tenant agrees to reimburse Landlord promptly upon demand for
all electric current measured by said meter at the rates charged for such
services by the local public utility, plus any additional expense incurred by
Landlord in accounting for electric current so consumed. If a separate meter is
not installed, the amount of excess electric consumption in the Premises and the
monthly cost thereof shall be estimated by the utility company or an electrical
engineer and Tenant shall pay such excess to Landlord on a monthly basis. If
the temperature otherwise maintained in any portion of the Premises by the
heating, air conditioning or ventilation systems is affected as a result of (a)
any lights, machines or equipment (including without limitation electronic data
processing machines) used by Tenant in the Premises, or (b) the occupancy of the
Premises by more than one person per one hundred seventy-five (175) square feet
of rentable area therein, Landlord shall have the right to install any machinery
and equipment that Landlord reasonably deems necessary to restore temperature
balance, including, without limitation, modifications to the standard air
conditioning equipment, and the cost thereof, including the cost of installation
and any additional cost of operation and maintenance incurred thereby, shall be
paid by Tenant to Landlord upon demand.
16. Default and Remedies
16.1 The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Tenant:
(a) The abandonment of the Premises by Tenant.
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(b) The failure of Tenant to make any payment of Rent or any other sum or
payment due from Tenant hereunder within ten (10) days after delivery of a
written demand from Landlord therefor.
(c) The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease, other than described in Section 16.1(b)
above, where such failure shall continue for a period of twenty (20) days after
written notice thereof by Landlord to Tenant; provided, however, that if the
nature of Tenant's default is such that more than twenty (20) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commences such cure within said twenty (20) day period and
thereafter diligently prosecutes such cure to completion.
(d) The making by Tenant of any general assignment or general arrangement
for the benefit of creditors; or the filing by or against Tenant of a petition
to have Tenant adjudged as bankrupt, or a petition of reorganization or
arrangement under any law relating to bankruptcy (unless in the case of such
petition filed against Tenant, the same is dismissed within sixty (60) days); or
the appointment of a trustee or a receiver to take possession of all or
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; or the attachment, execution or other judicial seizure of all or
substantially all of Tenant's assets located at the Premises or of Tenant's
Interest in this Lease, where such Seizure is not discharged in thirty (30)
days; the admission by Tenant in writing of the inability to pay its debts as
they become due.
(e) Failure by Tenant to renew the Standby Letter of Credit as defined in
Exhibit F attached hereto.
16.2 Upon the occurrence of a default by Tenant as provided in Section 16.1,
Landlord shall have the following rights and remedies in addition to all other
rights and remedies available to Landlord in law or equity;
(a) The rights and remedies provided by California Civil Code Section
1951.2, including, but not limited to, the right to terminate Tenants right to
possession of the Premises and to recover the worth at the time of award of the
amount by which the unpaid Rent and Additional Charges for the balance of the
Term after the time of award exceed the amount of rental loss for the same
period that the Tenant proves could be reasonably avoided, as computed pursuant
to subsection (b) of said Section 1951.2;
(b) The rights and remedies provided by California Civil Code Section
1951.4, which allows Landlord to continue this Lease in effect and to enforce
all of its rights and remedies under this Lease, including the right to recover
Rent and additional Charges as they become due, for so long as Landlord does not
terminate Tenant's right to possession. Acts of maintenance or preservation,
efforts to relet the Premises or the appointment of a receiver upon Landlord's
initiative to protect its interest under this Lease shall not constitute a
termination of Tenant's right to possession;
(c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law;
(d) The right and power, as attorney-in-fact for Tenant, to enter the
Premises and remove therefrom all persons and property, to store such property
in a public warehouse or elsewhere at the cost of and for the account of Tenant,
and to sell such property and apply the proceeds therefrom pursuant to
applicable California law; provided, however, that the foregoing remedy shall
only apply to a default by Tenant in payment of capital rent. Landlord, as
attorney-in-fact for Tenant, may from time to time sublet the Premises or any
part thereof for such
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term or terms (which may extend beyond the Term) and at such rent and such other
terms as Landlord in its sole discretion may deem advisable, with the right to
make alterations and repairs to the Premises. Upon each such subletting, (i)
Tenant shall be immediately liable for payment to Landlord of, in addition to
indebtedness other than Rent and Additional Charges due hereunder, the cost of
such subletting and such alterations and repairs incurred by Landlord and the
amount, if any, by which the Rent and Additional Charges for the period of such
subletting (to the extent such period does not exceed the Term) exceeds the
amount to be paid as Rent and Additional Charges for the Premises for such
period, or (ii) at the option of Landlord, rents received from such subletting
shall be applied, first, to payment of any indebtedness other than Rent and
Additional Charges due hereunder from Tenant to Landlord; second, to the payment
of any costs of such subletting and of such alterations and repairs; third, to
payment of Rent and Additional Charges due and unpaid hereunder; and the
residue, if any, shall be held by Landlord and applied in payment of future Rent
and Additional Charges as the same become due hereunder. If Tenant has been
credited with any rent to be received by such subletting under clause (i) and
such rent shall not be promptly paid to Landlord by the subtenant(s), or it such
rentals received from such subletting under clause (ii) during any month are
less than those to be paid during that month by Tenant hereunder, Tenant shall
pay any such deficiency to Landlord. Such deficiency shall be calculated and
paid monthly. For all purposes set forth in this Section 16.2(d), Landlord is
hereby irrevocably appointed attorney-in-fact for Tenant with power of
substitution. No taking possession of the Premises by Landlord, as attorney-in-
fact for Tenant, shall be construed as an election on its part to terminate this
Lease unless a written notice of such intention is given to Tenant.
Notwithstanding any such subletting without termination, Landlord may at any
time thereafter elect to terminate this Lease for such previous breach; and
(e) The right to have a receiver appointed for Tenant, upon
application by Landlord, to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights and remedies
granted to Landlord as attorney-in-fact for Tenant pursuant to Section 16.2(d)
hereof; provided, however, that the foregoing remedy shall only apply to a
default by Tenant in payment of capital rent.
16.3 If Tenant shall default in the performance of its obligations under
this Lease, Landlord, at any time thereafter and without notice, may remedy such
default for Tenant's account and at Tenants expense, without thereby waiving any
other rights or remedies of Landlord with respect to such default.
16.4 If Landlord fails to perform its obligations under this Lease within
fifteen (15) days after notice by Tenant to Landlord specifying the nature of
the obligations Landlord has failed to perform, Landlord shall be in default
hereunder. If the nature of Landlord's obligations is such that more than
fifteen (15) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such fifteen (15) day period
and thereafter diligently prosecutes the same to completion. In the event of a
default by Landlord hereunder, Tenant's remedies shall include an action for
damages and/or an injunction.
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17. Indemnity, Insurance and Subrogation
17.1 (a) Tenant agrees to indemnify Landlord against and save Landlord
harmless from any and all loss, cost, liability, damage and expense including,
without limitation, penalties, fines and reasonable counsel fees and
disbursements, incurred in connection with or arising from (i) any default or
breach by Tenant in the observance or performance of any of the terms, covenants
or conditions of this Lease; or (ii) any negligence or willful misconduct of
Tenant or of its contractors, agents, servants, employees, invitee or licensees
of Tenant in, on or about the Premises, or all or any part of the Real Property,
either prior to, during, or after the expiration of the Term and in connection
with this Lease. Tenant's obligations under this Section 17.1(a) shall survive
the expiration or other termination of this Lease.
(b) Landlord agrees to indemnify Tenant against and save Tenant harmless
from any and all loss, cost, liability, damage, and expense, including without
limitation penalties, fines and reasonable counsel fees and disbursements,
incurred in connection with or arising from (i) any default or breach by
Landlord in the observance of the terms, covenants, or conditions of this Lease;
or (ii) any negligence or willful misconduct of Landlord, or its contractors,
agents, servants, employees, invitees, or licensees in, on or about the
Premises, or all or any part of the Real Property, either prior to, during, or
after the expiration of the Term and in connection with this Lease. Landlords
obligations under this Section 17.1(b) shall survive the expiration or other
termination of this Lease.
17.2 Tenant agrees to carry and keep in force during the Term hereof, at
Tenant's sole cost and expense, the following types of insurance, in the amounts
and in the form provided for:
(a) Public Liability and Property Damage. Bodily and personal injury
liability insurance with limits of not less than Two Million Dollars
($2,000,000) per occurrence, insuring against any and all liability for injuries
to or death of persons occurring in, on or about the Premises or arising out of
the maintenance, use or occupancy thereof (including, for purposes of "personal
injury," coverage against false arrest, detention or imprisonment, malicious
prosecution, libel, slander and wrongful entry or eviction), and property damage
liability insurance with a limit of not less than Two Million Dollars
($2,000,000) per accident or occurrence. All such public liability and property
damage insurance shall specifically insure the performance by Tenant of its
indemnity obligations under Section 17.1 hereof with respect to liability for
injury to or death of persons and for damage to property.
(b) Workers' Compensation and Employers' Liability. Workers' compensation
and employers' liability insurance covering employees for California Workers'
Compensation benefits, including employers' liability with limits of at least
Five Hundred Thousand Dollars ($500,000) for each accident).
(c) Tenant Property. Insurance covering all improvements made by Tenant to
the Premises, and any and all Fixtures, equipment, furnishings and personal
property of Tenant from time to time in, on or about the Premises, providing
protection against all perils included within a standard fire and extended
coverage insurance policy ("all risk form"), together with insurance
15
against sprinkler damage, vandalism and malicious mischief. Such insurance shall
be in an amount not less than the full replacement cost of the property insured
without deduction for depreciation.
(d) Policy Form. All policies of insurance provided for herein shall be
issued by insurance companies with a general policyholders' rating of not less
than A and a financial rating of X111 as rated in the most current available
"Best's Insurance Reports," and qualified to do business in the State of
California. Except for workers' compensation and employers' liability, all such
policies shall be issued in the names of Landlord, Tenant and such other persons
or firms as Landlord specifies from time to time and shall be for the mutual and
joint benefit and protection of Landlord, Tenant and others herein above
mentioned. Executed copies of all such policies of insurance or certificates
thereof shall be delivered to Landlord prior to delivery of possession of the
Premises to Tenant, and thereafter within thirty (30) days prior to the
expiration of the term of each such policy. All public liability and property
damage policies shall contain a provision that Landlord, although named as an
insured, shall nevertheless be entitled to recovery under said policies for any
loss occasioned to it, its agents and employees by reason of the negligence of
Tenant. As often as any such policy shall expire or terminate, renewal or
additional policies shall be procured and maintained by the Tenant in like
manner and to like extent. All such policies of insurance shall provide that
the company writing said policy will give Landlord thirty (30) days' notice in
writing in advance of any cancellation or lapse or the effective date of any
reduction in the amounts of insurance. All public liability, property damage
and other casualty policies shall be written as primary policies, not
contributing with and not in excess of coverage which Landlord may carry.
17.3 Landlord's Property Insurance. Landlord shall use its best efforts to
maintain such insurance at such coverage and amounts substantially similar to
the existing insurance, and shall promptly notify Tenant in writing in the event
that the coverage and/or amounts of Landlord's property insurance are materially
reduced; provided, however, that in any event the coverage and amounts of
insurance carried by Landlord in connection with the Building shall, at a
minimum, be comparable to the coverage and amounts of insurance that are carried
by reasonably prudent landlords of Comparable Buildings and workers'
compensation coverage as required by applicable law. On inquiry by Tenant from
time to time, Landlord shall inform Tenant of all such insurance carried by
Landlord.
17.4 Landlord shall not be responsible for or liable to Tenant for any loss
or damage that may be occasioned by or through the acts or omissions of persons
occupying adjoining premises or any other part of the Building or the Complex,
or for any loss or damage resulting to Tenant or its property from burst,
stopped or leaking water, gas, sewer or steam pipes or for any damage or loss of
property within the Premises from any causes whatsoever, including theft;
provided, however, that nothing set forth herein shall be deemed to relieve
Landlord of its indemnity obligations under Section 17.1(b).
17.5 Notwithstanding anything to the contrary contained herein, to the
extent permitted by their respective policies of insurance and to the extent of
insurance proceeds received with respect to the loss, Landlord and Tenant each
hereby waive any right of recovery against the other party and
16
against any other party maintaining a policy of Insurance with respect to the
Building or any portion thereof or the contents of any of the same, for any loss
or damage sustained by such other party with respect to the Building, or the
Premises or any portion thereof or the contents of the same or any operation
therein, whether or not such loss is caused by the fault or negligence of such
other party. If any policy of insurance relating to the Premises carried by
Tenant does not permit the foregoing waiver or if the coverage under any such
policy would be invalidated as a result of such waiver, Tenant and Landlord
shall, if possible, obtain from their respective insurers under such policy a
waiver of all rights of subrogation the insurer might have against Landlord or
Tenant, as the case may be, or any other party maintaining a policy of insurance
covering the same loss, in connection with any claim, loss or damage covered by
such policy.
18. Entry by Landlord
18.1 Landlord reserves and shall at all times have the right to enter the
Premises at all reasonable times upon prior notice to Tenant (except in cases of
emergency or in the provision of services under this Lease, in which cases no
prior notice need be given) to inspect the same, to supply any service to be
provided by Landlord to Tenant hereunder, to show the Premises to prospective
purchasers, mortgagees or tenants, to post notices of non-responsibility, and to
alter, improve or repair the Premises and any portion of the Building, without
abatement of Rent or Additional Charges, and may for that purpose erect, use and
maintain scaffolding, pipes, conduits and other necessary structures in and
through the Premises where reasonably required by the character of the work to
be performed, provided that the entrance to the Premises shall not be blocked
thereby, and further provided that the business of Tenant shall not be
interfered with unreasonably. Tenant hereby waives any claim for damages for
any injury or inconvenience to or interference with Tenant's business, any loss
of occupancy or quiet enjoyment of the Premises or any other loss occasioned
thereby. For each of the aforesaid purposes, Landlord shall at ail times have
and retain a key with which to unlock all of the doors in, upon and about the
Premises, excluding Tenant's vaults and safes, or special security areas
(designated in advance), and Landlord shall have the right to use any and all
means that Landlord may deem necessary or proper to open said doors in an
emergency, in order to obtain entry to any portion of the Premises, and any
entry to the Premises or portions thereof obtained by Landlord by any of said
means, or otherwise, shall not under any circumstances be construed or deemed to
be a forcible or unlawful entry into, or a detailer of, the Premises, or an
eviction, actual or constructive, of Tenant from the Premises or any portion
thereof.
19. Notices
19.1 Except as otherwise expressly provided in this Lease, any bills,
statements, notices, demands, requests or other communications given or required
to be given under this Lease shall be effective only if rendered or given in
writing, sent by registered or certified mail or delivered personally, (a) to
Tenant (i) at Tenant's address set forth in the Basic Lease Information, if sent
prior to Tenant's taking possession of the Premises, or (ii) at the Building if
sent subsequent to Tenant's taking possession of the Premises, or (iii) at any
place where Tenant or any agent or employee of Tenant may be found if sent
subsequent to Tenant's vacation, deserting, abandoning or surrendering
17
the Premises, or (b) to Landlord at Landlord's address set forth in the Basic
Lease Information, or to such other address as either Landlord or Tenant may
designate as its new address for such purpose by notice given to the other in
accordance with the provisions of this Section 19.1. Any such bill, statement,
notice, demand, request or other communication shall be deemed to have been
rendered or given three (3) business days after the date when it shall have been
mailed as provided in this Section 19.1 if sent by registered or certified mail,
and such mortgagee or ground or underlying lessor shall be given a reasonable
opportunity to cure such default prior to Tenant exercising any remedy available
to it.
20. No Waiver
20.1 No failure by Landlord or Tenant to insist upon the strict performance
of any obligation of the other party under this Lease or to exercise any right,
power or remedy consequent upon a breach thereof, no acceptance of full or
partial Rent or Additional Charges during the continuance of any such breach,
and no acceptance of the keys to or possession of the Premises prior to the
termination of the Term by any employee of Landlord shall constitute a waiver of
any such breach or of such term, covenant or condition or operate as a surrender
of this Lease. No payment by Tenant or receipt by Landlord of a lesser amount
than the aggregate of all Rent and Additional Charges then due under this Lease
shall be deemed to be other than on account of the first items of such Rent and
Additional Charges then accruing or becoming due, unless Landlord elects
otherwise; and no endorsement or statement on any check and no letter
accompanying any check or other payment of Rent or Additional Charges in any
such lesser amount and no acceptance of any such check or other such payment by
Landlord shall constitute an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlords right to recover the
balance of such Rent or Additional Charges or to pursue any other legal remedy.
20.2 Neither this Lease nor any term or provision hereof may be changed,
waived, discharged or terminated orally, and no breach thereof shall be waived,
altered or modified, except by a written instrument signed by the party against
which the enforcement of the change, waiver, discharge or termination is sought.
No waiver of any breach shall affect or alter this Lease, but each and every
term, covenant and condition of this Lease shall continue in full force and
effect with respect to any other then existing or subsequent breach thereof.
21. Estoppel Certificates
21.1 Tenant at anytime and from time to time upon not less than ten (10)
days' prior written notice from Landlord, will execute, acknowledge and deliver
to Landlord and, at Landlords request to any prospective purchaser, ground or
underlying lessor or mortgagee of any part of the Real Property, a certificate
of Tenant stating: (a) that Tenant has accepted the Premises (or, if Tenant has
not done so, that Tenant has not accepted the Premises and specifying the
reasons therefor), (b) the Commencement and Expiration Dates of this Lease, (c)
that this Lease is unmodified and in full force and effect (or, if there have
been modifications, that same is in full force and effect as modified and
stating the modifications), (d) whether or not there are then existing any
defenses against the enforcement of any of the obligations of Tenant under this
Lease (and, if so, specifying same), (e) whether or not them are then existing
any defaults by Landlord in the performance of its
18
obligations under this Lease (and, if so, specifying same), (f) the dates, if
any, to which the Rent and Additional Charges and other charges under this Lease
have been paid, and (g) any other information that may reasonably be required by
any of such persons. It is intended that any such certificate of Tenant
delivered pursuant to this Section 21.1 may be relied upon by Landlord and any
prospective purchaser, ground or underlying lessor or mortgagee of any part of
the Real Property.
22. Rules and Regulations
22.1 Tenant shall faithfully observe and comply with the rules and
regulations attached to this Lease as Exhibit D and all modifications thereof
---------
and additions thereto from time to time put into effect by Landlord. Landlord
shall not be responsible for the nonperformance by any other tenant or occupant
of the Building or the Complex of any of said rules and regulations. In the
event of an express and direct conflict between the terms, covenants, agreements
and conditions of this Lease and the terms, covenants, agreements and conditions
of such rules and regulations, as modified and amended from time to time by
Landlord, this Lease shall control.
23. Tax on Tenant's Personal Property
23.1 At least ten (10) days prior to delinquency Tenant shall pay all taxes
levied or assessed upon Tenant's equipment, furniture, fixtures and other
personal property located in Or about the Premises. If the assessed value of
Landlord's property is increased by the inclusion therein of a value placed upon
Tenant's equipment, furniture, fixtures or other personal property, Tenant shall
pay to Landlord, upon written demand, the taxes so levied against Landlord, or
the proportion thereof resulting from said increase in assessment. The portion
of real estate taxes payable by Tenant pursuant to this Section 23.1 and by
other tenants of the Building pursuant to similar provisions in their leases
shall be excluded from Real Estate Taxes for purposes of computing the
Additional Charges to be paid pursuant to Article 4 hereof.
24. Authority
24.1 Each of the persons executing this Lease on behalf of Tenant and
Landlord does hereby covenant and warrant that the party for which they are
executing this Lease is a duly authorized and existing entity, that the party
for which they are executing this Lease has and is qualified to do business in
California, that the party for which they are executing this Lease has full
right and authority to enter into this Lease, and that any such person signing
on behalf of such party is authorized to do so. Upon either party's request,
the other party shall provide the requesting party with evidence reasonably
satisfactory to such party confirming the foregoing covenants and warranties.
25. Miscellaneous
25.1 The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. The words used in the neuter gender include the
masculine and feminine. If there is more than one Tenant, the obligations under
this Lease imposed on Tenant shall be joint and several. The captions preceding
the articles of this Lease have been inserted solely as a matter of
19
convenience and such captions in no way define or limit the scope or intent of
any provision of this Lease.
25.2 The terms, covenants and conditions contained in this Lease shall bind
and inure to the benefit of Landlord and Tenant and, except as otherwise
provided herein, their respective personal representatives and successors and
assigns; provided, however, upon the sale, assignment or transfer by the
Landlord named herein (or by any subsequent landlord) of its interest in the
Building as owner or less", including any transfer by operation of law, the
Landlord (or subsequent landlord) shall be relieved from all subsequent
obligations or liabilities under this Lease, and all obligations subsequent to
such sale, assignment or transfer (but not any obligations or liabilities that
have accrued prior to the date of such sale, assignment or transfer) shall be
binding upon the grantee, assignee or other transferee of such interest, and any
such grantee, assignee or transferee, by accepting such interest, shall be
deemed to have assumed such subsequent obligations and liabilities. A lease of
the entire Building to a person other than for occupancy thereof shall be deemed
a transfer within the meaning of this Section 26.2.
25.3 If any provision of this Lease or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable.,
shall not be affected thereby, and each provision of this Lease shall be valid
and be enforced to the full "tent permitted by law.
25.4 This Lease shall be construed and enforced in accordance with the laws
of the State of California.
25.5 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.
25.6 This instrument, including the Exhibits hereto, which are made a part
of this Lease, contains the entire agreement between the parties and all prior
negotiations and agreements are superseded by this Lease. Neither Landlord nor
Landlord's agents have made any representations or warranties with respect to
the Premises, the Building, the Real Property or this Lease except as expressly
set forth herein, and no rights, easements, or licenses are or shall be acquired
by Tenant by implication or otherwise unless expressly set forth herein.
25.7 The review, approval, inspection or examination by Landlord of any
item to be reviewed, approved, inspected or examined by Landlord under the terms
of this Lease or the Exhibits attached hereto shall not constitute the
assumption of any responsibility by Landlord for either the accuracy or
sufficiency of any such item or the quality or suitability of such item for its
intended use. Any such review, approval, inspection or examination by Landlord
is for the sole purpose of protecting Landlord's interests in the Building and
the Complex and under this Lease, and no third parties, including, without
limitation, Tenant or any person or entity claiming through or under Tenant, or
the contractors, agents, servants, employees, visitors or licensees of Tenant or
any such person or entity, shall have any rights hereunder.
20
25.8 In the event of any action or proceeding brought by either party
against the other under this Lease, the prevailing party shall be entitled to
recover all costs and expenses, including its attorney's fees, in such action or
proceeding in such amount as the court may adjudge reasonable. The prevailing
party shall be determined by the court based upon an assessment of which party's
major arguments made or positions taken in the proceedings could fairly be said
to have prevailed over the other party's major arguments or positions on major
disputed issues in the court's or arbitrator's decision. If Landlord is named
as a defendant in any suit brought against Tenant in connection with or in
anyway arising out of this Lease or Tenant's use or occupancy of the Premises,
Tenant shall pay Landlord's costs and expenses, including, without limitation,
reasonable attorney's fees, incurred in such suit or action.
25.9 Upon the expiration or sooner termination of the Term, Tenant will
quietly and peacefully surrender to Landlord the Premises in the condition in
which they are required to be kept as provided in Article 8 hereof, ordinary
wear and tear and the provisions of Article 12 excepted.
25.10 Upon Tenant paying the Rent and Additional Charges and performing all
of Tenant's obligations under this Lease, Tenant may peacefully and quietly
enjoy tile Premises during the Term as against all persons or entities lawfully
claiming by or through Landlord, subject, however, to the provisions of this
Lease and to any mortgages or ground or underlying leases referred to in Article
10 hereof.
25.11 Tenant covenants and agrees that no diminution of light, air or view
by any structure that may hereafter be erected (whether or not by Landlord)
shall entitle Tenant to any reduction of Rent or Additional Charges under this
Lease, result in any liability of Landlord in Tenant, or in any other way affect
this Lease or Tenant's obligations hereunder.
25.12 Any holding over by Tenant after the expiration or other termination
of the Term with the written consent of Landlord shall be construed to be a
tenancy from month-to-month at one hundred seventy-five percent (175%) of the
Rent in effect on the date of such expiration or termination and shall otherwise
be on the terms and conditions herein specified so far as applicable. Any
holding over without Landlord's consent shall constitute a default by Tenant and
entitle Landlord to reenter the Premises as provided in Article 16 hereof.
25.13 Time is of the essence with respect to all provisions of this Lease in
which a definite time for performance is specified.
25.14 Tenant warrants that it has had no dealings with any real estate
broker or agents in connection with the negotiation of this Lease other then the
party identified as "Broker" in the Basic Lease Information and it knows of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Tenant agrees to indemnify Landlord and hold Landlord harmless
from and against any and all claims, demands, losses, liabilities, lawsuits,
judgments, costs and expenses (including reasonable attorneys' fees) with
respect to any leasing commission or equivalent compensation alleged to be owing
on account of Tenant's dealings with any real estate broker or agent other than
Broker.
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25.15 The following Exhibits and Addenda are attached hereto and
incorporated herein by this reference: (a) Exhibits A, B, C, D and Addendum 1.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the day
and year first above written.
"Landlord" "Tenant"
Ahdi Nashashibi Andromedia, Inc.
- --------------- ----------------
An individual A California corporation
- ------------- ------------------------
By: /S/ AHDI NASHASHIBI By: /S/ JAMIE COHAN
----------------------- ------------------------
Its: Its:
----------------------- ------------------------
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EXHIBIT A
Floor Plans
TO BE SUPPLIED BY THE LANDLORD
23
EXHIBIT B
Monthly Premises Rent
The following monthly rent shall be paid by Tenant in respect of the Premises
during each month of the Term:
Month Monthly Rent
------------ ------------------------
1-36 $16,500.00 per month
37-60 $18,333.33 per month
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EXHIBIT C
Tenant Improvements
Landlord shall install Improvements in the Premises in accordance with the plans
and specifications (the "Plans") attached hereto. The cost of such improvements
shall be paid by Landlord, provided that Tenant shall pay to Landlord within ten
(10) days after taking occupancy of the Premises the amount set forth as
"Tenant's Share of Improvement Costs" in the Basic Lease Information.
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EXHIBIT D
Rules and Regulations
1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building without the written consent of Landlord. Landlord shall
have the right to remove any such sign, placard, picture, advertisement, name or
notice without notice to and at the expense of Tenant.
All approved signs or lettering on doors shall be printed, painted, affixed
or inscribed at the expense of Tenant by a person approved of by Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass or any window, door, partition or wall which may appear unsightly from
outside the Premises. Landlord shall furnish and install a Building standard
window covering at all exterior windows which shall not be modified by Tenant
without the prior written consent of Landlord.
2. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by any of the tenants or used by them for any purpose
other than for ingress and egress from their respective premises.
3. Tenant shall not alter any lock or install any new or additional locks to
any bolts on any doors or windows of the Premises with Landlord's prior approval
(not to be unreasonably withheld or delayed).
4. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein. The expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by the Tenant who, or whose employees or invitees, shall have caused it.
5. Tenant shall not overload the floor of the Premises or in any way deface
the Premises or any part thereof.
6. No furniture, freight or equipment of any kind shall be brought into the
Building without the prior notice to Landlord and all moving of the same into or
out of the Building shall be done at such time and in such manner as Landlord
shall designate. Landlord shall have the right to prescribe the weight, size
and position of all safes and other heavy equipment brought into the Building
and also the times and manner of moving the same in and out of the Building.
Safes or other heavy objects shall, if considered necessary by Landlord, stand
on supports of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property from any cause and all damage done to the Building by moving or
maintaining any such safe or other property shall be repaired at the expense of
Tenant. Tenant shall pay for any damage to walls, doors, paint, elevator cabs
or other items caused by Tenant's movers.
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7. Tenant shall not use, keep or permit to be used or kept arty foul or
noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to the Landlord or other
occupants of the Building by reason of noise, odors and/or vibrations, or
interfere in any way with other tenants or those having business therein, nor
shall any animals or birds be brought in or kept in or about the Premises or the
Building.
8. No commercial cooking shall be done or permitted by the Tenant on the
Premises, nor shall the Premises be used for the storage of merchandise, for
washing clothes, for lodging, or for any improper, objectionable or immoral
purposes.
9. Tenant shall not use or keep in the Premises or the Building any kerosene,
gasoline or inflammable or combustible fluid or material, or use any method of
heating or air conditioning other then that supplied by Landlord, if any.
10. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires will be
allowed without the prior consent of the Landlord. The location of telephones,
call boxes and other office equipment affixed to the Premises shall be subject
to the prior approval of Landlord.
11. On Saturdays, Sundays and legal holidays, and on other days between the
hours of 6:00 PM and 8:00 AM the following day, access to the Building, or to
the halls, corridors, elevators or stairways in the Building, or to the Premises
may be refused unless the person seeking access is known to the person or
employee of the Building in charge and has a pass or is properly identified.
The Landlord shall in no case be liable for damages for any error with regard to
the admission to or exclusion from the Building of any person. In case of
invasion, mob, riot, public excitement or other commotion, the Landlord reserves
the right to prevent access to the Building during the continuance of the same
by closing of the doors or otherwise, for the safety of the tenants and
protection of property in the Building and the Building.
12. Landlord reserves the right to exclude or expel from the Building any
person who, In the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
the rules and regulations of the Building.
13. No vending machines or machines of any description shall be installed,
maintained or operated upon the Premises without the written consent of the
Landlord.
14. Tenant shall not disturb, solicit, or canvas any occupant of the Building
and shall cooperate to prevent same.
15. Without the prior written consent of Landlord, Tenant shall not use the
name of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
16. Landlord shall have the right to control and operate the public portions of
the Building and the public facilities, as well as facilities furnished for the
common use of the tenants, in such manner as it deems best for the benefit of
the tenants generally.
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17. All entrance doors in the Premises shall be left locked when the Premises
are not in use, and all doors opening to public corridors shall be kept closed
except for normal ingress and egress from the Premises.
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EXHIBIT E
Option to Extend Term
(A) Tenant shall have one (1) option "Extension Option" to extend the term of
the Lease. The Extension Option shall extend the term of the Lease for a period
(the "Extension Term") of five (5) years commending on the expiration of the
Initial Term. Tenant shall be payable during the Extension Term as set forth in
Exhibit B. All other provisions of this Lease shall remain unchanged during the
Extension Term except that the "Base Year" for the Extension Term shall be 2003.
(B) The Extension Option shall only be effective if Tenant is not in default
under any of the terms and conditions of this Lease, either at the time the
Extension Option is exercised or at the commencement of the Extension Term. The
Extension Option must be exercised, if at all, by written notice from Tenant to
Landlord given not less than nine (9) months prior to the expiration of the
initial Term and once exercised is irrevocable.
(C) For the purposes of this Lease, "Fair Market Value" shall be defined as
the rental rate charged for comparable space as the Premises or other areas, as
may be applicable, taking into account the size, location, location in the
Building, and terms of this Lease, including, without limitation, rental
escalation terms. Within thirty (30) days of exercise of an Extension Option or
other event requiring the determination of Fair Market Value, Landlord shall
notify Tenant of its determination of Fair Market Value. If Tenant disputes
Landlord's determination of Fair Market Value, Tenant shall notify Landlord
within ten (10) days following Landlord's notice to Tenant and such dispute
shall be resolved as follows:
(1) Within thirty (30) days following Landlord's notice to Tenant of Fair
Market Value, Landlord and Tenant shall meet no less than two (2) times, at a
mutually agreeable time and place, to attempt to resolve any disagreement.
(2) If within this thirty (30) day period, Landlord and Tenant cannot reach
agreement as to Fair Market Value, they shall each select an appraiser to arrive
at a determination of Fair Market Value and submit his/her conclusions in
writing to Landlord and Tenant within thirty (30) days of the expiration of the
thirty (30) day consultation period described in (1) above.
(3) If only one appraisal is submitted within the requisite period of time,
it shall be deemed the Fair Market Value. If both appraisals are submitted
within such time period, and if the two appraisals differ by less than ten
percent (10%) of the higher of the two, the average of the two appraisals shall
be deemed to be Fair Market Value. If the two appraisals differ by more than
ten percent (10%) of the higher of the two, then the two appraisers shall
immediately select a third appraiser who will within thirty (30) days of his/her
selection make a determination of Landlord and Tenant. This third appraisal
shall then be averaged with the closer of the two previous appraisals and the
results shall be the Fair Market Value.
(4) All appraisers specified shall be members of the American Institute of
Real Estate Appraisers with not less than five (5) years experience appraising
commercial properties in San Francisco. Each party shall pay the cost of the
appraiser selected by such party, one-half of the
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cost of the third appraiser, plus one-half of any other costs incurred in
determining the Fair Market Value.
(D) In no event shall the Extension Option rent be less than the rent paid by
Tenant in the last month of the Initial term.
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ADDENDUM TO LEASE
This Addendum to Lease ("Addendum") is part of that certain Lease (defined
below) of even date herewith by and between AHDI NASHASHIBI, an individual
("Landlord"), and ANDROMEDIA, INC., a California corporation, ("Tenant") for
approximately 11,000 rentable square feet of premises ("Premises") located on
the second and third floors of the building ("Building") located at 818 Mission
Street, San Francisco, California, as more particularly described in the Lease
Form (defined below). Landlord and Tenant agree that, notwithstanding anything
to the contrary contained in the Lease Form, the Lease Form shall be amended,
supplemented and modified as follows:
1. Definitions
Unless otherwise defined in this Addendum, all terms used in this Addendum
shall have the same meaning and definition given them in the Lease Form. As
used in this Addendum, the term "Lease Form" shall mean the printed lease form,
together with all exhibits and attachments thereto, to which this Addendum is
attached. As used herein, the term "Lease" shall mean the Lease Form, this
Addendum, and all other addenda, exhibits, and attachments to the Lease Form
referred to in the Lease Form or in this Addendum.
2. Tenant Share of Increased Costs (Replacing Section 4 of the Lease)
2.1 For purposes of this Lease, the following terms shall have the
meanings hereinafter set forth:
(a) "Tenant's Percentage Share" shall mean the percentage figure so
specified in the Basic Lease Information. Tenant's Percentage Share has been
computed by dividing the floor(s) of the Premises by the total rentable square
footage of Floors 1-5 (whether occupied or not) and multiplying the resulting
quotient by 100.
(b) Tenant agrees to pay Tenant's Percentage Share of the increase in Taxes
over the Base Tax Year 1998, as set forth in the Basic Lease Information.
Landlord represents that the Base Tax Year 1998 is based upon a fully assessed
and occupied Building.
(c) "Real Estate Taxes" shall mean all taxes, assessments and charges
levied upon or with respect to the Real Property or any personal property of
Landlord used in the operation thereof, or Landlord's interest in the Real
Property or such personal property. Real Estate Taxes shall include, without
limitation, all general real property taxes and general and special assessments,
charges, fees or assessments for transit, housing, police, fire or other
governmental services or purported benefits to the Real Property, service
payments in lieu of taxes, and any tax, free or excise on the act of entering
into this Lease or any other lease of space in the Building, or on the use or
occupancy of the Real Property or any part thereof, or on the rent payable under
any lease or in connection with business of renting space in the Building that
are now or hereafter levied or assessed against Landlord by the United States of
America, the State of California, or any political subdivision, public
corporation, district or other political or public entity, and shall also
include any
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other tax, fee or other excise, however described, that may be levied or
assessed as a substitute for, or as an addition to, in whole or in part, any
other Real Estate Taxes, whether or not now customary or in the contemplation of
the parties on the date of this Lease. Any assessments may be included in Real
Estate Taxes and shall be deemed payable over the longest lawful period and only
the installment(s) due in a given tax year should be included in Real Estate
Taxes for any such tax year. Real Estate Taxes shall not include franchise,
transfer, inheritance and excess profits taxes, gift taxes, succession taxes,
estate taxes, federal and state income taxes, penalties arising from Landlord's
failure to pay taxes in a timely manner, and other taxes applied or measured by
Landlord's general or net income (as opposed to rents, receipts, or income
attributable to operations at the Building); capital stock or income taxes
unless, due to a change in the method of taxation, any of such taxes is levied
or assessed against Landlord as a substitute for, or as an addition to, in whole
or in part, any other tax that would otherwise constitute a Real Estate Tax and
items included as Operating Expenses. Real Estate Taxes shall also include
reasonable legal fees, costs and disbursements incurred in connection with
proceedings to contest, determine or reduce Real Estate Taxes. Tenant shall be
entitled to its share of Tax refunds for any Lease year where Tenant paid its
Share of Taxes.
(d) "Operating Expenses" shall mean the total cost and expenses paid or
incurred by Landlord in connection with the management, operation, maintenance,
and repair of the Building, including, without limitation: (i) janitorial,
maintenance, security guard and other service contracts; (ii) charges for
electricity, gas, steam, water, sewer, waste disposal and other utilities
furnished or incurred by Landlord and not otherwise billed directly to Tenant by
Landlord; (iii) materials, supplies, equipment and tools: (iv) maintenance and
repairs; (v) the cost of fire, extended coverage, boiler, sprinkler, public
liability, property damage, rent loss, earthquake and other insurance; (vi)
wages, salaries, and other labor costs, including taxes, insurance, retirement,
medical and other employee benefits of all personnel engaged solely in the
operation and maintenance of the Building; (vii) fees, charges and other costs,
(but excluding management fees, consulting fees, legal fees and accounting
fees), of all independent contractors engaged by Landlord or reasonable charges
incurred by Landlord if Landlord performs management services in connection with
the Building; (viii) if in performing its obligations pertaining to operation,
maintenance and repair of the Common Areas, Landlord should incur any costs
which would constitute capital expenditures under generally accepted accounting
principles, and if such capital expenditure does not result from damage or
destruction or Landlord's discretionary renovation, remodeling, alteration or
expansion of the building commonly referred to as 818 Mission Street, or part
thereof, such capital expenditure shall be amortized (without interest) over the
useful life of the equipment or improvement so repaired or replaced, and there
shall be included as part of Common Area Operating Expenses each year only the
amortized portion of such capital expenditure allocable to such calendar year;
(ix) all expenses payable by the Building pursuant to the Complex Covenants; and
(x) any other reasonable expenses of any other kind whatsoever reasonably
incurred in operating, maintaining and repairing the Building. Operating
Expenses shall not include Real Estate Taxes, depreciation on the Building other
than depreciation on carpeting in public corridors and common areas, costs for
which Landlord has a right of reimbursement from others, costs of Tenants'
Improvements, real estate brokers' commissions, executive salaries (exclusive of
salaries, wages or fees paid for management activities) and capital, items other
than those referred to in this Section 4.1(d): services not generally provided
32
to all Building tenants; legal compliance costs (such as the Americans With
Disabilities Act); utilities outside of common areas). Operating Expenses for
both Base Year and each subsequent calendar year shall be determined by
adjusting the actual Operating Expenses to equal Landlord's reasonable estimate
of what the total Operating Expenses would be if the total rentable area of the
Building had been 95% occupied for the entire calendar year. The computation of
Operating Expenses shall be made in accordance with generally accepted tax
accounting principles. Notwithstanding anything contained herein to the
contrary, Landlord shall deduct from Operating Expenses payment for Operating
Expenses received from any basement/lower level tenant.
2.2 In addition to the Rent payable by Tenant for each calendar year
subsequent to the Base Year 1998, Tenant shall pay Tenant's Percentage Share of
the total dollar increase, if any, in Operating Expenses paid or incurred by
Landlord in such calendar year over Operating Expenses paid or incurred by
Landlord in the Base Year 1998,
2.3 During December of each calendar year starting with the Base Year 1998
or as soon thereafter as practicable, Landlord shall give Tenant written notice
of Landlord's estimate of the amounts payable by Tenant under Section 4.2 (such
amounts are referred to herein as the "Estimated Operating Expenses") for the
ensuing calendar year. On or before the first day of each month during the
ensuing calendar year, Tenant shall pay to Landlord one-twelfth (1/12th) of the
Estimated Operating Expenses, provided that if such notice is not given in
December then Tenant shall continue to pay on the basis of the prior estimate
until the first day of the calendar month next succeeding the date such notice
is given. If at any time or times it appears to Landlord that the actual
amounts payable under Section 4.2 (such amounts are referred to herein as the
"Actual Operating Expenses") for the current calendar year will vary from the
Estimated Operating Expenses by more than five percent (5%), Landlord shall, by
written notice to Tenant, revise its estimate for such year, and subsequent
payments by Tenant for such year shall be based upon such revised estimate.
2.4 As soon after the close of each calendar year as practicable, Landlord
shall deliver to Tenant a statement of the Actual Operating Expenses for such
calendar year. If the Actual Operating Expenses are less than the estimated
payments for such calendar year previously made by Tenant and Tenant is not in
monetary default at the such statement is delivered, Landlord shall credit the
excess to the next payment of Rent failing due under this Lease. If the Actual
Operating Expenses are more than the estimated payments for such calendar year
previously made by Tenant, Tenant shall pay the deficiency to Landlord within
thirty (30) days after delivery of such statement. The respective obligations
of Landlord and Tenant under this Section 4.4 shall survive the expiration or
other termination of the term of this Lease, and if the term of this Lease shall
expire or terminate on a day other than the last day of the calendar year, the
adjustment in Additional Charges pursuant to this Section 4.4 for the calendar
year in which the term expires or otherwise terminates shall be prorated in the
proportion that the number of days in such year preceding expiration or
termination of the Lease bears to the number 365.
2.5 During December of each calendar year starting with the Base Year 1998
or as soon thereafter as practicable, Landlord shall give Tenant written notice
of Landlord's estimate of the
33
amounts payable by Tenant under Section 4.1 (such amounts are referred to herein
as the "Estimated Real Estate Taxes") for the ensuing calendar year. On or
before the first day of each month during the ensuing calendar year, Tenant
shall pay to Landlord one-twelfth (1/12th) of the Estimated Real Estate Taxes,
provided that if such notice is not given in December then Tenant shall continue
to pay on the basis of the prior estimate until the first day of the calendar
month next succeeding the date such notice is given. If at any time or times it
appears to Landlord that the actual amounts payable under Section 4.1 (such
amounts are referred to herein as the "Actual Real Estate Taxes") for the
current calendar year will vary from the Estimated Real Estate Taxes by more
than five percent (5%), Landlord shall, by written notice to Tenant, revise its
estimate for such year, and subsequent payments by Tenant for such year shall be
based upon such revised estimate.
2.6 As soon after the close of each calendar year as practicable, Landlord
shall deliver to Tenant a statement of the Actual Real Estate Taxes for the
calendar year. If the Actual Real Estate Taxes are less than the estimated
payments for such calendar year previously made by Tenant and Tenant is not in
monetary default at the time such statement is delivered, Landlord shall credit
the excess to the next payment for Rent failing due under this Lease. If the
Actual Real Estate Taxes are more than the estimated payments for such calendar
year previously made by Tenant, Tenant shall pay the deficiency to Landlord
within thirty (30) days after delivery of such statement. The respective
obligations of Landlord and Tenant under this Section 4.6 shall survive the
expiration or other termination of the term of this Lease, and if the term of
this Lease shall expire or terminate on a day other than the last day of the
calendar year, the adjustment in Real Estate Taxes pursuant to this Section 4.6
for the calendar year in which the term expires or otherwise terminates shall be
prorated in the proportion that the number of days in such year preceding
expiration or termination of the Lease bears to the number 365.
3. Acceptance of Premises [Section 5.11]
Tenant's acceptance of the Premises shall not be deemed a waiver of Tenant's
right to have defects in the Tenant Improvements or the Premises repaired at
Landlord's sole expense. Tenant shall give notice to Landlord whenever any such
defect becomes reasonably apparent, and Landlord shall repair such defect as
soon as practicable. Landlord also hereby assigns to Tenant all warranties with
respect to the Premises which would reduce Tenant's maintenance and obligations
hereunder and shall cooperate with Tenant to enforce all such warranties.
Landlord warrants and represents that as of the Commencement Date the Premises
will be in good condition and repair and the electrical, mechanical, HVAC,
plumbing, elevator and other systems serving the Premises and the Building will
be in good condition and repair.
4. Alterations and Additions (Replacing Section 7 of the Lease)
4.1 Tenant shall not make or suffer to be made any structural (or non-
structural if the cost thereof exceeds Five Thousand Dollars ($5,000.00)
alterations, additions or improvements (collectively, "Alterations"), to or of
the Premises or any part thereof, or attach any fixtures or equipment thereto,
without first obtaining Landlord's written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Any Alterations to the Premises
consented to by Landlord shall be made by Landlord or an agent or contractor
designated by Landlord for Tenants
34
account and Tenant shall reimburse Landlord for the commercially competitive
cost thereof (including a reasonable charge for Landlord's overhead) within ten
(10) days after receipt of a bill therefor. Any such alterations, additions or
improvements made in accordance with this section shall be competitively bid;
any contractor chosen shall be licensed, insured for projects in excess of
$25,000.00, Landlord may require Tenant to provide a performance bond in the
full amount of such alterations, additions or improvements. All Alterations
shall immediately become Landlord's property and, at the end of the term hereof,
shall remain on the Premises without compensation to Tenant unless Landlord
elects by notice to Tenant to have Tenant remove the same, in which event Tenant
shall promptly restore the Premises to their condition prior to the installation
of such alterations. Tenant shall have the right to make non-structural
alterations, additions or improvements (costing less than Five Thousand Dollars
($5,000.00)) without Landlord's consent. Tenant's alterations will not penetrate
the ceiling or the floors without the approval of Landlord, not to be
unreasonably withheld or delayed.
4.2 All furniture, furnishings, and articles of movable personal property
installed in the Premises by or for the account of Tenant, without expense to
Landlord, and which can be removed without structural or other material damage
to the Building (all of which are herein called "Tenant's Property") shall be
and remain the property of Tenant and may be removed by it at any time during
tile Term; provided, however, that any equipment or other property for which
Landlord has granted any allowance or credit to Tenant or which is a replacement
for items originally provided by Landlord at Landlord's expense shall not be
considered Tenant's Property. Upon the expiration or earlier termination of
this Lease, Tenant shall remove from the Premises all of Tenant's Property
except such items as the parties shall have agreed are to remain and become the
property of Landlord and Tenant shall repair or pay the costs of repairing any
damage to tile Premises or to the Building resulting from such removal.
Tenant's obligations under this Section 7.2 shall survive the termination of
this Lease. Any items of Tenant's Property that remain in the Premises after
the expiration or earlier termination of this Lease may, at the option of
Landlord, be deemed abandoned and in such case may either be retained by
Landlord as its property or be disposed of, without accountability, at Tenant's
expense in such manner as Landlord may see fit. In no event shall Tenant have
any obligation to remove any of the initial Tenant Improvements further defined
in Exhibit C.
5. Environmental
To the best knowledge of Landlord, (i) no Hazardous Material is present in, on
or under the Building or Property or the soil, surface water or groundwater
thereof, (ii) no underground storage tanks are present on the Property, and
(iii) no action, proceeding or claim is pending or threatened regarding the
Property concerning any Hazardous Material or pursuant to any Hazardous
Materials laws. Under no circumstance shall Tenant be liable for, and Landlord
shall indemnify, defend and hold harmless Tenant, its agents, contractors,
stockholders, directors, successors, representatives, and assigns from and
against, all losses, costs, claims, liabilities and damages (including
attorneys' and consultants' fees) of every type and nature, directly or
indirectly arising out of or in connection with any Hazardous Material present
at any time on or about the Property, or the soil, air, improvements,
groundwater or surface water thereof, or the violation of any laws, orders or
35
regulations, relating to any such Hazardous Material, except to the extent that
any of the foregoing actually results from the release or emission of Hazardous
Material by Tenant or its agents or employees in violation of applicable
Hazardous Materials laws.
6. Approvals
Notwithstanding anything to the contrary in the Lease Form, whenever the Lease
requires an approval, consent, designation, determination or judgment by either
Landlord or Tenant, such approval, consent, designation, determination or
judgement (including, without limiting the generality of the foregoing, those
required in connection with assignment and subletting) shall not be unreasonably
withheld or delayed and in exercising any right or remedy hereunder, each party
shall at all times act reasonably and in good faith.
7. Reasonable Expenditures
Notwithstanding anything to the contrary in the Lease Form, any expenditure by
a party permitted or required under the Lease, for which such party is entitled
to demand and does demand reimbursement from the other party, shall be limited
to the fair market value of the goods and services involved, shall be reasonably
incurred, and shall be substantiated by documentary evidence available for
inspection and review by the other party or its representative during normal
business hours.
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