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OFFICE LEASE
between
OAIC Bush Street, LLC
a Delaware limited liability company
as Landlord
and
Xoom.com, Inc.,
A Delaware corporation
as Tenant
THE SUBMISSION OF THIS DOCUMENT FOR EXAMINATION, NEGOTIATION AND/OR SIGNATURE
DOES NOT CONSTITUTE AN OFFER TO LEASE. THIS DOCUMENT SHALL NOT BE BINDING AND IN
EFFECT AGAINST EITHER PARTY UNTIL AT LEAST ONE COUNTERPART, DULY EXECUTED BY
LANDLORD AND TENANT, HAS BEEN RECEIVED BY LANDLORD AND TENANT.
<PAGE>
TABLE OF CONTENTS
<TABLE>
PAGE
<S> <C>
1. DEFINITIONS.............................................................................................1
2. LEASE TERM; CONDITION OF PREMISES.......................................................................1
3. 8TH AND 9TH FLOORS......................................................................................2
4. RENTAL..................................................................................................3
5. ADDITIONAL RENT FOR EXPENSES AND REAL ESTATE TAXES......................................................5
6. USE....................................................................................................10
7. SERVICES...............................................................................................11
8. TENANT REMEDIES........................................................................................14
9. IMPOSITIONS PAYABLE BY TENANT..........................................................................15
10. ALTERATIONS............................................................................................16
11. LIENS..................................................................................................18
12. REPAIRS; CONDITION OF PREMISES.........................................................................19
13. DESTRUCTION OR DAMAGE..................................................................................19
14. INSURANCE..............................................................................................21
15. WAIVER OF SUBROGATION..................................................................................23
16. INDEMNIFICATION........................................................................................24
17. COMPLIANCE WITH LEGAL REQUIREMENTS.....................................................................24
18. ASSIGNMENT AND SUBLETTING..............................................................................25
19. RULES; NO DISCRIMINATION...............................................................................29
20. ENTRY BY LANDLORD......................................................................................29
21. EVENTS OF DEFAULT......................................................................................30
22. TERMINATION UPON DEFAULT...............................................................................31
23. CONTINUATION AFTER DEFAULT.............................................................................32
24. OTHER RELIEF...........................................................................................32
25. LANDLORD'S RIGHT TO CURE DEFAULTS......................................................................32
26. LANDLORD DEFAULT.......................................................................................32
27. ATTORNEYS' FEES........................................................................................33
28. EMINENT DOMAIN.........................................................................................33
29. SUBORDINATION AND NONDISTURBANCE.......................................................................33
30. NO MERGER..............................................................................................34
-i-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
31. AMENDMENTS.............................................................................................34
32. ESTOPPEL CERTIFICATE...................................................................................34
33. NO LIGHT, AIR, OR VIEW EASEMENT........................................................................34
34. HOLDING OVER...........................................................................................34
35. SECURITY DEPOSIT.......................................................................................35
36. WAIVER.................................................................................................37
37. NOTICES AND CONSENTS...................................................................................37
38. COMPLETE AGREEMENT.....................................................................................37
39. CORPORATE AUTHORITY....................................................................................37
40. STORAGE SPACE..........................................................................................38
41. NO CONSEQUENTIAL DAMAGES...............................................................................38
42. MISCELLANEOUS..........................................................................................38
43. ABANDONMENT............................................................................................39
44. AMERICANS WITH DISABILITIES ACT AND SIMILAR ACTS.......................................................39
45. EXHIBITS...............................................................................................39
46. LANDLORD'S LIABILITY; SALE OF BUILDING.................................................................39
47. NAME OF BUILDING AND SIGNAGE...........................................................................40
48. HAZARDOUS SUBSTANCE DISCLOSURE.........................................................................41
49. REAL ESTATE BROKERS....................................................................................43
50. NOTICE TO MORTGAGEE; FINANCIAL STATEMENT...............................................................43
51. OPTION TO EXTEND.......................................................................................43
52. RIGHT OF FIRST REFUSAL.................................................................................46
53. PARKING................................................................................................47
54. BICYCLE PARKING........................................................................................48
55. INTERNAL FIRE STAIRS...................................................................................48
56. DEDICATED ELEVATOR.....................................................................................48
57. YEAR 2000..............................................................................................48
</TABLE>
-ii-
<PAGE>
OFFICE LEASE
BASIC LEASE INFORMATION
Lease Execution Date: August 13, 1999
The Lease Execution Date shall be the date upon which the Lease is
fully executed by both parties. Upon Lease execution by Landlord,
Landlord shall promptly send a copy of the fully executed Lease to
Tenant by facsimile, followed by overnight delivery of a complete,
fully executed original Lease.
Landlord: OAIC Bush Street, LLC, a Delaware limited liability company
Tenant: Xoom.com, Inc., a Delaware corporation
Building (Section 1(a)): 225 Bush Street, San Francisco, California
Premises (Section 1(b)):
Suite 800 on the entire 8th floor of the Building (the "8th Floor")
Suite 900 on the entire 9th floor of the Building (the "9th Floor")
Suite 1200 on the entire 12th floor of the Building (the "12th Floor")
Suite 1300 on the entire 13th floor of the Building (the "13th Floor")
Suite 1900 on the entire 19th floor of the Building (the "19th Floor")
Suite 2000 on the entire 20th floor of the Building (the "20th Floor")
Suite 2100 on the entire 21st floor of the Building (the "21st Floor")
Suite 2200 on the entire 22nd floor of the Building (the "22nd Floor")
Rentable Area of Premises (Section 1(b)):
25,233 rentable square feet on the 8th floor
26,042 rentable square feet on the 9th floor
26,041 rentable square feet on the 12th floor
26,034 rentable square feet on the 13th floor
24,157 rentable square feet on the 19th floor
22,123 rentable square feet on the 20th floor
18,751 rentable square feet on the 21st floor
18,314 rentable square feet on the 22nd floor
The total rentable square footage for the Premises is 186,695 rentable
square feet.
III
<PAGE>
The Premises rentable square footage was measured based upon ANSI/BOMA
Z65.1-1996 standards, except for the 22nd floor which calculation
excludes the exterior loggia area for the purposes of this Lease.
Landlord and Tenant have agreed to the Premises rentable square footage
for all purposes and said square footage will not be revised during the
entire term of the Lease, including all Extension Periods.
Term Commencement Date (Section 2(a)):
(1) The Term Commencement Date for the 19th Floor shall be on or
before September 1, 1999 (the "19th Floor Term Commencement Date").
(2) The Term Commencement Date for the 12th Floor and 13th Floor
shall be the earlier of twenty-six (26) weeks after the Lease Execution Date,
plus days attributable to Landlord Delays and Force Majeure Events, or
substantial completion of the Tenant Work and Base Building Work on the 12th and
13th Floor (the "12th and 13th Floor Term Commencement Date"). The estimated
12th and 13th Floor Term Commencement Date is February 4, 2000 (the "Estimated
12th and 13th Floor Term Commencement Date").
(3) The Term Commencement Date for the 20th Floor and 21st Floor
shall be the earlier of twenty-six (26) weeks after the Lease Execution Date,
plus days attributable to Landlord Delays and Force Majeure Events, or
substantial completion of the Tenant Work and Base Building Work on the 20th
Floor and 21st Floor (the "20th and 21st Floor Term Commencement Date"). The
estimated 20th and 21st Floor Term Commencement Date is February 4, 2000 (the
"Estimated 20th and 21st Floor Term Commencement Date").
(4) The Term Commencement Date for the 22nd Floor shall be the
earlier of fourteen (14) months after the Lease Execution Date, plus days
attributable to Landlord Delays and Force Majeure Events, or upon substantial
completion of the Tenant Work and Base Building Work on the 22nd Floor (the
"22nd Floor Term Commencement Date"). The estimated 22nd Floor Term Commencement
Date is October 15, 2000 (the "Estimated 22nd Floor Term Commencement Date").
(5) The Term Commencement Date for the 8th Floor and 9th Floor
shall be as set forth in Section 3 of the Lease.
Term Expiration Date (Section 2(a)): The last day of the month, one hundred
twenty (120) months after the 20th and 21st Floor Term Commencement Date.
IV
<PAGE>
Base Monthly Rental (Section 3(a)):
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
FLOOR OF PREMISES YEARS(2) 1-5: YEARS 6-10
<S> <C> <C>
----------------------------------------------------------------------------------------
8th Floor $73,596.25/mo. $79,904.50/mo.
$883,155/an. ($35.00(1)) $958,854/an. ($38.00(1))
----------------------------------------------------------------------------------------
9th Floor $75,955.83/mo. $82,466.33/mo.
$911,470/an. ($35.00(1)) $989,596/an. ($38.00(1))
----------------------------------------------------------------------------------------
12th Floor $80,293.08/mo. $84,633.25/mo.
$963,517.00/an. ($37.00(1)) $1,015,599.00/an. ($39.00(1))
----------------------------------------------------------------------------------------
13th Floor $80,271.50/mo. $84,610.50/mo.
$963,258.00/an. ($37.00(1)) $1,015,326.00/an. ($39.00(1))
----------------------------------------------------------------------------------------
19th Floor $74,484.08/mo. $78,510.25/mo.
$893,809.00/an. ($37.00(1)) $942,123.00/an. ($39.00(1))
----------------------------------------------------------------------------------------
20th Floor $73,743.33/mo. $82,961.25/mo.
$884,920.00/an. ($40.00(1)) $995,535.00/an. ($45.00(1))
----------------------------------------------------------------------------------------
21st Floor $62,503.33/mo. $70,316.25/mo.
$750,040.00/an. ($40.00(1)) $843,795.00/an. ($45.00(1))
----------------------------------------------------------------------------------------
22nd Floor $67,151.33/mo. $70,203.67/mo.
$805,816.00/an. ($44.00(1)) $842,444.00/an. ($46.00(1))
----------------------------------------------------------------------------------------
Total: $587,998.73/mo. $633,606.00/mo.
$7,055,985.00/an. $7,603,272.00/an.
----------------------------------------------------------------------------------------
</TABLE>
(1) Per rentable square, per annum.
(2) Years shall be measured from the 20th and 21st Floor Term Commencement Date
Base Expense Year (Section 1(c)): 2000
Base Tax Year (Section 1(d)): 2000
V
<PAGE>
Tenant's Expense Share (Section 5(a)): 33.62%
Tenant's Expense Share by floor of the Premises shall be
4.54% for the 8th Floor
4.69% for the 9th Floor
4.69% for the 12th Floor
4.69% for the 13th Floor
4.35% for the 19th Floor
3.98% for the 20th Floor
3.38% for the 21st Floor
3.30% for the 22nd Floor
Landlord and Tenant agree that Tenant's Expense Share is calculated
based upon the Building containing 555,325 rentable square feet
("Building Square Footage").
Tenant's Tax Share (Section 5(a)): 33.62% of the Building
Tenant's Tax Share by floor of the Premises shall be:
4.54% for the 8th Floor
4.69% for the 9th Floor
4.69% for the 12th Floor
4.69% for the 13th Floor
4.35% for the 19th Floor
3.98% for the 20th Floor
3.38% for the 21st Floor
3.30% for the 22nd Floor
Landlord and Tenant agree that Tenant's Tax Share is calculated based
upon the Building Square Footage (as defined above).
Security Deposit (Section 35): Upon full execution of the Lease: a Letter
of Credit in the amount of $4,500,000
subject to reduction and/or return to the
Tenant in accordance with the terms of
Section 35 of this Lease
Tenant's Address
for Notices (Section 37):
Prior to 19th Floor Term Commencement Date:
Xoom.com, Inc.
300 Montgomery Street, Suite 300
VI
<PAGE>
San Francisco, California 94104
Attn: Director of Operations and Administration
Phone: (415) 288-2500
Fax: (415) 288-2580
After the 19th Floor Term Commencement Date:
Xoom.com, Inc.
225 Bush Street, Suite ____
San Francisco, California 94104
Attn: Director of Operations and Administration
Phone: (415)_________________________
Fax: (415)___________________________
[blanks to be completed on occupancy]
Landlord's Address
for Notices (Section 37)
OAIC Bush Street, LLC
c/o Ocwen Capital Corporation
1675 Palm Beach Lakes Boulevard
The Forum, Suite 511
West Palm Beach, FL 33401
Attn: Secretary
Phone: (561) 682-8517
Fax: (561) 682-8177
with a copy to:
OAIC Bush Street, LLC
c/o Ocwen Capital Corporation
1675 Palm Beach Lakes Boulevard
The Forum
West Palm Beach, FL 33401
Attn: Real Estate Asset Management Department
Phone: (561) 682-8275
Fax: (561) 682-8163
VII
<PAGE>
with a copy to:
Jones Lang LaSalle
225 Bush Street, Suite 770
San Francisco, California 94104
Attn: Property Manager
Phone: (415) 835-0225
Fax: (415) 835-0222
Exhibit(s) and Addendum (Section 45):
Exhibit A: Floor Plan
Exhibit B: Rules and Regulations
Exhibit C: Work Letter
Exhibit D: Commencement Date Memorandum
Exhibit E: Tenant Estoppel
Exhibit F: Subordination, Attornment and Non-Disturbance Agreement
Real Estate Brokers (Section 49): Mark Rosen of Rosen and Reynolds for Tenant
and Angus Scott and Richard Dougherty of Grubb & Ellis for Landlord.
The provisions of the Lease identified above in parentheses are those provisions
where references to particular Basic Lease Information appear. Each such
reference shall incorporate the applicable Basic Lease Information. In the event
of any conflict between any Basic Lease Information and the Lease, the latter
shall control.
TENANT: LANDLORD:
Xoom.com, Inc. OAIC Bush Street, LLC,
a Delaware corporation a Delaware limited liability company
By: /s/ Chris Kitze By: /s/ Gregory Breskin
----------------------------- ---------------------------------
Name: Chris Kitze Name: Gregory Breskin
--------------------------- -------------------------------
Its: Chairman Its: Vice President
---------------------------- --------------------------------
By: /s/ John Harbottle By: /s/ Christine Reich
----------------------------- ---------------------------------
Name: John Harbottle Name: Christine Reich
--------------------------- -------------------------------
Its: CFO Its: President
---------------------------- --------------------------------
VIII
<PAGE>
OFFICE LEASE
THIS LEASE, dated August 13, 1999, for purposes of reference only,
is made and entered into by and between OAIC Bush Street, LLC, a Delaware
limited liability company ("Landlord"), and Xoom.com, Inc., a Delaware
corporation ("Tenant").
WITNESSETH:
Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the premises described in Section 1(b) below for the term and
subject to the terms, covenants, agreements and conditions hereinafter set
forth, to each and all of which Landlord and Tenant hereby mutually agree.
1. DEFINITIONS. Unless the context otherwise specifies or
requires, the following terms shall have the meanings herein specified:
(a) The term "Building" shall mean the building or
buildings described in the Basic Lease Information, and the parcel or parcels
of land on which such building or buildings are situated, together with all
other improvements and other real property located on such parcel or parcels,
including without limitation the garage, as well as any property interest in
the area of the streets bounding the parcel described in the Basic Lease
Information, and all other improvements on or appurtenances to said parcel or
said streets.
(b) The term "Premises" shall mean the portion of the
Building located on the floors specified in the Basic Lease Information which
is shown crosshatched on the floor plan(s) attached to this Lease as EXHIBIT A.
Landlord and Tenant agree that the Premises consist of the number of square
feet of rentable area set forth in the Basic Lease Information. All the
outside walls and windows of the Premises and any space in the Premises used
for shafts, stacks, pipes, conduits, ducts, electric or other utilities,
sinks or other Building facilities, and the use thereof and access thereto
through the Premises for the purposes of operation, maintenance and repairs,
are reserved to Landlord.
(c) The term "Base Expense Year" shall mean the
calendar year specified in the Basic Lease Information as the Base Expense
Year.
(d) The term "Base Tax Year" shall mean the calendar
year specified in the Basic Lease Information as the Base Tax Year.
2. LEASE TERM; CONDITION OF PREMISES.
(a) The Lease term (the "Lease Term") shall commence
for the respective floors of the Premises on the Term Commencement Dates
specified in the Basic Lease Information, as modified by the terms of the
Lease and the Work Letter attached hereto as Exhibit C (the "Work Letter"),
and unless ended sooner as herein provided, shall expire on the Term
Expiration Date specified in the Basic Lease Information.
<PAGE>
(b) Tenant and Landlord shall construct or install in
the Premises the improvements to be constructed or installed pursuant to the
Work Letter. Landlord shall own all of said initial improvements to be
constructed or installed pursuant to the Work Letter as of the Term
Commencement Date for each respective floor in the Premises.
(c) If Landlord for any reason whatsoever cannot
deliver possession of the Premises to Tenant on the respective Premises
Delivery Date (as defined in Exhibit C), this Lease shall not be void or
voidable, no obligation of Tenant shall be affected hereby and Landlord shall
not be liable to Tenant for any loss or damage resulting therefrom.
3. 8TH AND 9TH FLOORS.
(a) In connection with the 8th floor (the "8th Floor")
and 9th floor (the "9th Floor") in the Building, Landlord shall give written
notice to Tenant upon the current 8th and 9th Floor tenant's vacation of the
8th and 9th Floors (the "Availability Notice"). In no event shall Landlord
give Tenant the Availability Notice prior to January 1, 2000. Tenant shall
have thirty (30) days after Landlord provides the Availability Notice (the
"Availability Notice Period") to give Landlord written notice that (i) Tenant
desires to build out the 8th and/or 9th Floors for Tenant's use ("Tenant
Build Out"), or (ii) Tenant desires to sublet the 8th and/or 9th Floor to a
third party sublessee and build out the 8th and 9th Floors accordingly
("Sublessee Build Out"). Tenant shall have the right to pursue a Tenant Build
Out or a Sublessee Build Out on either the 8th Floor or 9th Floor and is not
required to elect the same build out for both of said floors. If Tenant fails
to deliver written notice during the Availability Notice Period, Tenant shall
be deemed to have elected a "Sublessee Build Out" for both the 8th Floor and
9th Floor. Each and every provision of this Lease and Exhibit C shall apply
to a Tenant Build Out or Sublessee Build Out, except as provided to the
contrary in this Section or in Exhibit C.
(b) In the case of a Tenant Built Out on the 8th Floor
and/or 9th Floor, as applicable, (i) Tenant shall be entitled to a Tenant
Improvement Allowance in Section 5 of Exhibit C of Forty Dollars ($40.00) per
square foot of rentable area for the 8th Floor ($1,009,320) and/or Forty
Dollars ($40.00) per square foot of rentable area for the 9th Floor
($1,041,680), (ii) as required in Section 1(a) of Exhibit C, Tenant shall
deliver an initial draft of the Space Plan for the 8th Floor and/or 9th
Floor, as applicable, after the end of the Availability Notice Period,
(iii) the Premises Delivery Date (as defined in Exhibit C), in Section 2(c)
of Exhibit C, for the 8th Floor and/or 9th Floor, as applicable, shall be on
or before six (6) weeks after the end of the Availability Notice Period, as
extended by any Force Majeure Events and/or Landlord Delay, and (iv) the Term
Commencement Date for the 8th Floor and/or 9th Floor ("8th Floor Term
Commencement Date" and/or "9th Floor Term Commencement Date" as applicable)
shall be twelve (12) weeks after the Premises Delivery Date. In addition to
the definition of Landlord Delay in EXHIBIT C, for purposes of this Section 3,
every day after January 1, 2000 until the date on which Landlord delivers the
Availability Notice to Tenant shall be considered a Landlord Delay.
(c) In the case of a Sublessee Build Out on the
8th Floor and/or 9th Floor, as applicable, (i) Tenant shall be entitled to an
initial Tenant Improvement Allowance in Section 5
2
<PAGE>
of Exhibit C of up to and including Five Dollars ($5.00) per square foot of
rentable area for the 8th Floor ($126,165) and/or up to and including Five
Dollars ($5.00) per square foot of rentable area for the 9th Floor
($130,210), (ii) as required in Section 1(a) of Exhibit C, Tenant shall
deliver an initial draft of the Space Plan for the 8th Floor and/or 9th
Floor, as applicable, after the end of the Availability Notice Period,
(iii) the Premises Delivery Date, in Section 2(c) of Exhibit C, for the
8th Floor and/or 9th Floor, as applicable, shall be the date that Landlord
receives written notice from the Tenant electing a Sublessee Build Out, but
in no event later than the expiration of the Availability Notice Period, and
(iv) the Term Commencement Date for the 8th Floor and/or 9th Floor
("8th Floor Term Commencement Date" and/or "9th Floor Term Commencement Date"
as applicable) shall be March 1, 2000, as extended by any Force Majeure
Events and/or Landlord Delay.
(d) In the event that Tenant elects a Sublessee Build
Out pursuant to this Section for either the 8th Floor and/or 9th Floor,
Tenant shall have the option, exercisable upon written notice to Landlord
("Additional Build Out Notice"), to further build out the 8th Floor and/or
9th Floor, as applicable for Tenant's use ("Additional Tenant Build Out"). In
connection therewith, Tenant shall be entitled to a total Tenant Improvement
Allowance in Section 5 of Exhibit C of Forty Dollars ($40.00) per square foot
of rentable area for the 8th Floor ($1,009,320) and/or ($40.00) per square
foot of rentable area for the 9th Floor ($1,041,680), less the amount of the
Tenant Improvement Allowance expended during the Sublessee Build Out of the
8th Floor and/or 9th Floor, as applicable. Notwithstanding anything to the
contrary contained herein, during the last twenty-four (24) months of the
original Lease Term, Tenant shall not be entitled to an any additional Tenant
Improvement Allowance from Landlord in connection with an Additional Tenant
Build Out. In the event that Tenant exercises the option contained in this
Section 3(d) Tenant shall deliver an initial draft of the Space Plan for the
tenant improvements to be constructed on the 8th Floor and/or 9th Floor, as
applicable, as required in Section 1(a) of Exhibit C after the Additional
Build Out Notice, and (ii) the parties agree that Landlord shall be required
to complete any remaining Base Building Work (as defined in Exhibit C) at the
time of the Additional Build Out.
(e) If the Tenant elects the Sublessee Build Out,
Tenant shall be entitled to a credit against the 8th Floor Base Monthly
Rental and 9th Floor Base Monthly Rental (collectively, "Rent Credit") in the
amount of three dollars ($3.00) per rentable square foot per year until the
earlier of (i) the nineteenth (19th) month after the 8th Floor Term
Commencement Date and/or the 9th Floor Term Commencement Date, as applicable,
or (ii) eighteen (18) weeks after the Additional Build Out Notice.
4. RENTAL.
(a) Commencing on the respective Rent Commencement
Dates, as defined below, with respect to each floor of the Premises and
thereafter through the remainder of the Lease Term, Tenant shall pay to
Landlord throughout the Lease Term as basic monthly rental for the Premises
the sum specified for each floor of the Premises in the Basic Lease
Information as the Base Monthly Rental. As additional rent hereunder during
such period, Tenant shall pay to Landlord the additional rent described in
Section 5 below. Base Monthly Rental and additional
3
<PAGE>
rent payable pursuant to Section 5 shall be collectively referred to herein
as "monthly rental." As used herein the "Rent Commencement Date" for each
floor of the Premises shall mean the Term Commencement Date for each
respective floor of the Premises as set forth in the Basic Lease Information.
Landlord and Tenant hereby agree to confirm the Rent Commencement Date and
Term Commencement Date for each floor of the Premises promptly after the Term
Commencement Date for each floor of the Premises, by executing and delivering
to each other a Commencement Date Memorandum in conformance with EXHIBIT D
attached hereto, but failure to do so shall not affect the Rent Commencement
Date, Term Commencement Date or Lease Term.
(b) Monthly rental shall be paid to Landlord on or
before the Rent Commencement Date and on or before the first day of each and
every successive calendar month thereafter during the term hereof. In the
event the Rent Commencement Date is on a day other than the first day of a
calendar month or the Lease Term ends on a day other than the last day of a
calendar month, the monthly rental for the first and last fractional months
hereof shall be appropriately prorated.
(c) All sums of money due from Tenant hereunder not
specifically characterized as rental shall constitute additional rent, and if
any such sum is not paid when due it shall nonetheless be collectible as
additional rent with the next installment of monthly rental thereafter
falling due, but nothing contained herein shall be deemed to suspend or delay
the payment of any sum of money at the time it becomes due and payable
hereunder, or to limit any other remedy of Landlord.
(d) Tenant hereby acknowledges that late payment by
Tenant to Landlord of monthly rental will cause Landlord to incur costs not
contemplated by this Lease, the exact amounts of which will be difficult to
ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed on Landlord by the
terms of any encumbrances covering the Building and the Premises.
Accordingly, if any installment of monthly rental shall not be received by
Landlord prior to the expiration of any applicable grace period described in
Section 21(a), Tenant shall pay to Landlord a late charge equal to five
percent (5%) of such overdue amount; provided that, on not more than two
(2) occasions in any consecutive twelve (12) month period Tenant may be up to
five (5) days late in the payment of monthly rental after written notice from
Landlord; provided further that, if monthly rental is not paid when due three
(3) times during any Lease Year, then thereafter Tenant shall not be entitled
to any grace period, and such late charge shall be assessed on any monthly
rental not paid by 5:00 p.m. on the date due. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant based on the
circumstances existing as of the date of this Lease. Acceptance of such late
charge by Landlord shall in no event constitute a waiver of Tenant's default
with respect to such overdue amount, nor prevent Landlord from exercising any
of the other rights and remedies granted hereunder.
(e) Any amount due from Tenant, if not paid when first
due, shall bear interest from the date first due until paid at an annual rate
of thirteen percent (13%) (but in no event in
4
<PAGE>
excess of the maximum rate of interest permitted by law), provided that
interest shall not be payable on late charges incurred by Tenant nor on any
amounts upon which late charges are paid by Tenant to the extent such
interest would cause the total interest to be in excess of that legally
permitted. Payment of interest shall not excuse or cure any default hereunder
by Tenant.
(f) Subject to the provisions of Section 21(a) below,
all payments due from Tenant to Landlord shall be paid to Landlord, without
notice, demand, deduction or offset, in lawful money of the United States of
America in immediately available funds or by good check as described below
and unless otherwise instructed, addressed to the Property Manager at the
address set forth in the Basic Lease Information, or to such other person or
at such other place as Landlord may from time to time designate by notice to
Tenant. Payments made by check must be drawn either on a California financial
institution or on a financial institution that is a member of the federal
reserve system. Notwithstanding the foregoing, Tenant may make any payments
due to Landlord by wire transfer and said payments shall be considered
received by Landlord upon receipt into Landlord's bank account.
5. ADDITIONAL RENT FOR EXPENSES AND REAL ESTATE TAXES.
(a) For purposes of this Section 5, the following
terms shall have the meanings hereinafter set forth:
(i) "Tenant's Tax Share" and "Tenant's
Expense Share" mean the percentage figures so specified in the Basic Lease
Information.
(ii) "Tax Year" means each twelve (12)
consecutive month period commencing January 1st of each year during the Lease
Term, including, without limitation, any partial year during which the Lease
may commence; provided that Landlord, upon notice to Tenant, may change the
Tax Year from time to time to any other twelve (12) consecutive month period
and, in the event of any such change, Tenant's Tax Share of Real Estate Taxes
shall be adjusted for the Tax Year involved in any such change.
(iii) "Real Estate Taxes" means all taxes,
assessments (whether general or special), levies, excises, fees and charges
of any kind whatsoever, ordinary or extraordinary, unforeseen as well as
foreseen, assessed, imposed or levied upon or with respect to the Building or
any part thereof or any personal property of Landlord used in the operation
thereof, or Landlord's interest in the Building 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 Building or the occupants thereof,
service payments in lieu of taxes, business taxes, and any tax, fee, 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 Building or any part thereof,
or on the rent payable under any lease or in connection with the business of
renting space in the Building, or any gross receipt taxes or excise taxes
that are now or hereafter levied or assessed against Landlord by the United
States of America, the State of California or any political subdivision
thereof, public corporation, district, or any other political or public
entity, and shall also include any other tax, fee, charge or other excise,
however described, that may be levied or assessed as a
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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. Real Estate Taxes shall not include taxes
assessed solely upon and/or paid by other tenants in the Building, franchise,
transfer, inheritance or capital stock taxes or income taxes measured by the
net income of Landlord from all sources unless, due to a change in the method
of taxation, any of 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. Real Estate Taxes shall also
include legal fees, costs, and disbursements incurred in connection with
proceedings to contest, determine, or reduce Real Estate Taxes.
(iv) "Expense Year" means each twelve (12)
consecutive month period commencing January 1st of each year during the Lease
Term, including, without any limitation, any partial year during which the
Lease may commence; provided that Landlord, upon notice to Tenant, may change
the Expense Year from time to time to any other twelve (12) consecutive month
period and, in the event of any such change, Tenant's Expense Share of
Expenses shall be adjusted for the Expense Years involved in any such change.
(v) "Expenses" means the total costs and
expenses paid or incurred by Landlord in connection with the ownership,
management, operation, maintenance and repair of the Building, including,
without limitation: (i) the cost of air conditioning, electricity, steam,
water, sewer, heating, mechanical, telephone, ventilating, escalator and
elevator systems and all other services and utilities; (ii) the cost of
repairs and replacements and all labor and material costs related thereto,
and the cost of general maintenance, cleaning and service contracts and the
cost of all supplies, tools and equipment required in connection thereof;
(iii) the cost of the Building delivery and messenger service; (iv) the cost
incurred by Landlord for all insurance carried on the Building or in
connection with the use and/or occupancy thereof and the amount of any
deductible on uninsured loss (earthquake insurance shall either be included
in the base year Expenses calculation or, if earthquake insurance is not so
included in the base year Expenses calculation, and Landlord in the future
desires to carry earthquake insurance, only that portion of the earthquake
insurance cost as represents the reasonable increase in the cost of such
earthquake insurance over an imputed base year cost shall be included as an
Expense); (v) wages, salaries, payroll taxes and other labor costs and
employee benefits for employees up to and including the level of Building
manager; (vi) management fees, which shall not exceed the market range for
such fees; (vii) fees, charges and other costs of all independent contractors
engaged by Landlord, including those providing janitorial, window cleaning,
security, extermination, rubbish removal, planting and other services;
(viii) accounting and legal expenses and the costs of other professionals and
consultants; (ix) Landlord's share of any shared expenses under any
reciprocal easement agreement or similar document; (x) depreciation on
personal property, including, without limitation, carpeting in public
corridor and common areas and window coverings provided by Landlord; (xi) the
rental paid for offices in the Building for the property manager and related
management and operations personnel; (xii) the cost of any capital
improvements made to the Building, or capital assets acquired by Landlord,
after completion of the Building's construction that are (A) a labor-saving
or energy saving device or to enhance the health and safety of the public
(including tenants) or to effect other economies in the operation or
maintenance of the Building to the extent of the actual savings, enhancement
or effect on other
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economies, or (B) made to the Building after the date of this Lease that are
required under any governmental law or regulation or insurance carrier that
was not applicable to the Building at the time that permits for the
construction thereof were obtained; provided that the total cost of said
improvements or assets that shall be included in the Expenses calculation
shall not exceed Three Hundred Thousand Dollars ($300,000) during any Expense
Year; (C) to the extent that the cost of any such improvement or asset is
less than One Hundred Thousand Dollars ($100,000.00), provided that the total
cost of said improvements or assets that shall be included in the Expenses
calculation shall not exceed Two Hundred Thousand Dollars ($200,000) during
any Expense Year, or (D) which improvements or assets have a useful life of
five (5) years or less (and the cost of which is not otherwise included in
Expenses pursuant to this Section 5(a)(v)), so long as the amortized amount
under this subsection (D) above that is included in the Expenses calculation
for any Expense year, when combined with the costs under subsection (C),
shall not exceed Two Hundred Thousand Dollars ($200,000); the costs pursuant
to this subsection 5(a)(v)(xii) (other than those described in clause (C)
above) are to be amortized over such period as Landlord shall determine
(including, without limitation, with respect to any improvements which result
in cost savings with respect to the Building, such period as would allow
Landlord to amortize the improvements to the extent of such cost savings in
any year or to any greater extent deemed appropriate to Landlord, together
with interest on the unamortized balance at the rate of ten percent (10%) per
annum or such higher rate as may have been paid by Landlord on funds borrower
for the purpose of constructing such capital improvements (GAAP shall be used
to determine if an item is an expense or a capital expenditure); (xiii) the
amortized cost of the Transit Impact Development Fee of the City and County
of San Francisco; (xiv) the cost of contesting the validity or applicability
of any governmental enactments which may affect operating expenses; (xv)
license, permit and inspection fees and charges; (xvi) sales, use and excise
taxes on goods and services purchased by Landlord in connection with the
operation, maintenance or repair of the Building and building systems and
equipment; (xvii) supplies, tools, materials and equipment used in connection
with the operation, maintenance or repair of the Building; (xviii) painting
the exterior or the public or common areas of the Building and the cost of
maintaining the sidewalks, landscaping and other common areas of the
Building; and (xiv) any other expenses and costs of any kind whatsoever
incurred in connection with the ownership, management, operation, maintenance
and repair of the Building. Expenses shall not include Real Estate Taxes, the
cost of tenant improvements, real estate broker's commissions, or interest or
principal payments on loans which are secured by a deed of trust or mortgage
encumbering the Building.
Actual Expenses for both the Base Expense Year and each
subsequent Expense Year shall be adjusted to equal Landlord's reasonable
estimate of the Expenses had the total area of the Building been occupied for
each such Expense Year. Landlord and Tenant acknowledge and agree that
certain costs of the ownership, management, operation maintenance and repair
of the Building may be allocated exclusively to a single component of the
Building (for example, and without limitation, to an office area, a retail
area or a parking facility) and certain of such costs may be allocated among
such components. The determination of such costs and their allocation shall
be made by Landlord in Landlord's reasonable discretion. To the extent costs
and expenses described above relate to both the Building and other property,
such costs and
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expenses shall, in determining the amount of Expenses, be allocated as
Landlord may determine to be appropriate.
Notwithstanding anything to the contrary in the definition
of Expenses, Expenses shall not include:
(i) Depreciation (except as provided in
Section 5(a)(v)(x) above), interest, or amortization on mortgages payments;
(ii) Leasing commissions, attorney's fees and
other costs and expenses incurred in connection with negotiations or disputes
with present or prospective tenants or other occupants of the Building;
(iii) Advertising and promotional expenditures
related to leasing tenant space in the Building;
(iv) Costs incurred with respect to the
installation of tenant improvements made for new tenants in the Building or
incurred in renovating or otherwise improving, decorating, painting or
redecorating space leased by or exclusively available to other tenants or
other occupants of the Building;
(v) Expenses, costs, and disbursements
relating to, or arising directly or indirectly from, the testing for or
analysis, handling, removal, treatment, disposal, remediation, or replacement
of asbestos or asbestos-containing materials, lead or Hazardous Materials in,
on, around, beneath, or from the Building;
(vi) To the extent that retail tenants in the
Building are separately metered or separately billed, the cost of
electricity, chilled and hot water for heating and cooling air, and
janitorial service for such retail tenants in their premises and in excess of
standard water service to retail tenants in the Building;
(vii) Cost for public art (including, without
limitation, paintings and sculptures); and
(viii) Expenses, to the extent reimbursed by
third parties; and
(ix) Any sales, mortgage or other brokerage
commissions in connection with the sale of financing of the Building.
(b) Tenant shall pay to Landlord as additional rent
one twelfth (1/12) of Tenant's Tax Share of increases in the Real Estate
Taxes for each Tax Year or portion thereof during the Lease Term after the
Base Tax Year when compared to Real Estate Taxes for the Base Tax Year (the
"Tax Increases"), in advance, on or before the first day of each month during
such Tax Year, in an amount estimated by Landlord in a writing delivered to
Tenant. Landlord may revise such estimates from time to time and Tenant will
thereafter make payments on the basis of such revised estimates.
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(c) Tenant shall pay to Landlord as additional rent
one twelfth (1/12) of Tenant's Expense Share of increases in the Expenses for
each Expense Year or portion thereof during the Lease Term after the Base
Expense Year when compared to Expenses for the Base Expense Year (the
"Expense Increases"), in advance, on or before the first day of each month
during such Expense Year, in an amount estimated by Landlord in a writing
delivered to Tenant. Landlord may revise such estimates from time to time and
Tenant will thereafter make payments on the basis of such revised estimates.
(d) With reasonable promptness after the expiration of
each Expense Year and Tax Year after the Base Expense Year and Base Tax Year,
including, without limitation, the Expense Year and Tax Year during which
this Lease terminates, Landlord will furnish Tenant with a statement (herein
called "Landlord's Expense Statement" and "Landlord's Tax Statement"),
prepared by Landlord or its accountant, setting forth in reasonable detail
the Expenses and Real Estate Taxes for each such Expense Year and Tax Year
and Tenant's Expense Share of the Expense Increases and Tenant's Tax Share of
the Tax Increases, which statement shall be conclusive and binding upon
Tenant, subject to Section 5(e). If the total of Tenant's Expense Share of
the Expense Increases for any such Expense Year as set forth in Landlord's
Expense Statement exceeds the total estimated payments for Expense Increases
paid by Tenant for such Expense Year, Tenant shall pay to Landlord (whether
or not this Lease has terminated) the difference between the total amount of
estimated payments paid by Tenant with respect to Expense Increases and the
total of Tenant's Expense Share of the actual Expense Increases within thirty
(30) days after the receipt of Landlord's Expense Statement. If the total
amount paid by Tenant for any such Expense Year shall exceed Tenant's Expense
Share of the actual Expense Increases for such Expense Year, such excess
shall be credited against the next installment of Expenses Increases due from
Tenant to Landlord hereunder. If this Lease has terminated and no amounts are
due or are to become due to Landlord from Tenant hereunder, any excess shall
be paid to Tenant by check within thirty (30) days after such final
determination of the actual Expenses. If the total of Tenant's Tax Share of
the Tax Increases for any Tax Year as set forth in Landlord's Tax Statement
exceeds the total estimated payments for Tax Increases paid by Tenant for
such Tax Year, Tenant shall pay to Landlord (whether or not this Lease has
terminated) the difference between the total amount of estimated payments
paid by Tenant with respect to Tax Increases and the total of Tenant's Tax
Share of the actual Tax Increases within thirty (30) days after the receipt
of Landlord's Tax Statement. If the total amount paid by Tenant for any such
Tax Year shall exceed Tenant's Tax Share of the actual Tax Increases for such
Tax Year, such excess shall be credited against the next installment of Tax
Increases due from Tenant to Landlord hereunder. If this Lease has terminated
and no amounts are due or are to become due to Landlord from Tenant hereunder,
any excess shall be paid to Tenant by check within thirty (30) days after
such final determination of the actual Tax Increases. Notwithstanding
anything to the contrary contained herein, in the event that the Expenses for
any subsequent Expense Year are less than Expenses for the Base Expense Year
or in the event that the Real Estate Taxes for any subsequent Tax Year are
less than the Real Estate Taxes for the Base Tax Year, Tenant shall not be
entitled to a credit against any Base Monthly Rental or other sums payable by
Tenant hereunder or to a payment from Landlord to Tenant with respect
thereto. Notwithstanding anything to the contrary contained herein, in no
event shall Tenant pay for Real Estate Taxes or Expenses attributable to the
period prior to the commencement of the Lease
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Term and following the Term Expiration Date, as the same may be extended
pursuant to the terms of the Lease.
(e) Tenant shall have the right, during the nine (9)
month period following delivery of a Landlord's Expense Statement or a
Landlord's Tax Statement, at Tenant's sole cost, to review in Landlord's
offices Landlord's records of Expenses or Real Estate Taxes for the subject
calendar year. Such review shall be carried out only by regular employees of
Tenant or by a major national accounting firm and not by any other third
party. No person conducting such an audit shall be compensated on a
"contingency" or other incentive basis. If, as of the end of the ninth (9th)
month after delivery to Tenant of a Landlord's Expense Statement or a
Landlord's Tax Statement, Tenant shall not have delivered to Landlord an
objection statement (as defined below), then such Landlord's Expense
Statement or Landlord's Tax Statement shall be final and binding upon
Landlord and Tenant, and Tenant shall have no further right to object thereto
or to obtain any further review or accounting thereof, all of which rights
Tenant expressly waives. If within such nine (9) month period, Tenant
delivers to Landlord a written statement specifying objections to such
Landlord Expense Statement or Landlord's Tax Statement (an "objection
statement"), then Tenant and Landlord shall meet to attempt to resolve such
objection within ten (10) days after delivery of the objection statement. If
such objection is not resolved within such ten (10) day period, then either
party shall have the right to require that the dispute be submitted to
binding arbitration under the rules of the American Arbitration Association.
Notwithstanding that any such dispute remains unresolved, Tenant shall be
obligated to pay when billed Landlord all amounts payable in accordance with
this Section 5 (including any disputed amount). If such dispute results in an
agreement or an arbitrator's determination that Tenant is entitled to a
refund, Landlord shall, at its option, either pay such refund or credit the
amount thereof to the monthly rental next becoming due from Tenant, or if the
Lease has terminated, pay Tenant such refund of credit within thirty (30)
days.
(f) If any of the respective Rent Commencement Dates
or Term Expiration Date of the term shall occur on a date other than the
first or last day, respectively, of a Tax Year and/or Expense Year, then
Tenant's Tax Share of the Tax Increases and/or Tenant's Expense Share of
Expense Increases for the year in which the Rent Commencement Date or Term
Expiration Date occurs shall be prorated based on a 365 day year , but shall
remain subject to adjustment based on receipt of information after the Term
Expiration Date.
6. USE.
(a) The Premises shall be used for general business
and professional office purposes only and for no other purpose without the
prior written consent of Landlord, which consent may be granted or denied in
Landlord's absolute discretion. Tenant shall not do or permit to be done in
or about the Premises, nor bring or keep or permit to be brought or kept
therein, anything which is prohibited by or would in any way conflict with
any law, statute, ordinance or governmental rule or regulation now in force
or which may hereafter be enacted or promulgated. Tenant shall not do or
permit anything to be done in or about the Premises which would in any way
obstruct or interfere with the rights of other tenants of the Building, or
injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or
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objectionable purposes, nor shall Tenant cause, maintain or permit any
nuisance or waste in, on or about the Premises.
(b) Tenant shall not cause or permit the storage, use,
generation, release, or disposal (collectively, "Handling") of any Hazardous
Materials (as defined below), in, on, or about the Premises or the Building
by Tenant or any agents, employees, contractors, licensees, subtenants,
customers, guests or invitees of Tenant (collectively with Tenant, "Tenant
Parties"), except that Tenant shall be permitted to use normal quantities of
office supplies or products (such as copier fluids or cleaning supplies)
customarily used in the conduct of general business office activities
("Common Office Chemicals"), providing that the Handling of such Common
Office Chemicals shall comply at all times with all Hazardous Materials Laws
(as defined below). Notwithstanding anything to the contrary contained
herein, however, in no event shall Tenant permit any usage of Common Office
Chemicals in a manner that may cause the Premises or the Building to be
contaminated by any Hazardous Materials or in violation of any Hazardous
Materials Laws. Tenant's obligations under this Section shall survive the
expiration or other termination of this Lease. For purposes of this Section
"Hazardous Materials" means any explosive, radioactive materials, hazardous
wastes, or hazardous substances, including without limitation, asbestos and
asbestos containing materials ("ACMs"), PCBs, CFCs, or substances defined or
regulated as hazardous substances or hazardous materials in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. Section 9601-9657; the Hazardous Materials Transportation Act of
1975, 42 U.S.C. Section 1001-1012; the Resource Conservation and Recovery Act
of 1976, 42 U.S.C. Section 6901-6987; or any other federal, state or local
law, ordinance or regulation. "Hazardous Materials Laws" shall mean all
federal, state, and local laws, ordinances and regulations defining,
regulating, restricting or otherwise governing the storage, use, generation,
release or disapproval of Hazardous Materials.
(c) Tenant shall immediately furnish Landlord with any
(i) notices received from any insurance company or governmental agency or
inspection bureau regarding any unsafe or unlawful conditions within the
Premises, and (ii) notices or other communications sent by or on behalf of
Tenant to any person relating to environmental laws or hazardous substances.
7. SERVICES.
(a) Landlord shall maintain the public and common
areas of the Building, including the lobbies, stairs, internal fire-stairs,
elevators, corridors and rest rooms (with hot water), windows, mechanical,
plumbing and electrical equipment, and the roof, external walls, foundations
and the structure itself in reasonably good order and condition except for
damage occasioned by the acts of Tenant, its employees, agents, contractors
or invitees, which damage shall be repaired by Landlord at Tenant's expense.
Tenant shall, at all times, have access to the Building, the Premises and,
for those individuals with monthly parking rights, the garage, twenty four
(24) hours a day, seven (7) days a week during the Lease Term , and the
utilities and services described in this Section shall be available to Tenant
twenty four (24) hours a day, seven (7) days a week. Landlord hereby agrees
that it shall do all of the foregoing in a manner
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consistent with the standards for other comparable first class office
buildings in the financial district of San Francisco north of Market Street
("Comparable Buildings").
(b) Landlord shall furnish the Premises with
(1) electricity for lighting and the operation of customary office machines
in an amount normally used for ordinary office use, (2) heat to the extent
reasonably required for the comfortable occupancy by Tenant in its use of the
Premises during the period from 7 a.m. to 6 p.m. on weekdays (except
holidays) ("Building Hours"), or such shorter period as may be prescribed by
any applicable policies or regulations adopted by any utility or governmental
agency, (3) elevator service, (4) lighting replacement (for building standard
lights), (5) restroom supplies, (6) window washing with reasonable frequency,
and (7) lobby attendant services and janitor service during the times and in
the manner that such services are customarily furnished in comparable
buildings; provided that, Landlord shall not be required to maintain any HVAC
system service to the Tenant's server room and Tenant shall be required to
maintain said service to Tenant's server room. Landlord hereby agrees that it
shall furnish said services to the Building in a manner consistent with the
standards for such services provided to other Comparable Buildings.
(c) Landlord may establish reasonable measures to
conserve energy, including but not limited to, automatic switching off of
lights after hours, so long as such measures do not unreasonably interfere
with Tenant's use of the Premises. Except to the extent due to Landlord's or
Landlord's agents', employees' or contractors' gross negligence or willful
misconduct, Landlord shall not be in default hereunder or be liable for any
damages directly or indirectly resulting from, nor shall the rental herein
reserved be abated, or this Lease terminated, by reason of (i) the
installation, use or interruption of use of any equipment in connection with
the furnishing of any of the foregoing services, (ii) failure to furnish or
delay in furnishing any such services or the making of necessary repairs or
improvements to the Premises or to the Building, or (iii) the limitation,
curtailment, rationing or restrictions on use of water, electricity, gas or
any other utilities serving the Premises or the Building, nor, in any event,
shall any such matter constitute or be construed as a constructive eviction.
Tenant hereby waives the provisions of California Civil Code Section 1932(1)
or any other applicable existing or future law, ordinance or governmental
regulation permitting the termination of this Lease due to such failure or
interruption. Landlord shall use reasonable diligent efforts to remedy any
interruption in the furnishing of such services. In the event any
governmental authority or public utility promulgates or revises any law,
ordinance, rule or regulation, or issues mandatory controls or voluntary
controls relating to the use or conservation of energy, water, gas, light or
electricity, the reduction of automobile or other emissions, or the provision
of any other utility or service (collectively "Controls"), or in the event
Landlord is required or elects to make alterations to the Premises or the
Building in order to comply with such mandatory or voluntary Controls,
Landlord may, in its discretion, take any reasonably appropriate action to
comply with such Controls or make such alterations to the Premises and/or
Building related thereto. Such compliance and the making of such alterations
shall not entitle Tenant to any abatement of rent, constitute an eviction of
Tenant, constructive or otherwise, or impose upon Landlord any liability
whatsoever, including but not limited to, liability for consequential damages
or loss of business by Tenant. In carrying out such compliance and
alterations, Landlord shall use its reasonable efforts to minimize any
disruptions to Tenant's business in the Premises.
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(d) Landlord shall provide twenty-four (24) hour
security service (either manned or electronic), comparable to other
Comparable Buildings, three hundred sixty-five (365) days per year. The
parties acknowledge that safety and security devices, services and programs
provided by Landlord, if any, while intended to deter crime and ensure
safety, may not in given instances prevent theft or other criminal acts, or
ensure safety of persons or property. The risk that any safety or security
device, service or program may not be effective, or may malfunction, or be
circumvented by a criminal, is assumed by Tenant with respect to Tenant's
property and interests, and Tenant shall obtain insurance coverage to the
extent Tenant desires protection against such criminal actions and other
losses, as further described in this Lease. Tenant agrees to cooperate in any
reasonable safety or security program developed by Landlord or required by
law. Tenant, at Tenant's sole cost and expense, may install a security system
in the Premises, including an electronic, magnetic card or similar door
access system, provided that said electric, magnetic card or similar door
access system complies with all applicable codes, regulations and law and
provided that Landlord shall have the right to approve any such system. In
the event that Landlord installs an electronic, magnetic or similar door
system, Landlord shall use reasonable efforts to inform Tenant about said
system and discuss and compare said system with any similar system of
Tenant's; provided that, said information and discussion shall in no way
increase Landlord's responsibility or obligations with respect to the
security of the Building or Premises.
(e) Whenever heat-generating equipment or lighting
other than building standard lights are used in the Premises by Tenant in
excess of ordinary office use, Landlord shall have the right, after notice to
Tenant, to install supplementary air conditioning facilities in the Premises
or otherwise modify the ventilating and air conditioning system serving the
Premises, and the cost of such facilities and modifications shall be borne by
Tenant.
(f) Landlord makes no representation to Tenant
regarding the adequacy or fitness of the heating or ventilation equipment in
the Building to maintain temperatures that may be required for, or because
of, any of Tenant's equipment which uses other than the fractional horsepower
normally required for office equipment, and Landlord shall have no liability
for loss or damage suffered by Tenant or others in connection therewith.
Landlord shall provide up to five (5) watts of electrical current per
rentable square foot, exclusive of lighting and life safety systems (the
"Electrical Allowance"); provided, however, (i) without Landlord's consent,
Tenant shall not install, or permit the installation, in the Premises of any
type of equipment or machines which will increase Tenant's use of electric
current in excess of that which Landlord is obligated to provide hereunder
(provided the foregoing shall not preclude the use of personal computers or
similar office equipment); (ii) if Tenant shall require electric current in
excess of the Electrical Allowance, Landlord may condition its consent upon
Tenant's payment of the cost of installing and providing any additional
facilities required to furnish such excess power to the Premises and upon the
installation in the Premises of electric current meters to measure the amount
of electric current consumed, in which latter event Tenant shall pay for the
cost of such meter(s) and the cost of installation, maintenance and repair
thereof, as well as for all excess electric current consumed at the rates
charged by the applicable local public utility, plus a reasonable amount to
cover the additional expenses incurred by Landlord in keeping account of the
electric current so consumed; (iii) if Tenant's increased electrical
requirements materially affect the temperature
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level in the Premises or the Building, Landlord's consent may be conditioned
upon Tenant's requirement to pay such amounts as will be incurred by Landlord
to install and operate any machinery or equipment necessary to restore the
temperature level to that otherwise required to be provided by Landlord,
including but not limited to the cost of modifications to the air
conditioning system, if any, in other parts of the Building. Landlord shall
not, in any way, be liable or responsible to Tenant for any loss or damage or
expense which Tenant may incur or sustain if, for any reasons beyond
Landlord's reasonable control, either the quantity or character of electric
service is changed or is no longer available or suitable for Tenant's
requirements. Tenant covenants that at all times its use of electric current
shall never exceed the capacity of the feeders, risers or electrical
installations of the Building. If submetering of electricity in the Building
will not be permitted under future laws or regulations, the Base Monthly
Rental will then be equitably adjusted to include an additional payment to
Landlord reflecting the cost to Landlord for furnishing electricity to the
Premises. Any amounts which Tenant is required to pay pursuant to this
Section shall be payable upon demand by Landlord and shall constitute
additional rent.
(g) In the event that Landlord, at Tenant's request,
provides services to Tenant that are not otherwise provided for in this Lease
(including electrical power or heating at times other than Building Hours or
in amounts in excess of the Electrical Allowance), Tenant shall pay
Landlord's reasonable charges for such services upon billing therefor,
including, without limitation, Landlord's then current administrative fee
therefor. Currently, the cost for HVAC outside of Business Hours, is
approximately sixty dollars ($60) per hour, which cost is subject to
adjustment by Landlord from time to time in Landlord's reasonable discretion.
Any such request for extra services shall be made not less than twenty-four
(24) hours in advance.
8. TENANT REMEDIES.
(a) Notwithstanding any contrary provision of this
Lease, in the event that there is a water leak into the Tenant's server room,
for a reason not caused by the acts of Tenant ("Water Leak"), Tenant shall
promptly provide written notice of a Water Leak as set forth in Section 8(c)
below ("Water Leak Notice"). If the Water Leak Notice is delivered to
Landlord during Building Hours, Landlord shall have four (4) hours to
commence curing said Water Leak and shall thereafter diligently pursue such
cure to completion using commercially reasonable efforts, subject to Force
Majeure Events. If the Water Leak Notice is delivered to Landlord outside of
Building Hours, Landlord shall have until the next business day, but in no
event longer than eight (8) hours, to commence curing said Water Leak and
shall diligently pursue such cure to completion using commercially reasonable
efforts, subject to Force Majeure Events. In the event that the Landlord
fails to commence the cure of a Water Leak within the applicable cure
commencement period as extended by Force Majeure Events, Tenant shall be
entitled to undertake such commercially reasonable efforts as are reasonably
necessary to cure the Water Leak. Subject to the rights of other tenants in
the Building, Tenant shall have the right to enter such portions of the
Building as may be reasonably required to effectuate any reasonable cure of
such Water Leak, provided that (i) Tenant shall use all reasonable efforts to
include the Building manager or Building personnel in connection with the
entry into any portions of the Building outside of the Premises, and (ii)
Tenant shall repair any damage caused by any such repair
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activities of Tenant and shall indemnify and hold Landlord harmless from any
claims, including any related attorneys fees, by other tenants in the
Building for damage to persons or property resulting from such activities of
Tenant. Tenant shall be entitled to reimbursement for the sums reasonably
expended by Tenant to effectuate such cure within thirty (30) days after
submitting a written invoice of said sums to Landlord. If Landlord fails to
reimburse Tenant within said thirty (30) days, Tenant shall be entitled to
offset said sums from its Base Monthly Rental; provided that, if Landlord
disputes the amount of such claim for reimbursement, Landlord shall give
Tenant written notice of such dispute prior to the end of such thirty (30)
day period in which event Landlord and Tenant shall meet and confer on not
less than two (2) occasions (at a mutually agreeable time and place in
San Francisco, California) in the ensuing sixty (60) days in an attempt to
resolve such dispute and Tenant shall not offset said sums until ninety (90)
days after the date of submission of such written invoice. Notwithstanding
anything to the contrary contained herein, nothing contained in this
subsection or elsewhere in this Lease shall be construed in any way to make
Landlord liable to Tenant in any way for a Water Leak which is caused by
Force Majeure Events.
(b) Notwithstanding any contrary provision of this
Lease, in the event that there is a failure in supply of electrical power to
the Premises or a telecommunications or data interruption in the Premises,
for a reason not caused by the acts of Tenant ("Communication Failure"),
Tenant shall promptly provide written notice of a Communication Failure as
set forth in Section 8(c) below ("Communication Failure Notice"). If the
Communication Failure Notice is delivered to Landlord during Building Hours,
Landlord shall have four (4) hours to commence curing said Communication
Failure and shall thereafter diligently pursue such cure to completion using
commercially reasonable efforts, subject to Force Majeure Events. If the
Communication Failure Notice is delivered to Landlord outside of Building
Hours, Landlord shall have until the next business day, but in no event
longer than eight (8) hours, to commence curing said Communication Failure
and shall diligently pursue such cure to completion using commercially
reasonable efforts, subject to Force Majeure Events. In the event that the
Landlord fails to commence the cure of a Communication Failure within the
applicable cure commencement period as extended by Force Majeure Events,
Tenant shall be entitled to undertake such commercially reasonable efforts as
are reasonably necessary to cure the Communication Failure. Subject to the
rights of other tenants in the Building, Tenant shall have the right to enter
such portions of the Building as may be reasonably required to effectuate any
reasonable cure of such Communication Failure, provided that (i) Tenant shall
use all reasonable efforts to include the Building manager or Building
personnel in connection with the entry into any portions of the Building
outside of the Premises, and (ii) Tenant shall repair any damage caused by
any such repair activities of Tenant and shall indemnify and hold Landlord
harmless from any claims, including any related attorneys fees, by other
tenants in the Building for damage to persons or property resulting from such
activities of Tenant. Tenant shall be entitled to reimbursement for the sums
reasonably expended by Tenant to effectuate such cure within thirty (30) days
after submitting a written invoice of said sums to Landlord. If Landlord
fails to reimburse Tenant within said thirty (30) days, Tenant shall be
entitled to offset said sums from its Base Monthly Rental; provided that, if
Landlord disputes the amount of such claim for reimbursement, Landlord shall
give Tenant written notice of such dispute prior to the end of such thirty
(30) day period in which event Landlord and Tenant shall meet and confer on
not less than two (2)
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occasions (at a mutually agreeable time and place in San Francisco,
California) in the ensuing sixty (60) days in an attempt to resolve such
dispute and Tenant shall not offset said sums until ninety (90) days after
the date of submission of such written invoice. Notwithstanding anything to
the contrary contained herein, nothing contained in this subsection or
elsewhere in this Lease shall be construed in any way to make Landlord liable
to Tenant in any way for a Communication Failure which is caused by Force
Majeure Events.
(c) For purposes of Section 8, during Building Hours,
Tenant shall provide written notice to the Building Manager or Building Chief
Engineer and outside of Building Hours, Tenant shall provide written notice
to the Building Manager, Building Chief Engineer or the Building security
guard in the main lobby.
9. IMPOSITIONS PAYABLE BY TENANT. In addition to the monthly
rental and other charges to be paid by Tenant hereunder, Tenant shall pay or
reimburse Landlord for any and all of the following items (hereinafter
collectively referred to as "Impositions"), whether or not now customary or
in the contemplation of the parties hereto: taxes (other than local, state
and federal personal or corporate income or franchise taxes measured by the
net income of Landlord from all sources), assessments (including, without
limitation, all assessments for public improvements, services or benefits,
irrespective of when commenced or completed), excises, levies, business
taxes, license, permit, inspection and other authorization fees, transit
development fees, assessments or charges for housing funds, service payments
in lieu of taxes and any other fees or charges of any kind, which are levied,
assessed, confirmed or imposed by any public authority, but only to the
extent the Impositions are: (a) upon, measured by or reasonably attributable
to the cost or value of Tenant's equipment, furniture, fixtures and other
personal property located in the Premises, or the cost or value of any
leasehold improvements made in or to the Premises by or for Tenant,
regardless of whether title to such improvements (b) upon, with respect to or
by reason of the development, possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises
or (c) upon this transaction or any document to which Tenant is a party
creating or transferring an interest or an estate in the Premises (including
any sales, excise or gross receipts tax measured by the rental payable
hereunder). In the event that it shall not be lawful for Tenant to reimburse
Landlord for the Impositions but it is lawful to increase the monthly rental
to take into account Landlord's payment of the Impositions, the monthly
rental payable to Landlord shall be revised to net Landlord the same net
return without reimbursement of the Impositions as would have been received
by Landlord with reimbursement of the Impositions.
10. ALTERATIONS.
(a) Tenant may make alterations, additions or
improvements (collectively, "Alterations") to the Premises or install
fixtures in the Premises after first obtaining Landlord's consent, which
consent shall not be unreasonably withheld; provided however, that it shall
be deemed reasonable for Landlord to withhold its consent if: (a) the cost of
the work will exceed Two Hundred Fifty Thousand Dollars ($250,000) (b) a
building permit will be required; or (c) if there will be any material
modifications to any exterior or structural components of the Building or any
of the Building's operating systems, including, without limitation, heating,
ventilating, air
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conditioning, plumbing, electrical, and other operating systems.
Notwithstanding the foregoing, Tenant may make any Alterations which are
cosmetic (e.g. minor painting, changes of floor coverings or wall coverings,
installation of artwork or decorations, etc.), without Landlord's consent
being required, provided such cosmetic alterations do not require a building
permit and do not effect the exterior of the Building or the structural or
mechanical components of the Building. Upon Tenant's written request for
Landlord's consent to certain Alterations pursuant to this Section, Landlord
shall have thirty (30) days from the date on which Landlord receives all
information reasonably required by Landlord for Landlord's review of said
request to provide Tenant with notice of Landlord's consent or withholding of
consent to Tenant's request (along with a written description of Landlord's
reason(s) for withholding of consent, if applicable). In the event that
Landlord elects to and has a right to oversee (or cause to be overseen)
Tenant's requested Alteration(s), Landlord shall provide Tenant with notice
of such election within said thirty (30) day period. In connection with
Tenant's request for Landlord's consent under this Lease, Tenant shall
pre-pay to Landlord the sum of Two Hundred Fifty Dollars ($250.00) for
Landlord's review of applicable documents and plans. Tenant also shall
reimburse Landlord for any third-party costs and expenses incurred or to be
incurred by Landlord related to such review within ten (10) days of receipt
of Landlord's statement therefor. Furthermore, in the event Landlord may
elect to oversee, or cause to be overseen, such Alterations, Landlord shall
be entitled to receive a fee for such oversight in an amount equal to three
(3%) of the cost of such alterations, additions or improvements. Landlord's
review and approval of Tenant's plans and specifications for any work
performed for or on behalf of Tenant shall not be deemed to be a
representation by Landlord that such plans and specifications comply with
applicable insurance requirements, building codes, ordinances, laws or
regulations including, without limitation, the provisions of the Americans
With Disabilities Act, 42. U.S.C. 12101 et seq. and any governmental
regulations with respect thereof (the "ADA") and Title 24 of the California
Administrative Code ("Title 24"), and other similar federal, state, and local
laws and regulations or that the Alterations are constructed in accordance
with such plans and specifications or that such plans and specifications will
be adequate for Tenant's use. In no event, however, may the Tenant make any
Alterations or install fixtures which, in Landlord's reasonable judgment,
might adversely affect the structural components of the Building or Building
mechanical, utility or life safety systems. At the time such consent is
requested, Tenant shall furnish to Landlord a description of the proposed
work, an estimate of the cost thereof and such information as shall
reasonably be requested by Landlord substantiating Tenant's ability to pay
for such work. Landlord, at its sole option, may require as a condition to
the granting of such consent to any work costing in excess of Five Hundred
Thousand Dollars ($500,000), that Tenant provide to Landlord, at Tenant's
sole cost and expense, a lien and completion bond in an amount equal to one
and one-half (1-1/2) times any and all estimated costs of the proposed work,
to insure Landlord against any liability for mechanics' and materialmen's
liens and to insure completion of the work. Before commencing any work,
Tenant shall give Landlord at least twenty (20) days written notice of the
proposed commencement of such work in order to give Landlord an opportunity
to prepare, post and record such notice as may be permitted by law to protect
Landlord's interest in the Premises and the Building from mechanics' and
materialmen's liens. Within a reasonable period following completion of any
work for which plans and specifications were required to obtain a building
permit for such work, Tenant shall furnish to Landlord "as built" plans
showing the changes made to the Premises.
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(b) All Alterations shall be constructed in a good and
workmanlike manner using building standard materials or other new materials
of equal or greater. Landlord, to the extent necessary to avoid any
disruption to the tenants and occupants of the Building, shall have the right
to designate the reasonable times when any such Alterations may be performed
(Tenant hereby agrees that it is reasonable for Landlord to require
Alterations to be performed on nights and weekends) and to otherwise
designate reasonable rules, regulations, and procedures for the performance
of work in the Building. Any Alterations to the Premises shall be made by
Tenant at Tenant's sole cost and expense, and any contractor, subcontractor
or other person selected by Tenant to make the same shall be selected from
Landlord's approved bidder list. Tenant's contractor and its subcontractors
shall employ union labor to the extent necessary to insure, so far as may be
possible, the progress of the Alterations and the performance of any other
work or the provision of any services in the Building without interruption on
account of strikes, work stoppage or similar causes of delay. All work
performed by Tenant shall comply with the laws, rules, orders, directions,
regulations and requirements of all governmental entities having jurisdiction
over such work including, without limitation, any laws, regulations or
requirements respecting asbestos or ACMs, the ADA and Title 24 and shall
comply with the rules, orders, directions, regulations and requirements of
any nationally recognized board of insurance underwriters. All Alterations
shall immediately become Landlord's property and shall remain on the Premises
without compensation to Tenant; provided, however, that unless Landlord has
previously agreed in writing that an Alteration does not have to be removed
by Tenant at the end of the Lease Term, Tenant shall, prior to the end of the
Lease Term, at its sole cost and expense, remove the Alterations required to
be removed by Landlord and repair and restore the Premises to their condition
at the commencement of the Lease Term. At the time that Tenant requests
Landlord's consent to an Alteration(s), Tenant may also request and require
that Landlord determine whether said Alteration(s) must be removed by Tenant
at the end of the Lease Term. If so requested by Tenant, Landlord shall
provide notice to Tenant of the Alteration(s) that Tenant is required to
remove at the end of the Lease Term simultaneous with Landlord's consent to
said Alteration(s), if Landlord's consent is given. In the event that
Landlord determines that an Alteration(s) must be removed by Tenant at the
end of the Lease Term, Tenant shall remove said Alteration(s) at Tenant's
sole cost and expense and repair and restore the Premises to their condition
prior to said Alteration.
(c) Tenant may, in a manner consistent with the
provisions of this Lease, install, maintain, replace, remove or use any
communications or computer wires, cables, and related devices (collectively,
the "Lines") at the Building in or serving the Premises, provided: (i) Tenant
shall obtain Landlord's prior written consent, which consent may be
conditioned as reasonably required by Landlord, (ii) if Tenant at any time
uses any equipment that may create an electromagnetic field exceeding the
normal insulation ratings of ordinary twisted pair riser cable or cause
radiation higher than normal background radiation, the Lines therefor
(including riser cables) shall be appropriately insulated to prevent such
excessive electromagnetic fields or radiation, and (iii) Tenant shall pay all
costs in connection therewith. Landlord reserves the right to require that
Tenant remove any Lines which are installed in violation of these provisions.
Landlord may (but shall not have the obligation to): (i) install new Lines at
the Property, and (ii) create additional space for Lines at the Property, and
(iii) adopt reasonable and uniform rules and regulations with respect to
Lines.
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Notwithstanding anything to the contrary contained in this Lease,
Landlord reserves the right to require Tenant to remove any or all Lines
installed by or for Tenant within or serving the Premises upon the Expiration
Date or earlier termination of this Lease. Tenant shall not, without the
prior written consent of Landlord in each instance, grant to any third party
a security interest or lien in or on the Lines, and any such security
interest or lien granted without Landlord's written consent shall be null and
void. Except to the extent arising from the gross negligence or intentional
acts of Landlord, Landlord or Landlord's agents or employees, Landlord shall
have no liability for damages arising from, and Landlord does not warrant
that Tenant's use of any Lines will be free from the following (collectively
"Line Problems"): (i) any eavesdropping or wire-tapping by unauthorized
parties, or (ii) any failure of any lines to satisfy Tenant's requirements.
Except to the extent arising from the Landlord's breach of Section 21(b) of
this Lease, or the gross negligence or intentional acts of Landlord or
Landlord's agents or employees, Landlord shall have no liability for damages
arising from, and Landlord does not warrant that Tenant's use of any Lines
will be free from any shortages, failures, variations, interruptions,
disconnections, loss or damage caused by the installation, maintenance,
replacement, use or removal of lines by or for other tenants or occupants at
the Property. Under no circumstances shall any Line Problems be deemed an
actual or constructive eviction of Tenant, render Landlord liable to Tenant
for abatement of Base Monthly Rental, or relieve Tenant from performance of
Tenant's obligations under this Lease. Landlord in no event shall be liable
for damages by reason of loss of profits, business interruption or other
consequential damages arising from any Line Problems.
11. LIENS. Tenant shall pay when due all costs for work
performed and materials supplied to the Premises. Tenant shall keep Landlord,
the Premises and the Building free from all liens, stop notices and violation
notices relating to the work performed, materials furnished or obligations
incurred by or for Tenant and Tenant shall protect, indemnify, hold harmless
and defend Landlord, the Premises and the Building of and from any and all
loss, cost, damage, liability and expense, including attorney's fees and
costs, arising out of or related to any such liens or notices. During the
progress of such work, Tenant shall, upon Landlord's request, furnish
Landlord with sworn contractor's statements and lien waivers covering all
work theretofore performed. Tenant shall satisfy or otherwise discharge all
liens, stop notices or other claims or encumbrances within twenty (20) days
after Tenant obtains knowledge that any such lien, stop notice, claim or
encumbrance has been filed. If Tenant fails to pay and remove such lien,
claim or encumbrance within such twenty (20) days, or Tenant fails to
diligently pursue, discharge or satisfy said lien, stop notice, claim or
encumbrance, Landlord, at its election, may pay and satisfy the same and in
such event the sums so paid by Landlord, with interest from the date of
payment as set forth in Section 3(e) hereof for amounts owed Landlord by
Tenant, shall be deemed additional rent due and payable by Tenant at once
without notice or demand. Notwithstanding the foregoing, if Tenant is
contesting any mechanics lien and provides to Landlord a bond reasonably
satisfactory to Landlord and sufficient to remove the lien of record under
California law, Landlord shall have no right to pay such lien after said bond
has been provided to Landlord.
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12. REPAIRS; CONDITION OF PREMISES.
(a) Subject to the Work Letter, by entry hereunder,
Tenant accepts the Premises as being in the condition in which Landlord is
obligated to deliver the Premises. Subject to the Work Letter, Tenant shall,
at all times during the term hereof and at Tenant's sole cost and expense,
keep the Premises in good condition and repair, in compliance with all laws,
including without limitation, the ADA and Title 24 (as defined hereafter);
ordinary wear and tear and damage thereto by fire, earthquake, act of God or
the elements excepted. Tenant hereby waives all rights to make repairs at the
expense of Landlord or in lieu thereof to vacate the Premises, abate rent or
terminate this Lease. Subject to the Work Letter, and subject to Landlord's
rights to require the removal of Alterations, Tenant shall at the end of the
term hereof surrender to Landlord the Premises and all Alterations thereto 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
herein set forth. No representations respecting the condition of the Premises
or the Building have been made by Landlord or Landlord's agents to Tenant,
except as specifically herein set forth.
(b) Subject to the Work Letter, Tenant has examined
the Premises and is fully informed to Tenant's satisfaction of the physical
and environmental condition and the utility of the Premises. Tenant
acknowledges that Landlord, its agents and employees and other persons acting
on behalf of Landlord have made no representation or warranty of any kind,
express or implied, with respect to: (i) the physical or environmental
condition, value, zoning or legal status or the Building; (ii) the fitness of
the Premises for Tenant's intended use; (iii) the degree of sound transfer
within the Building; (iv) the absence of electrical or radio interference in
the Premises or the Building; (v) the condition, capacity or performance of
electrical or communications systems or facilities; or (vi) the absence of
objectionable odors, bright lights or other conditions which may affect
Tenant's use and enjoyment of the Premises or the Building, upon which Tenant
has relied directly or indirectly for any purpose, except as specifically set
forth in this Lease.
13. DESTRUCTION OR DAMAGE.
(a) In the event the Premises or the portion of the
Building necessary for Tenant's use and enjoyment of the Premises are damaged
by fire, earthquake, act of God, the elements or other casualty, Landlord
shall repair the same (including the Tenant Work in the portion of the
Premises damaged to the extent of the actual cost of said Tenant Work, but
not to exceed the Tenant Improvement Allowance plus an additional Five
Dollars ($5.00) per rentable square foot for the portion of the Premises so
damaged), subject to the provisions of this Section hereinafter set forth, if
(i) such repairs can, in Landlord's reasonable opinion, be made within a
period of twelve (12) months after the date of casualty, (ii) the cost of
repairing damage for which Landlord is not insured shall be less than five
percent (5%) of the then full insurable value of the Premises with respect to
repairing any damage to the Premises, or five percent (5%) of the then full
insurable value of the Building with respect to repairing any damage to other
areas of the Building, (iii) the damage or destruction does not occur during
the last twelve (12) months of
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the Lease Term as the same may be extended under the terms of this Lease
(said twelve (12) months shall be measured after taking into account any
extension of the Lease Term under the terms of this Lease), and (iv)
Landlord's mortgagee does not require that the insurance proceeds payable as
a result of a casualty be applied to the payment of the mortgage debt. This
Lease shall remain in full force and effect except that so long as the damage
or destruction is not caused by the negligence or fault of Tenant, its
contractors, agents, employees or invitees, an abatement of monthly rental
shall be allowed Tenant for such part of the Premises as shall be rendered
unusable by Tenant in the conduct of its business during the time such part
is so unusable and Tenant does not actually occupy such part.
(b) As soon as is reasonably possible following the
occurrence of any damage, Landlord shall notify Tenant of the estimated time and
cost required for the repair or restoration of the Premises or the portion of
the Building necessary for Tenant's occupancy (including the Tenant Work in the
portion of the Premises damaged to the extent of the actual cost of said Tenant
Work, but not to exceed the Tenant Improvement Allowance plus an additional Five
Dollars ($5.00) per rentable square foot for the portion of the Premises so
damaged). If, in Landlord's reasonable opinion, such repairs cannot be made
within twelve (12) months as set forth in Section 13(a)(i) above, Landlord or
Tenant may elect by written notice to the other within thirty (30) days after
Landlord's notice of estimated time and cost is given (i) in the event of damage
or destruction to two entire floors in the Premises or less, to terminate this
Lease only as to the portion of the Premises damaged or destroyed, effective as
of the date of such damage, or (ii) in the event of damage or destruction to
more than two floors in the Premises, to terminate this Lease effective as of
the date of such damage. If Landlord is not obligated to effect the repair based
upon the circumstances set forth in Sections 13(a)(ii) or 13(a)(iii) above,
Landlord shall have the right to terminate this Lease, by written notice to
Tenant within thirty (30) days after Landlord's notice of time and cost is
given, effective as of the date of such damage or destruction. If neither party
so elects to terminate this Lease, this Lease shall continue in full force and
effect, but the rent shall be partially abated as provided in Section 13(a)
above, and Landlord shall proceed with reasonable promptness to repair such
damage.
(c) A total destruction of the Building shall
automatically terminate this Lease. Tenant hereby waives all statutory rights of
termination, including any such rights under California Civil Code Section 1933.
(d) In no event shall Tenant be entitled to any
compensation or damages from Landlord, specifically including, but not limited
to, any compensation or damages for (i) loss of the use of the whole or any part
of the Premises, (ii) damage to Tenant's personal property in or improvements to
the Premises, or (iii) any inconvenience, annoyance or expense occasioned by
such damage or repair (including moving expenses and the expense of establishing
and maintaining any temporary facilities).
(e) Landlord, in repairing the Premises, shall not be
required to repair any injury or damage to the personal property of Tenant, or
to make any repairs to or replacement of any alterations, additions,
improvements or fixtures installed on the Premises by or for Tenant, except the
Tenant Work to the extent of the actual cost of the Tenant Work, not to exceed
the
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Tenant Improvement Allowance plus an additional Five Dollars ($5.00) per
rentable square foot for the portion of the Premises so damaged.
14. INSURANCE.
(a) Tenant shall, at its sole cost and expense, during
the Lease Term, cause all improvements at any time located in the Premises
(other than Tenant Work to the extent of the actual cost thereof not to exceed
the Tenant Improvement Allowance plus an additional five dollars ($5.00) per
rentable square foot of the Premises) and all equipment and fixtures from time
to time used or intended to be used in connection with the operation and
maintenance of the Premises, to be insured for the mutual benefit of Landlord
and Tenant against loss or damage by fire and against loss or damage by other
risks now or hereafter included in an All-Risk insurance policy, in an amount
equal to the full insurable value thereof. All proceeds from such insurance
shall be used for the repair or replacement of such improvements, equipment and
fixtures.
(b) All coverage shall be written on an occurrence basis
and shall be primary and non-contributory over any insurance the Landlord may
elect to provide on its behalf. Upon the commencement of the Lease Term, and
upon renewal of such insurance coverage, Tenant shall deliver to the Landlord
certified copies of Tenant's insurance policies, or an original certificate of
such insurance from the insurer providing a minimum of thirty (30) days' notice
of cancellation or modification. In the event Tenant shall fail to procure such
insurance or to deliver such policies and certificates, Landlord may, at
Landlord's option and in addition to Landlord's other remedies in the event of a
default by Tenant hereunder, procure the same for the account of Tenant, and the
cost thereof shall be paid to Landlord as additional rent. All policies of
insurance required to be carried by Tenant under this Section 14 shall be in
form reasonably satisfactory to Landlord and, except for workers compensation,
business interruption and property, shall name Landlord, Landlord's mortgagee,
Landlord's managing agent and any other party designated by Landlord as
additional insureds. All policies of insurance required by Landlord under this
Lease shall be issued by responsible insurance companies which are licensed to
do business in the State of California, and shall have a Best's rating of at
least "A-" and a financial rating of not less than "X" and have been approved in
writing by Landlord. The Commercial General Liability policy shall contain
cross-liability endorsements or its equivalent, and shall be for the mutual and
joint benefit and protection of Landlord, Tenant and any other party designated
by Landlord as an additional insured.
Notwithstanding any other provisions of this Lease, Tenant, at its own
expense, shall also maintain the following insurance coverage:
(i) WORKER'S COMPENSATION AND EMPLOYER'S
LIABILITY. Tenant shall maintain Worker's Compensation insurance sufficient to
comply with all applicable State and/or Federal laws and an Employer's Liability
policy with a limit of not less than One Million Dollars ($1,000,000.00).
(ii) COMMERCIAL GENERAL LIABILITY. Tenant shall
maintain a Commercial General Liability policy applying to the use and occupancy
of the Premises and the Building, and any part of either, and any areas adjacent
thereto, and the business operated by
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Tenant, or by any other occupant of the Premises with limits of liability not
less than Two Million Dollars ($2,000,000.00) per occurrence and Three
Million Dollars ($3,000,000.00) general aggregate for Bodily Injury and
Property Damage and Three Million Dollars ($3,000,000.00) aggregate
products/completed operations coverage. Such policy shall specifically name
the Landlord, Landlord's mortgagee and Landlord's managing agent as
additional insureds. All such insurance shall provide for severability of
interests; shall provide that an act or omission of one of the named insureds
shall not reduce or avoid coverage to the other named insureds; and shall
afford coverage for all claims based on acts, omissions, injury and damage,
which claims occurred or arose (or the onset of which occurred or arose) in
whole or in part during the policy period. Tenant's Commercial General
Liability policy shall not provide for a deductible in excess of Two Hundred
Thousand Dollars ($200,000) without the prior written approval of Landlord
which shall not be unreasonably withheld. The amounts of insurance required
in this Section 14(b)(ii) may be satisfied by purchasing coverage for the
limits specified or by a combination of underlying and umbrella limits, so
long as the total amount of insurance is not less than the limits specified.
(iii) BUSINESS INTERRUPTION. Tenant shall also
maintain a policy of (or obtain an endorsement providing) business interruption
insurance insuring Tenant against losses from interruption of its use of the
Premises for any reason with coverage for a period of not less than one (1)
year.
(iv) PROPERTY INSURANCE. Tenant shall, at its
sole cost and expense, during the Lease Term, cause all improvements at any time
located in the Premises (other than the Building standard tenant improvements)
and all equipment and fixtures from time to time used or intended to be used in
connection with the operation and maintenance of the Premises, to be insured for
the mutual benefit of Landlord and Tenant against loss or damage by fire and
against loss or damage by other risks now or hereafter included in an All-Risk
insurance policy, in an amount equal to the full insurable value thereof. All
proceeds from such insurance shall be used for the repair or replacement of such
improvements, equipment and fixtures. Tenant's property policy shall not provide
for a deductible in excess of One Hundred Thousand Dollars ($100,000) without
the prior written approval of Landlord which shall not be unreasonably withheld.
(v) ADDITIONAL INSURANCE. Whenever good business
practice, in Landlord's reasonable judgment, indicates the need for additional
insurance coverage or different types of insurance in connection with the
Premises or Tenant's use and occupancy thereof, Tenant shall, upon request,
obtain such insurance at Tenant's expense and provide Landlord with evidence
thereof.
(c) Before any repairs, alterations, additions,
improvements, or construction are undertaken by or on behalf of Tenant, Tenant
shall carry and maintain at its expense, or Tenant shall require any contractor
performing work in the Premises to carry and maintain, at no expense to
Landlord, in addition to workers' compensation insurance as required by the
jurisdiction in which the Building is located, All Risk Builder's Risk Insurance
in the amount of the replacement cost of any alterations, additions or
improvements (or such other amount
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reasonably required by Landlord) and Commercial General Liability Insurance
(including, without limitation, Contractor's Liability coverage), written on
an occurrence basis with a minimum combined single limit of $2,000,000.00 and
adding the "owners of the Building and its (or their) respective members,
principals, beneficiaries, partners, officers, directors, employees, managing
agents, agents (and their respective members and principals) and
mortgagee(s)" (and any other designees of Landlord as the interest of such
designees shall appear) as additional insureds.
(d) Tenant shall not do or fail to do anything in, upon
or about the Premises which will: (i) violate the terms of any of Landlord's
insurance policies; (ii) prevent Landlord from obtaining policies of insurance
acceptable to Landlord or any mortgagees; or (iii) result in an increase in the
rate of any insurance on the Premises, the Building, any other property of
Landlord or of others in the Building. In the event of the occurrence of any of
the events set forth in this Section 14(d), Tenant shall pay Landlord, upon
demand, as additional rent, the cost of the amount of any increase in any such
insurance premium, provided that the acceptance by Landlord of such payment
shall not be construed as a waiver of any rights by Landlord in connection with
a default by Tenant under the Lease.
(e) Tenant shall, prior to and throughout the Lease Term,
procure from each of its insurers under all policies of fire, theft, public
liability, commercial general liability and any other insurance policies of
Tenant now or hereafter existing, pertaining in any way to the Premises or the
Building or any operation therein (except workers' compensation), a waiver, as
set forth in Section 15 of this Lease, of all rights of subrogation which the
insurer might otherwise, if at all, have against the Landlord or any officer,
agent or employee of Landlord (including, without limitation, Landlord's
managing agent).
(f) Landlord also shall maintain (i) a Commercial General
Liability policy applying to its use and occupancy of the Building and any areas
adjacent thereto, and the business operated by Landlord, with limits of
liability not less than One Million Dollars ($1,000,000.00) per occurrence and
Two Million Dollars ($2,000,000.00) general aggregate for Bodily Injury and
Property Damage with an umbrella liability policy with a minimum limit of Five
Million Dollars ($5,000,000) per occurrence and in the aggregate (the "Umbrella
Policy"), and (ii) a policy covering loss by fire or other casualty in the form
of an All-Risk policy covering the Building and the Tenant Work, but only the
extent of the actual cost of the Tenant Work, not to exceed the Tenant
Improvement Allowance plus five dollars ($5.00) per rentable square foot of the
Premises, in such amounts and with such coverages as would generally be carried
in Comparable Buildings, provided that Landlord may, but shall not be required
to, carry earthquake insurance.
15. WAIVER OF SUBROGATION. Landlord and Tenant shall each have
included in all policies of fire, extended coverage, business interruption and
other insurance respectively obtained by them covering the Premises, the
Building and contents therein, a waiver by the insurer of all right of
subrogation against the other in connection with any loss or damage thereby
insured against. Any additional premium for such waiver shall be paid by the
primary insured party. To the full extent permitted by law, Landlord and Tenant
each waives all rights of
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recovery against the other for, and agrees to release the other from
liability for, loss or damage to the extent such loss or damage is covered by
valid and collectible insurance in effect at the time of such loss or damage
or would be covered by the insurance required to be maintained under this
Lease by the party seeking recovery.
16. INDEMNIFICATION. Tenant hereby waives all claims against
Landlord and any employee or agent of Landlord and the direct or indirect
constituent partners, members, shareholders or other owners thereof and the
officers, directors, managers, agents and employees of all such persons
(collectively the "Landlord Indemnitees") for damage to any property or injury
or death of any person in, upon or about the Premises arising at any time and
from any cause except to the extent caused by reason of gross negligence or
willful act of Landlord, its agents, employees or contractors. Landlord shall
provide Tenant with prompt notice of such claims and Tenant shall defend
Landlord against, hold Landlord and each of the Landlord Indemnitees harmless
from, and reimburse Landlord and each of the Landlord Indemnitees for any and
all claims, liabilities, damages, losses, costs and expenses, including without
limitation, reasonable attorneys' fees and costs arising out of or in any way
connected with (a) injury to or death of any person, and (b) damage to or
destruction of any property, occurring in, on or about the Premises or
attributable to or resulting from the condition, use or occupancy of the
Premises by Tenant or Tenant's failure to perform its obligations under this
Lease, except such as is caused principally by gross negligence or willful
misconduct of Landlord, its contractors or employees. Landlord shall have the
right to approve the attorneys used by Tenant pursuant to this Section, which
approval shall not be unreasonably withheld or delayed; provided that, Landlord
shall have the right to use attorneys selected by Landlord, subject to Tenant's
approval which shall not be unreasonably withheld or delayed, if a conflict
between Landlord and Tenant exists which would make representation of Landlord
by Tenant's attorneys infeasible. Subject to the foregoing provision regarding
the use of a mutually acceptable attorney for a common defense, the foregoing
indemnity obligation of Tenant shall include reasonable attorneys' fees,
investigation costs and all other reasonable costs and expenses incurred by
Landlord or any Landlord Indemnitee from the first notice that injury, death or
damage has occurred or that any claim or demand is to be made or may be made.
The provisions of this Section 16 shall survive the termination of this Lease
with respect to any damage, injury or death occurring prior to such termination.
17. COMPLIANCE WITH LEGAL REQUIREMENTS. Tenant, at its sole cost
and expense, shall promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which may
hereafter be in force; with the requirements of any board of fire underwriters
or other similar body now or hereafter constituted; with any direction or
occupancy certificate issued pursuant to any law by any public officer or
officers, insofar as any thereof relate to or affect the condition, use or
occupancy of the Premises, including, without limitation, structural, utility
system and life safety system changes necessitated by Tenant's acts and specific
use of the Premises (but not by Tenant's mere occupancy of the Premises) or by
improvements made by or for Tenant.
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18. ASSIGNMENT AND SUBLETTING.
(a) Subject to the other provisions hereof, Tenant shall
not, without the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed by Landlord, transfer or assign this Lease or
any interest herein, sublet the Premises or any part thereof, or permit the use
of the Premises by any party other than Tenant. Subject to the other provisions
hereof, this Lease shall not, nor shall any interest herein, be assignable as to
the interest of Tenant by operation of law without the consent of Landlord,
which consent shall not be unreasonably withheld or delayed. Tenant shall not
hypothecate or encumber this Lease or any interest herein without the prior
written consent of Landlord, which consent may be granted or denied in
Landlord's reasonable discretion. Any of the foregoing acts without such consent
shall be void and shall at the option of Landlord, terminate this Lease.
(b) Notwithstanding any of the provisions of this Section
18, Tenant shall have the right (i) to assign the Premises or sublet the
Premises or any portion thereof to an Affiliate (as defined below) of Tenant,
and (ii) to sublet any portion of the Premises or permit the use or occupancy of
the Premises, either temporarily or long term, but in no event in excess of
10,000 square feet in the aggregate at any one time, to a supplier of services
to Tenant (e.g. data processing, photocopy, messenger, travel, communications,
facilities management, accounting, etc.), Tenant's consultants or Tenant's
contractors (the transfers described in (i) and (ii) above are referred to as
"Permitted Transfers" and the transferees described in (i) and (ii) above are
referred to as "Permitted Transferees"). "Affiliate" shall mean (i)the National
Broadcasting Company ("NBC"), (ii) any corporation in which or with which Tenant
is merged or consolidated in accordance with applicable statutory provisions for
merger or consolidation of corporations, so long as the liabilities of the
corporations participating in such merger or consolidation are assumed by the
corporation surviving such merger or created by such consolidation, (iii) to any
corporation or other entity acquiring this Lease and all or substantially all of
Tenant's assets, or (iv) to any corporation or other entity which purchases all
of the stock of Tenant, provided that Landlord has approved in writing the
financial condition of any such entity described in clauses (i), (ii), (iii) and
(iv) pursuant to Landlord's reasonable discretion, and any such entity has
assumed all obligations of Tenant hereunder pursuant to an assumption agreement
acceptable to Landlord; provided that, Landlord shall be deemed to have approved
the financial condition under (iv) above for NBC and that company resulting from
the merger transaction described in the S-4 Registration document filed July 12,
1999 by Tenant.
Tenant shall provide written notice to Landlord of any Permitted
Transfers and the full name of any Permitted Transferee using, occupying,
subletting or taking by assignment the Premises. The use of the Premises by each
Permitted Transferee is subject to all the terms and conditions of the Lease. No
subletting or assignment to a Permitted Transferee shall release Tenant of
Tenant's obligations under this Lease or alter the primary liability of Tenant
to pay the rental and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of rental by Landlord from a Permitted Transferee
shall not be deemed to be a waiver by Landlord of any provision hereof and
Landlord has no obligation to accept any rental from a Permitted Transferee. In
the event of default by any Permitted Transferee in the performance of
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any of the terms hereof, Landlord may proceed directly against Tenant without
the necessity of exhausting remedies against such assignee, sublessee or
successor.
(c) If Tenant is a publicly held corporation, the public
trading of stock in Tenant shall not be deemed an assignment or transfer within
the meaning of this Section.
(d) Without limiting the other instances in which it may
be reasonable for Landlord to withhold its consent to an assignment or
subletting, Landlord and Tenant acknowledge that it shall be reasonable for
Landlord to withhold or delay its consent in the following instances:
(1) if, at the time consent is requested, or at
any time prior to the granting of consent, Tenant is in default under this
Lease or would be in default under this Lease but for the pendency of any
grace or cure period under Section 21 below;
(2) if the proposed assignee or sublessee is
a governmental agency;
(3) if, in Landlord's sole and absolute
discretion, the use of the Premises by the proposed assignee or sublessee
would not be compatible with the operation and uses of other tenants in the
Building, would entail any alterations which would lessen the value of the
leasehold improvements in the Premises, would result in an increased burden
on the Building, the Premises and systems and structures thereof, would
likely cause an increase in insurance premiums for insurance policies
applicable to the Building, would conflict with any so-called "exclusive" or
percentage lease then in favor of another tenant of the Building or would
likely impair the dignity, reputation or character of the Building.
(4) if, in Landlord's reasonable judgement,
the financial worth or capacity of the proposed assignee or sublessee does
not meet the credit standards applied by Landlord for other tenants under
leases with comparable terms, or in Landlord's sole and absolute discretion,
the character, reputation, or business of the proposed assignee or sublessee
is not consistent with the quality of the other tenancies in the Building;
(5) any portion of the Building or Premises
would become subject to additional or different governmental laws and
regulations including, without limitation, the ADA and Title 24; provided
that, if Tenant elects to be responsible and pay for all costs resulting from
said additional or different governmental laws and regulations including,
without limitation, the ADA and Title 24, it shall not be reasonable for
Landlord to withhold or delay its consent;
(6) if the proposed assignee or sublessee is
an existing tenant, or affiliate of an existing tenant, of the Building; or
(7) if the proposed use is prohibited by law
or by any provision of this Lease, including, without limitation, the rules
and regulations then in effect; or
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(8) if Landlord is negotiating with, and has
at any time within the past sixty (60) days negotiated with, the proposed
assignee or sublessee for space in the Building.
(e) If, at any time during the Lease Term, Tenant desires
to assign its interest in this Lease or sublet all or any part of the Premises,
Tenant shall give written notice to Landlord ("Tenant's Notice") setting forth
the terms of the proposed transaction, which shall be expressly subject to the
provisions of this Lease, the identity of the parties to the transaction, the
proposed documentation for the transaction and reasonably detailed information
regarding the business and financial condition of the parties involved as
requested by Landlord. Landlord shall have the option, exercisable by notice
given to Tenant ("Landlord's Election Notice") within fifteen (15) days after
Tenant's Notice is given ("Landlord's Option Period"), to either (i) consent to
the assignment or subletting, in which event the provisions of Section 18(g)
hereof shall be applicable, or (ii) disapprove the proposed assignment or
subletting. In the event that Landlord fails to provide