SUBLEASE
This SUBLEASE ("Sublease") is effective as of May 1, 2000 ("Effective
Date"), between LADBROKE RACING CORPORATION, a Delaware corporation
("Sublessor"), and NEUROBIOLOGICAL TECHNOLOGIES, INC., a Delaware corporation
("Sublessee").
RECITAL
A. Pursuant to that certain lease dated as of July 7, 1997 ("Master
Lease"), 3260 Blume Associates, LLC ("Master Lessor") leased to Sublessor
approximately 4,333 square feet of space (the "Premises") located in the
building commonly known as 3260 Blume Drive, Suite 500, Richmond, California.
The Master Lease is for a period that commenced on or about August 1, 1997 and
terminates on July 31, 2002. The Master Lease is attached hereto as Exhibit A.
Sublessee and Master Lessor have previously expanded the Premises to include
other space (together with the Premises, the "Master Premises").
B. Sublessee desires to sublease from Sublessor and Sublessor desires
to sublet to Sublessee the entire Premises. The Premises are shown on the floor
plan attached hereto as Exhibit B.
C. All capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Master Lease.
THE PARTIES THEREFORE AGREE AS FOLLOWS:
1. Demise. Conditioned upon receipt of Master Lessor's written
consent, if required, Sublessor hereby subleases and demises to Sublessee and
Sublessee hereby takes and hires from Sublessor the Premises, subject to the
provisions hereinafter set forth.
2. Term. The term ("Term") of this Sublease shall commence on
May 1. 2000 ("Commencement Date") and, unless terminated earlier by Sublessor
under the terms and conditions of this Sublease, shall expire on the earlier of
July 31, 2002 or the date on which the Master Lease terminates without fault of
Sublessor. Notwithstanding the foregoing, if Sublessor is unable, for any
reason, to deliver the Premises to Sublessee within five (5) days after the
Commencement Date, Sublessee shall have the right to terminate this Sublease
upon written notice delivered to Sublessor.
3. Security Deposit. Concurrently herewith, Sublessor has
delivered to Sublessee a security deposit in the amount of $7, 582.75 (the
"Security Deposit") for the purpose of securing Sublessee's performance of its
obligations hereunder. The rights and obligations of Sublessor and Sublessee
with respect to the Security Deposit shall be as set forth in Section 26 of the
Master Lease.
4. Use. Sublessee shall use the Premises for general office
purposes consistent with the requirements and limitations set forth in the
Master Lease.
5. Rent. Sublessee shall pay to Sublessor, as rent for the
Premises, $7,582.75 on the first day of each and every month of the Term. Rent
for any partial month of the Term
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shall be prorated based on the actual number of days in the month during which
the Term commences or ends. Sublessee shall have no obligation to pay any
Additional Rent and without limitation, shall have no obligation to pay any
increases in Base Operating Costs and Taxes.
6. Sublessor's Use of Premises. During the first two months of
the Term, during normal business hours, Sublessor shall be afforded
non-exclusive access to, and the right to maintain its computer servers and
related fixtures and equipment in, the room that currently houses Sublessor's
computer servers (the "Computer Data Room"). By the end of such two-month
period, unless otherwise agreed to in writing by Sublessor and Sublessee,
Sublessor shall have removed all of its personal property and equipment and
shall have surrendered the Computer Data Room to Sublessee. Sublessor shall be
responsible for any and all damages caused by and liabilities arising out of
Sublessor's use of the Computer Data Room, including, without limitation, any
damage caused by Sublessor's removal of its property therein. Sublessee shall be
responsible for any and all damages to Sublessor's servers and equipment caused
by Sublessee's use of the Computer Data Room. Sublessor shall have the right to
access and use the Computer Data Room for the same purposes and to the same
extent that Sublessor currently uses such room and to service and remove
Sublessor's property contained therein. If Sublessor requires access to the
Computer Data Room during non-business hours, it shall provide Sublessee with
reasonable advance notice, and Sublessee shall use reasonable efforts to
accommodate Sublessor's request for access. Sublessee shall provide to Sublessor
a single key to the Premises, which may be used by Sublessor or its qualified
consultant in the event Sublessor requires access during non-business hours and
is unable to contact Sublessee after reasonable attempts to do so. Sublessor
shall advise Sublessee in writing of the name of the person that will retain the
Premises key. As consideration for Sublessor's continued use of the Computer
Data Room set forth above, Sublessee shall be entitled to a rent abatement equal
to $126.00 for each month during which the access is permitted.
7. Condition of Premises; Surrender. Except as set forth
below, Sublessee accepts the Premises in an "as is" condition as of the
Effective Date, and Sublessee acknowledges that no representations or warranties
with respect to the condition thereof have been made to it. Upon the expiration
date of or earlier termination of this Sublease by Sublessor, Sublessee shall
surrender the Premises to Sublessor in good condition and repair, broom-clean,
ordinary wear and tear and damage for which lessee under the Master Lease has no
obligation to restore or repair excepted and otherwise in the condition required
by the Master Lease, and shall repair any damage to the Premises occasioned by
the removal of Sublessee's trade fixtures, furnishings and equipment.
Notwithstanding the foregoing, Sublessor represents and warrants that the
Premises are in good condition, free, to best of Sublessor's knowledge, of
Hazardous Materials, and that no damage or condition exists in or around the
Premises that would require, pursuant to the terms hereof or the Master Lease,
Sublessor or Sublessee to make repairs prior to surrendering the Premises to
Master Lessor.
8. Subordination. This Sublease is subject and subordinate to
the Master Lease.
9. Indemnification. (a) Sublessee shall defend, indemnify and
hold Sublessor harmless from and against any and all losses, liabilities,
claims, causes of action, damages, costs and expenses (including attorneys' fees
and expert witnesses' fees) arising from
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or related to (i) any act or omission of Sublessee, Sublessee's officers,
agents, employees, contractors, invitees or licensees, (ii) Sublessee's use of
the Premises, or (iii) the conduct of Sublessee's business, or (iv) any activity
on or with respect to the Premises occurring on or after the Commencement Date
(other than as covered by Sublessor's indemnity below). In case any action or
proceeding is brought against Sublessor by reason of any such claim, Sublessee,
upon written notice from Sublessor, shall, at Sublessee's expense, resist or
defend such action or proceeding by counsel reasonably approved by Sublessor.
For the purposes of this Paragraph, "Sublessor" shall include any and all
officers, directors, employees, shareholders, parents, agents or affiliates of
Sublessor.
(b) Sublessor shall defend, indemnify and hold Sublessee
harmless from and against any and all losses, liabilities, claims, causes of
action, damages, costs and expenses (including attorneys' fees and expert
witnesses' fees) arising from or related to (i) any act or omission of
Sublessor, Sublessor's officers, agents, employees, contractors, invitees or
licensees, whether prior to or after the Commencement Date, (ii) Sublessor's use
of the Premises prior or after to the Commencement Date, (iii) any obligations
of the tenant under the Master Lease not assumed by Sublessee hereunder, (iv)
any entry to the Premises by Sublessor or its consultants during non-business
hours, and (v) any unauthorized copying or distribution of the Premises key by
Sublessor or its consultants. In case any action or proceeding is brought
against Sublessee by reason of any such claim, Sublessor, upon written notice
from Sublessee, shall, at Sublessor's expense, resist or defend such action or
proceeding by counsel reasonably approved by Sublessee. For the purposes of this
Paragraph, "Sublessee" shall include any and all officers, directors, employees,
shareholders, parents, agents or affiliates of Sublessee.
10. Insurance. Sublessee shall, at Sublessee's sole cost and
expense, maintain during the term of this Sublease the insurance required to be
maintained by the tenant under the Master Lease.
11. Master Lease. Except for the paragraphs of the Master
Lease which relate to the payment of Rent (including Additional Rent) and any
future options to purchase, renew or expand, and to the extent not otherwise
inconsistent with the provisions of this Sublease, the provisions of the Master
Lease are hereby incorporated herein by reference on the following
understandings:
a) The term "Premises" (or word of similar import) as
used therein shall refer to the Premises;
b) The term "tenant" (or word of similar import) as
used therein shall refer to Sublessee;
c) The term "landlord" (or word of similar import) as
used therein shall refer to Sublessor;
d) All of Master Lessor's rights under the Master
Lease shall inure to the benefit of Sublessor as well as to Master Lessor.
e) With respect to work, services, repairs,
repainting and restoration or the performance of other obligations required of
or imposed upon Master Lessor under the
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Master Lease, Sublessor's obligation with respect thereto shall be to request
the same of Master Lessor, upon request by Sublessee, and to attempt to obtain
the same from Master Lessor. Sublessee shall have the right to request the same
directly from Master Lessor. Sublessee shall perform such maintenance and
repairs with respect to the Premises as are required to be performed by the
tenant under the Master Lease.
f) Sublessee hereby assumes and agrees to perform all
of the obligations of the tenant under the Master Lease that arise during the
term of this Sublease in the manner and within the time required under the
Master Lease (provided, however, that if the Premises consists of less than all
of the Master Premises, the obligation of Sublessee hereunder shall be
interpreted to apply only to the extent to which the obligations of the tenant
under the Master Lease are applicable or allocable to the Premises). Sublessee
further covenants that Sublessee will neither commit, nor permit to be committed
by any third party, any act or omission which would violate any term or
condition of the Master Lease, or be cause for termination of the Master Lease
by Master Lessor. Sublessor agrees to perform all of the obligations of the
tenant under the Master Lease that are applicable or allocable to the any
portion of the Master Premises that are not a part of the Premises, as well as
those obligations which are not assumed by Sublessee hereunder, including,
without limitation, the payment of all Additional Rent allocable to the
Premises. Sublessor further covenants that Sublessor will neither commit, nor
permit to be committed by any third party, any act or omission which would
violate any term or condition of the Master Lease, or be cause for termination
of the Master Lease by Master Lessor.
g) In connection with any alterations Sublessee
desires to make to the Premises, Sublessee first shall obtain the prior written
consent of Sublessor and, if required under the terms and conditions of the
Master Lease, the prior written consent of Master Lessor.
h) Any act or omission by Sublessee which would
constitute a breach or default by the tenant under the Master Lease shall
constitute a default on the part of Sublessee hereunder. In the event of any
breach or default by Sublessee hereunder or under the Master Lease, Sublessor
shall have each and all of the rights and remedies afforded Master Lessor under
the Master Lease.
i) Sublessee and Sublessor each represent and warrant
that they have read and are familiar with the terms and conditions of the Master
Lease.
j) Sublessor represents and warrants to Sublessee
that as of the Effective Date of this Sublease, there are no defaults under the
terms of the Master Lease and all rental and other payments have been made to
Master Lessor under the terms and conditions of the Master Lease.
k) The event described in Section 16.3(a) of the
Master Lease constitutes an Event of Default by Master Lessor or Sublessor, as
the case may be.
l) Sections 4, 24 and 33 and Exhibit B of the Master
Lease are not a part of this Sublease. None of the amendments to the Master
Lease are a part of this Sublease.
<PAGE>
12. Sublessee's Sign. If the Premises consists of less than
all of the Master Premises and if the Master Lease contains any limitations on
the number of signs that may be placed on the Master Premises, such night to
place signs on the Premises shall be allocated between the parties on a
proportionate basis with respect to each party's relative square footage of use.
Notwithstanding the above, Sublessee's rights to install and maintain a sign on
the Premises shall be limited to the provisions of the Master Lease and shall
otherwise be conditioned upon receipt of prior written consent of Sublessor and
Master Lessor.
13. Brokers. Sublessee and Sublessor each represent and
warrant that no real estate broker or other party, who might claim or be
entitled to a commission or other compensation as a result of the execution or
performance of this Sublease, has participated in this transaction, other than
BT Commercial and Technology Commercial, whose commissions, if any are due,
shall be paid for by Sublessor pursuant to a separate agreement between
Sublessor and BT Commercial. Sublessee and Sublessor each shall indemnify,
defend and hold the other harmless from and against all claims, costs and
damages incurred as a result of the breach of the foregoing representations and
warranties. The provisions of this Paragraph shall survive the termination of
this Sublease.
14. Notices. Any notices or demands to be given pursuant to
the Master Lease or this Sublease shall be in writing and shall be delivered
personally or sent by reputable overnight courier that provides evidence of
delivery, or by registered or certified mail, return receipt requested, with all
postage and fees prepaid, to Sublessor or Sublessee, respectively, at the
following addresses, or at such other address as such party shall designate by
written notice to the other party. Such addresses are:
SUBLESSOR: Ladbroke Racing Corporation
Race Track Road
P.O. Box 499
Meadow Lands, Pennsylvania 15347
Attention: Mr. Robert Vogel
SUBLESSEE: Neurobiological Technologies, Inc.
3260 Blume Drive, Suite 500
Richmond, California 94806
Attention: Mr. Paul Freiman
Such notices shall be deemed to have been received and to be effective for all
purposes upon receipt or refusal to accept delivery at such address as indicated
on the return receipt or other record of delivery, or (if earlier) on the second
business day after being mailed in accordance with the requirements of this
paragraph.
15. No Oral Agreements. There are no oral agreements or
understandings between the parties hereto affecting this Sublease. This Sublease
cannot be changed or
<PAGE>
terminated orally but only by an agreement in writing signed by the party
against whom enforcement or any waiver, change, modification or discharge is
sought.
16. Governing Law. This Sublease shall be governed and
construed in accordance with the laws of the State of California.
17. Attorneys' Fees. If there is any legal action or
proceeding between Sublessor and Sublessee to enforce any provision of this
Sublease, or to protect or to establish any right or remedy of either party
hereunder, the prevailing party in such action or proceeding shall be entitled
to recover from the other party all costs and expenses, including reasonable
attorneys' fees and expert witnesses' fees incurred by such prevailing party in
connection with any such action or any appeal in connection therewith.
18. Inurement. This Sublease shall be binding upon and shall
inure to the benefit of the parties, their respective heirs, legal
representatives, successors and assigns.
19. Time. Time is of the essence of this Sublease and each and
all of its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Sublease
effective as of the day and year first above written.
SUBLESSOR: LADBROKE RACING CORPORATION
a Delaware corporation
By:/s/ Joseph W. Michaels
----------------------
Its: Director of Construction and Property
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By:
----------------------------------------
Its:
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SUBLESSEE: NEUROBIOLOGICAL TECHNOLOGIES, INC.,
a Delaware corporation
By:/s/ Calvert Yee
---------------
Its: VP, Operations and Administration
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By:
---------------------------------------
Its:
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<PAGE>
CONSENT
The undersigned, 3260 Blume Associates, LLC, Master Lessor under the
Master Lease described in the Sublease to which this Consent is attached, hereby
consents to the provisions of the foregoing Sublease effective as of May 1,
2000, by and between Ladbroke Racing Corporation, as Sublessor and
Neurobiological Technologies, Inc., as Sublessee. Master Lessor agrees to notify
Sublessee concurrently of any default by Sublessor under the Master Lease and
agrees that Sublessee shall be entitled to cure any such default by Sublessor
within the applicable cure periods set forth in the Master Lease. Master Lessor
further agrees not to terminate the Master Lease by reason of such default by
Sublessor if Sublessee diligently proceeds to cure the default within the
applicable time periods provided, however, (a) if the default is not capable of
being cured within the time periods provided, or (b) if the default relates to a
portion of the Master Premises that is not a part of the Premises leased by the
Sublease, and provided Sublessee is not then in default of its rent obligations
hereunder, Lessor agrees to enter into a new lease with Sublessee on the same
terms and conditions as set forth herein and for the remaining term of the
Master Lease. The foregoing Consent shall not be deemed to constitute consent by
the undersigned to any subletting other than that described in the Sublease.
3260 BLUME ASSOCIATES, LLC, a
____________ limited liability company
By:
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Title:
--------------------------------------------
Date:
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<PAGE>
EXHIBIT A
(Master Lease)
<PAGE>
EXHIBIT B
(Premises Floor Plan)
<PAGE>
LEASE AGREEMENT
for
Plaza II
3260 Blume Drive
Richmond, CA 94806
Suite 500
between
3260 Blume Associates, LLC
as "Landlord"
and
Ladbroke Racing Corporation
a Delaware Corporation
as "Tenant"
<PAGE>
LEASE AGREEMENT
Page
1. PREMISES 1
2. TERM, POSSESSION 1
3. RENT 1
4. ADDITIONAL RENT;
INCREASES IN OPERATING COSTS AND TAXES 1
5. USE OF PREMISES 4
6. ALTERATIONS 5
7. MAINTENANCE AND REPAIRS 5
8. TRADE FIXTURES 6
9. TENANT'S TAXES 6
10. UTILITIES AND SERVICES 6
11. EXCULPATION AND INDEMNIFICATION 8
12. INSURANCE 9
13. DAMAGE OR DESTRUCTION 10
14. CONDEMNATION 11
15. ASSIGNMENT AND SUBLETTING 13
16. DEFAULT AND REMEDIES 14
17. LATE CHARGE; INTEREST 17
18. WAIVER 18
19. ENTRY AND INSPECTION 18
20. SURRENDER AND HOLDING OVER 18
21. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE 19
22. MORTGAGEE PROTECTION 19
23. ESTOPPEL CERTIFICATES 19
i
<PAGE>
LEASE AGREEMENT
Page
24. NOTICES 20
25. ATTORNEYS' FEES 20
26. SECURITY DEPOSIT 21
27. QUIET POSSESSION 21
28. SECURITY MEASURES 21
29. FORCE MAJEURE 21
30. RULES AND REGULATIONS 21
31. LANDLORD'S LIABILITY 21
32. CONSENTS AND APPROVALS 22
33. BROKERS 22
34. OTHER RIGHTS RESERVED BY LANDLORD 22
35. HAZARDOUS MATERIALS 23
36. ENTIRE AGREEMENT 24
37. MISCELLANEOUS 24
38. AUTHORITY 25
EXHIBIT A: DESCRIPTION OF PREMISES
EXHIBIT B: CONSTRUCTION RIDER
EXHIBIT C: BUILDING RULES
EXHIBIT D: ADDITIONAL PROVISIONS
ii
<PAGE>
LEASE AGREEMENT
THIS LEASE is Made as of July 7, 1997 by and between 3260 Blume
Associates, LLC, ("Landlord"), and Ladbroke Racing Corporation ("Tenant").
Landlord and Tenant hereby agree as follows:
1. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, upon the terms and subject to the conditions of this
Lease, approximately 4,333 rentable square feet of office space (the
"Premises"), as shown on Exhibit A attached hereto and made a part
hereof. The Premises are located on the fifth (5th) floor, Suite 500,
of the building known as the Plaza 11 and located at 3260 Blume Drive,
Richmond, California (the "Building"). The Building contains a total of
approximately 77,475 rentable square feet of office space.
2. TERM; POSSESSION. The term of this Lease (the "Term") shall commence on
August 15, 1997 (the scheduled "Commencement Date"), but in no event
sooner than the date of substantial completion of the Landlord provided
improvements, if any, detailed in Exhibit B hereto and, unless sooner
terminated pursuant to the provisions of this Lease, shall expire on
day preceding the sixty (60) month anniversary of the Commencement Date
on August 14, 2002 ("Expiration Date").
3. RENT.
3.1 Base Rent. During the Term, Tenant shall pay to Landlord, as
monthly base rent for the Premises ("Base Rent"), without
offset, deduction, prior notice or demand, the following
amounts:
August 1, 1997 through July 31, 1998 $7,149.45
August 1, 1998 through July 31, 1999 $7,366.10
August 1, 1999 through July 31, 2002 $7,582.75
Base Rent for the first month of the Term for which Base Rent
is payable shall be payable in. advance upon the execution of
this Lease. Thereafter, Base Rent shall be payable in advance
on the first day of each calendar month during the Term that
follows first month of the Term for which Base Rent is
payable. Base Rent for any partial month during the Term shall
be prorated, based upon the daily Base Rent then in effect
(calculated on the basis of a 30-day month and the number of
days during the month that the Term is in effect).
3.2 Payment of Rent. All amounts payable or reimbursable by Tenant
to Landlord under this Lease, including amounts payable as
late charges or interest, shall constitute "Rent" and shall be
payable and recoverable as Rent in the manner provided in this
Lease. All sums payable to Landlord on demand under the terms
of this Lease shall be payable within fifteen (15) days after
written notice from Landlord of the amounts due. All Rent
shall be paid to Landlord in lawful money of the United States
at the address specified in Section 24 - "Notices" or at such
other place as Landlord may from time to time designate in
writing.
4. ADDITIONAL RENT: INCREASES IN OPERATING COSTS AND TAXES.
4.1 Definitions. For purposes of this Lease the following terms
shall be defined as follows:
(a) "Base Operating Costs and Taxes" means the sum of actual
1997 Operating Costs and Taxes, excluding therefrom,
however, any Gross Operating Costs or Gross Taxes of a
nature that would not ordinarily be incurred on an
annual, recurring basis;
1
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(b) "Gross Operating Costs" means all direct costs of
managing, operating, maintaining and repairing the
Property including the associated parking and common
areas, including, but not limited to: (i) costs of
maintenance and repair of the Property, including the
repair or replacement of glass and the roof covering or
membrane, (ii) costs of maintenance and replacement of
landscaping in the Property; (iii) costs of providing
utilities - including costs and charges for water, gas,
sewage disposal, rubbish removal, security services,
cleaning and janitorial services, window washing and
supplies and materials; (iv) charges for the services of
independent contractors and compensation (including
employment taxes and fringe benefits) for persons who
perform duties in connection with the operation,
maintenance and repair of the Building, such compensation
to be appropriately allocated for persons who perform
duties unrelated to the Building; (v) premiums for
property insurance (including coverage for earthquake and
flood is carried by Landlord), liability insurance,
rental income and other insurance relating to the
Property, and deductible amounts under such insurance
paid in connection with the repair or restoration of the
Property (including the common areas) after damage or
destruction of the Property; (vi) fees and charges for
licenses, permits and inspections: (vii) costs associated
with the maintenance of the Building; (viii) property
management fees of not more than five (5) percent of
Building gross receipts; (ix) costs for accounting, legal
and other professional services incurred in connection
with the operation of the Building and the calculation of
Gross Operating Costs and Gross Taxes (as defined below);
(X) a reasonable allowance for depreciation on machinery
and equipment used to maintain the Property in the common
area (xi) the reasonable cost of contesting the validity
or applicability of any governmental enactments that may
affect the Property; (xii) the Building's share of common
area maintenance fees and expenses; and (xiii) any other
expense or charge, whether or not hereinbefore described,
which in accordance with generally accepted property
management practices would be considered an expense of
managing, operating, maintaining and repairing the
Property.
GrossOperating Costs shall not include (i) capital
improvements subsequent to the initial construction and
development of the Building, other than those
specifically enumerated above in the definition of Gross
Operating Costs; (ii) costs of special services rendered
to individual tenants (including Tenant) for which a
special charge is made; (iii) interest and principal
payments on loans or indebtedness secured by the
Building; (iv) costs of improvements for other tenants of
the Building; (v) costs of services or other benefits of
a type which are not available to Tenant but which are
available to other tenants or occupants, and costs for
which Landlord is reimbursed by other tenants of the
Building other than through payment of tenants' shares of
Operating Costs and Taxes; (vi) leasing commissions,
attorneys' fees and other expenses incurred in connection
with negotiations or disputes with other tenants,
prospective tenants or occupants of the Property, or in
connection with the enforcement or violation by Landlord
or such tenant or occupant of any lease; (vii)
depreciation or amortization, other than as specifically
enumerated above in the definition of Gross Operating
Costs; (viii) costs, fines or penalties incurred due to
Landlord's violation of any law or governmental
regulation; and (ix) the excess of the cost of supplies
and services provided by subsidiaries and affiliates of
Landlord over competitive costs by independent suppliers
and contractors of comparable buildings in the vicinity
of the Property.
(c) "Gross Taxes" means all real property taxes and general,
special or district assessments or other governmental
impositions, of whatever kind, nature or origin, imposed
on or by reason of the ownership or use of the Property;
governmental charges, fees or assessments for transit
(including without limitation, area-wide traffic
improvement assessments and transportation system
management fees), housing, police, fire or other
governmental service or purported benefits to the
Property; personal property taxes assessed on the
2
<PAGE>
personal property of the Landlord used in the operation
of the Property; service payments in lieu of taxes and
taxes and assessments of every kind and nature whatsoever
levied or assessed in addition to, in lieu of or in
substitution for existing or additional real or personal
property taxes on the Property or the personal property
described above: taxes and assessments on the gross or
net rental receipts of Landlord derived from the Building
(excluding, however, state and federal personal or
corporate income taxes measured by the income of Landlord
from all sources); and the reasonable cost of contesting
by appropriate Landlord from all sources); and the
reasonable cost of contesting by appropriate proceedings
the amount or validity of any taxes, assessments or
charges described above. The term "Gross Taxes" shall not
include any "Tenant's Taxes" as defined in Section 9 -
"Tenant's Taxes".
(d) "Operating Costs" means the total Gross Operating Costs
for any calendar year divided by the number of rentable
square feet of office space in the Building. Operating
Costs for any year during which average occupancy of the
Building is less than ninety-five percent (95%) shall be
calculated based upon the Gross Operating Costs that
would have been incurred if the Building were so occupied
during the entire calendar year. Tenant's Share of
Operating Costs shall not be reduced as a result of
Tenant's performing for itself any of the services that
Landlord provides for the Property or for the tenants of
the Property.
(e) "Taxes" means the total Taxes for any calendar year
divided by the number of rentable square feet in the
Building. Taxes for any year during which average
occupancy of the Building is less than ninety-five
percent (95%) shall be calculated based upon the Gross
Taxes that would have been incurred if the Building were
so occupied during the entire calendar year.
(f) "Tenant's Share" means an amount equal to the number of
rentable square feet of office space in the Premises
multiplied by any increases in Operating Costs and Taxes
over Base Operating Costs and Taxes.
4.2 Additional Rent. If Operating Costs and Taxes for any calendar
year during the term of this Lease exceed Base Operating Costs
and Taxes, Tenant shall pay Landlord, as "Additional Rent",
Tenant's Share of such increase in Operating Costs and Taxes
(whether such increase, in the case of Taxes, is caused by
changes in valuation, rate or other factors or circumstances).
4.3 Notice and Payment. As close as reasonably possible to the end
of each calendar year, Landlord shall notify Tenant of any
increases in Operating Costs and Taxes over Base Operating
Costs and Taxes estimated by Landlord for the following
calendar year. Commencing on the first day of January of each
calendar year and on the first day of every month thereafter
in such year, Tenant shall pay to Landlord, as Additional
Rent, one twelfth (1/12th) of Tenant's Share of increases in
Operating Costs and Taxes as reasonably estimated by Landlord.
If at any time during any such calendar year, it appears that
Operating Costs or Taxes for such year will vary from
Landlord's estimate, Landlord may, by written notice to
Tenant, revise its estimate for such year and the Additional
Rent payments by Tenant for such year shall thereafter be
based upon such revised estimate.
As soon as possible after each calendar year for which Tenant
has made estimated payments or is liable for increases in
Operating Costs and Taxes, Landlord shall furnish Tenant a
statement with respect to such year, certified by Landlord's
controller, showing Gross Operating Costs and Gross Taxes,
Operating Costs and Taxes, the increase in Operating Costs and
Taxes in excess of Base Operating Costs and Taxes, Tenant's
Share of such increase, and the total payments made by Tenant
on the basis of any previous estimate of such increases.
Unless Tenant raises any objections to Landlord's statement
within one (1) year after receipt of the same .(except for
fraud), such statement shall conclusively be deemed correct
and Tenant shall have no right thereafter to dispute such
statement or any item therein or the
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computation of increases of in Operating Costs or Taxes. If
Tenant does object to such statement, Landlord shall provide
Tenant with reasonable verification of the figures shown on
the statement and the parties agree to negotiate in good faith
to resolve any disputes. Any amounts due Landlord or Tenant
shall be paid in the manner set forth below. Any objection of
Tenant to Landlord's statement and resolution of any dispute
shall not postpone the time for payment of any amounts due
Tenant or Landlord based on Landlord's statement, nor shall
any failure of Landlord to deliver Landlord's statement in a
timely manner relieve Tenant of its obligation to pay any
amounts due Landlord based on Landlord's statement.
If Tenant's Share for the year as finally determined exceeds
the total payments made by Tenant based on Landlord's
estimates, Tenant shall pay Landlord the deficiency within ten
(10) days of Tenant's receipt of Landlord's statement. If the
total payments made by Tenant based on Landlord's estimate of
the increases in Operating Costs and Taxes exceed Tenant's
Share of the increases, as determined by Landlord, Tenant's
excess payment shall be credited toward future payments by
Tenant of Rent or estimated increases in Operating Costs and
Taxes and if no future payments are due, payable to Tenant
within ten (10) days.
For any partial calendar year at the commencement or
termination of this Lease, Tenant's Share of any increases in
Operating Costs and Taxes over Base Operating Costs and Taxes
for such year shall be prorated on the basis of a 365-day year
by computing Tenant's Share of the increases in Operating
Costs and Taxes for the entire year and then prorating such
amount for the number of days the term of this Lease was in
effect during such year. Notwithstanding the termination of
this Lease, and within ten (10) days of Tenant's receipt of
Landlord's statement regarding the determination of increases
in Operating Costs and Taxes for the calendar year in which
this Lease terminates, Tenant shall pay to Landlord or
Landlord shall pay to Tenant, as the case may be, an amount
equal to the difference between Tenant's Share (as prorated)
of the increases in Operating Costs and Taxes for such year,
as finally determined by Landlord, and the amount previously
paid by Tenant toward such increases.
5. USE OF PREMISES. The Premises shall be used for general office purposes
and for no other business or purpose without the written consent of
Landlord.
Tenant shall comply with all present and future governmental laws,
ordinances, rules and regulations relating to Tenant's use or occupancy
of the Premises and shall observe the Building Rules, as defined in
Section 30 - "Rules and Regulations". Tenant shall not do, bring, keep
or sell anything in or about the Premises that is prohibited by the
standard form of fire insurance policy or that will cause a
cancellation of, or an increase in the existing premium for, any
insurance policy covering the Property or any part thereof. Any breach
of this covenant shall constitute a default under this Lease and in
addition shall obligate Tenant to pay to Landlord any and all increases
in insurance premiums resulting from such breach.
Tenant shall not occupy or use the Premises, or permit the Premises to
be occupied or used, in any manner that will constitute waste or a
nuisance or will disturb the quiet enjoyment of or otherwise annoy
other tenants in the Building. Tenant shall not, without the prior
consent of Landlord, bring into the Building or the Premises or use or
incorporate in the Premises any apparatus, equipment or supplies that
may cause substantial noise, odor or vibration or overload the Premises
or the Building or any of its utility or elevator systems or jeopardize
the structural integrity of the Building or any part thereof. If any of
Tenant's office machines or equipment disturb any other tenant in the
Building, then Tenant shall provide adequate insulation or take such
other action as may be necessary to eliminate the disturbance.
Tenant shall not, without the prior consent of Landlord, connect to the
utility systems of the Building any apparatus, machinery or other
equipment except typical office machines and devices such as electric
typewriters, word processors, mini and micro-computers and office-size
photocopiers. Tenant shall pay the cost of all utilities and services
supplied to Tenant in connection with Tenant's use of additional office
equipment approved by Landlord
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hereunder, as provided in Section 10.2 "Payment for Additional
Utilities and Services". Tenant shall not, without the prior consent of
Landlord, connect to any dedicated electrical circuit in the Premises
electrical apparatus or equipment of any type having in the aggregate
electrical power requirements in excess of two amps per outlet.
Notwithstanding Landlord's consent to such excess loading of circuits,
Tenant shall pay the cost of any additional or above-standard capacity
electrical circuits necessitated by such excess loading circuits and
the installation thereof.
6. ALTERATIONS. All alterations, improvements or changes to the Premises
(other than the suite improvements provided for in the Construction
Rider) desired by Tenant ("Alterations") shall be made at Tenant's
expense and shall require Landlord's prior approval. If Tenant desires
any Alteration, Tenant shall submit to Landlord for its prior approval
(which approval shall not, provided such Alteration does not affect the
structural portions or the mechanical or utility systems of the
Property, and subject to other terms of this Lease, be unreasonably
withheld or delayed) reasonably detailed final plans and specifications
and the name of the contractor proposed by Tenant to make the
Alteration. Tenant shall obtain all applicable permits, authorizations
and governmental approvals before commencement of the Alteration, and
the Alteration shall be completed with due diligence in compliance with
the plans and specifications approved by Landlord. In making any
Alteration, Tenant shall comply in all respects with the "Building
Rules" (as defined in Section 30 - "Rules and Regulations and with
Section 5 - "Use of Premises".
All Alterations shall be made at such times and in such manner as
Landlord may designate, only by such contractors or mechanics as are
approved by Landlord, and subject to all other conditions which
Landlord may in its discretion impose.
All Alterations shall be the property of Landlord, and upon expiration
or termination of this Lease, all Alterations which are permanently
affixed shall be surrendered with the Premises at the end of the term
of this Lease in accordance with Section 20.1 - "Surrender.
Tenant shall obtain liability insurance, in form and amount and from an
insurance company acceptable to Landlord, insuring Tenant against
damage to person and property arising out of the construction of the
Alteration. Tenant shall keep the Premises and the Property free and
clear of all liens arising out of any work performed, materials
furnished or obligations incurred by Tenant. Tenant shall give Landlord
at least five (5) days' notice prior to the commencement of any
Alterations. Landlord may post and record an appropriate notice of
non-responsibility with respect to any Alteration or the installation
of any "Trade Fixtures" (as defined in Section 8 - "Trade Fixtures")
and Tenant shall maintain any such notices posted by Landlord in or on
the Premises. In the event any such lien attaches to the Premises or
the Property, and Tenant does not cause the same to be released by
payment, bonding or otherwise, within ten (10) days after the
attachment thereof, Landlord shall have the right but not the
obligation to cause the same to be released by such means as it shall
deem proper, and any sums expended by Landlord in connection therewith
shall be payable by Tenant on demand with interest thereon from the
date of expenditure by Landlord at the rate specified in Section 17.2 -
"Interest" hereof.
7. MAINTENANCE AND REPAIRS. By taking possession of the Premises, Tenant
agrees that the Premises are then in a tenantable and good condition.
During the term of this Lease Tenant shall take good care of the
Premises and keep the Premises in a clean and orderly condition. As a
material part of the consideration for this Lease, Tenant hereby waives
the provisions of California Civil Code Sections 1932(l), 1941 and 1942
or any other applicable existing or future law, ordinance or
governmental regulation permitting Tenant to make repairs at the
Landlord's expense.
Landlord shall maintain or cause to be maintained in reasonably good
order, condition and repair, the structural portions of the roof,
foundations, floors and exterior walls of the Building, the equipment
and facilities by which utilities and services are provided and the
public and common areas of the Building, such as elevators, stairs,
corridors and restrooms; provided, however, that Tenant shall pay the
costs of repairs for damage occasioned by or any act or omission of
Tenant (collectively Tenant's "Representatives"). Landlord shall be
under no
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obligation to inspect the Premises. Tenant shall promptly report in
writing to Landlord any defective condition known to it which Landlord
is required to repair, and failure to so report such defect shall make
Tenant responsible to Landlord for any liability incurred by Landlord
by reason of such condition.
Landlord hereby reserves the right, in any time and from time to time,
without the same constituting an actual or constructive eviction, to
make alterations, additions, repairs, improvements to or in or to
decrease the size of area of, all or any part of the Building, the
fixtures and equipment therein, the heating, ventilation,
air-conditioning, plumbing, electrical, fire protection, life safety,
security and mechanical systems of the Building ("Building Systems"),
the common areas and all other parts of the Building, and to change the
arrangement and/or location of entrances or passageways, doors and
doorways, corridors, elevators, stairs, toilets and other public parts
of the Building-provided that such changes shall not detrimentally
impact parking, access or maintenance of the Building as a first- class
office building.
8. TRADE FIXTURES. Subject to the provisions of Section 5 - "Use of
Premises" and Section 6 -"Alterations", Tenant may install and maintain
furnishings, equipment, movable partitions, business machines and other
trade fixtures ("Trade Fixtures") in the Premises, provided that the
Trade Fixtures do not become an integral part of the Premises or the
Building. Tenant, if not then in default under this Lease, may after or
remove any of its Trade Fixtures at any time during the term of this
Lease or upon its expiration or termination. Tenant shall promptly
repair any damage to the Premises or the Building caused by such
removal. If Tenant fails to make such repairs, Landlord may do so at
Tenant's expense.
9. TENANT'S TAXES.
9.1 Definition. For purposes of this Section, "Tenant's Taxes"
shall mean all taxes, assessments, license fees and other
governmental charges or impositions levied or assessed against
or with respect to Tenant's personal property or Trade
Fixtures installed, located or attached to the Premises,
whether levied directly against Tenant or levied against
Landlord or the Property.
9.2 Payment. Tenant shall pay all Tenant's Taxes before
delinquency and, at Landlord's request, shall furnish Landlord
satisfactory evidence thereof. If Tenant fails timely to pay
any Tenant's Taxes levied directly against Tenant, if any
Tenant's Taxes are levied against Landlord or the Property, or
if the assessed value of the Building is increased by the
inclusion of a value placed on Tenant's personal property,
Trade Fixtures or Alterations, Landlord may pay the portion of
Tenant's Taxes that is not paid by Tenant or that is levied or
assessed against Landlord or the Property. Landlord may pay
such Tenant's Taxes regardless of the validity of their levy
or assessment and whether or not Tenant elects to contest the
same if, in the reasonable judgment of Landlord, the failure
to pay such taxes will jeopardize the interest of Landlord in
the Property. If Landlord pays Tenant's Taxes or any portion
thereof, Tenant shall, immediately upon demand by Landlord,
reimburse Landlord for the amount of such payment, together
with interest at the rate specified in Section 17.2 -
"Interest" from the date of Landlord's payment to the date of
Tenant's reimbursement.
10. UTILITIES AND SERVICES.
10.1 Description of Services. During the hours of 7:00 a.m. to 7:00
p.m. ("Business Hours") on weekdays except public holidays
("Business Days"); and subject to the rules and regulations of
the Building, Landlord shall furnish to the Premises "Building
Standard" amounts of electricity, water, heat,
air-conditioning and elevator service consisting of either
attended or non-attended automatic elevators. On Business
Days, subject to the rules and regulations of the Building,
Landlord shall furnish to the Premises and its attendant
restrooms and other common areas, "Building Standard"
janitorial service, window washing, fluorescent tube
replacement and toilet room supplies; provided, however, that
Landlord shall not be required to provide janitorial services
required due to the use of portions of the Premises for
preparation or consumption of food or beverages or for similar
purposes. During non-Business
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Hours, Landlord shall furnish the Premises with water and
elevator service and, subject to the provisions of Section
10.2 - "Payment for Additional Utilities and Services", and,
upon twenty-four (24) hours notice from Tenant, reasonable
heat and air conditioning. Any additional utilities or service
that Landlord may agree to provide at Tenant's request shall
be at Tenant's sole expense.
10.2 Payment for Additional Utilities and Services. Tenant hall pay
for heat and air-conditioning furnished at Tenant's request
during non-Business Hours on an hourly basis at the then
prevailing rate established for the Building by Landlord
calculated based on the estimated actual cost of providing
such heat and air-conditioning. If the service requested by
Tenant is not a continuation of service furnished during
Business Hours, Tenant shall pay for such service at such rate
for a period of two (2) hours preceding the commencement of
service.
If the temperature otherwise maintained in any portion of the
Premises by the heating, ventilating and air-conditioning
("HVAC) systems of the Building is affected as a result of (a)
any lights, machines or equipment used by Tenant in the
Premises; or (b) the occupancy of the Premises by more than
one person per 115 square feet of rentable area; then Landlord
shall have the right to install any machinery or equipment
that Landlord reasonably deems necessary to restore
temperature balance, including modifications to the standard
air-conditioning equipment calculated to cover the estimated
actual cost of providing such heat and air-conditioning. The
cost of any such equipment and modifications, including the
cost of installation and any additional cost of operation and
maintenance of the same, shall be paid by Tenant to Landlord
upon demand.
In the event the Tenant's usage of electricity, water or any
other utility exceeds the customary office usage consumption
of such utility, Landlord may determine the amount of such
excess use by any reasonable means (including, but not limited
to, the installation at Landlord's election and expense a
separate meter or measuring device. If it is determined that
Tenant is using excessive consumption, Tenant will reimburse
Landlord the cost of the meter or measuring device and pay to
Landlord the additional charge for excessive utilities. In
addition, Landlord may impose a reasonable charge for the use
of any additional or unusual janitorial services required by
Tenant because of any unusual Suite Improvements or
Alterations, the carelessness of Tenant or the nature of
Tenant's business (including hours of operation). All sums
payable hereunder by Tenant for additional services or for
excess utility usage shall be payable within ten (10) days
after notice from Landlord of the amounts due; except that
Landlord may require Tenant to pay monthly for the estimated
cost of Tenant's excess utility usage if such usage occurs on
a regular basis, and such estimated amounts shall be payable
in advance on the first day of each month.
10.3 Interruption of Services. In the event of an interruption in,
or failure or inability to provide any of the services or
utilities described in Section 10.1 - "Description of
Services" (a "Service Failure"), such Service Failure shall
not, regardless of its duration, 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 of,
except as provided herein, entitle Tenant to an abatement of
Rent or to terminate this Lease.
(a) If any Service Failure not caused by Tenant or its
Representatives or Visitors prevents Tenant from
reasonably using a material portion of the Premises
and Tenant in fact ceases to use such portion of the
Premises, Tenant shall be entitled to an abatement of
Base Rent and Additional Rent with respect to the
portion of the Premises that Tenant is prevented from
using by reason of such Service Failure in the
following circumstances: (i) if Landlord fails to
commence reasonable efforts to remedy the Service
Failure within two (2) Business Days following the
occurrence of the Service Failure or fails thereafter
to pursue diligently reasonable action to remedy the
Service
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Failure, the abatement of Rent shall commence on the
third Business Day following the Service Failure and
continue for the balance of the period during which
Tenant is so prevented from using such portion of the
Premises; and (ii) if the Service Failure in all
events is not remedied within fifteen (15) days
following the occurrence of the Service Failure and
Tenant in fact does not use such portion of the
Premises for an uninterrupted period of fifteen (15)
days or more by reason of such Service Failure, the
abatement of Rent shall commence no later than the
sixteenth day following the occurrence of the Service
Failure and continue for the balance of the period
during which Tenant is so presented from using such
portion of the Premises.
(b) If a Service Failure is caused by Tenant or its
Representatives or Visitors, Landlord shall
nonetheless remedy the Service Failure, at the
expense of Tenant, pursuant to Landlord's maintenance
and repair obligations under Section 7 - "Maintenance
and Repair" or Section 13.1 - "Landlord's Duty to
Repair" as the case may be, but Tenant shall not be
entitled to an abatement of Rent or to terminate this
Lease as a result of any such Service Failure.
(c) Notwithstanding Tenant's entitlement to Rent
abatement under the preceding provisions, Tenant
shall continue to pay Tenant's then current Rent
until such time as Landlord and Tenant agree on the
amount of the Rent abatement. If Landlord and Tenant
are unable to agree on the amount of such abatement
within ten (10) Business Days of the date they
commence negotiations regarding the abatement, then
either party may submit the matter to binding
arbitration pursuant to Sections 1280 et seg. of the
California Code of Civil Procedure.
(d) In addition to the foregoing provisions, if there is
a Service Failure not caused by Tenant or its
Representatives or Visitors and such Service Failure
prevents Tenant from conducting its business in the
Premises in the manner in which Tenant intends to
conduct such business, and (i) Landlord fails to
commence reasonable efforts to remedy the Service
Failure within two (2) days following the occurrence
of the Service Failure, or (ii) the Service Failure
in all events is not remedied within one-hundred
eighty (180) days following its occurrence and Tenant
in fact does not conduct any business in the Premises
for an uninterrupted period of one-hundred eighty
(180) days or more, Tenant shall have the right to
terminate this Lease by written notice delivered to
Landlord within ten (10) Business Days following the
event described in clauses (i) or (ii) above giving
rise to the right to terminate.
(e) Where the cause of a Service Failure is within the
control of a public utility or other public or
quasi-public entity outside Landlord's control,
notification to such utility or entity of the Service
Failure and request to remedy the failure shall
constitute "reasonable efforts" by Landlord to remedy
the Service Failure.
(f) Tenant hereby waives the provisions of California
Civil Code Section 1932(l) or any other applicable
existing or future law, ordinance or governmental
regulation permitting the termination of this Lease
due to such interruption, failure of inability.
10.4 Governmental Controls. In the event any governmental authority
having jurisdiction over the Property promulgates or revises
any law, ordinance or regulation or building, fire or other
code or imposes mandatory or voluntary controls or guidelines
on Landlord or the Property relating to the use or
conservation of energy or utilities or the reduction of
automobile or other emissions (collectively "Controls") or in
the event Landlord is required or elects to make alterations
to the Property in order to comply with such mandatory or
voluntary Controls, Landlord may, in its sole discretion,
comply with such Controls or make such alterations to the
Property related thereto. Such compliance and the making of
such alterations shall not constitute an eviction of
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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.
11. EXCULPATION AND INDEMNIFICATION. Except for the gross negligence of
Landlord, Landlord shall not be liable to Tenant for any loss, injury
or other damage to any person or property (including, but not limited
to, Tenant or Tenant's property) in or about the Premises or the
Property from any cause (including, but not limited to: defects in the
Property or in any equipment in the Property, fire, explosion or other
casualty; bursting, rupture, leakage or overflow of any plumbing or
other pipes or lines, sprinklers, tanks, drains, drinking fountains or
washstands in, above, or about the Premises or the Property; or acts of
other tenants in the Building). Tenant hereby waives all claims against
Landlord for such damage and the cost and expense of defending against
claims relating to such damage, except that Landlord shall indemnify
and hold Tenant harmless from and against any claims, liability,
damages, costs or expenses, including reasonable attomeys' fees and
costs incurred in defending against the same ("Claims"), to the extent
the same are caused by the willful or negligent acts or omissions of
Landlord or its authorized representatives. In no event, however, shall
Landlord be liable to Tenant for any punitive or consequential damages
or damages for loss of business by Tenant.
Tenant shall indemnify and hold Landlord harmless from and against any
Claims arising from (a) the acts or omissions of Tenant or its
Representatives or Visitors in or about the Property from and after the
date hereof, or (b) any construction or other work undertaken by Tenant
on the Premises from and after the date hereof, or (c) from any breach
or default under this Lease by Tenant from and after the date hereof,
or (d) any accident, injury or damage, howsoever and by whomsoever
caused, to any person or property, occurring in or about the Premises
during the Term; excepting only such Claims to the extent they are
caused by the negligent or willful acts or omissions of Landlord or its
authorized representatives.
Landlord shall indemnify and hold Tenant harmless from and against any
Claims arising from (a) the acts or omissions of Landlord or its
Representatives or Visitors in or about the Property from and after the
date hereof, or (b) any construction or other work undertaken by
Landlord on the Premises from and after the date hereof, or (c) from
any breach or default under this Lease by Landlord from an after the
date hereof, or (d) any accident, injury or damage, howsoever and by
whomsoever caused, to any person or property, occurring in or about the
Premises during the Term-, excepting only such Claims to the extent
they are caused by the negligent or willful acts or omissions of Tenant
or its authorized representatives.
The obligations of the parties under this Section 11 shall survive the
expiration or termination of this Lease.
12. INSURANCE.
12.1 Tenant's Insurance. Tenant, at its expense, shall maintain in
full force during the term of this Lease, a policy or policies
of commercial general liability insurance with a combined
single limit of at least two million dollars ($2,000,000) for
each occurrence, insuring against all liability of Tenant and
its representatives and Visitors for personal or bodily injury
or property damage arising out of or incurred in connection
with Tenant's use or occupancy of the Premises or the
Property. Such policy or policies shall further insure the
indemnification obligations of Tenant under this Lease.
Tenant shall at all times maintain in effect insurance with
respect to its Alterations and Trade Fixtures providing
coverage against fire, extended coverage perils and vandalism
and malicious mischief, to the extent of at least eighty
percent (80%) of the full replacement cost thereof. Tenant may
carry such insurance under a blanket policy, provided that
such policy provides equivalent coverage to a separate policy.
During the term of this Lease the proceeds from any such
policies of insurance shall be used for the repair or
replacement of the Alterations and Trade Fixtures so insured.
Landlord shall have no interest in such insurance and shall
sign all documents reasonably necessary or proper in
connection with the settlement of any
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claim or loss by Tenant. Landlord will not carry insurance on
Tenant's personal property or Trade Fixtures.
Each policy of insurance required under this Section 12.1
shall require at least fifteen (15) days' written notice to
Landlord prior to any termination or alteration of the policy.
Each policy of liability insurance shall name Landlord, its
partners and its property manager and mortgagees as additional
insured and provide that it is primary to, and not
contributing with, any policy carried by Landlord covering the
same loss. Tenant shall provide to Landlord, upon request,
evidence that the insurance required to be carried by Tenant
pursuant to this Section 12.1 is in full force and effect and
the premiums therefor have been paid.
Any limits set forth in this Lease on the amount or type of
coverage required by Tenant's insurance shall not limit the
liability of Tenant under this Lease.
12.2 Landlord's Insurance. During the term of this Lease Landlord
shall maintain in effect insurance on the Building against
fire, extended coverage perils and vandalism and malicious
mischief (to the extent such coverages are available), with
responsible insurers licensed to do business in the state in
which the Building is located, insuring the Building and the
Suite Improvements in an amount equal to one-hundred percent
(100%) of the replacement cost thereof, excluding foundations,
footings and underground installations. Landlord may, but
shall not be obligated to, carry insurance against additional
perils and/or in greater amounts. Upon written request of
Tenant and notification by Tenant of the insurable value of
Tenant's Alterations, Landlord will have such insurance cover
Tenant's Alterations. Tenant shall reimburse Landlord within
ten (10) days after notification of the amounts due, for all
premiums for insurance maintained by Landlord pursuant to this
Section 12.2 on Tenant's Alterations.
12.3 Waiver of Subrogation. To the extent permitted by their
respective policies of insurance, Landlord and Tenant each
hereby waive any right of recovery against the other and the
authorized representatives of the other for any loss or damage
that is covered by any policy of insurance maintained by
either party with respect to the Premises or the Property or
any operation therein. If any policy of insurance relating to
this Lease or to the Premises or the Property does not permit
the foregoing waiver or if the coverage under any such policy
would be invalidated as a result of such waiver, the party
maintaining such policy shall, if possible, obtain from the
insurer under such policy a waiver of all right of recovery by
way of subrogation against either party in connection with any
claim, loss or damage covered by such policy. If either party
is not able to obtain such waiver, then such party shall have
the other party named as an additional insured on all such
policies of insurance.
13. DAMAGE OR DESTRUCTION.
13.1 Landlord's Duty to Repair. If all or a substantial part of the
Premises are rendered untenantable or inaccessible by damage
to all or any part of the Property from fire or other casualty
then, unless either party is entitled to and elects to
terminate this Lease pursuant to Sections 13.2 - "Landlord's
Right to Terminate" and 13.3 - "Tenant's Right to Terminate"
Landlord shall, at its expense, use reasonable efforts to
repair and restore the Premises and/or the Property, as the
case may be, to substantially their former condition to the
extent permitted by the then applicable codes, laws and
regulations; provided, however, that in no event shall
Landlord have any obligation to repair or replace the Suite
Improvements beyond the extent of insurance proceeds received
for the repair or restoration thereof or any of Tenant's
personal property, Trade fixtures or Alterations.
Notwithstanding the above, if Landlord, at Tenant's request,
has insured Tenant's Alterations as provided in Section 12.2
"Landlord's Insurance", Landlord's obligation to repair or
restore shall also include such Alterations, but only to the
extent Landlord receives insurance proceeds covering the cost
of such repair or restoration.
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If Landlord is required or elects to repair damage to the
Premises and/or the Property this Lease shall continue in
effect but Tenant's Base Rent and Additional Rent from the
date of the casualty through the date of substantial
completion of the repair shall be abated. The amount and
period of rental abatement shall be determined by Landlord in
the exercise of its good faith reasonable judgment. In no
event shall Landlord be liable to Tenant by reason of any
injury to or interference with Tenant's business or property
arising from fire or other casualty or by reason of any
repairs to any part of the Property made necessary by such
casualty.
13.2 Landlord's Right to Terminate. Landlord may elect to terminate
this Lease, effective as of the date of the casualty, under
the following circumstances:
(a) Where, in the reasonable judgment of Landlord, the
damage cannot be substantially repaired and restored
under applicable laws and governmental regulations
within one (1) year from the date of the casualty;
(b) Where, in the reasonable judgment of Landlord,
adequate proceeds are not, for any reason, made
available to Landlord from Landlord's insurance
policies (and/or from Landlord's funds made available
for such purpose, at Landlord's sole option) to make
the required repairs; or,
(c) Where the Property is damaged or destroyed to the
extent that the cost to repair and restore the
Property exceeds twenty-five percent (25%) of the
full replacement cost of the Property, whether or not
the Premises are at all damaged or destroyed.
If any of the circumstances described in subparagraphs (a),
(b) or (c) of this subsection occur or arise, Landlord must
notify Tenant in writing of that fact within one hundred and
twenty (120) days after the date of the casualty and in such
notice Landlord must also advise Tenant whether Landlord has
elected to terminate this Lease as of the date of the
casualty.
13.3 Tenant's Right to Terminate. If all or a substantial part of
the Premises are rendered untenantable or inaccessible by
damage to all or any part of the Property from fire or other
casualty, then Tenant may elect to terminate this Lease under
the following circumstances:
(a) Where Landlord has the right under Section 13.2 -
"Landlord's Right to Terminate" to terminate this
Lease but has not elected to so terminate and
Landlord fails to commence the required repair within
one hundred and twenty (120) days after the date of
the casualty, in which event Tenant may elect to
terminate this Lease upon notice to Landlord given
within ten (10) days after such one hundred and
twenty (120)-day period, effective as of the next
calendar month following such notice to Landlord.
(b) In the circumstance described in Subsection 13.2(a)
above; in which event Tenant may elect to terminate
this Lease as of the date of the casualty by giving
Landlord notice of such election to terminate within
thirty (30) days after Landlord's notice to Tenant
pursuant to Section 13.2.
13.4 Waiver of Statutory Provisions. Landlord and Tenant each
hereby waive the provisions of California Civil Code Sections
1932(2), 1933(4) and any other applicable existing or future
law, ordinance or regulation with respect to damage or
destruction of leased premises or with respect to the
termination of a lease agreement in the event of such damage
or destruction under any circumstances other than as provided
in Section 13.2 "Landlord's Right to Terminate" and 13.3
-"Tenant's Right to Terminate".
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14. CONDEMNATION.
14.1 Definitions. For purposes of this Section, the following terms
shall be defined as follows:
(a) "Award" shall mean all compensation, sums, or
anything Of value awarded, paid or received on total
or partial Condemnation.
(b) "Condemnation" shall mean (i) a permanent or
temporary taking pursuant to the exercise by a
Condemnor of the power of condemnation or eminent
domain, whether by legal proceedings or otherwise, or
(ii) a voluntary sale or transfer by Landlord to any
Condemnor, either under threat of condemnation or
while legal proceedings for condemnation are pending.
(c) "Condemnor" shall mean any public or quasi public
authority, private corporation or individual having
the power of condemnation or eminent domain.
(d) "Date of Condemnation" shall mean the earlier of the
date that title to the property taken by the
Condemnor is tested in the Condemnor or the date the
Condemnor has the right to possession of the property
being condemned.
14.2 Condemnation. If the Premises are totally taken by a permanent
Condemnation, this Lease shall terminate as of the Date of
Condemnation. If a portion but not all of the Premises is
taken by a permanent Condemnation, this Lease shall remain in
effect; provided, however, that if Landlord and Tenant agree
that the portion of the Premises remaining after the
Condemnation will be unsuitable for Tenant's continued use,
then upon notice to Landlord within thirty (30) days after
Landlord notifies Tenant of the Condemnation, Tenant may
terminate this Lease effective as of the Date of Condemnation.
If twenty-five percent (25%) or more of the Land or of the
floor area in the Building is taken by Condemnation, whether
or not any portion of the Premises is so taken, Landlord may
elect to terminate this Lease at any time up to thirty (30)
days after to the Date of Condemnation. If Landlord so
terminates this Lease, the termination shall be effective as
of the Date of Condemnation. If all or a portion of the
Premises is taken by a temporary Condemnation, this Lease
shall remain in full force and effect.
14.3 Restoration. If this Lease is not terminated as provided in
Section 14.2 - "Condemnation" following a Condemnation,
Landlord, at its expense, shall diligently proceed to repair
and restore the Premises to substantially its former condition
(to the extent permitted by the then applicable codes, laws
and regulations) and/or repair and restore the Building to an
architecturally complete office building; provided, however,
that Landlord's obligations to so repair and restore shall be
limited to the amount of any Award received by Landlord and
not required to be paid to any lender holding a mortgage or
deed of trust on the Property. In no event shall Landlord have
any obligation to repair or replace any Suite Improvements
beyond the amount of any Award received by Landlord for such
repair or replacement or any of Tenant's personal property,
Trade Fixtures, or Alterations.
14.4 Abatement and Reduction of Rent. If any portion of the
Premises is permanently taken in a Condemnation or is rendered
permanently untenantable by repairs necessitated by the
Condemnation, and this Lease is not terminated, the Base Rent
and Additional Rent payable under this Lease shall be
proportionally reduced as of the Date of Condemnation based
upon the percentage of rentable square feet in the Premises so
taken or rendered permanently untenantable. In addition, if
this Lease remains in effect following a permanent
Condemnation and Landlord proceeds to repair and restore the
Premises, the Base Rent and Additional Rent payable under this
Lease shall be abated during the period of such repair or
restoration to the extent such repairs prevent Tenant's use of
the Premises.
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14.5 Awards. Any Award made shall be paid to Landlord, and Tenant
hereby assigns to Landlord, and waives all interest in or
claim to, any such award, including any claim for the value of
the unexpired term of this Lease; provided, however, that
Tenant shall be entitled to receive, or to prosecute a
separate claim for, an Award for a temporary Condemnation
where this Lease is not terminated, or an Award or portion
thereof separately designated for relocation expenses or the
interruption of or damage to Tenant's business or as
compensation for Tenant's personal property, Trade Fixtures or
Alterations.
Landlord and Tenant each hereby waive the provisions of
California Code of Civil Procedure Section 1265.130 and any
other applicable existing or future law, ordinance or
governmental regulation providing for, or allowing either
party to petition the courts of the state in which the
Property is located for, a termination of this Lease upon a
partial taking of the Premises and/or the Property.
15. ASSIGNMENT AND SUBLETTING.
15.1 Landlord's Consent Required. Tenant shall not assign,
transfer, mortgage, pledge, hypothecate or encumber this Lease
or any interest therein (each a "Transfer"), and shall not
sublet the Premises or any part thereof, without the prior
written consent of Landlord and any attempt to do so without
such consent being first had and obtained shall be wholly void
and shall constitute a breach of this Lease.
15.2 Reasonable Consent.
(a) If Tenant complies with the following conditions,
Landlord shall not unreasonably withhold its consent
to the subletting of the Premises or any portion
thereof or the assignment of this Lease. Tenant shall
submit in writing to Landlord (i) the name and legal
composition of the proposed subtenant or assignee;
(ii) the nature of the business proposed to be
carried on in the Premises; (iii) the terms and
provisions of the proposed sublease; (iv) such
reasonable financial information as Landlord may
request concerning the proposed subtenant or
assignee; and (v) the form of the proposed sublease
or assignment. Within five (5) business days after
Landlord receives all such information it shall
notify Tenant whether it approves such assignment or
subletting or if it elects to proceed under Section
15.8 below.
(b) The parties hereto agree and acknowledge that, among
other circumstances for which Landlord could
reasonably withhold its consent to a sublease or
assignment, it shall be reasonable for Landlord to
withhold its consent where (i) Landlord reasonably
disapproves of the Transferee's reputation or credit
worthiness or the character of the business to be
conducted by the Transferee at the Premises, (ii) the
Transferee is an existing tenant of the Building,
(iii) the assignment or subletting would increase the
burden on the Building services or the number of
people occupying the Premises, (iv) Landlord
otherwise reasonably determines that the assignment
or sublease would have the effect of decreasing the
value of the Property or increasing the expenses
associated with operating the Property.
15.3 Excess Consideration. If Landlord consents to the assignment
or sublease, Landlord shall be entitled to receive as
additional Rent hereunder any consideration paid by the
Transferee for the assignment or sublease and, in the case of
a sublease, the excess of the rent and other consideration
payable by the subtenant over the amount of Base Rent and
Additional Rent payable hereunder applicable to the subleased
space.
15.4 No Release Of Tenant. No consent by Landlord to any assignment
or subletting by Tenant shall relieve Tenant of any obligation
to be performed by Tenant under this Lease, whether occurring
before or after such consent, assignment or subletting, and
the Transferee shall be jointly and severally liable with
Tenant for the payment of
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Rent (or that portion applicable to the subleased space in the
case of a sublease) and for the performance of all other terms
and provisions of the Lease. The consent by Landlord to any
assignment or subletting shall not relieve Tenant and any such
Transferee from the obligation to obtain Landlord's express
written consent to any subsequent assignment or subletting.
The acceptance of rent by Landlord from any other person shall
not be deemed to be a waiver by Landlord of any provision of
this Lease or to be a consent to any assignment, subletting or
other transfer. Consent to one assignment, subletting or other
transfer shall not be deemed to constitute consent to any
subsequent assignment, subletting or other transfer.
15.5 Attorneys' Fees. Tenant shall pay Landlord's reasonable
attorneys' fees incurred in connection with reviewing any
proposed assignment or sublease.
15.6 Effectiveness Of Transfer. No permitted assignment (whether or
not requiring Landlord's consent) shall be effective until
Landlord has received a counterpart of the assignment and an
instrument in recordable form executed by the assignee in
which the assignee assumes all of Tenant's obligations under
this Lease arising on or after the date of assignment. No
permitted subletting (whether or not requiring Landlord's
consent) by Tenant shall be effective until there has been
delivered to Landlord a counterpart of the sublease and an
instrument in recordable form executed by the subtenant in
which the subtenant agrees to be and remain jointly and
severally liable with Tenant for the payment of Rent and for
the performance of all of the terms and provisions of this
Lease; provided, however, that the subtenant shall be liable
to Landlord for Rent only in the amount set forth in the
sublease. The failure or refusal of an assignee or subtenant
to execute any such instrument shall not release or discharge
the assignee or subtenant from its liability set forth above.
The voluntary, involuntary or other surrender of this Lease by
Tenant, or a mutual cancellation by Landlord and Tenant, shall
not work a merger, and any such surrender or cancellation
shall, at the option of Landlord, either terminate all or any
existing subleases or operate as an assignment to Landlord of
any or all of such subleases.
15.7 Landlord's Right To Space. Notwithstanding any of the above
provisions of this Section 15 to the contrary, if Tenant
notifies Landlord that it desires to assign this Lease or
sublet all or any part of the Premises, Landlord, in lieu of
consenting to such assignment or sublease, may elect to
terminate this Lease (in the case of an assignment or a
sublease of the entire Premises), or to terminate this Lease
as it relates to the space proposed to be subleased by Tenant
(in the case of a sublease of less than the entire Premises).
In such event, this Lease (or portion thereof) will terminate
on the date the assignment or sublease was to be effective,
and Landlord may lease such space to any party, including the
prospective Transferee identified by Tenant.
15.8 Transfer to Affiliate. Tenant may assign this Lease or sublet
the Premises or any portion thereof, without Landlord's
consent, to any corporation or other entity which controls, is
controlled by, or is under common control with Tenant, or to
any corporation or other entity resulting from a merger or
consolidation with Tenant, or to any person or entity which
acquires substantially all the assets of Tenant as a going
concern (collectively, an "Affiliate"), provided that the
Affiliate assumes in writing all of Tenant's obligations under
this Lease.
15.9 Involuntary Assignment. In the event that Landlord consents,
pursuant to Section 365 of the Federal Bankruptcy Code, to any
assumption, assignment or sublease ("transfer") of the rights
or interest of Tenant under this Lease, "adequate assurance of
future performance" of this Lease by the transferee shall
include, but not be limited to, establishment by the
transferee of an impound account into which the transferee
shall deposit, subject to withdrawal solely by Landlord from
time to time as the same becomes due, an amount equal to the
aggregate amount of all Rent which shall become due under this
Lease during the remainder of the term of this Lease.
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16. DEFAULT AND REMEDIES.
16.1 Events of Default. The occurrence of any of the following
shall constitute an "Event of Default" by Tenant:
(a) Tenant fails to make any payment of Rent within ten
(10) days of when due and such failure is not cured
within three (3) days after notice to Tenant thereof.
(b) Within ten (10) days after written notice, Tenant
fails to timely make payments of Rent within ten (10)
days of when due under this Lease three (3) or more
times during any twelve (12) month period during the
term of this Lease.
(c) Within ten (10) days after written notice, Tenant
abandons the Premises for thirty (30) consecutive
days, which failure shall be deemed an abandonment of
the Premises by Tenant.
(d) Within ten (10) days after written notice, Tenant
fails to deliver any estoppel certificate requested
by Landlord within the period described in Section 23
- "Estoppel Certificates".
(e) Within ten (10) days after written notice, Tenant
fails to comply with any of the provisions of Section
35 - "Hazardous Materials".
(f) Tenant ceases doing business as a going concern,
makes an assignment for the benefit of creditors, is
adjudicated an insolvent, files a petition (or files
an answer admitting the material allegations of such
petition) seeking relief under any reorganization,
arrangement, consolidation, readjustment,
liquidation, dissolution or similar arrangement or
proceeding under any state or federal bankruptcy or
other statute, law or regulation, or Tenant consents
to or acquiesces in the appointment, pursuant to any
state or federal bankruptcy or other statute, law or
regulation, of a trustee, receiver or liquidator for
the Premises, for Tenant or for all or any
substantial part of Tenant's assets.
(g) Tenant fails, within ninety (90) days after the
commencement of any proceedings against Tenant
seeking relief under any reorganization, arrangement,
consolidation, readjustment, liquidation, dissolution
or similar arrangement or proceeding under any state
or federal bankruptcy or other statute, law or
regulation, to have such proceedings dismissed or
stayed, or Tenant fails, within ninety (90) days
after an appointment pursuant to any state or federal
bankruptcy or other statute, law or regulation,
without Tenant's consent or acquiescence, of any
trustee, receiver or liquidator for the Premises, for
Tenant or for all or any substantial part of Tenant's
assets, to have such appointment vacated.
(h) Tenant fails to- perform or comply with any provision
of this Lease other than those described in (a)
through (g) above, and such failure is not cured
within fifteen (15) days after notice to Tenant or,
if such failure cannot be cured within such fifteen
(15)-day period, Tenant fails within such fifteen
(15)-day period to commence, and thereafter
diligently proceed with, all actions necessary to
cure such failure as soon as reasonably possible but
in all events within ninety (90) days of such notice.
16.2 Remedies. Upon the occurrence of an Event of Default Landlord
shall have the following remedies, which shall not be
exclusive, but shall be cumulative and shall be in addition to
any other remedies now or hereafter allowed by law:
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(a) Landlord may terminate Tenant's right to possession
of the Premises at any time by written notice to
Tenant. Tenant expressly acknowledges that in the
absence of such written notice from Landlord, no
other act of Landlord, including, but not limited to,
its re-entry into the Premises, efforts to relet the
Premises, its reletting of the Premises for Tenant's
account, its storage of Tenant's personal property
and Trade Fixtures, its acceptance of keys to the
Premises from Tenant or its exercise of any other
rights and remedies under this Section 16.2, shall
constitute an acceptance of ------------ - Tenant's
surrender of the Premises or of Tenant's right to
possession of the Premises.
Upon such termination in writing of Tenant's right to
possession of the Premises, as herein provided, this
Lease shall terminate and Landlord shall be entitled
to recover damages from Tenant as provided in
California Civil Code Section 1951.2 or any other
applicable existing or future law, ordinance or
regulation providing for recovery of damages for such
breach, including but not limited to the following:
(1) The reasonable cost of recovering the
Premises; plus,
(2) All unpaid Rent due or earned hereunder
prior to the date of termination, less the
proceeds of any reletting or any rental
received from subtenants prior to the date
of termination applied as provided in
subsection (b) below, together with interest
at the rate specified in Section 17.2 -
"Interest" of this Lease, on such sums from
the date such Rent is due and payable until
the date of the award of damages; plus,
(3) The amount by which the Rent which would be
payable by Tenant hereunder, including
Tenant's Share of increases in Operating
Costs and Taxes, as reasonably estimated by
Landlord, from the date of termination until
the date of the award of damages exceeds the
amount of such rental loss as Tenant proves
could have been reasonably avoided together
with interest at the rate specified in
Section 17.2 - "Interest" on such sums from
the date such Rent is due and payable until
the date of the award of damages; plus,
(4) The amount by which the Rent which would be
payable by Tenant hereunder, including
Tenant's Share of increases in Operating
Costs and Taxes, as reasonably estimated by
Landlord. for the remainder of the then
term, after the date of the award of damages
exceeds the amount of such rental loss as
Tenant proves could have been reasonably
avoided, discounted at the discount rate
published by the Federal Reserve Bank of San
Francisco for member banks at the time of
the award plus one percent (1%); plus,
(5) Such other amounts in addition to or in lieu
of the foregoing as may be permitted from
time to time by applicable law.
(b) Landlord may continue this Lease in full force and
effect and may enforce all its rights and remedies
under this Lease, including, but not limited to, the
right to recover Rent as it becomes due. During the
continuance of an Event of Default, Landlord may
enter the Premises without terminating this Lease and
sublet all or any part of the Premises for Tenant's
account to any person, for such term (which may be a
period beyond the remaining term of this Lease), at
such rents and on such other terms and conditions as
Landlord deems advisable. In the event of any such
subletting, rents received by Landlord from such
subletting shall be applied (i) first, to the payment
of the costs of maintaining, preserving, altering and
preparing the Premises for subletting and other costs
of subletting, including but not limited to brokers'
commissions, attorneys' fees and expenses of removal
of Tenant's personal
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property, Trade Fixtures, alterations and Suite
Improvements: (ii) second, to the payment of Rent
then due and payable: and (iii) third, the balance,
if any, shall be paid to Tenant upon (but not before)
expiration of the term of this Lease. If the rents
received by Landlord from such subletting, after
application as provided above, are insufficient in
any month to pay the Rent due and payable hereunder
for such month, Tenant shall pay such deficiency to
Landlord monthly upon demand. Notwithstanding any
such subletting for Tenant's account without
termination, Landlord may at any time thereafter, by
written notice to Tenant, elect to terminate this
Lease by virtue of a previous Event of Default.
During the continuance of an Event of Default, for so
long as Landlord does not terminate Tenant's right to
possession of the Premises and subject to Section 15
"Assignment and Subletting" and the options granted
to Landlord thereunder, Landlord shall not
unreasonably withhold its consent to an assignment or
sublease of Tenant's interest in the Premises or in
this Lease.
(c) During the continuance of an Event of Default,
Landlord may enter the Premises without terminating
this Lease and remove all Tenant's personal property,
Alterations and Trade Fixtures from the Premises. If
Landlord removes such property from the Premises and
stores it at Tenant's risk and expense, and if Tenant
fails to pay the cost of such removal and storage
after written demand therefor and/or to pay any Rent
then due, after the property has been stored for a
period of thirty (30) days or more Landlord may sell
such property at public or private sale, in the
manner and at such times and places as Landlord in
sole discretion deems commercially reasonable
following reasonable notice to Tenant of the time and
place of such sale. The proceeds of any such sale
shall be applied first to the payment of the expenses
for removal and storage of the property, preparation
for and conducting such sale, and attorneys' fees and
other legal expenses incurred by Landlord in
connection therewith, and the balance shall be
applied as provided in subsection (b) above.
Tenant hereby waives all claims for damages that may
be caused by Landlord's reentering and taking
possession of the Premises or removing and storing
Tenant's personal property pursuant to this Section,
and Tenant shall hold Landlord harmless from and
against any loss, cost or damage resulting from any
such act. No reentry by Landlord shall constitute or
be construed as a forcible entry by Landlord.
(d) Landlord may require Tenant to remove any and all
Suite Improvements from the Premises or, if Tenant
fails to do so within ten (10) days after Landlord's
request, Landlord may do so at Tenant's expense.
(e) See page 17A, Sections 16.3 and 16.4.
17. LATE CHARGE; INTEREST.
17.1 Late Charge. Tenant acknowledges that the late payment of any
Rent due hereunder will cause Landlord to incur expenses not
contemplated by this Lease and that the exact amount of such
expenses would be extremely difficult and impracticable to
fix. Such expenses include, but are not limited to, processing
and accounting charges, late charges that may be imposed on
Landlord by the terms of any encumbrance or note secured by
the Property and the loss of the use of delinquent Rent.
Therefore, if any payment of Rent is not received by Landlord
within ten (10) days of when due, Tenant shall pay to Landlord
on demand as a late charge an additional amount equal to four
percent (4%) of the overdue sum, which amount represents a
fair and reasonable estimate of the costs that Landlord will
incur by reason of late payment. Acceptance of any late charge
shall not constitute a waiver of Tenant's default with
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respect to the overdue sum or prevent Landlord from exercising
any of its other rights and remedies under this Lease.
17.2 Interest. In addition to the late charges referred to above,
which are intended to defray Landlord's costs resulting from
late payments, any late payment of Rent shall, at Landlord's
option, bear interest from the due date of any such payment to
the date same is paid at a eighteen percent (18%) per annum or
the maximum lawful rate that Landlord may charge to Tenant
under applicable laws, whichever is less.
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16.3 Landlord Events of Default. The occurrence of any of the
following shall constitute an "Event of Default" by Tenant:
(a) Landlord fails to perform or comply with any
provision of this Lease and such failure, where no
cure or grace period is otherwise provided, is not
cured within fifteen (15) days after notice to
Landlord or, if such failure where no cure or grace
period is otherwise provided, cannot be cured within
such fifteen (15) day period, Landlord fails within
such fifteen (15) day period to commence, and
thereafter diligently proceed with, all actions
necessary to cure such failure as soon as reasonably
possible but in all events within ninety (90) days of
such notice.
16.4 Remedies. Upon the occurrence of an Event of Default, Tenant
shall have the following remedies, which shall not be
exclusive, but shall be cumulative and shall be in addition to
any other remedies now or thereafter allowed by law:
(a) Tenant may terminate this Lease and Tenant's
obligations hereunder.
Upon such termination in writing of this Lease by
Tenant, this Lease shall terminate and Tenant shall
be entitled to recover damages from Landlord as
provided in California Civil Code Section 1951.2 or
any other applicable existing or future law,
ordinance or regulation providing for recovery of
damages for such breach, including but not limited to
the following:
(1) All Rent paid for periods subsequent to the
termination of this Lease, plus,
(2) Such other amounts in addition to or in lieu
of the foregoing as may be permitted from
time to time by applicable law.
(b) Tenant may continue this Lease in full force and
effect and may enforce all its rights and remedies
under this Lease.
(c) Tenant may cure the Event of Default at Landlord's
expense. If Tenant pays any sum or incurs any expense
in curing the Event of Default, Landlord shall
reimburse Tenant upon demand for the amount of such
payment or expense with interest at the rate
specified in Section 17.2 - "Interest" from the date
the sum is paid or the expense is incurred until
Tenant is reimbursed by Landlord.
18. WAIVER. No provisions of this Lease shall be deemed waived by Landlord
unless such waiver is in a writing signed by Landlord. The waiver by
Landlord of any breach of any provision of this Lease shall not be
deemed a waiver of such provision or of any subsequent breach of the
same or any other provision of this Lease. No delay or omission in the
exercise of any right or remedy of Landlord upon any default by Tenant
shall impair such night or remedy or be construed as a waiver.
Landlord's acceptance of any payments of Rent due under this Lease
shall not be deemed a waiver of any default by Tenant under this Lease
(including Tenant's recurrent failure to timely pay Rent) other than
Tenant's nonpayment of the accepted sums, and no endorsement or
statement on any check or accompanying any check or payment shall be
deemed an accord and satisfaction. Landlord's consent to or approval of
any act by Tenant requiring Landlord's consent or approval shall not be
deemed to waive or render unnecessary Landlord's consent to or approval
of any subsequent act by Tenant.
19. ENTRY AND INSPECTION. Upon reasonable verbal or written notice to
Tenant (except where in Landlord's judgment the existence of an
emergency necessitates an immediate entry into the Premises without
notice to avoid damage, loss or injury to persons or property or any
part of the Property), Landlord and its authorized representatives may
enter the Premises at all reasonable times to determine whether the
Premises are in good condition, to
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determine whether Tenant is complying with its obligations under this
Lease, to perform any maintenance or repair of the Premises or the
Property that Landlord has the right or obligation to perform, to
install or repair improvements for other tenants that require access to
the Premises for such installation or repair, to serve, post or keep
posted any notices required or allowed under the provisions of this
Lease, to show the Premises to prospective brokers, agents, buyers,
transferees, mortgagees or tenants, or to do any other act or thing
necessary for the safety or preservation of the Premises or the
Property. In the event Tenant is in default of the Lease, or during the
last six (6) months of the term of the Lease, Landlord or its agents
may show the premises to prospective new tenants.
Landlord shall not be liable in any manner for any inconvenience, loss
of business or other damage to Tenant or other persons arising out of
Landlord's entry on the Premises as provided in this Section. Landlord
shall conduct activities under this Section in a manner that will
minimize inconvenience to Tenant without incurring additional expense
to Landlord. When reasonably necessary Landlord may temporarily close
entrances, doors, corridors, elevators or other facilities in the
Property without liability to Tenant by reason of such closure and
without such action being construed as an eviction of Tenant or a
release of Tenant from its obligations under this Lease so long as
parking, access and use of the Premises are not interfered with
unreasonably. In no event shall Tenant be entitled to an abatement of
rent on account of any entry by the Landlord.
20. SURRENDER, HOLDING OVER.
20.1 Surrender. Upon the expiration or termination of this Lease,
Tenant shall surrender the Premises and all Suite Improvements
and Alterations to Landlord broom-clean and in their original
condition, except for reasonable wear and tear, damage from
casualty or condemnation and any changes resulting from
approved alterations; provided, however, that prior to the
expiration or termination of this Lease Tenant shall remove
from the Premises all Tenant's personal property.; or Trade
Fixtures, Alterations and Suite Improvements that Tenant has
the right or is required by Landlord to remove under the
provisions of this Lease. If such removal is not completed at
the expiration or termination of this Lease, Landlord may
remove the same at Tenant's expense. Any damage to the
Premises or the Building caused by such removal shall be
repaired promptly by Tenant or, if Tenant fails to do so,
Landlord may do so at Tenant's expense. Tenant's obligations
under this Section shall survive the expiration or termination
of this Lease. Upon expiration or termination of this Lease or
of Tenant's possession, Tenant shall surrender all keys to the
Premises or any other part of the Building and shall make
known to landlord the combination of locks on all safes,
cabinets and vaults that may be located in the Premises.
20.2 Holding Over. If Tenant remains in possession of the Premises
after the expiration or termination of this Lease, Tenant's
continued possession shall be on the basis of a tenancy at the
sufferance of Landlord, and Tenant shall continue to comply
with or perform all the terms and obligations of the Tenant
under this Lease, except that the Base Rent during Tenant's
holding over shall be at 150% of the Base Rent payable in the
last month prior to the termination hereof. Tenant shall
indemnify and hold Landlord harmless from and against all
claims, liability, damages, costs or expenses, including
reasonable attorneys fees and costs of defending the same,
incurred by Landlord and arising directly or indirectly from
Tenant's failure to timely surrender the Premises, including
(i) any rent payable by or any loss, cost, or damages,
including lost profits, claimed by any prospective tenant of
the Premises, and (ii) Landlord's damages as a result of such
prospective tenant rescinding or refusing to enter into the
prospective lease of the Premises by reason of such failure to
timely surrender the Premises.
21. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE. This Lease is expressly
made subject and subordinate to any mortgage, deed of trust, ground
lease, underlying lease or like encumbrance recorded affecting any part
of the Property or any interest of Landlord therein which is now
existing or hereafter executed or recorded ("Encumbrance"), and any
memorandum of this Lease, whether or not recorded in the public records
of the county in
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which the Property is located, shall so state; provided, however, that
such subordination shall only be effective, as to future Encumbrances,
if the holder of the Encumbrance agrees that this Lease shall survive
the termination of the Encumbrance by lapse of time, foreclosure or
otherwise so long as Tenant is not in default under this Lease.
Provided the conditions of the preceding sentence are satisfied, Tenant
covenants and agrees to execute and deliver, upon request by Landlord
and in a form reasonably requested by Landlord, any additional
documents evidencing the subordination of this Lease with respect to
any such Encumbrance and the non-disturbance agreement of the holder of
any such Encumbrance. If the interest of Landlord in the Property is
transferred to any person ( "Purchaser") pursuant to or in lieu of
proceedings for enforcement of any Encumbrance, Tenant shall
immediately and automatically attorn to the Purchaser, and this Lease
shall continue in full force and effect as a direct lease between the
Purchaser and Tenant on the terms and conditions set forth in this
Lease.
22. MORTGAGEE PROTECTION. Tenant agrees to give any holder of any
Encumbrance covering any part of the Property ("Mortgagee"), by
registered mail, a copy of any notice of default served upon the
Landlord, provided that prior to such notice Tenant has been notified
in writing (by way of notice of assignment of rents and leases, or
otherwise) of the address of such Mortgagee. If Landlord shall have
failed to cure such default within thirty (30) days from the effective
date of such notice of default, then the Mortgagee shall have an
additional thirty (30) days within which to cure such default or if
such default cannot be cured within that time, then such additional
time as may be necessary to cure such default (including the time
necessary to foreclose or otherwise terminate its Encumbrance, if
necessary to effect such cure), and this Lease shall not be terminated
so long as such remedies are being diligently pursued.
23. ESTOPPEL CERTIFICATES. Upon ten (10) days' notice from Landlord, Tenant
shall execute and deliver to Landlord, in form provided by or
satisfactory to Landlord, a certificate stating that this Lease is in
full force and effect, describing any amendments or modifications
hereto, acknowledging that this Lease is subordinate or prior, as the
case may be, to any Encumbrance and stating any other information
Landlord may reasonably request, including the term of this Lease, the
monthly Base Rent, the date to which Rent has been paid, the amount of
any security deposit or prepaid Rent, whether either party hereto is in
default under the terms of the Lease, whether Landlord has completed
its construction obligation hereunder and any other information
reasonably requested by Landlord. Any person or entity purchasing,
acquiring an interest in or extending financing with respect to the
Property shall be entitled to rely upon any such certificate. Tenant
shall be liable to Landlord for any damages incurred by Landlord
including any profits or other benefits from any financing of the
Property or any interest therein which are lost or made unavailable as
a result, directly or indirectly, of Tenant's failure or refusal to
timely execute or deliver such estoppel certificates.
24. NOTICES. Any notice, demand, request, consent, approval or
communication that either party desires or is required to give to the
other party under this Lease shall be in writing and shall be served
personally, delivered by independent messenger or courier service, or
sent by U.S. registered or certified mail, return receipt requested,
postage prepaid, addressed to the other party at the address set forth
below:
To Tenant: Ladbroke Racing Corporation
(at the Premises) 3260 Blume Drive, Suite 500
Richmond, CA 94806 and
Attn: John J. Ford John R. Long
Vice President & General President
Counsel
To Landlord: 3260 Blume Drive, L.L.C.
3260 Blume Drive and 1970 Broadway
Richmond, CA 94806 Oakland, CA 94612
Either party may change its address by a notice to the other party
complying with this Section. In the event Tenant sublets the Premises
in accordance with Section 15 - "Assignment and
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Subletting", notices from Landlord shall be effective on the subtenant
when given to Tenant pursuant to this Section. ,
Notices delivered personally will be effective immediately upon
delivery to an authorized representative of the party at the designated
address; notices sent by independent messenger or courier service will
be effective one (1) day after acceptance by the independent service
for delivery; notices sent by mail in accordance with this Section will
be effective two (2) days after mailing. In the event Tenant requests
dual notices hereunder, Tenant will be bound by such notice, from the
earlier of the effective times of the dual notices.
25. ATTORNEYS' FEES.
25.1 If Tenant or Landlord brings any action for the enforcement or
interpretation of this Lease, including any suit by Landlord
for the recovery of Rent or possession of the Premises, the
losing party shall pay to the prevailing party a reasonable
sum for attorneys' fees. The "prevailing party" will be
determined by the court before whom the action was brought
based upon an assessment of which party's major arguments or
positions taken in the suit or proceeding could fairly be said
to have prevailed over the other party's major arguments or
positions on major disputed issues in the court's decision.
25.2 If Landlord, without fault on Landlord's part, is made a party
to any litigation instituted by Tenant or by any third party
against Tenant, or by or against any person holding under or
using the Premises by license of Tenant or otherwise arising
out of or resulting from any act or transaction of Tenant or
of any such other person, Tenant covenants to hold Landlord
harmless from any judgment rendered against Landlord or the
Premises or any part thereof, and reimburse Landlord upon
demand for all costs and expenses, including reasonable
attorneys' fees, incurred by Landlord in or in connection with
such litigation.
25.3 If Tenant, without fault on Tenant's part, is made a party to
any litigation instituted by Landlord or by any third party
against Landlord, or by or against any person holding under or
using the Premises by license of Landlord or otherwise arising
out of or resulting from any act or transaction of Landlord or
of any such other person, Landlord covenants to hold Tenant
harmless from any judgment rendered against Tenant or the
Premises or any part thereof, and reimburse Tenant upon demand
for all costs and expenses, including reasonable attorney's
fees, incurred by Tenant in or in connection with such
litigation.
26. SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit with
Landlord the sum of $7,582.75 as a security deposit for the performance
by Tenant of the provisions of this Lease. Landlord may use the
security deposit or any portion thereof to cure any Event of Default
under this Lease or to compensate Landlord for any damage it incurs as
a result of Tenant's failure to perform any of its obligations
hereunder. In such event Tenant shall immediately pay to Landlord an
amount sufficient to replenish the security deposit to the sum
initially deposited with Landlord. If Tenant is not in default at the
expiration or termination of this Lease, Landlord shall return to
Tenant the security deposit or the balance thereof then held by the
security deposit with Landlord's general and other funds, and Landlord
shall not be required to pay interest on the security deposit to
Tenant. Upon termination of Landlord's interest in the Property,
whether by sale of the Property or otherwise, Landlord shall have no
further obligation to Tenant with respect to the security deposit or
any other sums due hereunder and prepaid by Tenant upon transfer of the
security deposit to Landlord's successor in interest.
27. QUIET POSSESSION. Subject to Tenant's full and timely performance of
all its obligations under this Lease and subject to the terms of this
Lease, including Section 21 - "Subordination; Attornment;
Non-Disturbance", Tenant shall have the quiet possession of the
Premises throughout the term of this Lease as against any persons or
entities lawfully claiming by, through or under Landlord.
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28. SECURITY MEASURES. Landlord may, but shall be under no obligation to,
implement security measures for the Building or the Property, such as
the registration or search of all persons entering or leaving the
Building, requiring identification for to the Building, evacuation of
the Building for cause, suspected cause, or for drill purposes, the
issuance of magnetic pass cards or keys for Building or elevator access
and other actions that Landlord deems necessary or appropriate to
prevent any threat of property loss or damage, bodily injury or
business interruption; provided, however, that such measures shall be
implemented in a way as not to unreasonably inconvenience tenants of
the Building. Tenant shall cooperate and comply with, and cause its
Representatives and Visitors to cooperate and comply with, such
security measures. Landlord, its agents and employees shall have no
liability to Tenant or its Representatives or Visitors for any
resulting disturbance of Tenant's use or enjoyment of the Premises.
29. FORCE MAJEURE. In the event Landlord is delayed, interrupted or
prevented from performing any of its obligations under this Lease,
including its obligations under the Construction Rider, and such delay,
interruption or prevention is due to fire, act of God,. governmental
act, strike, labor dispute, unavailability of materials or any other
cause outside the reasonable control of Landlord, then the time for
performance of the affected obligations of Landlord shall be extended
for a period equivalent to the period of such delay, interruption or
prevention.
30. RULES AND REGULATIONS. Tenant shall be bound by and shall comply with
the rules and regulations attached to and made a part of this Lease as
Exhibit C to the extent those rules and regulations are not in conflict
with the terms of this Lease, as well as any reasonable rules and
regulations hereafter adopted by Landlord for all tenants of the
Building, upon notice to Tenant thereof (collectively, the "Building
Rules"). Tenant's failure to comply with such Building Rules shall
constitute a failure to fully perform all the provisions of this Lease.
Landlord shall not be responsible to Tenant or to any other person for
any violation of, or failure to observe, the Building Rules by any
other tenant or other person.
31. LANDLORD'S LIABILITY. The term "Landlord", as used in this Lease, shall
mean only the owner or owners of the Property at the time in question.
Notwithstanding any other term or provision of this Lease, the
liability of Landlord for its obligations under this Lease is limited
solely to Landlord's interest in the Property as the same may from time
to time be encumbered, and no personal liability shall at any time be
asserted or enforceable against any other assets of Landlord or against
Landlord's stockholders, directors, officers or partners on account of
any of Landlord's obligations or actions under this Lease. In addition,
in the event of any conveyance of title to the Building or the
Property, then from and after the date of such conveyance, Landlord
shall be relieved of all liability with respect to Landlord's
obligations to be performed under this Lease after the date of such
conveyance. Upon any conveyance of title to the Building or the
Property, the grantee or transferee, by accepting such conveyance,
shall be deemed to have assumed Landlord's obligations to be performed
under this Lease from and after the date of transfer, subject to the
limitations on liability set forth above in this Section 31.
32. CONSENTS AND APPROVALS. Wherever the consent, approval, judgment or
determination of Landlord is required or permitted under this Lease,
Landlord may exercise its good faith business judgment in granting or
withholding such consent or approval or in making such judgment or
determination without reference to any extrinsic standard of
reasonableness, unless the provision providing for such consent,
approval, judgment or determination specifies that Landlord's consent
or approval is not to be unreasonably withheld, or that such judgment
or determination is to be reasonable, or otherwise specifies the
standards under which Landlord may withhold its consent. If it is
determined that Landlord failed to give its consent where it was
required to do so under this Lease, Tenant shall be entitled to
specific performance but not to monetary damages for such failure.
The review and/or approval by Landlord of any item to be reviewed or
approved by Landlord under the terms of this Lease or any Exhibits
hereto shall not impose upon Landlord any liability for accuracy or
sufficiency of any such item or the quality or suitability of such item
for its intended use. Any such review or approval is for the sole
purpose of protecting Landlord's
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interest in the Property under this Lease, and no third parties,
including Tenant or the Representatives and Visitors of Tenant or any
person or entity claiming by, through or under Tenant, shall have any
rights hereunder.
33. BROKERS. Tenant warrants and represents to Landlord that in the
negotiating or making of this Lease neither Tenant nor anyone acting on
its behalf has dealt with any real estate broker or finder who might be
entitled to a fee or commission for this Lease, with the exception of
Grubb & Ellis Company and Ellwood Commercial Real Estate. Tenant agrees
to indemnify and hold Landlord harmless from any claim or claims,
including costs, expenses and attorney's fees incurred by Landlord
asserted by any other broker or finder for a fee or commission based
upon any dealings with or statements made by Tenant or its
Representatives. Landlord agrees to indemnify and hold Tenant harmless
from any claim or claims, including costs, expenses and attorney's fees
incurred by Tenant asserted by any other broker or finder for a fee or
commission based upon any dealings with or statements made by Landlord
or its Representatives.
34. OTHER RIGHTS RESERVED By LANDLORD. In addition to the foregoing rights,
Landlord retains and shall have the rights set forth below, exercisable
without notice and without liability to Tenant for damage or injury to
property, person or business and without effecting an eviction,
constructive or actual, or disturbance of Tenant's use or possession of
the Premises or giving rise to any claim for set-off or abatement of
Rent:
(a) To change the Building's name.
(b) To install, affix and maintain any and all signs on
the exterior and interior of the Building.
(c) To grant to anyone the exclusive night to conduct any
business or render any service in or to the Building
and its tenants, provided such exclusive right shall
not operate to require Tenant to use or patronize
such business or service or to exclude Tenant from
its use of the Premises expressly permitted herein.
(d) To prohibit the placing of vending or dispensing
machines of any kind in or about the Premises without
the prior written permission of the Landlord.
(e) To reduce, increase, enclose or otherwise change at
any time and from time to time the size, number,
location, lay-out and nature of the common areas and
facilities and other tenancies and premises in the
Property and to create additional rentable areas
through use or enclosure of common areas so long as
parking, access and use of the premises is not
negatively impacted.
35. HAZARDOUS MATERIALS.
35.1 Definitions.
(a) "Hazardous Materials" shall mean any substance: (A)
that now or in the future is regulated or governed
by, requires investigation or remediation under, or
is defined as a hazardous waste, hazardous substance,
pollutant or contaminant under any governmental
statute, code, ordinance, regulation, rule or order,
and any amendment thereto, including for example only
and without limitation, the Comprehensive
Environmental Response Compensation and Liability
Act, 42 U.S.C. ss 9601 et seq., and the Resource
Conservation and Recovery Act, 42 U.S.C. ss 6901 et
seq., or (B) that is toxic, explosive, corrosive,
flammable, radioactive, carcinogenic, dangerous or
otherwise hazardous, including for example only and
without limitation, gasoline, diesel, petroleum
hydrocarbons, polychlorinated biphenyls (PCBs),
asbestos, radon and urea formaldehyde foam
insulation.
(b) "Environmental Requirements" shall mean all present
and future governmental statutes, codes, ordinances,
regulations, rules, orders, permits,
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licenses, approvals, authorizations and other
requirements of any kind applicable to Hazardous
Materials.
(c) "Handle," "Handled," or "Handling" shall mean any
installation, handling, generation, storing,
treatment, use, disposal, discharge, release,
manufacture, refinement, presence, migration,
emission, abatement, removal, transportation, or any
other activity of any type in connection with or
involving Hazardous Materials by Tenant or its
officers, employees, contractors, assignees,
sublessees, agents or invitees.
(d) "Environmental Losses" shall mean all costs and
expenses of any kind, damages, foreseeable and
unforeseeable consequential damages, fines and
penalties incurred in connection with any violation
of and compliance with Environmental Requirements and
all losses of any kind attributable to the diminution
of value, loss of use or adverse effects on
marketability or use of any portion of the Premises
or Property.
35.2 Tenant's Covenants. No Hazardous Materials shall be Handled at
or about the Premises or Property without Landlord's prior
written consent, which consent may be granted, denied, or
conditioned upon compliance with Landlord's requirements, all
in Landlord's absolute discretion. Notwithstanding the
foregoing, normal quantities and use of those Hazardous
Materials customarily used in the conduct of general office
activities, for example, copier fluids and cleaning supplies,
may be used and stored at the Premises without Landlord's
prior written consent. Tenant's activities at or about the
Premises and Property and the Handling of all Hazardous
Materials shall comply at all times with all Environmental
Requirements. At the expiration or termination of the Lease,
Tenant shall promptly remove from the Premises and Property
all Hazardous Materials Handled at the Premises or the
Property. Tenant shall keep Landlord fully and promptly
informed of all Handling of Hazardous Materials.
35.3 Compliance. Tenant covenants and warrants that it shall, at
its own expense, promptly take all actions required by any
governmental agency or entity in connection with the Handling
of Hazardous Materials at or about the Premises or Property,
including without limitation, inspection and testing,
performing all cleanup, removal and remediation work required
with respect to those Hazardous Materials, complying with all
closure requirements and post-closure monitoring, and filing
all required reports or plans. All of the foregoing work and
all Handling of all Hazardous Materials shall be performed in
a good, safe and workmanlike manner by consultants qualified
and licensed to undertake such work and in a manner that will
not interfere with Landlord's use, operation, leasing and sale
of the Property and other tenants' quiet enjoyment of their
premises in the Property. Tenant shall deliver to Landlord
prior to delivery to any governmental agency, or promptly
after receipt from any such agency, copies of all permits,
manifests, closure or remedial action plans, notices, and all
other documents relating to the Handling of Hazardous
Materials at or about the Premises or Property. Tenant shall
remove at its own expense, by bond or otherwise, all liens or
charges of any kind filed or recorded against the Premises or
Property in connection with the Handling of Hazardous
Materials, within ten (10) days after the filing or recording
of such lien or charge, and if Tenant fails to do so, Landlord
shall have the right, but not the obligation, to remove the
lien or charge at Tenant's expense in any manner Landlord
deems expedient.
35.4 Landlord's Rights. Landlord shall have the right, but not the
obligation, to enter the Premises at any reasonable time (i)
to confirm Tenant's compliance with the provisions of this
Section, and (ii) to perform Tenant's obligations under this
Section if Tenant has failed to do so. Landlord shall also
have the right to engage qualified Hazardous Materials
consultants to inspect the Premises and review the Handling of
Hazardous Materials, including review of all permits, reports,
plans, and other documents regarding same. Tenant shall pay
the costs of Landlord's consultants' fees and all costs
incurred by Landlord in performing Tenant's obligations under
this Section. Landlord shall use reasonable efforts to
minimize any interference with
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Tenant's business caused by Landlord's entry into the
Premises, but Landlord shall not be responsible for any
interference caused thereby.
35.5 Tenant's Indemnification. Tenant agrees to indemnify, defend
and hold harmless Landlord and its partners and their
directors, officers, shareholders, employees and agents from
air Environmental Losses and all other claims, losses,
damages, liabilities, costs and expenses of every kind,
including without limitation, reasonable attorneys' and
consultants' fees and costs, incurred at any time by Landlord
arising from or in connection with the Handling of Hazardous
Materials at or about the Premises or Property or Tenant's
failure to comply in full with all Environmental requirements
with respect to the Premises.
Tenant's obligations under this Section shall survive the
expiration or termination of this Lease.
36. ENTIRE AGREEMENT. This Lease, including the Exhibits and any addenda
attached hereto and the documents referred to herein, if any,
constitute the entire agreement between Landlord and Tenant with
respect to the leasing of space by Tenant in the Building, and
supersede all prior or contemporaneous agreements, understandings,
proposals and other representations by or between Landlord and Tenant,
whether written or oral. Neither Landlord nor Landlord's agents have
made any representations or warranties with respect to the Premises,
the Building, the Property or this Lease except as expressly set forth
herein, and no rights, easements or licenses shall be acquired by
Tenant by implication or otherwise unless expressly set forth herein.
The submission of this Lease for examination does not constitute an
option for the Premises and this Lease shall become effective as a
binding agreement only upon execution and delivery thereof by Landlord
to Tenant.
37. MISCELLANEOUS. This Lease may not be amended or modified except by a
writing signed by Landlord and Tenant. Subject to Section 15 -
"Assignment and Subletting" and Section 31 "Landlord's Liability", this
Lease shall be binding on and shall inure to the benefit of the parties
and their respective successors, assigns and legal representatives. The
determination that any provisions hereof may be void, invalid, illegal
or unenforceable shall not impair any other provisions hereof and all
such other provisions of this Lease shall remain in full force and
effect. The unenforceability, invalidity or illegality of any provision
of this Lease under particular circumstances shall not render
unenforceable, invalid or illegal other provisions of this Lease or the
same provisions under other circumstances. So as to avoid the rule
against perpetuities, in all events if the Commencement Date has not
occurred within two (2) years from the date this Lease is signed, all
rights and obligations of the parties hereunder shall terminate. This
Lease shall be construed and interpreted in accordance with the laws of
the state in which the Property is located. The provisions of this
Lease shall be construed in accordance with the fair meaning of the
language used and shall not be strictly construed against either party.
When required by the contents of this Lease, the singular includes the
plural. Wherever the term "including" is used in this Lease, it shall
be interpreted as meaning "including, but not limited to," the matter
or matters thereafter enumerated. The captions contained in this Lease
and for purposes of convenience only and are not to be used to
interpret or construe this Lease. If there be more than one person or
entity as Tenant hereunder, the obligations imposed hereunder shall be
joint and several. Time is of the essence with respect to this Lease,
except as to the conditions relating to the delivery of possession of
the Premises to Tenant. Neither Landlord nor Tenant shall record this
Lease.
38. AUTHORITY. If the Tenant is a corporation or a partnership, each of the
persons executing this Lease on behalf of Tenant warrants and
represents that Tenant is a duly organized and validly existing entity,
that Tenant has full right and authority to enter into this Lease and
that the persons signing on behalf of Tenant are authorized to do so
and have the power to bind Tenant to this Lease. Tenant shall provide
Landlord upon request, with evidence reasonably satisfactory to
Landlord confirming the foregoing representations.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first above written.
LANDLORD: TENANT:
3260 Blume Associates, LLC Ladbroke Racing Corporation
A Delaware Corporation
By: By:
-------------------------- --------------------------------
Its: Its:
-------------------------- --------------------------------
Date: Date:
-------------------------- -------------------------------
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EXHIBIT A
Floor Plan
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EXHIBIT B
CONSTRUCTION RIDER
1. Tenant Improvements.
Landlord shall with reasonable diligence through a contractor
designated by Landlord (which contractor may be an affiliate of
Landlord) to construct and install within the Premises the improvements
and fixtures provided for in this Construction Rider ("Tenant
Improvements").
1.1. Plans.
The Tenant Improvements shall be constructed substantially as
shown on the conceptual space plan for the Premises dated May
28, 1997 (the "Space Plan"), utilizing Building Standard
materials and finishes.
Upon Tenant's approval of the final Space Plan, the Space
Planner will prepare and deliver to Tenant detailed plans and
specifications sufficient to permit the construction of the
Tenant Improvements by Landlord's contractor ("Construction
Documents"). Landlord will provide Tenant with a cost estimate
for Tenant's portion of the work (if any) shown in the
Construction Documents. Tenant shall respond to the
Construction Documents and cost estimate within three (3) days
after receipt thereof, specifying any changes or modifications
Tenant desires in the Construction Documents. The Space
Planner will then devise the Construction Documents and
resubmit them to Tenant for its approval and Landlord will
provide Tenant with a revised cost estimate. Tenant shall
approve or disapprove the same within three (3) days after
receipt. The revised Construction Documents and cost estimate,
as approved by Tenant, are hereinafter referred to as the
"Final Construction Documents" and "Final Cost Estimate,"
respectively.
Additional interior decorating services and advice on the
furnishing and decoration of the Premises, such as the
selection of fixtures, furnishings or design of mill work,
shall be provided by Tenant at its expense, but shall be
subject to the reasonable approval of Landlord.
1.2. Construction.
Upon approval by Tenant of the Final Construction Documents
and the Final Cost Estimate, Landlord shall proceed with
reasonable diligence to cause the Tenant Improvements to be
Substantially Complete. The Tenant Improvements shall be
deemed to be "Substantially Completed" when they have been
completed in accordance with the Final Construction Documents,
except for finishing details, minor omissions, decorations and
mechanical adjustments of the type normally found on an
architectural "punch list". (The definition of Substantially
Completed shall also define the terms "Substantial Completion"
and "Substantially Complete.")
Following Substantial Completion of the Tenant Improvements
and within thirty (30) days after Tenant takes possession of
the Premises, Landlord and Tenant shall inspect the Premises
and jointly prepare a "punch list" of agreed items of
construction remaining to be complete. Landlord shall complete
the items set forth in the punch list as soon as reasonably
possible. Tenant shall cooperate with and accommodate Landlord
and its workers in completing the items on the punch list.
1.3. Cost of Tenant Improvements.
Landlord shall pay for the cost of the Space Plan, the Construction
Documents and the cost to construct and install the Tenant
Improvements, including building standard suite and directory signage.
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1.4. Changes.
If Tenant requests any change, addition or alteration in or to
any Final Construction Documents ("Changes") Landlord shall
cause the Space Planner to prepare additional Plans
implementing such Changes. As soon as practicable after the
completion of such additional Construction Documents, Landlord
shall notify Tenant of the estimated cost of the Changes.
Within three (3) working days after receipt of such cost
estimate, Tenant shall notify Landlord in writing whether
Tenant approves the Changes. If Tenant approves the Changes,
Landlord shall proceed with the Changes and Tenant shall be
liable for any Additional Cost resulting from the Changes. If
Tenant fails to approve the Changes within such three (3) day
period, construction of the Tenant Improvements shall proceed
as provided in accordance with the original Construction
Documents.
1.5. Delays.
Tenant shall be responsible for, and shall pay to Landlord,
any and all costs and expenses incurred by Landlord in
connection with any delay in the commencement or completion of
any Tenant Improvements and any increase in the cost of Tenant
Improvements caused by (i) Tenant's failure to submit
information to the Space Planner or approve any Space Plan,
Construction Documents or cost estimates within the time
periods required herein, (ii) any delays in obtaining any
items or materials constituting part of the Tenant
Improvements requested by Tenant that are not part of the
standard improvements (iii) any Changes, or (iv) any other
delay requested or caused by Tenant (collectively, "Tenant
Delays").
2. Delivery of Premises.
Upon Substantial Completion of the Tenant Improvements, Landlord shall
deliver possession of the Premises to Tenant. If Landlord has not
Substantially Completed the Tenant Improvements and tendered possession
of the Premises to Tenant on or before the Scheduled Commencement Date
specified in Section 2 - Term; Possession of the Lease, or if Landlord
is unable for any other reason to deliver possession of the Premises to
Tenant on or before such date, neither Landlord nor its representatives
shall be liable to Tenant for any damage resulting from the delay in
completing such construction obligations and/or delivering possession
to Tenant and the Lease shall remain in full force and effect unless
and until it is terminated under the express provisions of this
Paragraph. If any delays in Substantially Completing the Tenant
Improvements are attributable to Tenant Delays, then the Premises shall
be deemed to have been Substantially Completed and delivered to Tenant
on the date on which Landlord could have Substantially Completed the
Premises and tendered the Premises to Tenant but for such Tenant
Delays.
Notwithstanding the foregoing. if the Commencement Date has not
occurred or been deemed to have occurred within sixty (60) days after
the Scheduled Commencement Date, Tenant, by written notice to Landlord
given within ten (10) days after the expiration of such sixty (60) day
period, may terminate this Lease without any liability to Landlord,
provided, however, that if the delay in the Commencement Date is caused
by delays of the type described in Section 29 Force Majeure of the
Lease, and if Tenant elects to terminate as provided above, then Tenant
shall reimburse Landlord, within thirty (30) days after receipt of
notification from Landlord of the amounts due, for any amounts expended
by Landlord for the construction and installation of the Tenant
Improvements. If Tenant fails to perform any of Tenant's obligations
under this Construction Rider within the time periods specified herein,
Landlord may terminate the Lease or, in lieu of terminating the Lease
under the foregoing, provisions, treat such failure of performance as
an Event of Default under the Lease.
3. Access to Premises.
Landlord shall allow Tenant and Tenant's Representatives to enter the
Premises prior to the Commencement Date to permit Tenant to make the
Premises ready for its use and occupancy; provided, however, that prior
to such entry of the Premises, Tenant shall provide evidence reasonably
satisfactory to Landlord that Tenant's insurance, as described in Section
12.1 - Tenant's Insurance of the Lease, shall be in effect prior to the
time of such entry. Such permission may be revoked at any time upon
twenty-four (24) hours' notice, and Tenant and its
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Representatives shall not interfere with Landlord or Landlord's
contractor in completing the Building or the Tenant Improvements.
Tenant agrees that Landlord shall not be liable in any way for any
injury, loss or damage which may occur to any of Tenant's property placed
upon or installed in the Premises prior to the Commencement Date, the
same being at Tenant's sole risk, and Tenant shall be liable for all
injury, loss or damage to persons or property arising as a result of such
entry into the Premises by Tenant or its Representatives.
4. Ownership of Tenant Improvements.
All Tenant Improvements, whether installed by Landlord or Tenant, shall
become a part of the Premises, shall be come property of Landlord and,
subject to the provisions of the Lease, shall be surrendered by Tenant
with the Premises, without any compensation to Tenant, at the expiration
or termination of the Lease in accordance with the provisions of the
Lease.
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EXHIBIT C
BUILDING RULES
The following Building Rules are additional provisions of the foregoing Lease to
which they are attached. The capitalized terms used herein have the same
meanings as these terms are given in the Lease.
1. Use of Common Areas.
Tenant will not obstruct the sidewalks, halls, passages, exits,
entrances, elevators or stairways of the Building ("Common Areas"), and
Tenant will not use the Common Areas for any purpose other than ingress
and egress to and from the Premises. The Common Areas, except for the
sidewalks, are not open to the general public and Landlord reserves the
right to control and prevent access to the Common areas or any person
whose presence, in Landlord's opinion, would be prejudicial to the
safety, reputation and interests of the Building and its tenants.
2. No Access to Roof.
Tenant has no right of access to the roof of the Building and will not
install, repair or replace any antenna, aerial, aerial wires, fan,
air-conditioner or other device on the roof of the Building, without
the prior written consent of Landlord. Any such device installed
without such written consent is subject to removal at Tenant's expense
without notice at any time. In any event Tenant will be liable for any
damages or repairs incurred or required as a result of its
installation, use, repair, maintenance or removal of such devices on
the roof and agrees to indemnify and hold harmless Landlord from any
liability, loss, damage, cost or expense, including reasonable
attorneys' fees, arising from any activities of Tenant or of Tenant's
representatives on the roof of the Building.
3. Signage.
No sign, placard, picture, name, advertisement or notice visible from
the exterior of the Premises will be inscribed, painted, affixed or
otherwise displayed by Tenant on or in any part of the Building without
the prior written consent of Landlord. Landlord reserves the right to
adopt and furnish Tenant with general guidelines relating to signs in
or on the Building. All approved signage will be inscribed, painted or
affixed at Tenant's expense by a person approved by Landlord, which
approval will not be unreasonably withheld.
4. Prohibited Uses.
The Premises will not be used for manufacturing, for the storage of
merchandise held for sale to the general public, for lodging or for the
sale of goods to the general public. Tenant will not permit any food
preparation on the Premises except that Tenant may use Underwriters'
Laboratory approved equipment for brewing coffee, tea, hot chocolate
and similar beverages so long as such use is in accordance with all
applicable federal, state and city laws, codes, ordinances, rules and
regulations.
5. Janitorial Services.
Tenant will not employ any person for the purpose of cleaning the
Premises or permit any person to enter the Building for such purpose
other than the Landlord's janitorial service, except with Landlord's
prior written consent. Tenant will not necessitate, and will be liable
for the cost of, any undue amount of janitorial labor by reason of
Tenant's carelessness in or indifference to the preservation of good
order and cleanliness in the Premises. Janitorial service will not be
furnished to areas in the Premises on nights when such areas are
occupied after 9:30 p.m., unless such service is extended by written
agreement to a later hour in specifically designated areas of the
Premises.
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6. Keys and Locks.
Landlord will furnish Tenant, free of charge, two keys to each door or
lock in the Premises. Landlord may make a reasonable charge for any
additional or replacement keys. Tenant will not duplicate any keys,
alter any locks or install any new or additional lock or bolt on any
door of its Premises or on any other part of the Building without the
prior written consent of Landlord and, in any event, Tenant will
provide Landlord with a key for any such lock. On the termination of
the Lease, Tenant will deliver to Landlord all keys to any locks or
doors in the Building which have been obtained by Tenant.
7. Freight.
Upon not less than twenty-four hours prior notice to Landlord, which
notice may be verbal, an elevator will be made available for Tenant's
use for transportation of freight, subject to such scheduling as
Landlord in its discretion deems appropriate. Tenant shall not
transport freight in loads exceeding the weight limitations of such
elevator. Landlord reserves the right to prescribe the weight, size and
position of all equipment, materials, furniture or other property
brought into the Building, and no property will be received in the
Building or carried up or down the freight elevator or stairs except
during such hours and along such routes and by such persons as may be
designated by Landlord. Landlord reserves the right to require that
heavy objects will stand on wood strips of such length and thickness as
is necessary to property distribute the weight. Landlord will not be
responsible for loss of or damage to any such property from any cause,
and Tenant will be liable for all damage or injuries caused by moving
or maintaining such property.
8. Nuisances and Dangerous Substances.
Tenant will not conduct itself or permit its agents, employees,
contractors or invitees to conduct themselves, in the Premises or
anywhere on or in the Property in a manner which is offensive or unduly
annoying to any other Tenant or Landlord's property managers. Tenant
will not install or operate any phonograph, radio receiver, musical
instrument, or television or other similar device in any part of the
Common Areas and shall not operate any such device installed in the
Premises in such manner as to disturb or annoy other tenants of the
Building. Tenant will not use or keep in the Premises or the Property
any kerosene, gasoline or other combustible fluid or material other
than limited quantities thereof reasonably necessary for the
maintenance of office equipment, or, without Landlord's prior written
approval, use any method of heating or air conditioning other than that
supplied by Landlord. Tenant will not use or keep any foul or noxious
gas or substance in the Premises or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors or
vibrations, or interfere in any way with other tenants or those having
business therein. Tenant will not bring or keep any animals in or about
the Premises or the Property.
9. Building Name and Address.
Without Landlord's prior written consent, Tenant will not use the name
of the Building in connection with or in promoting or advertising
Tenant's business except as Tenant's address.
10. Building Directory.
A directory for the Building will be provided for the display of the
name and location of tenants. Landlord reserves the right to approve
any additional names Tenant desires to place in the directory and, if
so approved, Landlord may assess a reasonable charge for adding such
additional names.
11. Window Coverings.
No curtains, draperies, blinds, shutters, shades, awnings, screens or
other coverings, window ventilators, hangings, decorations or similar
equipment shall be attached to, hung or placed in, or used in or with
any window of the Building without the prior written consent of
Landlord,
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and Landlord shall have the right to control all lighting within the
Premises that may be visible from the exterior of the Building.
12. Floor Coverings.
Tenant will not lay or otherwise affix linoleum, tile, carpet or any
other floor covering to the floor of the Premises in any manner except
as approved in writing by Landlord. Tenant will be liable for the cost
of repair of any damage resulting from the violation of this rule or
the removal of any floor covering by Tenant or its contractors,
employees or invitees.
13. Electrical Installations.
Landlord will direct Tenant's electricians as to where and how
telephone, telegraph and electrical wires are to be installed. No
boring or cuffing for wires will be allowed without the prior written
consent of Landlord. The location of burglar alarms, smoke detectors,
telephones, call boxes and other office equipment affixed to the
Premises shall be subject to the written approval of Landlord.
14. Office Closing Procedures.
Tenant will see that the doors of the Premises are closed and locked
and that all water faucets, water apparatus and utilities are shut off
before Tenant or its employees leave the Premises, so as to prevent
waste or damage. Tenant will be liable for all damage or injuries
sustained by other tenants or occupants of the Building or Landlord
resulting from Tenant's carelessness in this regard or violation of
this rule. Tenant will keep the doors to the Building corridors closed
at all times except for ingress and egress.
15. Plumbing Facilities.
The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be
disposed of therein. Tenant will be liable for any breakage, stoppage
or damage resulting from the violation of this rule by the Tenant, its
employees or invitees.
16. Use of Hand Trucks.
Tenant will not use or permit to be used in the Premises or in the
Common Areas any hand trucks, carts or dollies except those equipped
with rubber tires and side guards or such other equipment as Landlord
may approve.
17. Refuse.
Tenant will store all its trash and garbage within the Premises. No
material will be placed in the trash boxes or receptacles if such
material may not be disposed of in the ordinary and customary manner of
removing and disposing of trash and garbage in the city in which the
Building is located without being in violation of any law or ordinance
governing such disposal. All trash and garbage removal will be only
through such Common Areas provided for such purposes and at such times
as Landlord may designate.
18. Soliciting.
Canvassing, peddling, soliciting and distribution of handbills or any
other written materials in the Building are prohibited, and Tenant will
cooperate to prevent the same.
19. Parking.
Tenant will use, and will cause its agents, employees, contractors and
invitees to use, the parking spaces to which it is entitled under the
Lease in a manner consistent with Landlord's directional signs and
markings in the Parking Facility. Specifically, but without limitation,
Tenant will not park, or permit its agents, employees, contractors or
invitees to park, in a
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manner that impedes access to and from the Building or the Parking
Facility or that violates space reservations for handicapped drivers
registered as such with the California Department of Motor Vehicles.
Landlord may use such reasonable means as may be necessary to enforce
the directional signs and markings in the Parking Facility.
20. Fire, Security and Safety Regulations.
Tenant will comply with all safety, security, fire protection and
evacuation measures and procedures established by Landlord or any
governmental agency.
21. Responsibility for Theft.
Tenant assumes any and all responsibility for protecting the Premises
from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
22. Sales and Auctions.
Tenant will not display or sell merchandise outside the exterior walls
and doorways of the Premises nor use such areas for storage. Tenant
will not install any exterior lighting, amplifiers or similar devices
or use in or about the Premises an advertising medium which may be
heard or seen outside the Premises, including flashing lights,
searchlights, loudspeakers, phonographs or radio broadcasts. Tenant
will not conduct or permit to be conducted any sale by auction in, upon
or from the Premises or elsewhere in the Property, whether said auction
be voluntary, involuntary, pursuant to any assignment for the payment
of creditors or pursuant to any bankruptcy or other insolvency
proceeding.
23. Enforcement.
Landlord may waive any one or more of these Building Rules for the
benefit of any particular tenant or tenants, but no such waiver by
Landlord will be construed as a waiver of such Building Rules in favor
of any other tenant or tenants nor prevent Landlord from thereafter
enforcing these Building Rules against any or all of the tenants of the
Building.
24. Effect on Lease.
These Building Rules are in addition to, and shall not be construed to
in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of the Lease. Violation of these Building
Rules constitutes a failure to fully perform the provisions of the
Lease, as referred to in Section 16.1 - "Events of Default".
25. Additional and Amended Rules.
Landlord reserves the right to rescind or amend these Building Rules
and/or adopt any other and reasonable rules and regulations as in its
judgment may from time to time be needed for the safety, care and
cleanliness of the Building and for the preservation of good order
therein.
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EXHIBIT D
ADDITIONAL PROVISIONS RIDER
1. Parking.
Tenant shall have the right to use seventeen (17) unreserved stall in
the Building parking facilities in common with other tenants of the
Building at no additional charge. Tenant agrees not to overburden the
parking facilities and agrees to cooperate with Landlord and other
tenants in use of the parking facilities. Landlord reserves the right
in its absolute discretion to determine whether the parking facilities
are becoming overburdened and to allocate and assign parking spaces
among Tenant and other tenants, and to reconfigure the parking area or
modify the existing ingress to and egress from the parking area as
Landlord shall deem appropriate.
2. Termination Agreement
Provided that Tenant is not in default, nor has been in default during
the term of the Lease, Tenant shall have a one time right to cancel
this Lease on the third (3rd) anniversary with one-hundred eighty (180)
days prior written notice to Landlord. In the event Tenant terminates
this Lease, Tenant will pay to Landlord all unamoritized leasing costs
to include leasing commissions, tenant improvements, permits and fees.
In addition, Tenant will pay Landlord two (2) months rent.
3. Expansion Right of First Refusal
Tenant will have the right to expand the Premises an additional 1,500
square feet on the same terms and conditions as contained in this Lease
(the "Expansion"). In the event Landlord receives a bona fide offer to
lease space which covers such expansion area, which Landlord intends to
accept, Landlord will give notice of such offer to Tenant. Tenant will
have three (3) business days after receipt of such offer to decide
whether to exercise the Expansion, provided that in such event, such
expansion will be at the rental rate as set forth in the offer and is
conditioned upon Tenant waiving the termination right set forth in
Section 2 of this Exhibit D.
<PAGE>
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (this "Amendment") is made as of
the 5th day of February, 1999 (the "Effective Date") by and between 3260 Blume
Drive Associates ("Landlord" and Ladbroke Racing Corporation ('Tenant").
RECITALS
A. Landlord and Tenant are parties to that certain Office Lease dated
as of July 7, 1997 (the "Lease"), for certain premises containing approximately
4,333 rentable square feet of space commonly known as Suite 500 (the
"Premises"), in the building located at 3260 Blume Drive, Richmond, California
(The Building").
B. Landlord and Tenant desire to amend the Lease to provide for the
expansion of the space and to make certain additional amendments to the Lease as
are more particularly described herein.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, the capitalized words
and terms used in this Amendment shall have the meanings ascribed to them in the
Lease.
2. Premises. The square footage shall be increased by 2,721 rentable
square feet for a total of 7,054 rentable square feet. The existing Premises and
the Expansion Premises are outlined as shown on Exhibit A.
3. Base Rent. The Base Monthly Rent shall be increased to incorporate
the expansion space and the total monthly Base Rent will be as follows:
March 1, 1999 through July 31, 1999: $11,991.80
August 1, 1999 through July 31, 2002: $12,334.50
3.1. Landlord will not be responsible for 1) any delays caused
by Tenant in approving Construction Documents within the time period required,
2) delay in obtaining any items or materials constituting part of the Tenant
Improvements requested by Tenant that are not part of the standard improvements,
3) any Changes, or 4) any other delay requested or caused by Tenant.
4. Condition of Premises. Landlord, at its sole cost and expense, shall
provide and install improvements as shown on the attached Exhibit A, Page 1 of
1, dated 1/19/99 in accordance with Exhibit 8 to the Lease with the same quality
as tenant's existing space with the Scheduled Commencement Date for the
expansion premises being March 1, 1999.
5. No Brokers. Tenant represents and warrants that Tenant has had no
dealings or communications with any broker or agent in connection with this
Amendment other than Grubb & Ellis Company ('Broker's"), and that no person or
entity is entitled to any brokerage commission or finder's fee on account of the
negotiation, execution, delivery, and consummation of this Amendment, other than
any commission which may be payable by Landlord to Broker. Tenant hereby agrees
to indemnify Landlord and to hold Landlord free and harmless of and from any and
all claims, losses, damages, costs and expenses of whatsoever nature, including
attorney's fees and cost of litigation. arising from or relating to, any
brokerage commissions or finders fees payable or alleged to be payable by reason
of any act of Tenant in connection with this Amendment or its negotiation,
excluding any amounts payable to Brokers.
<PAGE>
6. Exhibit D, Paragraph 1. Parking. The parking allocation is increased
to twenty-eight (28) unreserved stalls.
7. Exhibit D. Paragraph 2. Termination Agreement. This paragraph is
canceled in its entirety.
8 Exhibit D. Paragraph 3. Expansion Right of First Refusal. This
paragraph is canceled in its entirety.
9. Miscellaneous.
9.1 Except as modified by this Amendment, all of the terms,
conditions and provisions of the Lease shall remain in full force and effect and
are hereby ratified and confirmed. To the extent the terms of the Lease and this
Amendment are inconsistent, the terms of the Amendment shall control.
9.2 The submission of this Amendment to Tenant for examination
or execution does not create an option or constitute an offer to Tenant to amend
the Lease on the terms and conditions contained herein, and this Amendment shall
not become effective as an Amendment to the Lease unless and until it has been
executed and delivered by both Landlord and Tenant. By executing and delivering
this Amendment, the person or persons signing on behalf of Tenant represent and
warrant that they have the requisite authority to bind Tenant.
9.3 This Amendment contains the entire agreement of Landlord
and Tenant with respect to the subject matter hereof. There are no oral
agreements between Landlord and Tenant affecting the Lease as hereby amended,
and this Amendment supersedes and cancels any and all previous negotiations,
representations, agreements and understandings, if any, between Landlord and
Tenant and their respective agents with respect to the subject matter hereof,
and none shall be used to interpret to construe the Lease as amended hereby.
Tenant acknowledges that prior communications from Landlord and its agents were
not and are not, and shall not be construed to be representations or warranties
by Landlord or its agents as the matters communicated, and have not and will not
be relied upon by Tenant.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed as of the day and year first written above.
"Landlord" "Tenant"
3260 Blume Drive Associates Ladbroke Racing Corporation
By:/s/ Richard Granzella By:/s/ George P. Harbison
----------------------------------- -------------------------------------
Its: Manager Its: VP/CFO
------------------------------- --------------------------------
Date: 2/3/99 Date: 2/2/99
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EXHIBIT B
(Premises Floor Plan)
