Document:

Exhibit 10.14

 

LEASE

 

 

278 UNIVERSITY INVESTORS, LLC,

a California limited liability company

 

as Landlord,

 

 

and

 

 

INVITAE CORPORATION,

a Delaware corporation,

 

as Tenant

 

 

SUMMARY OF BASIC LEASE INFORMATION

 

This Summary of Basic Lease Information (“Summary”) is hereby incorporated into and made a part of the attached Lease. Each reference in the Lease to any term of this Summary shall have the meaning as set forth in this Summary for such term. In the event of a conflict between the terms of this Summary and the Lease, the terms of the Lease shall prevail. Any capitalized terms used herein and not otherwise defined herein shall have the meaning as set forth in the Lease.

 

TERMS OF LEASE

 

	
1.
    	
Date:
    	
OCT 31, 2012
    
	
 
    	
 
    	
 
    
	
2.
    	
Landlord:
    	
278 UNIVERSITY INVESTORS, LLC,
    
	
 
    	
 
    	
a California limited liability company
    
	
 
    	
 
    	
 
    
	
3.
    	
Address of Landlord (Section 26.19):
    	
278 UNIVERSITY INVESTORS, LLC
    
	
 
    	
 
    	
c/o Ventana Property Services
    
	
 
    	
 
    	
975 High St.
    
	
 
    	
 
    	
Palo Alto, CA 94301
    
	
 
    	
 
    	
Attn: Joseph F. Martignetti, Jr.
    
	
 
    	
 
    	
 
    
	
4.
    	
Tenant:
    	
INVITAE CORPORATION,
    
	
 
    	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
5.
    	
Address of Tenant (Section 26.19):
    	
Prior to Rent Commencement Date:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
INVITAE CORPORATION
    
	
 
    	
 
    	
458 Brannan St. 
    
	
 
    	
 
    	
San Francisco, CA 94107 
    
	
 
    	
 
    	
Attention: Richard Tompane
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
From and After Rent Commencement Date:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
INVITAE CORPORATION
    
	
 
    	
 
    	
The Premises
    
	
 
    	
 
    	
Attention: Richard Tompane
    
	
 
    	
 
    	
 
    
	
6.
    	
Premises (Article 1):
    	
 
    

 

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TERMS OF LEASE

 

	
 
    	
6.1
    	
Premises:
    	
Approximately eight thousand three hundred forty eight (8,348)   rentable square as determined by Landlord’s method of measurement (which has   been explained to Tenant) and, for purposes of this Lease, agreed to contain   such number of square feet. The Premises is located on the first and second   floor of the Building (as defined below) and consists of (i) six   thousand four hundred ninety nine (6,499) rentable square feet located on the   second floors of the Building and commonly known as Suite 200, as   described more particularly in Exhibit A-1 attached hereto   (collectively, the “Second Floor Premises”),   and (it) one thousand eight hundred forty nine (1,849) rentable square feet   located on the first floor of the Building and commonly known as   Suite 120, as described more particularly in Exhibit A-2   attached hereto (collectively, the “First   Floor Premises”). The Building and the Premises are not subject to   re-measurement unless, pursuant to a written amendment to this Lease signed   by both Landlord and Tenant, space is subtracted therefrom or additional   space is added thereto. Recognizing that both Landlord and Tenant have agreed   to the foregoing rentable square footage number and have agreed that there   will be no re-measurement except as expressly provided above, Landlord has   given Tenant the opportunity to measure the Building and the Premises and has   encouraged Tenant to do so, and Tenant hereby confirms that it has elected,   in its sole discretion and without reliance on any representation by Landlord   or its agents or any brokers, not to measure the Building or the Premises.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.2
    	
Building:
    	
The building to be constructed pursuant to this Lease which is to be   located at 278 University Avenue, Palo Alto, California, together with any   alterations, modifications, replacements or renovations thereto following the   mutual execution and delivery of this Lease
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
Term (Article 2):
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.1
    	
Lease Term:
    	
Approximately seven (7) years, unless sooner terminated or   extended in accordance with the provisions of this Lease.
    

 

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TERMS OF LEASE

 

	
 
    	
7.2
    	
Lease Commencement Date:
    	
The date that Landlord delivers the Premises to Tenant in a condition   enabling Tenant to commence its Tenant Improvements (as defined in   Exhibit B attached hereto), as reasonably determined by Landlord. The   Lease Commencement Date is anticipated to be November 1, 2012 (the “Anticipated Lease Commencement Date”).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.3
    	
Rent Commencement Date;
    	
The date that is one hundred five (105) days following the Lease   Commencement Date; provided that, in the event Tenant first conducts business   in the Premises prior to said date, the Rent Commencement Date shall be the   date Tenant first conducts business in the Premises.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.4
    	
Lease Expiration Date:
    	
The last day of the month in which the seventh (7th) anniversary of the Rent   Commencement Date occurs.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.5
    	
Option to Extend:
    	
One (1) extension term of seven (7) years
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
Base Rent (Article 3):
    	
 
    

 

	
 
    	
 
    	
Monthly
    	
 
    
	
 
    	
 
    	
Installment
    	
 
    
	
Months
    	
 
    	
of Base Rent
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Rent   Commencement Date -12th full calendar month of Term
    	
 
    	
$
    	
55,514.20
    	
 
    
	
Months   13-24
    	
 
    	
$
    	
57,179.63
    	
 
    
	
Months   25-36
    	
 
    	
$
    	
58,895.01
    	
 
    
	
Months   37-48
    	
 
    	
$
    	
60,661.87
    	
 
    
	
Months   49-60
    	
 
    	
$
    	
62,481.72
    	
 
    
	
Months   61-72
    	
 
    	
$
    	
64,356.17
    	
 
    
	
Months   73- Lease Expiration Date
    	
 
    	
$
    	
66,286.86
    	
 
    

 

	
9.
    	
Additional Rent (Article 4):
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.1
    	
Tenant’s Share of Operating Expenses, Tax Expenses and Utilities   Costs:
    	
 
    
	
 
    	
 
    	
40.76
    	
%
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
Security Deposit (Article 20):
    	
$
    	
992,807.68
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
11.
    	
Parking (Article 24):
    	
None.
    
	
 
    	
 
    	
 
    	
 
    
	
12.
    	
Brokers (Section 26.25):
    	
Cornish & Carey Newmark Knight Frank representing Landlord   and Cresa representing Tenant
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
Guarantor(s) (Section 26.32):
    	
None
    
							

 

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LEASE

 

This Lease, which includes the preceding Summary and the exhibits attached hereto and incorporated herein by this reference, dated as of the date set forth in Section 1 of the Summary, is made by and between 278 UNIVERSITY INVESTORS, LLC, a California limited liability company (“Landlord”), and INVITAE CORPORATION, a Delaware corporation (“Tenant”).

 

ARTICLE 1

 

REAL PROPERTY, BUILDING AND PREMISES

 

1.1          Real Property, Building and Premises.

 

1.1.1       Premises and Real Property. Upon and subject to the terms, covenants and conditions hereinafter set forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the premises set forth in Section 6.1 of the Summary (the “Premises”), which Premises are located in the Building defined in Section 6.2 of the Summary (the “Building”). The outline of the floor plan of the Premises is set forth in Exhibit A-1 and Exhibit A-2 attached hereto. The Building, any outside plaza areas, land and other improvements surrounding the Building which are designated from time to time by Landlord as common areas appurtenant to or servicing the Building, and the land upon which any of the foregoing are situated, are herein sometimes collectively referred to as the “Real Property”.

 

1.1.2       Tenant’s and Landlord’s Rights. Tenant is hereby granted the right to the nonexclusive use of the common corridors and hallways, stairwells, elevators, restrooms and other public or common areas located in the Building or on the Real Property that are designated by Landlord from time to time as common areas for the Building (collectively, the “Common Areas”) for the purposes for which they were designed and intended and for no other purposes whatsoever; provided, however, that (i) Tenant’s use thereof shall be subject to (A) the provisions of any covenants, conditions and restrictions regarding the use thereof now or hereafter recorded against the Real Property, and (B) the rules and regulations set forth in Exhibit D attached hereto, and such reasonable, nondiscriminatory revisions to such rules and regulations not inconsistent with the terms and provisions of this Lease, as Landlord may make from time to time (which shall be provided in writing to Tenant), and (ii) subject to Article 25 below, Tenant may not go on the roof of Building without Landlord’s prior consent (which may be withheld in Landlord’s sole and absolute discretion) and without otherwise being accompanied by a representative of Landlord, Landlord reserves the right from time to time to use any of the Common Areas of the Building, and the roof, risers and conduits of the Building for telecommunications and/or any other purposes, and to do any of the following: (1) make any changes, additions, improvements, repairs and/or replacements in or to the Real Property or any portion or elements thereof, including, without limitation, (x) changes in the location, size, shape and number of driveways, entrances, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways, public and private streets, plazas, courtyards, transportation facilitation areas and Common Areas, and (y) expanding or decreasing the size of the Real Property and the Building and any Common Areas and other elements thereof, thereon and therefrom; (2) close temporarily any of the Common Areas while engaged in making repairs, improvements or alterations to the Building; and (3) perform such other acts and make such other changes with respect to the Building as Landlord may, in the exercise of good faith business judgment, deem to be appropriate. Landlord reserves the right from time to time to grant, without the consent or joinder of Tenant, such easements, rights of way and dedications that Landlord deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights of way and dedications do not unreasonably interfere with the use of the Premises by Tenant or Tenant’s access to the Premises, and do not increase Tenant’s obligations hereunder. Tenant agrees to execute any documents reasonably requested by Landlord to effectuate any such easement rights, dedications, maps or restrictions.

 

1.2          Condition of Premises. Tenant acknowledges that, as of the date of this Lease, the Building has not yet been constructed and the Landlord Work has not been completed. Landlord warrants that (i) the Landlord Work shall be Substantially Completed in accordance with the Final Warm Shell Plans (as defined in Exhibit B attached hereto), as modified by any Change Orders (as defined in Exhibit B attached hereto) approved in writing by Landlord and Tenant pursuant to the express provisions of Exhibit B, subject only to items described in the Punch List, (ii) upon Substantial Completion of the Landlord Work, the then existing electrical, plumbing, lighting, and

 

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heating, ventilating and air conditioning systems are in good working condition and repair subject to maintenance, repairs or replacement required by the negligence, misuse or misconduct of Tenant or alterations or improvements made by Tenant and (iii) upon Substantial Completion of the Landlord Work, all interior and exterior elements of the Building for which Landlord is responsible as part of the Landlord Work shall be constructed in compliance with all Laws (as defined below) (specifically including, without limitation, accessibility Laws) applicable thereto for general office use (as opposed to any specific use intended by Tenant) to the extent such Laws were applicable to the Landlord Work at the time of construction. The warranty described in the foregoing sentence shall commence upon Substantial Completion of the Landlord Work and shall continue for a period of one hundred twenty (120) days thereafter (the “Warranty Period”), In the event that Tenant discovers a breach of the warranties expressly described in this Section 1.2, Tenant shall promptly notify Landlord of such noncompliance. In the event Tenant notifies Landlord of any noncompliance with said warranties during the Warranty Period and as Tenant’s sole and exclusive remedy for a breach of said warranties, Landlord shall promptly undertake to complete any required repairs or replacements identified in Tenant’s notice and such repairs or replacements shall be expeditiously completed at Landlord’s sole cost and expense, without reimbursement by Tenant. Except as otherwise expressly set forth in this Section 1.2 and for such contractor warranties assigned by Landlord to Tenant as set forth in Exhibit B hereunder, Landlord makes no warranties with regard to the condition of the Premises or the Building and Landlord shall not be obligated to provide or pay for any improvement, remodeling or refurbishment work or services related to the improvement, remodeling or refurbishment of the Premises, and Tenant shall accept the Premises in its “AS IS” condition on the Lease Commencement Date. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD HEREBY DISCLAIMS, AND TENANT WAIVES THE BENEFIT OF, ANY AND ALL IMPLIED WARRANTEES, INCLUDING IMPLIED WARRANTIES OF HABIT ABILITY AND FITNESS OR SUITABILITY FOR A PARTICULAR PURPOSE.

 

1.3          Rentable Square Feet. The parties hereby stipulate that the Premises contain the rentable square feet set forth in Section 6.1 of the Summary, and such square footage amount is not subject to adjustment or remeasurement by Landlord or Tenant. Accordingly, there shall be no adjustment in the Base Rent or other amounts set forth in this Lease which are determined based upon rentable or usable square feet of the Premises and Tenant hereby waives any and all claims at law or in equity based on the determination of rentable square feet set forth in Section 6.1 of the Summary.

 

ARTICLE 2

 

LEASE TERM

 

2.1          Initial Lease Term. The terms and provisions of this Lease shall be effective as of the date of this Lease except for the provisions of this Lease relating to the payment of Rent. The term of this Lease (the “Lease Term”) shall be as set forth in Section 7.1 of the Summary and shall commence on Lease Commencement Date described in Section 7.2 of the Summary and shall terminate on the Lease Expiration Date set forth in Section 7.4 of the Summary, unless this Lease is sooner terminated or extended as hereinafter provided. If Landlord does not deliver possession of the Premises to Tenant on or before the Anticipated Lease Commencement Date (as set forth in Section 7.2 of the Summary) or any other date, Landlord shall not be subject to any liability nor shall the validity of this Lease nor the obligations of Tenant hereunder be affected. Notwithstanding the foregoing provisions of this Section 2.1 or anything else in this Lease to the contrary, if the Lease Commencement Date does not occur prior to April 1,2013 for any reason other than delays caused by Tenant, Tenant shall have the right, as Tenant’s sole and exclusive remedy for a delivery failure, to terminate this Lease by written notice to Landlord delivered prior to the Lease Commencement Date and upon such termination all sums previously deposited with Landlord shall be refunded to Tenant and thereafter the parties shall have no further rights or obligations hereunder (except to the extent otherwise expressly set forth herein). Within a reasonable period of time after the date Tenant takes possession of the Premises Landlord shall deliver to Tenant a Commencement Date Memorandum in the form attached hereto as Exhibit C, attached hereto, setting forth the Lease Commencement Date, the Rent Commencement Date and the Lease Expiration Date, and Tenant shall execute and return such amendment to Landlord within ten (10) days after Tenant’s receipt thereof. If Tenant fails to execute and return the amendment within such 10-day period, Tenant shall be deemed to have approved and confirmed the dates set forth therein, provided that such deemed approval shall not relieve Tenant of its obligation to execute and return the amendment.

 

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2.2          Options to Extend. Provided the Lease is in full force and effect and no Event of Default is outstanding at the time of notification or commencement, Tenant shall have the option to extend the Term of this Lease as set forth in Section 7.5 of the Summary, on the same terms and conditions set forth in the Lease, except as modified by the terms, covenants and conditions as set forth herein. The extension right described herein is personal to INVITAE CORPORATION, a Delaware corporation and its Permitted Transferees (as defined below), and shall not otherwise be assigned or transferred and may only be exercised if Tenant is then in possession of the entire Premises If Tenant elects to exercise said option, then Tenant shall provide Landlord with written notice of such election not more than fifteen (15) months or less than nine (9) months prior to the then existing Lease Expiration Date, time being of the essence. If Tenant fails to timely provide such notice, Tenant shall have no further or additional right to extend or renew the term of the Lease. Any extension of the Term shall be upon all the terms and conditions set forth in this Lease, except that: (i) Landlord shall not be obligated to perform any remodeling, renovation, alteration or improvement work in the Premises; (ii) Landlord shall not be obligated to pay any commission to any broker with regard to extension of the Term; (iii) Base Rent for the extension term shall be at Fair Market Rental (as defined below) for the Premises.

 

2.2.1.      For the extension period, the Rent in effect at the expiration of the then current term of the Lease shall be adjusted to reflect the then current Fair Market Rental. “Fair Market Rental” shall mean the monthly amount, projected during the relevant period of time, that a willing, comparable non-equity tenant (excluding sublease and assignment transactions) would pay, and a willing comparable landlord of a comparable quality office building located in the Downtown Palo Alto rental market would accept, at arm’s length, to renew a lease for space of comparable size, quality, ceiling height, loading capabilities and power capacities as the Premises, taking into account the age, quality and layout of the Premises and also taking into account the provisions of this Lease and other items that professional real estate brokers customarily consider in calculating renewal rents such as current rental rates, escalation clauses, operating expense pass-through charges, rent abatement provisions (if any), tenant improvement allowances (if any), tenant size and creditworthiness and other factors typically considered by landlords of such similar facilities in the Downtown Palo Alto rental market. Notwithstanding the foregoing, in no event shall the Fair Market Rental for the option period be less than the highest per square foot Base Rent during the preceding period of the Lease Term.

 

2.2.2.      Landlord and Tenant shall endeavor to agree upon the Fair Market Rental. If they are unable to so agree within thirty (30) days after receipt by Landlord of Tenant’s notice of exercise of an option, Landlord and Tenant shall mutually select a licensed real estate broker who is active in the leasing of similar buildings in the Downtown Palo Alto rental market. If Landlord and Tenant are unable to agree on a broker within fifteen (15) days following the expiration of said thirty (30) day period, the parties shall jointly petition the Superior Court of San Mateo County to appoint a neutral broker similarly qualified. Landlord shall submit Landlord’s determination of Fair Market Rental and Tenant shall submit Tenant’s determination of Fair Market Rental to such broker, at such time or times and in such manner as Landlord and Tenant shall agree (or as directed by the broker if Landlord and Tenant do not promptly agree). The broker shall select either Landlord’s or Tenant’s determination as the Fair Market Rental, and such determination shall be binding on Landlord and Tenant. If Tenant’s determination is selected as the Fair Market Rental, then Landlord shall bear all of the broker’s cost and fees. If Landlord’s determination is selected as the Fair Market Rental, then Tenant shall bear all of the broker’s cost and fees.

 

2.2.3.      In the event the Fair Market Rental for the option period has not been determined at such time as Tenant is obligated to pay Base Rent for said period, Tenant shall pay as Base Rent pending such determination, the Base Rent in effect for such space immediately prior to the option period; provided, that upon the determination of the applicable Fair Market Rental, any shortage of Base Rent paid, together with interest at the rate specified in the Lease, shall be paid to Landlord by Tenant.

 

ARTICLE 3

 

BASE RENT

 

Commencing on the Rent Commencement Date, Tenant shall pay, without notice or demand, to Landlord or Landlord’s agent at the management office for the Building, or at such other place as Landlord may from time to time designate in writing, in cash or other immediately available good funds, base rent (“Base Rent”) as set forth in

 

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Section 8 of the Summary, payable in equal monthly installments as set forth in Section 8 of the Summary in advance on or before the first day of each and every month during the Lease Term, without any setoff or deduction whatsoever. The Base Rent for the first full month of the Lease Term in which Base Rent is payable hereunder, along with Landlord’s estimate of Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs for the first full month of the Lease Term, shall be paid at the time of Tenant’s execution of this Lease and shall be applied to Rent first due hereunder. If any rental payment date (including the Rent Commencement Date) falls on a day of the month other than the first day of such month or if any rental payment is for a period which is shorter than one month, then the rental for any such fractional month shall be a proportionate amount of a full calendar month’s rental based on the proportion that the number of days in such fractional month bears to the number of days in the calendar month during which such fractional month occurs. All other payments or adjustments required to be made under the terms of this Lease that require proration on a time basis shall be prorated on the same basis. Upon any Event of Default, Landlord shall be entitled to recover from Tenant the then unamortized portion of any Base Rent abated pursuant to Section 8 of the Summary.

 

ARTICLE 4

 

ADDITIONAL RENT

 

4.1          Additional Rent. Commencing on the Rent Commencement Date, in addition to paying the Base Rent specified in Article 3 of this Lease, Tenant shall pay as additional rent the sum of the following: (i) Tenant’s Share (as such term is defined below) of the annual Operating Expenses; plus (ii) Tenant’s Share of the annual Tax Expenses; plus (iii) Tenant’s Share of the annual Utilities Costs. Such additional rent, together with any and all other amounts payable by Tenant to Landlord pursuant to the terms of this Lease (including, without limitation, pursuant to Article 6), shall be hereinafter collectively referred to as the “Additional Rent.” The Base Rent and Additional Rent are herein collectively referred to as the “Rent.” All amounts due under this Article 4 as Additional Rent shall be payable for the same periods and in the same manner, time and place as the Base Rent. Without limitation on other obligations of Tenant which shall survive the expiration of the Lease Term, the obligations of Tenant to pay the Additional Rent provided for in this Article 4, to the extent allocable to the Lease Term, shall survive the expiration of the Lease Term.

 

4.2          Definitions. As used in this Article 4, the following terms shall have the meanings hereinafter set forth:

 

4.2.1       “Operating Expenses” shall mean all expenses, costs and amounts of every kind and nature which Landlord shall pay because of or in connection with the ownership, management, maintenance, repair, replacement, restoration or operation of the Building and the Real Property, including, without limitation, any amounts paid for: (i) the cost of operating, maintaining, repairing, renovating and managing the utility systems, mechanical systems, sanitary and storm drainage systems, any elevator systems and all other “Systems and Equipment” (as defined in Section 4.2.2 of this Lease), and the cost of supplies and equipment and maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections, and the cost of contesting the validity or applicability of any governmental enactments which may affect Operating Expenses, and the costs incurred in connection with implementation and of a transportation system management program or similar program; (iii) the cost of insurance carried by Landlord, in such amounts as Landlord may reasonably determine or as may be required by any mortgagees or the lessor of any underlying or ground lease affecting the Building; (iv) the cost of landscaping, relamping, supplies, tools, equipment and materials, and all fees, charges and other costs (including consulting fees, legal fees and accounting fees) incurred in connection with the management, operation, repair and maintenance of the Building (provided however property management fees shall be commercially reasonable and shall in no event exceed five percent (5,0%) of gross Building revenue); (v) any equipment rental agreements or management agreements (including the cost of any management fee and the fair rental value of any office space provided thereunder); (vi) wages, salaries and other compensation and benefits of all persons engaged in the operation, management, maintenance or security of the Building, and employer’s Social Security taxes, unemployment taxes or insurance, and any other taxes which may be levied on such wages, salaries, compensation and benefits; (vii) payments under any easement, license, operating agreement, declaration, restrictive covenant, underlying or ground lease (excluding rent), or instrument pertaining to the sharing of costs by the Building; (viii) the cost of janitorial service, alarm and security service, if any, window cleaning, trash removal, replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms and other common

 

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or public areas or facilities, maintenance and replacement of curbs and walkways, repair to roofs and re-roofing; (ix) amortization (including interest on the unamortized cost) of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Building; (x) earthquake insurance premiums and deductibles; and (xi) the cost of any improvements, repairs, replacements or other costs (I) which are intended as a labor-saving device or to effect other economies in the operation or maintenance of the Building, (II) made to the Building or the Real Property or any portion thereof after the Lease Commencement Date that are required under any governmental law or regulation, or (III) which are reasonably determined by Landlord to be in the best interests of the Building or the Real Property (excluding, however, the addition of rentable square footage to the Building); provided, however, that if any such cost described in (I), (II) or (III) above, is a capital expenditure, such cost shall be amortized (including interest on the unamortized cost at a rate reasonably determined by Landlord but which rate shall in no event be less than Landlord’s actual cost of funds) over its useful life as Landlord shall reasonably determine. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Building is less than one hundred percent (100%) occupied, Landlord shall make an appropriate adjustment to the variable components of Operating Expenses for such year or applicable portion thereof, employing sound accounting and management principles, to determine the amount of Operating Expenses that would have been paid had the Building been one hundred percent (100%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year, or applicable portion thereof.

 

Operating Expenses shall not include any of the following: (a) leasing commissions; (b) the cost of improvements installed for the exclusive use of other tenants or occupants of the Building; (c) wages, salaries, fees and fringe benefits paid to employees or officers of Landlord above the level of property manager; (d) costs for which Landlord has received actual reimbursement from others (other than through Operating Expenses); (e) costs to correct any construction or design defects in the Building or to construct capital improvements to comply with any private restrictions, underwriter’s requirement or Law that were applicable to the Building on the Lease Commencement Date; (f) costs of attorneys’ fees and other costs and expenses incurred in connection with negotiations or disputes with present or prospective tenants or other occupants of the Building; (g) costs of interest on debt or amortization on any mortgages, and rent payable under any ground lease of the Building; (h) costs of special services provided solely to an individual tenant of the Building other than Tenant; (i) costs which are generally treated as a capital expenditure, except to the extent expressly authorized in subsection 4.2.1 (xi) above; (j) Utilities Costs; (k)Tax Expenses; or (1) costs due to Landlord’s active gross negligence or willful misconduct or costs for which landlord has been actually reimbursed through insurance.

 

4.2.2       “Systems and Equipment” shall mean any plant, machinery, transformers, duct work, cable, wires, and other equipment, facilities, and systems designed to supply heat, ventilation, air conditioning and humidity or any other services or utilities, or comprising or serving as any component or portion of the electrical, gas, steam, plumbing, sprinkler, communications, alarm, security, or fire/life safety systems or equipment, or any other mechanical, electrical, electronic, computer or other systems or equipment which serve the Building in whole or in part.

 

4.2.3       “Tax Expenses” shall mean all federal, state, county, or local governmental or municipal taxes, fees, assessments, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary, (including, without limitation, real estate taxes, general and special assessments, transit assessments, fees and taxes, child care subsidies, fees and/or assessments, job training subsidies, fees and/or assessments, open space fees and/or assessments, housing subsidies and/or housing fund fees or assessments, public art fees and/or assessments, leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Building), which Landlord shall pay because of or in connection with the ownership, leasing and operation of the Building or Landlord’s interest therein. For purposes of this Lease, Tax Expenses shall be calculated as if (i) the tenant improvements in the Building were fully constructed, and (ii) the Building and all tenant improvements therein were fully assessed for real estate tax purposes.

 

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4.2.3.1    Tax Expenses shall include, without limitation:

 

(i)               Any tax on Landlord’s rent, right to rent or other income from the Building or as against Landlord’s business of leasing any of the Building;

 

(ii)              Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the State of California in the June 1978 election (“Proposition 13”) and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants. It is the intention of Tenant and Landlord that all such new and increased assessments, taxes, fees, levies, and charges and all similar assessments, taxes, fees, levies and charges be included within the definition of Tax Expenses for purposes of this Lease; provided, however, that Landlord shall in each case elect to pay any such assessments, taxes, fees, levies and charges over the course of the longest term permitted by applicable Laws provided such election does not require Landlord to incur any additional costs or expenses;

 

(iii)             Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the Premises or the rent payable hereunder, including, without limitation, any gross income tax upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof;

 

(iv)             Any assessment, tax, fee, levy or charge, upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises; and

 

(v)              Any reasonable expenses incurred by Landlord in attempting to protest, reduce or minimize Tax Expenses.

 

4.2.3.2    Notwithstanding anything to the contrary contained in this Section 4.2.3, there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal and state net income taxes, and other taxes to the extent applicable to Landlord’s net income (as opposed to rents, receipts or income attributable to operations at the Building), (ii) any items included as Operating Expenses or Utilities Costs, (iii) any items paid by Tenant under Section 4.4 of this Lease and (iv) any penalties resulting from Landlord’s late payment or nonpayment of any Tax Expenses (except to the extent due to a breach by Tenant of its obligations under this Lease).

 

4.2.4          “Tenant’s Share” shall mean the percentage set forth in Section 9.1 of the Summary. Tenant hereby waives any and all claims at law or in equity based on Landlord’s determination of Tenant’s Share. Notwithstanding the foregoing or anything to the contrary in this Lease, to the extent any Utilities Costs or Operating Expenses paid by Landlord are allocated entirely to the Premises by the applicable provider or are otherwise equitably allocable to only the Premises, at Landlord’s election, Tenant’s Share shall be deemed to be one hundred percent (100%) of such Utilities Costs or Operating Expenses based on such allocation by said provider or such equitable allocation by Landlord.

 

4.2.5       “Utilities Costs” shall mean all actual charges for utilities for the Building which Landlord shall pay, including, but not limited to, the costs of water, sewer and electricity, and the costs of HVAC (including, the cost of electricity to operate the HVAC units) and other utilities as well as related fees, assessments and surcharges (but excluding those charges for which tenants directly reimburse Landlord or otherwise pay directly to the utility company). Utilities Costs shall be calculated assuming the Building is one hundred percent (100%) occupied. If Landlord shall not provide any utilities (the cost of which, if provided by Landlord, would be included in Utilities Costs) to a tenant (including Tenant) who has undertaken to provide the same instead of Landlord, Utilities Costs shall be deemed to be increased by an amount equal to the additional Utilities Costs which would reasonably have been incurred during such period by Landlord if Landlord had at its own expense provided such utilities to such tenant; provided however, if Tenant has undertaken to obtain its own utilities instead of from Landlord, then Tenant’s Share of such Utility Costs shall be reduced by the amount paid by Tenant for such utilities. Utilities Costs shall include any costs of utilities which are allocated to the Building under any declaration,

 

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restrictive covenant, or other instrument pertaining to the sharing of costs by the Building or any portion thereof, including any covenants, conditions or restrictions now or hereafter recorded against or affecting the Building.

 

4.3          Calculation and Payment of Additional Rent.

 

4.3.1       Statement of Actual Operating Expenses, Tax Expenses and Utilities Costs and Payment by Tenant. Landlord shall endeavor to give to Tenant on or before the thirtieth (30th) day of June following the end of each calendar year during the Lease Term, a statement (the “Statement”) which shall state the Operating Expenses, Tax Expenses and Utilities Costs incurred or accrued for such preceding calendar year. Upon receipt of the Statement for each calendar year ending during the Lease Term, Tenant shall pay, within fifteen (15) days following delivery of the Statement, the full amount of the Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Expenses for such calendar year, less the amounts, if any, paid during such calendar year as “Estimated Expense Payments,” as that term is defined in Section 4.3.2 of this Lease. If, the Estimated Expense Payments made by Tenant for any calendar year exceed the actual amount of the Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Expenses for such calendar year, Landlord shall credit such excess to Tenant for sums then due or coming due hereunder or, at Landlord’s option, pay such excess to Tenant provided, however, that if Tenant is in default hereunder beyond any applicable notice and cure period set forth in Section 19.1 below, such payment shall be delayed until such time that Tenant has cured such default (or, at Landlord’s option, applied to the extent necessary to cure such default). The failure of Landlord to timely furnish the Statement shall not prejudice Landlord from enforcing its rights under this Article 4. The provisions of this Section 4.3.1 shall survive the expiration or earlier termination of the Lease Term.

 

4.3.2       Statement of Estimated Operating Expenses, Tax Expenses and Utilities Costs. In addition, Landlord shall endeavor to give Tenant, on or before March 1 of each calendar year during the Lease Term, a yearly expense estimate statement (the “Estimate Statement”) which shall set forth Landlord’s reasonable estimate (the “Estimate”) of what the total amount of Operating Expenses, Tax Expenses and Utilities Costs allocated to the Building pursuant to Article 4 shall be and the estimated amount of Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs (the “Estimated Expense Payments”) for such calendar year. The failure of Landlord to timely furnish the Estimate Statement for any calendar year shall not preclude Landlord from enforcing its rights to collect any Operating Expenses, Tax Expenses or Utilities Costs under this Article 4. Upon delivery of the Estimate Statement, Tenant shall pay, with its next installment of Base Rent due, a fraction of the Estimated Expense Payments for the then-current calendar year (reduced by any amounts paid pursuant to the last sentence of this Section 4.3.2). Such fraction shall have as its numerator the number of months which have elapsed in such current calendar year to the month of such payment, both months inclusive, and shall have twelve (12) as its denominator. Until a new Estimate Statement is furnished, Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated Expense Payments set forth in the previous Estimate Statement delivered by Landlord to Tenant.

 

4.4          Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant shall reimburse Landlord upon demand for any and all taxes or assessments required to be paid by Landlord (except to the extent included in Tax Expenses by Landlord or specifically excluded from the definition of Tax Expenses), excluding state, local and federal personal or corporate income taxes measured by the net income of Landlord from all sources and estate and inheritance taxes, whether or not now customary or within the contemplation of the parties hereto, when:

 

4.4.1       said taxes are measured by or reasonably attributable to the cost or value of Tenant’s equipment, furniture, fixtures and other personal property located in the Premises, or by the cost or value of any leasehold improvements made in or to the Premises by or for Tenant, to the extent the cost or value of such leasehold improvements exceeds the cost or value of a building standard build-out as determined by Landlord regardless of whether title to such improvements shall be vested in Tenant or Landlord;

 

4.4.2       said taxes are assessed upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion of the Building; or

 

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4.4.3       said taxes are assessed upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises.

 

4.5          Late Charges. If any installment of Rent or any other sum due from Tenant shall not be received by Landlord or Landlord’s designee by the due date therefor, then Tenant shall pay to Landlord, within fifteen (15) days after demand therefor, a late charge equal to ten percent (10%) of the amount due. The late charge shall be deemed Additional Rent and the right to require it shall be in addition to all of Landlord’s other rights and remedies hereunder, at law and/or in equity and shall not be construed as liquidated damages or as limiting Landlord’s remedies in any manner. In addition to the late charge described above, any Rent or other amounts owing hereunder which are not paid by the date that they are due shall thereafter bear interest until paid at a rate (the “Interest Rate”) equal to the lesser of (i) the “Prime Rate” or “Reference Rate” announced from time to time by the Bank of America {or such reasonable comparable national banking institution as selected by Landlord in the event Bank of America ceases to exist or publish a Prime Rate or Reference Rate), plus four percent (4%), or (ii) the highest rate permitted by applicable law.

 

4.6          Landlord’s Books and Records. Upon Tenant’s written request given not more than sixty (60) days after Tenant’s receipt of a Statement, and provided that Tenant is not then in monetary or material non-monetary default under this Lease, specifically including, but not limited to, the timely payment of Additional Rent (whether or not a component thereof is the subject of the audit contemplated herein), Landlord shall furnish Tenant with reasonable supporting documentation pertaining to the Statement Landlord shall provide said information pertaining to the relevant Statement within sixty (60) days after Tenant’s written request therefor. Within one hundred eighty (180) days after receipt of a Statement by Tenant (the “Review Period”), if Tenant disputes the amount set forth in the Statement, an independent certified public accountant (which accountant (A) is a member of a nationally or regionally recognized accounting firm, and (B) is not working on a contingency fee basis), designated and paid for by Tenant, may, after reasonable notice to Landlord and at reasonable times, audit Landlord’s records with respect to the amounts set forth in the Statement at Landlord’s corporate offices, provided that (i) Tenant is not then in default under this Lease (ii) Tenant has paid all amounts required to be paid under the applicable Statement, and (iii) a copy of the audit agreement between Tenant and its particular auditor has been delivered to Landlord prior to the commencement of the audit. In connection with such audit, Tenant and Tenant’s agents must agree in advance to follow Landlord’s reasonable rules and procedures regarding an audit of the aforementioned Landlord records, and shall execute a commercially reasonable confidentiality agreement regarding such audit. Any audit report prepared by Tenant’s auditors shall be delivered concurrently to Landlord and Tenant within the Review Period. Tenant’s failure to audit the amount set forth in any Statement within the Review Period shall be deemed to be Tenant’s approval of such Statement and Tenant, thereafter, waives the right or ability to audit the amounts set forth in such Statement. Tenant hereby acknowledges that Tenant’s sole right to audit Landlord’s books and records and to contest the amount of Operating Expenses, Tax Expenses and Utilities Costs payable by Tenant shall be as set forth in this Section 4.6, and Tenant hereby waives any and all other rights pursuant to applicable law to audit such books and records and/or to contest the amount of Operating Expenses, Tax Expenses and Utilities Costs payable by Tenant.

 

ARTICLE 5

 

USE OF PREMISES

 

Tenant shall use the Second Floor Premises solely for general office use and shall use the First Floor Premises for the retail sale of health information applications and appliances and professional services associated therewith (the “Permitted Use”), and Tenant shall not use or permit the Premises to be used for any other purpose or purposes whatsoever, Notwithstanding the foregoing, Tenant understands and acknowledges that use of the Premises is ultimately limited by, among other things, applicable Laws, specifically including, without limitation, zoning ordinances of the City of Palo Alto, and Landlord makes no representation or warranty whatsoever with regard to whether any prospective use of the Premises (including, without limitation, the Permitted Use) is permitted under applicable Laws. Within five (5) days following Landlord’s request, Tenant shall provide Landlord any evidence reasonably requested by Landlord confirming Tenant’s use of the Premises is in compliance with applicable Laws. Tenant further covenants and agrees that it shall not use, or suffer or permit any person or persons to use, the Premises or any part thereof for any use or purpose hi violation of the provisions of Exhibit D attached hereto (or any reasonable modifications thereto of which Tenant has notice) or in violation of the laws, ordinances,

 

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regulations, codes, orders or requirements of the United States of America, the State of California, or the local municipal or county governing body or other lawful authorities having jurisdiction over the Building, including, without limitation, the City of Palo Alto (collectively, “Laws”). Tenant shall not violate any recorded covenants, conditions, and restrictions, and the provisions of all ground or underlying leases, now or hereafter affecting the Building. All noise and odors generated by Tenant in its use of the Premises shall be confined, abated or muffled so that it does not unreasonably interfere with the businesses of or unreasonably annoy the occupants and/or users of other properties or premises. Tenant shall at all times maintain the Premises in a clean, neat and orderly condition. Notwithstanding anything in this Lease to the contrary, (i) Tenant shall not permit or suffer the Second Floor Premises to be occupied by more than five employees per thousand square feet (5/1000) at any one time and (ii) Tenant shall not permit or suffer the First Floor Premises to be occupied by more than four employees per thousand square feet (4/1000) at any one time.. Tenant shall not commit or allow to be committed any waste in or upon the Premises and shall refrain from using or permitting the use of the Premises or any portion thereof as living quarters, sleeping quarters or for lodging purposes.

 

ARTICLE 6

 

SERVICES AND UTILITIES

 

6.1          Standard Tenant Services, Landlord shall provide the following services on all days during the Lease Term, unless otherwise stated below.

 

6.1.1       Subject to reasonable changes implemented by Landlord and to all governmental rules, regulations and guidelines applicable thereto, Landlord shall provide heating and air conditioning when necessary for normal comfort for normal office use in the Premises, from Monday through Saturday, during the period from 7:00 a.m. to 6:00 p.m., except for the date of observation of New Year’s Day, Independence Day, Thanksgiving Day and, Christmas Day.

 

6.1.2       Landlord shall provide adequate electrical wiring and facilities for the Permitted Use as reasonably determined by Landlord.

 

6.1.3       Landlord shall provide city water from the regular Building outlets for drinking, lavatory and toilet purposes.

 

6.1.4       Landlord shall provide janitorial service to the Premises consistent with other similar Buildings in Downtown Palo Alto.

 

6.2          Overstandard Tenant Use. Tenant shall not, without Landlord’s prior written consent, use heat-generating machines, machines other than normal fractional horsepower office machines, or equipment or lighting other than building standard lights in the Premises, which may affect the temperature otherwise maintained by the air conditioning system or increase the water normally furnished for the Premises by Landlord pursuant to the terms of Section 6.1 of this Lease. If such consent is given, Landlord shall have the right to install supplementary air conditioning units or other facilities in the Premises, including supplementary or additional metering devices, and the actual and reasonable cost thereof, including the actual and reasonable cost of installation, operation and maintenance, increased wear and tear on existing equipment and other similar charges, shall be paid by Tenant to Landlord upon billing by Landlord. If Tenant uses water or heat or ah” conditioning in excess of that supplied by Landlord pursuant to Section 6.1 of this Lease, or if Tenant’s consumption of electricity shall exceed two (2) watts connected load per square foot of usable area of the Premises, calculated on a monthly basis for the hours described in Section 6.1.1 above, Tenant shall pay to Landlord, within thirty (30) days after billing and as additional rent, the cost of such excess consumption, the cost of the installation, operation) and maintenance of equipment which is installed in order to supply such excess consumption, and the cost of the increased wear and tear on existing equipment caused by such excess consumption; and Landlord may install devices to separately meter any increased use, and in such event Tenant shall pay, as additional rent, the increased cost directly to Landlord, within thirty (30) days after demand, including the cost of such additional metering devices. If Tenant desires to use heat, ventilation or air conditioning during hours other than those for which Landlord is obligated to supply such utilities pursuant to the terms of Section 6.1 of this Lease, (i) Tenant shall give Landlord such prior notice, as Landlord shall from time to time establish as appropriate, of Tenant’s desired use, (ii) Landlord shall supply such heating, ventilating and air

 

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conditioning to Tenant at such hourly cost to Tenant as Landlord shall from time to time establish, which shall be no more than the costs of similar after hours services customarily imposed by landlords of similar buildings in Downtown Palo Alto, and (iii) Tenant shall pay such cost within thirty (30) days after billing, as additional rent.

 

6.3          Interruption of Use. Tenant agrees that Landlord shall not be liable for damages, by abatement of Rent or otherwise, for failure to furnish or delay in furnishing any service (including telephone and telecommunication services), or for any diminution in the quality or quantity thereof, when such failure or delay or diminution is occasioned, in whole or in part, by repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other fuel at the Building after reasonable effort to do so, by any accident or casualty whatsoever, by act or default of Tenant or other parties, or by any other cause beyond Landlord’s reasonable control; and such failures or delays or diminution shall never be deemed to constitute an eviction or disturbance of Tenant’s use and possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations under this Lease. Furthermore, Landlord shall not be liable under any circumstances for a loss of, or injury to, property or for injury to, or interference with, Tenant’s business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to furnish any of the services or utilities as set forth in this Article 6. Notwithstanding anything to the contrary in this Lease, if the Premises are not reasonably suitable for Tenant’s use as a consequence of utilities interruption caused by the gross negligence of Landlord or its agents, employees or contractors and if restoration of such utilities service is within the reasonable control of Landlord, then Tenant shall be entitled to an equitable abatement of Rent to the extent such interference continues for more than five (5) consecutive business days.

 

6.4          Additional Services. Landlord shall also have the exclusive right, but not the obligation, to provide any additional services which may be required by Tenant, including, without limitation, locksmithing, lamp replacement, janitorial service, and additional repairs and maintenance, provided that Tenant shall pay to Landlord within thirty (30) days of billing, the sum of all costs to Landlord of such additional services, plus a reasonable administration fee. Charges for any utilities or services for which Tenant is required to pay from time to time hereunder, shall be deemed Additional Rent hereunder and shall be billed on a monthly basis.

 

ARTICLE 7

 

REPAIRS

 

7.1          Tenant’s Repairs. Subject to Landlord’s repair obligations in Sections 7.2 and 11.1 below, Tenant shall, at Tenant’s own expense, keep the Premises, including all improvements (specifically including, without limitation, the Tenant Improvements (as defined in Exhibit B attached hereto) and any Alterations (as defined below)), plate glass, doors and related hardware, equipment, fixtures and furnishings therein, in good order, repair and condition at all times during the Lease Term, which repair obligations shall include, without limitation, the obligation to promptly and adequately repair all damage to the Premises and replace or repair all damaged or broken fixtures and appurtenances; provided however, that, at Landlord’s option or if Tenant fails to make such repairs, Landlord may, but need not, make such repairs and replacements, and Tenant shall pay Landlord the cost thereof, including a percentage of the cost thereof (to be uniformly established for the Building) sufficient to reimburse Landlord for all overhead, general conditions, fees and other costs or expenses arising from Landlord’s involvement with such repairs and replacements forthwith upon being billed for same.

 

7.2          Landlord’s Repairs. Subject to Articles 4, 11 and 12 of this Lease, Landlord shall repair and maintain the common areas and the structural portions of the Building, including the basic plumbing, heating, ventilating, air conditioning, fire suppression and electrical systems serving the Building (except to the extent said systems are located in or exclusively service the Premises, in which event Tenant shall be responsible therefor); provided, however, that to the extent such maintenance and repairs are necessitated by the act, omission, negligence or willful misconduct of Tenant, its agents, servants, employees or invitees, Tenant shall pay to Landlord as additional rent, the reasonable cost of such maintenance and repairs. There shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or in or to fixtures, appurtenances and equipment therein. Tenant hereby waives and releases its right to make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code; or under any similar law, statute, or ordinance now or hereafter in effect.

 

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ARTICLE 8

 

ADDITIONS AND ALTERATIONS

 

8.1          Landlord’s Consent to Alterations. Tenant may not make any improvements, alterations, additions or changes to the Premises (collectively, the “Alterations”) without first procuring the prior written consent of Landlord to such Alterations, which consent shall be requested by Tenant not less than thirty (30) days prior to the commencement thereof, and which consent shall not be unreasonably withheld, conditioned or delayed by Landlord; provided, however, Landlord may withhold its consent in its sole and absolute discretion with respect to any Alterations which may affect the structural components of the Building or the Systems and Equipment or which can be seen from outside the Premises. Tenant shall pay for all overhead, general conditions, fees and other costs and expenses of the Alterations, and shall pay to Landlord a Landlord supervision fee of five percent (5%) of the cost of the Alterations. Notwithstanding the foregoing, Tenant may construct, without Landlord’s consent, Alterations in the Premises, the cost of which do not exceed Twenty Thousand Dollars ($20,000) per year, and which do not affect the structural components of the Building or the Systems and Equipment or which cannot be seen from outside the Premises (collectively, “Minor Alterations”); provided, however, Tenant shall notify Landlord at least fifteen (15) days prior to commencing such Minor Alterations, which notice shall describe in reasonable detail the scope of Minor Alterations Tenant intends to perform or cause to be performed. Landlord shall not be entitled to a supervision fee with respect to Minor Alterations.

 

8.2          Manner of Construction. Landlord may impose, as a condition of its consent to all Alterations or repairs of the Premises or about the Premises, such requirements as Landlord in its reasonable discretion may deem desirable, including, but not limited to, the requirement that Tenant utilize for such purposes only contractors, materials, mechanics and materialmen reasonably approved by Landlord; provided, however, Landlord may impose such requirements as Landlord may determine, in its sole and absolute discretion, with respect to any work affecting the structural components of the Building or Systems and Equipment (including designating specific contractors to perform such work). Tenant shall construct such Alterations and perform such repairs in conformance with any and all applicable rules and regulations of any federal, state, county or municipal code or ordinance and pursuant to a valid building permit, issued by the City of Palo Alto, and in conformance with Landlord’s construction rules and regulations. Landlord’s approval of the plans, specifications and working drawings for Tenant’s Alterations shall create no responsibility or liability on the part of Landlord for their completeness, design sufficiency, or compliance with all laws, rules and regulations of governmental agencies or authorities. All work with respect to any Alterations must be done in a good and workmanlike manner and diligently prosecuted to completion to the end that the Premises shall at all times be a complete unit except during the period of work. In performing the work of any such Alterations, Tenant shall have the work performed in such manner as not to obstruct access to the Building or the Common Areas for any other tenant of the Building, and as not to obstruct the business of Landlord or other tenants of the Building, or interfere with the labor force working at the Building. If Tenant makes any Alterations, Tenant agrees to carry a commercial general liability insurance policy, as well as “Builder’s All Risk” insurance in an amount reasonably approved by Landlord covering the construction of such Alterations, or cause its general contractor to carry such insurance, it being understood and agreed that all of such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease immediately upon completion thereof. In addition, Landlord may, in its discretion, with respect to Alterations costing in excess of One Hundred Thousand Dollars ($100,000) per project, require Tenant to obtain a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such Alterations and naming Landlord as a co-obligee. Upon completion of any Alterations, Tenant shall (i) cause a Notice of Completion to be recorded in the office of the Recorder of the county in which the Building is located in accordance with Section 3093 of the Civil Code of the State of California or any successor statute, (ii) deliver to the management office of the Building a reproducible copy of the “as built” drawings of the Alterations, and (iii) deliver to Landlord evidence of payment, contractors’ affidavits and full and final waivers of all liens for labor, services or materials.

 

8.3          Landlord’s Property. All Alterations, improvements, fixtures and/or equipment which may be installed or placed in or about the Premises, including any cabling and wiring associated with any telephone system or network, and all signs installed in, on or about the Premises, from time to time, shall be at the sole cost of Tenant and shall be and become the property of Landlord upon the expiration or earlier termination of this Lease; provided, however, Tenant’s trade fixtures and equipment shall remain the property of Tenant and shall be removed by Tenant pursuant to the provisions of Section 15.2 below prior to the expiration or earlier termination of this Lease.

 

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Notwithstanding the foregoing provisions of this Section 8.3, upon request by Landlord prior to the expiration of this Lease (or anytime following any earlier termination of this Lease) Tenant shall remove, prior the expiration or early termination of the Lease Term (or anytime following any earlier termination of this Lease), any improvements or Alterations (including any cabling and wiring associated with any telephone system or network) constructed by or for the benefit of Tenant and shall repair any damage to the Premises and Building caused by such removal; provided, however, promptly following Tenant’s written request for confirmation, which request must be made by Tenant no sooner than ninety (90) days prior to expiration of the Lease Term. Landlord shall confirm which improvements and Alterations Landlord will permit to remain upon expiration of the Lease Term. Furthermore, if Tenant fails to complete such removal and/or to repair any damage caused by the removal of any improvements or Alterations (including any cabling and wiring associated with any telephone system or network), Landlord may do so and may charge the cost thereof to Tenant (together with a five percent (5%) supervision/administration fee), and Tenant shall pay such cost to Landlord within thirty (30) days of being billed for the same.

 

8.4          Tenant Improvements. The provisions of the foregoing Sections 8.1 and 8.2 shall not be applicable to the design and construction of the Tenant Improvements (which design and construction shall instead shall be governed by Exhibit B attached hereto); however, for all other purposes under this Lease, the phrase “Alterations” shall be deemed to also include the Tenant Improvements.

 

ARTICLE 9

 

COVENANT AGAINST LIENS

 

Tenant has no authority or power to cause or permit any lien or encumbrance of any kind whatsoever, whether created by act of Tenant, operation of law or otherwise, to attach to or be placed upon the Building or the Real Property, and any and all liens and encumbrances created by Tenant shall attach to Tenant’s interest only. Landlord shall have the right at all times to post and keep posted on the Premises any notice which it deems necessary for protection from such liens. Tenant covenants and agrees not to suffer or permit any lien of mechanics or materialmen or others to be placed against the Building or the Real Property with respect to work or services claimed to have been performed for or materials claimed to have been furnished to Tenant or the Premises, and, in case of any such lien attaching or notice of any lien, Tenant covenants and agrees to cause it to be immediately released and removed of record. Notwithstanding anything to the contrary set forth in this Lease, if any such lien is not released and removed on or before the date notice of such lien is delivered by Landlord to Tenant, Landlord, at its sole option, may immediately take all action necessary to release and remove such lien, without any duty to investigate the validity thereof, and all sums, costs and expenses, including reasonable attorneys’ fees and costs, incurred by Landlord in connection with such lien shall be deemed Additional Rent under this Lease and shall immediately be due and payable by Tenant.

 

ARTICLE 10

 

INDEMNIFICATION AND INSURANCE

 

10.1        Indemnification and Waiver. To the maximum extent permitted by law, Tenant hereby assumes all risk of damage to property and injury to persons, in, on, or about the Premises, the Building or the Real Property from any cause whatsoever and agrees that neither Landlord or its officers, agents, property managers, servants, lenders, employees, and independent contractors (collectively, “Landlord Parties”) shall be liable for, and are hereby released from any responsibility for, any damage to property or injury to persons-or resulting from the loss of use thereof, which damage or injury is sustained by Tenant or by other persons claiming through Tenant. To the maximum extent permitted by law, Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties from any and all losses, claims, costs, damages, expenses, causes of action and liabilities (including without limitation court costs and reasonable attorneys’ fees) incurred in connection with or arising from (i) any breach or default by Tenant under this Lease, (ii) any cause in, on or about the Premises (including, without limitation, Tenant’s installation, placement operation and removal of Alterations, improvements, fixtures, furniture, devices, apparatus and/or equipment in, on or about the Premises), or (iii) the negligence or willful misconduct of Tenant or its contractors, agents, servants, employees, licensees or invitees (collectively, “Tenant Parties”); provided, however, that the terms of the foregoing indemnity shall not apply to the gross active negligence or willful

 

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misconduct of Landlord Parties. The provisions of this Section 10.1 shall survive the expiration or sooner termination of this Lease.

 

10.2        Tenant’s Compliance with Landlord’s Fire and Casualty Insurance. Tenant shall, at Tenant’s expense, comply as to the Premises with all insurance company requirements pertaining to the use of the Premises. Tenant shall not conduct nor permit any other person to conduct any activities nor keep, store or use (or allow any other person to keep, store or use) any item or thing within the Premises, the Building, the Common Areas or the Property which (i) is prohibited under the terms of any such policies, (ii) could result in the termination of the coverage afforded under any of such policies, or (iii) could give to the insurance carrier the right to cancel any of such policies. If the nature of Tenant’s conduct or use of the Premises causes any increase in the premium for such insurance policies, then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant’s expense, shall comply with all rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and with any similar body.

 

10.3        Tenant’s Insurance. Tenant shall maintain the following coverages in the following amounts.

 

10.3.1     Commercial General Liability Insurance covering the insured against claims of bodily injury, personal injury and property damage arising out of Tenant’s operations, assumed liabilities or use of the Premises, including a Broad Form Commercial General Liability endorsement covering the insuring provisions of this Lease and the performance by Tenant of the indemnity agreements set forth in Section 10.1 of this Lease, (and with owned and non-owned automobile liability coverage, and liquor liability coverage in the event alcoholic beverages are served on the Premises) for limits of liability not less than;

 

	
Bodily Injury and
    	
$2,000,000 each occurrence
    
	
Property Damage Liability
    	
$3,000,000 annual   aggregate
    
	
 
    	
 
    
	
Personal Injury Liability
    	
$2,000,000 each occurrence
    
	
 
    	
$3,000,000 annual   aggregate
    
	
 
    	
0% Insured’s participation
    

 

10.3.2     Physical Damage Insurance covering (i) all office furniture, trade fixtures, office equipment, merchandise and all other items of Tenant’s property on the Premises installed by, for, or at the expense of Tenant, (ii) the Alterations, including any Alterations which Landlord permits to be installed above the ceiling of the Premises or below the floor of the Premises, (iii) all other improvements, alterations and additions to the Premises, including any improvements, alterations or additions installed at Tenant’s request above the ceiling of the Premises or below the floor of the Premises and (iv) all plate glass and exterior glazing. Such insurance shall be written on a “physical loss or damage” basis under a “special form” policy, for the full replacement cost value new without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include a vandalism and malicious mischief endorsement, sprinkler leakage coverage and earthquake sprinkler leakage coverage.

 

10.3.3     Workers’ compensation insurance as required by law.

 

10.3.4     Loss-of-income, business interruption and extra-expense insurance providing coverage in such amounts as will reimburse Tenant for no less than twelve (12) months of direct and indirect loss of earnings attributable to all perils commonly insured against by Tenant’s property insurance required hereunder or attributable to prevention of loss of access to the Premises or to the Building as a result of such perils.

 

10.3.5     Tenant shall carry comprehensive automobile liability insurance having a combined single limit of not less than Two Million Dollars ($2,000,000.00) per occurrence and insuring Tenant against liability for claims arising out of ownership, maintenance or use of any owned, hired or non-owned automobiles.

 

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10.3.6     The minimum limits of policies of insurance required of Tenant under this Lease shall in no event limit the liability of Tenant under this Lease. Such insurance shall: (i) name Landlord, and any other party it so specifies, as an additional insured; (ii) specifically cover the liability assumed by Tenant under this Lease, including, but not limited to, Tenant’s obligations under Section 10.1 of this Lease; (iii) be issued by an insurance company having a rating of not less than A-VIII in Best’s Insurance Guide or which is otherwise reasonably acceptable to Landlord and licensed to do business in California; (iv) be primary insurance as to all claims thereunder and provide that any insurance carried by Landlord is excess and is non-contributing with any insurance requirement of Tenant; (v) provide that said insurance shall not be canceled or coverage changed-unless thirty (30) days’ prior written notice shall have been given to Landlord and any mortgagee or ground or underlying lessor of Landlord; (vi) contain a cross-liability endorsement or severability of interest clause reasonably acceptable to Landlord; and (vii) with respect to the insurance required in Sections 10.3.1 and 10.3.2 above, have deductible amounts not exceeding Five Thousand Dollars ($5,000.00). Tenant shall deliver said policy or policies or certificates thereof to Landlord on or before the Lease Commencement Date and at least ten (10) days before the expiration dates thereof. If Tenant shall fail to procure such insurance, or to deliver such policies or certificate, within such time periods, Landlord may, at its option, in addition to all of its other rights and remedies under this Lease, and without regard to any notice and cure periods set forth in Section 19.1, procure such policies for the account of Tenant, and the cost thereof shall be paid to Landlord as Additional Rent within ten (10) days after delivery of bills therefor.

 

10.4        Subrogation. Landlord and Tenant agree to have their respective insurance companies issuing property damage insurance waive any rights of subrogation that such companies may have against Landlord or Tenant, as the case may be, so long as the insurance carried by Landlord and Tenant, respectively, is not invalidated thereby. As long as such waivers of subrogation are contained in their respective insurance policies, Landlord and Tenant hereby waive any right that either may have against the other on account of any loss or damage to their respective property to the extent such loss or damage is insurable under policies of insurance for fire and all risk coverage, theft, public liability, or other similar insurance, regardless of any negligence on the part of either party.

 

10.5        Additional Insurance Obligations. Tenant shall carry and maintain during the entire Lease Term, at Tenant’s sole cost and expense, increased amounts of the insurance required to be carried by Tenant pursuant to this Article 10, and such other reasonable types of insurance coverage and in such reasonable amounts covering the Premises and Tenant’s operations therein, as may he reasonably requested by Landlord.

 

ARTICLE 11

 

DAMAGE AND DESTRUCTION

 

11.1        Repair of Damage to Premises by Landlord. Tenant shall promptly notify Landlord of any damage to the Premises resulting from fire or any other casualty. If the Premises or any Common Areas serving or providing access to the Premises shall be damaged by fire or other casualty, Landlord shall (i) within sixty (60) days following such fire or casualty, notify Tenant in writing of Landlord’s reasonable expectation of the time required to restore any damage to the Premises caused by such fire or other casualty (the “Restoration Notice”), and (ii) promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord’s reasonable control, and subject to all other terms of this Article 11, restore the base, shell, and core of the Premises and such Common Areas. Such restoration shall be to substantially the same condition of the base, shell, and core of the Premises and Common Areas prior to the casualty, except for modifications required by zoning and building codes and other Laws or by the holder of a mortgage on the Building or the Real Property, or the lessor of a ground or underlying lease with respect to the Building and/or the Real Property, or any other modifications to the Common Areas deemed desirable by Landlord, provided access to the Premises and any common restrooms serving the Premises shall not be materially impaired. Notwithstanding any other provision of this Lease, upon the occurrence of any damage to the Premises, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant’s insurance required under Section 10.3 of this Lease to the extent attributable to any Alterations, and Landlord shall repair any injury or damage to the tenant improvements and Alterations installed in the Premises and shall return such tenant improvements and Alterations to their original condition; provided that if the reasonably estimated cost of restoring such Alterations, as reasonably determined by Landlord’s contactor prior to restoration, exceeds the amount of insurance proceeds received by Landlord from Tenant’s insurance carrier, as assigned by Tenant, then the positive difference between the reasonable estimated cost

 

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of such repairs and the amount of insurance proceeds received by Landlord from Tenant’s insurance carrier shall be paid by Tenant to Landlord prior to Landlord’s repair of the damage. Notwithstanding anything to the contrary herein, in no event shall Landlord be obligated to repair or restore any specialized or dedicated equipment serving Tenant, such as any cabling, wiring, supplemental utility system, telephone system or wireless/Wi-Fi network. In connection with such repairs and replacements, Tenant shall, prior to the commencement of construction, submit to Landlord, for Landlord’s review and approval, all plans, specifications and working drawings relating thereto, and Landlord shall select the contractors to perform such improvement work. Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s business resulting in any way from such damage or the repair thereof; provided however, that if such fire or other casualty shall have damaged the Premises or Common Areas necessary to Tenant’s occupancy, and if such damage is not the result of the negligence or willful misconduct of Tenant or Tenant’s employees, contractors, licensees, or invitees, Tenant shall be entitled to a proportionate abatement of Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs to the extent Landlord is reimbursed from the proceeds of rental interruption insurance purchased by Landlord as part of Operating Expenses, during the time and to the extent the all or a portion of the Premises are unfit for occupancy for the purposes permitted under this Lease, and not occupied by Tenant as a result thereof.

 

11.2        Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the Premises, the Building and/or any other portion of the Real Property and instead terminate this Lease by notifying Tenant in writing of such termination within sixty (60) days after the date of damage, such notice to include a termination date as of the date of such damage, giving Tenant ninety (90) days to vacate the Premises, but Landlord may so elect only if the Building shall be damaged by fire or other casualty or cause, whether or not the Premises are affected, and one or more of the following conditions is present: (i) repairs cannot reasonably be completed within one hundred eighty (180) days of the date of damage (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the Building or ground or underlying lessor with respect to the Building and/or the Real Property shall require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate the ground or underlying lease, as the case may be; or (iii) the damage is not fully covered, except for deductible amounts, by Landlord’s insurance policies. In addition, if the Premises or the Building is destroyed or damaged to any substantial extent during the last twelve (12) months of the Lease Term, then notwithstanding anything contained in this Article 11, Landlord shall have the option to terminate this Lease by giving written notice to Tenant of the exercise of such option within thirty (30) days after such damage or destruction, in which event this Lease shall cease and terminate as of the date of such damage. In the event Landlord elects to restore the Premises or the Building, and the Restoration Notice estimates that the time required for such restoration shall exceed one year, Tenant shall have the right to terminate this Lease upon written notice to Landlord within ten (10) days following Tenant’s receipt of the Restoration Notice. In addition, if Landlord elects to restore the Premises or the Building, and such restoration exceeds Landlord’s estimate set forth in the Restoration Notice by a period of more than ninety (90) days, Tenant shall have the right to terminate this Lease upon written notice to Landlord, delivered not more than ten (10) days following such additional ninety (90) day period. Upon any such termination of this Lease pursuant to this Section 11.2, Tenant shall pay the Base Rent and Additional Rent, properly apportioned up to such date of termination, and both parties hereto shall thereafter be freed and discharged of all farther obligations hereunder, except as provided for in provisions of this Lease which by their terms survive the expiration or earlier termination of the Lease Term.

 

11.3        Waiver of Statutory Provisions. The provisions of this Lease, including this Article 11, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building or any other portion of the Real Property, and any statute or regulation of the state of California, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other statute or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or any other portion of the Real Property.

 

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ARTICLE 12

 

CONDEMNATION

 

12.1        Permanent Taking. If the whole or any part of the Premises, Building or the Real Property shall be taken by power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose, or if any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such manner as to require the use, reconstruction or remodeling of any part of the Premises, Building or the Real Property, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, Landlord shall have the option to terminate this Lease upon ninety (90) days’ notice, provided such notice is given no later than one hundred eighty (180) days after the date of such taking, condemnation, reconfiguration, vacation, deed or other instrument. If more than twenty-five percent (25%) of the rentable square feet of the Premises is taken, or if access to the Premises is substantially impaired, Tenant shall have the option to terminate this Lease upon ninety (90) days’ notice, provided such notice is given no later than one hundred eighty (180) days after the date of such taking. Landlord shall be entitled to receive the entire award or payment in connection therewith, except that Tenant shall have the right to file any separate claim available to Tenant for any taking of Tenant’s personal property and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the terms of this Lease, and for moving expenses, so long as such claim does not diminish the award available to Landlord, its ground lessor with respect to the Building or its mortgagee, and such claim is payable separately to Tenant. All Rent shall be apportioned as of the date of such termination, or the date of such taking, whichever shall first occur. If any part of the Premises shall be taken, and this Lease shall not be so terminated, the Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs shall be proportionately abated. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure.

 

12.2        Temporary Taking. Notwithstanding anything to the contrary contained in this Article 12, in the event of a temporary taking of all or any portion of the Premises for a period of one hundred and eighty (180) days or less, then this Lease shall not terminate but the Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs shall be abated for the period of such taking in proportion to the ratio that the amount of rentable square feet of the Premises taken bears to the total rentable square feet of the Premises. Landlord shall be entitled to receive the entire award made in connection with any such temporary taking.

 

ARTICLE 13

 

COVENANT OF QUIET ENJOYMENT

 

Landlord covenants that so long as Tenant is not in default of its obligations under this Lease beyond any applicable notice and cure period, Tenant shall peaceably and quietly have, hold and enjoy the Premises subject to the terms, covenants, conditions, provisions and agreements hereof without interference by any persons lawfully claiming by or through Landlord. The foregoing covenant is in lieu of any other covenant express or implied.

 

ARTICLE 14

 

ASSIGNMENT AND SUBLETTING

 

14.1        Transfers. Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment or other such foregoing transfer of this Lease or any interest hereunder by operation of law, sublet the Premises or any part thereof, or permit the use of the Premises by any persons other than Tenant and its employees (all of the foregoing are hereinafter sometimes referred to collectively as “Transfers” and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “Transferee”). If Tenant shall desire Landlord’s consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the “Transfer Notice”) shall include (i) the proposed effective date of the Transfer, which shall not be less than thirty (30) days nor more than one hundred eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the portion of the Premises to be transferred (the “Subject Space”), (iii) all of the terms of the proposed Transfer, the name and address of the proposed Transferee, and a copy of all existing and/or

 

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proposed documentation pertaining to the proposed Transfer, including all existing operative documents to be executed to evidence such Transfer or the agreements incidental or related to such Transfer, (iv) current financial statements of the proposed Transferee certified by an officer, partner or owner thereof, and (v) such other information relating to the business of the proposed Transferee as Landlord may reasonably require. Any Transfer made without Landlord’s prior written consent (if required hereunder) shall, at Landlord’s option, be null, void and of no effect, and shall, at Landlord’s option, constitute a default by Tenant under this Lease. Each time Tenant requests Landlord’s consent to a proposed Transfer, whether or not Landlord shall grant consent, within thirty (30) days after written request by Landlord, as Additional Rent hereunder, Tenant shall reimburse Landlord for any reasonable legal fees incurred by Landlord in connection with Tenant’s proposed Transfer.

 

14.2        Landlord’s Consent. Landlord shall not unreasonably withhold, condition or delay its consent to any proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice. The parties hereby agree that it shall be reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer where one or more of the following apply, without limitation as to other reasonable grounds for withholding consent:

 

14.2.1     The Transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Building;

 

14.2.2     The Transferee intends to use the Subject Space for purposes winch are not permitted under this Lease;

 

14.2.3     The Transferee is either a governmental agency or instrumentality thereof;

 

14.2.4     The Transfer will result in more than the legally permitted number of occupants per floor within the Subject Space;

 

14.2.5     The Transferee is not a party of reasonable financial worth and/or financial stability that has and will continue to have sufficient financial strength to perform all of the remaining obligations of Tenant under the Lease (or in the case of a subletting, then its obligations under the sublease) from and after the date of transfer, as reasonably determined by Landlord taking into account all relevant facts and circumstances;

 

14.2.6     The proposed Transfer would cause Landlord to be in violation of another lease with a tenant in the Building, or would give an occupant of the Building a right to cancel its lease;

 

14.2.7  The terms of the proposed Transfer will grant the Transferee the right to exercise a right of renewal, right of expansion, right of first offer, or other similar right held by Tenant, or will require Tenant to exercise such right on behalf of such Transferee; or

 

14.2.8  Either the proposed Transferee (or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed Transferee) is negotiating with Landlord, or has negotiated with Landlord during the prior six (6) month period, to lease space in the Building.

 

If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any recapture rights Landlord may have under Section 14.4 of this Lease), Tenant may within six (6) months after Landlord’s consent, but not later than the expiration of said six-month period, enter into such Transfer of the Premises or portion thereof, upon substantially the same terms and conditions as are set forth in the Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that if there are any changes in the terms and conditions from those specified in the Transfer Notice (i) such that Landlord would initially have been entitled to refuse its consent to such Transfer under this Section 14.2, or (ii) which would cause the proposed Transfer to be more favorable to the Transferee than the terms set forth in Tenant’s original Transfer Notice, Tenant shall again submit the Transfer to Landlord for its approval and other action under this Article 14 (including Landlord’s right of recapture, if any, under Section 14.4 of this Lease).

 

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14.3        Transfer Premium. If Landlord consents to a Transfer, as a condition thereto which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of any “Transfer Premium,” as that term is defined in this Section 14.3, received by Tenant from such Transferee. “Transfer Premium” shall mean all rent, additional rent or other consideration payable by such Transferee in excess of the Rent and Additional Rent payable by Tenant under this Lease on a per rentable square foot basis if less than all of the Premises is transferred, after deducting the reasonable expenses incurred by Tenant for (i)any reasonable changes, alterations and improvements to the Premises in connection with the Transfer (but only to the extent approved by Landlord as required herein), and (ii) any reasonable brokerage commissions and reasonable attorneys’ fees in connection with the Transfer. “Transfer Premium” shall also include, but not be limited to, key money and bonus money paid by Transferee to Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to Transferee or for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such Transfer.

 

14.4        Landlord’s Option as to Subject Space. Notwithstanding anything to the contrary contained in this Article 14, Landlord shall have the option, by giving written notice to Tenant within ten (10) business days after receipt of any Transfer Notice, to recapture the Subject Space. Such recapture notice shall cancel and terminate this Lease with respect to the Subject Space as of the date stated in the Transfer Notice as the effective date of the proposed Transfer until, at Landlord’s election, (i) the last day of the term of the Transfer as set forth in the Transfer Notice or (ii) the expiration of the Lease Term. If this Lease shall be canceled with respect to less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the same. If Landlord declines, or fails to elect in a timely manner to recapture the Subject Space under this Section 14.4, then, provided Landlord has consented to the proposed Transfer, Tenant shall be entitled to proceed to transfer the Subject Space to the proposed Transferee, subject to provisions of the last paragraph of Section 14.2 of this Lease.

 

14.5        Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and conditions of this Lease shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord, promptly after execution, an original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord, and (iv) no Transfer relating to this Lease or agreement entered into with respect thereto, whether with or without Landlord’s consent, shall relieve Tenant or any guarantor of the Lease from liability under this Lease. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found understated, Tenant shall, within thirty (30) days after demand, pay the deficiency and Landlord’s costs of such audit.

 

14.6        Additional Transfers. For purposes of this Lease, the term “Transfer” shall also include (i) if Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by operation of law during the Term, of fifty percent (50%) or more of the partners, or transfer of twenty-five percent or more of partnership interests, or the dissolution of the partnership, and (ii) if Tenant is a closely held corporation (i.e., whose stock is not publicly held and not traded through an exchange or over the counter), (A) the dissolution, merger, consolidation or other reorganization of Tenant, (B) the sale or other transfer of more than an aggregate of thirty percent (30%) of the voting shares of Tenant (other than to immediate family members by reason of gift or death) during the Term, or (C) the sale, mortgage, hypothecation or pledge of more than an aggregate of fifty percent (50%) of the value of the unencumbered assets of Tenant within a twelve (12) month period.

 

14.7        General Conditions Applicable to Transfer. Any Transfer hereunder shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any sublease or similar occupancy arrangement, Landlord shall have the right, in its sole and absolute discretion, to: (a) treat such sublease or occupancy agreement as canceled and repossess the entire Premises by any lawful means, or (b) require that such subtenant or occupant attorn to and recognize Landlord as its landlord under any such sublease or occupancy agreement. If Tenant shall be in default under this Lease, Landlord is hereby irrevocably authorized to direct any subtenant or occupant to make all payments under or in connection with a sublease or occupancy agreement directly to Landlord (which landlord shall apply towards Tenant’s obligations under this Lease) until

 

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such default is cured. Such subtenant or occupant shall rely on any representation by Landlord that Tenant is in default hereunder, without any need for confirmation thereof by Tenant.

 

14.8        Permitted Transfers. Notwithstanding anything to the contrary in this Lease but subject to the last sentence of this Section 14.8), Tenant may, without Landlord’s prior written consent and without the right of recapture or any participation by Landlord in assignment and subletting proceeds, sublet the Premises or assign the Lease to: (i) a parent, subsidiary, affiliate, division or corporation controlling, controlled by or under common control with Tenant; (ii) an acquirer or purchaser of all or substantially all of Tenant’s assets in the geographic market area; (iii) any entity resulting from a merger, nonbankruptcy consolidation, or other nonbankruptcy reorganization of Tenant (which shall include a change of control of Tenant resulting from any of the foregoing); and/or (iv) any entity or person by sale or other transfer of a percentage of capital stock of Tenant which results in a change of controlling persons. Any of the above are referenced hereafter as “Permitted Transfer” and the transferee is referenced as “Permitted Transferee”. For the purpose of this Lease, sale of Tenant’s capital stock through any public exchange or the issuance of capital stock in connection with a bona fide financing of Tenant shall not be deemed an assignment, subletting, or any other transfer of the Lease or the Premises. The foregoing rights of Tenant under this Section 14.8 are expressly subject to the satisfaction of all of the following conditions: (l)the transfer contemplated by this Section 14.7 must be made for a legitimate independent business purpose and not for the purpose of transferring this Lease, (2) with respect to an assignment of this Lease or a sublease of more than fifty percent (50%) of the Premises, the proposed successor to Tenant must have a tangible net worth computed in accordance with generally accepted accounting principles consistently applied (and excluding goodwill, organization costs and other intangible assets) that is at least equal to the net worth of Tenant (A) immediately prior to the proposed assignment or sublease, or (B) on the Lease Commencement Date (as evidenced by the financial statements delivered to Landlord in connection with the negotiation of this Lease), whichever is greater, (3) Tenant shall deliver proof reasonably satisfactory to Landlord of such net worth and compliance with the other provisions of this Section 14,8 at least 10 days prior to the effective date of any such transaction (or immediately after such transaction if disclosure is prohibited by legally enforceable confidentiality requirements), (4) any such transfer shall be subject and subordinate to all of the terms and provisions of this Lease, and the transferee shall assume, in a written document reasonably satisfactory to Landlord and delivered to Landlord upon or prior to the effective date of such transfer, all the obligations of Tenant under this Lease, and (5) Tenant shall remain fully liable for all obligations to be performed by Tenant under this Lease.

 

ARTICLE 15

 

SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES

 

15.1        Surrender of Premises. No act or thing done by Landlord or any agent or employee of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises unless such intent is specifically acknowledged in a writing signed by Landlord. The delivery of keys to the Premises to Landlord or any agent or employee of Landlord shall not constitute a surrender of the Premises or effect a termination of this Lease, whether or not the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be entitled to the return of such keys at any reasonable time upon request until this Lease shall have been properly terminated. The voluntary or other surrender of this Lease by Tenant, whether accepted by Landlord or not, or a mutual termination hereof shall not work a merger, and at the option of Landlord shall operate as an assignment to Landlord of all subleases or subtenancies affecting the Premises.

 

15.2        Removal of Tenant Property by Tenant. Upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender possession of the Premises to Landlord in as good order and condition as when Tenant took possession and as thereafter improved by Landlord and/or Tenant, reasonable wear and tear and repairs which are specifically made the responsibility of Landlord hereunder excepted. Upon such expiration or termination, Tenant shall, without expense to Landlord, remove or cause to be removed from the Premises all debris and rubbish, and such items of furniture, equipment, free-standing cabinet work, and other articles of personal property owned by Tenant or installed or placed by Tenant at its expense in the Premises, and cabling, wiring or conduit (including any such cabling or wiring associated with any telephone system or network, if any) which may have been placed at the Building or within the Building by or on behalf of Tenant, and such similar articles of any other persons claiming under Tenant, as Landlord may, in its sole discretion, require to be removed, and Tenant shall repair at its own

 

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expense all damage to the Premises and Building resulting from such removal. Any such properly not so removed by Tenant shall be deemed to be abandoned and at the option of Landlord shall either (a) become Landlord’s property without any payment to Tenant or (b) remain Tenant’s property, but Landlord shall have the right to sell or otherwise dispose of such personal property in any commercially reasonable manner, provided that any proceeds realized from the sale of Tenant’s property shall be applied first to offset all expenses of storage and sale, then credited against Tenant’s outstanding obligations under this Lease (including, without limitation, past due rent amounts and any termination damages owing by Tenant to Landlord pursuant to Article 19 hereof), and any remaining balance shall be returned to Tenant.

 

ARTICLE 16

 

HOLDING OVER

 

If Tenant holds over after the expiration of the Lease Term hereof, with or without the express or implied consent of Landlord, such tenancy shall be from month-to-month only, and shall not constitute a renewal hereof or an extension for any further term, and in such case Base Rent shall be payable at a monthly rate equal to one hundred fifty percent (150%) of the Base Rent applicable during the last rental period of the Term. Such month-to-month tenancy shall be subject to every other term, covenant and agreement contained herein. Landlord hereby expressly reserves the right to require Tenant to surrender possession of the Premises to Landlord as provided in this Lease upon the expiration or other termination of this Lease. The provisions of this Article 16 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law. If Tenant fails to surrender the Premises upon the termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys’ fees) and liability resulting from such failure, including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender, and any lost profits to Landlord resulting therefrom.

 

ARTICLE 17

 

ESTOPPEL CERTIFICATES

 

Within ten (10) business days following a request in writing by Landlord, Tenant shall execute and deliver to Landlord an estoppel certificate, which, as submitted by Landlord, shall be in the form as may be required by any prospective mortgagee or purchaser of the Real Property (or any portion thereof), indicating therein any exceptions thereto that may exist at that time, and shall also contain any other information reasonably requested by Landlord or Landlord’s mortgagee or prospective mortgagee. Tenant shall execute and deliver whatever other instruments may be reasonably required for such purposes. Failure of Tenant to timely execute and deliver such estoppel certificate or other instruments shall constitute an acceptance of the Premises and an acknowledgment by Tenant that statements included in the estoppel certificate are true and correct, without exception. Failure by Tenant to so deliver such estoppel certificate shall be a material default of the provisions of this Lease.

 

ARTICLE 18

 

SUBORDINATION

 

This Lease is subject and subordinate to all present and future ground or underlying leases of the Building and to the lien of any mortgages or trust deeds, now or hereafter in force against the Real Property, if any, and to all renewals, extensions, modifications, consolidations and replacements thereof, and to all advances made or hereafter to be made upon the security of such mortgages or trust deeds, unless the holders of such mortgages or trust deeds, or the lessors under such ground lease or underlying leases, require in writing that this Lease be superior thereto. Tenant covenants and agrees in the event any proceedings are brought for the foreclosure of any such mortgage, or if any ground or underlying lease is terminated, to attorn, without any deductions or set-offs whatsoever, to the purchaser upon any such foreclosure sale, or to the lessor of such ground or underlying lease, as the case may be, if so requested to do so by such purchaser or lessor and to recognize such purchaser or lessor as the lessor under this Lease. Tenant shall, within five (5) days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm the subordination or superiority of this Lease to

 

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any such mortgages, trust deeds, ground leases or underlying leases. Tenant waives the provisions of any current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale. Notwithstanding anything to the contrary in this Lease, at Tenant’s request, Landlord shall use commercially reasonable efforts to obtain from any existing or future lender which has or may have a security interest in the Building an agreement on such lender’s standard form which provides for the recognition of Tenant’s interests under this Lease so long as Tenant is not in default hereunder in the event of a foreclosure of the lender’s security interest (an “SNDA”); provided, however, (i) Landlord’s obligations to use commercially reasonable efforts to obtain a SNDA shall not require Landlord to expend attorneys’ fees or initiate legal proceedings against any lender and (ii) Landlord shall have no liability and the validity of this Lease shall not be affected in the event Landlord is unable to secure an SNDA.

 

ARTICLE 19

 

TENANT’S DEFAULTS; LANDLORD’S REMEDIES

 

19.1        Events of Default by Tenant. All covenants and agreements to be kept or performed by Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost and expense and without any reduction of Rent The occurrence of any of the following shall constitute a default of this Lease by Tenant:

 

19.1.1     Any failure by Tenant to pay any Rent or any other charges required to be paid under this Lease, or any part thereof, within five (5) days of the date due; or

 

19.1.2     Any failure by Tenant to observe or perform any other provision, obligation, covenant or condition of this Lease to be observed or performed by Tenant where such failure continues for fifteen (15) days after written notice thereof from Landlord to Tenant; provided however, if the nature of such default is such that the same cannot reasonably be cured within a fifteen (15) day period, Tenant shall not be deemed to be in default if it diligently commences such cure within such period and thereafter diligently proceeds to rectify and cure said default as soon as possible; or

 

19.1.3     Abandonment of the Premises by Tenant. Abandonment is herein defined to include, but is not limited to, any absence by Tenant from the Premises for three (3) business days or longer while in default of any provision of this Lease.

 

19.1.4     Any failure by Tenant to observe or perform the provisions of Sections 14.17,18 or 26.4 where such failure continues for more than three (3) business days after written notice from Landlord.

 

19.1.5 Tenant (i) makes a general assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy, or suffers the filing of an involuntary petition by creditors, (iii) suffers the appointment of a receiver to take possession of all or substantially all of its assets, (iv) suffers the attachment or other judicial seizure of all or substantially all of its assets, (v) admits in writing its inability to pay its debts as they come due, or (vi) makes an offer of settlement, extension or composition to its creditors generally.

 

Tenant acknowledges that Landlord’s delivery of any notice described in the foregoing provisions of this Section 19.1 shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 or any similar or successor law.

 

19.2        Landlord’s Remedies Upon Default. Upon the occurrence of any such default by Tenant, Landlord shall have, in addition to any other remedies available to Landlord at law or in equity, the option to pursue any one or more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever.

 

19.2.1     Terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Premises and expel or remove Tenant and any

 

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other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim or damages therefor; and Landlord may recover from Tenant the following:

 

(i)               The worth at the time of award of any unpaid rent which has been earned at the time of such termination; plus

 

(ii)              The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

 

(iii)             The worth at the time of award of the amount by which the unpaid rent for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

 

(iv)             Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, specifically including but not limited to, brokerage commissions and advertising expenses incurred, expenses of remodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant, including, without limitation, any rent abatement; and

 

(v)              At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law.

 

The term “rent” as used in this Section 19.2 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others. As used in Sections 19.2.1(i) and (ii), above, the “worth at the time of award” shall be computed by allowing interest at the Interest Rate set forth in Section 4.5 of this Lease. As used in Section 19.2.1 (iii) above, the “worth at the time of award” shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

 

19.2.2     Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due.

 

19.2.3     Landlord may, but shall not be obligated to, make any such payment or perform or otherwise cure any such obligation, provision, covenant or condition on Tenant’s part to be observed or performed (and may enter the Premises for such purposes). In the event of Tenant’s failure to perform any of its obligations or covenants under this Lease, and such failure to perform poses a material risk of injury or harm to persons or damage to or loss of property, then Landlord shall have the right to cure or otherwise perform such covenant or obligation at any time after such failure to perform by Tenant, whether or not any such notice or cure period set forth in Section 19.1 above has expired. Any such actions undertaken by Landlord pursuant to the foregoing provisions of this Section 19.2.3 shall not be deemed a waiver of Landlord’s rights and remedies as a result of Tenant’s failure to perform and shall not release Tenant from any of its obligations under this Lease.

 

19.3        Payment by Tenant. Tenant shall pay to Landlord, within fifteen (15) days after delivery by Landlord to Tenant of statements therefor: (i) sums equal to expenditures reasonably made and obligations incurred by Landlord in connection with Landlord’s performance or cure of any of Tenant’s obligations pursuant to the provisions of Section 19.2.3 above; and (ii) sums equal to all expenditures made and obligations incurred by Landlord in collecting or attempting to collect the Rent or in enforcing or attempting to enforce any rights of Landlord under this Lease or pursuant to law, including, without limitation, all legal fees and other amounts so

 

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EXHIBIT B-1

 

FINAL WARM SHELL PLANS

 

Tenant has been provided electronic access to and hard copies of a complete set of the NEW FOUR STORY COMMERCIAL SHELL BUILDING PERMIT 278 University Avenue Palo Alto, California (Permit Submission: 12.28.10 & Plan Check Response: 05.16.11) base building plans and specifications for the 278 University Avenue, Palo Alto Building as prepared by The Hayes Group and the various project engineers dated July 20, 2012 (the “Contract Documents”). The Contract Documents include, but are not limited to, all drawings and specifications as listed on the Drawing Index contained on Sheet A0.1 of the Contract Documents.

 

Tenant, and its agents, shall familiarize themselves with the Contract Documents and shall insure that all Tenant Improvements for the Premises are compatible with and of equal or better quality to those base Building systems defined in the Contract Documents. Should a conflict exist between the specification provided for in this Exhibit B-2 and the Contract Documents, the more stringent or higher quality application or condition shall be utilized by Tenant in the design and construction of the Tenant Improvements for the Premises.

 

The following exerts from the Contract Documents are included for reference purposed only into Exhibit B-1

 

B-1.1 Contract Document Sheet A0.1, Cover Sheet and Drawing Index

 

B-1.2 Contract Document Sheet A2.2, First Floor Plan

 

B-1.3 Contract Document Sheet A2.3, Second Floor Plan

 

 

 

 

 

 

 

 

EXHIBIT B-2

 

BUILDING STANDARD TENANT IMPROVEMENT SPECIFICATIONS

 

In the construction of all tenant improvements, Tenant shall comply with all Building standards established by Landlord including, but not limited to, those contained in this Exhibit B-2. The intent of this Exhibit B-2 is to establish minimum building specifications for Tenant to require its designers, engineers and contractors to comply with in the design and construction of Tenant’s Tenant Improvements in the Premises.

 

Tenant has been provided access to and copies of the base building plans and specifications for the 278 University Avenue, Palo Alto Building shell as prepared by The Hayes Group and the various project engineers and as approved for building permit by the City of Palo Alto (the “Contract Documents”). Tenant, and its agents, shall familiarize themselves with the Contract Documents and shall insure that all Tenant Improvements for the Premises are compatible with and of equal or better quality to those base Building systems defined in the Contract Documents. Should a conflict exist between the specification provided for in this Exhibit B-2 and the Contract Documents, the more stringent or higher quality application or condition shall be utilized by Tenant in the design and construction of the Tenant Improvements for the Premises.

 

All Tenant Improvements designed and constructed by Tenant shall be limited to equipment, components, systems and materials manufactured by the same manufacturer as those base Building components, as specified in the Contract Documents and installed in the Building shell, to which such Tenant Improvement will integrate and connect. For example, the main electrical switchgear located in the basement is manufactured by General Electric. All electrical Tenant Improvement equipment, components and materials (for example subpanels, circuit breakers, etc.) are to be manufactured by General Electric and compatible with the shell Building systems. All Tenant Improvement mechanical control systems are to manufactured by Johnson Controls and be compatible with the base shell Building control system by Johnson Controls, No substitutions shall be permitted.

 

The following documents, establishing minimum standards and specifications, are hereby incorporated into Exhibit B-2

 

B-2.1 Requirements of the Working Drawings by Tenant

 

B-2.2 Contractor Rules and Regulations

 

B-2.3 Plumbing, Mechanical and Electrical Basis of Design prepared by AICES Engineering

 

B-2.4 Mechanical Riser Diagram for the Mechanical and Control Systems for 278 University

 

B-2.5 Single Line Diagram of the Electrical Systems of 278 University, Palo Alto

 

B-2.6 Close-Out Package Requirements

 

 

B-2.1      Requirements of the Working Drawings by Tenant

 

Tenant shall cause Tenant’s Architect to prepare the Working Drawings in accordance with this Exhibit B-2.1. The Working Drawings shall:

 

1.    Be compatible with the design and construction of the Building and the Building Systems and Equipment;

 

2.    Include floor plans (not less than 1/8 inch scale) indicating:

 

(i)                              Quantity, location and type of all partitions.

 

(ii)                           Quantity, location and type of all doors and frames, indicating hardware and providing keying schedule.

 

(iii)                        Quantity, location and type of glass partitions, windows and doors.

 

(iv)                       Critical dimensions necessary for construction.

 

(v)                                 Quantity and location of all electrical items, including without limitation, outlets, switches, telephone outlets, lighting and floor corings.

 

(vi)                              Quantity, location and type of equipment that will require special electrical requirements, with manufacturers’ specifications for use and operation.

 

(vii)                           Reflected ceiling plans including, without limitation, all lighting, vents, diffusers, recessed screens and audio visual equipment.

 

(viii)                        Quantity, location, weight per square foot and description of any equipment or filing system exceeding 50 psf (spread) live load.

 

(ix)                              Requirements for special air conditioning or ventilation-exhaust fans or equipment loads.

 

(x)                                 Quantity, location, type and color of floor covering.

 

(xi)                              Quantity, location, type and color of wall covering.

 

(xii)                          Quantity, location and type of plumbing.

 

(xiii)                       Quantity, location and type of appliances, kitchen equipment and millwork;

 

3.    Include details (not less than 1/4 inch scale) showing:

 

(i)            All millwork with verified dimensions and dimensions of all equipment to be built-in.

 

(ii)                                  Bracing or support of special walls, glass partitions or other features if desired (if not included with the Working Drawings, Landlord’s Engineer, at Tenant’s expense, will design all support or bracing required);

 

 

4.                                      Comply with all applicable laws, including without limitation, the provisions of the ADA;

 

5.                                      Comply with all applicable insurance regulations for a fire resistant Class A building with fire sprinklers;

 

6.                                      Include locations of all improvements including complete dimensions;

 

7.                                      Comply with all building standards as established by the Landlord from time to time in its sole and absolute discretion including, but not limited to:

 

a.              Exit Lighting by Cooper Lighting, Sure-Lites ELX Series, recessed, LED lamps, edgelit and self-powered emergency capabilities.

 

b.              MechoSystems Roller Shade Window Coverings, MechoShade or ElectroShade, fabric and color as selected by Landlord.

 

c.               Mechanical control systems by Johnson Controls, Tridium technology controls and integrated HVAC systems including, but not limited to, valves, actuators, dampers, sensors, thermostats and other control components.

 

d.              Security Systems as specified by Northland Controls, Inc., or such other vendor as selected by Landlord including, but not limited to, a Lenel OnGuard PCS-32ES Server System; Intelligent System Controller LNL-3300; iClass Card Contactless Smart Hexagonal Keys 2052NKNNN; Card Reader iClass RP40 (Black, Universal); CCTV EL-SR 8 Linux Hybrid NVR Appliance 2TB; Alphone Corp. Intercom System GT-DM; and CCTV Camera IP MegaDome, Color, D/N, Vandal Resistant AV2155DN. Tenant shall reimburse Landlord for its prorata share of the cost of the Building house security systems and be responsible for the cost for and installation of all security devices and systems serving and within the Premises.

 

8.                              Confirm and acknowledge that all ceiling heights and dimensions shown on the Landlord’s Contract Documents are estimates only. Landlord shall not be responsible or liable for delivery of the Premises to Tenant with ceiling heights and dimensions as shown on the Contract Documents. Tenant shall verify all actual ceiling heights, dimensions and field conditions and shall not rely on the Contract Documents for such. Tenant shall be solely responsible for installing the tenant improvements within the constraints of the as-built conditions of the Premises in the field upon delivery by Landlord to Tenant.

 

9.                              Confirm that all shaft locations within the Premises are available for Landlord’s future use. Landlord reserves the right to utilize areas designated within the Premises as shaft conditions (either existing or future) in the Contract Documents for vertical penetrations for mechanical, electrical, plumbing and building systems. Tenant shall design all interior improvements so that they do not interfere with Landlord’s future use of ail shaft areas. Tenant shall relocate any tenant improvements that interfere with Landlord’s future use of such shafts areas.

 

10.                       Include any other information reasonably required by Landlord, or Landlord’s Architect and consultants.

 

 

B-2.2      Contractor Rules and Regulations

 

The following Rules and Regulations (“R&R’s”) are to be followed by all contractors, subcontractors, suppliers, consultants and vendors (collectively, “Contractors”) that perform any tenant lease space construction or other construction-related activity (the “Work”) at 278 University Avenue, Palo Alto California (the “Premises”). The term “General Contractor” as used in these R&R’s means any Contractor that contracts directly with a tenant to perform the Work, including providing labor, materials, equipment or services. The term “Subcontractor” as used in these R&R’s means any Contractor retained by a General Contractor directly or indirectly to perform the Work, including providing labor, materials, equipment or services. If a tenant is licensed as a contractor in California and will itself be performing any of the Work, then it will be a “General Contractor” for purposes of these R&R’s and must therefore comply with all requirements of these R&R’s applicable to General Contractors. General Contractors must require their Subcontractors, suppliers and vendors of every tier to comply with the requirements of these R&R’s that apply generally to Contractors and specifically to Subcontractors, and will be responsible for their Subcontractors’, suppliers’ and vendors’ failure to do so.

 

I. ADMINISTRATION OF CONTRACTS

 

A.                                    Modifications to these R&R’s will be effective only if they are initialed by authorized representatives of both the General Contractor and Landlord. The R&R’s cannot be amended by implication, oral agreements, actions, inactions, course of conduct, or implied waiver.

 

B.                                    Each General Contractor must maintain and provide to Landlord, and by written agreement, must require each of its Subcontractors to maintain the insurance and the evidence of insurance required in the tenant’s lease. General Contractor shall provide Builder’s Risk Insurance for the Work.

 

C.                                    Contractor shall provide a single contact person. That person will be responsible to see that the Contractor complies with these R&R’s. Should that person be replaced, a replacement person shall be designated by the Contractor.

 

D.                                    Landlord will have no responsibility to plan, contract, schedule and execute contracts involving furniture, moving companies, telephone and telecommunication equipment, cabling and termination, computer installation and tenant signage. Promptly upon Landlord’s request, all Contractors (including consultants, suppliers and vendors directly contracted with a tenant and working within the Premises), must furnish to Landlord a certificate of insurance and/or other evidence of the insurance.

 

E.                                     General Contractor shall be responsible for obtaining proper permits for all Work including, without limitation, prior to inspection of fire/life safety system related alterations. Promptly upon request, such permits must be submitted to the Landlord’s designated representative as set forth in the tenant’s lease of the Premises (“Landlord’s Representative”) during or prior to inspection of the Work.

 

 

II PRE-CONSTRUCTION AND BIDDING REQUIREMENTS

 

A.                                    General Contractor shall be responsible for verifying all patent conditions affecting the scope of the Work prior to submitting proposals.

 

B.                                    General Contractor shall include in its proposals the following costs: additional security, trash removal, window removal, and any other use of the building services associated with the scope of Work.

 

C.                                    General Contractor shall provide for any necessary OSHA approved safety procedures, instruction, and equipment for their workers and Subcontractors.

 

D.                                    Although General Contractor must comply with these R&R’s, General Contractor is responsible for and has control over (i) means, methods, techniques and procedures for me Work and (ii) initiating, maintaining and supervising all safety precautions and programs in connection with the performance of the Work. General Contractor shall take all prudent precautions for safety and security of, and shall provide protection to prevent damage, injury or loss to, persons or property, including employees performing the Work, other persons that may be affected by the Work, the Work itself, and any other personal or real property that may be affected by the Work.

 

E.                                     General Contractor shall be responsible for the acquisition, notification and supervision of permits required for the Work. General Contractor is required to schedule, be available and resolve any notifications acquired as a result of inspections required by any government agencies whose jurisdiction includes the Premises.

 

F.                                      A pre-construction walk-through with General Contractor and Landlord’s Representative shall be arranged so as to note any pre-existing conditions within and to the areas affecting the scope of Work.

 

G.                                    Acquisition of City of Palo Alto Building Department “variances” requires approval by Landlord’s Representative (which approval shall not be unreasonably withheld, conditioned or delayed) after collaboration between General Contractor, the approved architect and/or (as applicable) engineer for the Work and governmental agencies whose jurisdiction includes the Premises.

 

H.                                   General Contractor shall include all costs associated with the modifications of the fire/life safety system that may he required by the scope of Work. This includes development of plans, constructing fire ratings of walls, floor, ceiling and door assemblies, as well as any changes to the mechanisms of the fire control center system and the automatic sprinkler system.

 

I.                                        General Contractor shall at its own expense promptly address and resolve any correction of defects in the Work within one year after substantial completion of the Work.

 

 

J.                                        General Contractor shall include a wash and (possible) re-lamp fee of all lighting fixtures within the area affected by the scope of Work, General Contractor shall specify as to whether this is included or an alternate within the proposal.

 

K.                                   General Contractor shall include the cost of removing and correcting exposed and concealed items caused by the Work, abandoned or non-essential equipment caused by the Work, including but not limited to any electrical and communication wiring, inoperative plumbing devices, receptacles, misc. equipment, empty conduit, etc., which exists in affected areas of the scope of Work.

 

L.                                     General Contractor shall include a one-time touch up paint assignment on affected areas, including wood surface doors, for after tenant move-in. The purpose of this is to fix incidental damage incurred from moving of furnishings and shall be completed within ten (5) business days after Tenant move-in or renewed occupancy of affected area.

 

M.                                 No storage of flammable substances outside of normal and customary construction materials will be allowed in any of the buildings on the Premises unless approved by Landlord’s Representative (which approval shall not be unreasonably withheld, conditioned or delayed) and in accordance with approved building codes and regulations.

 

N.                                    General Contractor shall be required to insure access to all necessary mechanical and electrical equipment after completion of the scope of Work. This includes all HVAC mixing boxes, control dampers, shut off valves, fire dampers, and any other item that pertains to maintenance and serviceability of building equipment.

 

O.                                    General Contractor shall use high quality workmanship practices that shall include proper wall preparation, use of sealers, primers, etc. for protection of any finishes within the scope of Work.

 

P.                                      Landlord’s Representative shall have the right to suspend a Contractor’s Work if such Work is presenting or may present a danger to life, safety or property, or in an emergency situation.

 

Q.                                    Contractors shall be licensed to the extent required by California law, and shall maintain such license in good standing so long as performing any of the Work.

 

III. BUILDING ACCESS AND FACILITIES COORDINATION

 

A.                            Landlord’s Representative shall reasonably specify the location of roll-off containers for construction trash and debris.

 

B.                            General Contractor shall notify Landlord’s Representative of any hazardous materials (other than those contained in standard tenant improvement construction materials) being used for the scope of Work and storage provisions for such products. Such use must have prior written consent from Landlord’s Representative before the introduction of such materials into the Premises.

 

 

C                                       General Contractor shall maintain an on-site superintendent who will provide direct supervision of all of the Work being performed, including the delivery of materials. Such supervisory personnel shall be fully empowered to coordinate, respond to and authorize Subcontractors to perform such of the Work as necessary to enable the scope of Work.

 

IV. FINISH PROTECTION AND HOUSEKEEPING

 

A.                                    General Contractor shall provide for reasonable removal of all debris that arises during the course of construction in affected areas. Building trash receptacles and dumpsters shall not be used by Contractor.

 

B.                                    Contractor shall keep work areas in a reasonably clean and orderly condition. Affected areas shall be regularly swept and debris removed during the course of the Work.

 

C.                                    Discarded, open food containers and related debris shall be disposed of properly at the Premises.

 

D.                                    General Contractor may be billed for any additional cost as a result of the use of restroom sinks, floor sinks or other fixtures to fill buckets, make paste, wash brushes, etc.

 

E.                                     Elevators are not to be used by Contractors and General Contractor. Access to the stairwells will be provided.

 

F.                                      Neither Landlord nor Landlord’s Representative assumes any responsibility for trash containers stored outside for use by the Contractors. It is the responsibility of the General Contractor to monitor and resolve any usage issues with their trash containers. Trash is to be placed in the containers and containers are to be emptied as often as reasonably necessary.

 

G.                                    At the end of any given workday, all lights in the area affected by the Work must be turned off. General Contractor’s electrician shall provide means of accomplishing this at all times.

 

H.                                   General Contractor may, at the request of the Landlord’s Representative, be required to stock and keep clean the restrooms on the floor or floors where they are working. If above average wear and tear on designated restrooms is observed by Landlord’s Representative, Contractor will be required to return the restroom to its prior condition.

 

V. CONSTRUCTION REQUIREMENTS

 

A.                                    Unused floor penetrations within the scope of Work must be properly filled prior to covering. The accepted procedure for filling penetrations up to 2” in diameter requires beveling the edge of the penetration prior to pouring concrete. For larger penetrations or where grouping of holes requires, the same process plus backing from below the floor needs to occur.

 

 

B.                                    Any penetrations to be made in structural steel beams are to be approved, in advance by a Structural Engineer chosen by Landlord’s Representative and permitted by local building official and/or the State of California, as applicable.

 

C.                                    Landlord’s Representative may reasonably request that all structural analysis be paid for by Tenant, should questionable loads be shown to affect the floors of the scope of Work.

 

D.                                    Any attachment or intrusion into the skin of any of the building or roofing system shall be drawn in detail and submitted to Landlord’s Representative for review and approval (which approval shall not be unreasonably withheld, conditioned or delayed, but in any event subject to the provisions of the Lease with respect to approvals required in connection with penetrations of the roof membrane), prior to commencement of the Work. In addition written verification will be required to assure no warranties may be voided from any of the Work affecting the skin or roofing system of the building. Tenant shall use Landlord’s selected subcontractors to perform any and all Work that penetrates the Building skin, waterproofing and/or roofing membrane to insure that all base building warranties remain in full force and effect.

 

E.                                     Contractor shall make sure that any extra ceiling tiles, pieces, extra debris, non-essential metal, etc. is removed from the space above ceiling tiles, prior to ceiling tile being installed.

 

F.                                      As good workmanship practice, Contractor shall have all wall plates, thermostats, and any other like devices removed from their location prior to paint and wall preparation. When paint or wall covering is complete, devices can be reinstalled.

 

G.                                    Hot work may only be done on the Premises by person(s) who are trained to local safety standards. Any such hot work will comply with all permit requirements, and the hot work may be overseen by Landlord’s Representative. Any deviations from standard safety procedures with respect to hot work will result in immediate dismissal from the project site. Safety and procedural compliance is essential.

 

H.                                   A hot work permit is required for any temporary operation involving open flames or which produces heat and/or sparks. This includes, but is not limited to: brazing, cutting, grinding, soldering, torch applied roofing, welding and all other portable torch and hot gun uses. Hot work permits are logged by Landlord’s Representative.

 

Contractor shall abide by any decision of Landlord’s Representative that a ‘fire watch’ be arranged with additional personnel. Personnel must be able to supervise and activate alarms on the fire control center, use extinguishing agents, and may be required to observe the work area four (4) hours after Work completion.

 

J.             All approved gas and oxygen canisters shall be properly chained and supported to

 

 

eliminate all potential hazards. At the completion of use, said containers shall be promptly removed from the building.

 

K.            No gasoline powered devices shall be permitted within the building.

 

L.                                     General Contractor shall be required to keep at least four (4) currently certified 10 pound ABC fire extinguishers in the area of the scope of Work in the building during construction.

 

 

VI. FIRE/LIFE SAFETY SYSTEMS

 

A.                                    Failure to notify and coordinate with Landlord’s Representative regarding any Work on any fire/life safety system, including the fire control center and fire sprinkler equipment, may result in the automatic dispatch of fire trucks, General Contractor shall bear responsibility for any monetary costs incurred by the dispatching of city emergency services or Work stoppage that result from a failure to notify Landlord’s Representative in advance.

 

B.                                    General Contractor can choose to ‘cap’, protect any smoke detectors in the vicinity of the scope of Work during construction in order to mitigate nuisance activation by dust or smoke byproducts, At the end of each day, all ‘capped’ smoke detectors shall be uncovered and proper operation verified by the General Contractor.

 

C.                                    Junction boxes for fire/life safety devices shall be painted red to indicate their use.

 

D.                                    Only plenum rated cable shall be used where communication/data or other low-voltage conductors are installed in the return air plenum out of conduit.

 

E.                                     For Fire Safety and proper evacuation procedures, fire rated doors are never to be propped open or blocked from automatically closing.

 

F,                                      General Contractor shall be responsible for pre-testing the fire/life safety system and insuring that it meets permit requirements.

 

VII. MECHANICAL AND ELECTRICAL SYSTEMS

 

A.                                    All duct runs to all ceiling diffusers (registers) shall include a manual volume damper for each register outlet, installed as close to the mixing box as feasible for isolating the respective register. Registers shall be thoroughly cleaned prior to project turnover.

 

B.                                    General Contractor shall maintain a maximum 25 feet in length from the mixing box to diffuser, and may use aluminum flex ductwork with (min.) 1.5” insulation. Only the last 7 feet of any duct (from mixing box to register) can be of fiberglass, flex type duct material.

 

C.                                    General Contractor shall accept responsibility for purification and testing of domestic water, piping and dispensing fixtures and insure that systems are in accordance with current ASHRAE guidelines. These procedures are required especially when altered with the use of soldering.

 

 

D.                                    Landlord requires all Contractors to use high quality workmanship practices and use non-flexible conduit, properly bent and attached wherever possible.

 

E.                                     In the event that temporary power connection is required, such connections shall be made by a licensed and insured electrical contractor and General Contractor shall give Forty-eight (48) hours prior notice to Landlord’s Representative.

 

VIII. MOVE-IN PROCEDURE

 

A.                                    Prior to move-in, Tenant and General Contractor must obtain and provide a temporary or final certificate of occupancy or other authorization allowing Tenant to occupy the Premises.

 

B.                                    Tenant shall coordinate all move-in activities with Landlord’s Representative.

 

C.                                    A designated representative of Tenant and/or moving company will be present at all times during the move-in.

 

D.                                    Movers shall protect all surfaces on the interior and exterior of the Building prior to moving Tenant possession into the Building. All flooring shall be covered with Masonite. Elevators shall have Masonite floor protection and wall/ceiling protection. After the move, movers shall breakdown and remove all boxes and packaging after the move. Such packaging must be removed from Premises.

 

E.                                     Heavy objects loaded onto the freight elevators (if any) must be within elevator load limits and with sturdy floor protection.

 

F.                                      Tenant’s moving company, vendors, and service companies must meet Landlord’s reasonable the insurance requirements.

 

G.                                    Telephone, security and internet installation and service is the Tenant’s responsibility and expense.

 

IX. CLOSE-OUT AND COMPLETION

 

A.                                    A completion package consisting of all items listed in Exhibit B-2.6 attached hereto, shall be turned over to Landlord’s Representative prior to final payment by either Landlord or Tenant.

 

B.                                    “As-Built” drawings must be an accurate record of all items altered from original drawings and include pertinent written material (i.e., appliances, finishes, field conditions, etc.). Such drawings could be updated renderings or could show corrections in red ink and be initialed and dated by the General Contractor’s supervisor.

 

C.                                    Failure to turn over necessary documentation described in Exhibit B-2.6 attached hereto can delay disbursement of Tenant’s allowance or payment to the General Contractor.

 

 

X. PROVISOS

 

A.                                    The rights of Landlord (including rights of Landlord’s Representative) under these R&R’s are solely for Landlord’s benefit, and Landlord has no obligation to exercise any rights in favor of Tenant, any Contractor or any other person or entity.

 

B.                                    The failure of Landlord or Landlord’s Representative to insist upon compliance with any requirement of these R&R’s will not constitute a waiver of such requirement. Any waiver by Landlord or Landlord’s Representative will be effective only if made specifically and in writing by Landlord’s Representative, and will not be implied. A proper written waiver by Landlord’s Representative will only be applicable to the specific provision and instance to which it is related, and will not be deemed to be a continuing or future or broader waiver.

 

C.                                    Notwithstanding any rights granted to Landlord (including rights of Landlord’s Representative) under these R&R’ s to review and approve documentation submitted by Contractor or the Work performed by Contractor, no such review or approval will deemed to be Landlord’s acceptance of, or assumption of responsibility for, any defect, deviation or inadequacy in such documentation or the Work.

 

 

B-2.3 PLUMBING, MECHANICAL AND ELECTRICAL BASIS OF DESIGN PREPARED BY ACIES ENGINEERING FOR 278 UNIVERSITY, PALO ALTO CALIFORNIA

 

ATTACHED

 

 

	

    	
 
    	
EXHIBIT B-2.3
    

 

278 UNIVERSITY AVE., PALO ALTO

 

PLUMBING, MECHANICAL AND ELECTRICAL BASIS OF

DESIGN

 

PLUMBING SYSTEM DESCRIPTION

 

The plumbing system Will include plumbing fixtures, sanitary, vent, cold and hot water, and gas piping. The design for this system includes all piping within the building.

 

DOMESTIC HOT AND COLD WATER PIPING

 

· Domestic water system will be complete with isolation valves (for maintenance purposes) and water hammer arrestors. Shut-off valves shall be located in accessible locations.

 

· Sizes shall be based on number of fixture units, and demand load curves in the California Plumbing Codes.

 

· Friction loss; 5 psi per 100 feet of pipe.

 

· Maximum allowable water velocity for cold water: 8 feet per second inside buildings.

 

· Maximum allowable water velocity for hot water: 5 feet per second inside buildings.

 

· Expansion and contraction of all hot water piping shall be considered in the design.

 

· The tenant space is provided with 1” cold water and 3/4” hot water valved stub-outs located above ceiling.

 

· Domestic hot and cold water supply for each tenant space shall be provided with sub-meters (flow meters).

 

· Domestic water piping will be type L copper for above grade, and type K copper for below grade.

 

· All equipment and piping shall be seismically braced and anchored.

 

SOIL, WASTE AND VENT PIPING

 

· Soil, waste and vent piping will be no-hub cast iron.

 

· Sanitary waste and vent system complete with cleanouts and traps. Cleanouts locations to be reviewed by Landlord.

 

· Trap primers will be placed near the floor drain and floor sink locations in order to prevent trap seal loss and avoid sewer fumes.

 

· Waste piping will be installed with a minimum slope of 1/4” per foot.

 

111W Evelyn Avenue, Suite 301, Sunnyvale, CA 94086 phone: (408) 522-5255 fax: (408) 522-5260 email: info@acies.net

 

 

· A 4” waste and 2” vent stub-outs axe provided for the tenants use.

 

PLUMBING FIXTURES

 

Tenants shall provide high efficient plumbing fixtures as required per LEED credit WE 3 Water Use Reduction.

 

· Plumbing fixtures will be California State and CalGreen approved for conservation and for handicapped regulations.

 

· Tank type water closets shall be of pressure-assisted type.

 

· ADA fixtures and control valves will be provided as required.

 

· The plumbing fixtures will be high efficient type with the following flow rates:

 

·    Lavatory faucets - 0.5 gpm

·    Sink faucets — 1.8 gpm

·    Gravity tank-type water closets — 1.28 gpf

·    Flushometer valve water closets — 1.28 gpf

·    Urinals — 1/8 gpf

 

MECHANICAL SYSTEM DESCRIPTION

 

WATER-SOURCE HEAT-PUMPS WITH COOLING TOWER

 

The water-source heat-pumps use cooling tower for heat rejection.

 

System components:

 

The forced-air water-source heat-pumps system with the cooling tower consists of the following components:

 

1.                   The water-source heat-pump (WSHP-1.1 - Florida Heat Pump EP012 and WSHP-0.1 - Trane GEH0061) as a stand-alone air conditioning unit that can be used for heating and cooling and it is utilizing condensing water as the medium for heat rejection or absorption. The unit consists of supply fan, refrigerant compressor, reversing valve, direct-expansion cooling coil and water cooled condenser mounted inside the insulated sheet-metal enclosure. (The “coil” is refrigerant-to-air heat exchanger — can be used for heating or cooling of the supply air). The temperature of the supply air (or the room temperature) is controlled by starting and stopping (cycling) the compressor and by energizing the reversing valve to switch to the heating (reverse) mode.

 

2.                   Condensing water pumps (CWP-1A, 1B — Bell & Gossett, B-224.2H, Series 1510 2AC) and distribution piping: Circulating pumps provide circulation of the condensing water through the cooling tower and water-source heat pumps. Cooling tower (CT-1 — EVAPCO LRWB 5-7J9-1): is using cooling effect of water evaporation to cool the condensing water. The cooling tower is located on the roof.

 

3.                   Heating boiler (B-1 - MACH C-300): If the water-source heat pumps are running in the heating mode, there will be extracting the heat from the condensing water and the temperature of the condensing water will drop. The hot water from the boiler will be injected to the condensing water

 

 

to maintain the water temperature above 60°F. The boiler is located next to the cooling tower, and uses the natural-gas as the fuel.

 

4.                   Temperature Controls and water treatment system: The condensing water temperature control system sequences and modulates the cooling tower and heating boiler to maintain the condensing water temperature within 60°F to 90°F. The water treatment system is using the chemical or non-chemical means of water treatment to prevent deposits of calcium-carbonate inside the cooling tower, extending the life-cycle and minimizing the maintenance of the cooling tower.

 

FRESH AIR SUPPLY SYSTEM

 

System Description

 

The fresh air is supplied to the building through ERV (energy recovery ventilator, ERV-1 — DAIS D5R-FSE) that consists of two fans (supply and exhaust fan) and air-to-air plate heat exchanger. Both fans are controlled, by variable speed drives. On each floor the fresh air from ERV is delivered through the VAV box. The VAV box (TITUS ESV10) is used to measure and control the amount of fresh air supplied to each floor.

 

FUTURE TENANT REQUIREMENTS

 

· The Water Source heat pumps (WSHP - Florida Heat Pump EP) shall have a minimum 19 EER and 5.35 COP rating compliant with requirements of 2010 Cal green.

 

· The Water Source heat pump unit shall be equipped with motorized shut-off valve to stop condensing water flow when the unit’s compressor is not running.

 

· The Water Source heat-pumps shall he controlled by BacNet compatible networked thermostat “Johnson Controls” TEC2602 for heat-pump application

 

· All the tenant’s HVAC controls shall be tied-in (networked) into the building’s BMS using BacNet communication protocol.

 

· The outside-air delivery VAV box (TITUS ESV) shall be set to operate in the constant volume mode and be set to deliver minimum O.A. required per T24 for particular tenant. If the CO2 monitor detects concentrations of CO2 above 400 ppm, the supply air flow rate shall be re-set to higher level (required for “LEED” enhanced ventilation).

 

· The VAV box shall be controlled by Johnson Controls Tridium VMA-16 controller with Tridium NS network CO2 monitor.

 

· The tenant’s electrical power usage shall be monitored by power meter integrated into building BMS. See electrical sections.

 

· The usage of domestic cold and domestic hot water shall be monitored by BMS system through control input module “Johnson Controls” IOM1711 by connecting pulse output from water meter. (See plumbing for sections and specifications)

 

· Each floor (tenant) has an allowance for maximum 40 GPM of condensing water usage corresponding to approximately 15 tons of cooling. The landlord has to approve any condensing water usage exceeding the limit.

 

 

ELECTRICAL SYSTEM DESCRIPTION

 

ELECTRICAL POWER DISTRIBUTION SYSTEM

 

Electrical service switchboard is rated 1200A, 120/208V, 3 phase, 4 wire, 42,000 AIC and is located in the main electrical room in the basement. The tenant’s spaces shall be separately metered, and capacities and services per floor are as follows:

 

·       First Floor:

 

· (1) 400A meter for retail/café/light food service tenant

 

· (1) 200A meter for retail tenant

 

·       Second floor:

 

· (I) 400A meter for retail/café/light food service tenant

 

·       Third floor:

 

· (1) 200A meter for office tenant

 

·    Fourth floor:

 

· (1) 200A meter for office tenant

 

In the main switchboard, there are spaces for two additional rated 200A, and there are spare 2” empty conduits stubbed to each floor in case if additional meters are required for further floor separations.

 

Main Switchboard “MS” is GE Spectra Series switchboard. The circuit breakers for tenant spaces are as follows:

 

· 400 Amps breakers are GE SGHA4 series

 

· 200 Amps breakers are GE SFHA series.

 

All tenant’s panels must be manufactured by GE; no alternate products will be approved. If series-rated combination system is used, all tenant’s panels must be UL listed as series-combination rated system with the main switchboard breakers used above and rated for available short circuit current of 42,000 Amps.

 

The power conduits are stubbed to each floor into accessible ceiling space. Tenants shall extend the conduits designated for their use to their respective panels and shall provide conductors for entire run.

 

Tenants shall provide sub-meters for monitoring of power usage and as required per LEED credit EA 5.2 “Measurement and Verification - Tenant Sub-metering”. Tenants shall design their electrical distribution systems to allow separate sub-metering of lighting and HVAC loads. The sub-meters shall be compatible with BACnet MS/TP Communication Protocol for integration in building sub-metering and power monitoring system. Sub-meters shall be E-Mon D-Mon Green Class with BACnet MS/TP protocol, model number as follows:

 

·      For 120/208V, 3 phase, 100A service: E50-208100-J03-N-KIT

 

·      For 120/208V, 3 phase, 200A service: E50-208200-J03-N-KIT

 

·      For 120/208 V, 3 phase, 400A service: E50-208400-J03-N-KIT

 

Within the space, tenant’s contractor shall install all power wiring in raceways. The use of MC Cable is allowed for branch circuit concealed in the ceiling, walls, and partitions, No aluminum conductors are allowed.

 

 

PHONE, FIRE ALARM AND DATA DISTRIBUTION SYSTEMS

 

The Minimum Point of Entry (MPOE) is located in the main electrical room, in the basement. From there, there are (3) 2” empty conduits stubbed to each floor. Tenant’s shall extend these conduits to their phone system distribution point, and shall provide cabling for entire runs.

 

Per each floor, there are (2) 3” conduits subbed for fire alarm system. Tenants shall provide devices compatible with building fire alarm system, and shall integrate with building fire alarm system. Tenant is required to use base building fire alarm system design/built contractor; no other contractors are allowed to be used.

 

For data system cabling and distribution, there is IT room provided in the basement for tenant’s use. Tenants shall have option of installing their equipment in this room and installing cabling from this equipment to their floor. There are (3) 3” empty conduits per each floor for tenant’s system cabling between IT room in the basement and their floors.

 

LIGHTING

 

Tenants shall provide interior lighting in compliance with city of Palo Alto ordinance which requires that interior lighting allowance betters Title 24 by 15%.

 

Tenants shall provide interior Lighting Controls Panel (LCP) that is California Energy Commission (CEC) certified and Title 24 compliant Lighting controls panel shall allow integration with base Building Automation System (BAS) using communication protocol BACnet MS/TP. LCP shall be Watt Stopper LIB8, LIB24 or LIB48 as required per tenant’s number of interior lighting zones.

 

 

B-2.4      MECHANICAL RISER DIAGRAM FOR THE MECHANICAL AND CONTROL SYSTEMS FOR 278 UNIVERSITY, PALO ALTO CALIFORNIA

 

ATTACHED

 

 

 

 

B-2.5      SINGLE LINE DIAGRAM OF THE ELECTRICAL SYSTEMS FOR 278 UNIVERSITY, PALO ALTO CALIFORNIA

 

ATTACHED

 

 

 

 

B-2.6      CLOSE-OUT PACKAGE REQUIREMENTS

 

CLOSE-OUT PACKAGE REQUIREMENTS

 

The General Contractor will be required to provide a closing package (in both hard copy and one electronic pdf format) to Landlord to include, at a minimum, the following items:

 

(a)                         General Contractor’s and all subcontractors’ name, address and current contact information.

 

(b)                         Signed-off final punch list from Tenant, the Landlord’s Representative, and the architect or engineer (as applicable) for the Work.

 

(c)                          All unconditional closing lien releases for the Work.

 

(d)                         Warranty letter from the General Contractor and from the major Contractors/Subcontractors performing the Work including the major plumbing, electrical, mechanical and fire/life safety subcontractors, with agreed date.

 

(e)                          Manufacturer’s warranties, guarantees and Operations and Maintenance Manual (three (3) copies).

 

(f)                           Stamped set of city building department approved permitted drawings.

 

(g)                          As-Built drawings for architectural, electrical, mechanical, fire sprinkler, fire/life safety, and any other applicable subcontractor As-Builts (three (3) hard copies and two electronic copies in pdf and CAD format.)

 

(h)                         Air Balance Report (three copies).

 

(i)                             Three (3) copies of any required documents from City of Palo Alto, including Temporary and/or final Certificates of Occupancy and a final inspection record card (three copies)

 

 

EXHIBIT C

 

COMMENCEMENT DATE MEMORANDUM

 

THIS COMMENCEMENT DATE MEMORANDUM (this “Memorandum”) is made and entered into effective as of                                                                , 2012, by and between 278 UNIVERSITY INVESTORS, LLC, a California limited liability company (“Landlord”) and INVITAE CORPORATION, a Delaware corporation (“Tenant”).

 

RECITALS:

 

A.            Landlord and Tenant entered into that certain Lease dated as of                                                                          , 2012 (the “Lease”) pursuant to which Landlord leased to Tenant and Tenant leased from Landlord certain “Premises”, as described in the Lease, in that certain Building located at 278 University Avenue, Palo Alto, California.

 

B.            Except as otherwise set forth herein, all capitalized terms used in this Amendment shall have the same meaning as such terms have in the Lease.

 

C.            Landlord and Tenant desire to confirm the Lease Commencement Date and the Expiration Date of the Lease Term, as hereinafter provided.

 

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.         Confirmation of Dates. The parties hereby confirm:

 

(a)           The Lease Commencement Date is

 

(b)           The Rent Commencement Date is

 

(c)           The Lease Expiration Date is

 

2.         No Further Modification. Except as set forth in this Amendment, all of the terms and provisions of the Lease shall remain unmodified and in full force and effect.

 

IN WITNESS WHEREOF, this Amendment to Lease has been executed as of the day and year first above written.

 

 

	
 
    	
“Landlord”:
    
	
 
    	
 
    
	
 
    	
278 UNIVERSITY INVESTORS, LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
“Tenant”:
    
	
 
    	
 
    
	
 
    	
INVITAE CORPORATION,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    

 

 

EXHIBIT D

 

RULES AND REGULATIONS

 

Tenant shall faithfully observe and comply with the following Rules and Regulations. Landlord shall not be responsible to Tenant for the nonperformance of any of said Rules and Regulations by or otherwise with respect to the acts or omissions of any other tenants or occupants of the Building.

 

1.           Tenant shall not alter any lock or install any new or additional locks or bolts on any doors or windows of the Premises without obtaining Landlord’s prior written consent. Tenant shall bear the cost of any lock changes or repairs required by Tenant. Two keys will be furnished by Landlord for the Premises, and any additional keys required by Tenant must be obtained from Landlord at a reasonable cost to be established by Landlord.

 

2.           All doors opening to public corridors shall be kept closed at all times except for normal ingress and egress to the Premises, unless electrical hold backs have been installed.

 

3.           Landlord reserves the right to close and keep locked all entrance and exit doors of the Building during such hours as are customary for comparable buildings in the vicinity of the Building. Tenant, its employees and agents must be sure that the doors to the Building are securely closed and locked when leaving the Premises if it is after the normal hours of business for the Building. Any tenant, its employees, agents or any other persons entering or leaving the Building at any time when it is so locked, or any time when it is considered to be after normal business hours for the Building, may be required to sign the Building register when so doing. After-hours access by Tenant’s authorized employees may be provided by card-key access or other procedures adopted by Landlord from time to time; Tenant shall pay for the costs of all access cards provided to Tenant’s employees and all replacements thereof for lost, stolen or damaged cards. Access to the Building and/or the Real Property may be refused unless the person seeking access has proper identification or has a previously arranged pass for such access. Landlord and its agents shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Building and/or the Real Property of any person. In case of invasion, mob, riot, public excitement, or other commotion, Landlord reserves the right to prevent access to the Building and/or the Real Property during the continuance of same by any means it deems appropriate for the safety and protection of life and property.

 

4.           Landlord shall have the right to prescribe the weight, size and position of all safes and other heavy property brought into the Building. Safes and other heavy objects shall, if considered necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute the weight. Landlord will not be responsible for loss of or damage to any such safe or property in any case. All damage done to any part of the Building, its contents, occupants or visitors by moving or maintaining any such safe or other property shall be the sole responsibility of Tenant and any expense of said damage or injury shall be borne by Tenant.

 

5.           Except for normal deliveries of packages in the ordinary course of business, no furniture, freight, packages, supplies, equipment or merchandise will be brought into or removed from the Building or carried up or down in the elevators, except upon prior notice to Landlord, and in such manner, in such specific elevator, and between such hours as shall be designated by Landlord. Tenant shall provide Landlord with not less than 24 hours prior notice of the need to utilize an elevator for any such purpose, so as to provide Landlord with a reasonable period to schedule such use and to install such padding or take such other actions or prescribe such procedures as are appropriate to protect against damage to the elevators or other parts of the Building.

 

6.           Landlord shall have the right to control and operate the public portions of the Building and the Real Property, the public facilities, the heating and air conditioning, and any other facilities furnished for the common use of tenants, in such manner as is customary for comparable buildings in the vicinity of the Building.

 

 

7.           The requirements of Tenant will be attended to only upon application at the management office of the Building or at such office location designated by Landlord. Employees of Landlord shall not perform any work or do anything outside their regular duties unless under special instructions from Landlord.

 

8.           Tenant shall not disturb, solicit, or canvass any occupant of the Building or the Real Property and shall cooperate with Landlord or Landlord’s agents to prevent same.

 

9.           The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed, and no foreign substance of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the tenant who, or whose employees or agents, shall have caused it.

 

10.         Tenant shall not overload the floor of the Premises. Tenant shall not mark, drive nails or screws, or drill into the partitions, woodwork or plaster or in any way deface the Premises or any part thereof without Landlord’s consent first had and obtained; provided, however, Landlord’s prior consent shall not be required with respect to Tenant’s placement of pictures and other normal office wall hangings on the interior walls of the Premises (but at the end of the Term, Tenant shall repair any holes and other damage to the Premises resulting therefrom).

 

11.         Except for vending machines intended for the sole use of Tenant’s employees and invitees, no vending machine or machines of any description other than fractional horsepower office machines shall be installed, maintained or operated upon the Premises without the written consent of Landlord.

 

12.         Tenant shall not use any method of heating or air conditioning other than that which may be supplied by Landlord, without the prior written consent of Landlord.

 

13.         Tenant shall not use or keep in or on the Premises, the Building or the Real Property any kerosene, gasoline or other inflammable or combustible fluid or material. Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas or substance in or on the Premises, or permit or allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Building or the Real Property by reason of noise, odors, or vibrations, or interfere in any way with other tenants or those having business therewith.

 

14.         Tenant shall not bring into or keep within the Building, the Real Property or the Premises any animals, birds, bicycles or other vehicles.

 

15.         The Premises shall not be used for lodging or for any improper, objectionable or immoral purposes.

 

16.         No cooking shall be done or permitted by Tenant on the Premises, nor shall the Premises be used for the storage of merchandise. Notwithstanding the foregoing, Underwriters’ laboratory-approved equipment and microwave ovens may be used in the Premises for heating food and brewing coffee, tea, hot chocolate and similar beverages, provided that such use is in accordance with all applicable federal, state and city laws, codes, ordinances, rules and regulations, and does not cause odors which are objectionable to Landlord and other tenants.

 

17.         Landlord will approve where and how telephone and telegraph wires and other cabling are to be introduced to the Premises. No boring or cutting for wires shall be allowed without the consent of Landlord. The location of telephone, call boxes and other office equipment and/or systems affixed to the Premises shall be subject to the approval of Landlord.

 

18.         Landlord reserves the right to exclude or expel from the Building and/or the Real Property any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of these Rules and Regulations.

 

 

19.         Tenant, its employees and agents shall not loiter in the entrances or corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or elevators, and shall use the same only as a means of ingress and egress for the Premises.

 

20.         Tenant shall not waste electricity, water or air conditioning and agrees to cooperate fully with Landlord to ensure the most effective operation of the Building’s heating and air conditioning system, and shall refrain from attempting to adjust any controls.

 

21.         Tenant shall store all its trash and garbage within the interior of the Premises. No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash and garbage in the city in which the Building is located without violation of any law or ordinance governing such disposal. All trash, garbage and refuse disposal shall be made only through entry-ways and elevators provided for such purposes at such times as Landlord shall designate. Tenant shall cooperate with Landlord to achieve full compliance with any recycling or waste management requirements of the City of Palo Alto.

 

22.         Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency.

 

23.         Tenant shall assume any and all responsibility for protecting the Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises closed, when the Premises are not occupied.

 

24.         No awnings or signage shall be attached to the outside walls of the Building without the prior written consent of Landlord. No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises without the prior written consent of Landlord and, as a condition to consent to installation of any blinds or window coverings, Landlord may require, among other things, that Tenant install Building standard blinds or window coverings. The sashes, sash doors, skylights, windows, and doors that reflect or admit light and air into the halls, passageways or other public places in the Building shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or other articles be placed on the windowsills. All electrical ceiling fixtures hung in offices or spaces along the perimeter of the Building must be fluorescent and/or of a quality, type, design and bulb color approved by Landlord.

 

25.         The washing and/or detailing of or, the installation of windshields, radios, telephones in or general work on, automobiles shall not be allowed on the Building.

 

26.         Food vendors shall be allowed in the Building upon receipt of a written request from the Tenant. The food vendor shall service only the tenants that have a written request on file in the management office of the Building. Under no circumstance shall the food vendor display their products in a public or Common Area including corridors and elevator lobbies. Any failure to comply with this rule shall result in immediate permanent withdrawal of the vendor from the Building.

 

27.         Tenant must comply with requests by the Landlord concerning the informing of their employees of items of importance to the Landlord.

 

28.         Tenant shall not permit any smoking within any portion of the Building and shall comply with any non-smoking ordinance adopted by any applicable governmental authority.

 

29.         Landlord may waive any one or more of these Rules and Regulations for the benefit of any particular tenant or tenants, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of any other tenant or tenants, nor prevent Landlord from thereafter enforcing any such Rules or Regulations against any or all tenants of the Building and/or the Real Property. Landlord reserves the right at any time to change or rescind any one or more of these Rules and Regulations, or to make such other and further reasonable Rules and Regulations as in Landlord’s judgment may from time to time be necessary for the

 

 

management, safety, care and cleanliness of the Premises, Building and the Real Property, and for the preservation of good order therein, as well as for the convenience of other occupants and tenants therein. Landlord shall not be responsible to Tenant or to any other person for the nonobservance of the Rules and Regulations by another tenant or other person. Tenant shall be deemed to have read these Rules and Regulations and to have agreed to abide by them as a condition of its occupancy of the Premises.

 

 

expended. Tenant’s obligations under this Section 19.3 shall survive the expiration or sooner termination of the Lease Term.

 

19.4        Sublessees of Tenant. Whether or not Landlord elects to terminate this Lease on account of any default by Tenant, as set forth in this Article 19, Landlord shall have the right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord’s sole discretion, succeed to Tenant’s interest in such subleases, licenses, concessions or arrangements. In the event of Landlord’s election to succeed to Tenant’s interest in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder.

 

19.5        Waiver of Default. No waiver by Landlord of any violation or breach by Tenant of any of the terms, provisions and covenants herein contained shall be deemed or construed to constitute a waiver of any other or later violation or breach by Tenant of the same or any other of the terms, provisions, and covenants herein contained. Forbearance by Landlord in enforcement of one or more of the remedies herein provided upon a default by Tenant shall not be deemed or construed to constitute a waiver of such default. The acceptance of any Rent hereunder by Landlord following the occurrence of any default, whether or not known to Landlord, shall not be deemed a waiver of any such default, except only a default in the payment of the Rent so accepted. No endorsement or statement on any check or any letter accompanying any payment of Base Rent or such other sums shall be deemed an accord and satisfaction, and Landlord may accept any such check or payment without prejudice to Landlord’s right to receive payment of the balance of such rent and/or other sums, or Landlord’s right to pursue Landlord’s remedies.

 

19.6        Efforts to Relet. For the purposes of this Article 19, Tenant’s right to possession shall not be deemed to have been terminated by efforts of Landlord to relet the Premises, by its acts of maintenance or preservation with respect to the Premises, or by appointment of a receiver to protect Landlord’s interests hereunder. The foregoing enumeration is not exhaustive, but merely illustrative of acts which may be performed by Landlord without terminating Tenant’s right to possession.

 

19.7        Landlord Default. Landlord shall not be in default hereunder unless it fails to cure any breach within thirty (30) days after notice from Tenant, provided however, if the nature of such breach is such that the same cannot reasonably be cured within a thirty (30) day period, Landlord shall not be deemed to be in default if it diligently commences such cure within such period and thereafter diligently proceeds to rectify and cure said default as soon as possible. Before exercising any remedies for a default by Landlord, Tenant shall give notice and a reasonable time to cure to any lender of Landlord of which Tenant has been notified.

 

ARTICLE 20

 

SECURITY DEPOSIT

 

Concurrent with Tenant’s execution of this Lease, Tenant shall deposit with Landlord a security deposit (the “Security Deposit”) in the amount set forth in Section 10 of the Summary. The Security Deposit shall be held by Landlord as security for the faithful performance by Tenant of all the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the Lease Term. If Tenant defaults with respect to any provisions of this Lease, including, but not limited to, the provisions relating to the payment of Rent, Landlord may, but shall not be required to, use, apply or retain all or any part of the Security Deposit for the payment of any Rent or any other sum in default, or for the payment of any amount that Landlord spends or becomes obligated to spend by reason of Tenant’s default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant’s default. If any portion of the Security Deposit is so used or applied, Tenant shall, within five (5) days after written demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount, and Tenant’s failure to do so shall be a default under this Lease. The Security Deposit, or any balance thereof not applied to cure a default of Tenant as permitted hereby, shall be returned to Tenant, or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder, within thirty (30) days following the expiration of the Lease Term. Tenant shall not be entitled to any interest on the Security Deposit. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, and all other provisions of law, now or hereafter in force, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the Premises, it

 

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being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee of Tenant.

 

ARTICLE 21

 

COMPLIANCE WITH LAW

 

Notwithstanding any other provision of this Lease to the contrary, Tenant, at its expense, shall comply with all Laws relating to the operation of its business at the Premises and Tenant shall not do anything or suffer anything to be done in or about the Premises which will in any way violate or conflict with any Laws now in effect or hereafter enacted or promulgated; provided however, Tenant shall have no obligation to make any structural alterations in connection therewith unless such alterations are required due to Tenant’s Alterations to the Premises (or any application for such Alterations) or Tenant’s particular manner of use of the Premises in which event Tenant shall, upon demand and at Landlord’s option, either (i) make such alterations at Tenant’s sole cost and subject to Article 8 above or (ii) immediately cease the use or remove the Alterations or furniture, fixtures, equipment or apparatus triggering such compliance requirements, all at Tenant’s sole cost. Tenant shall not do anything or suffer anything to be done in or about the Premises which will in any way conflict with any law, statute, ordinance or other governmental rule, regulation or requirement now in force or which may hereafter be enacted or promulgated. In addition, Tenant shall fully comply with all present or future programs intended to manage parking, transportation or traffic in and around the Building, and in connection therewith, Tenant shall take responsible action for the transportation planning and management of all employees located at the Premises by working directly with Landlord, any governmental transportation management organization or any other transportation-related committees or entities. The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of said governmental measures, shall be conclusive of that fact as between Landlord and Tenant.

 

ARTICLE 22

 

ENTRY BY LANDLORD

 

Landlord reserves the right at all reasonable times and upon reasonable notice to Tenant to enter the Premises to: (i) inspect them; (ii) show the Premises to prospective purchasers, mortgagees or tenants, or to the ground or underlying lessors; (iii) to post notices of nonresponsibility; or (iv) alter, improve or repair the Premises or the Building if necessary to comply with current building codes or other applicable laws, or for structural alterations, repairs or improvements to the Building, or as Landlord may otherwise reasonably desire or deem necessary. Notwithstanding anything to the contrary contained in this Article 22, Landlord may enter the Premises at any time, without notice to Tenant, in emergency situations and/or to perform janitorial or other services required of Landlord pursuant to this Lease. Any such entries shall be without the abatement of Rent and shall include the right to take such reasonable steps as required to accomplish the stated purposes. Tenant hereby waives any claims for damages or for any injuries or inconvenience to or interference with Tenant’s business, lost profits, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. For each of the above purposes, Landlord shall at all times have a key with which to unlock all the doors in the Premises, excluding Tenant’s vaults, safes and special security areas designated in advance by Tenant. In an emergency, Landlord shall have the right to enter without notice and use any means that Landlord may deem proper to open the doors in and to the Premises. Any entry into the Premises in the manner hereinbefore described shall not be deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from any portion of the Premises.

 

ARTICLE 23

 

ENVIRONMENTAL PROTECTION

 

23.1        Environmental Protection. Tenant’s obligations under this Article 23 shall survive the expiration or termination of this Lease.

 

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23.1.1     As used herein, the term “Hazardous Materials” shall mean any toxic or hazardous substance, material or waste or any pollutant or infectious or radioactive material, including but not limited to those substances, materials or wastes regulated now or in the future under any of the following statutes or regulations and any and all of those substances included within the definitions of “hazardous substances,” “hazardous materials,” “hazardous waste,” “hazardous chemical substance or mixture,” “imminently hazardous chemical substance or mixture,” “toxic substances,” “hazardous air pollutant,” “toxic pollutant,” or “solid waste” in the (a) Comprehensive Environmental Response, Compensation and Liability Act of 1990 (“CERCLA” or “Superfund”), as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), 42 U.S.C § 9601 et seq., (b) Resource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. § 6901 et seq., (c) Federal Water Pollution Control Act (“FSPCA”), 33 U.S.C. § 1251 et seq., (d) Clean Air Act (“CAA”), 42 U.S.C. § 7401 et seq., (e) Toxic Substances Control Act (“TSCA”), 14 U.S.C. § 2601 et seq., (f) Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., (g) Carpenter-Presley-Tanner Hazardous Substance Account Act (“California Superfund”), Cal. Health & Safety Code § 25300 et seq., (h) California Hazardous Waste Control Act, Cal. Health & Safety code § 25100 et seq., (i) Porter-Cologne Water Quality Control Act (“Porter-Cologne Act”), Cal. Water Code § 13000 et seq., (j) Hazardous Waste Disposal Land Use Law, Cal. Health & Safety codes § 25220 et seq., (k) Safe Drinking Water and Toxic Enforcement Act of 1986 (“Proposition 65”), Cal. Health & Safety code § 25249.5 et seq., (l) Hazardous Substances Underground Storage Tank Law, Cal. Health & Safety code § 25280 et seq., (m) Air Resources Law, Cal. Health & Safety Code § 39000 et seq., and (n) regulations promulgated pursuant to said Laws or any replacement thereof, or as similar terms are defined in the federal, state and local Laws, statutes, regulations, orders or rules. Hazardous Materials shall also mean any and all other biohazardous wastes and substances, materials and wastes which are, or in the future become, regulated under applicable Laws for the protection of health or the environment, or which are classified as hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any federal, state or local law, regulation or order or by common law decision, including, without limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and other chlorinated solvents, (ii) any petroleum products or fractions thereof, (iii) asbestos, (iv) polychlorinated biphenyls, (v) flammable explosives, (vi) urea formaldehyde, (vii) radioactive materials and waste, and (viii) materials and wastes that are harmful to or may threaten human health, ecology or the environment.

 

23.1.2     Notwithstanding anything to the contrary in this Lease, Tenant, at its sole cost, shall comply with all Laws relating to the storage, use and disposal of Hazardous Materials; provided, however, that Tenant shall not be responsible for complying with any Laws relating to Hazardous Materials existing on, under or around the Premises or the Building as of the date the Premises are delivered to Tenant, and Landlord hereby releases Tenant from any liability with respect thereto. Tenant shall not store, use or dispose of any Hazardous Materials except for standard office supplies in commercially reasonable quantities, and only then in compliance with applicable Laws, and except for those Hazardous Materials listed in a Hazardous Materials management plan (“HMMP”) which Tenant shall deliver to Landlord upon execution of this Lease and update at least annually with Landlord (collectively, “Permitted Materials”) which may be used, stored and disposed of provided (i) such Permitted Materials are used, stored, transported, and disposed of in strict compliance with applicable Laws, (ii) such Permitted Materials shall be limited to the materials listed on and may be used only in the quantities specified in the HMMP, and (iii) Tenant shall provide Landlord with copies of all material safety data sheets and other documentation required under applicable Laws in connection with Tenant’s use of Permitted Materials as and when such documentation is provided to any regulatory authority having jurisdiction. In no event shall Tenant cause or permit to be discharged into the plumbing or sewage system of the Building or onto the land underlying or adjacent to the Real Property any Hazardous Materials. Tenant shall be solely responsible for and shall defend, indemnify, and hold Landlord and its agents harmless from and against all claims, costs and liabilities, including attorneys’ fees and costs, arising out of or in connection with Tenant’s storage, use and/or disposal of Hazardous Materials. If the presence of Hazardous Materials in or on the Premises, the Building, the Common Areas, or the Real Property caused or knowingly permitted by Tenant results in contamination or deterioration of water or soil, then Tenant shall promptly take any and all action necessary to clean up such contamination, but the foregoing shall in no event be deemed to constitute permission by Landlord to allow the presence of such Hazardous Materials. At any time prior to the expiration of the Lease Term if Tenant has a reasonable basis to suspect that there has been any release or the presence of Hazardous Materials in the ground or ground water on the Premises which did not exist upon commencement of the Lease Term, Tenant shall have the right to conduct appropriate tests of water and soil and to deliver to Landlord the results of such tests to demonstrate that no contamination in excess of permitted levels has occurred as a result of Tenant’s use of the Premises. Tenant shall further be solely responsible for, and shall defend, indemnify, and hold Landlord and its agents harmless from and against all claims,

 

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costs and liabilities, including attorneys’ fees and costs, arising out of or in connection with any breach by Tenant of its obligations under this Section 23.1.2 and any removal, cleanup and restoration work and materials required under this Section 23.1.2 to return the Premises the Building, the Common Areas, or the Real Property and any other property of whatever nature to their condition existing prior to the appearance of the Hazardous Materials.

 

23.1.3    Upon termination or expiration of the Lease Term, Tenant at its sole expense shall cause all Hazardous Materials placed in or about the Premises, the Building and/or the Real Property by Tenant, its agents, contractors, or invitees, and all installations (whether interior or exterior) made by or on behalf of Tenant relating to the storage, use, disposal or transportation of Hazardous Materials to be removed from the property and transported for use, storage or disposal in accordance and compliance with all Laws and other requirements respecting Hazardous Materials used or permitted to be used by Tenant. Tenant shall apply for and shall obtain from all appropriate regulatory authorities (including any applicable fire department or regional water quality control board) all permits, approvals and clearances necessary for the closure of the Real Property and shall take all other actions as may be required to complete the closure of the Building and the Real Property. In addition, if Landlord has a reasonable basis to suspect the existence of Hazardous Materials contamination caused or knowingly permitted by Tenant, then prior to vacating the Premises, Landlord may undertake an environmental site assessment from an environmental consulting company which site assessment shall evidence Tenant’s compliance with this Paragraph 23.1.3. Such testing shall be at Tenant’s expense if Landlord has a reasonable basis for suspecting and confirms the presence of Hazardous Materials in the soil or surface or ground water in, on, under, or about the Real Property, the Building or the Premises, which has been caused by or resulted from the activities of Tenant, its agents, contractors, or invitees.

 

23.1.4    At any time prior to expiration of the Lease Term, subject to reasonable prior notice (not less than forty-eight (48) hours) and Tenant’s reasonable security requirements and provided such activities do not unreasonably interfere with the conduct of Tenant’s business at the Premises, Landlord shall have the right to enter in and upon the Real Property, Building and Premises in order to conduct appropriate tests of water and soil to determine whether levels of any Hazardous Materials in excess of legally permissible levels has occurred as a result of Tenant’s use thereof. Landlord shall furnish copies of all such test results and reports to Tenant and, at Tenant’s option and cost, shall permit split sampling for testing and analysis by Tenant. Such testing shall be at Tenant’s expense if Landlord has a reasonable basis for suspecting and confirms the presence of Hazardous Materials in the soil or surface or ground water in, on, under, or about the Real Property, the Building or the Premises, which has been caused by or resulted from the activities of Tenant, its agents, contractors, or invitees.

 

23.1.5    Landlord may voluntarily cooperate in a reasonable manner with the efforts of all governmental agencies in reducing actual or potential environmental damage. Tenant shall not be entitled to terminate this Lease or to any reduction in or abatement of rent by reason of such voluntary cooperation, nor for any required compliance. Tenant agrees at all times to cooperate fully with the requirements and recommendations of governmental agencies regulating, or otherwise involved in, the protection of the environment.

 

ARTICLE 24

 

[OMITTED].

 

ARTICLE 25

 

RADIO TRANSCEIVER AND SATELLITE DISH

 

25.1       Grant of License for Wireless Services. Provided that Tenant has not assigned this Lease or sublet any or all of the Premises other than to a Permitted Transferee (it being intended that all rights pursuant to this provision are and shall be personal to the original Tenant under this Lease and shall not be transferable or exercisable for the benefit of any party other than a Permitted Transferee), Tenant shall have the non-exclusive license, in accordance with the terms and conditions of this Article 25, and subject to the provisions of this Lease, to install on the roof of the Building and use during the Term, one (1) line of sight radio transceiver for internet access (“Radio Transceiver”) and one (1) satellite dish (“Dish”) supplied and installed by an installation company reasonably acceptable to Landlord (“Installer”). The support equipment (“Support Equipment”) for the Radio Transceiver and Dish shall be subject to Landlord’s prior approval in its sole discretion. Exclusive of the Support

 

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Equipment, no dimension of the Radio Transceiver or Dish unit shall exceed twenty-four (24) inches. The Radio Transceiver and Dish shall be operated, maintained, repaired, replaced as necessary, and removed by Tenant at Tenant’s sole cost and expense and at no cost or expense to Landlord. The license granted herein shall be for no additional rent or other charge (other than reimbursement of any out-of-pocket expenditures incurred in good faith by Landlord in connection therewith and payment of other costs as provided below).

 

25.2        Location of the Radio Transceiver or Dish. The Radio Transceiver or Dish shall be located on the roof of the Building (and not the elevator penthouse or any parapet) in a location designated by Landlord in its sole discretion (the “Licensed Area”). Tenant shall not install any equipment on the roof of the Building other than the Radio Transceiver or Dish, the Support Equipment and any associated wiring and cabling. If Tenant desires to locate the Radio Transceiver or Dish outside the Licensed Area, then Landlord may designate the location or locations of the Radio Transceiver or Dish in its sole discretion, and the designated location for such Radio Transceiver or Dish shall be included in the definition of Licensed Area. The Licensed Area shall be included within the term Premises for all purposes under the Lease, except for the use provisions of Section 5 and payment of Rent.

 

25.3        Approval by Landlord and Permits. The proposed installation, all associated equipment, the means of placing the Radio Transceiver or Dish on the roof of the Building, the connections between the Radio Transceiver or Dish and the Premises, power requirements and cable specifications, shall be subject to Landlord’s prior written approval in its sole discretion, and any approval from all applicable governmental agencies, including ordinances, regulations and any approval from the City of Palo Alto, California. Tenant shall be responsible, at Tenant’s sole cost and expense, to obtain from the City of Palo Alto all permits from any applicable governmental agency necessary to install and operate the Radio Transceiver or Dish. To the extent any installation of the Radio Transceiver or Dish affects the structural integrity of the Building Landlord shall have the absolute right, in its sole discretion, to require any changes or impose any conditions on the installation of the Radio Transceiver or Dish.

 

25.4        Installation and Maintenance of Equipment. The Licensed Area will be delivered to Tenant in its AS IS and WHERE IS condition and Landlord shall have no obligation to modify or install any improvements in the Licensed Area. There shall be no roof penetration in connection with the Radio Transceiver or Dish. If the installation of the Radio Transceiver or Dish adversely affects the structural integrity of the roof, causes any leaks or voids any roof warranty, Tenant shall be responsible for the costs of repairing the roof. Tenant shall coordinate the installation of the Radio Transceiver or Dish with Landlord’s roofing contractor, at Tenant’s sole cost and expense. The mounting of the Radio Transceiver or Dish shall be properly counterweighted. Prior to installing the Radio Transceiver or Dish in the Licensed Area or any equipment associated therewith, Tenant shall provide the insurance certificates reasonably required by Landlord in connection with the work contemplated hereunder. Tenant shall cause Installer to (i) label each cable placed in or on the Building, as well as the Radio Transceiver or Dish, with information as to where the cables originate and where the cables terminate, (ii) prominently label any related equipment with appropriate safety warnings when human exposure to radio frequency radiation may exceed the safety standards of any applicable governmental authority, and (iii) at Tenant’s sole cost, maintain the Radio Transceiver or Dish, all cabling and the Licensed Area in a good, orderly, sanitary and safe condition and repair. Tenant and Installer shall have access to the Licensed Area and other portions of the roof of the Building at all reasonable times and as necessary for the installation, operation, use, maintenance, repair, replacement and removal of the Radio Transceiver or Dish and other improvements associated therewith.

 

25.5        Use: Compliance with Laws. The Licensed Area may be used by Tenant only for the installation, operation, use, maintenance, repair, replacement and removal of the Radio Transceiver or Dish, all at Tenant’s sole risk and expense and in full compliance with all applicable Laws.

 

25.6        Interference. The Radio Transceiver or Dish shall not interfere in any manner with Landlord’s or any tenant’s, occupant’s or licensee’s use or activities in the Building and shall not damage or interfere with any facilities or equipment of any type installed by Landlord or any other person or entity, including without limitation, the Building systems and any satellite dishes, antenna, computer or other devices or systems installed at the Building at any time. Tenant agrees, warrants and represents that if such interference should occur, then Tenant shall take whatever steps are required to correct such interference within two (2) business days after receiving written notice thereof from Landlord. If despite Tenant’s steps to stop such interference, the interference continues, then Tenant shall discontinue using the Radio Transceiver or Dish and related equipment. Tenant’s failure to promptly correct

 

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any such interference or to discontinue using the Radio Transceiver or Dish after written notice of such interference, as set forth herein, shall constitute a default by Tenant under this Lease without requirement for further notice. Tenant agrees that Landlord shall not be responsible for preventing or correcting any interference that may be caused to the Radio Transceiver or Dish and related equipment or its use and that Tenant shall be fully responsible for coordinating and cooperating with other tenants, occupants or licensees who have communications devices at the Building in order to minimize or prevent any interference by or with the Radio Transceiver or Dish and its use.

 

25.7        Title to Equipment and Removal. Tenant or Installer shall at all times remain the owner of the Radio Transceiver or Dish and the related equipment, which shall not be deemed fixtures, notwithstanding their method of installation or attachment to the Building. Tenant shall pay all Tenant’s Taxes with respect to the Radio Transceiver or Dish and related equipment constructed or installed by Tenant or Installer. On or before the Expiration Date or earlier termination date of the Lease, Tenant, at Landlord’s request, shall cause Installer to (i) remove the Radio Transceiver or Dish and related equipment installed or constructed by Installer, (ii) restore the Licensed Area and Building to the condition they were in upon installation of the Radio Transceiver or Dish and related equipment, reasonable wear and tear excepted, and (iii) return the Licensed Area with all debris associated with the Radio Transceiver or Dish being removed. If any of the improvements installed or constructed by Tenant at the Building penetrated the roof membrane or otherwise in any affected the watertight integrity of the Building’s roof, then upon removal of such improvements, Tenant shall provide Landlord with a written warranty, in a form and from a contractor reasonably acceptable to Landlord, warranting the watertight integrity of the roof for a period of ten (10) years after removal of such improvements. If Tenant does not remove the Radio Transceiver or Dish and all of the related equipment, as required hereunder, Landlord may, at its sole option, either retain such items as its own, without any further actions, notice or compensation to Tenant, or remove and dispose of such items in any manner it chooses, restore the Property as required hereunder and charge Tenant for all costs incurred in that effort.

 

25.8        Utilities. Tenant shall pay for all costs of electrical service provided to the Radio Transceiver or Dish.

 

25.9        Relocation. Upon sixty (60) days prior written notice from Landlord Tenant shall relocate the Radio Transceiver or Dish to a different location on the roof of the Building, which area shall become the new Licensed Area.

 

25.10      Indemnification and Waiver. In addition to the indemnification of Landlord set forth in the Lease, Tenant shall indemnity, protect, defend and hold harmless Landlord from any claims, losses, demands, liabilities, and expenses, including attorneys’ fees arising out of or resulting from, in whole or in part, any loss, injury or damage occurring or caused to any person or property during the Term (i) in or about the Licensed Area, or the roof of the Building, arising from the acts or omissions of Tenant, its agents, employees, contractors, or others acting under its control or at its discretion, or by the existence of cabling and any other improvements on the roof of the Building, or (ii) within the vicinity of the Building caused by the Radio Transceiver or Dish becoming detached from the roof; provided, however, that the foregoing indemnification by Tenant shall not apply to the extent any such claims, losses, demands, liabilities, and expenses, including attorneys’ fees are proven by final judgment to have been caused by acts or omissions of Landlord that constitute gross active negligence or willful misconduct. This indemnification shall apply and be enforced to the fullest extent permitted by Law and shall survive termination or expiration of the Term. Landlord shall not be liable to Tenant, and Tenant hereby waives all claims it may have against Landlord, for any loss, injury or damage to any person or property in or about the Licensed Area or the roof of the Building, or resulting from the Radio Transceiver or Dish becoming detached from the roof, any interruption of services and loss of use of the Radio Transceiver or Dish, from any cause, without limitation as to type or description and specifically including acts or omissions constituting the active or sole negligence of Landlord, but excluding from all of the foregoing the acts or omissions of Landlord that are proven by final judgment to constitute gross active negligence or willful misconduct. Notwithstanding any other provision of the Lease, in no event shall Landlord be liable to Tenant for any punitive or consequential damages or damages for loss of business by Tenant. It is the intent of the foregoing provisions that Tenant shall look to its own insurance for payment or reimbursement for any such loss, damage, injury or liability.

 

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ARTICLE 26

 

MISCELLANEOUS PROVISIONS

 

26.1        Terms; Captions. The necessary grammatical changes required to make the provisions hereof apply either to corporations or partnerships or individuals, men or women, as the case may require, shall in all cases be assumed as though in each case fully expressed. The captions of Articles and Sections are for convenience only and shall not be deemed to limit, construe, affect or alter the meaning of such Articles and Sections.

 

26.2        Binding Effect. Each of the provisions of this Lease shall extend to and shall, as the case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also of their respective successors or assigns, provided this clause shall not permit any assignment by Tenant contrary to the provisions of Article 14 of this Lease.

 

26.3        No Waiver. No waiver of any provision of this Lease shall be implied by any failure of a party to enforce any remedy on account of the violation of such provision, even if such violation shall continue or be repeated subsequently, any waiver by a party of any provision of this Lease may only be in writing, and no express waiver shall affect any provision other than the one specified in such waiver and that one only for the time and in the manner specifically stated. No consent, approval, permission or agreement required of Landlord hereunder shall be of any force or effect except to the extent the same is provided in a writing signed by Landlord. No receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Lease Term or of Tenant’s right of possession hereunder or after the giving of any notice shall reinstate, continue or extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after the service of notice or the commencement of a suit or after final judgment for possession of the Premises, Landlord may receive and collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment.

 

26.4        Modification of Lease; Financials. Should any current or prospective mortgagee or ground lessor for the Building require a modification or modifications of this Lease, which modification or modifications will not cause an increased cost or expense to Tenant or in any other way materially and adversely change the rights and obligations of Tenant hereunder, then and in such event, Tenant agrees that this Lease may be so modified and agrees to execute whatever documents are required therefor and deliver the same to Landlord within ten (10) days following the request therefor. Should Landlord or any such current or prospective mortgagee or ground lessor require execution of a short form of Lease for recording, containing, among other customary provisions, the names of the parties, a description of the Premises and the Lease Term, Tenant agrees to execute such short form of Lease and to deliver the same to Landlord within ten (10) days following the request therefor. In addition, upon request from time to time, Tenant agrees to provide to Landlord, within ten (10) days of written request, current financial statements for Tenant, dated no earlier than one (1) year prior to such request, certified as accurate by Tenant or, if available, audited financial statements prepared by an independent certified public accountant with copies of the auditor’s statement. All such financial statements will be delivered to Landlord and any such lender or purchaser in confidence and shall only be used for purposes of evaluating the financial strength of Tenant or of Guarantor, as applicable.

 

26.5        Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has the right to transfer all or any portion of its interest in the Building, the Real Property and/or in this Lease, and Tenant agrees that in the event of any such transfer, Landlord shall automatically be released from all liability under this Lease and Tenant agrees to look solely to such transferee for the performance of Landlord’s obligations hereunder after the date of transfer. Without limiting the generality of the foregoing, it is acknowledged and agreed that the liability of Landlord under this Lease is limited to its actual period of ownership of title to the Building. The liability of any transferee of Landlord shall be limited to the interest of such transferee in the Building or the Real Property and such transferee shall be without personal liability under this Lease, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. Tenant further acknowledges that Landlord may assign its interest in this Lease to a mortgage lender as additional security and agrees that such an assignment shall not release Landlord from its obligations hereunder and that Tenant shall continue to look to Landlord for the performance of its obligations hereunder.

 

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26.6        Prohibition Against Recording. Except as provided in Section 26.4 of this Lease, neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant, and the recording thereof in violation of this provision shall make this Lease null and void at Landlord’s election.

 

26.7        Landlord’s Title; Air Rights. Landlord’s title is and always shall be paramount to the title of Tenant. Nothing herein contained shall empower Tenant to do any act which can, shall or may encumber the title of Landlord. No rights to any view or to light or air over any property, whether belonging to Landlord or any other person, are granted to Tenant by this Lease.

 

26.8        Tenant’s Signs. Tenant shall be entitled to Building standard signage provided that such signage shall be installed by Landlord at Tenant’s sole cost and the location, quality, design, style, lighting and size of such signs shall be consistent with the applicable laws and ordinances, Landlord’s Building standard signage program and shall be subject to Landlord’s prior written approval, in its reasonable discretion. Upon the expiration or earlier termination of this Lease, Landlord shall, at Tenant’s sole cost and expense, remove such signage and repair all damage to the Building caused by such removal. Subject to the foregoing provisions of this Section 26.8, Tenant may not install any signs on or in the Building or the Common Areas or any signs, window coverings, or blinds (even if the same are located behind the Landlord approved window coverings for the Building), or other items visible from the exterior of the Premises or Building are subject to the prior approval of Landlord, in its sole and absolute discretion.

 

26.9        Relationship of Parties. Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent, partnership, joint venturer or any association between Landlord and Tenant, it being expressly understood and agreed that neither the method of computation of Rent nor any act of the parties hereto shall be deemed to create any relationship between Landlord and Tenant other than the relationship of landlord and tenant.

 

26.10      Application of Payments. Landlord shall have the right to apply payments received from Tenant pursuant to this Lease, regardless of Tenant’s designation of such payments, to satisfy any obligations of Tenant hereunder, in such order and amounts as Landlord, in its sole discretion, may elect.

 

26.11      Time of Essence. Time is of the essence of this Lease and each of its provisions.

 

26.12      Partial Invalidity. If any term, provision or condition contained in this Lease shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, provision or condition to persons or circumstances other than those with respect to which it is invalid or unenforceable, shall not be affected thereby, and each and every other term, provision and condition of this Lease shall be valid and enforceable to the fullest extent possible permitted by law.

 

26.13      No Warranty. In executing and delivering this Lease, Tenant has not relied on any representation, including, but not limited to, any representation whatsoever as to the amount of any item comprising Additional Rent or the amount of the Additional Rent in the aggregate or that Landlord is furnishing the same services to other tenants, at all, on the same level or on the same basis, or any warranty or any statement of Landlord which is not set forth herein or in one or more of the Exhibits attached hereto.

 

26.14 Landlord Exculpation. It is expressly understood and agreed that notwithstanding anything in this Lease to the contrary, and notwithstanding any applicable law to the contrary, the liability of Landlord and the Landlord Parties hereunder (including any successor landlord) and any recourse by Tenant against Landlord or the Landlord Parties shall be limited solely and exclusively to an amount which is equal to the ownership interest of Landlord in the Building and Real Property (excluding any rents, profits or proceeds derived therefrom prior to any final judgment), and neither Landlord, nor any of the Landlord Parties shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant.

 

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26.15      Entire Agreement. It is understood and acknowledged that there are no oral agreements between the parties hereto affecting this Lease and this Lease supersedes and cancels any and all previous negotiations, arrangements, brochures, agreements and understandings, if any, between the parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof, and none thereof shall be used to interpret or construe this Lease. This Lease and any side letter or separate agreement executed by Landlord and Tenant in connection with this Lease and dated of even date herewith contain all of the terms, covenants, conditions, warranties and agreements of the parties relating in any manner to the rental, use and occupancy of the Premises, shall be considered to be the only agreement between the parties hereto and their representatives and agents, and none of the terms, covenants, conditions or provisions of this Lease can be modified, deleted or added to except in writing signed by the parties hereto. All negotiations and oral agreements acceptable to both parties have been merged into and are included herein. There are no other representations or warranties between the parties, and all reliance with respect to representations is based totally upon the representations and agreements contained in this Lease.

 

26.16      Right to Lease. Landlord reserves the absolute right to effect such other tenancies in the Building as Landlord in the exercise of its sole business judgment shall determine to best promote the interests of the Building. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or type or number of tenants shall, during the Lease Term, occupy any space in the Building (or that any specific tenant or type or number of tenants will not occupy the Building during the Lease Term).

 

26.17      Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions, fire or other casualty, and other causes beyond the reasonable control of the party obligated to perform, except with respect to the obligations imposed with regard to Rent and other charges to be paid by Tenant pursuant to this Lease (collectively, the “Force Majeure”), notwithstanding anything to the contrary contained in this Lease, shall excuse the performance of such party for a period equal to any such prevention, delay or stoppage and, therefore, if this Lease specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party’s performance caused by a Force Majeure.

 

26.18      Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and for all those claiming under Tenant all right now or hereafter existing to redeem by order or judgment of any court or by any legal process or writ, Tenant’s right of occupancy of the Premises after any termination of this Lease.

 

26.19      Notices. All notices, demands, statements or communications (collectively, “Notices”) given or required to be given by either party to the other hereunder shall be in writing, shall be sent by United States certified or registered mail, postage prepaid, return receipt requested, or delivered personally (i) to Tenant at the appropriate address set forth in Section 5 of the Summary, or to such other place as Tenant may from time to time designate in a Notice to Landlord; or (ii) to Landlord at the addresses set forth in Section 3 of the Summary, or to such other firm or to such other place as Landlord may from time to time designate in a Notice to Tenant. Any Notice will be deemed given on the date it is mailed as provided in this Section 26.19 or upon the date personal delivery is made. If Tenant is notified of the identity and address of Landlord’s mortgagee or ground or underlying lessor, Tenant shall give to such mortgagee or ground or underlying lessor written notice of any default by Landlord under the terms of this Lease by registered or certified mail, and such mortgagee or ground or underlying lessor shall be given a reasonable opportunity to cure such default prior to Tenant’s exercising any remedy available to Tenant.

 

26.20      Joint and Several. If there is more than one Tenant, the obligations imposed upon Tenant under this Lease shall be joint and several.

 

26.21      Authority. If Tenant is a corporation or partnership, Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in the state of California and that Tenant has full right and authority to execute and deliver this Lease and that each person signing on behalf of Tenant is authorized to do so. Tenant confirms that it is not in violation of any executive order or similar governmental regulation or law, which prohibits terrorism or transactions with suspected or confirmed terrorists or terrorist entities or with persons or organizations that are associated with, or that provide any form of support to, terrorists. Tenant further confirms that it will comply throughout the Term of this Lease, with all governmental laws, rules or regulations governing transactions or business dealings with any suspected or confirmed terrorists or terrorist entities, as identified from

 

34

 

time to time by the U.S. Treasury Department’s Office of Foreign Assets Control or any other applicable governmental entity.

 

26.22      Jury Trial; Attorneys’ Fees. IF EITHER PARTY COMMENCES LITIGATION AGAINST THE OTHER FOR THE SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR THE BREACH HEREOF OR OTHERWISE FOR ENFORCEMENT OF ANY REMEDY HEREUNDER, THE PARTIES HERETO AGREE TO AND HEREBY DO WAIVE ANY RIGHT TO A TRIAL BY JURY. In the event of any such commencement of litigation, the prevailing party shall be entitled to recover from the other party such costs and reasonable attorneys’ fees as may have been incurred, including any and all costs incurred in enforcing, perfecting and executing such judgment.

 

26.23      Governing Law. This Lease shall be construed and enforced in accordance with the laws of the state of California.

 

26.24      Submission of Lease. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or an option for lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant.

 

26.25      Brokers. Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Lease, excepting only the real estate brokers or agents specified in Section 12 of the Summary (the “Brokers”), and that they know of no other real estate broker or agent who is entitled to a commission in connection with this Lease. Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, and costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of the indemnifying party’s dealings with any real estate broker or agent other than the Brokers.

 

26.26      Independent Covenants. This Lease shall be construed as though the covenants herein between Landlord and Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute to the contrary and agrees that if Landlord fails to perform its obligations set forth herein, Tenant shall not be entitled to make any repairs or perform any acts hereunder at Landlord’s expense or to any setoff of the Rent or other amounts owing hereunder against Landlord; provided, however, that the foregoing shall in no way impair the right of Tenant to commence a separate action against Landlord for any violation by Landlord of the provisions hereof so long as notice is first given to Landlord and any holder of a mortgage or deed of trust covering the Building, the Real Property or any portion thereof, of whose address Tenant has theretofore been notified, and an opportunity is granted to Landlord and such holder to correct such violations as provided above.

 

26.27      Building Name and Signage. Landlord shall have the right at any time to change the name(s) of the Building and to install, affix and maintain any and all signs on the exterior and on the interior of the Building as Landlord may, in Landlord’s sole discretion, desire. Tenant shall not use the name of the Building or use pictures or illustrations of the Building in advertising or other publicity, without the prior written consent of Landlord.

 

26.28      Confidentiality. Tenant acknowledges that the content of this Lease and any related documents are confidential information. Tenant shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than Tenant’s financial, legal, and space planning consultants, or as may be required by applicable Law or a court of competent jurisdiction.

 

26.29      Reasonableness. Tenant’s sole and exclusive remedy for any claim against Landlord that Landlord has unreasonably withheld or unreasonably delayed any consent or approval shall be an action for injunctive or declaratory relief.

 

26.30      Security. Tenant acknowledges that Landlord has not undertaken any duty whatsoever to provide security for the Premises, the Building, the Common Areas or the Real Property and, accordingly, Landlord is not responsible for the security of same or the protection of Tenant’s property or Tenant’s employees, invitees, or contractors from any cause whatsoever, including but not limited to criminal and/or terrorist acts. To the extent

 

35

 

Tenant determines that such security or protection services are advisable or necessary, Tenant shall arrange for and pay the costs of providing same. In the event Landlord in its sole and absolute discretion agrees to provide any security services, whether it be guard service or access systems or otherwise, Landlord shall do so strictly as an accommodation to Tenant and Landlord shall have no liability whatsoever in connection therewith, whether it be for failure to maintain the secure access system, or for failure of the guard service to provide adequate security, or otherwise.

 

26.31      Energy And Resource Consumption. Landlord may voluntarily cooperate in a reasonable manner with the efforts of governmental agencies and/or utility suppliers in reducing energy or other resource consumption within the Property. Tenant shall not be entitled to terminate this Lease or to any reduction in or abatement of rent by reason of such cooperation. Tenant agrees at all times to cooperate fully with Landlord and to abide by all reasonable rules established by Landlord (i) in order to maximize the efficient operation of the electrical, heating, ventilating and air conditioning systems and all other energy or other resource consumption systems with the Property and/or (ii) in order to comply with the recommendations of utility suppliers and governmental agencies regulating the consumption of energy and/or other resources.

 

26.32      Counterparts. This Lease may be executed by facsimile or scanned .pdf (or similar electronic file format) and in counterparts, each of which shall be deemed an original, but such counterparts, when taken together, shall constitute one agreement.

 

[Signatures on Following Page]

 

36

 

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first above written.

 

	
 
    	
“Landlord”:
    
	
 
    	
 
    
	
 
    	
278 UNIVERSITY INVESTORS, LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    	
Name:
    	
[ILLEGIBLE]
    
	
 
    	
 
    	
Its:
    	
Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
“Tenant”:
    
	
 
    	
INVITAE CORPORATION,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Tompane
    
	
 
    	
 
    	
Name:
    	
Richard Tompane
    
	
 
    	
 
    	
Its:
    	
President & CEO
    

 

37

 

Exhibit A-1

 

 

 

 

 

EXHIBIT B

 

WORK LETTER

 

THIS WORK LETTER (“Work Letter”) is entered into as of this 31st day of OCTOBER, 2012, by and between 278 UNIVERSITY INVESTORS, LLC, a California limited liability company (“Landlord”), and INVITAE CORPORATION, a Delaware corporation (“Tenant”). This Work Letter shall set forth the terms and conditions relating to the initial construction of the Premises.

 

1.             Landlord Work.

 

1.1          Landlord Work. Subject to any “Tenant Delay” or “Force Majeure Delay” (as such terms are defined below), Landlord shall, at Landlord’s sole cost and expense, use its commercially reasonable and diligent efforts to cause South Bay Construction, Inc. (“Contractor”) to complete the construction and installation of the Landlord Work in accordance with the terms of this Work Letter and the Lease. As used in this Work Letter and in the Lease, the terms “Landlord Work” shall mean those improvements expressly set forth on the “Final Warm Shell Plans” (as defined below), as modified by any Change Orders (as defined below) approved pursuant to the express provisions of this Exhibit B.

 

1.2          Substantial Completion. The Landlord Work shall be deemed to be “Substantially Completed” on the date Landlord certifies (a set forth in a written certification signed by Landlord) the Landlord Work has been substantially completed in accordance with the Final Warm Shell Plans, as modified by any Change Orders approved pursuant to the express provisions of this Exhibit B. subject to items described in the Punch List; provided the certification as to completion is also reasonably approved by Tenant’s architect, and the completion of any Punch List items do not materially affect Tenant’s occupancy. The definition of Substantially Completed shall also define the terms “Substantial Completion” and “Substantially Complete.”

 

1.3          Final Warm Shell Plans. As used herein the “Final Warm Shell Plans” shall mean and refer to the Final Warm Shell Plans attached hereto as Exhibit B-1. Notwithstanding anything to the contrary contained in the Lease or herein, Landlord’s participation in the preparation of the Final Warm Shell Plans, the cost estimates for the Landlord Work and the construction thereof shall not constitute any representation or warranty, express or implied, that the Landlord Work, if built in accordance with the Final Warm Shell Plans, will be suitable for Tenant’s intended purpose. Tenant acknowledges and agrees that the improvements comprising the Landlord Work are intended for use by Tenant and the specifications and design requirements for such improvements are not within the special knowledge or experience of Landlord. Landlord’s sole obligation shall be to arrange the construction of the Landlord Work in accordance with the requirements of the Final Warm Shell Plans. Notwithstanding the foregoing, Landlord agrees to assign to Tenant on a non-exclusive basis the benefit of all construction warranties pertaining to the Landlord Work to the extent that they relate to portions of the Landlord Work that Tenant is required to maintain and repair under the Lease. Landlord does not warrant that the Building or any component thereof will be free of latent defects or that it will not require maintenance and/or repair within any particular period of time, except as expressly provided in Section 1.2 of the Lease. Tenant acknowledges and agrees that it shall rely solely on the warranty or guaranty, if any, from Landlord’s Contractor or other material and/or service providers relative to the proper design and construction of the Landlord Work or any component thereof. Landlord shall have the right to make modifications to the Final Warm Shell Plans without Tenant’s prior written consent provided that such modifications do not materially and adversely affect Tenant (as reasonably determined by Landlord).

 

1.4          Change Orders. Any changes to the Final Warm Shell Plans requested by Tenant shall require the prior written approval of Landlord (not to be unreasonably withheld or delayed). If Tenant desires any change in the Final Warm Shell Plans or Landlord Work which is reasonable and practical (which shall be conclusively determined by Landlord), such changes may only be requested by the delivery to Landlord by Tenant of a proposed written “Change Order” specifically setting forth the requested change. Landlord shall endeavor, within ten (10) business days from the receipt of the proposed Change Order, to provide Tenant with Landlord’s disapproval of the proposed change stating the reason(s) for such disapproval, or if the Landlord approves the proposed change, the following items: (i) a summary of any increase in the cost of Landlord Work caused by such

 

 

change (the “Change Order Cost”), (ii) a statement of the number of days of any delay caused by such proposed change (the “Change Order Delay”), and (iii) a statement of the cost of the Change Order Delay (the “Change Order Delay Expense”), which Change Order Delay Expense shall be the product of the number of days of delay multiplied by the estimated daily Base Rent rate. Tenant shall then have three (3) business days to approve the Change Order Cost, the Change Order Delay and the Change Order Delay Expense. If Tenant approves these items, the sum of the Change Order Cost and Change Order Delay Expense shall be concurrently paid to Landlord at the time of such Tenant approval, and Landlord shall thereafter promptly execute the Change Order and cause the appropriate changes to the Final Warm Shell Plans to be made. If Tenant fails to respond to Landlord or pay the amounts described in the foregoing sentence within said three (3) business day period, the Change Order Cost, the Change Order Delay and the Change Order Delay Expense shall be deemed disapproved by Tenant and Landlord shall have no further obligation to perform any work set forth in the proposed Change Order. The Change Order Cost shall include all costs associated with the Change Order, including, without limitation, architectural fees, engineering fees and construction costs, as conclusively determined by Landlord. The Change Order Delay shall include all delays caused by the Change Order, including, without limitation, all design and construction delays, as conclusively determined by Landlord.

 

1.5          Tenant Delays: Force Majeure Delays. As used herein, “Tenant Delays” means any delay in the completion of the Landlord Work resulting from any or all of the following: (1) Tenant’s failure to timely perform any of its obligations pursuant to this Work Letter, including, without limitation, any failure to complete, on or before the due date therefor, any action item which is Tenant’s responsibility pursuant to this Work Letter, including Tenant’s failure to grant approvals and/or make payments within the time frames described herein; (2) Tenant’s requested modifications to the Final Warm Shell Plans or any Tenant-initiated Change Orders; (3) Tenant’s request for materials, finishes, or installations which are not readily available, (4) [Omitted], (5) Change Order Delays, or (6) any other act or failure to act by Tenant, Tenant’s Representative, Tenant’s employees, agents, independent contractors, consultants and/or any other person performing or required to perform services on behalf of Tenant, including interference with Landlord, or its contractors, during any early occupancy permitted by Landlord. If there is any delay in the Lease Commencement Date and such delay results from a Tenant Delay, then the Rent Commencement Date and the payment of rent under the Lease shall be accelerated by the number of days of delay caused by the Tenant Delay(s). “Force Majeure Delays” as used herein shall have the same meaning as set forth in Section 26.17 of the Lease.

 

1.6          Walk-Through and Punch List. Upon Substantial Completion of the Landlord Work, Tenant and Landlord shall jointly conduct a walk-through of the Landlord Work and shall jointly prepare a punch list (“Punch List”) of items needing additional work, including, finishing details, minor omissions, decorations and mechanical adjustments of the type normally found on an architectural “punch list”; provided, however, the Punch List shall be limited to items which are required by the Final Warm Shell Plans as modified by any Change Orders approved pursuant to the express provisions of this Exhibit B.

 

2.             Tenant Improvements.

 

2.1          Space Plan: Working Drawings: Approved Working Drawings. Tenant has retained Ken Hayes or the Hayes Group (the “Tenant Architect”) to prepare and supply Landlord with its space plan (the “Space Plan”) showing layout and designation of all offices, rooms and other partitioning, their intended use, and equipment to be contained therein along with other renderings or illustrations reasonably required by Landlord. Landlord shall advise Tenant within five (5) business days after Landlord’s receipt of the complete Space Plan for the Premises if the same is unsatisfactory or incomplete in any respect. If Tenant is so advised, Tenant shall promptly cause the Space Plan to be revised to correct any deficiencies or other matters Landlord may reasonably require. Landlord’s approval of the Space Plan shall not be unreasonably withheld; provided, however, Landlord may withhold its consent in its sole and absolute discretion with respect to any Alterations which may affect the structural components of the Building or the Systems and Equipment or which can be seen from outside the Premises. After the Space Plan has been approved by Landlord, Tenant shall cause the Tenant Architect to complete the architectural and engineering drawings for the Premises, and the Tenant Architect shall compile a fully coordinated set of architectural, structural, mechanical, electrical and plumbing working drawings in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable permits (collectively, the “Working Drawings”) and shall submit the same to Landlord for Landlord’s approval. The Working Drawing shall be in conformance with the Building Standard

 

 

Tenant Improvement Specifications attached hereto as Exhibit B-2 (the “Building Standard Specifications”). Landlord shall advise Tenant within ten (10) business days after Landlord’s receipt of the Working Drawings for the Premises if the same is unsatisfactory or incomplete in any respect. If Tenant is so advised, Tenant shall immediately revise the Working Drawings in accordance with such review and any disapproval of Landlord in connection therewith. The Working Drawings shall be approved by Landlord (the “Approved Working Drawings”) prior to the commencement of construction of the Premises by Tenant. After approval by Landlord of the Working Drawings, Tenant may submit the same to the appropriate municipal authorities for all applicable building permits. Tenant hereby agrees that neither Landlord nor Landlord’s consultants shall be responsible for obtaining any building permit or certificate of occupancy for the Premises and that obtaining the same shall be Tenant’s responsibility. No changes, modifications or alterations in the Approved Working Drawings may be made without the prior written consent of Landlord, which consent may not be unreasonably withheld. Landlord’s review of the documents described in this paragraph, shall be for its sole purpose and shall not imply Landlord’s review of the same, or obligate Landlord to review the same, for quality, design, code compliance or other like matters. Tenant shall pay all direct architectural and/or engineering fees incurred by Landlord in connection with its review of the Space Plan, the Working Drawings and the Approved Working Drawings. The improvements and alterations shown in the Approved Working Drawings shall be referred to collectively herein as the “Tenant Improvements”.

 

2.2          Construction of Tenant Improvements. Tenant shall retain Contractor or another licensed general contractor reasonably approved in advance by Landlord (“Tenant Contractor”) to construct the Tenant Improvements. The Tenant Improvements shall be diligently prosecuted to completion and shall be constructed in strict accordance with the Approved Working Drawings, at Tenant’s sole cost and expense (subject only to Section 3 below), in a good and workmanlike manner and in compliance with all applicable codes and with the Building Standard Specifications. All subcontractors, laborers, materialmen, and suppliers used by Tenant in connection with the Tenant Improvements (such subcontractors, laborers, materialmen, and suppliers, and the Tenant Contractor to be known collectively as “Tenant’s Agents”) must be reasonably acceptable to Landlord. Tenant’s indemnity of Landlord as set forth in this Lease shall also apply with respect to (i) any and all costs, losses, damages, injuries and liabilities related in any way to any act or omission of Tenant or the Tenant’s Agents, or anyone directly or indirectly employed by any of them, relating to the Tenant Improvements and (ii) Tenant’s non-payment of any amount arising out of the Tenant Improvements or Tenant’s disapproval of all or any portion of any request for payment. Tenant acknowledges that the Building elevator shall not be used for transportation of construction personnel, equipment or materials.

 

2.3          Insurance. All of Tenant’s Agents shall carry worker’s compensation insurance covering all of their respective employees, and shall also carry public liability insurance, including property damage, all with limits, in form and with companies as are required to be carried by Tenant as set forth in this Lease. Tenant shall carry “Builder’s All Risk” insurance in an amount approved by Landlord covering the construction of the Tenant Improvements, and such other insurance as Landlord may require, it being understood and agreed that the Tenant Improvements shall be insured by Tenant pursuant to this Lease immediately upon completion thereof. Certificates for all insurance carried pursuant to this Section 2.3 shall be delivered to Landlord before the commencement of construction of the Tenant Improvements. All such policies of insurance must contain a provision that the company writing said policy will give Landlord thirty (30) days prior written notice of any cancellation or lapse of the effective date or any reduction in the amounts of such insurance. In the event that the Tenant Improvements are damaged by any cause during the course of the construction thereof, Tenant shall immediately repair the same at Tenant’s sole cost and expense. All policies carried under this Section 2.3 shall insure Landlord and Tenant, as their interests may appear, as well as the Tenant Contractor and Tenant’s Agents.

 

2.4          Governmental Compliance. The Tenant Improvements shall comply in all respects with all state, federal, city or quasi-governmental laws, codes, ordinances and regulations, as each may apply according to the rulings of the controlling public official, agent or other person.

 

2.5          Inspection by Landlord. Landlord shall have the right to inspect the Tenant Improvements at all times, provided however, that Landlord’s failure to inspect the Tenant Improvements shall in no event constitute a waiver of any of Landlord’s rights hereunder nor shall Landlord’s inspection of the Tenant Improvements constitute Landlord’s approval of the same.

 

 

3.2          Disbursement of the Improvement Allowance. Except as otherwise set forth in this Work Letter, the Improvement Allowance shall be disbursed by Landlord only for the following items and costs (collectively the “Improvement Allowance Items”); (i) payment of the fees of the Tenant Contractor for the cost of construction of the Tenant Improvements, (iv) the hard costs of any changes in the base Building when such changes are required by the Approved Working Drawings, such cost to include all direct architectural and/or engineering fees and expenses incurred in connection therewith, and (v) the hard costs of any changes to the Approved Working Drawings or Tenant Improvements required by all applicable building codes. In no event shall any portion of the Improvement Allowance be used for design costs, moving costs, cabling or for Tenant’s furniture or any other movable items.

 

3.3          Disbursement of Improvement Allowance. The Improvement Allowance, to the extent payable hereunder, shall be paid to Tenant within thirty (30) days following the completion of construction of the Tenant Improvements, provided that (i) Tenant delivers to Landlord (a) paid invoices for all Tenant Improvements and related costs for which the Tenant Improvement Allowance is to be dispersed, (b) signed permits for all Tenant Improvements completed within the Premises, (c) properly executed unconditional mechanics lien releases in compliance with both California Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or Section 3262(d)(4) from Tenant’s contractor, subcontractors and material suppliers and any other party which has lien rights in connection with the construction of the Tenant Improvements, (ii) Landlord has determined that no substandard work exists which adversely affects the mechanical, electrical, plumbing, heating, ventilating and air conditioning, life-safety or other systems of the Building, the curtain wall of the Building, the structure or exterior appearance of the Building, or any other tenant’s use of such other tenant’s leased premises in the Building, (iii) the Tenant Architect delivers to Landlord a “Certificate of Substantial Completion”, in a form reasonably acceptable to Landlord, certifying that the construction of the Tenant Improvements in the Premises has been substantially completed, (iv) Tenant delivers final as-built drawings to Landlord; and (v) a certificate of occupancy, a temporary certificate of occupancy or its equivalent is issued to Tenant for the Premises. Landlord shall only be obligated to make disbursements from the Improvement Allowance to the extent costs are incurred by Tenant for Improvement Allowance Items. In lieu of paying the Improvement Allowance in cash, Landlord shall have the right, in Landlord’s sole and absolute discretion, to apply that portion of the Improvement Allowance payable to Tenant under this Section 3 to Rent first payable by Tenant following satisfaction of the conditions set forth in this Section 3.3.

 

4.             Miscellaneous Construction Covenants.

 

4.1          Other Terms. All Improvement Allowance Items for which the Improvement Allowance has been made available shall be deemed Landlord’s property under the terms of this Lease, Landlord may, by written notice to Tenant prior to the end of the Lease Term, or given following any earlier termination of the Lease, require Tenant, at Tenant’s expense, to remove any Tenant Improvements and to repair any damage to the Premises and Building caused by such removal and return the affected portion of the Premises or Building to their condition existing prior to the installation of such Tenant Improvements; provided, however, that notwithstanding the foregoing, upon request by Tenant at the time of Tenant’s request for Landlord’s approval of the Approved Working Drawings, Landlord shall notify Tenant whether the Tenant Improvements will be required to be removed pursuant to the terms of this Section 4.1. Notwithstanding any provision to the contrary contained in the Lease or this Work Letter, if any default by Tenant under the Lease or this Work Letter occurs at any time on or before the substantial completion of the Tenant Improvements, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, Landlord shall have the right to withhold payment of all or any portion of the Tenant Improvement Allowance and/or Landlord may, without any liability whatsoever, cause the cessation of construction of the Tenant Improvements (in which case, Tenant shall be responsible for any delay in the substantial completion of the Tenant Improvements and any costs occasioned thereby), and (ii) all other obligations of Landlord under the terms of the Lease and this Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of the Lease.

 

4.2          Early Occupancy. If any portion of the Premises may be occupied by Tenant without materially interfering (in Landlord’s reasonable opinion) with the safe and efficient completion of the Landlord Work by Landlord, upon no less than three days prior written notice to Landlord, Tenant may elect to enter upon the Premises for the sole purpose of constructing its Tenant Improvements, trade fixtures and equipment and installing telephone and computer lines and equipment. Any early occupancy of the Premises permitted by Landlord prior to the Lease

 

 

Commencement Date shall not trigger any obligation of Tenant for the payment of the Base Rent, but shall be subject to all other terms and conditions of the Lease, specifically including, without limitation, the terms of this Work Letter. If, in Landlord’s reasonable judgment, Tenant interferes with the Landlord Work or detrimentally affects Landlord’s ability to comply with its commitments for completing its improvements on the Premises or causes labor difficulties, Landlord will have the right, without limiting any other remedies of Landlord, to order Tenant’s early entry to cease on 24 hours’ notice to Tenant, and if Landlord so requires in connection therewith because such items are interfering with the Landlord Work, Tenant agrees to remove all tools, equipment and materials from the Premises.

 

4.3          Designation of Representatives. With respect to the planning, design and construction of the Landlord Work and the Tenant Improvements, Landlord hereby designates Joe Martignetti as “Landlord’s Representative” and Tenant hereby designates Richard Tompane as “Tenant’s Representative.” Tenant hereby confirms that Tenant’s Representative has full authority to act on behalf of and to bind Tenant with respect to all matters pertaining to the planning, design and construction of the Landlord Work and the Tenant Improvements. Landlord hereby confirms that Landlord’s Representative has authority to act on behalf of Landlord with respect to matters pertaining to the planning, design and construction of the Improvements. Either party may change its designated representative upon five (5) days prior written notice to the other party.

 

IN WITNESS WHEREOF, this Work Letter is executed as of the date first written above.

 

	
LANDLORD:
    	
TENANT:
    
	
 
    	
 
    
	
278 UNIVERSITY INVESTORS,   LLC,
    	
INVITAE CORPORATION,
    
	
a California limited   liability company 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    	
 
    
	
By: 
    	
[ILLEGIBLE]
    	
 
    	
By: 
    	
/s/ RICHARD TOMPANE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name: 
    	
[ILLEGIBLE]
    	
 
    	
Name: 
    	
RICHARD TOMPANE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
MEMBER
    	
 
    	
Title: 
    	
PRESIDENT & CEO
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Dated: 
    	
OCTOBER 31 , 2012
    	
 
    	
Dated: 
    	
31 OCTOBER , 2012
    

 

 

EXHIBIT C

 

COMMENCEMENT DATE MEMORANDUM

 

THIS COMMENCEMENT DATE MEMORANDUM (this “Memorandum”) is made and entered into effective as of December 1, 2012, by and between 278 UNIVERSITY INVESTORS, LLC, a California limited liability company (“Landlord”) and INVITAE CORPORATION, a Delaware corporation (“Tenant”).

 

R  E  C  I  T  A  L  S:

 

A.             Landlord and Tenant entered into that certain Lease dated as of October 31, 2012 (the “Lease”) pursuant to which Landlord leased to Tenant and Tenant leased from Landlord certain “Premises”, as described in the Lease, in that certain Building located at 278 University Avenue, Palo Alto, California.

 

B.             Except as otherwise set forth herein, all capitalized terms used in this Memorandum shall have the same meaning as such terms have in the Lease.

 

C.             Landlord and Tenant desire to confirm the Lease Commencement Date and the Expiration Date of the Lease Term, as hereinafter provided.

 

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.              Confirmation of Dates.   The parties hereby confirm:

 

(a)           The Lease Commencement Date is December 1, 2012.

 

(b)           The Rent Commencement Date is March 15, 2013

 

(c)           The Lease Expiration Date is March 31, 2020.

 

2.              No Further Modification.   Except as set forth in this Memorandum, all of the terms and provisions of the Lease shall remain unmodified and in full force and effect.

 

IN WITNESS WHEREOF, this Memorandum has been executed as of the day and year first above written.

 

 

	
 
    	
“Landlord”:
    
	
 
    	
 
    
	
 
    	
278 UNIVERSITY INVESTORS, LLC,
    
	
 
    	
a California Limited liability company
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    	
Name: 
    	
[ILLEGIBLE]
    
	
 
    	
 
    	
Its: 
    	
MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
“Tenant”:
    
	
 
    	
 
    
	
 
    	
INVITAE CORPORATION,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    	
Name:
    	
[ILLEGIBLE]
    
	
 
    	
 
    	
Its:
    	
PRESIDENT & CEOExhibit 10.15

 

 

SUBLEASE AGREEMENT BETWEEN

 

INMOBI, INC.

 

AND

 

INVITAE CORPORATION

 

475 BRANNAN STREET
 SAN FRANCISCO, CALIFORNIA

 

Portion of 3rd Floor

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
Subleased Premises
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
Term
    	
1
    
	
 
    	
 
    	
 
    
	
3.
    	
Rent
    	
2
    
	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Rent Payments
    	
2
    
	
 
    	
3.2
    	
Operating Costs
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
Security Deposit
    	
5
    
	
 
    	
 
    	
 
    
	
5.
    	
Use and Occupancy
    	
6
    
	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Use
    	
6
    
	
 
    	
5.2
    	
Compliance with Master   Lease
    	
6
    
	
 
    	
5.3
    	
Landlord’s Obligations
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
Master Lease and   Sublease Terms
    	
7
    
	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
Subject to Master Lease
    	
7
    
	
 
    	
6.2
    	
Representations
    	
7
    
	
 
    	
6.3
    	
Incorporation of Terms   of Master Lease
    	
7
    
	
 
    	
6.4
    	
Modifications
    	
8
    
	
 
    	
6.5
    	
Exclusions
    	
8
    
	
 
    	
6.6
    	
Preservation of Master   Lease
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
Transfers
    	
9
    
	
 
    	
 
    	
 
    
	
8.
    	
Default
    	
9
    
	
 
    	
 
    	
 
    
	
9.
    	
Remedies
    	
9
    
	
 
    	
 
    	
 
    
	
10.
    	
Right to Cure Defaults
    	
9
    
	
 
    	
 
    	
 
    
	
 
    	
10.1 
    	
Subtenant Default
    	
9
    
	
 
    	
10.2 
    	
Sublandlord Default
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
Consents and Approvals
    	
10
    
	
 
    	
 
    	
 
    
	
12.
    	
Sublandlord’s Liability
    	
10
    
	
 
    	
 
    	
 
    
	
13.
    	
Indemnities
    	
11
    
	
 
    	
 
    	
 
    
	
 
    	
13.1 
    	
Indemnification of   Sublandlord
    	
11
    
	
 
    	
13.2 
    	
Indemnification of   Subtenant
    	
11
    

 

i

 

	
 
    	
13.3
    	
Control of Defense and   Attorneys’ Fees
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
14.
    	
Delivery of Possession
    	
12
    
	
 
    	
 
    	
 
    
	
 
    	
14.1
    	
Timing
    	
12
    
	
 
    	
14.2
    	
Condition
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
15.
    	
Surrender and Holding   Over
    	
12
    
	
 
    	
 
    	
 
    
	
16.
    	
Parking
    	
13
    
	
 
    	
 
    	
 
    
	
17.
    	
Notices
    	
13
    
	
 
    	
 
    	
 
    
	
18.
    	
Signage
    	
14
    
	
 
    	
 
    	
 
    
	
19.
    	
Brokers
    	
14
    
	
 
    	
 
    	
 
    
	
20.
    	
Conditions Precedent
    	
15
    
	
 
    	
 
    	
 
    
	
21.
    	
Complete Agreement
    	
15
    
	
 
    	
 
    	
 
    
	
22.
    	
Interpretation
    	
15
    
	
 
    	
 
    	
 
    
	
23.
    	
Counterparts
    	
16
    
	
 
    	
 
    	
 
    
	
24.
    	
Quiet Enjoyment
    	
16
    
	
 
    	
 
    	
 
    
	
25.
    	
Authority to Execute
    	
16
    
	
 
    	
 
    	
 
    
	
26.
    	
Recitals and Exhibits
    	
16
    
	
 
    	
 
    	
 
    
	
27.
    	
Right of First Offer to   Expand
    	
16
    
	
 
    	
 
    	
 
    
	
28.
    	
Furniture
    	
16
    
	
 
    	
 
    	
 
    
	
29.
    	
Cabling
    	
17
    

 

ii

 

SUBLEASE

 

THIS SUBLEASE (“Sublease”) is entered into and effective as of November 21, 2014, by and between INMOBI INC., a Delaware corporation (“Sublandlord”) and INVITAE CORPORATION, a Delaware corporation (“Subtenant”) with reference to the following facts:

 

A.                               Pursuant to that certain Lease dated as of March 26, 2012 (the “Master Lease”), CLPF-475 Brannan Street, L.P., a Delaware limited partnership (“Landlord”), successor in interest to PRU/SKS Brannan Associates, LLC, as Landlord, leases to Sublandlord, as Tenant, certain space (the “Master Lease Premises”) consisting of 39,372 rentable square feet on the third (3rd) and fourth (4th) floors of the Building located at 475 Brannan Street in the city of San Francisco, California (the “Building”). A copy of the Master Lease is attached hereto as Exhibit A. Unless otherwise defined herein, capitalized terms used herein shall have the same meaning as in the Lease.

 

B.                                    Subtenant wishes to sublease from Sublandlord, and Sublandlord wishes to sublease to Subtenant, a portion of the Master Lease Premises, known as the Suite 310 Premises, more particularly identified and described in Section 1 below and on the floor plan attached hereto as Exhibit B.

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the parties, Sublandlord and Subtenant hereby agree as follows:

 

1.                                      Subleased Premises. Sublandlord hereby subleases to Subtenant and Subtenant hereby subleases from Sublandlord for the Term, at the rental, and upon all of the conditions set forth herein, the Subleased Premises. The term “Subleased Premises” means the premises containing approximately 12,286 rentable square feet of space located on the 3rd floor of the Building.

 

2.                                      Term.

 

(a)                                 Initial Term. The term of this Sublease (“Term”) shall commence on the date (the “Commencement Date”) that is the later to occur of (i) receipt of a commercially reasonable form of Landlord’s Consent hereto (the “Landlord Consent”), and (ii) December 1, 2014, and shall end on April 30, 2017 (the “Expiration Date”), unless sooner terminated pursuant to any provision hereof. Upon the determination of the Commencement Date, Sublandlord and Subtenant will enter into a letter agreement in the form of Exhibit C attached hereto.

 

(b)                                 Delay in Commencement Date. Notwithstanding any of the foregoing, if the Commencement Date does not occur on or before December 31, 2014, for any reason other than due to delays caused by Subtenant (including, without limitation, delays in the Commencement Date arising from Subtenant’s failure to timely execute and deliver the Landlord Consent), Subtenant shall have the right to terminate this Sublease upon delivering written notice to Sublandlord at any time prior to the Commencement Date, and, in such event, Sublandlord shall refund any monies previously tendered by Subtenant within thirty (30) days of receipt of such notice, this Sublease shall immediately terminate, and neither party shall have any further rights or obligations under this Sublease. For the sake of clarity, Subtenant’s sole and exclusive

 

1

 

remedy for any delay in the Commencement Date (irrespective of the cause of delay) shall be termination of this Sublease and refund of all monies previously tendered by Subtenant.

 

(c)           Early Access. If Sublandlord receives the Landlord Consent prior to December 1, 2014, Sublandlord shall permit Subtenant to access the Subleased Premises to commence installation of Subtenant’s furniture, fixtures, and equipment, and such occupancy (i) shall be subject to all of the provisions of this Sublease, except for the obligation to pay Base Rent or Additional Rent (as defined below); and (ii) shall not advance the Expiration Date of this Sublease.

 

3.                                      Rent.

 

3.1                               Rent Payments.

 

(a)                                 From and after the Commencement Date, Subtenant shall pay to Sublandlord as base rent for the Subleased Premises during the Term (“Base Rent”) the following:

 

	
Months of Term
    	
 
    	
Annual Base Rent Per RSF
    	
 
    	
Monthly Base Rent
    
	
1–12*
    	
 
    	
$
    	
64.00
    	
 
    	
$
    	
65,525.33
    
	
13–24
    	
 
    	
$
    	
65.92
    	
 
    	
$
    	
67,491.09
    
	
25–29
    	
 
    	
$
    	
67.90
    	
 
    	
$
    	
69,518.28
    

 

* If the Commencement Date is a date other than the first (1st) day of a calendar month, then the “first” month following the Commencement Date for purposes of the foregoing Base Rent schedule shall be the first full month after the month in which the Commencement Date occurs. For example, if the Commencement Date is February 25, 2015, for the purposes of this schedule, the first “month” following the Commencement Date will be March, 2015, and thus “months 1 - 12” in the above-referenced chart would expire as of February 29, 2016.

 

(b)                                      Notwithstanding anything above to the contrary, during the period from the Commencement Date until the “Sublandlord Work,” as that term is defined in Section 14.2, below, is substantially completed, (i) Sublandlord shall be permitted access to the kitchen in the Subleased Premises during non-business hours for the purposes of using the dishwasher and sink and (ii) as long as Subtenant is not in default of this Sublease, Subtenant shall be entitled to a twenty percent (20%) discount on its Base Rent payments. Sublandlord’s access of the Subleased Premises pursuant to this Section 3.1(b) shall be limited to the kitchen and a reasonable path-of-travel from the staircase to the kitchen, and Sublandlord shall have no right to enter portions of the Subleased Premises other than the kitchen and such path-of-travel. Further, Sublandlord shall use diligent, good faith efforts to refrain from interfering with the business operations of Subtenant in the other areas of the Subleased Premises, and shall use diligent, good faith efforts to protect the confidentiality of Subtenant’s work product, files, documents, computer files, and all other confidential or proprietary information located in the Subleased Premises.

 

(c)                                  Notwithstanding anything above to the contrary and provided that Subtenant is not then in default under this Sublease beyond any notice and cure period,

 

2

 

Subtenant shall be entitled to an abatement of Rent for the thirteenth (13th) and twenty-fifth (25th) full calendar months of the Term (each, a “Rent Abatement Period”). During each Rent Abatement Period, the monthly Base Rent and Subtenant’s Percentage Share of Operating Costs shall be abated. Subtenant acknowledges and agrees that the abatement provided herein has been granted to Subtenant as additional consideration for entering into this Sublease, and for agreeing to pay the rental and performing the terms and conditions otherwise required under this Sublease. If Subtenant shall be in default and shall fail to cure such default within the notice and cure period, if any, permitted for cure pursuant to this Sublease, then Subtenant’s right to the abatement shall terminate, and if this Sublease is terminated, Sublandlord shall be permitted to pursue, as part of its damages pursuant to Section 9 of this Sublease, the recovery of the unamortized portion of any abated Base Rent, with interest.

 

(d)                            Base Rent shall be paid on the first day of each month commencing as of the Commencement Date, except that Subtenant shall pay the first month’s Base Rent to Sublandlord upon execution of this Sublease and delivery of this Sublease to Sublandlord; said pre-paid Base Rent will be applied towards Base Rent for first month payable following the Commencement Date. If the Term does not begin on the first day of a calendar month, the Base Rent and Additional Rent (hereinafter defined) for any partial month shall be prorated by multiplying the monthly Base Rent and Additional Rent by a fraction, the numerator of which is the number of days of the partial month included in the Term and the denominator of which is the total number of days in the full calendar month. All Rent (hereinafter defined) shall be payable in lawful money of the United States, by regular bank check of Subtenant, to Sublandlord at the following address:

 

InMobi, Inc.

475 Brannan Street, Suite 410

San Francisco, CA 94107

Attn: Mr. Amit Gupta

 

or to such other persons or at such other places as Sublandlord may designate in writing; provided, that Sublandlord shall have the right to have all Rent paid by electronic transfer in accordance with written instructions from Sublandlord to Subtenant.

 

3.2                               Operating Costs.

 

(a)                                 Definitions. For purposes of this Sublease and in addition to the terms defined elsewhere in this Sublease, the following terms shall have the meanings set forth below:

 

(i)                                     “Additional Rent” shall mean the sums payable pursuant to Section 3.2(b) below.

 

(ii)                                  “Operating Costs” shall mean Operating Expenses and Real Property Taxes (as defined in the Master Lease) charged by Landlord to Sublandlord pursuant to the Master Lease.

 

(iii)                               “Rent” shall mean, collectively, Base Rent, Additional Rent, and all other sums payable by Subtenant to Sublandlord under this Sublease, whether or

 

3

 

not expressly designated as “rent”, all of which are deemed and designated as rent pursuant to the terms of this Sublease.

 

(iv)                              “Subtenant’s Percentage Share” shall mean 31.21%.  Subtenant’s Percentage Share has been obtained by dividing the rentable area of the Subleased Premises by the rentable area of the Master Lease Premises and multiplying such quotient by 100. In the event Subtenant’s Percentage Share is changed during a calendar year by reason of a change in the rentable area of the Subleased Premises or the Master Lease Premises, Subtenant’s Percentage Share shall thereupon be adjusted to equal the result obtained by dividing the rentable area of the Subleased Premises by the rentable area of the Master Lease Premises and multiplying such quotient by 100, and Subtenant’s Percentage Share shall be determined on the basis of the number of days during such calendar year at each such percentage share.

 

(b)                                 Payment of Additional Rent. In addition to the Base Rent payable pursuant to Section 3.1 above, for each calendar year of the Term, Subtenant, as Additional Rent, shall pay Subtenant’s Percentage Share of Operating Costs payable by Sublandlord for the then current calendar year. Sublandlord shall give Subtenant written notice of Sublandlord’s estimate of the amount of Additional Rent per month payable pursuant to this Section 3.2(b) for each calendar year promptly following the Sublandlord’s receipt of Landlord’s estimate of the Operating Costs payable under the Master Lease. Thereafter, the Additional Rent payable pursuant to this Section 3.2(b) shall be determined and adjusted in accordance with the provisions of Section 3.2(c) below.

 

(c)                                  Procedure. The determination and adjustment of Additional Rent payable hereunder shall be made in accordance with the following procedures:

 

(i)                                     Delivery of Estimate; Payment. Upon receipt of a statement from Landlord specifying the estimated Operating Costs to be charged to Sublandlord under the Master Lease with respect to each calendar year, or as soon after receipt of such statement as practicable, Sublandlord shall give Subtenant written notice of its estimate of Additional Rent payable under Section 3.2(b) for the ensuing calendar year, which estimate shall be prepared based on the estimate received from Landlord (as Landlord’s estimate may change from time to time), together with a copy of the statement received from Landlord. On or before the first day of each month during each calendar year, Subtenant shall pay to Sublandlord as Additional Rent 31.21% of such estimated amount together with the Base Rent.

 

(ii)                                  Sublandlord’s Failure to Deliver Estimate. In the event Sublandlord’s notice set forth in Subsection 3.2(c)(i) is not given on or before December of the calendar year preceding the calendar year for which Sublandlord’s notice is applicable, as the case may be, then until the calendar month after such notice is delivered by Sublandlord, Subtenant shall continue to pay to Sublandlord monthly, during the ensuing calendar year, estimated payments equal to the amounts payable hereunder during the calendar year just ended. Upon receipt of any such post-December notice Subtenant shall (i) commence as of the immediately following calendar month, and continue for the remainder of the calendar year, to pay to Sublandlord monthly such new estimated payments, (ii) if the monthly installment of the new estimate of such Additional Rent is greater than the monthly installment of the estimate for the previous calendar year, pay to Sublandlord within thirty (30) days of the receipt of such

 

4

 

notice an amount equal to the difference of such monthly installment multiplied by the number of full and partial calendar months of such year preceding the delivery of such notice and (iii) if the monthly installment of the new estimate of such Additional Rent is less than the monthly installment of the estimate for the previous calendar year, an amount equal to the difference of such monthly installment multiplied by the number of full or partial calendar months of such year preceding the delivery of such notice shall be credited against the next payment of Rent coming due by Subtenant under this Sublease.

 

(d)                                 Year End Reconciliation. Within thirty (30) days after the receipt by Sublandlord of a final statement of Operating Costs from Landlord with respect to each calendar year, Sublandlord shall deliver to Subtenant a statement (“Sublandlord’s Statement”) the adjustment to be made pursuant to Section 3.2 for the calendar year just ended, together with a copy of any corresponding statement received by Sublandlord from Landlord. If on the basis of such Sublandlord’s Statement Subtenant owes an amount that is less than the estimated payments actually made by Subtenant for the calendar year just ended, Sublandlord shall credit such excess to the next payment of Rent coming due or, if the term of this Sublease is about to expire, refund such excess to Subtenant within thirty (30) days of determination. If on the basis of such Sublandlord’s Statement Subtenant owes an amount that is more than the estimated payments for the calendar year just ended previously made by Subtenant, Subtenant shall pay the deficiency to Sublandlord within thirty (30) days after delivery of the statement from Sublandlord to Subtenant.

 

(e)                                  Review of Master Landlord’s Books. For so long as Sublandlord has not subleased the remaining Master Lease Premises to a third party, Sublandlord may elect, in its reasonable discretion, to review Master Landlord’s books and records as permitted under Section 4(c) of the Master Lease. However, if Sublandlord subleases the remaining Master Lease Premises to a third party, then, on Subtenant’s request and at Subtenant’s expense, Sublandlord must review Master Landlord’s books and records as permitted under Section 4(c) of the Master Lease. To the extent any refunds are credited to Sublandlord relative to amounts actually paid by Subtenant, Sublandlord shall promptly refund such amounts to Subtenant.

 

(f)                                   Survival. The expiration or earlier termination of this Sublease shall not affect the obligations of Sublandlord and Subtenant pursuant to Subsection 3.2(d), and such obligations shall survive, remain to be performed after, any expiration or earlier termination of this Sublease.

 

4.                                      Security Deposit. Concurrently with Subtenant’s execution of this Sublease, Subtenant shall deposit with Sublandlord the cash sum of $208,554.84 (the “Security Deposit”). The Security Deposit shall be held by Sublandlord as security for the faithful performance by Subtenant of all the provisions of this Sublease to be performed or observed by Subtenant. If Subtenant fails to pay rent or other sums due hereunder, or otherwise defaults with respect to any provisions of this Sublease, and such failure or default is not cured within the applicable notice and cure period, Sublandlord may use, apply or retain all or any portion of the Security Deposit for the payment of any rent or other sum in default, to repair or maintain the Subleased Premises, to perform any other terms, covenants, or conditions contained in this Sublease, or to compensate Sublandlord for any loss or damage which Sublandlord may suffer thereby. If Sublandlord so uses or applies all or any portion of the Security Deposit, Subtenant shall within ten (10) days

 

5

 

after demand therefor deposit cash with Sublandlord in an amount sufficient to restore the Security Deposit to the full amount thereof and Subtenant’s failure to do so shall be a material breach of this Sublease. Sublandlord shall not be required to keep the Security Deposit separate from its general accounts. If Subtenant performs all of Subtenant’s obligations hereunder, the Security Deposit, or so much thereof as has not theretofore been applied by Sublandlord, shall be returned, without interest, to Subtenant (or, at Sublandlord’s option, to the last assignee, if any, of Subtenant’s interest hereunder) within thirty (30) days following the later to occur of (x) the expiration of the Term, and (y) Subtenant’s vacation of the Subleased Premises. No trust relationship is created herein between Sublandlord and Subtenant with respect to the Security Deposit.

 

5.                                      Use and Occupancy.

 

5.1                               Use. The Subleased Premises shall be used and occupied only for general office use, and for no other use or purpose, in full compliance with the Master Lease and this Sublease.

 

5.2                               Compliance with Master Lease. Subtenant agrees that it will occupy the Subleased Premises in accordance with the terms of the Master Lease and each party agrees that it will not do or omit to do or permit any act which may result in a violation of or a default under any of the terms and conditions of the Master Lease, or render Sublandlord or Subtenant liable for any damage, charge or expense thereunder. Except as otherwise expressly provided herein, Sublandlord will perform its covenants and obligations under the Master Lease which do not require for their performance possession of the Subleased Premises and which are not otherwise to be performed hereunder by Subtenant on behalf of Sublandlord. Any other provision in this Sublease to the contrary notwithstanding, Subtenant shall pay to Sublandlord as Rent hereunder any and all sums which Sublandlord may be required to pay Landlord arising out of a request by Subtenant for, or use by Subtenant of, additional or over-standard Building services from Landlord (for example, but not by way of limitation, charges associated with after-hour HVAC usage and overstandard electrical charges) and Sublandlord agrees to cooperate with Subtenant in requesting such additional services. Sublandlord acknowledges and agrees that, to the extent required by the Master Lease, Sublandlord shall be responsible for all modifications or improvements to the Subleased Premises required to comply with governmental requirements that do not result from Subtenant’s specific use, alterations, or improvements in the Subleased Premises.

 

5.3                               Landlord’s Obligations. Sublandlord hereby grants to Subtenant the right to receive all of the services and benefits with respect to the Subleased Premises which are to be provided by Landlord under the Master Lease. Subtenant agrees that Sublandlord shall not be required to perform any of the covenants, agreements and/or obligations of Landlord under the Master Lease and, insofar as any of the covenants, agreements and obligations of Sublandlord hereunder are required to be performed under the Master Lease by Landlord thereunder, Subtenant acknowledges and agrees that Sublandlord shall be entitled to look to Landlord for such performance. In addition, Sublandlord shall have no obligation to perform any repairs or any other obligation of Landlord under the Master Lease with respect to this Sublease. Sublandlord shall not be responsible for any failure or interruption, for any reason whatsoever, of the services or facilities that may be appurtenant to or supplied at the Building by Landlord or

 

6

 

otherwise, including, without limitation, heat, air conditioning, ventilation, life-safety, water, electricity, elevator service and cleaning service, if any; and no failure to furnish, or interruption of, any such services or facilities shall give rise to any (i) abatement, diminution or reduction of Subtenant’s obligations under this Sublease except as otherwise provided herein or in the Master Lease, or (ii) liability on the part of Sublandlord. Notwithstanding the foregoing, Sublandlord shall use commercially reasonable efforts to secure such performance upon Subtenant’s request to Sublandlord to do so, and, if and to the extent Sublandlord’s rent abates under the Master Lease for any reason, including, but not limited to, loss of services from Master Landlord, impaired access to the Premises, or impaired occupancy of the Premises due to casualty or condemnation, then to the extent any rent abatement applies to the Subleased Premises, Subtenant’s Base Rent shall abate for the portion of the Subleased Premises affected by such event.

 

6.                                      Master Lease and Sublease Terms.

 

6.1                               Subject to Master Lease. This Sublease is and shall be at all times subject and subordinate to the Master Lease and the Landlord Consent. Subtenant acknowledges that Subtenant has reviewed and is familiar with all of the terms, agreements, covenants and conditions of the Master Lease and Landlord Consent. Subtenant agrees to maintain the terms of this Sublease and the Master Lease in strict confidence. During the Term and for all periods subsequent thereto with respect to obligations which have arisen prior to the termination of this Sublease, Subtenant agrees to perform and comply with, for the benefit of Sublandlord and Landlord, the obligations of Sublandlord under the Master Lease which pertain to the Subleased Premises and/or this Sublease, except for those provisions of the Master Lease which are expressly and directly contradicted by this Sublease, in which event the terms of this Sublease document shall control over the Master Lease.

 

6.2                               Representations. Sublandlord represents and warrants to Subtenant that (a) Exhibit A is a full and complete copy of the Master Lease, (b) the Master Lease is, as of the date hereof, in full force and effect, and (c) to Sublandlord’s knowledge, no default has occurred under the Master Lease, no notices of default have been sent or received by Sublandlord with respect to the Master Lease, and no event has occurred and is continuing which would constitute an Event of Default but for the requirement of giving notice and/or the expiration of the period of time to cure.

 

THE EXPRESS WARRANTIES SET FORTH IN THIS SUBLEASE ARE THE ONLY WARRANTIES MADE BY A PARTY, AND THERE ARE NO IMPLIED WARRANTIES STATUTORY OR OTHERWISE.

 

6.3                               Incorporation of Terms of Master Lease. The terms, conditions and respective obligations of Sublandlord and Subtenant to each other under this Sublease shall be the terms and conditions of the Master Lease, except for those provisions of the Master Lease which are directly contradicted by this Sublease, in which event the terms of this Sublease shall control over the Master Lease. Therefore, for the purposes of this Sublease, (a) wherever in the Master Lease the word “Landlord” is used it shall be deemed to mean Sublandlord (except where this Sublease requires otherwise), (b) wherever in the Master Lease the word “Tenant” is used it shall be deemed to mean Subtenant (except where this Sublease requires otherwise), (c) each

 

7

 

reference to “Lease” shall be deemed a reference to “Sublease”, (d) each reference to the “Premises” shall be deemed a reference to the “Subleased Premises”, and (e) each reference to “Term”, “Commencement Date”, and “Expiration date” shall be deemed a reference to the Term, Commencement Date, and Expiration Date of this Sublease, respectively. Any right of Landlord under the Master Lease (a) of access or inspection, (b) to do work in the Master Lease Premises or in the Building, (c) in respect of rules and regulations, which is incorporated herein by reference, shall be deemed to inure to the benefit of Sublandlord, Landlord, and any other person intended to be benefited by said provision, for the purpose of incorporation by reference in this Sublease.

 

6.4                               Modifications. For the purposes of incorporation herein, the terms of the Master Lease are subject to the following additional modifications:

 

(a)                                      Approvals. In all provisions of the Master Lease (under the terms thereof and without regard to modifications thereof for purposes of incorporation into this Sublease) requiring the approval or consent of Landlord, Subtenant shall be required to obtain the approval or consent of both Sublandlord and Landlord.

 

(b)                                      Deliveries. In all provisions of the Master Lease requiring Tenant to submit, exhibit to, supply or provide Landlord with evidence, certificates, or any other matter or thing, Subtenant shall be required to submit, exhibit to, supply or provide, as the case may be, the same to both Landlord and Sublandlord.

 

(c)                                       Damage; Condemnation. Neither Sublandlord nor Subtenant shall have an obligation to restore or rebuild any portion of the Subleased Premises after any destruction or taking by eminent domain.

 

(d)                                      Insurance. In all provisions of the Master Lease requiring Tenant to designate Landlord as an additional or named insured on its insurance policy, Subtenant shall be required to so designate Landlord and Sublandlord on its insurance policy.

 

(e)                                       Waiver of Subrogation. Subtenant hereby waives claims against Master Landlord and Sublandlord for property damage to the Subleased Premises or its contents and for all other claims waived as and to the extent that Sublandlord (as “Tenant”) waived such claims against Master Landlord (as “Landlord”) under the Master Lease. Notwithstanding anything to the contrary in the Master Lease or the Sublease, Sublandlord and Subtenant hereby release each other from all liability for damage to any property or loss of any kind which is caused by or results from any risk insured against under any property insurance policy required to be carried by either party under this Sublease, which is required to be insured against under this Sublease, or which would normally be covered by all risk property insurance.

 

6.5                               Exclusions. Notwithstanding the foregoing, Subtenant shall have no rights nor obligations under the following parts, Sections and Exhibits of the Master Lease: Sections 2, 3(a), 3(d), 3(e), 22, 23(g), 23(s), first sentence of 25(a), 25(d), 26, 27, 30 and Exhibits A-1, A-2, C, D, E, F and G.

 

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6.6                               Preservation of Master Lease. Sublandlord agrees that it will not exercise any right to terminate the Master Lease prior to the expiration of the Master Lease Term without obtaining the prior written consent of Subtenant.

 

7.                                      Transfers. Subtenant shall not Transfer this Sublease or all or any part of the Subleased Premises except subject to and in compliance with all of the terms and conditions of Article 12 of the Master Lease. In addition, Sublandlord shall have the same approval rights and notification obligations with respect to assignment and subleasing as Landlord has under Article 12(c) of the Master Lease. Subtenant shall pay all fees and costs payable to Master Landlord pursuant to the Master Lease in connection with any proposed Transfer, together with all of Sublandlord’s reasonable out-of-pocket costs relating to Subtenant’s request for such consent (such costs not to exceed $3,500.00), regardless of whether such consent is granted, and the effectiveness of any such consent shall be conditioned upon Master Landlord’s and Sublandlord’s receipt of all such fees and costs.

 

8.                                      Default. Except as expressly set forth herein, Subtenant shall perform all obligations in respect of the Subleased Premises that Sublandlord would be required to perform pursuant to the Master Lease. It shall constitute an event of default hereunder if Subtenant fails to perform any obligation hereunder, or any obligation under the Master Lease which has been incorporated herein by reference, and Subtenant has not remedied such failure after delivery of any written notice required under this Sublease and passage of any applicable grace or cure period provided in the Master Lease less one (1) business day for the Event of Default described in Section 18(a)(i) and less three (3) business days for all other Events of Default under the Master Lease. Notwithstanding anything to the contrary in the Master Lease or this Sublease, Subtenant shall be entitled to a grace period of five (5) days for the first (1st) two (2) late payments of Rent in any calendar year during the Term, so long as such late payments are each received within such five (5) day grace period.

 

9.                                      Remedies. In the event of any default of this Sublease by Subtenant beyond any notice and cure period, Sublandlord shall have all remedies provided to the “Landlord” in the Master Lease as if an Event of Default had occurred thereunder and all other rights and remedies otherwise available at law and in equity. Without limiting the generality of the foregoing, Sublandlord may continue this Sublease in effect after Subtenant’s breach and abandonment and recover Rent as it becomes due. Sublandlord may resort to its remedies cumulatively or in the alternative.

 

10.                               Right to Cure Defaults.

 

10.1                        Subtenant Default. If Subtenant fails to perform any of its obligations under this Sublease after expiration of applicable grace or cure periods, then Sublandlord may, but shall not be obligated to, perform any such obligations for Subtenant’s account. All costs and expenses incurred by Sublandlord in performing any such act for the account of Subtenant shall be deemed Rent payable by Subtenant to Sublandlord upon demand, together with interest thereon at the lesser of (i) five percent (5%) per annum or (ii) the maximum rate allowable under law from the date of demand to Subtenant until repaid. If Sublandlord undertakes to perform any of Subtenant’s obligations for the account of Subtenant pursuant hereto, the taking of such action

 

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shall not constitute a waiver of any of Sublandlord’s remedies. Subtenant hereby expressly waives its rights under any statute to make repairs at the expense of Sublandlord.

 

10.2                        Sublandlord Default. Sublandlord hereby irrevocably authorizes and directs Subtenant, upon receipt of any written notice from Master Landlord stating that a default exists in the performance of Sublandlord’s obligations under the Master Lease, to pay to Master Landlord the rents due and to become due under this Sublease. Sublandlord agrees that Subtenant shall have the right to rely upon any such statement and request from Master Landlord, and that Subtenant shall pay such rents to Master Landlord without any obligation to inquire as to whether such default exists and notwithstanding any notice or claim from Sublandlord to the contrary, and Sublandlord shall have no right or claim against Subtenant for any such rents so paid by Subtenant.

 

11.                               Consents and Approvals. Except as otherwise provided herein, Sublandlord shall not unreasonably withhold, or delay its consent to or approval of a matter requiring Sublandlord’s consent hereunder. In the event Landlord’s consent is required hereunder, Sublandlord hereby agrees to cooperate with Subtenant in seeking such consent, including, without limitation, delivering any applicable documentation requested by Subtenant.

 

12.                               Sublandlord’s Liability. Notwithstanding any other term or provision of this Sublease, the liability of Sublandlord to Subtenant for any default in Sublandlord’s obligations under this Sublease shall be limited to actual, direct damages, and under no circumstances shall Subtenant, its partners, members, shareholders, directors, agents, officers, employees, contractors, sublessees, successors and/or assigns be entitled to recover from Sublandlord (or otherwise be indemnified by Sublandlord) for (a) any losses, costs, claims, causes of action, damages or other liability incurred in connection with a failure of Master Landlord, its partners, members, shareholders, directors, agents, officers, employees, contractors, successors and/or assigns to perform or cause to be performed Master Landlord’s obligations under the Master Lease, except to the extent caused by Sublandlord or Sublandlord’s breach of this Sublease or the Master Lease, (b) lost revenues, lost profit or other consequential, special or punitive damages arising in connection with this Sublease for any reason, or (c) any damages or other liability arising from or incurred in connection with the condition of the Subleased Premises or suitability of the Subleased Premises for Subtenant’s intended uses, except to the extent caused by the gross negligence or willful misconduct of Sublandlord or Sublandlord’s breach of this Sublease or the Master Lease. Notwithstanding any other term or provision of this Sublease, no personal liability shall at any time be asserted or enforceable against Sublandlord’s stockholders, directors, officers, or partners on account of any of Sublandlord’s obligations or actions under this Sublease. As used in this Sublease, the term “Sublandlord” means the holder of Sublandlord’s interest under this Sublease. In the event of any assignment or transfer of the Sublandlord’s interest under this Sublease, which assignment or transfer may occur at any time during the Term in Sublandlord’s sole discretion, Sublandlord shall be and hereby is entirely relieved of all covenants and obligations of Sublandlord hereunder accruing subsequent to the date of the transfer and it shall be deemed and construed, without further agreement between the parties hereto, that any transferee has assumed and shall carry out all covenants and obligations thereafter to be performed by Sublandlord hereunder, provided that Sublandlord has delivered the Security Deposit to the transferee and the transferee has expressly assumed Sublandlord’s obligations under this Sublease. Sublandlord shall transfer and deliver (i) any then-existing

 

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Security Deposit to the transferee of Sublandlord’s interest under this Sublease, (ii) the written assumption of this Sublease and the Master Lease by Transferee, and (iii) written notice to Subtenant identifying the amount of the Security Deposit transferred and the name and address of the transferee, and, provided that the entire remaining amount of the Security Deposit has been transferred, Sublandlord shall be discharged from any further liability with respect thereto.

 

13.                               Indemnities.

 

13.1                        Indemnification of Sublandlord. Except to the extent caused by the negligence or willful misconduct of Sublandlord, its agents, employees, contractors or invitees, Subtenant shall indemnify, defend, protect and hold Sublandlord harmless from and against any and all claims, liabilities, judgments, causes of action, damages, injuries, costs and expenses (including reasonable attorneys’ and experts’ fees), by whomsoever made, incurred or suffered, and caused by or arising in connection with: (i) the use or occupancy of the Subleased Premises by Subtenant; (ii) the negligence or willful misconduct of Subtenant or its employees, contractors, agents or invitees; or (iii) a material breach of Subtenant’s obligations under this Sublease or the provisions of the Master Lease assumed by Subtenant hereunder. Subtenant’s indemnification of Sublandlord shall survive termination of this Sublease.

 

13.2                        Indemnification of Subtenant. Subject to Section 12 above and except to the extent caused by the negligence or willful misconduct of Subtenant, its agents, employees, contractors or invitees, Sublandlord shall indemnify, defend, protect and hold Subtenant harmless from and against any and all claims, liabilities, judgments, causes of action, damages, injuries, costs and expenses (including reasonable attorneys’ and experts’ fees), by whomsoever made, incurred or suffered, and caused by or arising in connection with (i) any material breach of Sublandlord’s obligations under this Sublease; (ii) any material breach of Sublandlord’s obligations under the Master Lease which Sublandlord is required to perform; or (iii) the negligence or willful misconduct of Sublandlord or its employees, contractors, agents or invitees. Sublandlord’s indemnification of Subtenant shall survive termination of this Sublease.

 

13.3                        Control of Defense and Attorneys’ Fees.  The party seeking indemnification under this Sublease (the “Indemnified Party”) shall promptly notify the other party (the “Indemnifying Party”) in writing of the claim and provide reasonable assistance in connection with the defense and settlement thereof. The Indemnifying Party shall be entitled to control the defense and settlement thereof unless it fails to take up such defense within a reasonable period of time. The Indemnifying Party shall not arrive at a settlement which adversely affects the Indemnified Party without the prior written consent of the Indemnified Party, such consent not to be unreasonably withheld, conditioned, or delayed. Failure to provide prompt notice shall not absolve the Indemnifying Party of its obligation to indemnify, provided however, it shall be excused from any incremental loss arising solely from such failure to notify. If Sublandlord or Subtenant brings an action to enforce the terms hereof or to declare rights hereunder, the prevailing party who recovers substantially all of the damages, equitable relief or other remedy sought in any such action on trial and appeal shall be entitled to receive from the other party its costs associated therewith, including, but not limited to, reasonable attorney’s fees, expert fees, and court costs from the other party.

 

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14.                               Delivery of Possession.

 

14.1                        Timing. Sublandlord will deliver possession of the Premises to Subtenant on the Commencement Date (subject to the provisions of Section 2(b)). Sublandlord shall use commercially reasonable efforts to complete the Sublandlord Work on or before January 1, 2015. If, for any reason whatsoever, the Sublandlord Work has not been substantially completed on or before February 15, 2015, then, in addition to Subtenant’s other rights and remedies, Subtenant shall be entitled to a credit against rent in the amount of $2,185.00 for each day that substantial completion of the Sublandlord Work is delayed beyond February 15, 2015; and if the Sublandlord Work has not been substantially completed on or before March 15, 2015 (which date may be extended in Subtenant’s sole and absolute discretion), then, in addition to Subtenant’s other rights and remedies, after March 15, 2015, Subtenant may elect to terminate this Sublease, which termination will be effective ten (10) days after written notice to Sublandlord, whereupon the Security Deposit and any pre-paid rent will be returned to Subtenant.

 

14.2                        Condition. Sublandlord will, at Sublandlord’s sole expense, have the Premises professionally cleaned prior to the Commencement Date. Further, Sublandlord will promptly complete the following work (“Sublandlord Work”): (a) install commercially reasonable separation between the stairwell connecting the Subleased Premises with the remainder of the Master Premises, and install separation along the guardrails. Except as set forth in this Section 14.2, Sublandlord shall deliver, and Subtenant shall accept, possession of the Subleased Premises in their “AS IS” condition as the Subleased Premises exists on the date hereof. Except as set forth in this Section 14.2 and Section 28, Sublandlord shall have no obligation to furnish, render or supply any work, labor, services, materials, furniture, fixtures, equipment, decorations or other items to make the Subleased Premises ready or suitable for Subtenant’s occupancy. In making and executing this Sublease, Subtenant has relied solely on such investigations, examinations and inspections as Subtenant has chosen to make or has made and has not relied on any representation or warranty concerning the Subleased Premises or the Building, except as expressly set forth in this Sublease. Subtenant acknowledges that Sublandlord has afforded Subtenant the opportunity for full and complete investigations, examinations and inspections of the Subleased Premises and the common areas of the Building. Subtenant acknowledges that it is not authorized to make or do any alterations or improvements in or to the Subleased Premises except as permitted by the provisions of this Sublease and the Master Lease.

 

15.                               Surrender and Holding Over.

 

15.1                        Prior to expiration of this Sublease, Subtenant shall surrender the Subleased Premises to Sublandlord in the same condition existing at the Commencement Date, ordinary wear and tear, Sublandlord’s or Master Landlord’s alterations and repair and maintenance obligations, casualties, condemnation, and alterations or other interior improvements made by Sublandlord, excepted.

 

15.2                        If Subtenant fails to surrender the Subleased Premises at the expiration or earlier termination of this Sublease, occupancy of the Subleased Premises after the termination or expiration shall be that of a tenancy at sufferance. Subtenant’s occupancy of the Subleased

 

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Premises during the holdover shall be subject to all the terms and provisions of this Sublease and Subtenant shall pay an amount equal to 200% of the sum of the Base Rent and Additional Rent due for the period immediately preceding the holdover. No holdover by Subtenant or payment by Subtenant after the expiration or early termination of this Sublease shall be construed to extend the Term or prevent Sublandlord from immediate recovery of possession of the Subleased Premises by summary proceedings or otherwise. In addition to the payment of the amounts provided above, if Subtenant holds over for a period in excess of thirty (30) days beyond the Expiration Date and Sublandlord is unable to deliver possession of the Subleased Premises to a new subtenant or to Landlord, as the case may be, or to perform improvements for a new subtenant, as a result of Subtenant’s holdover, Subtenant shall be liable to Sublandlord for all out-of-pocket damages, including, without limitation, consequential damages, that Sublandlord suffers from the holdover; Subtenant expressly acknowledges that such damages may include all of the holdover rent charged by Landlord under the Master Lease as a result of Subtenant’s holdover, which Master Lease holdover rent may apply to the entire Master Lease Premises.

 

16.                               Parking. Subtenant shall have the right to use twelve (12) of Sublandlord’s unreserved parking spaces in the Parking Lot (“Subtenant’s Allotted Spaces”). Subtenant’s use of Subtenant’s Allotted Spaces is subject to, and Subtenant shall use Subtenant’s Allotted Spaces in full compliance with, all restrictions and provisions set forth in Section 25 of the Master Lease. Without limiting the foregoing, the use of Subtenant’s Allotted Spaces shall be for the parking of motor vehicles used by Subtenant, its officers, employees and customers only, and shall be subject to all applicable laws and the reasonable, uniform and non- discriminatory rules and regulations adopted by Landlord from time to time for the use of the Parking Lot, and upon the expiration or earlier termination of this Sublease, Subtenant’s rights with respect to all leased parking spaces shall immediately terminate. Subtenant and its agents, employees, contractors, invitees or licensees shall not unreasonably interfere with the rights of Landlord, Sublandlord or others entitled to similar use of the Parking Lot. On a semi-annual basis (January through June and July through December), Subtenant shall notify Sublandlord in writing as to the number of Subtenant’s Allocated Spaces that Subtenant will utilize during that semi-annual period, such number to be the same for every day of the semi-annual period, subject to a minimum of ten (10) spaces (the “Noticed Spaces”). For the first partial calendar year hereunder (Commencement Date through June 30, 2015), Subtenant shall specify the number of Noticed Spaces in a written notice to Sublandlord no later than the Commencement Date. For all subsequent semi-annual periods, Subtenant shall give its written notice no later than either May 30 for the semi-annual period commencing on July 1 or November 30 for the semi-annual period commencing on January 1. As consideration for the parking rights granted herein, Subtenant shall pay to Sublandlord a monthly “Sublease Parking Rental” equal to the number of Noticed Spaces times the monthly per-space Parking Rental paid by Sublandlord from time to time under the terms of the Master Lease. Sublease Parking Rental shall be due and payable in advance, as additional rent, on the first day of each month during the Term.

 

17.                               Notices. Any notice by either party to the other required, permitted or provided for herein shall be valid only if in writing and shall be deemed to be duly given only if (a) delivered personally, or (b) sent by means of Federal Express, UPS Next Day Air or another reputable express mail delivery service guaranteeing next day delivery, or (c) sent by United States Certified or registered mail, return receipt requested, addressed:

 

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if to Sublandlord, at the following addresses:

 

InMobi Inc.

475 Brannan Street, Suite 410
 San Francisco, CA 94107
 Attn: Ms. Anne Frisbie

Lease Notice - Important

 

and

 

InMobi Pte. Ltd. 20
 Cecil Street

14-01 Equity Plaza
 Singapore 049705

Attn: Sharat Kharuna

 

if to Subtenant, at the following address:

 

Prior to the date Subtenant opens for business at the Subleased Premises:

 

Invitae Corporation
 458 Brannan Street
 San Francisco, CA, 94107

Attn: Robbie Evans

 

After Subtenant opens for business at the Subleased Premises:
  
 The Premises

 

with a copy to:

 

Invitae Corporation
 458 Brannan Street
 San Francisco, CA, 94107

Attn: Robbie Evans

 

or at such other address for either party as that party may designate by notice to the other. A notice shall be deemed given and effective upon receipt or refusal of receipt.

 

18.                               Signage. Subject to procuring the prior written approval of both Sublandlord, which shall not be unreasonably withheld or delayed, and Landlord in accordance with the terms of the Master Lease, Subtenant shall have the right to have Subtenant’s name on the directory board in the lobby of the Building and on the Building stand and signage in the elevator lobby of the fourth floor, and to have Building standard signage on the door to the Subleased Premises, as permitted and defined in the Master Lease.

 

19.                               Brokers. Subtenant represents that it has dealt directly with and only with CBRE, Inc. (“Subtenant’s Broker”), as a broker in connection with this Sublease. Sublandlord

 

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represents that it has dealt directly with and only with CBRE, Inc. (“Sublandlord’s Broker”), as a broker in connection with this Sublease. Sublandlord and Subtenant shall indemnify, defend, and hold each other harmless from all claims of any brokers other than Subtenant’s Broker and Sublandlord’s Broker claiming to have represented Sublandlord or Subtenant in connection with this Sublease. Subtenant and Sublandlord agree that Subtenant’s Broker and Sublandlord’s Broker shall be paid commissions by Sublandlord in connection with this Sublease pursuant to a separate agreement.

 

20.                               Conditions Precedent. This Sublease and Sublandlord’s and Subtenant’s obligations hereunder are conditioned upon the written consent of Landlord in a form reasonably acceptable to Subtenant and which includes (unless waived in whole or in part by Subtenant) Landlord’s agreement that the provisions of Section 12(e) and 12(f) of the Master Lease shall apply for the benefit of Subtenant (with references therein to “Tenant” and “the initially named Tenant “ deemed to be references to Subtenant) such that Subtenant shall be permitted to sublease or assign to “Affiliates” of Subtenant in accordance with such Section 12(e) and engage in Approved Reorganizations in accordance with such Section 12(f). Sublandlord shall use commercially reasonable efforts to obtain Landlord’s consent to this Sublease.

 

21.                               Complete Agreement. There are no representations, warranties, agreements, arrangements or understandings, oral or written, between the parties or their representatives relating to the subject matter of this Sublease which are not fully expressed in this Sublease. This Sublease cannot be changed or terminated nor may any of its provisions be waived orally or in any manner other than by a written agreement executed by both parties.

 

22.                               Interpretation. Irrespective of the place of execution or performance, this Sublease shall be governed by and construed in accordance with the laws of the State of California. If any provision of this Sublease or the application thereof to any person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Sublease and the application of that provision to other persons or circumstances shall not be affected but rather shall be enforced to the extent permitted by law. The table of contents, captions, headings and titles, if any, in this Sublease are solely for convenience of reference and shall not affect its interpretation. This Sublease shall be construed without regard to any presumption or other rule requiring construction against the party causing this Sublease or any part thereof to be drafted. If any words or phrases in this Sublease shall have been stricken out or otherwise eliminated, whether or not any other words or phrases have been added, this Sublease shall be construed as if the words or phrases so stricken out or otherwise eliminated were never included in this Sublease and no implication or inference shall be drawn from the fact that said words or phrases were so stricken out or otherwise eliminated. Each covenant, agreement, obligation or other provision of this Sublease shall be deemed and construed as a separate and independent covenant of the party bound by, undertaking or making same, not dependent on any other provision of this Sublease unless otherwise expressly provided. All terms and words used in this Sublease, regardless of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context may require. The word “person” as used in this Sublease shall mean a natural person or persons, a partnership, a corporation or any other form of business or legal association or entity.

 

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23.                               Counterparts. This Sublease may be executed in separate counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument. This Sublease shall be fully executed when each party whose signature is required has signed and delivered to each of the parties at least one counterpart, even though no single counterpart contains the signatures of all parties hereto.

 

24.                               Quiet Enjoyment. Subject to the terms and conditions of the Master Lease (including Master Landlord’s rights thereunder) and the terms and conditions of this Sublease (including Sublandlord’s rights hereunder), so long as Subtenant is not in default under this Sublease beyond any notice and cure periods, Subtenant’s right to occupy the Sublease Premises shall not be disturbed by Sublandlord or any entity or person claiming by, through, or under Sublandlord, during the Term.

 

25.                               Authority to Execute. Subtenant and Sublandlord each represent and warrant to the other that each person executing this Sublease on behalf of each party is duly authorized to execute and deliver this Sublease on behalf of that party.

 

26.                               Recitals and Exhibits. The Recitals and the Exhibits to this Sublease are integral and operative provisions of this Sublease and are incorporated herein.

 

27.                               Right of First Offer to Expand. Subtenant will have an on-going Right of First Offer (the “Right of First Offer”) with respect to any space subleased by Sublandlord. Sublandlord will provide written notice (the “Offer Notice”) to Subtenant when any such space becomes available for sublease (the “Offer Space”), which Offer Notice will describe the Offer Space and the proposed rent for the Offer Space, which will be the fair market rent to sublease the Offer Space as of the proposed commencement date. Subtenant shall have ten (10) business days from receipt of the Offer Notice to notify Sublandlord that Subtenant will (a) accept all or any portion of the Offer Space on the financial terms offered, (b) accept all or any portion of the Offer Space but elect to submit the determination of the fair market rent to binding arbitration by JAMS in San Francisco, in accordance with its comprehensive arbitration rules, or (c) decline to sublease the Offer Space. If Subtenant does not notify Sublandlord of its election in writing within said ten (10) business day period, then Sublandlord thereafter shall have the right to sublease the Offer Space to a third party on any terms Sublandlord desires. If Sublandlord subleases any or all of the Offer Space, the parties will promptly execute an amendment incorporating the additional subleased Offer Space as part of the “Subleased Premises” and the terms and conditions of this Sublease shall apply to such subleased Offer Space, including the Expiration Date. If Sublandlord does not sublease the Offer Space within ninety (90) days after the expiration of said ten (10) business day period, any further transaction shall be deemed a new determination by Sublandlord to lease the Offer Space and the provisions of this paragraph shall again be applicable. Subtenant’s Right of First Offer shall be continuous during the Term of this Sublease. Subtenant’s rejection of any particular offer shall not relieve Sublandlord of its obligation to again offer any Offer Space to Subtenant at any time that any Offer Space subsequently becomes available.

 

28.                               Furniture. Subtenant shall have the right to use during the Term the office furnishings within the Subleased Premises which are identified on Exhibit D attached hereto (the “Furniture”) at no additional cost to Subtenant. If Subtenant provides written notice to

 

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Sublandlord that Subtenant desires any one or more items of the Furniture to be removed from the Subleased Premises, then Sublandlord will remove such items from the Subleased Premises at Sublandlord’s expense, such removal to be completed by Sublandlord within the following timeframes: (a) prior to the Commencement Date, if Sublandlord receives any such notice within thirty (30) days prior to the Commencement Date, and (b) no later than thirty (30) days following written notice from Subtenant if Sublandlord receives such notice during the Term. Upon any such removal, the term “Furniture” shall be deemed to exclude such removed items. Subtenant shall maintain the Furniture in good condition and repair and shall surrender the Furniture to Sublandlord upon the termination of this Sublease in the same condition as exists as of the Commencement Date, reasonable wear and tear, casualty, and condemnation excepted.

 

29.                               Cabling. During the Term, and subject to Master Landlord’s consent, Subtenant shall have the right to install, maintain, replace, and remove network cabling for the benefit of the Subleased Premises (the “Cabling”) in Sublandlord’s server room located in the remaining Master Lease Premises. Subtenant’s installation, maintenance, replacement or removal of such Cabling shall not interfere with Sublandlord’s cabling or the functionality of its server room. Sublandlord and Subtenant shall cooperate in good faith to allow Subtenant to access the server room for the installation, maintenance, replacement, and removal of the Cabling permitted by this Section 29. Subtenant shall be required to remove the Cabling prior to surrendering the Subleased Premises pursuant to Section 15.1.

 

[Signatures follow on next page.]

 

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IN WITNESS WHEREOF, the parties hereto hereby execute this Sublease as of the day and year first above written.

 

	
 
    	
SUBLANDLORD:
    
	
 
    	
 
    
	
 
    	
INMOBI INC.,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Amit Gupta
    
	
 
    	
Name: 
    	
Amit Gupta
    
	
 
    	
Title: 
    	
Co-founder
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SUBTENANT:
    
	
 
    	
 
    
	
 
    	
INVITAE CORPORATION,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Lee Bendekgey
    
	
 
    	
Name: 
    	
Lee Bendekgey
    
	
 
    	
Title: 
    	
CFO
    

 

18

 

EXHIBIT A to SUBLEASE

 

Master Lease

 

Exhibit A

 

OFFICE LEASE
 SUMMARY OF LEASE TERMS

 

475 Brannan Street
 San Francisco, California

 

	
A.
    	
 
    	
Date:
    	
 
    	
March 26, 2012
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
B.
    	
 
    	
Landlord:
    	
 
    	
PRU/SKS Brannan Associates, LLC, a
    
	
 
    	
 
    	
 
    	
 
    	
Delaware limited liability company
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Landlord’s address for notices:

[Paragraph 23(k)]
    	
 
    	
c/o The Prudential Insurance Company of America

4 Embarcadero Center, 27th Floor

San Francisco, CA 94111

Attn: PRISA II Asset Manager
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
c/o The Prudential Insurance Company of America
    
	
 
    	
 
    	
 
    	
 
    	
8 Campus Drive, 4th Floor
    
	
 
    	
 
    	
 
    	
 
    	
Parsippany, New Jersey 07054
    
	
 
    	
 
    	
 
    	
 
    	
Attn: Greg Shanklin, Esquire
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
c/o SKS Investments LLC
    
	
 
    	
 
    	
 
    	
 
    	
601 California Street, Suite 1310
    
	
 
    	
 
    	
 
    	
 
    	
San Francisco, CA 94108
    
	
 
    	
 
    	
 
    	
 
    	
Attn: Ms. Pamela Izzo
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
C.
    	
 
    	
Tenant:
    	
 
    	
INMOBI INC., a Delaware corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tenant’s address for notices:
    	
 
    	
475 Brannan Street, Suite 310
    
	
 
    	
 
    	
[Paragraph 23(k)]
    	
 
    	
San Francisco, California
    
	
 
    	
 
    	
 
    	
 
    	
Attn: Lease Notice - Important
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
InMobi Inc.
    
	
 
    	
 
    	
 
    	
 
    	
20 CECIL ST. 14-01 EQUITY PLAZA

SINGAPORE 049705
    
	
 
    	
 
    	
 
    	
 
    	
Attn: Sharat Kharuna
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tenant Contact Person:
    	
 
    	
Sharat Kharuna
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
D.
    	
 
    	
Floor(s) on which Premises are situated: [Paragraph   1(f)]
    	
 
    	
3rd and 4th floors; Suites 310, 410 and 420
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
E.
    	
 
    	
Rentable area of Premises:
    	
 
    	
39,372 square feet.
    

 

i

 

	
 
    	
 
    	
[Paragraph 1(f)]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
F.
    	
 
    	
Tenant’s Percentage Share:
    	
 
    	
16.11%
    
	
 
    	
 
    	
[Paragraph 1(j)]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
G.
    	
 
    	
Base Year: [Paragraph 1(a)]
    	
 
    	
2012
    
	
 
    	
 
    	
Tax Base Year: [Paragraph 1(a)]
    	
 
    	
Tax Fiscal Year from 7/1/2012 - 6/30/2013
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
H.
    	
 
    	
Term; [Paragraph 2]
    	
 
    	
Period that begins on the Commencement Date and   ending on the last day of the 60th month following the Commencement Date,   subject to extension for 60 months as provided in Paragraph 2*
    
	    

    
	
 
    	
 
    	
 
    	
 
    	
* Term with respect to the Suite 420 Premises   shall be as provided in Paragraph 2(a).
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
I.
    	
 
    	
Basic Monthly Rental:
    	
 
    	
Months 1 – 12
    	
$170,612.00*
    
	
 
    	
 
    	
[Paragraph 3(a)]
    	
 
    	
Months 13 – 24:
    	
$175,730.36
    
	
 
    	
 
    	
 
    	
 
    	
Months 25 – 36:
    	
$181,002.27
    
	
 
    	
 
    	
 
    	
 
    	
Months 37 – 48:
    	
$186,432.34
    
	
 
    	
 
    	
 
    	
 
    	
Month 49 –
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Expiration of
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Initial Term:
    	
$192,025.31
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	    

    
	
 
    	
 
    	
 
    	
 
    	
* Basic Monthly Rental with respect to the Suite 420   Premises prior to the Commencement Date shall be as provided in Paragraph   3(a).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
J.
    	
 
    	
Letter of Credit Required Amount:

[Paragraph 26(a)]
    	
 
    	
$682,448.00, subject to reduction as provided in   Paragraph 26(a).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
K.
    	
 
    	
Brokers:

[Paragraph 23(q)]
    	
 
    	
Colliers International (“Landlord’s Broker”) Cassidy   Turley/BT Commercial (“Tenant’s Broker”)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
L.
    	
 
    	
Exhibits and addenda: 
    	
 
    	
Exhibit A -
    	
Floor Plan
    
	
 
    	
 
    	
[Paragraph 23(u)]
    	
 
    	
Exhibit B - 
    	
Building Rules and Regulations
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit C - 
    	
Tenant Work Letter
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit D - 
    	
Commencement Date Memorandum
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit E - 
    	
Form of Letter of Credit
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit F - 
    	
Included Personal Property
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit G - 
    	
Lease Guaranty
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
M.
    	
 
    	
Guarantor:

[Paragraph 30]
    	
 
    	
InMobi Pte Ltd., Singapore
    

 

ii

 

The provisions of the Lease identified above in brackets are those provisions where references to particular Lease Terms appear. Each such reference shall incorporate the applicable Lease Terms. In the event of any conflict between the Summary of Lease Terms and the Lease, the latter shall control.

 

	
 
    	
LANDLORD:
    
	
 
    	
 
    
	
 
    	
PRU/SKS BRANNAN ASSOCIATES, LLC, a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By 
    	
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey   corporation, its Managing Member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    

 

iii

 

	
 
    	
TENANT:
    
	
 
    	
 
    
	
 
    	
INMOBI INC., a Delaware   corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Its:
    	
 
    

 

iv

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
TERM
    	
5
    
	
 
    	
 
    	
 
    
	
3.
    	
RENTAL; SECURITY   DEPOSIT
    	
9
    
	
 
    	
 
    	
 
    
	
4.
    	
TENANT’S SHARE OF   OPERATING EXPENSES AND REAL PROPERTY TAXES; ADDITIONAL RENT
    	
11
    
	
 
    	
 
    	
 
    
	
5.
    	
OTHER TAXES PAYABLE BY   TENANT
    	
13
    
	
 
    	
 
    	
 
    
	
6.
    	
USE
    	
13
    
	
 
    	
 
    	
 
    
	
7.
    	
COMPLIANCE WITH   LAWS/ENVIRONMENTAL MATTERS
    	
14
    
	
 
    	
 
    	
 
    
	
8.
    	
ALTERATIONS; LIENS
    	
17
    
	
 
    	
 
    	
 
    
	
9.
    	
MAINTENANCE AND REPAIR
    	
18
    
	
 
    	
 
    	
 
    
	
10.
    	
SERVICES
    	
18
    
	
 
    	
 
    	
 
    
	
11.
    	
SECURITY; ACCESS;   CONTROL
    	
20
    
	
 
    	
 
    	
 
    
	
12.
    	
ASSIGNMENT AND   SUBLETTING
    	
22
    
	
 
    	
 
    	
 
    
	
13.
    	
WAIVER; INDEMNIFICATION
    	
27
    
	
 
    	
 
    	
 
    
	
14.
    	
INSURANCE
    	
28
    
	
 
    	
 
    	
 
    
	
15.
    	
PROTECTION OF LENDERS
    	
29
    
	
 
    	
 
    	
 
    
	
16.
    	
ENTRY BY LANDLORD
    	
30
    
	
 
    	
 
    	
 
    
	
17.
    	
ABANDONMENT
    	
31
    
	
 
    	
 
    	
 
    
	
18.
    	
DEFAULT AND REMEDIES
    	
31
    
	
 
    	
 
    	
 
    
	
19.
    	
DAMAGE BY FIRE OR OTHER   CASUALTY
    	
34
    
	
 
    	
 
    	
 
    
	
20.
    	
EMINENT DOMAIN
    	
36
    
	
 
    	
 
    	
 
    
	
21.
    	
HOLDING OVER
    	
37
    
	
 
    	
 
    	
 
    
	
22.
    	
INTENTIONALLY OMITTED
    	
37
    
	
 
    	
 
    	
 
    
	
23.
    	
MISCELLANEOUS
    	
37
    

 

i

 

	
24.
    	
ERISA
    	
43
    
	
 
    	
 
    	
 
    
	
25.
    	
PARKING
    	
43
    
	
 
    	
 
    	
 
    
	
26.
    	
LETTER OF CREDIT
    	
44
    
	
 
    	
 
    	
 
    
	
27.
    	
[INTENTIONALLY OMITTED]
    	
49
    
	
 
    	
 
    	
 
    
	
28.
    	
TENANT’S RIGHT OF FIRST   NOTIFICATION
    	
49
    
	
 
    	
 
    	
 
    
	
29.
    	
PERSONAL PROPERTY
    	
49
    
	
 
    	
 
    	
 
    
	
30.
    	
GUARANTY
    	
50
    
	
 
    	
 
    	
 
    
	
EXHIBIT A-1
    	
SUITES 310/410 PREMISES   FLOOR PLAN
    
	
 
    	
 
    
	
EXHIBIT A-2
    	
SUITE 420 PREMISES   FLOOR PLAN
    
	
 
    	
 
    
	
EXHIBIT B
    	
BUILDING RULES AND   REGULATIONS
    
	
 
    	
 
    
	
EXHIBIT C
    	
TENANT WORK LETTER
    
	
 
    	
 
    
	
EXHIBIT D
    	
COMMENCEMENT DATE   MEMORANDUM
    
	
 
    	
 
    
	
EXHIBIT E
    	
FORM OF LETTER OF   CREDIT
    
	
 
    	
 
    
	
EXHIBIT F
    	
INCLUDED PERSONAL   PROPERTY
    
	
 
    	
 
    
	
EXHIBIT G
    	
LEASE GUARANTY
    
				

 

ii

 

475 BRANNAN STREET

 

OFFICE LEASE

 

THIS LEASE is dated as of the date stated in Paragraph A of the Summary of Basic Lease Terms between PRU/SKS BRANNAN ASSOCIATES, LLC, a Delaware limited liability company (“Landlord”), and INMOBI INC., a Delaware corporation (“Tenant”).

 

W I T N E S S E T H:

 

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises described in Paragraph 1(f) below, for the term and subject to the terms, covenants, agreements and conditions hereinafter set forth.

 

1.                                      DEFINITIONS.

 

In addition to terms that are defined elsewhere in this Lease, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified:

 

(a)                                 The term “Base Year” shall mean calendar year 2012 and the term “Tax Base Year” shall mean the tax fiscal year from July 1, 2012, through June 30, 2013..

 

(b)                                 The term “Building” shall mean the office building located at 475 Brannan Street in San Francisco, California.

 

(c)                                  The term “Expense Year” shall mean each calendar year in which any portion of the Lease term falls, through and including the calendar year in which the term expires; provided, however, that Landlord, upon notice to Tenant, may change the Expense Year from time to time to any other twelve (12) consecutive month period, and, in such event, Tenant’s Percentage Share of increases in Real Property Taxes over the Tax Base Year amounts and Operating Expenses over the Base Year amounts shall be equitably adjusted for any Expense Year involved in any such change.

 

(d)                                 The term “Land” means the parcel(s) of land on which the Building and the adjacent below-grade parking lot (“Parking Lot”) are located.

 

(e)                                  The term “Operating Expenses” shall mean the total costs and expenses incurred by Landlord in connection with the management, operation, maintenance, repair and ownership of the Real Property (as defined in Paragraph 1(g) hereof), including, without limitation, the following costs: (1) salaries, wages, bonuses and other compensation (including hospitalization, medical, surgical, retirement plan, pension plan, union dues, parking privileges, life insurance, including group life insurance, welfare and other fringe benefits, and vacation, holidays and other paid absence benefits) relating to employees of Landlord or its agents engaged in the management, operation, repair, or maintenance of the Real Property and costs of training such employees; (2) payroll, social security, workers’ compensation, unemployment and similar taxes with respect to such employees of Landlord or its agents, and the cost of providing disability or other benefits imposed by law or otherwise, with respect to such employees;

 

1

 

(3) uniforms (including the cleaning, replacement and pressing thereof) provided to such employees; (4) premiums and other charges incurred by Landlord with respect to fire, earthquake, other casualty, boiler and machinery, theft, rent interruption, liability insurance, any other insurance as is deemed necessary or advisable in the reasonable judgment of Landlord, or any insurance required by the holder of any Superior Interest (as defined in Paragraph 15), all in such amounts as Landlord determines to be appropriate, and the actual costs incurred in repairing an insured casualty to the extent of the deductible amount under the applicable insurance policy; (5) water charges and sewer rents or fees; (6) license, permit and inspection fees and charges, the cost of contesting any governmental enactments that may affect Operating Expenses, and the costs incurred in connection with any transportation system management program or similar program; (7) sales, use and excise taxes on goods and services purchased by Landlord in connection with the operation, maintenance or repair of the Real Property and building systems and equipment; (8) telephone, telegraph, postage, stationery supplies and other expenses incurred in connection with the operation, maintenance, or repair of the Real Property; (9) management fees and expenses (including fees and expenses for accounting, financial management, data processing and information services) and costs of tenant service programs; (10) repairs to and physical maintenance of the Real Property, including building systems and appurtenances thereto and normal repair and replacement of worn-out equipment, facilities and installations, but excluding the replacement of major building systems (except to the extent otherwise included as an Operating Expense pursuant to this Paragraph 1(e)); (11) janitorial (excluding janitorial service to the Premises and the premises of other tenants), window cleaning, security services, extermination, water treatment, rubbish removal, plumbing and other services and inspection or service contracts for elevator, electrical, mechanical, sanitary, heating, ventilation and air conditioning, and other building equipment and systems or as may otherwise be necessary or proper for the operation or maintenance of the Real Property; (12) supplies, tools, materials and equipment used in connection with the operation, maintenance or repair of the Real Property;  (13) accounting, legal and other professional, consulting or service fees and expenses; (14) painting the exterior or the public or common areas of the Building and the cost of maintaining and replacing the sidewalks, landscaping and other common areas of the Real Property; (15) all costs and expenses for electricity, chilled water, air conditioning, water for heating, gas, fuel, steam, heat, lights, sewer service, communications service, power and other energy related utilities required in connection with the operation, maintenance and repair of the Real Property, including the Premises and the premises of other tenants to the extent not separately metered; (16) the cost of any capital improvements made by Landlord to the Real Property or capital assets acquired by Landlord during the term of this Lease required under any governmental law, regulation or insurance requirement, such cost or allocable portion to be amortized over the useful life thereof, together with interest on the unamortized balance at a rate per annum equal to the Reference Rate (as defined in Paragraph 3(c)) charged at the time such capital improvements or capital assets are constructed or acquired or such higher rate as may have been paid by Landlord on funds borrowed for the purpose of constructing or acquiring such capital improvements or capital assets, but in either case not more than the maximum rate permitted by law at the time such capital improvements or capital assets are constructed or acquired; (17) the cost of any capital improvements made by Landlord to the Building or capital assets acquired by Landlord during the term of this Lease for the protection of the health and safety of the occupants of the Real Property or that are designed to reduce other Operating Expenses, such cost or allocable portion thereof to be amortized over the useful life thereof

 

2

 

(except that Landlord may include as an Operating Expense in any calendar year a portion of the cost of such a capital improvement or capital asset equal to Landlord’s estimate of the amount of the reduction of other Operating Expenses in such year resulting from such capital improvement or capital asset), together with interest on the unamortized balance at a rate per annum equal to  the Reference Rate charged at the time such capital improvements or capital assets are constructed or acquired or such higher rate as may have been paid by Landlord on funds borrowed for the purpose of constructing or acquiring such capital improvements or capital assets, but in either case not more than the maximum rate permitted by law at the time such capital improvements or capital assets are constructed or acquired; (18) the cost of furniture, window coverings, carpeting, decorations, landscaping and other customary and ordinary items of personal property provided by Landlord for use in common areas of the Real Property or in the Building office (to the extent that such Building office is dedicated to the operation and management of the Real Property), such costs to be amortized over the useful life thereof; (19) the cost of any capital improvements made by Landlord to the Real Property or capital assets acquired by Landlord during the term of this Lease to the extent that the cost of any such improvement or asset is less than five thousand dollars ($5,000); (20) the cost of any capital improvements made by Landlord to the Real Property or capital assets acquired by Landlord during the term of this Lease that have a useful life of five (5) years or less (and the cost of which is not otherwise included in Operating Costs pursuant to this Paragraph 1(e)), such cost to be amortized over the useful life thereof, together with interest on the unamortized balance at a rate per annum equal to the Reference Rate charged at the time such capital improvements or capital assets are constructed or acquired or such higher rate as may have been paid by Landlord on funds borrowed for the purpose of constructing or acquiring such capital improvements or capital assets, but in either case not more than the maximum rate permitted by law at the time such capital improvements or capital assets are constructed or acquired; (21) any such expenses and costs resulting from substitution of work, labor, material or services in lieu of any of the above itemizations, or for any such additional work, labor, services or material resulting from compliance with any governmental laws, rules, regulations or orders applicable to the Real Property or any part thereof; (22) property management office rent or rental value; and (23) cost of operation, repair and maintenance of the Parking Lot, including resurfacing, restriping and cleaning.

 

To the extent costs and expenses described above relate to both the Real Property and other property, such costs and expenses shall, in determining the amount of Operating Expenses, be allocated as Landlord may reasonably determine to be equitable and appropriate.

 

Despite any foregoing provisions to the contrary, Operating Expenses shall not include the following: (i) depreciation on the Building; (ii) debt service; (iii) rental under any ground or underlying lease; (iv) interest (except as expressly provided in this Paragraph 1(e)); (v) Real Property Taxes; (vi) attorneys’ fees and expenses incurred in connection with lease  negotiations with prospective Building tenants and in connection with the enforcement of leases; (vii) the cost of any improvements or equipment that would be properly classified as capital expenditures (except for any capital expenditures expressly included in Operating Expenses pursuant to this Paragraph 1(e)); (viii) the cost of decorating, improving for tenant occupancy, painting or redecorating portions of the Building to be demised to tenants; (ix) advertising expenses relating to vacant space; (x) real estate brokers’ or other leasing commissions; or (xii) costs of utilities for tenants’ premises if separately metered; (xiii) the cost of providing any

 

3

 

service directly to and paid directly by any tenant other than through payment of Operating Expenses; (xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease; (xv) costs of any items for which Landlord receives reimbursement from insurance proceeds or a third party (and insurance proceeds shall be excluded from Operating Expenses in the year in which they are received, except that any deductible amount under any insurance policy shall be included within Operating Expenses); or (xvi) any items paid directly by Tenant under Paragraph 10.

 

(f)                                   The term “Premises” shall mean the space in the Building designated by cross-hatching on the floor plan(s) attached hereto as Exhibits A-1 and A-2 (exclusive of the areas, if any, shown by shading) and situated on the floor(s) of the Building specified in Paragraph D of the Summary of Lease Terms, together with the appurtenant right to the use, in common with others, of lobbies, entrances, stairs, elevators and other public portions of the Building. Landlord and Tenant agree that the Premises contain the number of square feet of rentable area specified in Paragraph E of the Summary of Lease Terms. All the outside walls and windows of the Premises and any space in the Premises used for shafts, stacks, pipes, conduits, ducts, electric or other utilities, sinks or other Building facilities, and the use thereof and access thereto through the Premises for the purposes of operation, maintenance and repairs, are reserved to Landlord.

 

(g)                                  The term “Real Property” shall mean, collectively, the Land, the Building, the Parking Lot, and the other improvements on the Land.

 

(h)                                 The term “Real Property Taxes” shall mean all taxes, assessments (whether general or special), excises, transit charges, housing fund assessments or other housing charges, levies or fees, ordinary or extraordinary, unforeseen as well as foreseen, of any kind, which are assessed, levied, charged, confirmed or imposed on the Real Property or any part thereof, on the Landlord with respect to the Real Property, on the act of entering into this Lease or any other lease of space in the Real Property, on the use or occupancy of the Real Property or any part thereof, with respect to services or utilities consumed in the use, occupancy or operation of the Real Property, or on or measured by the rent payable under this Lease or in connection with the business of renting space in the Real Property, including, without limitation, any gross income tax, gross receipts tax or excise tax levied with respect to the receipt of such rent, by the United States of America, the State of California, the City and County of San Francisco, any political subdivision, public corporation, district or other political or public entity or public authority, and shall also include any other tax, fee or other excise, however described, that may be levied or assessed in lieu of, as a substitute (in whole or in part) for, or as an addition to, any other Real Property Taxes. Real Property Taxes shall include reasonable attorneys’ fees, costs and disbursements incurred in connection with proceedings to contest, determine or reduce Real Property Taxes.

 

Despite any foregoing provisions to the contrary, Real Property Taxes shall not include (i) income, excess profits, franchise, transfer, inheritance or capital stock taxes, unless, due to a change in the method of taxation, any of such taxes is levied or assessed against Landlord in lieu of, as a substitute (in whole or in part) for, or as an addition to, any other charge that would otherwise constitute a part of Real Property Taxes; (ii) any items included as Operating Expenses; (iii) any taxes included in the Parking Rental under Paragraph 25, or

 

4

 

(iv) any items paid by Tenant under Paragraph 5. Landlord and Tenant acknowledge and agree that certain other buildings exist or encroach upon the Land, that Tenant shall have no liability as to any item of Real Property Taxes attributable or allocable to, or assessed against, buildings other than the Building and that Landlord’s good faith determination of the proper allocation of any item of Real Property Taxes allocable to buildings other than the Building shall be binding on Landlord and Tenant.

 

(i)                                     The term “Rental” shall include the Basic Monthly Rental set forth in Paragraph I of the Summary of Lease Terms, all additional rent, and any other costs or charges payable by Tenant to Landlord hereunder.

 

(j)                                    The term “Suites 310/410 Premises” means the portion of the Premises commonly known as Suites 310 and 410 and shown on Exhibit A-1 attached hereto.

 

(k)                                 The term “Suite 420 Premises” means the portion of the Premises commonly known as Suite 420 and shown on Exhibit A-2 attached hereto.

 

(l)                                     The term “Tenant’s Percentage Share” shall mean the percentage figure specified in Paragraph F of the Summary of Lease Terms (subject to Landlord’s right, from time to time, to adjust such percentage to reflect accurate measurements of the Premises or other portions of the Building and/or to reflect changes in Landlord’s standard common area load factor).

 

2.                                      TERM.

 

(a)                                 Subject to Paragraphs 2(c) and 2(d) hereof, the term of this Lease (the “Term”) with respect to the Suite 420 Premises shall commence on the date (the “Suite 420 Commencement Date”) that is the earlier of (i) the date Tenant commences business operations in the Suite 420 Premises, and (ii) the date that is thirty (30) days after Landlord delivers possession of the Suite 420 Premises to Tenant, and the Term with respect to the Suites 310/410 Premises shall commence on the date (the “Commencement Date”) that is thirty (30) days after Landlord delivers possession of the Suites 310/410 Premises to Tenant, and, unless ended sooner as herein provided, shall expire on the last day of the sixtieth (60th) month following the Commencement Date. For purposes of this Section 2(a), Tenant shall not be deemed to have commenced business operations in the Suite 420 Premises by reason of having conducted meetings in the Suite 420 Premises on no more than two days. Landlord and Tenant hereby agree to confirm the actual Commencement Date and Expiration Date promptly after the commencement of the Term, by executing and delivering to each other counterparts of a Commencement Date Memorandum in the form of Exhibit D attached hereto, but the Term of this Lease shall commence on the Suite 420 Commencement Date and end on the Expiration Date whether or not such amendment is executed.

 

(b)                                 Tenant shall cause to be constructed or installed in the Premises the Tenant Improvements in accordance with the terms of the Tenant Work Letter attached hereto as Exhibit C. Landlord shall deliver possession of the Premises to Tenant following termination of the existing lease of the Premises to another tenant and the surrender of possession of the Premises to Landlord by that other tenant (and any subtenants or other occupants of that other

 

5

 

tenant). Landlord shall notify Tenant no later than three (3) business days prior to the each of the respective dates on which it intends to deliver the Suite 420 Premises and the Suites 310/410 Premises; such notifications shall be made to Tenant at 1200 Park Place, Suite 290  San Mateo, CA 94403, Attn: 475 Brannan Delivery Notice.

 

(c)                                  If Landlord fails to deliver the entire Premises to Tenant within sixty (60) days after the execution of this Lease and does not cure such failure within fifteen (15) days of Tenant’s written notice thereof (“Tenant’s Full Premises Delivery Notice”), Tenant shall have the option to terminate this Lease upon written notice to Landlord within fifteen (15) days of the expiration of Tenant’s Full Premises Delivery Notice. If Tenant does not exercise its option to terminate the Lease under this Paragraph 2(c), this Lease thereafter shall not be void or voidable and no obligation of Tenant shall be affected by Landlord’s failure to deliver the Premises; provided that, until Landlord’s delivery of the Premises to Tenant, Tenant shall have no obligations under this Lease concerning the Rental payable hereunder or otherwise relating to occupancy of the Premises (excepting the obligation concerning payment of Basic Monthly Rental upon execution of this Lease as provided in Paragraph 3(d) and the obligation to pay Basic Monthly Rental with respect to each portion of the Premises that has been delivered Tenant). Regardless of whether Tenant exercises its option to terminate under this Paragraph 2(c), in no event shall Landlord be liable to Tenant for any loss or damage resulting from Landlord’s failure to deliver the Premises.

 

(d)                                 If either:

 

(A) Landlord has delivered the Suite 420 Premises to Tenant within sixty (60) days after the execution of this Lease but fails to deliver the Suites 310/410 Premises to Tenant within ninety (90) days after the execution of this Lease and does not cure such failure within fifteen (15) days of Tenant’s written notice thereof (“Partial Delivery Notice”), or

 

(B) Landlord has delivered the Suites 310/410 Premises to Tenant within sixty (60) days after the execution of this Lease but fails to deliver the Suite 420 Premises to Tenant within ninety (90) days after the execution of this Lease and does not cure such failure within fifteen (15) days of Tenant’s written notice thereof (also, a “Partial Delivery Notice”), then Tenant shall have the option to terminate this Lease with respect to the portion of the Premises that remains undelivered upon written notice to Landlord within fifteen (15) days of the expiration of the Partial Delivery Notice.

 

In the event of such partial termination, the following changes shall be made to the Lease (which changes shall be promptly documented in an amendment executed by Landlord and Tenant, but which amendment shall not be necessary in order for such changes to be effective):

 

	
Premises remaining
    	
 
    	
Suite 420
    	
 
    	
Suites 310/410
    
	
Commencement Date
    	
 
    	
Suite 420   Commencement Date
    	
 
    	
Commencement Date
    
	
Term
    	
 
    	
Suite 420   Commencement Date to last day of 60th month
    	
 
    	
Commencement Date to   last day of 60th month following
    

 

6

 

	
 
    	
 
    	
following   Suite 420 Commencement Date, subject to extension per Paragraph 2
    	
 
    	
Commencement Date,   subject to extension per Paragraph 2
    
	
Rentable area of   Premises
    	
 
    	
14,818 sq. feet
    	
 
    	
24,554 sq. feet
    
	
Tenant’s Percentage   Share
    	
 
    	
6.063%
    	
 
    	
10.047%
    
	
Basic Monthly Rental
    	
 
    	
Months 1 – 12:   $64,211.33 
   Months 13 – 24: $66,137.67

Months 25 – 36:   $68,121.80

Months 37 – 48:   $70,165.45

Month 49 – Expiration   of
   Initial Term: $72,270.42
    	
 
    	
Months 1 – 12:   $106,400.67 

Months 13 – 24:   $109,592.69 

Months 25 – 36:   $112,880.47 

Months 37 – 48:   $116.266.88 

Month 49 – Expiration   of
   Initial Term: $119,754.89
    
	
Letter of Credit   Required Amount
    	
 
    	
$256,845.32*
    	
 
    	
$425,607.67*
    
	
New Required Amount
    	
 
    	
$128,422.66
    	
 
    	
$212,803.83
    
	
Tenant’s Allotted   Spaces
    	
 
    	
15
    	
 
    	
25
    
	
Tenant Improvement
   Allowance
    	
 
    	
$74,090, allocable to   any Tenant Improvement Allowance Items**
    	
 
    	
$368,310, provided that   Tenant Improvement Allowance Items in Work Letter §§ 2.2.1.1 &   2.2.1.8 shall not exceed $122,770**
    

 

* This reduction shall be effectuated by Tenant replacing the Letter of Credit then being held by Landlord with a new Letter of Credit in the reduced Letter of Credit Required  Amount or amending the then-existing Letter of Credit to that new Letter of Credit Required Amount (or, if Tenant originally satisfied its Letter of Credit delivery obligation by the delivery of two Letters of Credit, one for each of the above stated amounts, then the reduction shall be effectuated by Landlord’s return of one such Letter of Credit so that the result is Landlord retaining the Letter of Credit that is in the new Letter of Credit Required Amount).

 

** No Tenant Improvement Allowance shall be disbursed by Landlord with respect to any space not eventually leased by Tenant under this Lease. Any costs related to Tenant Improvements for space not yet delivered to Tenant under this Lease shall be incurred at Tenant’s risk.

 

(e)                                  Tenant shall have the option to renew this Lease with respect to the entire Premises then leased by Tenant upon the expiration of the initial Term for one (1) additional term of five (5) years (the “Extension Term”), by delivering notice to Landlord of Tenant’s option to extend at least nine (9) months but no more than twelve (12) months prior to the end of the initial Term. If Tenant exercises its right to extend, the Term shall be extended for an additional five (5) years, and Tenant shall continue to lease the Premises on all of the terms and conditions of this Lease, except that Basic Monthly Rental for the Extension Term shall increase to the Fair Market Rental Rate (as defined below). In no event shall the Basic Monthly Rental

 

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for the Extension Term be less than the Basic Monthly Rental rate in effect during the last month of the initial Term.

 

(f)                                   For the purposes of the Lease, the term “Fair Market Rental Rate” shall mean the annual amount per rentable square foot that Landlord or other owners of similar property in the vicinity of the Real Property have accepted for comparable space, for a comparable use. Landlord shall determine the Fair Market Rental Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days after Tenant provides the notice to Landlord exercising Tenant’s extension option. Tenant shall have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental rate within which to accept such rental rate or to reasonably object thereto in writing. In the event Tenant objects, Landlord and Tenant shall attempt to agree upon such Fair Market Rental Rate, using their good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s Review Period (the “Outside Agreement Date”), then each party shall place in a separate sealed envelope its final proposal as to the Fair Market Rental Rate, and such determination shall be submitted to arbitration in accordance with subsections (i) through (iv) below. Failure of Tenant to so object in writing within Tenant’s Review Period shall conclusively be deemed its approval of the Fair Market Rental Rate determined by Landlord. In the event that Landlord fails to timely generate the initial written notice of Landlord’s opinion of the Fair Market Rental Rate that triggers the negotiation period of this Paragraph 2(f), then Tenant may commence such negotiations by providing the initial notice, in which event Landlord shall have thirty (30) days (“Landlord’s Review Period”) after receipt of Tenant’s notice of the new rental rate within which to accept such rental rate. In the event Landlord fails to accept in writing such rental rate proposed by Tenant, then such proposal shall be deemed rejected, and Landlord and Tenant shall attempt in good faith to agree upon such Fair Market Rental Rate, using their good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Landlord’s Review Period (which shall be, in such event, the “Outside Agreement Date” in lieu of the above definition of such date), then each party shall place in a separate sealed envelope its final proposal as to Fair Market Rental Rate and such determination shall be submitted to arbitration in accordance with subsections (i) through (iv) below. If the final determination of the Fair Market Rental Rate has not been made prior to the date on which Tenant’s obligation to pay Basic Monthly Rental during the Extension Term commences, then, from such date until the date the final determination is made (“Interim Period”), Tenant shall pay estimated Basic Monthly Rental for the Premises at the rate applicable to the Premises during the last month of the initial Term. Once the final determination of the Fair Market Rental Rate has been made, if the Basic Monthly Rental payable by Tenant for the Premises pursuant to the Fair Market Rental Rate exceeds the Basic Monthly Rental paid by Tenant during the Interim Period, Tenant shall pay the excess to Landlord concurrently with Tenant’s next installment of Basic Monthly Rental.

 

(i)                                     Landlord and Tenant shall meet with each other within ten (10) business days of the Outside Agreement Date and exchange the sealed envelopes and then open such envelopes in each other’s presence. If Landlord and Tenant do not mutually agree upon the Fair Market Rental Rate within ten (10) business days of the exchange and opening of envelopes, then, within twenty (20) business days of the exchange and opening of envelopes, Landlord and Tenant shall agree upon and jointly appoint a single arbitrator who shall by profession be a real estate lawyer or broker who shall have been active over the five (5) year period ending on the

 

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date of such appointment in the leasing of industrial properties in the vicinity of the Real Property. Neither Landlord nor Tenant shall consult with such broker or lawyer as to his or her opinion as to Fair Market Rental Rate prior to the appointment, nor shall such broker or lawyer have been in the employ of either Landlord or Tenant in the last two (2) years. The determination of the arbitrator shall be limited solely to the issue of whether Landlord’s or Tenant’s submitted Fair Market Rental Rate for the Premises is the closest to the actual Fair Market Rental Rate for the Premises as determined by the arbitrator, taking into account the requirements of this Paragraph 2(f). Such arbitrator may hold such hearings and require such briefs as the arbitrator, in his or her sole discretion, determines is necessary. In addition, Landlord or Tenant may submit to the arbitrator (with a copy to the other party) within ten (10) business days after the appointment of the arbitrator any market data and additional information that such party deems relevant to the determination of Fair Market Rental Rate (“FMRR Data”), and the other party may submit a reply in writing within ten (10) business days after receipt of such FMRR Data.

 

(ii)                                  The arbitrator shall, within thirty (30) days of his or her appointment, reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Fair Market Rental Rate and notify Landlord and Tenant of such determination.

 

(iii)                               The decision of the arbitrator shall be binding upon Landlord and Tenant.

 

(iv)                              If Landlord and Tenant fail to agree upon and appoint an arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the San Francisco Superior Court, or, if he or she refuses to act, by any judge having jurisdiction over the parties.

 

(v)                                 The cost of arbitration (not including costs incurred by either party for their own advice and assistance) shall be paid by Landlord and Tenant equally.

 

3.                                      RENTAL; SECURITY DEPOSIT.

 

(a)                                 Beginning on the Suite 420 Commencement Date and continuing through the day prior to the Commencement Date, Tenant agrees to pay to Landlord as Basic Monthly Rental for the Suite 420 Premises the amount of $64,211.33 per month. Beginning on the Commencement Date, Tenant agrees to pay to Landlord as Basic Monthly Rental for the Premises the sums specified in Paragraph I of the Summary of Lease Terms. For purposes of Rent adjustment under this Lease, the number of months is measured from the Commencement Date. Notwithstanding the foregoing, in the event that the Suite 420 Commencement Date does not precede the Commencement Date, then from the Commencement Date until the day immediately prior to the Suite 420 Commencement Date, Basic Monthly Rental for the Suites 310/410 Premises shall be the amount of $106,400.67 per month, and beginning on the Suite 420 Commencement Date Basic Monthly Rental shall be as specified in Paragraph I of the Summary of Lease Terms.

 

(b)                                 Basic Monthly Rental shall be paid to Landlord, in advance, on or before the first day of each and every successive calendar month during the term hereof. In the event the term of this Lease commences on a day other than the first day of a calendar month, or ends

 

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on a day other than the last day of a calendar month, then the Basic Monthly Rental for the first and/or last fractional months of the term shall be appropriately prorated. All such prorations shall be made on the basis of a 360-day year consisting of twelve 30-day months.

 

(c)                                  Rental shall be paid to Landlord without notice, demand, deduction or offset in lawful money of the United States in immediately available funds or by good check as described below at the office of Landlord at Landlord’s address for notices specified in the Summary of Lease Terms, or to such other person or at such other place as Landlord from time to time may designate in writing. Payments made by check must be drawn either on a California financial institution or on a financial institution that is a member of the federal reserve system. All amounts of Rental, if not paid when due, shall bear interest from the due date until paid at an annual rate of interest (the “Interest Rate”) equal to the lesser of (i) the maximum annual interest rate allowed by law on such due date for business loans (not primarily for personal, family or household purposes) not exempt from the usury law, or (ii) a rate equal to the sum of five (5) percentage points over the publicly announced reference rate (the “Reference Rate”) charged on such due date by the San Francisco Main Office of Bank of America, N.A. (or any successor bank thereto) (or if there is no such publicly announced rate, the rate quoted by such bank in pricing ninety (90) day commercial loans to substantial commercial borrowers). In addition, Tenant acknowledges that late payment by Tenant to Landlord of Rental will cause Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult to fix. Such costs include, without limitation, processing and accounting charges, and late charges that may be imposed on Landlord by the terms of any encumbrance and/or note secured by an encumbrance covering the Premises. Therefore, if any installment of Rental due from Tenant is not received within ten (10) days of the date due, Tenant shall pay to Landlord an additional sum of five percent (5%) of the overdue Rental as a late charge; provided that, if Rental is not paid when due three (3) times during the term of this Lease and if Landlord shall have notified Tenant in writing that Tenant shall thereafter be entitled to no further grace periods, then thereafter Tenant shall not be entitled to such ten (10) day grace period, and such late charge shall be assessed on any Rental not paid by 5:00 p.m. on the date due. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment of Rental by Tenant. Acceptance of any late charge shall not constitute a waiver of Tenant’s default with respect to the overdue amount, or prevent Landlord from exercising any of the other rights and remedies available to Landlord.

 

(d)                                 Upon execution of this Lease, Tenant shall pay Landlord the amount of $170,612.00, which amount Landlord shall apply to the first installments of Basic Monthly Rental due under this Lease.

 

(e)                                  The date on which Tenant is required to deliver the initial Letter of Credit to Landlord under Paragraph 26(b) of this Lease (i.e., the date Landlord delivers possession of any portion of the Premises to Tenant) may be postponed under the following terms and conditions. Tenant may delay the required date for delivery of the Letter of Credit by up to thirty (30) days by depositing with Landlord a cash sum in the Letter of Credit Required Amount (the “Cash Security”). Landlord shall hold the Cash Security as security for the performance of Tenant’s obligations under this Lease. If Tenant defaults on any provision of this Lease, Landlord may (but shall not be required to), without prejudice to any other remedy it has, apply all or part of the Cash Security to any Rent or other sum in default, any amount that Landlord may spend or

 

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become obligated to spend in exercising Landlord’s rights under Paragraph 23(e), or any expense, loss, or damage that Landlord may suffer because of Tenant’s default. Tenant waives the provisions of California Civil Code §1950.7, and all other provisions of law now in force or that become in force after the date of execution of this Lease, that provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of accrued Rent, to repair damage caused by Tenant, or to clean the Premises. Landlord and Tenant agree that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other foreseeable or unforeseeable loss or damage caused by the act or omission of Tenant or Tenant’s officers, agents, employees, independent contractors, or invitees, including future rent payments. Tenant may not assign or encumber the Cash Security without the prior, written consent of Landlord. Any attempt to do so shall be void and shall not be binding on Landlord. If Landlord applies any portion of the Cash Security, Tenant shall, within ten (10) days after demand by Landlord, deposit with Landlord an amount sufficient to restore the Cash Security to its original amount. Tenant is not entitled to any interest on the Cash Security. Provided that Tenant performs the requirement of delivering the Letter of Credit to Landlord within thirty (30) days of the date Landlord delivers possession of any portion of the Premises to Tenant, the unused portion of the Cash Security shall be returned to Tenant within five (5) business days following the date on which Tenant delivers the initial Letter of Credit to Landlord, and any sums not timely returned shall bear interest at the Interest Rate until paid.

 

4.                                      TENANT’S SHARE OF OPERATING EXPENSES AND REAL PROPERTY TAXES; ADDITIONAL RENT.

 

(a)                                 In addition to the Basic Monthly Rental payable during the Term of this Lease, commencing on January 1, 2013 and continuing throughout the remaining Term of this Lease (including the Extension Term, if applicable) Tenant shall pay to Landlord, as additional rent, Tenant’s Percentage Share of: (i) the amount, if any, by which Operating Expenses paid or incurred by Landlord in any calendar year subsequent to the Base Year exceed the amount of Operating Expense allocable to the Base Year; and (ii) the amount, if any by which Real Property Taxes paid or incurred by Landlord in any calendar year subsequent to the Base Year exceed the amount of Real Property Taxes allocable to the Tax Base Year. Notwithstanding the foregoing, if the Building is less than one hundred percent (100%) occupied in the Base Year, the Tax Base Year or in any other Expense Year during the Term, then Operating Expenses for the Base Year, Real Property Taxes for the Tax Base Year, and Operating Expenses and Real Property Taxes for such other Expense Year shall be adjusted, for purposes of the foregoing calculations to the amounts that they would have been if the Building had been one hundred percent (100%) occupied. If it shall not be lawful for Tenant to reimburse Landlord for any increase in Real Property Taxes as defined herein, then the Basic Monthly Rental payable to Landlord prior to the imposition of such increases in Real Property Taxes shall be increased to net Landlord the same net Basic Monthly Rental after imposition of such increases in Real Property Taxes as would have been received by Landlord prior to the imposition of such increases in Real Property Taxes.

 

(b)                                 Commencing on January 1, 2013, and continuing throughout the remainder of the Lease Term (including the Extension Term, if applicable), Tenant shall pay to Landlord, as additional rent, one-twelfth (1/12th) of Tenant’s Percentage Share of increases in Operating Expenses over the Base Year and Real Property Taxes over the Tax Base Year for

 

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such Expense Year on or before the first day of each calendar month of such Expense Year, in advance, in an amount estimated by Landlord in notices delivered to Tenant. If Landlord fails to deliver such an estimate to Tenant prior to the commencement of any Expense Year, then Tenant shall continue to pay Tenant’s Percentage Share of increases in Operating Expenses and Real Property Taxes on the basis of the prior Expense Year’s estimate until the first day of the next calendar month after such notice is given, provided that on such date Tenant shall pay to Landlord the amount of such estimated adjustment payable to Landlord for prior months during the Expense Year in question, less any portion thereof previously paid by Tenant. Landlord may revise its estimate of Tenant’s Percentage Share of increases in Operating Expenses and Real Property Taxes for any Expense Year from time to time by giving written notice of such revision to Tenant, in which event subsequent payments by Tenant for such Expense Year shall be based on Landlord’s revised estimate. The failure or delay by Landlord to provide Tenant with Landlord’s estimate of Tenant’s Percentage Share of increases in Operating Expenses and Real Property Taxes or Landlord’s annual statement (as described in subparagraph 4(c) below) for any Expense Year shall not constitute a default by Landlord hereunder, or a waiver by Landlord of Tenant’s obligation to pay Tenant’s Percentage Share of increases in Operating Expenses or Real Property Taxes for such Expense Year or of Landlord’s right to send to Tenant such an estimate or annual statement, as the case may be.

 

(c)                                  Within ninety (90) days after the close of each Expense Year or as soon after such ninety (90) day period as practicable, Landlord shall deliver to Tenant a statement of the amounts payable under Paragraph 4(a) above for such Expense Year (an “Annual Statement”). Within 60 days after receiving any Annual Statement (the “Review Notice Period”), Tenant may give Landlord notice (“Review Notice”) stating that Tenant elects to review Landlord’s calculation of the Operating Expenses and/or Real Property Taxes for the calendar year to which such Annual Statement applies and identifying with reasonable specificity the records of Landlord reasonably relating to such matters that Tenant desires to review. Within a reasonable time after receiving a timely Review Notice, Landlord shall deliver to Tenant, or make available for inspection at a location reasonably designated by Landlord, copies of such records. Within 60 days after such records are made available to Tenant (the “Objection Period”), Tenant may deliver to Landlord notice (an “Objection Notice”) stating with reasonable specificity any objections to the Annual Statement, in which event Landlord and Tenant shall work together in good faith to resolve Tenant’s objections. If Tenant fails to give Landlord a Review Notice before the expiration of the Review Notice Period or fails to give Landlord an Objection Notice before the expiration of the Objection Period, Tenant shall be deemed to have approved the Annual Statement. If Tenant retains an agent to review Landlord’s records, the agent must be with a CPA firm licensed to do business in the State of California and its fees shall not be contingent, in whole or in part, upon the outcome of the review. Tenant shall be responsible for all costs of such review. The records and any related information obtained from Landlord shall be treated as confidential, and as applicable only to the Premises, by Tenant, its auditors, consultants, and any other parties reviewing the same on behalf of Tenant (collectively, “Tenant’s Auditors”). Notwithstanding any contrary provision hereof, Tenant may not examine Landlord’s records or dispute any Annual Statement if any Rent remains unpaid past its due date. If, for any calendar year, Landlord and Tenant determine that the Operating Expenses and/or Real Property Taxes is less or more than the amount reported, Tenant shall receive a credit in the amount of its overpayment against Rent then or next due hereunder, or pay Landlord the amount of its underpayment with the Rent next due hereunder; provided, however, that if this Lease has

 

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expired or terminated and Tenant has vacated the Premises, Landlord shall pay Tenant the amount of its overpayment (less any Rent due), or Tenant shall pay Landlord the amount of its underpayment, within 15 days after such determination.

 

(d)                                 If this Lease expires or terminates on a day other than the last day of an Expense Year, the amounts payable by Tenant under Paragraph 4(a) above with respect to the Expense Year in which such expiration or termination occurs shall be prorated on the basis that the number of days from the commencement of such Expense Year, to and including such expiration or termination date, bears to three hundred sixty (360). The expiration or termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to Paragraph 4(c) above to be performed after such expiration or termination.

 

(e)                                  It is the intention of Landlord and Tenant that, except as stated to the contrary in this Lease, the Basic Monthly Rental paid to Landlord throughout the term of this Lease shall be absolutely net of all increases in Real Property Taxes over the Tax Base Year and Operating Expenses over the Base Year and the foregoing provisions of this Paragraph 4 are intended to so provide.

 

5.                                      OTHER TAXES PAYABLE BY TENANT. Tenant shall reimburse Landlord upon demand for any and all taxes payable by Landlord (other than net income taxes and Real Property Taxes) whether or not now customary or within the contemplation of the parties hereto:

 

(a)                                 imposed upon, measured by or reasonably attributable to the cost or value of Tenant’s equipment, furniture, fixtures and other personal property located in the Premises or by the cost or value of any leasehold improvements made in or to the Premises by or for Tenant, regardless of whether title to such improvements shall be in Tenant or Landlord;

 

(b)                                 imposed upon or measured by the Basic Monthly Rental payable hereunder, including, without limitation, any gross income tax or excise tax levied by the City and County of San Francisco, the State of California, the federal government or any other governmental body with respect to the receipt of such rental;

 

(c)                                  imposed upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; or

 

(d)                                 imposed upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises.

 

In the event that it shall not be lawful for Tenant to so reimburse Landlord, the Basic Monthly Rental payable to Landlord under this Lease shall be revised to net Landlord the same income after imposition of any such tax upon Landlord as would have been received by Landlord hereunder prior to the imposition of any such tax.

 

6.                                      USE. Tenant agrees to use the Premises for general office purpose, and Tenant agrees not to use or permit the use of the Premises or any part thereof for any other purpose. Tenant agrees not to do or permit to be done in or about the Premises or the Building, or to bring or keep or permit to be brought or kept in or about the Premises or the Building, anything that is

 

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prohibited by or will in any way conflict with any law, statute or governmental regulation now or hereafter in effect, or that would subject Landlord or Landlord’s agents to any liability, or that is prohibited by the standard form of fire insurance policy, or that will in any way increase the existing rate of (or otherwise affect) fire or any other insurance on the Building or any of its contents. If any act or omission of Tenant results in any such increase in premium rates, Tenant shall pay to Landlord, as additional rent, upon demand the amount of such increase. Tenant agrees not to do or permit to be done anything in, on or about the Premises or the Building that will in any way obstruct or interfere with the rights of other tenants or occupants of the Building, or injure or annoy them, or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose. Tenant agrees not to cause, maintain or permit any nuisance in, on or about the Premises or the Building, or to use or permit to be used any loudspeaker or other device, system or apparatus that can be heard outside the Premises without the prior written consent of Landlord or to permit any objectionable odors, bright lights or electrical or radio interference that may annoy or interfere with the rights of other tenants of the Building or the public. Tenant agrees not to commit or suffer to be committed any waste in or upon the Premises. The provisions of this Paragraph 6 are for the benefit of Landlord only and shall not be construed to be for the benefit of any tenant or occupant of the Building.

 

7.                                      COMPLIANCE WITH LAWS/ENVIRONMENTAL MATTERS.

 

(a)                                 Tenant agrees at its sole cost and expense to promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now or hereafter constituted; with any direction or occupancy certificate issued pursuant to law by any public officer; and with the provisions of all recorded documents affecting the Premises, insofar as any thereof relates to or affects the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant’s improvements, acts or particular use of the Premises. The judgment of any court of competent jurisdiction or the admission of Tenant in any action against Tenant (whether Landlord be a party thereto or not) that Tenant has violated any such law, statute, ordinance or governmental rule, regulation, requirement, direction or provision, shall be conclusive of that fact as between Landlord and Tenant. If Tenant’s use or operation of the Premises or any of Tenant’s equipment therein requires a governmental permit, license or other authorization or any notice to any governmental agency, Tenant shall promptly provide a copy thereof to Landlord. Tenant shall not be obligated to make any improvements to the Premises in order to comply with applicable laws, except to the extent the improvement is required due to a Trigger Event (as defined below). As used herein, the term “Trigger Event” means one or more of the following events or circumstances:

 

(i)                                     Tenant’s particular use of the Premises (other than normal office uses, software and hardware development);

 

(ii)                                  The manner of conduct of Tenant’s business or operation of its installations, equipment or other property outside those of normal office use, software and hardware development;

 

(iii)                               The performance of any improvements of alterations or the installation of any Tenant systems; or

 

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(iv)                              The breach of any of Tenant’s obligations under this Lease.

 

(b)                                 Tenant shall not bring or keep, or permit to be brought or kept, in the Premises or in or on the Real Property any “hazardous substance” (as hereinafter defined). Tenant shall not manufacture, generate, treat, handle, store or dispose of any hazardous substance in the Premises or in or on the Real Property, or use the Premises for any such purpose, or emit, release or discharge any hazardous substance into any air, soil, surface water or groundwater comprising the Premises or the Real Property, or permit any person using or occupying the Premises to do any of the foregoing. Tenant shall comply, and shall cause all persons using or occupying the Premises to comply, with all “environmental laws” (as hereinafter defined) applicable to the Premises, the use or occupancy of the Premises or any operation or activity therein. Tenant shall, within ten (10) days after Tenant’s receipt thereof, give written notice to Landlord of any notice or other communication (oral or written) regarding any (i) actual or alleged violation of environmental laws by Tenant or with respect to the Premises, (ii) actual or threatened release of any hazardous substance from the Premises, or (iii) the existence of any hazardous substance in or on the Premises or regarding any actual or threatened investigation, inquiry, lawsuit, claim, citation, directive, summons, proceeding, complaint, notice, order, writ or injunction relating to any of the foregoing. Tenant shall indemnify and defend Landlord against and hold Landlord harmless from all claims, demands, liabilities, damages, fines, encumbrances, liens, losses, costs and expenses, including reasonable attorneys’ fees and disbursements, and costs and expenses of investigation, arising from or related to the existence on or after the Commencement Date of hazardous substances from the Premises as a result of contamination caused by Tenant or the existence on or after the Commencement Date of a violation of environmental laws by Tenant with respect to the Premises. To the extent Tenant has an indemnification obligation under this Paragraph 7(b), Tenant shall, to the reasonable satisfaction of Landlord, perform all remedial actions necessary to remove any hazardous substances in or on the Premises on or after the Commencement Date or to remedy actual or threatened migration from the Premises of any hazardous substances or to remedy any actual or threatened violation of environmental laws. This Paragraph 7(b) shall survive termination of this Lease. As used in this Lease, “hazardous substance” shall mean any substance or material that is described as a toxic, hazardous, bio-hazardous, corrosive, ignitable, flammable or reactive substance, waste or material or a pollutant or contaminant, or words of similar import, in any of the environmental laws, and includes asbestos, petroleum, petroleum products, polychlorinated biphenyls, radon gas, radioactive matter, and chemicals that may cause cancer or reproductive toxicity. As used in this Lease, “environmental laws” shall mean all federal, state and local laws, ordinances, rules and regulations now or hereafter in force, as amended from time to time, in any way relating to or regulating human health or safety, or industrial hygiene or environmental conditions, or protection of the environment, or pollution or contamination of the air, soil, surface water or groundwater. The provisions of this Paragraph 7(b) shall not prohibit Tenant from the use and storage on the Premises of ordinary office supplies in reasonable quantities and in compliance with all environmental laws.

 

(c)                                  Tenant shall immediately furnish Landlord with any (i) notices received from any insurance company or governmental agency or inspection bureau regarding any unsafe or unlawful conditions within the Premises, and (ii) notices or other communications sent by or on behalf of Tenant to any person relating to environmental laws or hazardous substances.

 

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(d)                                 California law requires landlords to disclose to tenants the existence of certain hazardous substances. Accordingly, the existence of gasoline and other automotive fluids, asbestos containing materials, maintenance fluids, copying fluids and other office supplies and equipment, certain construction and finish materials, tobacco smoke, cosmetics and other personal items must be disclosed. Gasoline and other automotive fluids are found in the Parking Lot. Cleaning, lubricating and hydraulic fluids used in the operation and maintenance of the Building are found in the utility areas of the Building not generally accessible to Building occupants or the public. Many Building occupants use copy machines and printers with associated fluids and toners, and pens, markers, inks, and office equipment that may contain hazardous substances. Certain adhesives, paints and other construction materials and finishes used in portions of the Building may contain hazardous substances. Although smoking is prohibited in the public areas of the Building, these areas may from time to time be exposed to tobacco smoke. Building occupants and other persons entering the Building from time to time may use or carry prescription and non-prescription drugs, perfumes, cosmetics and other toiletries, and foods and beverages, some of which may contain hazardous substances.

 

(e)                                  As an inducement to Landlord to enter into this Lease, Tenant hereby represents and warrants that: (i) Tenant is not, nor is it owned or controlled directly or indirectly by, any person, group, entity or nation named on any list issued by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”) pursuant to Executive Order 13224 or any similar list or any law, order, rule or regulation or any Executive Order of the President of the United States as a terrorist, “Specially Designated National and Blocked Person” or other banned or blocked person (any such person, group, entity or nation being hereinafter referred to as a “Prohibited Person”); (ii) Tenant is not (nor is it owned or controlled, directly or indirectly, by any person, group, entity or nation which is) acting directly or indirectly for or on behalf of any Prohibited Person; and (iii) neither Tenant (nor any person, group, entity or nation which owns or controls Tenant, directly or indirectly) has conducted or will conduct business or has engaged or will engage in any transaction or dealing with any Prohibited Person, including without limitation any assignment of this Lease or any subletting of all or any portion of the Premises or the making or receiving of any contribution of funds, goods or services to or for the benefit of a Prohibited Person. Tenant covenants and agrees (a) to comply with all requirements of law relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect, (b) to immediately notify Landlord in writing if any of the representations, warranties or covenants set forth in this Section 8(e) are no longer true or have been breached or if Tenant has a reasonable basis to believe that they may no longer be true or have been breached, (c) not to use funds from any Prohibited Person to make any payment due to Landlord under the Lease and (d) at the request of Landlord, to provide such information as may be requested by Landlord to determine Tenant’s compliance with the terms hereof. Any breach by Tenant of the foregoing representations and warranties shall be deemed an Event of Default by Tenant under this Lease and shall be covered by the indemnity provisions of Section 13 above. The representations and warranties contained in this subsection shall be continuing in nature and shall survive the expiration or earlier termination of this Lease.

 

(f)                                   The provisions of this Paragraph 7 are for the benefit of Landlord only and shall not be construed to be for the benefit of any tenant or occupant of the Building.

 

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8.                                      ALTERATIONS; LIENS.

 

(a)                                 Tenant agrees not to make or suffer to be made any alteration, addition or improvement to or of the Premises (hereinafter referred to as “Alterations”), or any part thereof, without the prior written consent of Landlord. Any such Alterations made by Tenant, including without limitation any partitions (movable or otherwise) or carpeting, shall become a part of the Building and belong to Landlord; provided, however, that equipment, trade fixtures and movable furniture shall remain the property of Tenant. If Landlord consents to the making of any Alterations, the same shall be designed and constructed or installed by Tenant at its expense (including expenses incurred in complying with applicable laws, including laws relating to the handling and disposal of asbestos-containing materials). Tenant shall use a general contractor, subcontractors, engineers and architects that are on Landlord’s approved list of design and construction professionals. All Alterations shall be made in accordance with plans and specifications approved in writing by Landlord and shall be designed and constructed in compliance with all applicable codes, laws, ordinances, rules and regulations. The design and construction of any Alterations shall be performed in accordance with Landlord’s applicable rules, regulations and requirements. Under no circumstances shall Landlord be liable to Tenant for any damage, loss, cost or expense incurred by Tenant on account of Tenant’s plans and specifications, Tenant’s contractors or subcontractors, design of any work, construction of any work, or delay in completion of any work; provided that this sentence shall not be construed to permit Landlord to extend any time periods under the terms of the Work Letter except where the delay is beyond Landlord’s reasonable control. Tenant shall pay to Landlord a fee in the amount of five percent (5%) of the cost of the Alterations for Landlord’s review of plans and its management and supervision of the progress of the work; provided that this requirement shall not apply to the Tenant Improvements made under the Tenant Work Letter, it being agreed that for such Alterations the Coordination Fee (as defined therein) shall supersede this requirement. All sums due to such contractors, if paid by Landlord due to Tenant’s failure to pay such sums when due, shall bear interest payable to Landlord at the Interest Rate until fully paid. Upon the expiration or sooner termination of this Lease, Tenant, at its expense, shall promptly remove any such Alterations made by Tenant and designated by Landlord so to be removed and repair any damage to the Premises caused by such removal. Tenant shall use the general contractor designated by Landlord for such removal and repair. Upon submission of any plans for Landlord’s approval, Tenant may request prior to the installation of specific fixtures, equipment or improvements in the Premises, that Landlord agree not to require Tenant to remove such items upon expiration or termination of the Lease or agree to permit Tenant to remove any item it may otherwise not be permitted to remove under the terms of this Lease. Such consent, which may be granted or denied in Landlord’s sole discretion, must be granted in writing prior to the installation of the subject items in order to be binding against Landlord.

 

(b)                                 Tenant agrees to keep the Premises and the Real Property free from any liens arising out of any work performed, materials furnished or obligations incurred by Tenant. Tenant shall promptly and fully pay and discharge all claims on which any such lien could be based. In the event that Tenant does not, within ten (10) business days following Tenant’s learning of any such lien, cause the same to be released of record, Landlord shall have, in addition to all other remedies provided herein and by law, the right, but not the obligation, to cause the same to be released by such means as it shall deem proper, including payment of the claim giving rise to such lien. All sums paid by Landlord for such purpose, and all expenses

 

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incurred by it in connection therewith, shall be payable to Landlord by Tenant, as additional rent, on demand, together with interest at the Interest Rate from the date such expenses are incurred by Landlord to the date of the payment thereof by Tenant to Landlord. Landlord shall have the right at all times to post and keep posted on the Premises any notices permitted or required by law, or which Landlord shall deem proper for the protection of Landlord, the Premises, the Building, or the Real Property, from mechanic’s and materialmen’s and like liens. Tenant shall give Landlord at least ten (10) days’ prior written notice of the date of commencement of any construction on the Premises in order to permit the posting of such notices.

 

9.                                      MAINTENANCE AND REPAIR.

 

(a)                                 Landlord shall deliver the Premises to Tenant in good and sanitary order, condition and repair. Thereafter, subject to any pre-existing defects discovered by Tenant, Tenant, at its expense, shall at all times keep the Premises and every part thereof and all equipment, fixtures and improvements therein in good and sanitary order, condition and repair, damage thereto by fire, the perils of the extended coverage endorsement excepted, and Tenant waives all rights under, and benefits of, subsection 1 of Section 1932 and Sections 1941 and 1942 of the California Civil Code and under any similar law or ordinance now or hereafter in effect. Upon the expiration or sooner termination of this Lease, Tenant shall surrender the Premises and (unless designated by Landlord to be removed in accordance with Paragraph 8 above) all Alterations thereto to Landlord in the same condition as when received, ordinary wear and tear (except such as Tenant is obligated to repair to keep the Premises in good condition and repair) and damage thereto by fire, the perils of the extended coverage endorsement excepted. It is agreed that Landlord has no obligation, and has made no promises, to alter, add to, remodel, improve, repair, decorate or paint the Premises or any part thereof and that no representations respecting the condition of the Premises, the Building or the Real Property have been made by Landlord to Tenant except as may be specifically set forth herein. No representation or warranty, express or implied, is made with respect to (i) the condition of the Premises or the Building, (ii) the present or future suitability or fitness of the Premises for Tenant’s intended or permitted use, (iii) the degree of sound transfer within the Building, (iv) the absence of electrical or radio interference in the Premises or the Building, (v) the condition, capacity or performance of electrical or communications systems or facilities, or (vi) the absence of objectionable odors, bright lights or other conditions that may affect Tenant’s use and enjoyment of the Premises or the Building.

 

(b)                                 Landlord agrees to make all necessary repairs to the structure, the exterior, and the public and common areas of the Building and all Building systems, and to maintain the same in reasonably good order and condition. Any damage arising from the acts of Tenant, its agents, employees, contractors or invitees shall be repaired by Landlord at Tenant’s sole expense. Tenant shall pay Landlord on demand the cost of any such repair.

 

10.                               SERVICES.

 

(a)                                 Provided that Tenant is not in default in the performance or observance of any of the terms, covenants or conditions of this Lease to be performed or observed by Tenant and the Lease has not terminated, Landlord, subject to the terms of this Paragraph 10 and the Building Rules and Regulations attached hereto as Exhibit B and subject to applicable laws,

 

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regulations and rules of public utilities, shall furnish to the Premises water, electrical power and elevator service suitable for the use of the Premises for ordinary office purposes; heating and air conditioning suitable for the comfortable use and occupation of the Premises (assuming normal office use thereof and subject to any restrictions on use as may be prescribed by any applicable policies or regulations of any utility or governmental agency) during normal business hours (specifically, 7:00 a.m. to 7:00 p.m.), excluding weekends and holidays. Tenant agrees to pay, as additional rent, promptly on demand any and all costs incurred by Landlord (as reasonably determined by Landlord) in connection with providing any additional or excessive (i.e., amounts in excess of normal office use during normal business hours) utilities or services Landlord may provide. Unless otherwise specifically provided in this Lease, all means of distribution of all utilities within the Premises shall be supplied by Tenant at its expense, and Tenant shall bear the cost of water, gas, electricity, sewerage and other utilities serving the Premises. Landlord reserves the right to install, at Tenant’s expense, a separate meter in the Premises for electricity. Tenant agrees that at all times it will cooperate fully with Landlord and abide by all regulations and requirements that Landlord may prescribe for the proper functioning and protection of the Building heating, ventilating and air conditioning systems. Landlord shall not be liable for and Tenant shall not be entitled to any abatement or reduction of Rental by reason of Landlord’s failure to furnish any of the foregoing or any other utilities or services when such failure is caused by accident, breakage, repairs, strikes, lockouts or other labor disturbances or disputes of any character, by the limitation, curtailment, rationing or restrictions on use of electricity, gas or any form of energy, or by any other cause, similar or dissimilar, beyond the reasonable control of Landlord. No such failure and no interruption of utilities or services from any cause whatsoever shall 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. Tenant hereby waives the provisions of California Civil Code  Section 1932(1) or any other applicable existing or future law, ordinance or governmental regulation permitting the termination of this Lease due to such failure or interruption. Landlord shall not be liable under any circumstances for injury to or death of any person or damage to or destruction of property, however occurring, through or in connection with or incidental to the furnishing of or the failure to furnish any of the foregoing utilities or services or any other utilities or services. Tenant shall at Tenant’s sole cost and expense provide janitorial service to the Premises using the same janitorial contractor that provides janitorial service to the balance of the Building.

 

(b)                                 Landlord makes no representation to Tenant regarding the adequacy or fitness of the heating, air conditioning or ventilation equipment in the Building to maintain temperatures that may be required for, or because of, any of Tenant’s equipment that uses other than the fractional horsepower normally required for office equipment, and Landlord shall have no liability for loss or damage suffered by Tenant or others in connection therewith. If Tenant’s use of the heating, air conditioning or ventilation system exceeds normal office use and thereby causes damages to any of the air conditioning units or other equipment, the cost to repair or replace any such units or equipment due to such use shall be paid by Tenant to Landlord, as additional rent, upon demand by Landlord. If the temperature otherwise maintained in any portion of the Premises by the heating, air conditioning or ventilation system is affected as a result of (i) any lights, machines or equipment (including without limitation electronic data processing machines) used by Tenant in the Premises, (ii) the occupancy of the Premises by more than one person per two hundred (200) square feet of rentable area therein, (iii) an

 

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electrical load for lighting or power in excess of the limits per square foot of rentable area of the Premises specified in Paragraph 10(c) below, or (iv) any rearrangement of partitioning or other improvements, Landlord shall have the right to install supplementary air conditioning units or other equipment Landlord deems appropriate in the Premises, and the cost thereof, including the cost of installation, operation and maintenance thereof, shall be paid by Tenant to Landlord, as additional rent, upon demand by Landlord.

 

(c)                                  Tenant agrees it will not, without the written consent of Landlord, use any equipment, apparatus or device in the Premises (including, without limitation, electronic data processing machines, computers or machines using current in excess of 110 volts) that will, individually or in the aggregate, in any way cause the amount of electricity, water or heating, ventilation or air conditioning supplied to the Premises to exceed the amount usually furnished or supplied to premises being used as general office space, or connect with electric current (except through existing electrical outlets in the Premises) or with water pipes any equipment, apparatus or device for the purposes of using electric current or water. Landlord shall not, in any way, be liable or responsible to Tenant for any loss or damage or expense that Tenant may incur or sustain if, for any reasons beyond Landlord’s reasonable control, either the quantity or character of electric service is changed or is no longer available or suitable for Tenant’s requirements. Tenant covenants that at all times its use of electric current shall never exceed the capacity of the feeders, risers or electrical installations of the Building. If submetering of electricity in the Building will not be permitted under future laws or regulations, the Basic Monthly Rental will then be equitably adjusted to include an additional payment to Landlord reflecting the cost to Landlord for furnishing electricity to the Premises.

 

(d)                                 Tenant shall give reasonable notice in making any request for utilities required outside of normal business hours. Tenant agrees to pay, as additional rent, promptly on demand any and all costs incurred by Landlord in connection with providing any additional utilities and services Landlord may provide.

 

(e)                                  In the event any governmental authority having jurisdiction over the Real Property or the Building 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 Real Property or the Building 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 Real Property or the Building 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 Real Property or the Building related thereto. Such compliance and the making of such alterations shall not 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.

 

11.                               SECURITY; ACCESS; CONTROL.

 

(a)                                 Landlord shall have the right from time to time to adopt such policies, procedures and programs as it shall, in Landlord’s sole discretion, deem necessary or appropriate for the security of the Building, and Tenant shall cooperate with Landlord in the enforcement of, and shall comply with, the policies, procedures and programs adopted by Landlord insofar as the

 

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same pertain to Tenant, its agents, employees, contractors and invitees. Tenant acknowledges that the safety and security devices, services and programs provided by Landlord from time to time, if any, may not prevent theft or other criminal acts, or insure the safety of persons or property, and Tenant expressly assumes the risk that any safety device, service or program may not be effective or may malfunction or be circumvented. In all events and notwithstanding any provision of this Lease to the contrary, Landlord and the other Indemnitees (defined below) shall not be liable to Tenant, and Tenant hereby waives any claim against the Indemnitees to the maximum extent permitted by law, for (i) any unauthorized or criminal entry of third parties into the Premises or the Building, (ii) any injury to or death of persons from any unauthorized or criminal acts of third parties, or (iii) any loss of property in and about the Premises or the Building by or from any unauthorized or criminal acts of third parties, regardless of any action, inaction, failure, breakdown, malfunction and/or insufficiency of the security services provided by Landlord, or any allegation of active or passive negligence on the part of Landlord or the other Indemnitees. Tenant shall obtain insurance coverage to the extent Tenant desires protection against criminal acts and other losses.

 

(b)                                 In no event shall Landlord be liable for damages resulting from any error with regard to the admission to or the exclusion from the Building of any person. In the case of invasion, mob, riot, public demonstration or other circumstances rendering such action advisable in Landlord’s opinion, Landlord reserves the right to prevent access to the Building during the continuance of the same by such action as Landlord may deem appropriate, including closing doors.

 

(c)                                  In the event of any picketing, public demonstration or other threat to the security of the Building that is attributable in whole or in part to Tenant, Tenant shall reimburse Landlord for any costs incurred by Landlord in connection with such picketing, demonstration or other threat in order to protect the security of the Building, and Tenant shall indemnify and hold Landlord harmless from and protect and defend Landlord against any and all claims, demands, suits, liability, damage or loss and against all costs and expenses, including reasonable attorneys’ fees incurred in connection therewith, arising out of or relating to any such picketing, demonstration or other threat. Tenant agrees not to employ any person, entity or contractor for any work in the Premises (including moving Tenant’s equipment and furnishings in, out or around the Premises) whose presence may give rise to a labor or other disturbance in the Building and, if necessary to prevent such a disturbance in a particular situation, Landlord may require Tenant to employ union labor for the work. The obligations imposed on Tenant in this Paragraph 11(c) shall not apply to the extent caused by Tenant’s employ of a person, entity or contractor whose selection is based on a pre-approved Landlord list.

 

(d)                                 Subject to (i) all of the terms and conditions of this Lease, including the Rules and Regulations attached hereto as Exhibit B, (ii) emergency situations or other matters outside the reasonable control of Landlord, and (iii) the requirements of applicable laws, Tenant shall have access to and use of the Building twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year throughout the Term.

 

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12.                               ASSIGNMENT AND SUBLETTING.

 

(a)                                 Tenant shall not, either voluntarily or by operation of law, (i) assign or transfer this Lease or any interest herein, (ii) sublet the Premises, or any part thereof, or (iii) enter into a license agreement or other arrangement whereby the Premises, or any portion thereof, are held or utilized by another party (each of the foregoing defined herein as a “Transfer”), without the express prior written consent of Landlord, which consent Landlord shall not unreasonably withhold, condition or delay. Any such act (whether voluntary or involuntary, by operation of law or otherwise) without the consent of Landlord pursuant to the provisions of this Paragraph 12 shall, at Landlord’s option, be void and/or constitute an Event of Default under this Lease. Consent to any Transfer shall neither relieve Tenant of the necessity of obtaining Landlord’s consent to any future Transfer nor relieve Tenant from any liability under this Lease.

 

By way of example and without limitation, the failure to satisfy any of the following conditions or standards shall be deemed to constitute reasonable grounds for Landlord to refuse to grant its consent to the proposed Transfer:

 

(1)                                 The proposed Transferee must expressly assume all of the provisions, covenants and conditions of this Lease on the part of Tenant to be kept and performed.

 

(2)                                 The proposed Transferee must satisfy Landlord’s then-current credit and other standards for tenants of the Building and, in Landlord’s reasonable opinion, have the financial strength and stability to perform all of the obligations of the Tenant under this Lease (as they apply to the transferred space) as and when they fall due.

 

(3)                                 The proposed Transferee must be reasonably satisfactory to Landlord as to character and professional standing.

 

(4)                                 The proposed use of the Premises by the proposed Transferee must be, in Landlord’s opinion: (A) lawful; (B) in compliance with Paragraph 6 of this Lease; (C) appropriate to the location and configuration of the Premises; (D) unlikely to cause an increase in insurance premiums for insurance policies applicable to the Building; (E) a use not requiring any new tenant improvements that Landlord would be entitled to disapprove pursuant to Paragraph 8 hereof; (F) unlikely to cause any material increase in services to be provided to the Premises; (G) unlikely to create any materially increased burden in the operation of the Building, or in the operation of any of its facilities or equipment; and (H) unlikely to impair the dignity, reputation or character of the Building.

 

(5)                                 The proposed use of the Premises must not result in the division of the Premises into more than two (2) parcels or tenant spaces.

 

(6)                                 At the time of the proposed Transfer, an Event of Default (as defined in Paragraph 18(a) below) shall not have occurred and be continuing, and no event may have occurred that with notice, the passage of time, or both, would become an Event of Default.

 

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(7)                                 The proposed Transferee shall not be a governmental entity or hold any exemption from the payment of ad valorem or other taxes that would prohibit Landlord from collecting from such Transferee any amounts otherwise payable under this Lease.

 

(8)                                 The proposed Transferee shall not be a then present tenant or affiliate or subsidiary of a then present tenant in the Building unless there is no other suitable space available in the Building.

 

(9)                                 Landlord shall not be negotiating with, and shall not have at any time within the past thirty (30) days negotiated with, the proposed Transferee for space in the Building.

 

(b)                                 Except in the event of (i) a Transfer pursuant to Paragraphs 12(e) or 12(f) below, or (ii) subleases that both (A) cover in the aggregate not more than 15,000 rentable square feet of space in the Premises and (B) have terms that (1) commence no later than the date that is twenty-four (24) months after the Commencement Date and (2) expire no later than the date that is twenty four (24) months after the commencement of the first sublease of space in any portion of the Premises, Landlord shall have no obligation to consent or consider granting its consent to any proposed Transfer unless Tenant has first delivered to Landlord a written offer to enter into such Transfer with Landlord, which offer shall include the base rent and other economic terms of the proposed Transfer, the date upon which Tenant desires to effect such Transfer and all of the other material terms of the proposed Transfer (“Tenant’s Offer”). Landlord shall have twenty (20) days from receipt of Tenant’s Offer within which to notify Tenant in writing of Landlord’s decision to accept or reject such Transfer on the terms set forth in Tenant’s Offer. If Landlord does not accept Tenant’s Offer within such period, Tenant shall deliver to Landlord a second notice of such offer. If Landlord does not accept Tenant’s offer within five (5) days after receipt of such second notice, Tenant may enter into such Transfer with any bona fide independent third-party Transferee (as defined in Paragraph 12(c) below) within ninety(90) days of the end of such twenty(20) day period, so long as such Transfer is for the same base rent offered to Landlord in Tenant’s Offer and such Transfer otherwise contains terms not more than five percent (5%) more favorable economically to the Transferee than the terms stated in Tenant’s Offer, taking into account all rent concessions, tenant improvements, and any other terms that have an economic impact on the Transfer; provided, however, that the prior written approval of Landlord for such Transfer must be obtained, and the other provisions of this Paragraph 12 must be complied with, all in accordance with this Paragraph 12. If Landlord accepts Tenant’s Offer, Landlord and Tenant shall enter into an agreement for such Transfer within thirty (30) days of the date Landlord makes its election. If Landlord accepts Tenant’s Offer, then (i) Landlord may enter into a new lease, sublease or other agreement covering the Premises or any portion thereof with the intended Transferee on such terms as Landlord and such Transferee may agree, or enter into a new lease or agreement covering the Premises or any portion thereof with any other person or entity, and in any such event, Tenant shall not be entitled to any portion of the profit, if any, that Landlord may realize on account of such new lease or agreement, (ii) Landlord may, at Landlord’s sole cost, construct improvements in the subject space and, so long as the improvements are suitable for general office purposes, Landlord shall have no obligation to restore the subject space to its original condition following the termination of a sublease, and (iii) Landlord shall not have any liability for any real estate brokerage commission(s) or with respect to any of the costs and expenses that Tenant may have incurred in connection with its

 

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proposed Transfer, and Tenant agrees to indemnify, defend and hold harmless Landlord from and against any and all claims (including, without limitation, claims for commissions) arising from such proposed Transfer.

 

Except in the event of a proposed Transfer pursuant to Paragraphs 12(e) or 12(f) below, in the case of a proposed assignment of this Lease or a sublease of substantially the entire Premises for substantially the balance of the term of this Lease, then in addition to the foregoing rights of Landlord, Landlord shall have the right, by notice to Tenant within fifteen (15) days after receipt of Tenant’s Offer, to terminate this Lease, which termination shall be effective as of the date on which the intended assignment or sublease would have been effective if Landlord had not exercised such termination right. If Landlord elects to terminate this Lease, then from and after the date of such termination, Landlord and Tenant each shall have no further obligation to the other under this Lease with respect to the Premises except for matters occurring or obligations arising hereunder prior to the date of such termination.

 

Landlord’s foregoing rights and options shall continue throughout the entire term of this  Lease.

 

(c)                                                Tenant shall, in each instance of a proposed Transfer, give written notice to Landlord at least thirty (30) days prior to the effective date of any proposed Transfer, specifying in such notice (i) the nature of the proposed Transfer, (ii) the portion of the Premises to be transferred, (iii) the intended use of the transferred Premises, (iv) all economic terms of the proposed Transfer, (v) the effective date thereof, (vi) the identity of the transferee under the proposed Transfer (the “Transferee”), (vii) current financial statements of the Transferee, and (viii) detailed documentation relating to the business experience of the Transferee (collectively, “Tenant’s Notice”). Tenant also shall promptly furnish Landlord with any other information reasonably requested by Landlord relating to the proposed Transfer or the proposed Transferee. Within fifteen (15) days after receipt by Landlord of Tenant’s Notice and any additional information and data requested by Landlord, Landlord shall notify Tenant of Landlord’s determination to either (i) consent to the proposed Transfer, or (ii) refuse to consent to such proposed Transfer.

 

(d)                                               Fifty percent (50%) of all of the following (“Excess Rental”) shall be paid by Tenant to Landlord immediately upon receipt thereof by Tenant: (i) consideration paid or payable by Transferee to Tenant as consideration for any such Transfer; and (ii) rents received in connection with the Transfer by Tenant from Transferee in excess of the Rental payable by Tenant to Landlord under this Lease, less reasonable, documented, out-of-pocket costs paid by Tenant to third parties for brokerage commissions, tenant improvement costs and legal fees in connection with the subject Transfer (amortized equally over the term of the Sublease (in the case of a Sublease) or the remaining term of the Lease (in the case of an assignment)). If there is more than one sublease under this Lease, the amounts (if any) to be paid by Tenant to Landlord pursuant to the preceding sentence shall be separately calculated for each sublease and amounts due Landlord with regard to any one sublease may not be offset against rental and other consideration pertaining to or due under any other sublease. Upon Landlord’s request, Tenant shall assign to Landlord all amounts to be paid to Tenant by any Transferee and shall direct such Transferee to pay the same directly to Landlord, in which case Landlord shall pay to Tenant fifty percent (50%) of such Excess Rental promptly upon Landlord’s receipt thereof.

 

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If this Lease is assigned, whether or not in violation of the terms of this Lease, Landlord may collect rent from the assignee. If the Premises or any part thereof is sublet, Landlord may, upon an Event of Default by Tenant hereunder, collect rent from the subtenant. In either event, Landlord may apply the amount collected from the assignee or subtenant to Tenant’s monetary obligations hereunder. Neither Landlord’s collection of rent from a Transferee nor any course of dealing between Landlord and any Transferee shall constitute or be deemed to constitute Landlord’s consent to any Transfer.

 

(e)                                                Notwithstanding anything to the contrary contained in this Article 18, Tenant may assign this Lease or sublet the Premises without the need for Landlord’s consent if such assignment or sublease is to any parent, subsidiary or affiliate business entity which the initially named Tenant controls, is controlled by or is under common control with (each, an “Affiliate”) provided that: (i) at least thirty (30) days prior to such assignment or sublease, Tenant delivers to Landlord the financial statements or other financial and background information of the assignee or sublessee as required for other transfers; (ii) if the transfer is an assignment, the assignee assumes, in full, the obligations of Tenant under this Lease (or if a sublease, the sublessee of a portion of the Premises or term assumes, in full, the obligations of Tenant with respect to such portion); (iii) the financial audited net worth of the assignee or sublessee for the most recently ended fiscal year as of the time of the proposed transfer is equal to or greater than the financial audited net worth of the originally named Tenant for the most recently ended fiscal year upon the date of this Lease and is sufficient for such assignee or sublessee to fulfill its obligations pursuant to such assignment or sublease; (iv) Tenant remains fully liable under this Lease; and (v) unless Landlord consents to the same, the use of the Premises set forth herein remains unchanged. As used in this section, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies through ownership of more than fifty percent (50%) of the securities or partnership or other ownership interests of the entity subject to control.

 

(f)                                                 Notwithstanding anything to the contrary contained in this Article 18, Tenant may engage in Approved Reorganizations (as defined below), without the need for the consent of Landlord; provided that (a) at least ten (10) days prior to the effective date of the Approved Reorganization, Tenant shall furnish Landlord with the name of the transferee and a written certification from an officer of Tenant certifying that the assignment or sublease qualifies as an Approved Reorganization, (b) no Event of Default exists under this Lease during the period commencing on the date of Tenant’s request and ending on the effective date of the Approved Reorganization, and (c) there is no change in use of the Premises. To the extent that legal requirements or confidentiality requirements do not permit Tenant to give Landlord prior notice of an Approved Reorganization, then Tenant may in lieu of the prior notice required under this Section give Landlord notice within ten (10) days after the effective date of the Approved Reorganization, together with the name of the transferee and a written certification from an officer of Tenant certifying that the assignment or sublease qualifies as an Approved Reorganization. As used herein, the term “Approved Reorganizations” means any statutory share exchange, merger, reorganization or consolidation involving Tenant or its stockholders, (whether or not Tenant is the surviving entity), or the sale of all or substantially all of the assets or stock of Tenant, in each case as a going concern, where (1) Tenant’s successor (together with Tenant, so long as Tenant remains liable under this Lease) shall have a net worth following

 

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consummation of such transaction, as reasonably determined by Landlord in accordance with generally accepted accounting principles, that is at least equal to the net worth, on the date of this Lease, of the original named Tenant, and (2) Tenant’s successor shall have a net worth following consummation of such transaction, as reasonably determined by Landlord in accordance with generally accepted accounting principles, that is sufficient to meet the remaining obligations of Tenant under this Lease.

 

(g)                                                Notwithstanding anything to the contrary contained in this Article 18,, a sale, transfer or assignment of a general partner’s interest or any portion thereof in Tenant, if Tenant is a partnership, or a sale, transfer or assignment of fifty percent (50%) or less in the aggregate of the voting stock of Tenant if Tenant is a corporation, or a sale, transfer or assignment of fifty percent (50%) or less in the aggregate of the membership interests of Tenant if Tenant is a limited liability company, whether such sale, transfer or assignment occurs in a single transaction or a series of transactions (provided that all transactions shall be aggregated for purposes of determining whether the fifty percent (50%) thresholds described above have been exceeded), shall not be deemed a Transfer and shall not require Landlord’s consent in accordance with the procedures specified in Paragraph 12(a) above.

 

(h)                                               In addition, notwithstanding anything to the contrary contained in this Article 18, Landlord’s consent shall not be required with respect to any and all infusions of additional equity capital in Tenant or an initial public offering of equity securities of Tenant under the Securities Act of 1933, as amended, which results in Tenant’s stock being traded on a national securities exchange, including, but not limited to, the NYSE, the NASDAQ Stock Market or the NASDAQ Small Cap Market System.

 

(i)                                                   Tenant agrees that any instrument by which Tenant assigns this Lease or any interest therein or sublets or otherwise Transfers all or any portion of the Premises shall expressly provide that the Transferee may not further assign this Lease or any interest therein or sublet the sublet space without Landlord’s prior written consent (which consent shall be subject to the provisions of this Paragraph 12), and that the Transferee shall comply with all of the provisions of this Lease pertaining to the sublet space and that Landlord may enforce such Lease provisions directly against such Transferee. No permitted subletting by Tenant shall be effective until there has been delivered to Landlord a counterpart of the sublease in which the subtenant agrees to be and remain jointly and severally liable with Tenant for the payment of rent pertaining to the sublet space and for the performance of all of the terms and provisions of this Lease pertaining to the sublet space; provided, however, that the subtenant shall be liable to Landlord for rent only in the amount set forth in the sublease. No permitted assignment shall be effective unless and until there has been delivered to Landlord a counterpart of the assignment in which the assignee assumes all of Tenant’s obligations under this Lease arising on or after the date of the assignment. The failure or refusal of a subtenant or assignee to execute any such instrument shall not release or discharge the subtenant or assignee from its liability as set forth above.

 

(j)                                                  If Landlord consents to a Transfer hereunder and this Lease contains any renewal options, expansion options, rights of first refusal, rights of first negotiation or any other rights or options pertaining to additional space in the Building, such rights and/or options shall

 

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not run to the Transferee, it being agreed by the parties hereto that any such rights and options are personal to the original Tenant named herein and may not be transferred.

 

(k)                                               Notwithstanding any provision of this Lease to the contrary, Tenant shall not mortgage, encumber or hypothecate this Lease or any interest herein without the prior written consent of Landlord, which consent may be withheld in Landlord’s sole and absolute discretion. Any such act without the prior written consent of Landlord (whether voluntary or involuntary, by operation of law or otherwise) shall, at Landlord’s option, be void and/or constitute an Event of Default under this Lease.

 

(l)                                                   The voluntary or other surrender of this Lease or of the Premises by Tenant or a mutual cancellation of this Lease shall not work a merger, and at the option of Landlord any existing subleases may be terminated or be deemed assigned to Landlord in which latter event the subleases or subtenants shall become tenants of Landlord.

 

(m)                                           Tenant shall pay to Landlord the amount of Landlord’s cost of processing each proposed Transfer (including, without limitation, attorneys’ and other professional fees, and the cost of Landlord’s administrative, accounting and clerical time; collectively “Processing Costs”), and the amount of all direct and indirect expenses incurred by Landlord arising from the assignee or sublessee taking occupancy of the subject space (including, without limitation, costs of freight elevator operation for moving of furnishings and trade fixtures, security service, janitorial and cleaning service, and rubbish removal service). Notwithstanding anything to the contrary herein, Landlord shall not be required to process any request for Landlord’s consent to a Transfer until Tenant has paid to Landlord the amount of Landlord’s estimate of the Processing Costs and all other direct and indirect costs and expenses of Landlord and its agents arising from the assignee’s or subtenant’s taking occupancy.

 

13.                               WAIVER; INDEMNIFICATION. Neither Landlord nor Landlord’s agents, nor any member, shareholder, constituent partner or other owner of Landlord or any agent of Landlord, nor any contractor, officer, director or employee of any thereof, shall be liable to Tenant, and Tenant waives all claims against Landlord and such other persons for any injury to or death of any person or for loss of use of or damage to or destruction of property in or about the Premises or the Building by or from any cause whatsoever, including without limitation, earthquake or earth movement, gas, fire, oil, electricity or leakage from the roof, walls, basement or other portion of the Premises or the Building, unless caused solely by the gross negligence or willful misconduct of Landlord, its agents or employees. Tenant agrees to indemnify and hold Landlord, Landlord’s agents, the members, shareholders, constituent partners and/or other owners of Landlord or any agent of Landlord, and all contractors, officers, directors and employees of any thereof (collectively, “Indemnitees”), and each of them, harmless from and to protect and defend each Indemnitee against any and all claims, demands, suits, liability, damage or loss and against all costs and expenses, including reasonable attorneys’ fees incurred in connection therewith, (a) arising out of any injury or death of any person or damage to or destruction of property occurring in, on or about the Premises, from any cause whatsoever, unless caused solely by the gross negligence or willful misconduct of an Indemnitee, or (b) occurring in, on or about any facilities (including without limitation elevators, stairways, passageways or hallways) the use of which Tenant has in common with other tenants, or elsewhere in or about the Real Property or in the vicinity of the Real Property, when such claim,

 

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injury or damage is caused in whole or in part by the act, neglect, default, or omission of any duty by Tenant, its agents, contractors, employees, invitees, or subtenants, or otherwise by any conduct of any of said persons in or about the Premises or the Real Property, or (c) arising from any failure of Tenant to observe or perform any of its obligations hereunder. If any action or proceeding is brought against any of the Indemnitees by reason of any such claim or liability, Tenant, upon notice from Landlord, covenants to resist and defend at Tenant’s sole expense such action or proceeding by counsel reasonably satisfactory to Landlord. The provisions of this Paragraph shall survive the termination of this Lease with respect to any claims or liability occurring prior to such termination.

 

14.                               INSURANCE.

 

(a)                                 At Tenant’s expense, Tenant shall procure, carry and maintain in effect throughout the term of this Lease, in a form and with deductibles acceptable to Landlord and with such insurance companies as are acceptable to Landlord (which companies shall have a Best’s rating of A-X or better), the following insurance coverages:

 

(i)                                     commercial general liability insurance, including Broad Form Property Damage and Contractual Liability with the following minimum limits: General Aggregate $3,000,000.00; Products/Completed Operations Aggregate $2,000,000.00; Each Occurrence $2,000,000.00; Personal and Advertising Injury $1,000,000.00; Medical Payments $5,000.00 per person,

 

(ii)                                  Umbrella/Excess Liability on a following form basis with the following minimum limits: General Aggregate $5,000,000.00(cumulative total); Each Occurrence $5,000,000.00(cumulative total);

 

(iii)                               Workers’ Compensation with statutory limits;

 

(iv)                              Employer’s Liability insurance with the following limits: Bodily injury by disease per person $1,000,000.00; Bodily injury by accident policy limit $1,000,000.00; Bodily injury by disease policy limit $1,000,000.00;

 

(v)                                 property insurance on special causes of loss insurance form covering any and all personal property of Tenant including but not limited to alterations, improvements, betterments, furniture, fixtures and equipment in an amount not less than their full replacement cost, with a deductible not to exceed $25,000.00; and

 

(vi)                              comprehensive automobile liability insurance having a combined single limit of not less than One Million Dollars ($1,000,000.00) per occurrence and insuring Tenant against liability for claims arising out of ownership, maintenance or use of any owned, hired or non-owned automobiles.

 

(b)                                 Not more often than once per year and upon not less than sixty (60) days’ prior written notice, Landlord, in its reasonable discretion, may require Tenant to increase the insurance limits set forth in Paragraph 14(a) above.

 

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(c)                                  All policies of liability insurance so obtained and maintained shall: be carried in the name of Tenant; name Landlord and Landlord’s designated agents as additional insureds; provide that the insurance policy so endorsed will be the primary insurance providing coverage for Landlord; and contain a cross-liability endorsement stating that the rights of insureds shall not be prejudiced by one insured making a claim or commencing an action against another insured. Any other liability insurance maintained by Landlord shall be excess and non-contributing. At Landlord’s election, such policies of Tenant shall name the holder of any Superior Interest or any other interested party as an insured party under a standard mortgagee endorsement.

 

(d)                                 All insurance policies required under this Lease shall provide that the insurer shall not cancel, reduce, modify or fail to renew such coverage without forty-five (45) days prior written notice to Landlord. Tenant shall deliver certificates of all insurance required hereunder prior to the commencement of the term of this Lease. In the event Tenant does not comply with the requirements of this Paragraph 14, Landlord may, at its option and at Tenant’s expense, purchase such insurance coverage to protect Landlord. The cost of such insurance shall be paid to Landlord by Tenant, as additional rent, immediately upon demand therefor, together with interest at the Interest Rate until paid.

 

(e)                                  The parties release each other, and their respective authorized representatives, from any claims for loss or damage that are caused by or result from perils insured under any insurance policies carried by the parties in force at the time of any such damage. Each party shall cause each insurance policy obtained by it to provide that the insurer waives all right of recovery by way of subrogation against either party in connection with any loss or damage covered by the policy. Neither party shall be liable to the other for any loss or damage caused by the insured risks under any insurance policy required by this Lease.

 

15.                               PROTECTION OF LENDERS.

 

(a)                                 This Lease shall be subject and subordinate at all times to all ground or underlying leases that may now or hereafter exist affecting the Building or the Real Property, or both, and to the lien of any mortgage or deed of trust in any amount or amounts whatsoever now or hereafter placed on or against the Building or the Real Property, or both, or on or against Landlord’s interest or estate therein (such mortgages, deeds of trust and leases are referred to herein, collectively, as “Superior Interests”), all without the necessity of any further instrument executed or delivered by or on the part of Tenant for the purpose of effectuating such subordination. Notwithstanding the foregoing, Tenant covenants and agrees to execute and deliver, upon demand, such further instruments evidencing such subordination of this Lease to any such Superior Interest as may be required by Landlord. Landlord agrees to use good faith efforts to deliver to Tenant from any existing or future Holder (as defined below) a written subordination and non-disturbance agreement in recordable form acceptable to such Holder in its sole discretion providing that so long as Tenant performs all of the terms of this Lease, Tenant’s possession under this Lease shall not be disturbed and Tenant shall not be joined by the Holder in any action or proceeding to foreclose thereunder, except where such is necessary for jurisdictional or procedural reasons. Tenant shall pay all costs for legal services incurred by Landlord in obtaining that subordination and non-disturbance agreement.

 

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(b)                                               Notwithstanding the foregoing, in the event of a foreclosure of any such mortgage or deed of trust or of any other action or proceeding for the enforcement thereof, or of any sale thereunder, this Lease shall not be terminated or extinguished, nor shall the rights and possession of Tenant hereunder be disturbed, if no Event of Default then exists under this Lease, and Tenant shall attorn to the person who acquires Landlord’s interest hereunder through any such mortgage or deed of trust.

 

(c)                                                Within ten (10) days after Landlord’s written request, Tenant shall deliver to Landlord, or to any actual or prospective holder of a Superior Interest (“Holder”) that Landlord designates, such financial statements as are reasonably required by such Holder to verify the financial condition of Tenant (or any assignee, subtenant or guarantor of Tenant). Tenant represents and warrants to Landlord and such Holder that each financial statement delivered by Tenant shall be accurate in all material respects as of the date of such statement. All financial statements shall be confidential and used only for the purposes stated herein.

 

(d)                                               If Landlord is in default, Tenant shall accept cure of any default by any Holder whose name and address shall have been furnished to Tenant in writing. Tenant may not exercise any rights or remedies for Landlord’s default unless Tenant gives notice thereof to each such Holder and the default is not cured within thirty (30) days thereafter or such greater time as may be reasonably necessary to cure such default. A default that cannot reasonably be cured within said 30-day period shall be deemed cured within said period if work necessary to cure the default is commenced within such time and proceeds diligently thereafter until the default is cured.

 

(e)                                                If any prospective Holder should require, as a condition of any Superior Interest, a modification of the provisions of this Lease, Tenant shall approve and execute any such modifications promptly after request, provided no such modification shall relate to the Rental payable hereunder or the length of the term hereof or otherwise materially alter the rights or obligations of Landlord or Tenant hereunder.

 

16.                               ENTRY BY LANDLORD.

 

(a)                                 Landlord reserves, and shall at all times have, the right to enter the Premises upon 24-hours’ prior notice (which may be oral and is not required in the event of emergency or in the ordinary provisioning of services) to inspect them; to supply janitorial service and any other service to be provided by Landlord hereunder; to submit the Premises to prospective purchasers, mortgagees or tenants; to post notices of nonresponsibility; and to alter, improve or repair the Premises and any portion of the Building as permitted or provided hereunder, all without abatement of Rental; and may erect scaffolding and other necessary structures in or through the Premises where reasonably required by the character of the work to be performed; provided, however, that any such entrance or work shall not unreasonably interfere with Tenant’s use of the Premises. If such entry is made as aforesaid, Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned by such entry. For each of the foregoing purposes, Landlord shall at all times have and retain a key and/or other access device with which to unlock all of the doors in, on and about the Premises (excluding Tenant’s vaults, safes and similar areas designated in writing by Tenant

 

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in advance and approved by Landlord); and Landlord shall have the right to use any and all means that Landlord may deem proper to open said doors in an emergency in order to obtain entry to the Premises, and any entry to the Premises obtained by Landlord by any of said means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into or a detainer of the Premises, or any portion thereof.

 

(b)                                 Landlord also shall have the right at any time to change the arrangement or location or times of access of entrances or passageways, doors and doorways, and corridors, elevators, stairs, toilets or other public parts of the Building, and to change the name, number or designation by which the Building is commonly known, and none of the foregoing shall be deemed an actual or constructive eviction of Tenant, nor shall it entitle Tenant to any reduction of Rental hereunder or result in any liability of Landlord to Tenant.

 

17.                               ABANDONMENT. Tenant shall not vacate or abandon the Premises or any part thereof at any time during the term hereof. Tenant understands that if Tenant leaves the Premises or any part thereof vacant, the risk of fire, other casualty and vandalism to the Premises and the Building will be increased. Accordingly, such action by Tenant shall constitute an immediate Event of Default hereunder regardless of whether Tenant continues to pay Basic Monthly Rental and other Rental under this Lease. If Tenant abandons, vacates or surrenders all or any part of the Premises or is dispossessed of the Premises by process of law, or otherwise, any movable furniture, equipment, trade fixtures, or other personal property belonging to Tenant and left on the Premises shall at the option of Landlord be deemed to be abandoned and, whether or not the property is deemed abandoned, Landlord shall have the right to remove such property from the Premises and charge Tenant for the removal and any restoration of the Premises as provided in Paragraph 8(a). Landlord may charge Tenant for the storage of Tenant’s property left on the Premises at such rates as Landlord may from time to time reasonably determine, or, Landlord may, at its option, store Tenant’s property in a public warehouse at Tenant’s expense. Notwithstanding the foregoing, neither the provisions of this Paragraph 17 nor any other provision of this Lease shall impose upon Landlord any obligation to care for or preserve any of Tenant’s property left upon the Premises, and Tenant hereby waives and releases Landlord from any claim or liability in connection with the removal of such property from the Premises and the storage thereof and specifically waives the provisions of California Civil Code Section 1542 with respect to such release. Landlord’s action or inaction with regard to the provisions of this Paragraph 17 shall not be construed as a waiver of Landlord’s right to require Tenant to remove its property, restore any damage to the Building caused by such removal or make any restoration required pursuant to Paragraph 8(a) hereof.

 

18.                               DEFAULT AND REMEDIES.

 

(a)                                 The occurrence of any one or more of the following events (each an “Event of Default”) shall constitute a breach of this Lease by Tenant:

 

(i)                                     Tenant fails to pay any Basic Monthly Rental or additional monthly rent under Paragraph 4(b) hereof as and when such rent becomes due and payable and such failure continues for more than three business (3) days after Landlord gives written notice thereof to Tenant; provided, however, that after the second such failure in a calendar year, only

 

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the passage of time, but no further notice, shall be required to establish an Event of Default in the same calendar year; or

 

(ii)                                  Tenant fails to pay any additional rent or other amount of money or charge payable by Tenant hereunder as and when such additional rent or amount or charge becomes due and payable and such failure continues for more than ten (10) days after Landlord gives written notice thereof to Tenant; provided, however, that after the second such failure in a calendar year, only the passage of time, but no further notice, shall be required to establish an Event of Default in the same calendar year; or

 

(iii)                               Tenant fails to perform or breaches any other agreement or covenant of this Lease to be performed or observed by Tenant as and when performance or observance is due and such failure or breach continues for more than ten (10) days after Landlord gives written notice thereof to Tenant; provided, however, that if, by the nature of such agreement or covenant, such failure or breach cannot reasonably be cured within such period of ten (10) days, an Event of Default shall not exist as long as Tenant commences with due diligence and dispatch the curing of such failure or breach within such period of ten (10) days and, having so commenced, thereafter prosecutes with diligence and dispatch and completes the curing of such failure or breach within a reasonable time; or

 

(iv)                              Tenant (A) is generally not paying its debts as they become due, (B) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy, insolvency or other debtors’ relief law of any jurisdiction, (C) makes an assignment for the benefit of its creditors, (D) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers of Tenant or of any substantial part of Tenant’s property, or (E) takes action for the purpose of any of the foregoing; or

 

(v)                                 Without consent by Tenant, a court or government authority enters an order, and such order is not vacated within thirty (30) days, (A) appointing a custodian, receiver, trustee or other officer with similar powers with respect to Tenant or with respect to any substantial part of Tenant’s property, or (B) constituting an order for relief or approving a petition for relief or reorganization or arrangement or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy, insolvency or other debtors’ relief law of any jurisdiction, or (C) ordering the dissolution, winding-up or liquidation of Tenant; or

 

(vi)                              This Lease or any estate of Tenant hereunder is levied upon under any attachment or execution and such attachment or execution is not vacated within thirty (30) days; or

 

(vii)                           Tenant vacates or abandons the Premises; or

 

(viii)                        If the performance of Tenant’s obligations under this Lease is guaranteed: (a) the death of a Guarantor, (b) the termination of a Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (c) a Guarantor’s becoming insolvent or the subject of a bankruptcy filing, (d) a Guarantor’s revocation of or refusal to honor the guaranty, or (e) a Guarantor’s breach of its guaranty obligation on an

 

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anticipatory basis, and Tenant’s failure, within 60 days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Tenant, equals or exceeds the combined financial resources of Tenant and the Guarantor that existed at the time of execution of this Lease.

 

(b)                                 If an Event of Default occurs, Landlord shall have the right at any time to give a written termination notice to Tenant and, on the date specified in such notice, Tenant’s right to possession shall terminate and this Lease shall terminate. Upon such termination, Landlord shall have the right to recover from Tenant:

 

(i)                                     The worth at the time of award of all unpaid rent that had been earned at the time of termination;

 

(ii)                                  The worth at the time of award of the amount by which all unpaid rent that would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided;

 

(iii)                               The worth at the time of award of the amount by which all unpaid rent for the balance of the term of this Lease after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; and

 

(iv)                              All other amounts necessary to compensate Landlord for all detriment proximately caused by Tenant’s failure to perform all of Tenant’s obligations under this Lease or that in the ordinary course of things would be likely to result therefrom.

 

The “worth at the time of award” of the amounts referred to in clauses (i) and (ii) above shall be computed by allowing interest at the maximum annual interest rate allowed by law for business loans (not primarily for personal, family or household purposes) not exempt from the usury law at the time of termination or, if there is no such maximum annual interest rate, at the rate of eighteen percent (18%) per annum. The “worth at the time of award” of the amount referred to in clause (iii) above shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). For the purpose of determining unpaid rent under clauses (i), (ii) and (iii) above, the rent reserved in this Lease shall be deemed to be the total rent payable by Tenant under Articles 3 and 4 hereof; for purposes of computing Tenant’s Percentage Share of increases in Operating Expenses over the Base Year and Real Property Taxes over the Tax Base Year for the calendar year in which the default occurs and each future calendar year or portion thereof in the Lease Term, Tenant’s Percentage Share of increases in Operating Expenses and Real Property Taxes shall be assumed to be equal to the amount thereof for the calendar year prior to the year in which the default shall occur, increased annually at a rate equal to the average rate of increase, if any, in such items from the Commencement Date through the time of award.

 

(c)                                  Even though Tenant has breached this Lease, this Lease shall continue in effect for so long as Landlord does not terminate Tenant’s right to possession, and Landlord shall have all of its rights and remedies, including the right, pursuant to California Civil Code Section 1951.4, to recover all rent as it becomes due under this Lease. Acts of maintenance or preservation or efforts to relet the Premises or the appointment of a receiver upon initiative of

 

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Landlord to protect Landlord’s interest under this Lease shall not constitute a termination of Tenant’s right to possession unless written notice of termination is given by Landlord to Tenant.

 

(d)                                 The remedies provided for in this Lease are in addition to all other remedies available to Landlord at law or in equity, by statute or otherwise. All costs incurred by Landlord in connection with collecting any Rent or other amounts and damages owing by Tenant pursuant to the provisions of this Lease, or to enforce any provision of this Lease, including reasonable attorneys’ fees from the date such matter is turned over to an attorney, whether or not one or more actions are commenced by Landlord, shall also be recoverable by Landlord from Tenant. If any notice and grace period required under subparagraphs 18(a)(i), (ii) or (iii) was not previously given, a notice to pay rent or quit, or to perform or quit, as the case may be, given to Tenant under any statute authorizing the forfeiture of leases for unlawful detainer shall also constitute the applicable notice for grace period purposes required by subparagraphs 18(a)(i), (ii) or (iii). In such case, the applicable grace period under subparagraphs 18(a)(i), (ii) or (iii) and under the unlawful detainer statute shall run concurrently after the one such statutory notice, and the failure of Tenant to cure the default within the greater of the two (2) such grace periods shall constitute both an unlawful detainer and an Event of Default entitling Landlord to the remedies provided for in this Lease and/or by said statute.

 

(e)                                  In the event that Tenant’s right of possession of the Premises is terminated prior to the end of the initial Term by reason of an Event of Default by Tenant, then immediately upon such termination, an amount shall be due and payable by Tenant to Landlord equal to the unamortized portion as of that date (which amortization shall be based on an interest rate of eleven percent (11%) per annum) of the sum of (a) the cost of Landlord’s Work (if any), (b) the Allowance (if any), (c) the value of any free Rent (i. e., the Rent stated in this Lease to be abated as an inducement to Tenant’s entering into this Lease) enjoyed as of that date by Tenant, and (d) the amount of all commissions paid by Landlord in order to procure this Lease.

 

19.                     DAMAGE BY FIRE OR OTHER CASUALTY.

 

(a)                                 If the Premises are partially destroyed or damaged by fire or other casualty, Landlord shall, subject to Paragraph 19(b), 19(c), 19(d) and 19 (e) below, promptly repair such damage if, in Landlord’s judgment, such repair can be completed within ninety (90) days under the laws and regulations of the state, federal, county and municipal authorities having jurisdiction, and this Lease shall remain in full force and effect, provided that if there shall be damage to the Premises from any such cause and such damage is not the result of the act, neglect, default or omission of Tenant, its agents, employees, contractors or invitees, Tenant shall be entitled to a reduction of Basic Monthly Rental while such repair is being made in the proportion that the area of the Premises rendered untenantable by such damage bears to the total area of the Premises. Tenant’s right to a reduction of Basic Monthly Rental under this Paragraph 19 shall be Tenant’s sole remedy in connection with any such damage.

 

(b)                                 If such repairs, in Landlord’s judgment, cannot be completed within ninety (90) days, or if such damage occurs during the last six (6) months of the term of this Lease, Landlord shall have the option either (i) to repair such damage, this Lease continuing in full force and effect, but with the Basic Monthly Rental proportionately reduced (subject to the condition set forth in Paragraph 19 (a) above), or (ii) to give notice to Tenant at any time within

 

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thirty (30) days after the occurrence of such damage terminating this Lease as of a date specified in such notice, which termination date shall not be less than thirty (30) nor more than sixty (60) days after the giving of such notice. If such notice of termination is so given, the Lease and all interest of Tenant in the Premises shall terminate on the date specified in such notice, and the Basic Monthly Rental, reduced (subject to the condition set forth in Paragraph 19(a) above) in proportion to the area of the Premises rendered untenantable by the damage, shall be paid up to the date of such termination, Landlord hereby agreeing to refund to Tenant any Rental theretofore paid for any period of time subsequent to the termination date.

 

(c)                                  If the Building is damaged by fire or other casualty to the extent that the repair cost would exceed twenty percent (20%) or more of its replacement value, or if more than twenty percent (20%) of the rentable area of the Building is affected by fire or other casualty and repairs to the Building cannot, in Landlord’s judgment, be completed within ninety (90) days, or if insurance proceeds sufficient to complete the repairs are not available due to exercise of rights of a Holder to collect such proceeds, then in any such case, whether the Premises are damaged or not, Landlord shall have the right, at its option, to terminate this Lease by giving Tenant notice thereof within thirty (30) days of such casualty specifying the date of termination, which termination date shall not be less than thirty (30) nor more than sixty (60) days after the giving of such notice.

 

(d)                                 If the Premises are damaged by fire or other casualty not resulting in whole or in part from the negligence or willful misconduct of Tenant or its employees, agents, contractors or subtenants and the repair to the Premises cannot, in Landlord’s judgment, be completed within one hundred eighty (180) days, assuming the availability of labor and materials, then Tenant at its option may terminate this Lease. Tenant’s notice to Landlord of Tenant’s election to terminate the Lease under the preceding sentence must be delivered to Landlord within thirty (30) days after the occurrence of such damage, and the termination shall be effective as of a date specified in such notice, which termination date shall be no less than thirty (30) nor more than sixty (60) days after the giving of such notice. In the event of a termination of the Lease by Tenant under this Paragraph 19(d), the Basic Monthly Rental shall be reduced in the same manner as provided under Paragraph 19(b) above. If Tenant shall notify Landlord as to Tenant’s election to terminate this Lease, Landlord shall have the right by giving Tenant notice within twenty (20) days of Landlord’s receipt of Tenant’s election notice, to relocate Tenant in substantially similar space in the Building or in another building in the general vicinity of the Building within thirty (30) days of the date of Tenant’s notice to Landlord, in which case the Lease then shall be deemed to have not been terminated. If Landlord so elects to relocate Tenant, Landlord shall bear the cost of moving Tenant to such other space, Tenant shall continue to pay Basic Monthly Rental and other Rental to Landlord as provided herein and Landlord shall bear the cost of any rental in excess thereof for such other space. Tenant’s occupancy of such other space shall not exceed one (1) year from the commencement of such occupancy. In the event Landlord cannot complete repairs to the Premises within one (1) year from the date of Tenant’s commencement of occupancy in such other space, Landlord shall notify Tenant in writing not later than sixty (60) days prior to the expiration of such one-year period and upon expiration of such one-year period, this Lease shall terminate. In the event Landlord can complete such repairs within such one-year period, Landlord shall so notify Tenant in writing and shall move Tenant back into the Premises as soon as practicable after such repairs

 

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have been completed. The cost of moving Tenant back into the Premises shall be borne by Landlord.

 

(e)                                  Notwithstanding any of the provisions of this Lease, Landlord shall in no event be required to repair any injury or damage by fire or other cause whatsoever to, or to make any repairs or replacements of, any panelings, decorations, partitions, railings, ceilings, floor coverings, equipment, trade or office fixtures or any other property of, or improvements (including the Tenant Improvements and any Alterations) installed on the Premises by or at the election of, Tenant. Tenant hereby agrees to promptly repair any damage to the Tenant Improvements and any Alterations at its sole cost and expense in the event that Landlord is required to, or elects to, repair the remainder of the Premises pursuant to Paragraphs19 (a) or 19(b) above.

 

(f)                                   Tenant hereby waives the provisions of subsection 2 of Section 1932, subsection 4 of Section 1933, and Sections 1941 and 1942 of the California Civil Code.

 

20.                          EMINENT DOMAIN.

 

(a)                                 If all or part of the Premises shall be taken by any public or quasi-public authority under the power of eminent domain or conveyance in lieu thereof, this Lease shall terminate as to any portion of the Premises so taken or conveyed on the date when title or the right to possession vests in the condemnor.

 

(b)                                 If (i) a part of the Premises shall be taken by any public or quasi-public authority under the power of eminent domain or conveyance in lieu thereof; and (ii) Tenant is reasonably able to continue the operation of Tenant’s business in that portion of the Premises remaining; and (iii) Landlord elects to restore the Premises to an architectural whole, then this Lease shall remain in effect as to said portion of the Premises remaining, and the Basic Monthly Rental payable from the date of the taking shall be reduced in the same proportion as the area of the Premises taken bears to the total area of the Premises. If, after a partial taking, Tenant is not reasonably able to continue the operation of its business in the Premises or Landlord elects not to restore the Premises as hereinabove described, then this Lease may be terminated by either Landlord or Tenant by giving written notice to the other party within thirty (30) days of the date of the taking. Such notice shall specify the date of termination, which termination date shall be not less than thirty (30) nor more than sixty (60) days after the date of said notice.

 

(c)                                  If a portion of the Building is taken, whether any portion of the Premises is taken or not, and Landlord determines that it is not economically feasible to continue operating the portion of the Building remaining, then Landlord shall have the option for a period of thirty (30) days after such determination to terminate this Lease. If Landlord determines that it is economically feasible to continue operating the portion of the Building remaining after such taking, then this Lease shall remain in effect, with Landlord, at Landlord’s cost, restoring the Building to an architectural whole.

 

(d)                                 Landlord shall be entitled to any and all payment, income, rent, award, or any interest therein whatsoever that may be paid or made in connection with such taking or conveyance, and Tenant shall have no claim against Landlord or otherwise for the value of any

 

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unexpired term of this Lease or for the value of any improvements in or to the Premises. Tenant hereby assigns any such claim to the Landlord. Notwithstanding the foregoing, to the extent that the same shall not diminish Landlord’s recovery for such taking, Tenant shall have the right to make a claim directly to the entity expressing the power of eminent domain for moving expenses and for loss or damage to Tenant’s trade fixtures, equipment and movable furniture.

 

(e)                                  Tenant hereby waives sections 1265.110 through 1265.160 of the California Code of Civil Procedure.

 

21.                               HOLDING OVER. Any holding over after the expiration or other termination of the term of this Lease with the prior written consent of Landlord delivered to Tenant shall be construed to be a tenancy from month-to-month at the Basic Monthly Rental in effect on the date of such expiration or termination (subject to adjustment as provided in Paragraph 3(a) hereof) on the terms, covenants and conditions herein specified so far as applicable. Any holding over after the expiration or other termination of the term of this Lease without the prior written consent of Landlord shall be construed to be a tenancy at sufferance on all the terms set forth herein, except that the Basic Monthly Rental shall be an amount equal to two hundred percent (200%) of the Basic Monthly Rental payable by Tenant immediately prior to such holding over. Acceptance by Landlord of Rental after the expiration or termination of this Lease shall not constitute a consent by Landlord to any such tenancy from month to month or result in any other tenancy or any renewal of the term hereof. The provisions of this Paragraph are in addition to, and do not affect, Landlord’s right to re-entry or other rights hereunder or provided by law.

 

22.                               INTENTIONALLY OMITTED.

 

23.                               MISCELLANEOUS.

 

(a)                                 Any liability of Landlord (including without limitation Landlord’s members, partners, shareholders, affiliates, agents, and employees) to Tenant under this Lease shall be limited to the equity interest of Landlord in the Real Property, and Tenant agrees to look solely to such interest for the recovery of any judgment, it being intended that Landlord and such other persons shall not be personally liable for any deficiency or judgment. Notwithstanding any other provision of this Lease, Landlord shall not be liable for any consequential damages, nor shall Landlord be liable for loss of or damage to artwork, currency, jewelry, bullion, unique or valuable documents, securities or other valuables, or for other property not in the nature of ordinary fixtures, furnishings and equipment used in general office activities and functions. Wherever in this Lease Tenant (a) releases Landlord from any claim or liability, (b) waives or limits any right of Tenant to assert any claim against Landlord or to seek recourse against any property of Landlord or (c) agrees to indemnify Landlord against any matters, the relevant release, waiver, limitation or indemnity shall run in favor of and apply to Landlord, its agents, the constituent shareholders, partners or other owners of Landlord or its agents, and the directors, officers, and employees of Landlord and its agents and each such constituent shareholder, partner or other owner.

 

(b)                                 In the event of a sale or conveyance of the Building by Landlord, the transferor shall thereby be released from any further liability under this Lease arising after the making of such transfer, and, in such event, Tenant agrees to look solely to the successor in

 

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interest of such transferor in and to the Building and this Lease. Tenant agrees to attorn to the successor in interest of such transferor. If Tenant provides Landlord with any security for Tenant’s performance of its obligations hereunder, and Landlord transfers, or provides a credit (that is treated by the recipient as a transfer) with respect to, such security to the grantee or transferee of Landlord’s interest in the Real Property, Landlord shall be released from any further responsibility or liability for such security.

 

(c)                                  Tenant shall, at any time and from time to time within ten (10) days following request from Landlord, execute, acknowledge and deliver to Landlord a statement in writing, (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect), (ii) certifying that there are not, to Tenant’s knowledge, any uncured defaults on the part of the Landlord hereunder and that Tenant has no defenses to or offsets against its obligations under this Lease, or specifying such defaults, defenses or offsets if any are claimed, (iii) certifying the date that Tenant entered into occupancy of the Premises and that Tenant is open for business in the Premises, (iv) certifying the amount of the Basic Monthly Rental and the Rental payable under Paragraph 4(a) and the date to which Rental is paid in advance, if any, and certifying that Tenant is entitled to no rent abatement or other economic concessions not specified in the Lease (v) evidencing the status of this Lease as may be required either by a lender making a loan affecting, or a purchaser of, the Premises, the Building, the Real Property or any interest therein from Landlord, (vi) certifying the amount of the Deposit, if any, (vii) certifying that all Improvements to be constructed in the Premises by Landlord are completed (or specifying any obligations of Landlord respecting Improvements), and (viii) certifying such other matters relating to this Lease and/or the Premises as may be requested by a lender making a loan to Landlord or a purchaser of the Premises, the Building, the Real Property or any interest therein from Landlord. Any such statement may be relied upon by, and shall upon Landlord’s request be addressed to, any prospective purchaser or encumbrancer of all or any portion of the Real Property or any interest therein. Tenant shall, within ten (10) days following request of Landlord, deliver such other documents regarding Tenant’s financial situation including Tenant’s financial statements as are reasonably requested in connection with the sale of, or loan to be secured by, the Real Property or any part thereof or interest therein. Tenant’s failure to deliver said statement in the time required shall entitle Landlord to make a second written request for said statement, and Tenant’s failure to deliver said statement within three (3) days thereafter shall be conclusive upon Tenant that: (i) the Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) there are no uncured defaults in Landlord’s performance and Tenant has no right of offset, counterclaim or deduction against Rental under the Lease and (iii) no more than one month’s Basic Monthly Rental has been paid in advance.

 

(d)                                 On or before April 1 of each year throughout the Term, Tenant shall deliver to Landlord Tenant’s financial statements (“Financial Statements”) for the fiscal year of Tenant ended on the previous December 31, which Financial Statements shall include a combined balance sheet of Tenant and its combined subsidiaries as at the end of such fiscal year, a combined statement of operations of Tenant and its combined subsidiaries for such fiscal year, and a certificate of Tenant’s auditor (or, if audited Financial Statements are not available, then a certificate of Tenant’s Chief Financial Officer) to the effect that such Financial Statements were prepared in accordance with generally accepted accounting principles, consistently applied, and

 

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fairly present the financial condition and operations of Tenant and its combined subsidiaries for and as at the end of such fiscal year.

 

(e)                                  All terms and covenants of this Lease to be performed or observed by Tenant shall be performed or observed by Tenant at Tenant’s expense and without any reduction of Rental. If Tenant fails to pay any Rental hereunder or fails to perform any other term or covenant hereunder on its part to be performed, and such failure constitutes an Event of Default, Landlord, without waiving or releasing Tenant from any obligation of Tenant hereunder, may make any such payment or perform any such other term or covenant on Tenant’s part to be performed but shall not be obligated to do so. All sums so paid by Landlord and all necessary costs of such performance by Landlord, together with interest thereon at the Interest Rate from the date of such payment or performance by Landlord, shall be paid (and Tenant covenants to make such payment) to Landlord on demand by Landlord, and Landlord shall have (in addition to any other right or remedy of Landlord) the same rights and remedies in the event of nonpayment thereof by Tenant as in the case of failure by Tenant in the payment of Rental hereunder.

 

(f)                                   Tenant agrees to faithfully observe and to comply with the Building Rules and Regulations attached hereto as Exhibit B and incorporated herein by this reference, and all modifications of and additions thereto from time to time put into effect by Landlord that are applicable to all tenants of the Building and of which Tenant shall have notice. Landlord shall not be responsible to Tenant for the non-performance by any other tenant or occupant of the Building of any of said Building Rules and Regulations. In the event any of the Building Rules and Regulations conflict with any express provision of this Lease, the provisions of this Lease shall govern.

 

(g)                                  In case any suit or other proceeding shall be brought for an unlawful detainer of the Premises or for the recovery of any Rental due under the provisions of this Lease or because of the failure of performance or observance of any other term or covenant herein contained on the part of Landlord or Tenant, including any proceeding or action in a bankruptcy case, the unsuccessful party in such suit or proceeding shall pay to the prevailing party therein reasonable attorneys’ fees and costs, which shall include fees and costs of any appeal, all as fixed by the Court. If Landlord or Tenant should be named as a defendant in any suit brought against the other in connection with Tenant’s occupancy of the Premises under this Lease, the party defendant primarily responsible for the bringing of such suit shall pay to the other party its costs and expenses incurred in such suit and reasonable attorneys’ fees.

 

(h)                                 If any action or proceeding between Landlord and Tenant to enforce the provisions of this Lease (including an action or proceeding between Landlord and the trustee or debtor in possession while Tenant is a debtor in a proceeding under any bankruptcy law) proceeds to trial, Landlord and Tenant hereby waive their respective rights to a jury in such trial.

 

(i)                                     The failure of either Landlord or Tenant to object to or to assert any remedy by reason of the other’s failure to perform or observe any covenant or term hereof or Landlord’s or Tenant’s failure to assert any rights by reason of the happening or non-happening of any condition hereof shall not be deemed a waiver of its right to assert and enforce any remedy it may have by reason of such failure on the part of the other or the happening or non-

 

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happening of such condition or a waiver of its rights to enforce any of its rights by reason of any subsequent failure of the other to perform or observe the same or any other term or covenant or by reason of the subsequent happening or non-happening of the same or any other condition. No custom or practice that may develop between the parties hereto during the term hereof shall be deemed a waiver of, or in any way affect, the right of Landlord or Tenant to insist upon performance and observance by the other in strict accordance with the terms hereof. The acceptance of Rental hereunder by Landlord shall not be deemed to be a waiver of any preceding failure of Tenant to perform or observe any term or covenant of this Lease, other than the failure of Tenant to pay the particular Rental so accepted, irrespective of any knowledge on the part of Landlord of such preceding failure at the time of acceptance of such Rental. Landlord’s acceptance of partial payment of rent does not constitute a waiver of any rights, including without limitation any right Landlord may have to recover possession of the Premises.

 

(j)                                    Tenant agrees that no diminution or shutting off of light, air or view by any structure that may be erected (whether or not by Landlord) on property adjacent to the Building shall in any way affect this Lease, entitle Tenant to any reduction of Rental hereunder or result in any liability of Landlord to Tenant.

 

(k)                                 All notices, demands, requests, advices or designations (“Notices”) that may be or are required to be given by either party to the other hereunder shall be in writing. All Notices by Landlord to Tenant shall be sufficiently given, made or delivered if personally served (including delivery by messenger or nationally-recognized overnight mail courier) on Tenant by leaving the same at the Premises, or if sent by United States certified or registered mail, postage prepaid, addressed to Tenant at Tenant’s address for notices as set forth in the Summary of Lease Terms. All Notices by Tenant to Landlord shall be sufficiently given, made or delivered if personally served (including delivery by messenger or nationally-recognized overnight mail courier) on Landlord, or sent by United States certified or registered mail, postage prepaid, addressed to Landlord at Landlord’s address for notices specified in Paragraph B of the Summary of Lease Terms. Each Notice shall be deemed received on the date of the personal service or three (3) days after the mailing thereof, in the manner herein provided, as the case may be.

 

(l)                                     Tenant agrees that it shall not, without first obtaining the written consent of Landlord (which consent may be withheld in Landlord’s sole and absolute discretion): (i) use the name of the Building for any purpose other than as the address of the business conducted by Tenant in the Premises; or (ii) use for any purpose any image of, rendering of, or design based on, the exterior appearance or profile of the Building.

 

(m)                             This Lease shall in all respects be governed by and construed in accordance with the laws of California. If any provision of this Lease shall be invalid, unenforceable or ineffective for any reason whatsoever, all other provisions hereof shall be and remain in effect.

 

(n)                                 The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The term “Landlord” or any pronoun used in place thereof includes the plural as well as the singular and the successors and assigns of Landlord. The term “Tenant” or any pronoun used in place thereof includes the plural as well as the

 

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singular and each of their respective heirs, executors, administrators, successors and permitted assigns, according to the context hereof. The provisions of this Lease shall inure to the benefit of and bind Landlord and Tenant and their respective heirs, executors, administrators, successors and permitted assigns. The term “person” includes the plural as well as the singular and individuals, firms, associations, partnerships and corporations. Words used in any gender include the other gender. If there be more than one Tenant the obligations of Tenant hereunder are joint and several. The Paragraph headings of this Lease are for convenience of reference only and shall have no effect upon the construction or interpretation of any provision hereof.

 

(o)                                 Time is of the essence of this Lease with respect to the payment of Rental and the performance of all obligations.

 

(p)                                 Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option for a lease, and this instrument is not effective as a lease or otherwise until its execution and delivery by both Landlord and Tenant.

 

(q)                                 Tenant agrees to protect, defend, indemnify and hold Landlord harmless from any and all claims, loss, cost, damage and/or expense (including, without limitation, attorneys’ fees and court costs) by any real estate broker or salesperson or other entity or party for a commission or finder’s fee as a result of Tenant’s entering into this Lease, other than the Brokers identified in Paragraph K of the Summary of Lease Terms, if and to the extent such other real estate broker or salesperson or other entity or party bases such claim on its dealings with Tenant.

 

(r)                                    Landlord agrees to list Tenant’s name on the directory board in the lobby of the Building and on the Building standard signage in the elevator lobbies of the third floor and to provide Building standard signage on the door to the Premises, at Landlord’s cost and expense; provided, however, any change to the initial listing or any additional listings shall be at Tenant’s cost and expense. Landlord’s acceptance of any name for listing on the directory board, the standard signage or any exterior sign shall in no event be, or be deemed to be, nor will it substitute for, Landlord’s consent, as required by this Lease, to any sublease, assignment, or other occupancy of the Premises.

 

(s)                                   Tenant may, at Tenant’s sole cost and expense, install one elevator lobby sign identifying Tenant’s name and logo in the 4th floor elevator lobby (the “Tenant’s Signage”) that is the equivalent of the ngmoco signage existing on the date of this Lease. The costs of the actual sign comprising Tenant’s Signage and the installation, design, construction, and any and all other costs associated with Tenant’s Signage, including, without limitation and maintenance and repairs, shall be the sole responsibility of Tenant. Should Tenant’s Signage require repairs and/or maintenance, as determined in Landlord’s reasonable judgment, Landlord shall have the right to provide notice thereof to Tenant and Tenant (except as set forth above) shall cause such repairs and/or maintenance to be performed within fifteen (15) business days after receipt of such notice from Landlord, at Tenant’s sole cost and expense. Should Tenant fail to perform such repairs and/or maintenance within the periods described in the immediately preceding sentence, Landlord shall, upon the delivery of an additional five (5) business days’ prior written notice, have the right to cause such work to be performed and to charge Tenant as additional rent for the cost of such work. At the expiration or earlier termination of this Lease or termination of

 

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Tenant’s sign rights as provided below, Landlord shall, at Tenant’s sole cost and expense, cause the Tenant’s Signage to be removed and the area of the Building affected by Tenant’s Signage to be restored to the condition existing prior to the installation of Tenant’s Signage. The right to Tenant’s Signage is personal to the initially named Tenant in this Lease, provided that said right shall not terminate by reason of a Transfer pursuant to Paragraphs 12(e), 12(f) or 12(h). All of Tenant’s rights to install and maintain Tenant’s Signage in accordance with this Paragraph 23(a) shall permanently terminate upon the first to occur of the following: (i) Landlord’s recapture of the Suites 310/410 Premises pursuant to Paragraph 12(b); (ii) Tenant ceases to occupy at least a portion of the Suites 310/410 Premises for a period in excess of ninety (90) days, unless Tenant is in occupancy of all of the Suite 420 Premises; or (iii) Tenant exercises its right under Paragraph 2(d) to terminate the Lease as to the Suites 310/410 Premises.

 

(t)                                    If Tenant is a corporation (or other business organization), Tenant and each person executing this Lease on behalf of Tenant represents and warrants to Landlord that (a) Tenant is duly incorporated (or organized) and validly existing under the laws of its state of incorporation (or organization), (b) Tenant is qualified to do business in California, (c) Tenant has full right, power and authority to enter into this Lease and to perform all of Tenant’s obligations hereunder, and (d) the execution, delivery and performance of this Lease has been duly authorized by Tenant and each person signing this Lease on behalf of the Tenant is duly and validly authorized to do so. Not more than twenty (20) days after signing this Lease, Tenant shall deliver to Landlord a true and correct copy of resolutions duly adopted by the board of directors of Tenant, that authorize each person signing this Lease on behalf of Tenant to do so.

 

(u)                                 This Lease may not be amended or modified in any respect whatsoever, except by an instrument in writing signed by Landlord and Tenant.

 

(v)                                 The Exhibits and Addenda referenced in the Summary of Lease Terms are a part of this Lease and are incorporated herein by this reference. In the event of any discrepancy between the Lease and any such Exhibit or Addendum, the Exhibit or Addendum shall control. This Lease is the entire and integrated agreement between Landlord and Tenant with respect to the subject matter of this Lease, the Premises and the Building. There are no oral agreements between Landlord and Tenant affecting this Lease, and this Lease supersedes and cancels any and all previous negotiations, arrangements, brochures, offers, agreements and understandings, oral or written, if any, between Landlord and Tenant or displayed by Landlord to Tenant with respect to the subject matter of this Lease, the Premises or the Building. There are no representations between Landlord and Tenant or between any real estate broker and Tenant other than those expressly set forth in this Lease and all reliance with respect to any representations is solely upon representations expressly set forth in this Lease.

 

(w)                               This Lease may be executed in counterparts, all of which shall constitute the same Lease, notwithstanding that all parties to this Lease are not signatory to the same or original counterpart. Delivery of an executed counterpart of this Lease by telefacsimile shall be equally as effective as delivery of an original executed counterpart. Any party delivering an executed counterpart of this Lease by telefacsimile also shall deliver an original executed counterpart of this Lease, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability and binding effect of this Lease. Signature and

 

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acknowledgment pages may be detached from the counterparts and attached to a single copy of this Lease to physically form one (1) document.

 

24.                               ERISA. To satisfy compliance with the Employee Retirement Income Security Act of 1974, as amended, Tenant represents and warrants to Landlord and The Prudential Insurance Company of America, a New Jersey corporation (“Prudential”), that:

 

(a)                                 Tenant is not an “employee benefit plan” (as that term is defined in Section 3(3) of ERISA); and

 

(b)                                 Tenant is not acquiring the Property as a plan asset subject to ERISA but for Tenant’s own investment account; and

 

(c)                                  Tenant is not an “affiliate” of Prudential as defined in Section IV(b) or PTE 90-1;

 

(d)                                 Tenant is not a “party in interest” (as that term is defined in Section 3(14) of ERISA) to the Virginia Retirement System; and

 

(e)                                  Tenant agrees to keep the identity of the Virginia Retirement System confidential, except to the extent that Tenant may be required to disclose such information as a result of (i) legal process, or (ii) compliance with ERISA or other Laws governing Tenant’s operations.

 

25.                               PARKING.

 

(a)                                 Upon payment of the Parking Rental (defined below), Tenant shall have the right to lease on a non-exclusive basis up to the level of one (1) unreserved parking space in the Parking Lot for every one thousand (1,000) square feet of rentable area of the Premises (“Tenant’s Allotted Spaces”). The use of Tenant’s Allotted Spaces shall be for the parking of motor vehicles used by Tenant, its officers, employees and customers only, and shall be subject to all applicable laws and the reasonable, uniform and non-discriminatory rules and regulations adopted by Landlord from time to time for the use of the Parking Lot. The Parking Rental payable by Tenant hereunder shall include all taxes imposed on the use of the parking spaces by any governmental or quasi-governmental authority. Parking Rental shall be due and payable in advance, as additional rent, on the first day of each month during which parking spaces are leased hereunder. Parking spaces may not be assigned or transferred separate and apart from this Lease, and upon the expiration or earlier termination of this Lease, Tenant’s rights with respect to all leased parking spaces shall immediately terminate. Tenant and its agents, employees, contractors, invitees or licensees shall not unreasonably interfere with the rights of Landlord or others entitled to similar use of the Parking Lot. Access to the Parking Lot will generally be available on a twenty-four (24) hour basis, with in and out privileges. Tenant shall have the right, upon at least thirty (30) days’ prior written notice to Landlord, to elect not to lease some or all of the Allotted Spaces. If Tenant so relinquishes its rights to any Allotted Spaces, upon Tenant’s written request to Landlord at any time, Tenant shall be eligible to re-lease its relinquished parking spaces on a first-come, first-served basis if such spaces are available.

 

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(b)                                 The Parking Lot shall be subject to the reasonable control and management of Landlord, who may, from time to time, establish, modify and enforce reasonable, uniform and non-discriminatory rules and regulations with respect thereto. Landlord reserves the right to change, reconfigure, or rearrange the parking areas, to reconstruct or repair any portion thereof, and to restrict the use of any parking areas and do such other acts in and to such areas as Landlord deems necessary or desirable without such actions being deemed an eviction of Tenant or a disturbance of Tenant’s use of the Premises and without Landlord’s being deemed in default hereunder; provided that Landlord shall use commercially reasonable efforts to minimize (to the extent consistent with applicable laws) the extent and duration of any resulting interference with Tenant’s parking rights. Landlord may, in its sole discretion, convert the Parking Lot to a reserved and/or controlled parking facility, or operate the Parking Lot (or a portion thereof) as an attendant assisted and/or valet parking facility.

 

(c)                                  If parking spaces are not assigned pursuant to the terms of this Lease, Landlord reserves the right at any time to assign parking spaces in a reasonable manner, and Tenant shall thereafter be responsible for insuring that its employees park in the designated areas. Tenant shall, if requested by Landlord, comply with all reasonable parking practices and otherwise furnish Landlord with such information as Landlord reasonably requests. Landlord shall not be liable for any damage of any nature to, or any theft of, vehicles or the contents thereof in or about the Parking Lot. At Landlord’s request, Tenant shall request that its employees and agents using Tenant’s parking spaces to execute an agreement confirming the foregoing.

 

(d)                                 “Parking Rental” shall mean ($225) per space for the first month of the Term, and thereafter the current parking rental rate per parking space being charged by Landlord for monthly parking in the Parking Lot.

 

(e)                                  Subject to availability, Landlord will attempt to provide additional parking spaces in the Parking Lot on a month-to-month basis if requested by Tenant.

 

26.                          LETTER OF CREDIT

 

(a)                                 Letter of Credit.  Tenant agrees to provide, at Tenant’s sole cost and expense, a Letter of Credit (as defined below) in the Letter of Credit Required Amount (as defined below) as additional security for the faithful performance and observance by Tenant of all of the provisions of this Lease, on the terms and conditions set forth below. The use, application or retention of the Letter of Credit, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by law, it being intended that Landlord shall not first be required to proceed against the Letter of Credit and the Letter of Credit shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. As used herein the term “Letter of Credit Required Amount” initially means $682,448.00. Subject to the remaining terms of this Paragraph 26, and provided the Reduction Conditions (as defined below) have been satisfied at the particular reduction effective date, Tenant shall have the right to reduce the Letter of Credit Required Amount so that the new Letter of Credit Required Amount shall be $341,224.00 (the “New Required Amount”) effective as of the first day of the thirty-seventh (37th) month of the Term. If Tenant is entitled to a reduction in the Letter of Credit Required Amount, Tenant shall provide Landlord with written

 

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notice requesting that the Letter of Credit Required Amount be reduced as provided above (the “Reduction Notice”). The Reduction Notice must include copies of Tenant’s financial statements covering at least the 12-month period ending on the most recent completed fiscal quarter prior to the date the Reduction Conditions must be satisfied (collectively, the “Required Financial Statements”) in a form reasonably acceptable to Landlord and Tenant’s calculation of EBITDA Margin (as defined below) and the Interest Coverage Ratio (as defined below) based on those Required Financial Statements showing that the applicable Reduction Conditions have been satisfied. If Tenant provides Landlord with a Reduction Notice, and Tenant is entitled to reduce the Required Amount as provided herein, the reduction shall be effectuated by Tenant replacing the Letter of Credit then being held by Landlord with a new Letter of Credit in the New Required Amount or amending the then-existing Letter of Credit to that New Required Amount. The term “Reduction Conditions” means the following conditions which, as to clauses (i) and (ii), have been satisfied in the Required Financial Statements as determined by Landlord:

 

(i)                                     EBITDA Margin for the prior twelve months is not less than 15%.

 

(ii)                                  Interest Coverage Ratio for the prior twelve months is not less than 1.6X.

 

(iii)                               No Event of Default shall have occurred and be continuing under this Lease.

 

As used in this Paragraph 26(a), the following terms shall have the following meanings.

 

(1)                                 “EBITDA” means Income (Loss) before income taxes plus interest expense plus depreciation and amortization plus any write-downs of goodwill or intangibles, all as disclosed in Tenant’s financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America;

 

(2)                                 “EBITDA Margin” means EBITDA as a percentage of Revenue; and

 

(3)                                 “Interest Coverage Ratio” means (A) EBITDA, divided by (B) interest expense. If Tenant makes an acquisition during the period of time for which the Interest Coverage Ratio is being calculated which requires the issuance of additional debt, then the Tenant will also provide a proforma Interest Coverage Ratio calculation which assumes the debt issued for the acquisition was done so at the beginning of the 12 month period for which the Interest Coverage Ratio is being calculated.

 

In the event that Reduction Conditions are not satisfied at the first day of the thirty-seventh (37th) month of the Term, then Tenant shall have the right annually thereafter to reduce the Letter of Credit Required Amount to the New Required Amount on any such anniversary date on which the Reduction Conditions are satisfied, by following the reduction procedures of this Paragraph 26(a).

 

(b)                                 Delivery of Letter of Credit.  (i) Tenant shall cause a Letter of Credit, in the amount of the Letter of Credit Required Amount to be issued by the L/C Bank (as defined below) in favor of Landlord, and its successors, assigns and transferees; (ii) Tenant will cause the Letter of Credit to remain in full force and effect during the entire Term and thereafter until

 

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thirty (30) days after expiration or earlier termination of the Lease; and (iii) the initial Letter of Credit will be delivered to Landlord no later than the date upon which Landlord delivers possession of any portion of the Premises to Tenant. So long as no Event of Default then exists, Landlord shall return the Letter of Credit to Tenant within 30 days after the expiration or earlier termination of the Lease. The specific requirements for the Letter of Credit and the rights of Landlord to make draws thereon will be as set forth in this Paragraph 26. All of Tenant’s rights and all of Landlord’s obligations under this Lease are strictly contingent on Tenant’s delivering and thereafter causing the Letter of Credit to remain in full force and effect during the entire Term.

 

(c)                                  Draws on the Letter of Credit.  Immediately upon, and at any time or from time to time after, the occurrence of any one or more Draw Events (as defined below), Landlord will have the unconditional right to draw on the Letter of Credit in accordance with this Paragraph 26. Upon the payment to Landlord of the Draw Proceeds, Landlord will hold the Draw Proceeds in its own name and for its own account, without liability for interest, to use and apply any and all of the Draw Proceeds only (a) to cure any Event of Default by Tenant; (b) to pay any other sum to which Landlord becomes obligated by reason of Tenant’s failure to carry out its obligations under this Lease; or (c) to compensate Landlord for any monetary loss or damage which Landlord suffers thereby arising from Tenant’s failure to carry out its obligations under this Lease. In addition, if the Draw Event is the failure of Tenant to renew the Letter of Credit as required hereunder, then Landlord shall be entitled to draw the entire Letter of Credit as a cash security deposit, held as a pledge under the California Uniform Commercial Code to secure Tenant’s obligations under this Lease. Among other things, it is expressly understood that the Draw Proceeds will not be considered an advance payment of Base Rent or Additional Rent or a measure of Landlord’s damages resulting from any Event of Default hereunder (past, present or future). Further, immediately upon the occurrence and during the continuance of any one or more Draw Events, Landlord may, from time to time and without prejudice to any other remedy, use the Draw Proceeds (whether from a contemporaneous or prior draw on the Letter of Credit) to the extent necessary to make good any arrearages of Base Rent or Additional Rent, to pay to Landlord any and all amounts to which Landlord is entitled in connection with the pursuit of any one or more of its remedies hereunder, and to compensate Landlord for any and all other damage, injury, expense or liability caused to Landlord by any and all such Events of Default. Any delays in Landlord’s draw on the Letter of Credit or in Landlord’s use of the Draw Proceeds as provided in this Paragraph 26 will not constitute a waiver by Landlord of any of its rights hereunder with respect to the Letter of Credit or the Draw Proceeds. Following any such application of the Draw Proceeds and Landlord’s written notice to Tenant thereof, Tenant will either pay to Landlord on demand the cash amount so applied in order to restore the Draw Proceeds to the full amount thereof immediately prior to such application or cause the Letter of Credit to be replenished to its full amount thereunder. Failure to either pay that cash amount or cause the Letter of Credit to be replenished to its full amount thereunder within three (3) business days after that application of the Draw Proceeds shall constitute an Event of Default without the right to any notice or cure period. Landlord will not be liable for any indirect, consequential, special or punitive damages incurred by Tenant arising from a claim that Landlord violated the bankruptcy code’s automatic stay in connection with any draw by Landlord of any Draw Proceeds, Landlord’s liability (if any) under such circumstances being limited to the reimbursement of direct costs as and to the extent expressly provided in this Paragraph 26(c). Nothing in this Lease or in the Letter of Credit will confer upon Tenant any property rights or

 

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interests in any Draw Proceeds; provided, however, that upon the expiration or earlier termination of this Lease, and so long as there then exist no Draw Events or Events of Default hereunder, Landlord agrees to return any remaining unapplied balance of the Draw Proceeds then held by Landlord to Tenant, and the Letter of Credit itself (if and to the extent not previously drawn in full) to the L/C Bank. Landlord may draw on the Letter of Credit and/or apply any Deposit in any order.

 

(d)                                 Applicable Definitions.

 

“Draw Event” means each of the following events:

 

(i)                                     the occurrence of any one or more of the following which shall have also been preceded, simultaneously accompanied, or succeeded by an Event of Default under this Lease regardless of the absence of any notice of default which might otherwise be required with respect to an Event of Default if the giving of notice to Tenant about such breach by Tenant is stayed or barred due to one of the following events: (1) Tenant’s filing of a petition under any chapter of the Bankruptcy Code, or under any federal, state or foreign bankruptcy or insolvency statute now existing or hereafter enacted, or Tenant’s making a general assignment or general arrangement for the benefit of creditors, (2) the filing of an involuntary petition under any chapter of the Bankruptcy Code, or under any federal, state or foreign bankruptcy or insolvency statute now existing or hereafter enacted, or the filing of a petition for adjudication of bankruptcy or for reorganization or rearrangement, by or against Tenant and such filing not being dismissed within sixty (60) days, (3) the entry of an order for relief under any chapter of the Bankruptcy Code, or under any federal, state or foreign bankruptcy or insolvency statute now existing or hereafter enacted, (4) the appointment of a “custodian,” as such term is defined in the Bankruptcy Code (or of an equivalent thereto under any federal, state or foreign bankruptcy or insolvency statute now existing or hereafter enacted), for Tenant, or the appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease and possession not being restored to Tenant within sixty (60) days, or (5) the subjection of all or substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease to attachment, execution or other judicial seizure and such subjection not being discharged within sixty (60) days;

 

(ii)                                  the failure of Tenant, not less than thirty (30) days prior to the stated expiration date of the Letter of Credit then in effect, to cause an extension, renewal or replacement issuance of the Letter of Credit, to be effected, which extension, renewal or replacement issuance will be made by the L/C Bank, will otherwise meet all of the requirements of the initial Letter of Credit hereunder, which failure will be an Event of Default under this Lease;

 

(iii)                               the failure of Tenant to make when due any payment of Base Rent, of any monthly installment of any Additional Rent, or pay any other monetary obligation within three (3) business days after the amount is due; provided that in the event Tenant is entitled to a notice prior to the occurrence of an Event of Default for non-payment of Base Rent pursuant to Paragraph 18(a) this Draw Event shall not be deemed to have occurred until expiration of three (3) business days after that notice (or, if Landlord is prevented from giving notice by application of the bankruptcy code’s automatic stay, any failure of Tenant to make when due any payment of

 

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Base Rent, of any monthly installment of any Additional Rent, or to pay any other monetary obligation within five days after the amount is due).

 

(iv)                              the payment by Landlord of any sum to cure a failure by Tenant to comply with any non-monetary obligation hereunder which Tenant has not cured within thirty (30) days after notice thereof by Landlord (or, if Landlord is prevented from giving notice by application of the bankruptcy code’s automatic stay, the payment of Landlord of any sum to cure a failure by Tenant to comply with any non-monetary obligation hereunder that Tenant has not cured within thirty (30) days from the date of the breach).

 

“Draw Proceeds” means the proceeds of any draw or draws made by Landlord under the Letter of Credit, together with any and all interest accruing thereon.

 

“L/C Bank” means any United States bank which is approved by Landlord in Landlord’s sole discretion.

 

“Letter of Credit” means that certain one-year irrevocable letter of credit, in the Letter of Credit Required Amount, issued by the L/C Bank, as required under Paragraph 26(b) and, if applicable, as extended, renewed, replaced or modified from time to time in accordance with this Lease, which letter of credit will be transferable and in substantially the same form as attached Exhibit E.  Without limiting any of Landlord’s rights or Tenant’s obligations under this Paragraph 26, it is agreed that Tenant shall have the right to fulfill the requirement of providing Landlord with a Letter of Credit by causing the L/C Bank to issue two (2) Letters of Credit whose sum equals in the Letter of Credit Required Amount, each of which Letters of Credit shall be in the required format and fulfill all requirements of this Paragraph 26.

 

(e)                                  Transfer of Letter of Credit.  The Letter of Credit shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Premises and the Building and in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the Letter of Credit and/or the Draw Proceeds to the transferee or mortgagee, and in such event, Tenant shall look solely to such transferee or mortgagee for return of the Letter of Credit and/or the Draw Proceeds so transferred. Tenant shall pay all fees and charges of the L/C Bank with respect to any transfer of the Letter of Credit. Tenant shall, within five (5) days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm Landlord’s transfer or assignment of the Letter of Credit and/or the Draw Proceeds to such transferee or mortgagee.

 

(f)                                   Letter of Credit is Not Security Deposit.  Landlord and Tenant acknowledge and agree that in no event or circumstance shall the Letter of Credit, any renewal thereof or substitute therefor or the proceeds thereof be (i) deemed to be or treated as a “security deposit” within the meaning of California Civil Code Section 1950.7, (ii) subject to the terms of such Section 1950.7, or (iii) intended to serve as a “security deposit” within the meaning of such Section 1950.7. The parties hereto (A) recite that the Letter of Credit is not intended to serve as a security deposit and such Section 1950.7 and any and all other laws, rules and regulations applicable to security deposits in the commercial context (“Security Deposit Laws”) shall have no applicability or relevancy thereto and (B) waive any and all rights, duties and obligations

 

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either party may now or, in the future, will have relating to or arising from the Security Deposit Laws. Notwithstanding the foregoing, to the extent California Civil Code 1950.7 in any way: (1) is determined to be applicable to this Lease or the Letter of Credit (or any proceeds thereof); or (2) controls Landlord’s rights to draw on the Letter of Credit or apply the proceeds of the Letter of Credit to any amounts due under this Lease or any damages Landlord may suffer following termination of this Lease, then Tenant full and irrevocably waives the benefits and protections of Section 1950.7 of the California Civil Code, it being agreed that Landlord may recover from the Letter of Credit (or its proceeds) all of Landlord’s damages under this Lease and California law including, but not limited to, any damages accruing upon the termination of this Lease in accordance with this Lease and Section 1951.2 of the California Civil Code.

 

(g)                                  Substitute Letter of Credit.  In the event the L/C Bank is declared insolvent by the FDIC or is closed for any reason, Tenant shall immediately provide a substitute Letter of Credit meeting the requirements of this Paragraph 26 from another United States bank which is approved by Landlord in Landlord’s sole discretion.

 

27.                          [INTENTIONALLY OMITTED]

 

28.                          TENANT’S RIGHT OF FIRST NOTIFICATION

 

(a)                                 Landlord shall give Tenant a written notice (this Paragraph 28, the “Availability Notice”) from time to time when Landlord first determines that Other Space (as defined below) will become Available (as defined in this Paragraph 28). As used in this Paragraph 28, “Other Space” means all leasable space on the third (3rd) and fourth (4th) floors of the Building other than the Premises. As used herein, “Available” means that the space (i) is not part of the Premises, (ii) is not then subject to a lease, (iii) is not then subject to any rights of tenant to renew their lease or expand their premises as set forth in their lease, and (iv) was not subject to any negotiations between Landlord and a prospective tenant or an existing tenant.

 

(b)                                 Landlord is only obligated to give an Availability Notice once as to any specific Other Space; provided that if Landlord leases any Other Space after Tenant has received an Availability Notice and that space again becomes Available after the expiration of that lease, then Landlord shall again give Tenant an Availability Notice with respect to that Other Space after that space again becomes Available.

 

(c)                                  Tenant’s rights and Landlord’s obligations under this Paragraph 28 are expressly subject to and conditioned upon there not existing an Event of Default by Tenant under this Lease at the time of delivery of an Availability Notice.

 

(d)                                 It is understood and agreed that Tenant’s rights under this Paragraph 28 are personal to Tenant and not transferable. In the event of any assignment or subletting of the Premises or any part thereof, this expansion right shall automatically terminate and shall thereafter be null and void.

 

29.                               PERSONAL PROPERTY.

 

(a)                                 Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord, the Personal Property listed on Exhibit F hereto, if any (the “Included Personal Property”).

 

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(b)                                 Tenant shall:

 

(1)                                 accept the Included Personal Property in its “as is” condition as of the date hereof, as the same may be affected by reasonable wear and tear after the date hereof,

 

(2)                                 insure the Included Personal Property against loss or damage by fire or other casualty (and all of the provisions of this Lease applicable to insurance required to be carried by Tenant shall be applicable thereto),

 

(3)                                 surrender the Included Personal Property to Landlord in the Premises upon the expiration or sooner termination of this Lease in the same condition as at the commencement of this Lease, as the same may be affected by reasonable wear and tear or damage by fire or other casualty; provided, however, that if the Included Personal Property shall have been damaged by fire or other casualty and not repaired or replaced then upon such expiration or sooner termination Tenant shall pay to Landlord the full replacement cost thereof.

 

(c)                                  No later than ten (10) days after the delivery of possession of each portion of the Premises to Tenant, representatives of Landlord and Tenant shall jointly walk through the applicable portion of the Premises to confirm the inventory on Exhibit F and make any revisions thereto necessary to conform it to the actual items located therein.

 

30.                               GUARANTY. Tenant will deliver to Landlord, concurrently with Tenant’s execution and delivery of this Lease, a guaranty agreement in the form attached as Exhibit G hereto duly executed by the Guarantor listed in the Summary of Lease Terms (such guaranty agreement being referred to as the “Guaranty”). Tenant acknowledges that Landlord would not enter into this Lease with Tenant on the terms contained herein without the credit support provided by the Guaranty. Tenant covenants and agrees to maintain the Guaranty in full force and effect at all times during the Term; provided that this duty shall not be required of any subtenant of all or a portion of the Premises, notwithstanding anything contained in Paragraph 12 of this Lease to the contrary. If, to Tenant’s actual knowledge, Guarantor becomes insolvent or otherwise unable to perform under its Guaranty, or if any event of default occurs under the Guaranty, Tenant will give Landlord prompt notice thereof. Tenant will take such actions as Landlord may request to obtain a cure of the Guaranty default and/or to replace such Guaranty with additional security satisfactory to Landlord (which may include, in Landlord’s discretion, additional guaranties, security deposits, letters of credit, or other security) sufficient to provide Landlord with credit enhancement for this Lease at least equivalent in value to that provided when the Lease was entered into by the parties.

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this Lease as of the day and year first above written.

 

	
 
    	
LANDLORD:
    
	
 
    	
 
    
	
 
    	
PRU/SKS BRANNAN ASSOCIATES, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By
    	
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey   corporation, its Managing Member
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Kristin Paul
    
	
 
    	
 
    	
Its:
    	
Kristin Paul 
    
	
 
    	
 
    	
 
    	
Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TENANT:
    
	
 
    	
 
    
	
 
    	
INMOBI INC., a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Naveen Tawari
    
	
 
    	
Its:
    	
Naveen Tawari, CEO
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Its:
    	
 
    

 

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EXHIBIT A-1

 

SUITES 310/410 PREMISES FLOOR PLAN

 

(See Attached)

 

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EXHIBIT A-1

 

 

 

EXHIBIT A-1

 

 

 

EXHIBIT A-2

 

SUITE 420 PREMISES FLOOR PLAN

 

(See Attached)

 

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EXHIBIT B

 

BUILDING RULES AND REGULATIONS

 

1.                                      Sidewalks, halls, passages, exits, entrances, elevators, escalators and stairways shall not be obstructed by tenants or used by them for any purpose other than for ingress to and egress from their respective premises. The halls, passages, exits, entrances, elevators, escalators and stairways are not for the use of the general public and Landlord shall in all cases retain the right to control and prevent access thereto by all persons whose presence, in the judgment of Landlord, would be prejudicial to the safety, character, reputation and interests of the Building and its tenants.

 

2.                                      No sign, placard, picture, name, advertisement or notice, visible from the exterior of leased premises shall be inscribed, painted, affixed or otherwise displayed by any tenant either on its premises or any part of the Building without the prior written consent of Landlord, and Landlord shall have the right to remove any such sign, placard, picture, name, advertisement, or notice without notice to and at the expense of the tenant.

 

If Landlord shall have given such consent to any tenant at any time, whether before or after the execution of the Lease, such consent shall in no way operate as a waiver or release of any of the provisions hereof or of such Lease, and shall be deemed to relate only to the particular sign, placard, picture, name, advertisement or notice so consented to by Landlord and shall not be construed as dispensing with the necessity of obtaining the specific written consent of Landlord with respect to any other such sign, placard, picture, name, advertisement or notice.

 

No signs will be permitted on any entry door unless the door is glass. All glass door signs must be approved by Landlord. Signs or lettering shall be printed, painted, affixed or inscribed at the expense of the tenant by a person approved by Landlord.

 

3.                                      The bulletin board or directory of the Building will be provided exclusively for the display of the name and location of tenants only, and Landlord reserves the right to exclude any other names therefrom. Landlord reserves the right to restrict the amount of directory space utilized by Tenant.

 

4.                                      No curtains, draperies, blinds, shutters, shades, screens or other coverings, hangings or decorations shall be attached to, hung or placed in, or used in connection with, any window on any premises without the prior written consent of Landlord. In any event, with the prior written consent of Landlord, all such items shall be installed inside of Landlord’s standard draperies and shall in no way be visible from the exterior of the Building. No articles shall be placed or kept on the window sills so as to be visible from the exterior of the Building.

 

5.                                      Landlord reserves the right to exclude from the Building between the hours of 7 P.M. and 7 A.M. and at all hours on Saturdays, Sundays and holidays all persons who do not present a pass to the Building signed by Landlord. Landlord will furnish passes to persons for whom any tenant requests the same in writing. Each tenant shall be responsible for all persons for whom it requests passes and shall be liable to Landlord for all acts of such persons.

 

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Landlord shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Building of any person.

 

During any invasion, mob, riot, public excitement or other circumstance rendering such action advisable in Landlord’s opinion, Landlord reserves the right to prevent access to the Building by closing the doors, or otherwise, for the safety of tenants and protection of the Building and property in the Building.

 

6.                                      No tenant shall employ any person or persons other than the janitor of Landlord for the purpose of cleaning the premises unless otherwise agreed to by Landlord in writing. Except with the written consent of Landlord, no person or persons other than those approved by Landlord shall be permitted to enter the Building for the purpose of cleaning the same. No tenant shall cause any unnecessary labor by reason of such tenant’s carelessness or indifference in the preservation of good order and cleanliness. Landlord shall in no way be responsible to any tenant for any loss of property on the premises, however occurring, or for any damage done to the property of any tenant by the janitor or any other employee or any other person. Janitorial service shall include ordinary dusting and cleaning by the janitor assigned to such work and shall not include beating or cleaning of carpets or rugs or moving of furniture or other special services. Janitorial service will not be furnished on nights when rooms are occupied after 9:30 p.m. Window cleaning shall be done only by Landlord, and at such intervals and such hours as Landlord shall deem appropriate.

 

7.                                      No tenant shall obtain for use upon its premises towel or other similar services, or accept barbering or bootblacking services in its premises, except from persons authorized by Landlord, and at hours and under regulations fixed by Landlord.

 

8.                                      Each tenant shall see that the doors of its premises are closed and securely locked and must observe strict care and caution that all water faucets or water apparatus are entirely shut off before the tenant or its employees leave such premises, and that all utilities shall likewise be carefully shut off, so as to prevent waste or damage, and for any default or carelessness the Tenant shall make good all injuries sustained by other tenants or occupants of the Building or Landlord. On multiple-tenancy floors all tenants shall keep the door or doors to the Building corridors closed at all times except for ingress and egress.

 

9.                                      No tenant shall alter any lock or install a new or additional lock or any bolt on any door of its premises without the prior written consent of Landlord. If Landlord shall give its consent, the tenant shall in each case furnish Landlord with a key for any such lock.

 

10.                               Landlord will furnish Tenant without charge two (2) keys to each door lock provided in the Premises by Landlord. Landlord may make a reasonable charge for any additional keys. Tenant shall not have any such keys copied or any keys made. Each tenant, upon the termination of the tenancy, shall deliver to Landlord all the keys of or to the Building, offices, rooms and toilet rooms that shall have been furnished to the Tenant or that the Tenant shall have had made. In the event of the loss of any keys so furnished by Landlord, Tenant shall pay Landlord therefor.

 

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11.                               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 thrown therein, and the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the tenant who, or whose employees or invitees, shall have caused it.

 

12.                               No tenant shall use or keep in its premises or the Building any kerosene, gasoline or inflammable or combustible fluid or material or use any method of heating or air conditioning other than that supplied by Landlord.

 

13.                               No tenant shall use, keep or permit to be used or kept in its premises any foul or noxious gas or substance or permit or suffer such 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 and/or vibrations or interfere in any way with other tenants or those having business therein. No animals or birds shall be brought or kept in or about any premises or the Building; provided that Tenant’s employees may bring dogs into the Building so long as the dogs and their owners meet and comply with the requirements of the rules and regulations therefor established from time-to-time by Landlord in Landlord’s sole and absolute discretion, including without limitation the requirement that the dog owner execute Landlord’s form of indemnification agreement each time it brings a dog into the Building.

 

14.                               No cooking shall be done or permitted by any tenant on its premises, except that the preparation of coffee, tea, hot chocolate and similar items for tenants and their employees shall be permitted, nor shall such premises be used for lodging.

 

15.                               Except with the prior written consent of Landlord, no tenant shall sell, or permit the sale, at retail of newspapers, magazines, periodicals, theater tickets or any other goods or merchandise in or on any premises, nor shall any tenant carry on, or permit or allow any employee or other person to carry on, the business of stenography, typewriting or any similar business in or from any premises for the service or accommodation of occupants of any other portion of the Building, nor shall the premises of any tenant be used for the storage of merchandise or for manufacturing of any kind, or the business of a public barber shop, beauty parlor, or any business or activity other than that specifically provided for in such tenant’s lease.

 

16.                               Landlord will direct electricians as to where and how telephone, telegraph and electrical wires are to be introduced or installed. No boring or cutting for wires will be allowed without the prior written consent of Landlord. The location of telephones, call boxes and other office equipment affixed to all premises shall be subject to the written approval of Landlord. All electrical appliances must be grounded and must meet UL Label Standards.

 

17.                               No tenant shall install any radio or television antenna, loudspeaker or any other device on the exterior walls or roof of the Building.

 

18.                               No tenant shall lay linoleum, tile, carpet or any other floor covering so that the same shall be affixed to the floor of its premises in any manner except as approved in writing by Landlord. The expense of repairing any damage resulting from a violation of this rule or the

 

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removal of any floor covering shall be borne by the tenant by whom, or by whose contractors, employees or invitees, the damage shall have been caused.

 

19.                               No furniture, freight, equipment, packages or merchandise shall be received in the Building or carried up or down the elevators, except between such hours, through such entrances and in such elevators as shall be designated by Landlord. Landlord reserves the right to require that moves be scheduled and carried out during non-business hours of the Building. Landlord shall have the right to prescribe the weight, size and position of all safes and other heavy equipment brought into the Building. Safes or other heavy objects shall, if considered necessary by Landlord, stand on wood strips of such thickness as is necessary to properly distribute the weight thereof. Landlord will not be responsible for loss of or damage to any such safe or property from any cause, and all damage done to the Building by moving or maintaining any such safe or other property shall be repaired at the expense of the tenant.

 

20.                               No tenant shall overload the floor of its premises or mark, or drive nails, screw or drill into, the partitions, woodwork or plaster or in any way deface such premises or any part thereof.

 

21.                               There shall not be used in any space, or in the public areas of the Building, either by any tenant or others, any hand trucks except those equipped with rubber tires and side guards. No other vehicles of any kind shall be brought by any tenant into or kept in or about any premises in the Building.

 

22.                               Each tenant shall store all its trash and garbage within the interior of its premises. No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash and garbage in the City of San Francisco without violation of any law or ordinance governing such disposal. All trash, garbage and refuse disposal shall be made only through entryways and elevators provided for such purposes and at such times as Landlord shall designate.

 

23.                               Tenant agrees not to employ any person, entity or contractor for any work in the Premises (including moving Tenant’s equipment and furnishings in, out of or around the Premises) whose presence may give rise to a labor or other disturbance in the Building, and, if necessary to prevent such a disturbance in a particular situation, Landlord may require Tenant to employ union labor for the work.

 

24.                               Canvassing, soliciting, distribution of handbills and other written materials and peddling in the Building are prohibited and each tenant shall cooperate to prevent the same.

 

25.                               Landlord shall have the right, exercisable without notice and without liability to any tenant, to change the name and address of the Building.

 

26.                               The requirements of tenants will be attended to only upon application at the office of the Building. Employees of Landlord shall not perform any work or do anything outside of their regular duties unless under special instructions from Landlord, and no employee will admit any person (tenant or otherwise) to any office without specific instructions from Landlord.

 

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27.                               Landlord may waive any one or more of these Rules and Regulations for the benefit of any particular tenant or tenants, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of any other tenant or tenants, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all tenants of the Building.

 

28.                               These Rules and Regulations may be changed from time to time, as Landlord may in good faith deem appropriate and necessary to the efficient, safe, and orderly operation of the Building and the Real Property, and are in addition to, and shall not be construed to in any way modify, alter or amend, in whole or in part, the terms, covenants and conditions of the Lease.

 

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EXHIBIT C

 

TENANT WORK LETTER

 

This Tenant Work Letter (“Tenant Work Letter”) shall set forth the terms and conditions relating to the construction of the Premises. All references in this Tenant Work Letter to “the Lease” shall mean the relevant portions of the Lease to which this Tenant Work Letter is attached as Exhibit C.

 

SECTION 1

 

BASE, SHELL AND CORE

 

Landlord has previously constructed the base, shell, and core (i) of the Premises and (ii) of the floor(s) of the Building on which the Premises are located (collectively, the “Base, Shell, and Core”), and Tenant shall accept the Base, Shell and Core and the Premises and any other existing systems and improvement in the Premises in their current “As-Is” condition existing as of the date of the Lease and the Commencement Date. Tenant shall install in the Premises certain “Tenant Improvements” (as defined below) pursuant to the provisions of this Tenant Work Letter. Except for Landlord’s obligation to disburse the Tenant Improvement Allowance as described below, Landlord shall not be obligated to make or pay for any alterations or improvements to the Premises, the Building or the Real Property.

 

SECTION 2

 

TENANT IMPROVEMENTS

 

2.1                               Tenant Improvement Allowance. Tenant shall be entitled to a one-time tenant improvement allowance (the “Tenant Improvement Allowance”) in the amount of up to, but not exceeding $442,400.00, for costs relating to the design and construction of the improvements made pursuant to this Tenant Work Letter which are permanently affixed to or placed within the Premises (the “Tenant Improvements”); provided, however, that Landlord shall have no obligation to disburse all or any portion of the Tenant Improvement Allowance to Tenant unless Tenant makes a request for disbursement pursuant to the terms and conditions of Section 2.2 below prior to that date which the earlier of (a) the date is six (6) months after the completion of construction and (b) the date which is twelve (12) months after the Commencement Date. In no event shall Landlord be obligated to make disbursements to or on behalf of Tenant pursuant to this Tenant Work Letter in a total amount which exceeds the Tenant Improvement Allowance. Tenant shall not be entitled to receive any cash payment or credit against Rent or otherwise for any unused portion of the Tenant Improvement Allowance which is not used to pay for the Tenant Improvement Allowance Items (as such term is defined below). Notwithstanding anything to the contrary this Tenant Work Letter, the portion of the Tenant Improvement Allowance disbursed for the Tenant Improvement Allowance Items described in Sections 2.2.1.1 and 2.2.1.8 shall not exceed in the aggregate $5.00 per rentable square foot of the Premises (i.e., up to $196,860.00 based on 39,372 rentable square feet in the Premises). In no event shall the Tenant Improvement Allowance be used for purposes of constructing

 

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improvements in the Premises for purposes of offering space for sublease or for the benefit of a subtenant.

 

2.2                               Disbursement of the Tenant Improvement Allowance.

 

2.2.1                     Tenant Improvement Allowance Items. Except as otherwise set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by Landlord only for the following items and costs (collectively, the “Tenant Improvement Allowance Items”):

 

2.2.1.1           Payment of the fees of the “Architect” and the “Engineers,” as those terms are defined in Section 3.1 of this Tenant Work Letter and payment of the fees incurred by, and the cost of documents and materials supplied by, Landlord and Landlord’s consultants in connection with the preparation and review of the “Construction Drawings,” as that term is defined in Section 3.1 of this Tenant Work Letter;

 

2.2.1.2           The payment of plan check, permit and license fees relating to construction of the Tenant Improvements;

 

2.2.1.3           The cost of construction of the Tenant Improvements, including, without limitation, contractors’ fees and general conditions, testing and inspection costs, costs of utilities, trash removal, parking and hoists, and the costs of after-hours freight elevator usage.

 

2.2.1.4           The cost of any changes in the Base, Shell and Core work when such changes are required by the Construction Drawings (including if such changes are due to the fact that such work is prepared on an unoccupied basis), such cost to include all direct architectural and/or engineering fees and expenses incurred in connection therewith;

 

2.2.1.5           The cost of any changes to the Construction Drawings or Tenant Improvements required by applicable laws and building codes (collectively, “Code”);

 

2.2.1.6           Sales and use taxes and Title 24 fees;

 

2.2.1.7           The “Coordination Fee,” as that term is defined in Section 4.2.2.2 of this Tenant Work Letter;

 

2.2.1.8           Cost of furniture, fixtures and equipment installed in the Premises; and

 

2.2.1.9           All other costs to be expended by Landlord in connection with the construction of the Tenant Improvements.

 

2.2.2                     Disbursement of Tenant Improvement Allowance. Subject to Section 2.1 above, during the construction of the Tenant Improvements, Landlord shall make monthly disbursements of the Tenant Improvement Allowance for Tenant Improvement Allowance Items for the benefit of Tenant and shall authorize the release of monies for the benefit of Tenant as follows:

 

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2.2.2.1           Monthly Disbursements. On or before the first (1st) day of each calendar month during the construction of the Tenant Improvements (or such other date as Landlord may designate), Tenant shall deliver to Landlord: (i) a request for payment of the “Contractor,” as that term is defined in Section 4.1 below, approved by Tenant, in a form to be provided by Landlord, showing the schedule, by trade, of percentage of completion of the Tenant Improvements in the Premises, detailing the portion of the work completed and the portion not completed, and demonstrating that the relationship between the cost of the work completed and the cost of the work to be completed complies with the terms of the “Construction Budget,” as that term is defined in Section 4.2.1 below; (ii) invoices from all of “Tenant’s Agents,” as that term is defined in Section 4.1.2 below, for labor rendered and materials delivered to the Premises; (iii) executed mechanic’s lien releases from all of Tenant’s Agents which shall comply with the appropriate provisions, as reasonably determined by Landlord, of California Civil Code Section 3262(d); and (iv) all other information reasonably requested by Landlord. On or before the fifth (5th) day of the following calendar month, Landlord shall deliver a check to Tenant made jointly payable to Contractor and Tenant in payment of the lesser of (A) Landlord’s Percentage Share of the amounts so requested by Tenant, as set forth in this Section 2.2.2.1, above, less a Landlord’s Percentage Share of ten percent (10%) retention (the aggregate amount of such retentions to be known as the “Final Retention”) and (B) the balance of any remaining available portion of the Tenant Improvement Allowance (not including the Final Retention), provided that Landlord does not dispute any request for payment based on non-compliance of any work with the “Approved Working Drawings”, as that term is defined in Section 3.4 below, or due to any substandard work, or for any other reason. For purposes of this Tenant Work Letter, “Landlord’s Percentage Share” shall be calculated by dividing the amount of the Tenant Improvement Allowance by the estimated budget for the Tenant Improvements (including any change orders) as prepared by Tenant and reasonably approved by Landlord from time to time, and shall in no event exceed one hundred percent (100%). Within twenty (20) days after Tenant’s delivery to Landlord of the items described in clauses (i) through (iv), Tenant shall pay the balance of the amounts requested by Tenant (less the remaining balance of the retention), and shall provide Landlord with written evidence of that payment. Landlord’s payment of such amounts shall not be deemed Landlord’s approval or acceptance of the work furnished or materials supplied as set forth in Tenant’s payment request.

 

2.2.2.2           Final Retention. Subject to the provisions of this Tenant Work Letter, a check for the Final Retention payable jointly to Tenant and Contractor shall be delivered by Landlord to Tenant following the completion of construction of the Premises, provided that (i) Tenant delivers to Landlord properly executed mechanics lien releases in compliance with both California Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or Section 3262(d)(4), and (ii) Landlord has determined that no substandard work exists which adversely affects the mechanical, electrical, plumbing, heating, ventilating and air conditioning, life-safety or other systems of the Building, the curtain wall of the Building, the structure or exterior appearance of the Building, or any other tenant’s use of such other tenant’s leased premises in the Building.

 

2.2.2.3           Other Terms. Landlord shall only be obligated to make disbursements from the Tenant Improvement Allowance to the extent costs are incurred by Tenant for Tenant Improvement Allowance Items.

 

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2.2.3                     Specifications for Building Standard Components. Landlord has established specifications (the “Specifications”) for the Building standard components to be used in the construction of the Tenant Improvements in the Premises which Specifications have been received by Tenant. Unless otherwise agreed to by Landlord, the Tenant Improvements shall comply with the Specifications. Landlord may make changes to the Specifications from time to time.

 

SECTION 3

 

CONSTRUCTION DRAWINGS

 

3.1                               Selection of Architect/Construction Drawings. Tenant shall retain the architect/space planner (the “Architect”) approved by Landlord, which approval shall not be unreasonably withheld, to prepare the Construction Drawings. Tenant shall retain the engineering consultants designated by Landlord (the “Engineers”) to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the Premises. The plans and drawings to be prepared by Architect and the Engineers hereunder shall be known collectively as the “Construction Drawings.” All Construction Drawings shall comply with the drawing format and specifications reasonably determined by Landlord, and shall be subject to Landlord’s approval; provided that Landlord shall not unreasonably withhold its approval. Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the base building plans, and Tenant and Architect shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith. Landlord’s review of the Construction Drawings as set forth in this Section 3, shall be for its sole purpose and shall not imply Landlord’s review of the same, or obligate Landlord to review the same, for quality, design, Code compliance or other like matters. Accordingly, notwithstanding that any Construction Drawings are reviewed by Landlord or its space planner, architect, engineers and consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord’s space planner, architect, engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith and shall not be responsible for any omissions or errors contained in the Construction Drawings.

 

3.2                               Final Space Plan. Tenant shall supply Landlord with four (4) copies signed by Tenant of its final space plan for the Premises before any architectural working drawings or engineering drawings have been commenced. The final space plan (the “Final Space Plan”) shall include a layout and designation of all offices, rooms and other partitioning, their intended use, and equipment to be contained therein. Landlord may request clarification or more specific drawings for special use items not included in the Final Space Plan. Landlord shall advise Tenant within five (5) days after Landlord’s receipt of the Final Space Plan for the Premises if the same is unsatisfactory or incomplete in any respect. If Tenant is so advised, Tenant shall promptly (i) cause the Final Space Plan to be revised to correct any deficiencies or other matters Landlord may reasonably require, and (ii) deliver such revised Final Space Plan to Landlord.

 

3.3                               Final Working Drawings. After the Final Space Plan has been approved by Landlord and Tenant, Tenant shall promptly cause the Architect and the Engineers to

 

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complete the architectural and engineering drawings for the Premises, and cause the Architect to compile a fully coordinated set of architectural, structural, mechanical, electrical and plumbing working drawings in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable permits for the Tenant Improvements (collectively, the “Final Working Drawings”), and shall submit the same to Landlord for Landlord’s approval. Tenant shall supply Landlord with four (4) copies signed by Tenant of such Final Working Drawings. Landlord shall advise Tenant within five (5) days after Landlord’s receipt of the Final Working Drawings for the Premises if the same is unsatisfactory or incomplete in any respect. If Tenant is so advised, Tenant shall promptly (i) revise the Final Working Drawings in accordance with such review and any disapproval of Landlord in connection therewith, and (ii) deliver such revised Final Working Drawings to Landlord.

 

3.4                               Approved Working Drawings. The Final Working Drawings shall be approved by Landlord (the “Approved Working Drawings”) prior to the commencement of construction of the Premises by Tenant. After approval by Landlord of the Final Working Drawings, Tenant shall promptly submit the same to the appropriate governmental authorities for all applicable building permits. Tenant hereby agrees that neither Landlord nor Landlord’s consultants shall be responsible for obtaining any building permit or certificate of occupancy for the Premises and that obtaining the same shall be Tenant’s responsibility; provided, however, that Landlord shall cooperate with Tenant in executing permit applications and performing other ministerial acts reasonably necessary to enable Tenant to obtain any such permit or certificate of occupancy. No changes, modifications or alterations in the Approved Working Drawings may be made without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed.

 

3.5                               Design Problem. Notwithstanding anything to the contrary in this Tenant Work Letter, Landlord shall be deemed to have acted reasonably in disapproving plans or designs if Landlord determines in good faith that the matter disapproved constitutes or would create a Design Problem (as defined below). As used herein, a “Design Problem” shall mean (i) adverse effect on the structural integrity of the Building; (ii) possible damage to the Building’s systems; (iii) non-compliance with applicable codes; (iv) adverse effect on the exterior appearance of the Building; (v) creation of the potential for unusual expenses to be incurred upon the removal of the alteration or improvement and the restoration of the Premises upon termination of this Lease, unless Tenant agrees to pay for the incremental removal costs caused by the non-typical alterations; (vi) creation of the potential for unusual expenses to be incurred in connection with the maintenance by Landlord of the alteration or improvement, unless Tenant agrees to pay for the incremental maintenance costs caused by the non-typical alterations, or (vii) a material effect any other tenant or occupant of the Building.

 

SECTION 4

 

CONSTRUCTION OF THE TENANT IMPROVEMENTS

 

4.1                               Tenant’s Selection of Contractor and Tenant’s Agents.

 

4.1.1                     The Contractor. A general contractor shall be retained by Tenant to construct the Tenant Improvements. Such general contractor (“Contractor”) shall be selected

 

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by Tenant from the following list of general contractors, and Tenant shall deliver to Landlord notice of its selection of the Contractor upon such selection: Principal and NOVO.

 

4.1.2                     Tenant’s Agents. All subcontractors, laborers, materialmen, and suppliers used by Tenant (such subcontractors, laborers, materialmen, and suppliers, and the Contractor to be known collectively as “Tenant’s Agents”) must be approved in writing by Landlord, which approval shall not be unreasonably withheld or delayed; provided that, in any event, Tenant must contract with Landlord’s base building subcontractors for any mechanical, electrical, plumbing, life safety, structural, heating, ventilation, and air-conditioning work in the Premises. If requested by Landlord, Tenant’s Agents shall all be union labor in compliance with the master labor agreements existing between trade unions and the local chapter of the Associated General Contractors of America.

 

4.2                               Construction of Tenant Improvements by Tenant’s Agents.

 

4.2.1                     Construction Contract. Prior to Tenant’s execution of the construction contract and general conditions with Contractor (the “Contract”), Tenant shall submit the Contract to Landlord for its approval, which approval shall not be unreasonably withheld or delayed. Prior to the commencement of the construction of the Tenant Improvements, and after Tenant has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord with a written detailed cost breakdown by trade, of the final costs to be incurred, or which have been incurred, as set forth more particularly in Section 2.2.1.1 through 2.2.1.8 above, in connection with the design and construction of the Tenant Improvements to be performed by or at the direction of Tenant or the Contractor which costs form a basis for the amount of the Contract.

 

4.2.2                     Tenant’s Agents.

 

4.2.2.1           Landlord’s General Conditions for Tenant’s Agents and Tenant Improvement Work. Tenant’s and Tenant’s Agents’ construction of the Tenant Improvements shall comply with the following: (i) the Tenant Improvements shall be constructed in strict accordance with the Approved Working Drawings; (ii) Tenant and Tenant’s Agents shall not, in any way, interfere with, obstruct, or delay, the work of Landlord’s base building contractor and subcontractors with respect to the Base, Shell and Core or any other work in the Building; (iii) Tenant’s Agents shall submit schedules of all work relating to the Tenant’s Improvements to Contractor and Contractor shall, within five (5) business days of receipt thereof, inform Tenant’s Agents of any changes which are necessary thereto, and Tenant’s Agents shall adhere to such corrected schedule; and (iv) Tenant shall abide by all rules made by Landlord’s Building contractor or Landlord’s Building manager with respect to the use of freight, loading dock and service elevators, storage of materials, coordination of work with the contractors of other tenants, and any other matter in connection with this Tenant Work Letter, including, without limitation, the construction of the Tenant Improvements.

 

4.2.2.2           Coordination Fee. Tenant shall pay a logistical coordination fee (the “Coordination Fee”) to Landlord in an amount equal to the product of (i) five percent (5%), and (ii) the sum of the Tenant Improvement Allowance, the Over-Allowance Amount, as such amount may be increased hereunder, and any other amounts

 

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expended by Tenant in connection with the design and construction of the Tenant Improvements, which Coordination Fee shall be for services relating to the coordination of the construction of the Tenant Improvements.

 

4.2.2.3           Indemnity. Tenant’s indemnity of Landlord as set forth in the Lease shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to any act or omission of Tenant or Tenant’s Agents, or anyone directly or indirectly employed by any of them, or in connection with Tenant’s non-payment of any amount arising out of the Tenant Improvements and/or Tenant’s disapproval of all or any portion of any request for payment. Such indemnity by Tenant, as set forth in the Lease, shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to Landlord’s performance of any ministerial acts reasonably necessary (i) to permit Tenant to complete the Tenant Improvements, and (ii) to enable Tenant to obtain any building permit or certificate of occupancy for the Premises.

 

4.2.2.4           Insurance Requirements.

 

4.2.2.4.1  General Coverages. All of Tenant’s Agents shall carry worker’s compensation insurance covering all of their respective employees, and shall also carry public liability insurance, including property damage, all with limits, in form and with companies as are required to be carried by Tenant as set forth in the Lease.

 

4.2.2.4.2  Special Coverages. Tenant shall carry “Builder’s All Risk” insurance in an amount approved by Landlord covering the construction of the Tenant Improvements, and such other insurance as Landlord may require, it being understood and agreed that the Tenant Improvements shall be insured by Tenant pursuant to the Lease immediately upon completion thereof. Such insurance shall be in amounts and shall include such extended coverage endorsements as may be reasonably required by Landlord, and in form and with companies as are required to be carried by Tenant as set forth in the Lease.

 

4.2.2.4.3  General Terms. Certificates for all insurance carried pursuant to this Section 4.2.2.4 shall be delivered to Landlord before the commencement of construction of the Tenant Improvements and before the Contractor’s equipment is moved onto the site. All such policies of insurance must contain a provision that the company writing said policy will give Landlord thirty (30) days prior written notice of any cancellation or lapse of the effective date or any reduction in the amounts of such insurance. In the event that the Tenant Improvements are damaged by any cause during the course of the construction thereof, Tenant shall immediately repair the same at Tenant’s sole cost and expense. All policies carried under this Section 4.2.2.4 shall insure Landlord and Tenant, as their interests may appear, as well as Contractor and Tenant’s Agents, and shall name as additional insureds Landlord’s Property Manager, Landlord’s Asset Manager, and all mortgagees and ground lessors of the Building. All insurance, except Workers’ Compensation, maintained by Tenant’s Agents shall preclude subrogation claims by the insurer against anyone insured thereunder. Such insurance shall provide that it is primary insurance as respects the owner and that any other insurance maintained by owner is excess and noncontributing with the insurance required hereunder. The requirements for the foregoing insurance shall not derogate from the provisions for indemnification of Landlord by Tenant under Section 4.2.2.3 of this Tenant Work Letter.

 

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4.2.3       Governmental Compliance. The Tenant Improvements shall comply in all respects with the following: (i) the Code and other state, federal, city or quasi-governmental laws, codes, ordinances and regulations, as each may apply according to the rulings of the controlling public official, agent or other person; (ii) applicable standards of the American Insurance Association (formerly, the National Board of Fire Underwriters) and the National Electrical Code; and (iii) building material manufacturer’s specifications.

 

4.2.4       Inspection by Landlord. Landlord shall have the right to inspect the Tenant Improvements at all times, provided however, that Landlord’s failure to inspect the Tenant Improvements shall in no event constitute a waiver of any of Landlord’s rights hereunder nor shall Landlord’s inspection of the Tenant Improvements constitute Landlord’s approval of the same. Should Landlord disapprove any portion of the Tenant Improvements, Landlord shall notify Tenant in writing of such disapproval and shall specify the items disapproved. Any defects or deviations in, and/or disapproval by Landlord of, the Tenant Improvements shall be rectified by Tenant at no expense to Landlord, provided however, that in the event Landlord determines that a defect or deviation exists or disapproves of any matter in connection with any portion of the Tenant Improvements and such defect, deviation or matter might adversely affect the mechanical, electrical, plumbing, heating, ventilating and air conditioning or life-safety systems of the Building, the structure or exterior appearance of the Building or any other tenant’s use of such other tenant’s leased premises, Landlord may, take such action as Landlord deems necessary, at Tenant’s expense and without incurring any liability on Landlord’s part, to correct any such defect, deviation and/or matter, including, without limitation, causing the cessation of performance of the construction of the Tenant Improvements until such time as the defect, deviation and/or matter is corrected to Landlord’s satisfaction.

 

4.2.5       Meetings. Commencing upon the execution of the Lease, Tenant shall hold weekly meetings at a reasonable time, with the Architect and the Contractor regarding the progress of the preparation of Construction Drawings and the construction of the Tenant Improvements, which meetings shall be held at the Building, and Landlord and/or its agents shall receive prior notice of, and shall have the right to participate in or attend, all such meetings, and, upon Landlord’s request, certain of Tenant’s Agents shall participate in or attend such meetings. In addition, if requested by Landlord, minutes shall be taken of all such meetings, a copy of which minutes shall be promptly delivered to Landlord. One such meeting each month shall include the review of Contractor’s current request for payment.

 

4.3          Notice of Completion; Copy of “As Built” Plans. Within ten (10) days after completion of construction of the Tenant Improvements, Tenant shall cause a Notice of Completion to be recorded in the office of the Recorder of the County in which the Building is located in accordance with Section 3093 of the Civil Code of the State of California or any successor statute, and shall furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do so, Landlord may execute and file the same on behalf of Tenant as Tenant’s agent for such purpose, at Tenant’s sole cost and expense. At the conclusion of construction, (i) Tenant shall cause the Architect and Contractor (A) to update the Approved Working Drawings as necessary to reflect all changes made to the Approved Working Drawings during the course of construction, (B) to certify to the best of their knowledge that the “record-set” of as-built drawings are true and correct, which certification shall survive the expiration or termination of the Lease, (C) to deliver to Landlord two (2) sets of sepias of such as-built drawings within

 

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ninety (90) days following issuance of a certificate of occupancy for the Premises, and (D) to deliver to Landlord a computer disk containing the Approved Working Drawings in AutoCAD format, and (ii) Tenant shall deliver to Landlord a copy of all warranties, guaranties, and operating manuals and information relating to the improvements, equipment, and systems in the Premises.

 

4.4          Coordination by Tenant’s Agents with Landlord. Upon Tenant’s delivery of the Contract to Landlord under Section 4.2.1 of this Tenant Work Letter, Tenant shall furnish Landlord with a schedule setting forth the projected date of the completion of the Tenant Improvements and showing the critical time deadlines for each phase, item or trade relating to the construction of the Tenant Improvements.

 

SECTION 5

 

MISCELLANEOUS

 

5.1          Tenant’s Representative. Tenant has designated Jason Schlutt as its sole representative with respect to the matters set forth in this Tenant Work Letter, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work Letter.

 

5.2          Landlord’s Representative. Landlord has designated Jackie Holland as its sole representative with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Tenant Work Letter.

 

5.3          Time of the Essence in This Tenant Work Letter. Unless otherwise indicated, all references herein to a “number of days” shall mean and refer to calendar days. If any item requiring approval is timely disapproved by Landlord, the procedure for preparation of the document and approval thereof shall be repeated until the document is approved by Landlord; provided, however, that Landlord’s required response time for any re-submissions shall be reduced by two (2) days.

 

5.4          Tenant’s Lease Default. Notwithstanding any provision to the contrary contained in the Lease, if an Event of Default by Tenant under the Lease or a default by Tenant under this Tenant Work Letter has occurred at any time on or before the substantial completion of the Premises, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, at law and/or in equity, Landlord shall have the right to withhold payment of all or any portion of the Tenant Improvement Allowance and/or Landlord may cause Contractor to cease the construction of the Premises (in which case, Tenant shall be responsible for any delay in the substantial completion of the Premises caused by such work stoppage), and (ii) all other obligations of Landlord under the terms of this Tenant Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of the Lease (in which case, Tenant shall be responsible for any delay in the substantial completion of the Premises caused by such inaction by Landlord). In addition, if the Lease is terminated prior to the Commencement Date, for any reason due to an Event of Default by Tenant under the Lease or a default under this Tenant Work Letter, in addition to any other remedies available to Landlord under the Lease, at law and/or in

 

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equity, Tenant shall pay to Landlord, as Additional Rent under the Lease, within five (5) days of receipt of a statement therefor, any and all costs (if any) incurred by Landlord (including any portion of the Tenant Improvement Allowance disbursed by Landlord) and not reimbursed or otherwise paid by Tenant through the date of such termination in connection with the Tenant Improvements to the extent planned, installed and/or constructed as of such date of termination, including, but not limited to, any costs related to the removal of all or any portion of the Tenant Improvements and restoration costs related thereto.

 

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EXHIBIT D

 

COMMENCEMENT DATE MEMORANDUM

 

THIS MEMORANDUM is entered into as of                              ,       by and between PRU/SKS BRANNAN ASSOCIATES, LLC, a Delaware limited liability company (“Landlord”), and INMOBI INC., a Delaware corporation (“Tenant”), with respect to that certain Office Lease dated as of                                    , 20   (the “Lease”) respecting certain premises (the “Premises”) located in the building known as 475 Brannan Street, San Francisco, California.

 

Pursuant to Paragraph 2(a) of the Lease, Landlord and Tenant hereby confirm and agree that the Commencement Date (as defined in the Lease) is                                       , 20   and that the Expiration Date (as defined in the Lease) is                                      , 20  .

 

This Memorandum supplements, and shall be a part of, the Lease.

 

IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this Memorandum as of the day and year first above written.

 

	
 
    	
LANDLORD:
    
	
 
    	
 
    
	
 
    	
PRU/SKS BRANNAN ASSOCIATES, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By
    	
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation,   its Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TENANT:
    
	
 
    	
 
    
	
 
    	
INMOBI INC., a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Its:
    	
 
    

 

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EXHIBIT E

 

FORM OF LETTER OF CREDIT

 

DATE:

 

BENEFICIARY:

 

PRU/SKS BRANNAN ASSOCIATES, LLC,

A DELAWARE LIMITED LIABILITY COMPANY

C/O THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

4 EMBARCADERO CENTER, 27TH FLOOR

SAN FRANCISCO, CA 94111

ATTN: PRISA II ASSET MANAGER

 

ISSUING BANK:

 

CITIBANK, N.A.

C/O ITS SERVICER, CITICORP NORTH AMERICA, INC. 

3800 CITIBANK CENTER, BUILDING B, 3RD FLOOR

TAMPA, FL 33610

 

LETTER OF CREDIT NO.

 

LADIES AND GENTLEMEN:

 

BY ORDER OF OUR CLIENT,             (THE “APPLICANT”), WE HEREBY OPEN OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. , IN YOUR FAVOR FOR AN AMOUNT NOT TO EXCEED IN AGGREGATE USD                           (AMOUNT IN WORDS AND 00/100 U.S. DOLLARS), EFFECTIVE IMMEDIATELY AND EXPIRING AT THE OFFICE OF OUR SERVICER, CITICORP NORTH AMERICA, INC. AT 3800 CITIBANK CENTER, BUILDING B, 3RD FLOOR, TAMPA, FLORIDA 33610 ATTN. STANDBY LETTER OF CREDIT UNIT OR SUCH OTHER OFFICE AS WE MAY ADVISE YOU FROM TIME TO TIME (THE “OFFICE”), ON MARCH 31, 2013, SUBJECT TO EXTENSION AS PROVIDED BELOW.

 

FUNDS ARE AVAILABLE AGAINST YOUR SIGHT DRAFT(S) DRAWN ON US, IN THE FORM OF ANNEX 1 ATTACHED HERETO, PURPORTEDLY SIGNED BY THE BENEFICIARY, PRESENTED TO THE OFFICE OF OUR SERVICER, CITICORP NORTH AMERICA, INC. AT 3800 CITIBANK CENTER, BUILDING B, 3RD FLOOR, TAMPA, FLORIDA 33610.

 

IN ADDITION, PRESENTATION OF SUCH DRAFT MAY ALSO BE MADE BY FAX TRANSMISSION TO FAX NO. 813-604-7187 OR SUCH OTHER FAX NUMBER IDENTIFIED BY CITIBANK IN A WRITTEN NOTICE TO YOU. TO THE EXTENT A PRESENTATION IS MADE BY FAX TRANSMISSION, YOU MUST (I) PROVIDE TELEPHONE NOTIFICATION THEREOF TO CITIBANK (PHONE NO. 866-945-6284)

 

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PRIOR TO OR SIMULTANEOUSLY WITH THE SENDING OF SUCH FAX TRANSMISSION AND (II) SEND THE ORIGINAL OF SUCH DRAFT TO CITIBANK BY OVERNIGHT COURIER, AT THE ADDRESS PROVIDED ABOVE FOR PRESENTATION OF DOCUMENTS, PROVIDED HOWEVER, THAT CITIBANK’S RECEIPT OF SUCH TELEPHONE NOTICE OR ORIGINAL DOCUMENTS SHALL NOT BE A CONDITION TO PAYMENT HEREUNDER.

 

PARTIAL DRAWINGS ARE PERMITTED UNDER THIS CREDIT.

 

DRAFTS PRESENTED PRIOR TO 10:00 A.M. NEW YORK CITY TIME ON ANY BUSINESS DAY SHALL BE PAID BY BANK CHECK OR WIRE TRANSFER, AT BENEFICIARY’S INSTRUCTION, ON THE SAME BUSINESS DAY. DRAFTS PRESENTED AFTER 10:00 A.M. NEW YORK CITY TIME ON ANY BUSINESS DAY SHALL BE PAID BY BANK CHECK OR WIRE TRANSFER, AT BENEFICIARY’S INSTRUCTION, BY CLOSE OF BUSINESS ON THE NEXT SUCCEEDING BUSINESS DAY.

 

IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY EXTENDED, WITHOUT AMENDMENT, FOR ADDITIONAL PERIOD(S) OF ONE YEAR FROM THE EXPIRY DATE HEREOF, OR ANY FUTURE EXPIRATION DATE, BUT NOT BEYOND JUNE 30, 2017, UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO ANY EXPIRATION DATE WE NOTIFY YOU BY REGISTERED MAIL OR BY ANY OTHER RECEIPTED MEANS THAT WE ELECT NOT TO CONSIDER THIS LETTER OF CREDIT RENEWED FOR ANY SUCH ADDITIONAL PERIOD, WHEREUPON YOU MAY DRAW FOR THE AVAILABLE AMOUNT UNDER THIS LETTER OF CREDIT BY MEANS OF YOUR SIGHT DRAFT(S), DRAWN ON US, MENTIONING OUR LETTER OF CREDIT NUMBER.

 

IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT IS TRANSFERABLE AND MAY BE TRANSFERRED IN ITS ENTIRETY, BUT NOT IN PART, AND MAY BE SUCCESSIVELY TRANSFERRED BY YOU OR ANY TRANSFEREE HEREUNDER TO A SUCCESSOR TRANSFEREE(S). TRANSFER UNDER THIS LETTER OF CREDIT TO SUCH TRANSFEREE SHALL BE EFFECTED UPON PRESENTATION TO US OF THE ORIGINAL OF THIS LETTER OF CREDIT AND ANY AMENDMENTS HERETO ACCOMPANIED BY A REQUEST DESIGNATING THE TRANSFEREE IN THE FORM OF EXHIBIT “A” ATTACHED HERETO APPROPRIATELY COMPLETED.

 

ALL THE CHARGES, INCLUDING WITHOUT LIMITATION ANY TRANSFER FEE, SHALL BE ON ACCOUNT OF APPLICANT. ANY TRANSFER OF THIS LETTER OF CREDIT IS NOT CONTINGENT ON APPLICANT’S ABILITY TO PAY THE TRANSFER FEE OR SUCH CHARGES.

 

WE HEREBY AGREE TO HONOR EACH DRAFT DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT IF PRESENTED, AS SPECIFIED, AT OUR OFFICE ON OR BEFORE EXPIRATION DATE.SHOULD YOU HAVE OCCASION TO COMMUNICATE WITH US REGARDING THIS LETTER OF CREDIT, PLEASE DIRECT YOUR CORRESPONDENCE TO OUR OFFICE, MAKING SPECIFIC MENTION OF

 

2

 

THE LETTER OF CREDIT NUMBER INDICATED ABOVE.

 

EXCEPT AS FAR AS OTHERWISE EXPRESSLY STATED HEREIN, THIS STANDBY LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES (“ISP98”), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 590, AND AS TO MATTERS NOT GOVERNED BY THE ISP98, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE U.S. FEDERAL LAW.

 

3

 

ANNEX 1

 

(FORM OF SIGHT DRAFT)

 

DATE:

 

AGGREGATE AMOUNT: U.S. DOLLARS

 

TO: [NAME OF ISSUER]

 

AT SIGHT OF THIS DRAFT, PAY TO THE ORDER OF OURSELVES, THE AGGREGATE AMOUNT OF U.S. DOLLARS                                                                                  (INSERT                  DOLLAR AMOUNT IN WORDS)                                   DRAWN UNDER [NAME OF ISSUER] STANDBY IRREVOCABLE TRANSFERABLE LETTER OF CREDIT NO.                                DATED

 

 

	
 
    	
[BENEFICIARY]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BY:
    	
 
    
	
 
    	
 
    	
(SIGNATURE)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(PRINT NAME AND TITLE)
    

 

4

 

Exhibit A

Request for Full Transfer

Relinquishing all Rights as Beneficiary

 

(This form is to be used when the Letter of Credit is to be Transferred in its entirety and, no substitution of invoices is involved and, no rights are to be retained by the undersigned Beneficiary. )

 

	
Citicorp   North America Inc.,
    	
Date:
    
	
As   Servicer for Citibank, N.A.
    	
 
    
	
3800   Citibank Center, Bldg. B, 3rd Fl.
    	
 
    
	
Tampa,   FL 33610
    	
 
    

 

Re: L/C No.

 

Issued by: CITIBANK, N.A.

 

Citibank, N.A. Ref:

 

Gentlemen:

 

Receipt is acknowledged of the original instrument which you forwarded to us relative to the issuance of a Letter of Credit ( herein called the “Credit” ) bearing your reference number as above in favor of ourselves and/or Transferees and we hereby request you to transfer the said Letter of Credit, in its entirety, to:

 

 

whose address is

 

 

(Optional) Please advise Beneficiary through the below indicated Advising Bank:

 

 

We are returning the original instrument to you herewith in order that you may deliver it to the Transferees together with your customary letter of transfer.

 

It is understood that any amendments to the Letter of Credit which you may receive are to be advised by you directly to the Transferees and that the drafts and documents of the Transferees, if issued in accordance with the conditions of the Letter of Credit, are to be forwarded by you directly to the party for whose account the credit was opened (or any intermediary) without our intervention.

 

(continued on page 2 )

 

5

 

Page 2 Request for Full Transfer Relinquishing all Rights as Beneficiary

 

	
 
    	
Citibank, N.A. reference
    

 

WE UNDERSTAND THAT ALL THE CHARGES, INCLUDING WITHOUT LIMITATION ANY TRANSFER FEE, SHALL BE ON ACCOUNT OF APPLICANT. AS PROVIDED IN THE LETTER OF CREDIT, TRANSFER OF THE LETTER OF CREDIT IS NOT CONTINGENT ON APPLICANT’S ABILITY TO PAY THE TRANSFER FEE OR SUCH CHARGES.

 

 

	
SIGNATURE GUARANTEED
    	
 
    	
Sincerely yours,
    
	
 
    	
 
    	
 
    
	
The First Beneficiary’s   signature(s) with title(s) conforms with that on file with us and   such is/are authorized for the execution of this instrument.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Name of Bank)
    	
 
    	
(Name of First Beneficiary)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Bank Address)
    	
 
    	
(Telephone Number)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(City, State, Zip Code)
    	
 
    	
(Authorized Name and Title)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Telephone Number)
    	
 
    	
(Authorized Signature)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Authorized Name and Title)
    	
 
    	
(Authorized Name and Title)
    
	
 
    	
 
    	
( If applicable )
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Authorized Signature)
    	
 
    	
(Authorized Signature)
    

 

6

 

 

EXHIBIT F

 

INCLUDED PERSONAL PROPERTY

 

Suites 310/410 Premises furniture inventory

 

	
Item No.
    	
 
    	
Description
    	
 
    	
Qty.
    
	
1
    	
 
    	
Two drawer   pedestal filing cabinet
    	
 
    	
122
    
	
2
    	
 
    	
Three drawer   pedestal filing cabinet
    	
 
    	
127
    
	
3
    	
 
    	
Private offices   desks with built in returns
    	
 
    	
20
    
	
4
    	
 
    	
Workstations
    	
 
    	
121
    
	
5
    	
 
    	
Upright wood   bookshelves
    	
 
    	
3
    
	
6
    	
 
    	
Conference   tables — dark wood
    	
 
    	
6
    
	
7
    	
 
    	
Glass console   table curved
    	
 
    	
1
    
	
8
    	
 
    	
Glass side table
    	
 
    	
1
    
	
9
    	
 
    	
4 drawer lateral   file cabinet
    	
 
    	
2
    
	
10
    	
 
    	
2 drawer lateral   file cabinet
    	
 
    	
1
    
	
11
    	
 
    	
3 shelf cabinet   on wheels
    	
 
    	
15
    
	
12
    	
 
    	
3 drawer lateral   file cabinet
    	
 
    	
8
    
	
13
    	
 
    	
Refrigerator
    	
 
    	
1
    
	
14
    	
 
    	
Dishwasher
    	
 
    	
1
    
	
15
    	
 
    	
Large square   patio tables
    	
 
    	
3
    
	
16
    	
 
    	
Small square   patio tables
    	
 
    	
4
    
	
17
    	
 
    	
Silver patio   tables
    	
 
    	
4
    
	
18
    	
 
    	
Reception Desk   4th floor
    	
 
    	
1
    

 

Suite 420 Premises furniture inventory

 

	
Item No.
    	
 
    	
Description
    	
 
    	
Qty.
    
	
“A”
    	
 
    	
Round table
    	
 
    	
9
    
	
“B”
    	
 
    	
Under desk   filing cabinet
    	
 
    	
95
    
	
“C”
    	
 
    	
Reception desk
    	
 
    	
1
    
	
“D”
    	
 
    	
Red guest side   chairs
    	
 
    	
2
    
	
“E”
    	
 
    	
Private office
    	
 
    	
 
    
	
 
    	
 
    	
2 drawer file
    	
 
    	
1
    
	
 
    	
 
    	
4 foot grey   table
    	
 
    	
1
    
	
“F”
    	
 
    	
Bar stools —   silver & red
    	
 
    	
10
    
	
“G”
    	
 
    	
Brown &   black conference table
    	
 
    	
1
    
	
“H”
    	
 
    	
Red conference   table
    	
 
    	
1
    
	
“I”
    	
 
    	
Black leather   conf. chairs
    	
 
    	
21
    
	
“J”
    	
 
    	
White side   cabinet
    	
 
    	
1
    
	
“K”
    	
 
    	
Black coffee   table
    	
 
    	
1
    
	
“L”
    	
 
    	
Brown   rectangular table
    	
 
    	
2
    
	
“M”
    	
 
    	
Tan sofa set
    	
 
    	
1
    
	
“N”
    	
 
    	
Red/Brown sofa   set
    	
 
    	
1
    
	
“O”
    	
 
    	
Red curved sofa set
    	
 
    	
1
    

 

1

 

	
“P”
    	
 
    	
Boxed coffee   tables
    	
 
    	
2
    
	
“Q”
    	
 
    	
Orange sofa set
    	
 
    	
1
    
	
“R”
    	
 
    	
White square   coffee table
    	
 
    	
1
    
	
“S”
    	
 
    	
Small corner   table
    	
 
    	
1
    
	
“T”
    	
 
    	
Cubicles
    	
 
    	
122
    
	
“U”
    	
 
    	
Telecomm cabling   and wiring
    	
 
    	
unknown
    

 

2

 

EXHIBIT G

 

FORM OF LEASE GUARANTY

 

 

LEASE GUARANTY

 

This Lease Guaranty (“Guaranty”), dated as of March 26, 2012, is executed by InMobi Pte Ltd, Singapore (“Guarantor”), in favor of PRU/SKS Brannan Associates, LLC, a Delaware limited liability company (“Landlord”), in conjunction with, and to induce Landlord to enter into, that certain Lease of even date herewith (the “Lease”) between INMOBI INC., a Delaware corporation (“Tenant”) and Landlord, pursuant to which Landlord is leasing to Tenant certain real property (the “Premises”) more particularly described in the Lease. Capitalized terms used and not otherwise defined in this Guaranty shall have the meanings set forth for them in the Lease.

 

In consideration of the foregoing, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:

 

1.             Guaranty of Tenant’s Obligations. Guarantor hereby unconditionally and irrevocably guarantees to Landlord (a) the prompt payment by Tenant of all rent, additional rent and other amounts from time to time owing to Landlord under the Lease, and (b) the prompt and diligent performance and observance of all other terms, conditions, obligations and provisions of the Lease by Tenant. The payment of all such amounts and the performance and observance of all such other obligations and provisions shall be collectively referred to herein as the “Tenant Obligations.” This Guaranty will apply to the Lease, any extension or renewal of the Lease, and any holdover term following the term of the Lease, or any such extension or renewal.

 

2.             Modification of Lease; Assignment and Subletting. It is specifically agreed and understood that the terms, covenants and conditions of the Lease may be altered, affected, modified, amended, compromised, released or otherwise changed by agreement between Landlord and Tenant, or by course of conduct and Guarantor does guaranty and promise to perform all of the Tenant Obligations of Tenant under the Lease as so altered, affected, modified, amended, compromised, released or changed and the Lease may be assigned by or with the consent of Landlord or any assignee of Landlord without consent or notice to Guarantor and that this Guaranty shall thereupon and thereafter guaranty the performance of the Tenant Obligations as so changed, modified, amended, compromised, released, altered or assigned. In addition, no subletting of all or any portion of Tenant’s interest in the Lease or the Premises shall impair or affect the continuing force of this Guaranty.

 

3.             Reletting the Premises. In the event that Tenant defaults under the Lease, Landlord may, but shall not be required to, take such action as Landlord deems appropriate to relet all or part of the Premises in order to reduce Landlord’s loss or any liability under the Lease or this Guaranty. Without limiting the generality of any other provision hereof, Guarantor shall reimburse Landlord within 10 business days following written demand from time to time for all expenses reasonably incurred by Landlord (including without limitation repair and improvement expenses, advertising fees and brokerage commissions) in connection with any such reletting of the Premises.

 

4.             Guarantor Waivers. Guarantor hereby waives, to the fullest extent allowed by law, all suretyship rights, defenses and other benefits to which it might otherwise be entitled (including without limitation any and all rights and defenses that may be available by reason of

 

1

 

California Civil Code Sections 2787 to 2855, inclusive). Without limiting the generality of the foregoing: (a) Landlord shall be entitled to proceed against Guarantor with respect to any unfulfilled Tenant Obligation regardless of whether Landlord has proceeded, is then proceeding, or intends to proceed, against Tenant or any other person with respect thereto; (b) Landlord shall not be required to furnish Guarantor with copies of any notices given or required to be given to Tenant under the Lease, including without limitation notices of default; (c) Guarantor’s liability for the Tenant Obligations shall not be affected, released, terminated, discharged or impaired by (i) the existence of any bankruptcy, insolvency, reorganization or similar proceeding with respect to Tenant or any other person, (ii) any exercise, non-exercise or delay or lack of diligence in the exercise of remedies by Landlord against Tenant or any other person (except to the extent that the same has resulted in the fulfillment of the applicable Tenant Obligation), (iii) any assignment or other transfer (voluntary or involuntary) of Tenant’s interests in the Lease, (iv) the rejection of the Lease in any bankruptcy proceeding with respect to Tenant, or any other release or discharge of Tenant in any bankruptcy, insolvency, reorganization or similar proceeding; (v) any amendment of the Lease; (vi) any change in the time, manner or place of payment, performance or observance of any of the Tenant Obligations; (vii) any waiver of, or any assertion or enforcement or failure or refusal to assert or enforce, or any consent or indulgence granted by Landlord with respect to a departure from, any term of the Lease, including without limitation the waiver of any default by Tenant, or the making of any other arrangement with, or the accepting of any compensation or settlement from, Tenant; provided that to the extent that Landlord provides Tenant with a written waiver of, or written agreement with respect to a consent or indulgence with respect to a departure from, any term of the Lease, the Tenant Obligations for which Guarantor is liable under the Guaranty shall be deemed modified to reflect the terms of such written waiver or agreement; (viii) any other guaranty now or hereafter executed by Guarantor or any other guarantor or the release of any other guarantor from liability for the payment, performance or observance of any of the Tenant Obligations, whether by operation of law or otherwise; or (ix) any defect in or invalidity of the Lease caused by Tenant; and (d) Guarantor hereby expressly waives (i) notice of acceptance of this Guaranty and of any change in the financial condition of Tenant, (ii) presentment, demand and protest, (iii) until such time as all defaulted Tenant Obligations are fulfilled, all right of subrogation with respect to any obligation of Tenant that is fulfilled by Guarantor hereunder, (iv) the right to trial by jury in any action or proceeding arising out of or with respect to this Guaranty or the interpretation, breach or enforcement hereof, (v) the right to interpose any setoff or counterclaim in any action or proceeding arising out of or with respect to this Guaranty, (vi) any right or claim of right to cause a marshaling of the assets of Tenant or to cause Landlord to apply to any Tenant Obligation any  security deposit or to proceed against Tenant or any collateral or security held by Landlord at any time or in any particular order, and (vii) any and all defenses relating to Landlord’s failure to perfect a security interest in Tenant’s property and/or impairment of collateral. Guarantor subordinates any liability or indebtedness of Tenant held by Guarantor to the Tenant Obligations.

 

5.             No Release. This Guaranty shall not be released, modified or affected by failure or delay on the part of Landlord to enforce any of the rights or remedies of Landlord under the Lease, whether pursuant to the terms thereof or at law or in equity, or by any release of any person liable under the terms of the Lease other than Guarantor (including, without limitation, Tenant, or any other guarantor).

 

2

 

6.             Continuing Guaranty. Guarantor’s liability under this Guaranty shall continue until all rents due under the Lease have been paid in full in cash and until all of the other Tenant Obligations to Landlord have been satisfied, and shall not be reduced by virtue of any payment by Tenant of any amount due under the Lease except, subject to the last sentence of this Section 6, as to the payment made. If all or any portion of the Tenant Obligations under the Lease are paid or performed by Tenant, the obligations of Guarantor hereunder shall continue and remain in full force and effect in the event that all or any part of such payment(s) or performance(s) is avoided or recovered directly or indirectly from Landlord as a preference, fraudulent transfer or otherwise.

 

7.             Representations and Warranties of Guarantor. Guarantor warrants and represents to Landlord that Guarantor now has and will continue to have full and complete access to any and all information concerning the Lease, the value of the assets owned or to be acquired by Tenant, Tenant’s financial status and its ability to pay and perform the obligations owed to Landlord under the Lease. Guarantor further warrants and represents that Guarantor has reviewed and approved copies of the Lease and is fully informed of the remedies Landlord may pursue, with or without notice to Tenant, in the event of default under the Lease. So long as Guarantor’s obligations hereunder remain unsatisfied or owing to Landlord, Guarantor shall keep fully informed as to all aspects of Tenant’s financial condition and the performance of said obligations. Guarantor further represents and warrants to Landlord that as of the date hereof Guarantor has unencumbered assets to satisfy Guarantor’s liability under this Guaranty, and upon request by Landlord made not more often than once per year, shall update such representation and warranty in a writing delivered to Landlord within thirty (30) days of such request.

 

8.             Cure of Defaults. Guarantor hereby covenants and agrees with Landlord that if a default shall at any time occur in the payment of any sums due under the Lease by Tenant, or in the performance of any other obligation of Tenant under the Lease, Guarantor shall and will forthwith upon demand pay such sums and any arrears thereof, to Landlord in legal currency of the United States of America for payment of public and private debts, and take all other actions necessary to cure such default and perform such obligations of Tenant.

 

9.             Guaranty of Payment and Performance. The liability of Guarantor under this Guaranty is a guaranty of payment and performance and not of collectibility, and is not conditioned or contingent upon the genuineness, validity, regularity or enforceability of the Lease or the pursuit by Landlord of any remedies which it now has or may hereafter have with respect thereto, at law, in equity or otherwise.

 

10.          Jurisdiction. All disputes with respect to this Guaranty, and all actions to enforce this Guaranty, may be adjudicated in the state courts of California or the federal court sitting in San Francisco, California, and Guarantor hereby irrevocably submits to the jurisdiction of such courts in any action relating to this Guaranty. To the fullest extent permitted by law, this submission to California jurisdiction shall be self-operative and no further instrument or action, other than service of process, shall be required to confer jurisdiction over Guarantor in any such court. Nothing in this paragraph shall be construed to limit the right of Landlord to serve process in any manner permitted by law, or to institute any action against Guarantor in the courts of other appropriate jurisdictions. Guarantor hereby irrevocably appoints and designates Tenant as

 

3

 

Guarantor’s duly authorized agent for service of legal process and agrees that service of such process upon such party shall constitute personal service of process upon Guarantor. In the event service is undeliverable because such agent moves or ceases to do business in the State of California, Guarantor shall, within ten (10) days after Landlord’s request, appoint a substitute agent in the State of California on its behalf and within such period notice Landlord of such appointment. If such substitute agent is not timely appointed, Landlord shall, in its sole discretion, have the right to designate a substitute agent upon five (5) days’ notice to Guarantor.

 

11.          Notices. All notices and other communications provided for in this Guaranty shall be in writing and be delivered to the appropriate party at its address as follows:

 

	
If to Guarantor:
    	
 
    
	
 
    	
 
    
	
 
    	
475 Brannan Street, Suite 310
    
	
 
    	
San Francisco, California
    
	
 
    	
Attn: Lease Guaranty Notice - Important
    
	
 
    	
 
    
	
 
    	
InMobi Pte Ltd
    
	
 
    	
20 CECIL ST 14-01 EQUITY PLAZA
    
	
 
    	
SINGAPORE 049705
    
	
 
    	
 
    
	
If to Landlord:
    	
 
    
	
 
    	
 
    
	
 
    	
c/o The Prudential Insurance Company of America
    
	
 
    	
4 Embarcadero Center, 27th Floor
    
	
 
    	
San Francisco, CA 94111
    
	
 
    	
Attn: PRISA II Asset Manager
    
	
 
    	
 
    
	
 
    	
c/o The Prudential Insurance Company of America
    
	
 
    	
8 Campus Drive, 4th Floor
    
	
 
    	
Parsippany, New Jersey 07054
    
	
 
    	
Attn: Greg Shanklin, Esquire
    
	
 
    	
 
    
	
 
    	
c/o SKS Investments LLC
    
	
 
    	
601 California Street, Suite 1310
    
	
 
    	
San Francisco, CA 94108
    
	
 
    	
Attn: Ms. Pamela Izzo
    

 

Addresses for notice may be changed from time to time by written notice to all other parties. All communications shall be effective when actually received; provided, however, that nonreceipt of any communication as the result of a change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication.

 

12.          Attorneys’ Fees. In the event that any litigation is commenced with respect to this Guaranty, the party prevailing in such litigation shall be entitled to recover, in addition to such other relief as may be granted, its reasonable costs and expenses, including without limitation

 

4

 

reasonable attorneys’ fees and court costs, whether or not taxable, as awarded by a court of competent jurisdiction.

 

13.          Authority. Guarantor represents and warrants to Landlord that: (a) the execution, delivery and performance of this Guaranty by Guarantor will not violate any provision of any law, regulation, order or decree of any governmental authority or of any court binding on Guarantor, or conflict with, result in a breach of or constitute a default under any provision of any instrument to which Guarantor is a party or which it or any of its property is bound, and will not result in the imposition or creation of any lien, charge or encumbrance on, or security interest in, any of its property pursuant to the provisions of any of the foregoing; and (b) this Guaranty has been duly executed and delivered by Guarantor and constitutes a legal, valid and binding obligation of Guarantor, enforceable against it in accordance with its terms, subject as to enforcement of rights and remedies to any applicable bankruptcy, reorganization, moratorium or other laws affecting the enforcement of creditors’ rights generally and doctrines of equity affecting the availability of specific enforcement or other equitable remedies.

 

14.          Bankruptcy. The obligations of Guarantor under this Guaranty shall not be altered, limited or affected by any case, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Tenant or any defense which Tenant may have by reason of order, decree or decision of any court or administrative body resulting from any such case. Landlord shall have the sole right to accept or reject any plan on behalf of a Guarantor proposed in such case and to take any other action which Guarantor would be entitled to take, including, without limitation, the decision to file or not file a claim. Guarantor acknowledges and agrees that any payment which accrues with respect to Tenant’s obligations under the Lease (including, without limitation, the payment of rent) after the commencement of any such proceeding (or, if any such payment ceases to accrue by operation of law by reason of the commencement of such proceeding, such payment as should have accrued if said proceedings has not been commenced) shall be included in Guarantor’s obligations hereunder because it is the intention of the parties that said obligations should be determined without regard to any rule or law or order which may relieve Tenant of any of its obligations under the Lease. Guarantor hereby permits any trustee in bankruptcy, receivers, debtor-in-possession, assignee for the benefit of creditors or similar person to pay Landlord, or allow the claim of Landlord in respect of, any such payment accruing after the date on which such proceeding is commenced. Guarantor hereby assigns to Landlord Guarantor’s right to receive any payments from any trustee in bankruptcy, receiver, debtor-in-possession, assignee for the benefit of creditors or similar person by way of dividend, adequate protection payment or otherwise.

 

15.          Estoppel Certificate. Landlord, by its acceptance of this Guaranty, and Guarantor agree that (a) each will, from time to time, within 10 business days following request by the other (the “Requesting Party”), execute and deliver to the Requesting Party a statement certifying that this Guaranty is unmodified and in full force and effect (or if modified, that it is in full force and effect as modified and stating such modifications), and (b) such certificates may be relied upon by anyone holding or proposing to acquire from or through Landlord or Guarantor any interest in the premises of which the Premises are a part or by any mortgagee or prospective mortgagee of such premises or any interest therein or by any prospective assignee or subtenant of Tenant.

 

5

 

 

16.          Financial Statements.  Annually during the Term of the Lease, promptly following Landlord’s request, Guarantor shall provide to Landlord financial statements which will include a balance sheet, income statement, statement of changes in equity, statement of consolidated cash flows and such other financial information as Landlord may reasonably request. Non-audited financial statements shall be certified to Landlord and Landlord’s lender, if applicable, as being accurate and complete in all material respects (the “Certified Statements”). The Certified Statements shall be signed by an officer, authorized agent, partner or managing member of the Guarantor.

 

17.          Miscellaneous.  This Guaranty shall (a) remain in full force and effect until the payment, performance or observance in full of the Tenant Obligations and all other amounts payable under this Guaranty, (b) be binding upon Guarantor, its heirs, legal representatives, successors and assigns (whether this Guaranty is assigned voluntarily or by operation of law), and (c) inure to the benefit of and be enforceable by Landlord and its successors and assigns or by any person to whom Landlord’s interest in the Lease or any part thereof, including the rents, may be assigned, whether by way of mortgage or otherwise (including without limitation any purchaser at a judicial foreclosure sale or trustee’s sale or a holder of a deed in lieu of foreclosure). Wherever in this Guaranty reference is made to Landlord or Tenant, the same shall be deemed to refer also to the then heir, legal representative, successor or assign of Landlord or Tenant, respectively. No provision of this Guaranty that is held to be inoperative, unenforceable or otherwise invalid shall affect the remaining provisions, and to this end all provisions hereof shall be severable. No failure or delay on the part of Landlord to exercise any power, right or privilege under this Guaranty shall impair any such power, right or privilege or be construed to be a waiver of any default or any acquiescence therein, nor shall any single or partial exercise of such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. This Guaranty shall constitute the entire agreement between Guarantor and the Landlord with respect to the subject matter hereof. No provision of this Guaranty or right of Landlord hereunder may be waived nor may Guarantor be released from any obligation hereunder except by a writing duly executed by an authorized officer, director or trustee of Landlord. The liability of Guarantor and all rights, powers and remedies of Landlord hereunder and under any other agreement now or at any time after in force between Landlord and Guarantor relating to the Lease shall be cumulative and not alternative and such rights, powers and remedies shall be in addition to all rights, powers and remedies given to Landlord by law. In the event that more than one person or entity executes this Guaranty as Guarantor, (a) the term “Guarantor” shall mean each such person or entity, (b) the obligations of each Guarantor shall be joint, several and independent, and (c) this Guaranty shall be construed and enforced as though each Guarantor executed a separate guaranty on the terms set forth in this Guaranty. Time is of the essence of this Guaranty. This Guaranty shall be governed by the laws of the State of California.

 

6

 

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed as of the date first written above.

 

	
 
    	
“Guarantor:”
    
	
 
    	
 
    
	
 
    	
InMobi Pte Ltd,   Singapore
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Naveen Tewari
    
	
 
    	
 
    	
Naveen Tewari,   CEO
    
	
 
    	
 
    	
[printed name and   title]
    

 

7

 

EXHIBIT B to SUBLEASE

 

Subleased Premises

 

 

Exhibit B

 

EXHIBIT C to SUBLEASE

 

Commencement Agreement

 

	
Date
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Subtenant
    	
Invitae Corporation
    	
 
    
	
Address
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

Re:                             Commencement Letter with respect to that certain Sublease dated as of the          day of                         , 2014, by and between INMOBI, INC., a Delaware corporation, as Sublandlord, and INVITAE CORPORATION, a Delaware corporation, as Subtenant, for 12,286 rentable square feet on the third (3rd) floor of the Building located at 475 Brannan Street, San Francisco, California.

 

Dear                                                   :

 

In accordance with the terms and conditions of the above referenced Sublease, Subtenant accepts possession of the Premises and agrees:

 

1.                                      The Commencement Date is                                          ;

 

2.                                      The Expiration Date is April 30, 2017.

 

Please acknowledge your acceptance of possession and agreement to the terms set forth above by signing all 3 counterparts of this Commencement Letter in the space provided and returning 2 fully executed counterparts to my attention.

 

Sincerely,

 

INMOBI INC.,

a Delaware corporation

 

 

	
 
    	
 
    
	
Authorized Signatory
    	
 
    
	
 
    	
 
    
	
Agreed and Accepted:
    	
 
    

 

	
Subtenant:
    	
INVITAE CORPORATION,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    	
 
    

 

Exhibit C

 

EXHIBIT D to SUBLEASE

 

Included Personal Property

 

Subleased Premises furniture inventory:

 

1.              Desk Workstations (desk; blue chair; dividers & filing ped) – 52

 

2.              IKEA Desks – 25

 

3.              Filing Cabinets

 

·                  6 drawers – 3

 

4.              Book Cases

 

·                  Metal – 3

 

·                  Light Wood Tall – 1

 

·                  Short metal – 1

 

·                  Rolling Carts – 4

 

5.              Filing Cabinets Peds - 68

 

6.              Conference Room Tables

 

·                  Regular – 1

 

·                  Large – 2

 

7.              Chairs

 

·                  Braided Black – 4

 

·                  Braided Grey – 12

 

·                  Black Pods – 23

 

·                  Tall Back Mesh – 4

 

·                  Short Back Mesh – 14

 

·                  Black Leather – 18

 

·                  Grey Fabric – 3

 

·                  Black with silver handles – 3

 

8.              Cabinets

 

·                  Dark – 3

 

·                  2 drawer file cabinet – 1

 

1

 

9.              Tables

 

·                  IKEA Small Square dark – 6

 

·                  Round Conf Tables – 3

 

10.       Patio Furniture

 

·                  Tables (4 ppl) – 4

 

·                  Table (2 ppl) – 1

 

·                  Chairs – 17

 

11.       Other Items

 

·                  Green Bean Bag

 

·                  Big Red Chair

 

12.       Kitchen

 

·                  Kegarator - 1

 

·                  Refrigerators - 2

 

·                  Dishwashers - 2

 

Sublandlord and Subtenant each acknowledge that the furniture listed above is owned by Sublandlord. Subtenant shall have the right to remove or replace any of the furniture, provided Subtenant delivers written notice to Sublandlord of such request, so that Sublandlord can remove such furniture at its cost. Subtenant will have no right to dispose of items identified in the above list without the written consent of the Sublandlord.

 

2

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