HomeMy WebLinkAbout0346.092.. .-.
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July 23., 1992
HONORABLE CITY COu~CIL
PALO ALTO, CA.LIFORNIA
6
TWO-YEAR LEASE AT 209 KA..lIILTON AVE.l'lUE. FOR UTILITY OFFICE SPACE
Membe~s of the Council:
hport: in Brief
This report requests Council approval of a t. ...... o-year lease aqreemant
between Hamilton properties (Lessor) and the City of Palo Alto
(Lessee) for 4,500 square feet of office space at 209 Ha!D.ilton
Avenue, Palo Alto, California, to accommodate 1S Utilities
Department statf for approxi~ately two years~
Background
During the F'i 1990-91 budget process (CMR: 282: 0), Cannci 1 approved
funds far t~elve ~dditional permanen~ employees to the Utilities
st.aff as part of a process to upgrade and repair the City's
infrastructure systern~ In order to provide space for the addi
tional employees, staff proposed leasing office space close to City
Hall.. On March 12,. 1991 council rejected a propose-C!. 10-year lease
of office space at 300 Ha~ilton Avenue as too costly (CMR:163:91).
Staff returned to Coun~il on February 24, 1992 (CMR:1Sl:92). with
a Utilities Capital Improvement Program (CIP) project that propos~d
a buildout of the Civic Center, to create additional office space
on the mezzanine and the eighth floors instead of leasing space.
In order to proceed with the hiring of the additional staff neces
sary to begin work on the infrastructure upgrade and repair, staff
also requested Council approval of a temporary two-year lease of
Office space~ Council approved the concept of the buildout and
authorized staff to obtain the temporary office space.
CMR,346:92
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On Ap~il 29, 1992 a lease proposal for commercial office space waS
prepared and mailed to .).11 interested parties (see attached Exhibit
A).. The proposal requiz-ed that the proposed site to 1:Jeet six
minimum criteria.
1) Accommodate UP to 15 utilities Department staff members
(appro';.(il'l'latelY 3,000 sq .. ft.};
2} Comply with current law regardinq access by disabled persons
at the couuDencoemerJ"i: of the leasej
3) Have proper heating, vent::ilation an\! air conditioning;
4) Have some natural lighting;
5) Be renovated and ready to occupy by July 15th for a minimum of
two j'ears; and
6) Be :!"entahle at a fixed rental rate per-year basis. (The City
will not accept any pass-through additional rent payments.)
The proposal also req-:.lested infortr,atio:J. on wtlether the building 'Was
sprinklered; the presence of any kno~n hazardous or toxic materials
on or near the property, as .... ell as 'Whether a study of the
existence of taxies had been completed; the number of on-site
parking spaces; and information 1:"eqarding t~r,ant improvements~
Four respor.ses were received prior to the May 15 deadline. All
four sites meet the minimum requirements: 3600 West Bayshorei 209
namilton Avenu~; 285 Hamiltcn Avenue and 310 University Avenue.
Attac~ent 1 is an overview of each of the four response$~
Proposed Leas~ Site
310 University was rejected ou'Cright because of the six-month
termination requirement. 'The Utilities Department could not take
the chance of not having a leased facility prior to the completion
o~ construction at City Hall. 3600 West Bayshore: \o!as eliminated
"'hen staff considered the loss of time and the cost of travel for
the: engineers to travel to and from City Hall~ That left 209
Hamil ton AV9nue and 285 hamilton Avenue. uti Ii ties Department
statf selected 209 Hamilton as the site that best suited the city's
needs. The site meets all of Utilities Oepartment requirements,
and the lease has an option to extend if construction delays OCcur.
It is close to City Hall, and the o~ners ~ill agree to provide more
space at a relatively lo .... er per-square-foot rate 'lJith r.o unforeseen
CMR:3<6:92 2
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charqes. In order to comply with the requirements of the Americans
with Disabilities Act {kDA), the Owners have also agreed to provide
an elevator and engage in rest rocm ::r.odifications at no cost to tile
City. A summary of the major lea~e provisions (Exhibit B) is
attached to the propo~ed t~o-year leas2 (Exhibit C).
EnvirOnmental Impact Assessmect
This lease represents continued use of an e){istinq facility;
therefore, it carries a Class I existing facility exemption from
the requirements of CEQ~.
Btaf~ ReCOmmendation
Staff recommends that Co~ncil authorize the Mayor to execute the
att.:tched two-year lease ""ith Hamilton Properties for the leased
premises Bt 209 Hamilton Avenue, Palo Alto, California.
Respectfully sI"bmitted,
Wtl£iL<n.,jt~ J 4(;,v--
WILLIAM W. Fti.r.MAN
Manager, Real property
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Exhibit A:
Exhibit B:
Lease proposal fOL Commercial Office Space
Major Lease Provisions
E><hibit c: Proposed Two-Year Lease -209 Hamilton
Relate~ Staff Reports: C!'IR:183:0
CMR:282:0
CMR:163:91
CMR:206:91
CMR:151:92
CHi!:,346:92 3
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size (square feet)
Monthly Rental Ra~e
}l.mericans With
Disabilities Act
Sprinkl@red
On-Site Parking
Any Xnown Hazardous
Materials
Toxic study
~~nt Improvements
Is OWner Willing To
~ortize Cost of
Improvem~nt.s
Other
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CMR:J46:92
3600 West
Bayshore
:'1.000
$5,700
Yes
Yes
Yea
1'10
Yes
$25 per s.f.
Yes
Not as accessi ....
ble to City
Hall
Attaclua.nt 1
209
Hall\11ton
Appro'l'. 4,50(}
$6,000
WiU Be
Yes
"0
1'10
No -
None -
Yes
Willing to ex-
tEInd th(! lease
tel"ln to HCcomm-
odate City Hall
construction
delays
4
285 110
Ham.ilton University
3,]J9 3,000 ~
$6,010 $5,250
Yes Y"s -
Yes No
No No
tlo No
, --No ,
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None :None
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Yes 'leG
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Provides a two-conta.lns a 6-
year Bublease lTIonth term in-
with no exten-ation notice
siona Jat any time
dut"inq the 2-
year term of
the: lease ----. ----
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lit,p of Talo 'Hlto
REAL EST~T.B DIVISION
<15/329-2<72
April 29, 1992
EXHIBIT A
Re: Lease Propo~al for Com~erci31 Office Space
The city of Palo Alto j,s ~nterested in le~sing approxima~ely 3,000
sq. ft. of commercial office space within close prQxi~ity of 250
Hamilton }I.venue (City Hall). The 5pace ..... 'ill be used by 15 utility
staff members for a mini~um of t~o years. Each staff person will
require approximately 125 sq. ft:. The office spact:! can be divided
by temporary parti t ions or-exist illq p>2rc,dnent ",'aIls. T!le estimated
space braakdO'. ... n is as follC:J·.~·S:
15 offices ~ 125 sq. f~.
Conference Roo~ 10x2a
stcrage/Files Arsa 10~lC
Copi@:r/Fax
Receptivfl area,
halls, etc.
~pproximate Space Required
XINIXUM CRITERIA
1875
:200
100
50
_'7S
3,COO sq. ft.
The City will not consider lease proposals ~hich do not meet the
following minimum criteria. The leased sit~ ~ust:
1) acco~nodate 15 ~tillty staff (approximately 3,000 sq.ft.)
2) meet the cu~rent code requirecents for ~ccess by disabl~d
persons at t~e commenceren~ of the le~se.
3) have proper heatiDg, ventilation and air conditioning.
4) have some natura 1 1 ightitlg, i. e., ·",'ir·::10·,.'5, sky lights.
5) be rencv~ted and ready to occupy by no later than July 15,
1992 for a mininurn of two years.
6) be rentable at a fixed rental rate per year basis. (The City
will not accept any pass through additional rental payments.)
The City of Palo Alto ~il1 net pay real estate co~rissions.
ATTACHMENTS/SUBMITTAL FORJoIjLEASE TERMS
All lease propoEals ~GS~ be sub~itted in ~riting and the details
inCluded on the attached submittal Focm ~'hich must be fully
completed. All 'Sub:':1issions ~u5t be:'! delivered to 250 Ha-:rdlton
Avenue l ~ level, Real Estate Division. Submissions will :be
accepted Until 3pm, May 15, 1~92.
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In the ~vent the City chooses ~o l~ase a pa~t~cular site, all of
t!'1.e City's Lease Terms must be incl:.lded in a lease agre£mer.~. All
lease terms and conditions ar-e subject to the Palo Alto City
council's final revie;"t and approva I.
SELECTION CRITERIA
The pri~ary criteria on ~hich the City will base its decision to
lease a particular site ",'ill b.~ 1,1 3 fllli service rent; 2) the
site's proximity to City Hall, 3) con~ition of th8 site, including
its amenities, a~d 4) tenant improvements allowances.
The landlord should. provide all ja;;j torial services based. or: a
level of service set forth in Ule Lease Terms docu1':1ent. The cost.
e! the service may be reflected in the rental rate. If there is hO
other alternative and the City has to provide i~5 o~n janitorial
services, the City will add twenty cents (.20) per sq. ft. per
month to the sllbmittal for compar-is':.n purposes.
Questions regarding this soli~itation should be directed to Bill
Fellman (415) 32-9-2472. Th;;,nk 1'()U for you!' attention to this
matter. I look fon,lard to hearing fro::,: you.
Sincerely.
Attachments:
AfAu:,sI A n: ~,lJTPROS
Submittal Form
Lease Te::-ms
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SUBII-mTAL FORM
Wct.: A scaled floor plan of the lea •• apace ayat be .tt.ch.4~
Date:
Property:
Addreas: _____________________________________________ __
Assessor's Pa.rcel No: ________ _ Zoning: _______________ _
Total sq. ft. of bldq: _________ sq. ft. ct proposed space: ___ __
Special office features, if any (eq: common meeting roo:a) : _____ _
Are the premises accessi'ble to handicapped individuals?
Is the building currently sprinklered? _____________________ _
Number of available cn-si~e parkinq spaces : ____________ _
Are there any known hazardous O~ toxic materials located j~# on# or
about the property?
Has .e: taxies study been completed? __________ If yes, please provide
a copy.
What: is the triple net rental rate?
What is the tenant improvement allowance per sq. ft.? ______________ _
Is the owner 'Willing to construct any city improvements and
amortize the c~st of the improvements as part of the lease payment?
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LEASE TERMS
city of Palo Alto, a municipal corporation:
PONlllMmpgprr
The Lease Agreement shall commence ypon:
• Full execution of the Lease~
• Completion tlf tenant improvements and all pl.mch list
items.
• Issuance of an occupancy pe~it.
• Thorough cleaninq of the premises.
• Occupancy of the pre~ises by the City.
After the language and terms have been ~greed up¢n by staff, and
the lancUorcl has executed the lease, it will be placed on the
agenda for consideration by the city Council. The Mayor is the
only individual with the authority to sign a lease ~greement for
the City.
Upon full execution of the lease, the landlord shall begin the
construction of tenant improvements, if any. The city does not
recommend that the landlord begin such construction until the lease
has been fully executed. Therefore I should the landlord commence
construction prior to lease execution, it must be understood that
such action shall be at the landlord's own risk and expense.
Upon completion of construction, the landlord and city shall
conduct a "walk-through-for the purpose generating a "punch-list-.
The punch list items shall be cured prior tv occupancy.
The landlord shall clean the premises (see janitorial specifica
tions) prior to the City's occupancy.
Upon full and satisfactcry completion of the above requirements,
the City shall occupy the premises.
* Rent shall be paid in advance.
,. The rental rate shall be annual fixed rental over the
term, with increases based on consumer price index.
* Rent for a partial month shall be prorated based upon the
actual number of days in the month owed. * Holding over s.hall be month to month, up"=,n the same
terms, cQv$nants and conditions.
LEASE TERMS PAGE 2
liD EliS ES
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The landlord shall pay for all utility expenses to the property and
common areas, including, but not limited to, gas, electricity and
water.
The landlc-rd shall pay for all taxes and assessments to the
premises and common areas.
In8ur&ll c.:
The City is self-insured and shall provide cover~ge for its own
contents.
XD4eaDi~ication:
Mutual in~emnification is required.
Telephone:
The City shall pay for its telephone services.
G.rbaq.~
The landlo~d shall pay for all garbage re~oval.
P ••• '1"b.rOughs:
The City does no~ pay expense pass-thrcughs or additional rent of
any type. The rent over the term must be certain a~d definite $0
that all costs can be anticipated and bUdgeted.
Tenant's maintenance responsibilities include:
* Plumbing on premises
Repairs of tenant caused dama~e
.. Glass
Rep~irs to windows broken by tenant or invitees
Landlord's maintenance responsibilities include:
.. Structure
* Roof
"~t~}y;
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LEASE TERMS
.. Plumbing
Unless Ci result of tenant negligence
" Electrical
Ballasts, bulbs repairs
• Heating, ventilating and air-conditioning
P~riodic maintenance , filter cha~ge6
Periodic bal.=!ncing
Repairs
.. Code compliance
Fire
Building
Health * Pre-existing contamination
* Glass
Unless a result of tenant negligence * Floor coverings * Fire extinguishers * Parking lot
Repairs
Periodic cleaning
.. Landscaping
Weed abatement * G~rbage removal
.. Pest and rodent control
'LABS AND sllCIvrCATIOHB
PAGE 3
* The City viII not directly pay for tenant improvements;
thel'"E'fore all tenant improvement costs shall be reflected
by the lease rate. * The landlord shall provide the City with space planning
services for the proposed site.
" The City shall have prior a?proval of all Plans and
Specifications. * construction drawings and specifications, if required,
will be attached as an exhibit to the lease agreement.
• City and landlord shall conduct a ftwalk through" for the
purpose of developing a "punch list-. All punch list
items shall he c~red prior to City's occupancy.
it A construction schedule, if required, shall be agreed
upon.
* One day's free rent shall be provided for each day the
construction schedule is delayed, and the term shall be
extended by the same number of days and other penalties
may apply for late cO!r'.pletion of construction ..
.. Upon completio.n of City improvements, the landlord shall
provide the tenant with "As Built" plans of the premises.
In the event that tenant improvements are not required,
the. landlord shall provide the City with its most -As
Builts".
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LEASE TERMS PARB 4
The landlcrd should provide all janitorial services and supplies.
prior to OCcuPaDey:
A thorough one-time cleaning whicn includes all of the
specific~tions found belo~ must be dona prior to the city occupying
the space,
lIaily,
~ DUst all furniture, counter.s, cabinets and window sills * Vacuum all rugs and carpets * Damp mop all vinyl floors * Empty all ash trays and wa5teh~skets * Remove all spots and spills from rugs and carpets * Clean and sanitize the entire area of the restrooms * Clean entry aoors and lobby windows * Sweep sidewalks and halls
• Replace toilet paper, p~per towel, sanitary napkin, seat
cover and soap dispensers
* Rep~ace light bulbs, tUbes, ballasts and starters * Replace cleaning products
•• eltly,
• Clean interior and exterior of all lobhy windo~s
• Dust all window blinds
Xo"tllly. * Spray buff all vinyl floors
Quarterly.
• Strip and vax all fl~rs
~ Treat all rugs and carpets for anti-static control (if
not bUilt-in)
'l"Vic. Yearly;
wash all: •
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Yearly, •
Interior and e~terior _indo~s
Window blinds
HVAC vents
Light fixtures
Walls and painted surfaces
steam clean all rugs and carpets
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LEASETERMS 1'1005 5
The landlord sltall provide a lI-ritten schedule to the tena.nt
indicating the dates on which periodic services ~ill be provided
and writ'ten notice sh.all be -.liven to the. City at any time the
schedule will be altered.
The City may provide: any janit.oria.l services and supplies which
landlord tails to provide, after three days no~ice, and deduct the
cost from the rent.
I:!!.AUlSfATE,IItltD..sn
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Ienant:
Premises:
Landlord:
Maintenance and
Janitorial:
uti 11 t i .s>
~ssi9nlTJe.nt ~~_M.
Subletting:
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EXHfBITB
lEASE SUMMAR;
209 HAMILTON AVENUE
Hamilton Froperties
City of Pale Alto
209 Hamilton Avenue,
l/l of the 2nd floor (east ,ide)
2 years with two 6·montn optlon5
aJ
b)
Base rent of $6~OOO.OO p~r month.
CPI adjustment for-2nd year.
landlord sna.ll furl11sh ele\lator and make one restroOl'l! handicap
accessible.
T";5 faciiity is a full service faci1ity. Maintenance and
janitorial are provided by the landlord as part of tne rent.
Prop:erty taxes are included irl ttle monthly ;oental as part of
this full ser ..... ice faciiity.
Landi ord \OJ] I furn ish all ut i1 it i es as P' rt of the full
service facil1ty.
City must ~ave landlord's permission to assign or sublet any
portion of the premises.
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TABLa OF CONTZ'!lTS
},.rticle 1 Definitions.
Article 2 Ten:!
Article ) Demised Premises
Article 4 Uses and Limitations
Article 5 Rent
Article 6 Security Deposit
Article 7 Taxes and AssessI:lents
Article 8 Altera.tions and Irnpr-ovements
Article 9 Mainter.ance and Repairs
Article 1~ utilities and Services
Article 11 Insura!1ce
Article 12 Indemnity
Article 13 Waiver
Article 14 Quiet Enjoyment
Article 15 Rules and Reg'"oJlations
Ar-ticle 16 Assignment and Sublease
Article 17 Surrender and Abandonment
ArticltS! 18 Condemnation
Article 19 Damage and DestructiDn
Article 20 Compliance with La",
Article 21 Default and Remedies
Article 22 Entry by Landlord
Article 23 Notices
Article 24 Tenant's Certificate
Article 25 Subordination
Article 26 Miscellaneous Provisions
Exhibit itA--
Exhibit -B n -
Exhibit "C" -
Exhibit "'D" -
Premises Floor Plan
Rules and Regulations
Janitorial Services
Confirmation of Commencement Date
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OFFICI SPACE LEASE
This Office Space Lease~ dated J~ly 27, 1992, is entered
into by and between Hamilton properties and the city of palo Alto.
UCITALS
WHEREAs, on April 29, 1992~ the City of Palo Alto issued
a request for proposals for office space in Palo Alto tor certain
employees of the city of Palo Alto Department of V~jlities~ and
WHEREAS~ Hamilton properties submitted a lease proposal
which the City's staff has determined meets its office space
requirements; and
WHEREAS, the Council of the City of Palo Alto has
determined that the execution of an office space lease w'ith
Hamilto:l properties will best serve the short-term office s.pace
ueeds of the city's Department of Utilities;
NOW, 'l'HEREFORE ~ in
conoitions, covenants and other
Lease, the parties agree:
consideration of thE terms,
provisions ~f this Office Space
Article 1 -D8~initions
The ~ords and phrases as used in thi~ Office Space Lease
shall have the follo"Wing meanings, unless the context clearly
indicates otherwise:
"Anniversary Year" means a pe~iod of twelve (121 consecutive
calendar months, whetner or not all twelve (12) calendar months
fall within th-e same calendar year. The first day of tbe first
~:iversary Y~ar shall coincid2 ~ith the Commencement Date.
"'Business Day" means any calendar day except saturday, Slmde:y,
and any ot.her day observed as a holiday by the city of Palo Alto
pursuant to PAMe Section 2~OS.lOO.
"Improvement" means all.y addition~ alteration, betterment,
construction or improvement to the Premises or the Building, or any
part thereof~
"Landlord" means Hamilton Properties,. a california partner-ship
having as its partners the following individuals: Donald Mullen,
Carol Mullen# Meyer Scher, and Hannah Scher.
"La.,," means any judicial decisioTI J statute, constitution~
ordinance, resolution, regulation, rule, administrative order I
policy, or other req'uirements of any federal, state, county or
municipal or other governmental agency or authority having
jurisdiction over the parties or the Building or premises, or both,
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in effect either at the time of execution of this Lease or at any
time during the term of the Lea~e, including, without limitation,
a~y regulation or order of a quasi-official entity or bodY4
WLease" means this Office Space Lease.
~PAMC" means the palo Alto Municipal Code.
"Person" !Deans an individual, a corporation, a partnership, a
joiTl_t venture, and other form of business association.
"Provision" ~eans any term; agreement, covenant, condition,
clause, qualification, restriction, reservation, or other
stipl.llation in the Lease that d~fines or otherwise controls,
establiEhes, or limits the performance required or permitted by
either party. All Provisions, ;.rhether covenants or conditions,
shall be deemed to be both covenants and conditions.
~Taxft means any assessment, license, charge, fee. impcsition
or le .... 7 imposed by any governmental body.
"Tenant-means the city of Palo Alto, a muni~ipal corporation
of the state of California.
'IITenant Improvements" means any Ir.provements existing on the
Premises at the Commencement Date and any other Improvements which
may be constructed on the Premises by Tenant ~r by Landlord for the
benefit ot Tenant.
"Tenant Property" means all of Tenant's personal proper-ty,
including, 'Without limitation, furnishings, trade fixtures, and
equipment.
2.1 This Lease shall be binding en the date of its
approval by the Council of the City of Palo Alto as first above set
forth ("Effective Date~). The term of this Lease shall consist of
a basic term and, at Tenant's option, two extension terms.
2.2 Unless sooner terminated purs~ant to the Provisions
of this Lease or unless the Lease is extended as set forth herein,
the basic term shall be for a t .... 'o-year period commencing on the day
the parties agree in 'Writinq that, pursuant to Article 8 t~ereof I
Landlord has comple_ted the following Tenant Improvements and has
undertaken the commencement of construction of such other Building
Improvements (~Commencement Date~) as follows:
Ca) The completion of construction of 13',11 Tenant
Improvements and Tenant's approval of the same as
more particularly set forth in section 8.3;
(b) The completion of construction of the elevator
-shaft extending from the first floor to the second
floor of the Building; and
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(e) The completion of wall cuts and i."stallation of
temporary boardin~ of such wall cuts for three (3)
windows in offices ~ithin the Premises.
The COilllDencement Date shall be
parties, and such confirmation
Exhibit "D~.
confirmed,
shall be
in writing, by the
3tt~ched hereto as
2.3 The basic term may be extended by Tenant for a
maxi~um of two (2} con~ecutive six-month terms, commencing the Day
after the basic term expires, provided, however, Ten~nt shall give
Landlord 12.0 days I prior writter, notice of its inte1";t to extend
the basic term or the first extension term, as applicable.
2.4 Tenant shall not take possession of the Premises,
unless and until Landlord has completed all Tenant Improvements and
such other Improvement'S as Landlord has agreed to construct before
Tenant is -.... ,ligated to take possession, provided, however, Landlord
shall perL. ~ Tenant to en~er the Pre~ises ~ithin thirty (30) d3ys
of tbe anticipated commencement Date in order to install all
reasonable and necessary utili ties, Ten.ant Property, and other
items in preparation for Tenant·s taking of the actual and full
possession of the Premises.
2.5 If Tenant, with Landlo!'"d's consent, remai.,s in
possession aft.er the r.,eaE·e expires, Tenant's occupancy shall bs
deemed to be on a month-to-month basis, and Tenant agrees to pay
rent dUring such holdover in accordance with the terms and
conditions of Sec~ion 5.3.
2.6 The parties agree that if exclu6ive possession of
the Premises i~ not granted within 180 days after the Effective
Date, Tenant, at its opti~n, may decla~e this Lease null and void
and Tenant shall not be liable to Landlord for rent O~ any other
payment under this Lease.
Article 3 -Demise4 pra.ises
3.1 The demised premises and all appurtenants thereto
consists of Suites ·A~ and RB" of the second floor ,-Premises") of
a 27,000 qross square feet two-story building structure
(·Buildinq") located at 209 Hamilton Avenue in the city of Palo
Alto, county of Santa Clara~ state of california (As$essor's Parcel
Number 120-2S-074): the Premises Floor Plan is attached hereto as
Exhibit ·Aw~ The total area o! the Premjses is warranted to be not
less than 3.500 square feet, and shall contain operable windo~·s.
kitchen fa.cilities, including electrical connections stubbed to the
wall J a conference room and skyligllts W'ith airtight seals. 'The
Building includes the common areas ,"common Areas") of the
Building, ~hich are not a part of the Premises but are provided and
de.siqnated by Landlord for the general noneXClusive use of all
tenants and their invitees, including, 'Without limitation, the
restrooms, hallways, lobbies, ccrridors, stair"'tays, entrances,
elevator, sidewalks, and driveways.
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3.2 Landlord shall deliver t:!".e PreZ!lises to Tenant in its
-as is· condition, provided, hOIJever, prior to the COlnl!lencE!nlent
Date, pursuant to Section B~3, Landlord ~arrants that th~ carpets
of the Premises shall be cleaned, patched and repaired to a good
and new condition and the ~al1s shall be patch&d and painted at
Tenant' 5 cost and expanse. Except as othenris~ provided herein,
Tena:1.t hcrebj... accepts the Premises, the Common Areas and the
Building (collectively, "Project N ) in their existing condition on
the commencement Date.
3.3 Landlord represents and .... arrants. and Tenar:t~ in
reliance thereon enters into this Lease on condition that, the
electrical. plumbing, !igh~ing~ air conditioning. and heating and
other RVAC system components is in compliance -wrolith applicable Law
and shall be fully operating within the Project on the Commencement
Date and. contir:uously t}'jereafter during the term of this Lease,
that the Project is tully sprinklered and contain a sufficient
quantity of fire alarms and/or smo'ke detectors, that the Project
contains no asbestos or asbestos-containing materials which would
pose a: threat of harm or ir.jury to any person, that there are no
knovm hazardous cr toxic materials located in~ or:; or about the
Project to the best of Landlord1s knowledge, and that the Project
shall be fully acc~ssible to persons with disabilities in
compliance wi't;h the requirements of tl'.e Ame.ricans ... ·ith Disabilities
Act of 1990 at the Co~ncement Date.
3 ~4 Landlord further represents that there is no on-site
parking facilities that is dedicated to Project occupants.
J.5 Landlord 'Warreants that, promptly after the Effective
Date, Landlord, at its sole cost and expense, shall arrange for the
construction of an elevator shaft in the Building and three wall
cuts for three (3) windows in an office or offices within the
Premises. The complete installation ~f the elevator and the three
(3) · .. lndows shall be perfonned at Landlord'S sole cost and expense.
The completion date of such construction and installation __ ill
occur no later tndn on October 1, 1992. If such construction and
installation is not completed within 18C days after the Effective
Date, Tenant, at its option and without liability t,o Landlord, may
ele'.::t to notify Landlord t.hat Tenent deems this Lease null and void
~hirty (30} days after service of such notice upon Landlord.
3.6 Tenant shall keep the Premises and t~e Buildinq in
which the Premises are situated, free from any liens arising out of
any work performed, materials f~rnished, or o~ligations incurr@d by
Tenant.
Artie1e • -Uses and Limitationa
4.1 Landlord hereby leases to Tenant, and Tenant hires
from Landlord, the Premises for general office space purpos~s, and
for no other purpose. The use of such Premises shall include the
following nonexclusive rights: use of the restroom facilities~ the
right of ingress and egress, the ri0ht to construct, install, use
and maintain any Tenant I:mp~ .. ovements and Tenant property, and the
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use of the sidewalks and dr-ivews.ys and the areas directly beneath
or ab::.ve such sidewalks and driveways adjacent to the Bt:ilding.
4.2 Tenant sh311 not commit, or sl.lffer to be committed,
any 'Waste upon the Prem.l.scs, or any nuisance, or other act or thing
which ~ay disturb the quiet enjoYEent cf any other te~ant in the
BUil~ing, or allow the sale by auction upon the Premises, or allov
the Premises to be used for 15ny improper, immoral, unlawful or
objectionable purposes, or place any loads upon the floor, walls or
c~ilir'<3s 'Which endanger the B\;ilding structure, or place any
harmful liquids in th.l3! drainage system of the Building. Nc waste
materials or refuse shall be dumped upon or permitted to remain
upon any part of the Premises outside the Building. No materials,
supplies .. equipmE":ot, finish-cd products or semi-finished pI'oduct.s,
raw materia: . or articles cf any natl:ire shall be stored upon or be
permitted to remai~ on any portion of the Premises outside of the
Buildinq.
Article 5 -Rent
5~.l Durir.q the first Anniversary 'lear of the basic term,
Tenant shall pay as rent on a monthly basis in advance the sum of
six: thovsand dollars ($6,000). During the second Anniversari Year
of the basic term, Tenan~ shall pay as rent on a monthly basis in
advance an adjusted amount, which in no event sh~ll be less than
$6 j 000 per month, ,~s follows:
The base for computing the adjustment shall be the
Consumer Price Index [All Urban Consumers] (base year lS82 -1984
= 100) for the San Francisco-Oakland-San Jose CSMA published by the
united States Department of Labor, Bureau of Labor sta.tistics
(-Index"). which is publi~hed most immediately preceoing the date
the second Anniversary Year commEnces (-Extension Index"), shall be
compared with the Index published most immediately preceoing the
Commenceme .. lt Date (IiBeginning Index") ~
If the ExtE'.nsion Ind€x has increased over the Beginning
Inde}(, the monthly rent payable auring the second Anniv~rsary Year
shall be set by :onultiplying the sum of s.ix thousand dollars
($6~ 000) by a fraction, the r.umerator of IJhich is the Extension
Index and the denominator of which is the Beginning Index.
landlord shall give Tenant 'Written notice of the rent paya.ble for
the second Anniversary 'lear.
If the Index is changed so that the base year differs
from that used as of the month most immediately preceding the
Commencement Date, the Index shall be convert.ed in accordance with
the conversion factor published by the United States Oep~rtment of
Labor. Bureau of Labor Statistics. If the Index is discontinued or
revised during the term, such other governmental inde~ or
computation with which it is replaced shall be uGed in order to
obtain substantially the same result as would be obtained if the
Index had not been discontinued or revised.
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5 . .2 During th~ '9xtc::nsion terms, Tenant sh'"J.ll pay as rent
on a monthly basis in advance the sum of seven t,hoU51'l1nd dollars
($7,000).
5.3 In the event Tenant holds over after the basic term l
the ~onthly rent payahle in advance shall be equal to one hundred
fifty percent (150'J ot the monthly rental payable by Tenar.t
immediately preceding the month in -which Ten~r.t holds over.
5.4 Landlord r~l'rezel"l.ts and warrants that payttent of
rent shall include the pay.nent of all operating expenses incurred
by Landlord with respect to sud'l. Premises and Tenant's allocable
portion of su~~ operating expens~s with respect to the Common Areas
and the Building4 These operating expenses shall include, ~ithout
limitation, costs tor the operation, re.pair, maintenance, and
replacelUent in ne.at. clean, sate, and good condition ot: th.e
Project, the disposal of trash, janitorial services, ",ny other
se.rvice to be provided by Lan~lord that is declared in this Lease
to be an "operating expense, n the cost of premiwrts for the
liability arld property insurance policies to be maintained by
Landlord on the Project, the amount of real p~operty taxes to be
paid on the Project and the real property on 'Which such project is
located, the costs of utilities (water. elec't.ricity, gas, selorier,
and other publicly mandated utility services to the Project) as set
forth in Article 10, the salaries, ~ages, and other fringe benefits
and costs, ~aterials, anc Guppli&5 used in maintaining the Project,
the replacement and/or addition of any I~provement mandateu by any
governmental agency and the replacement and/or addition of any
eq'lwlipment. Landlord 'Warrants that the costs of installing the
eleYator shall be at Landlord I s sole cost and -expense and shall not
be included in the rent payable by Tenant.
S.5 On or before the first day of each successive
calendar month of the basic term~ commenci~g with the Commencement
Date J Tenant shall pay rent to Landlord as set forth herei~. Such
rent shall be payable in la.'ful mClney of the United states to
Hamilton Partners to the address set forth ~n Article 23 or to such
person or at such place as Landlo~d rodY designate from time to time
in writing. In the event that any Anniversary Year, O!: part
thereof, of the basic term or extension term does not commence on
the first day of a calendar ~Qnth or does not terminate on the last
day of a calendar month, thE: payment of rent for such partial
calendar month shall b~ prorated en the ba3.is of the actual n\l'mber
of Qays in such partial calendar month.
~ticl. 6 -security Depoait
6.1 At the Commencement Date, ,!'enant st'.all deposit with
Landlord a security deposit in the amount of six tho~sand dollars
(~6/000). Upon payment of such deposit, Landlord shall provide to
Tenant's rea~ property manager one set of keys to each of the
Premises and the B-:Jilding, and Tenant~ at its cost and expense.
shall be entitled to duplicate, or Landlord shall dupl ic:atE: for
Ten~~t, fifteen (15) seTS cf keys to the Premises and the Building.
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'41 Latldlord shall p-"y all real prop.erty taxes,
assessments and insurance costs applicable to the Premises during
the term of this Lease, and such taxes, aS6essm~nts and costs shall
be dee~ed includtble in the rent paya~le hereu~der.
7.2 Tenant shall pay~ prior to delinquency, all taxes
as~essed against and levied ~pon Tenant property situated ~ithin
the Premises. When possible, Tenant shall cause its Tenant
Property to be assess-ed and billed separately from the real
property of Landlord. If any Tenant Property is assessed with
Landlo~d's real property, Tenant shall pay to Landlord the taxes
allocable to Tenant Property ~ithin ten (10) Business Days after
receipt by Tenant of a written statement setting forth the taxes
4ttributa~le to Tenant Property. Tenant shall pay for all business
licenses and taxes incurred in the operation of Tenant's business
on the Premises. Tenant shall also pay any city of Palo Alto tax
or assessment levied or assessed against tenants in the city of
Palo Alto.
7.3 Tenant shall be the owner during the t~rm of any
Tenant Improvements i~stalled at Tenant's expense, and any such
Tenan.t Improveme.nts shall be. entirely assessed to Tena.nt for
pr-operty-tax purposes. If any such Tenant Improvements are
assessed with Landlord's real proper~y taxes, Tenant shall pay to
Landlord the taxe~ allocable to Tenant Improvements within ten (10)
Business Days after receipt by Tenant of a written statement
setting forth the taxes attributable to Tenant Improvements.
Tenant shall be entitled, upon request, to receive from. Landlord a
'Written oetet"lDination of the method of allocation of Landlord ts
t~xe6 to Tenant Improvements_ Tenant shall not remove from the
Premises any Tenant Improvements, unless Landlord requests such
removal, and 6uch removal shall be undertaken at Tenant's cost and
Gxpense~
7.4 Nothing in this Article shall be construed to
prohibit Tenant from contesting any such le~~ or assessmen~, and,
if Tenant should so cor:test'J Tenant I S oblig3ltion to pay such tax or
assessmont shall during the period of c.ontest be temporarily
suspended.
Articl. 8 -Alt~rations and raprovemente
8.1 Tenant shall not ~ake. or suffer to be made, any
alteration or addition to the Premises, or-any part thereof,
without the written consent of Landlord first had and obtained by
Tenant, but at a cost of Tenant~ and any addition to, or
alterations of, the premises, except Tenant Property, shall beco~e
the property of Landlord at the e.xpiration or sooner termination of
the Lease.
8.2
placed in, on
conditioning,
Tenant shall retain title to all Tenant Property
or about the project. All heating, electri~al, a,ir
partitioning, drapery and carpeting installations
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~ade by or for Tnnant, together ~ith all personal property that has
becollle an integral }.Iart of the Bi..i.ilding j srlall be and become the
property of Landlord upon the expiration or sooner termi~ation of
the Lease, and such personal prcperty shall nat be deemed Tenant
PropertYr except as may be now or hereafter agreed to by the
parties. Tenant agrees th.a:t it will not proceed to !nake such
alterations or additions, having obtained consent from Landlord to
ao so, ~hich L~ndlord agrees to not unreasonably ~ithhold, until
two (:t) days from the receipt of such consent~ in order that
Landl.ord may post appropriate notices t.o avoid any liability to
contract.ors. or material suppliers for paYl!lent of Tenant
Improvements. Te~ant will ,3.t all times permit such n:;)ticE's tc be
posted and to remain posted until the completion of work.
8.3 Le.ndlord shall construct sLlch Im.provements requested
by Tenant, and Tenant agrees to pay for the costs of such
Im.pc-ovements~ 'Which Landlord represents 'Will net exceed twenty
thou&o!md dollars ($ 20~OOO), pro:rnptly upon 'Tenant's approval of the
cC'mpletion of such Improvements as set forth herein. Landlord
agre-es that there is no maximum dollar amount established for the
Tena.nt Improvement allowance. The. I-mproveme:'l.ts requested by
Tenant herein shall include:
(a) Opening of tt,e wall between the storage room and
the adjacent space and removal of the shelving on
the wall of the storage room;
(b) Covering of the cables and electrical outlets in
the room adjacent to the kitchen;
(c) Install three (3) windows of a size similar to
o'ther windows located 'Within the Premises in an
office or offices as determined by Tenant at IS cost
not to exceed S1 1 000 per window;
(d) Cleaning of the carpets and the patchi~g and
repairing of any da!!",aged areas of the: carpet.s.
(e) patching and painting of all interior 'Walls.
Landlord agrees to install, at Tenant's cost and expense, any other
Improvements requested by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld.
8.4 Upon the completion of construction of Tenant
Improvements, Landlord and 'I'enant shall conduct a final inspe?t~on
for the purposes of generating a pllnchl ist ot all rema~n~ng
Improvements to be completed prior to ~enant's taking full
possession of the Premises~ Any sLlch punchlist items shall be
completed by Landlord not later than thirty (30) days after the
date of final inspection.
8.5 Landlord represents and warrants that the elevator
shaft and the three (3) office windowG 'Within the Premises, the
construction of ~hich will be commenced by Landlord or its agents
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or CQ41t:rac~ors prior to the Commencement Date, shall be fully
installed 3fter all appropriate ceviews, permits and approv41s have
been obto!:l:1ned but in no event shal~ the completion of such
installation occur l~ter than OctobEr 1, 19~2~
8~ 6 At the expiration or earlier termination of this
Lease~ Landlord, at its option and upon written notice ~o Tenant,
may require Tenant to reinstall the wall between the st~raqc room
and the adjacent space, or Lar.dlord sna!l perform s~ch I~r~ove~ents
on ~ehalf 0: Tenant at Tenant's sole cost and expense.
9.1 Landlord shall, at its sole cost and expense, keep
and l!laintain the interior of the. Premises in good And sanitary
order, condition and repair, subject to r~a6onahle vear and tear.
Tenant expressly waives all rights to make repairs at the expense
of Landlord as provided for by Lay in effect on the Effective Date
or any amenOlllent thereof or-al"ly lAw hereafter passed dl.lr inq the
term of this Lease.
9.2 Landlord agrees to maintain the Project. including
the Preudses, and provide janitorial services to the Premises and
the other parts of the Project, as more fully set forth in
~~ihit ~c~, and repair the exterior walls of the BUilding and the
roof and other Project structural features, providing that Tenant
installs no additional air conditioning or other equipment on the
roof that damages the roof or roof structure. All costs incurr~d
by Landlord bereunder shall be deeDlea part of the operating
expenses includible in the rent charged hereunder to Tenant~
Article 10 -otilitiea and services
10.1 Landlord shall pay for all wate~, gas, n~at, light.
power an~ air conditioning costs. including the costs of
maintenance and re?air of such utility conduits and outlets.
Landlord shall provide janitorial supplies and light. bulhs for
general lightir.g purposes. All costs incurred vy Landlord
hereunder shall be dee~ed part of the operating expenses includible
in the rent cnarged hereunder to Tenant.
10.2 Notwithstanding that Landlord has no obligation to
provide 9~neral building security services under this Le~se,
J...andlord directly or through its janitorial contractor \iarrants
that the Building doors fronting on the Emerson and Hamilton public
riqhts of way shall be locked at all ti~es other than during the
busine.ss hours of 'tenant ar.d any other tenant occupying space in
such Building upon completion of the performance of such janitorial
s.ervices.
~ticl. 11 -Insuranee
11.1 Tenant shall not use, or permit tha Premises, or
any part thereof, to be used for any purpose other than that set
forth in Article 4. No use shall be made or permitted to be made
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of the PreIll'.ses, nor acts done 1 .... hich 'Will cause a cancellation of
any insurance policy covering the Buildj r.q, or any part thereof,
ncr shall ~enant ke~p or use or permit to be kept or used, in or
about the Premises, any article which may be prohibited by the
standard fonn of fire insurance policies. Tenant shall not be
required to provide any evidenc~ of liability insurance hereunder I
and Landlord ackno"lII'ledges that Tenant shall seJ f-in;slJre for any
r~quired amounts or liability insurance at its sol-e cost and
expense or it shall provide evidence of insurance coverage by its
membership in a pooling program.
lL2 Lar.dlord. agrees to purchase and xeep in force fire,
extended coverage, and "'all risk lT insurance, incl!lding flood
insurance, coverinq the Project in amounts r',ot to exceed the actual
insurable value of the Project as determir.ed by insurance company
appraisers. Landlord estimates that the actual insurable value of
the Building is not less than $2,500,OOO~ Landlord shall submit to
Tenant proof of such coverage in ~riting on or before the Effe~tive
Date~ Landlord warrat'Jts that the Building complies with applicable
La .... as respects earthquake safety standards for tenant occupancy of
such Building.
1]~3 Tenant shall, at its sole cost and expense, obtain
and keep in force during the term of this Le,:lse a policy of
comprehensive general liability insurance utilizing an Insurance
Services Office standard form with broad form general liability
endorsement ,GL0404), or equivalent, in an amount of not less than
one million dolla~s per occurrence ot bodily injury and property
damage combined or in a greater amount as reasonably determined by
Landlord, and shall insure Tenant with Landlord as an additional
insu4ed against liability arising out of the usa, occupancy, or
maintenance of the Premises, or Te~ant. at its option, shall self
insure for the required amounts or by providing proof of coverage
of City's participation in a pooling program with applicable
coverage. Compl iance .... i th the above requirement shall nut I
however, limit the liability o! Tenant hereunder.
Article 12 -rn~emnity
12~1 Tenant will hold Landlord exempt and harml~$s from
any damage or injury to any person, or to the personal property of
any person, arising from the use of the Premises by Tenant, or
from the failure of Tenant to keep the Premises in qood condition
and repair, as herein provided, except as such damage or injury may
arise from the negligence or willful act of Landlord or except as
any such liability, loss or damage may be allocated between the
parties and any other party under applicable prinCiples of
comparative neglig~nce.
12.2 Lar.dlord covenants and agrees to protect, defend,
inde~~ify and hold harmless Tenant, its council membe~s, cfficers~
employees, and agents, from and against any and all claims,
demands, liability, losses, costs, expenses, penalties, suits,
judgments or da~ages, including attorneys' fees, arising out of or
resulting at any time from any injury or death to person or damage
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too property as a result of the ... ·illiul or t"e-;ligent act or emission
ot La.ndlC'rd, its p.::lrtners, employees, or agents, or except as any
such liability, loss or damage may be allocated between tne parties
and any other party under applicable principles of comparativ£:
negligence, O~ ~hich results from their nonco~pliance ~ith any Law
respectinq the condition, use, occupation, or safety of the
Proj ect, or any part thereof. or ltfhi ch .:lr i ses from Landlord 15
failure to do anything required under the L.ease or for doing
anything which Landlord is required not to do under the Lease~ Th~
ind2mnity shall extend to all claims, dema~ds. or liens made or
filed by reason of any construction, renovation or remodeling by
Landlord at any time during the term of this Lease o:c arising
the=eafter~
~ticl. 13 -Waiver
13.1 Tenant, as a ~aterial part of the ccn$ideration to
be rendered to Umdlord, hereby ... ·aives all claims aqainet Landlord
for da~ages to TQnant Property in. upon or about the Premises and
for injuries to persons in, upon or ~bout premises, from any cause
arising at any time, except such da~age or injury as may arise from
the neqliqence or willful act of Landlord.
13.2 The waiver by r.andlord af any breach of any
Provision herein contained shall not be deemed to be a waivar of
such Provision or any sub5e~~ent breach of the same or any other
Provision herein contained~ 'rhe subseque.nt acceptance of rent
hereunder by Landlord shall not be deemed to be a ~aiver of any
precedinq breach by Tenant of any Provision of this Lease, other
than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's kno~ledge of such preceding ~reach at the
time of acceptance of such rent.
Artiele l' -Q~i.t Dnjoyment
14.1 Tenant shall have the right to peaceably hold, use
ar~ enjoy the Premises to the extent Tenant pays rent, obs~rves all
P-rovisior:.s of this Lease, al"1d is not in default of tbis. Lease
durinq the term of this Lease.
Article 15 -Rules an4 Regulations
15.1 '!enant .. ill not place or pentiit to be placed in.
upon or ~boyt the Premises any unusual or e~traordinary signs, and
will not conduct, or permit to be conducted, any sale by auction on
t.he Premises~ It is hereby mutually covenanted and. agreed tha.t
Landlord has z."eserved the el<clusi .... e right to the exterior sideW"alls
and roof .of the premises, and t:hat Te.nant vill not place., or
pe.nuit to be placed,. upon the exterior sidewalls, or roof I any
signs, advertisements Qr notices, without the written consent of
Landlord first had and obtained. Any sign so placed on the
Premises, shall be so placed upon the understanding and agreement
that Tenant .. ill remove the same at the terIilinatian of the tenancy
herein create.d and repair any damage or injury to the Premises
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caused thereby. ~nd if not so removed by Tenant~ th~n at Tenant's
expense.
15.2 Landlord's General Rules and Ragulations are
attached hereto as Exhicit -3".
16.1 Tenant shall not assign, mortgage, or hypothec~te
this Lease, Clr any interest thelein and shall not sublet the
Premises, or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person (t1:1e agents,
employees, ~nd of ricers of Ten"nt excepted) to occupy or use the
premises, or any portion thereof, ~ithout the written consent ~f
Landlord first had and obtained, ...... hich consent shall not be
unreasonably ~ithheld. A consent to one assignment, subletting,
occupation or use by any other person, shall not be dee~ed to be a
consent to any subsequent assignment, subletting~ occupation or use
by another person. ~ny such assignment or subletting ~itho~t such
consent s"al1 be void, and shall, at the option of Landlord,
terminate this Lease. This Lease shall not, ~or shall any interest
therein, b~ assignable, as to the interest of Tenant, by operation
of law~ without the written consent of Landlord.
Artiele 17 -Surren4er an4 Abandonment
17~1 No act or conduct of Landlord, ~hether consisting
of acceptance of the keys to the premises, or other act shall be
deemed to be or constitute an acceptance or-surrenc'le:-of the
premises by Tenant prior to the expiration of the term hereof and
such acceptance by Landlord of surrender by Tenant shall only flow
from and must be evidenced by w~itten ackno~ledqment of acceptance
cf surrender.
17.2 The surrender of this LeaGe by Tenant, voluntarily
or otherwise, shall not 'Work a merger but shall oper30te as an
assignment to Landlord of any and all existing sublee.ses, or
Landlord may, at its option, terminate any or all of such subleases
by notifying the sublessees of its el~ctivn so to do within five
(5) da}Ys after such surrender.
17~3 Tenant shall not vacate or abandon the Premises at
any time during the term. If Tenant shall abandon, vacate or
surrender the Premises; o~ be dispossessed by proces.s of laW', o'r
othe.niise, any Tenant Prcpert:r~ and left on the Premises for more
than thirty (30) days shall be deemed to be abar.doned, at the
option of Landlord, except such Tenant Property as may be mortgaged
to Landlord.
public or
domain or
terminate
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~rti~le 18 -~on4amn&tion
18.1 If any part of the project shall be taken for any
quasi-pUblic use, under any Law or by right of eminent
private purchase in 1 ieu thereof, this Lease shall
as of the date title shall vest in the condemnor or
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purchaser. Landlord shall have the option to terminate this LeasE
as of the date 'When title to suc!1. part so ta'ken vests in the
condemnor or purchaser. If all of the Project, or such part
thereot, be taker.. E>.O that. t.here does no-t. remain a substa.ntial
portion of tne Premises susceptible for occupation hereunder, this
Lease shall thereupon t~rminate.
Artiele 19 -naaaq. and Destruction
19.1 In the event cf a partial destruction of the
Premiees during the term of this Lease fro-m any cause, e>tcept for
incidental damage and destruction c~used from vandalism and
accidents to the P=emlses ~hich Ten~nt is responsible for
hereund~r, Landlord shall forthwith repair the same, provided such
repairs can be madp. ",ithin sixty (60} days under-applicable Law~
but such partial ~ ~truction shall in no way annul or void this
Lease, ~x:cept that Tenant sl'lall be entitled to a proportionate
deduction of I'ent 'While such repairs are being made (provided the
fire or other destructions to the Premises shall not have been
caused by the fault or neglect of Tenant) ~ such proportionate
deduction to be based upon the extent to ~hich the making of such
repairs shall interfere ~ith the business carried en by Tenant in
the Premises.
19.2 If such repairs cannot be made in sixty (60) days,
Landlord may, at its option, maKe the same within an additional
thirty (30) days, and this Lease shall continue in full force and
effect and the rent shall be proportionately reduced as provided in
Section 19.1~ In the event that Landlord does not so elect to make
such repairs which cannot be made in sixty (60) days, ot'" such
repairs cannot be made under La~, this Lease may be teTbinated at
the option of either party. NotWithstanding the foregoing, in the
eve.nt that. the Building in 'Which the. Premise.s ma.y be situated be
destroyed to the extent of not less than thirty three and one third
percent (33-1/3\1 of the replacement cost thereof, Landlord may
elect to terminate this Lease, whether the Premises be injured or
not. A total destruction of the :auilding in which the Premises
are situated shall terminate t.his Lease.. In the event of any
dispute bet .... -een Lar.dlord and 'Tenant relative to the provisions of
this Section 19.2, they shall each select an arbitrator, the two
arbitrators so selected shall select a third arbitrator, and the
three arbitrators so selected shall hear and determine the
controversy and the.ir decision thereon shall be. final and binding
upon both Landlord and Tenant, 'Who shall pear the cost of suer.
ar~itration equally between them. The parties shall select their
respective arbitrators within ten (10) days of the written request
by either party and the third shall be selected within five (5)
days therE'.after~ Failure of the seleccion of an arbitrator as
herein provided shall entitle either party to petition a court of
competent jurisdiction to make the appointment of an arbitrator
~hose decision shall be final.
19~1 Th~ provisions of any Law which may be in effect at
the time of t.he occurrence of any such damage or destruction, under
which ~ lease is automatically terminated or a tenant is given the
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right to terminate a lease upon the OCCUI"l:"ence of any such damage
or destruction, are hereby exprcs$ly ~aived by Tenant, but only
\lith respect to a partial destru.ction of the premises. Tenant
reserves t'tle right to terminate t-he Lease in the event of the
substantial destruction of the Premises.
~ticl. 20 -Compliance with Law
20.1 Tenant shall, at its sole cost arid expense, comply
with the requireme~ts of applicable ~~ vhich may be no~ in force,
or yhich may hereafter be in force perteining to the Tenant's use
of the PremisE!.s, and s!1ould faithfully observe in the use of the
Premises applicable La .... nov in force or as may hereafter be in
force. The ju".gment of any court of cOlllpetent jurisdiction~ or the
written admission of Tenant in any action or proceedin9 against
Tenant b~t only if Idndlord is a party thereto, that Tenant has
~lolated any such La~ in the use of the premises. shall create a
rebuttable presumpt-.ion of that fact as between Landlord and Tenant.
Artiele 21 -Default and Reme~ies
21.1 Should Tenant DL-each this Lease or abandon the
Premises before the end of the term, or if Tenant I s right to
possession of the Premises is ter.minat~d by Landlord because cf a
preach by Tenant of this Lease, th~ Lease shall l at the option of
Landlord, terminate except as provided herein and upon such
termir.ation Landlord. may recover from Tenant all dal!1.ages suffered
!::y landlord or as a result of Tenant I s failure to perform its
obligations hereunder, including but not restricted to (i) the
worth at the time of the award of the unpaid rent earned at the
time of termination of this Leas.e including interest at se~/en per
cent (7%)# Cii) the worth at time of the award by which the Unpaid
rent would have been earned after termination until the award
exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided including interest at seven per cent
(7\); (iii, the worth at the ti~e of the a~ard by which the unpaid
rent for the balance of the t.erm clfter the time of the a ..... ard
exceed.s such re."lital loss tha.t Tenant proves could be re.ason.abl.y
avoided; ~iv) any other amount reasonable and necessary to
compensa.te Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease.
Efforts by Landlord to mitigate the damages caused by Tenant 1 5
breach of this Lease shall not waive Landlord's right to recover
damages under this Section 21.1.
:21.2 In the event Tenant breaches this Lease or abandons
the Premises, the Lease shall continue in effect so long as
Landlord does not terminate Tenant's right to possession of the
Premises and Landlord may enforce all of its rights and rem~dies
otherwise given by Lay and this Lease and "Without limiting the
generality of the foregoing collect the rent as it falls due. For
the purposes of this section 22.2, the follo~ing shall not
constitute termination of Tenant's right to possession: (i) acts of
maintenance or preservation or efforts to re-let the Premises; or
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(1i) the app::>il"'tment of a receiver upon initiative of Landlord to
protect ~ndlord's interest under this Lease.
21.3 ~he remedies herein provided are not exclusive and
Landlord and Tenant shall have any and all other re~edies provided
herein or b:.r LaW.
21.4 Should Landlord bring suit for th~ possession cf
the Premises, for the recovery of any sum due hereunder r or becaus~
of the breach of any other covenant hereir., or should Tenant or
La,ndlord brinq any action for any relief; declaratory or otherwise
arising out of this Lease, the nc~-prevailing party in any such
suit shall pay court costs and a reasonably attorney's fee, which
shall be deemed to have accrued on the commencemetl't of such
action and shall be enforceable whether or not such action
is prosecuted to judgment.
21.5 Either Ca) the appointment of a receiver to take
possession of all or substantially all of the assets of Tenant, or
(b) a qeneral assignment by Tenant for the benefit of creditors, or
(c} any action tak~n or suffered by Tenant under any insolvency or
bankruptcy act shall constitute a breach of this Lease by Tenant.
Upon the happening of any such event this ~~5e shall terminate ~t
the option of Landl,:>rd to the extent permitted by Law, thirty (30)
days after written notice of termination from Landlord to Tenant.
Article 22 -Intry by Lan~lord
22.1 Tenant shall permit Landlord and its agents to
enter into and upon the Premises at all reasonable ti~es for the
purpose of inspecting tl1e same or showing the Premises to a
prospective purchaser, or for the purpoe;e of maiTl,taining the
Building in Which the Premises are situat~d, or for the purpose of
making repairs, alterations or additions to any other portion of
tbp.. Building, including the et"ection and maintenance of such
scaffolding, can~pies, fences and props as may b6 required, or tor
the purpose of placing upon the property in which the Preaises ~re
located any usual or ordinarj -For SaleK signs, ~itho~t any rebate
of rent and without any 1 iability to Tena.nt for any loss of
occupation or quiet enjoyment of the premises thereby occasioned,
and shall permit Landlord and its agents, at any time within ninety
(90) days prior to the expiration ot this Lease, to place upon
Premises any usu~l or ordinary ~TO Let~ or nTo Lease" signs and
exhibit the Premises to prospective tenants at reasonable ho~rs~
Landlord shall give Tenant reasonable prior notice of Landlord's
desire to enter upon the Premises.
Artiol. 23 -Motices
23.1 All notices ~hich mayor are required to be given
by either party to the other may be given in ~riting and shall be
deemed to have been fully given when either delivered personally or
15
deposited in the u.s. mail, postage prepaid, or otherwise to the
following address or any other add:ess as subsequently noticed in
vriting by either party as follo .. s:
To Landlord:
with a copy to,,:
To Tenant:
with a ,,::opY to:
Hamilton prcperties
c/o Scher , Bassett
464 South Mathilda Avenue
Suite 210
Sunnyvale, CA 94086
ATTN: Meyer Scher, Esq.
Hamilton Properties
c/o Carol Mullen
618 Tennyson Avenue
Palo Alto, CA 9430~
City of Palo Alto
Manager, Resource Planning
Department of Utilities
P.O. Box 10250
Palo Alto, CA 94303
City of Palo Alto
Real Property Manager
P.O. Box 10250
Palo Alto, CA 94303
Artiele 2~ -Tenant'. Certificate
24.1 Tenant Shall, without charge, at any time within
ten (1-1:)) da.ys after receipt by Tenant from Landlord of written
request therefor, deliver a duly executed and acknowledqGd
certificate to Landlord or any other Person designated by Landlord,
certifying: (i) this Lease is unmodified and in full force and
effect, or if there has been any modification, that the same is in
full force and effect as modified, and stating any such
modification~ (iiJ whether or not there is then existing any claim
of Landlord's default hereunder and, if so, specifying the nature
thereof: and (iiiJ the dates to ~hich the rent and other charges
payable hereunder by Tenant have been paid.
Article 25 -Subordination
25.1 Tenant agrees that this Lease may, at the option of
Landlord .. be subject and subordinate t.o any mortgage, deed of trust
or other instrument of security ~hich has been or shall be placed
on the Project of 'Which the Premises fon:c. a part, and this
subordination is hereby effective 'Without any fUrther act of
Tenant. Tenant shall, at any time hereinafter, on demand, execute
any instruments, releases .. or other documents that may be required
by any mortgagee, mortgagor, or trustor or beneficiary under any
deed of trust for the purpose of subjecting and subordinating this
Lease to the lien of any such mortgage, deed of trust or other
instrument of security, and the failure of Tenant to execute any
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such instruments, r.eleases or d~uments: shall constitute a default
hereunder.
26.1 The invalidity or \.menfcrceability of any Provision
of this Lease shall not affect the validity or enforceability of
the remainder of this Lease~
2~.2 The Provisions of this Lease shall, subject to the
Provisions on assiqnment, apply to and bind the heirs, successors,
executors, adminiet~ator5 and assigns of all of the parties hereto,
and all of the parties hereto shall be jointly and severally liable
hereund:er.
26.3 Time is of the essence of this Lease ana each and
all of its provisions.
26.4 The margin;;.l captions, h~adinqs or title to the
Sections of this Lease are not a part of this Lease and shall
have no effect upon the construction or interpretation of any part
thereof.
2.6~5 'Ihis inst-rument contain:; all of the Provisions m~de
between the parties hereto and may not be modified orally or in any
other ~anneT than by an agree~ent in ~riting signed by all of the
parties hereto or their respective successors in interest.
26.6 The undersigned parties hereby warrant that they
are du1y authorized and empo~ered to execute this Lease.
26.1 Tenant shall not be liable to any real est.ate
broker or any other agent retained by Landlord to procure the
execution of this Lease for any broKerage fee or any other fee, and
Landlord aqrees to be severally liable for the payment of any such
applicable fee~
26.8 If the time in which any act is to be performed
falls on a saturday, Sunda.r or a city holiday, the ti!'le for
performance shall be extended to the following Business Day~
26~9 All Exhibits no..., or her-eafter referenced herein are
lly such reference incorporated in this Lease and made a part
hereof.
IN WITNESS WHEREOF 1 the parties have executed this Lease
in Palo Alto~ California on the date first above stated.
"LANDLORD" "TENANT"
HAMILTON PROPERTIES CITY OF PALO ALTO
Donald Mullen l Partner
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Carol Mullen, Partner
Mayer Scher, Partner
""",-:;,--;:-.-:=--==-=------Hannah Scher, Partner
,.
J..TTEST:
City cl-erk
APPROVED AS TO FORM
S:r ~ Assistant Ci.ty Attorney
APPROVF.:D
City Manager
Director of Utilities
Director of Finance
Real Property Manager
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o EX~IS!T A
209 Hamilton Ave., Palo Alto
-.ABey-
-Emerson-
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June 18. 1992
.-C)
RULES At-iD REGULATIOr,S FOR
STI',NDA.RD OFFiCE LEA.S::
RAM1L'tQ:N PROP!.R'IIES, l.E3S0F: AND eIn: OF ?:u.D _ .... LTD, 1.ESSEE
GENERAL RULES
~ It"UIe't $\\101\ 1'\'0\ " .. I'll!' 1;)' ~tmll tr'l~ ob!.\'IJCtICr. 0\ a,,.. (0 ..... ""'0:\ lJof..s,. mCI'Jdlt',~ a"'<e"'~1" ..... al~ .. a"s 011,"11: Stair",;:.":!.
~ leU!:)' rnll!.-...t3 !ne ng~' 10 rlt ... "e Ii;;;CIt~~ 10 an,' pt'~n.s i..~:;.~r "':/wc tart" , ... oo~~ Ie b€:!; !1'1'e~' tc tree ~i!(:~)' ;e,",U1il:::O~ o· Olooer"l~ o·
trle"Dh,Cf' liIuifC1n; PrOlt'c: II'ld 1\:> oct-uea".I.!
J Le~~ $lI.;!11 "'Ot m.r;e c' DE'rm,: an)' rlO1Se o· OCl~r~ !noll' ''lnoy or 1r,<'~'lere W1~~ Cl,I'1e' ie.slees 0' Dt":; .. '1& ~JVH'!; D:.J~"I€'S.s Wlln,r lrH!' O+:,;:e
~UIIO"';; Pra,e:C'.
4 Lt'5:sl!e :;.t'liIIll 1"101 io:.",P .nrmal~ or til rns ... r~t,.,,; lne ~ IC'!' S"il(j'''g J:'01eCI ""0 iI'~li not br"'51 C'L"', <:::''= s, f!1 C[O'(;y~le~ or Orne' ,,~n"C'iI!j irllC erea:;.
1"101 De~nIoll10 If a.rrrlon;zec: :Cl' ~".,C
LeS$ft! ~11'Ki1 ~ .. e, :su~r C' ~rmlt 11111" e:o:r::eo' "". app'''tm~lle r~":<!.oiaCJe51o.' IM~ ourpost-
6 ~U5!'e Wll rn;l: aHt· 'n>' lock Qr 1f1:;liI~i new 0; .IId!:liHD'1.<:i ~oc~.! o' DO~tli
7 lt5~ S!'!.all bt' resPQn:;Jtlle 10< Into ,"",pprOO".lt use c! ;a.,~ loile,' rooms, Olu,"TI[)H"19 01 Ol"'~' l.'\','II!e .. ND ).;;re,!;Ir, 5,,=-$r~noes oj .""1' iur:C !rt
,:> t>t InseT1eo l1M!r!1n
I! l~ Ylilil nOi oeliilCIllIrn!' wall:'. oariliions 01 otner s;.rl'1i1ces cllM' o.emls.t~ 0' Ofh ... ~ r:'~oIOrn; ~rC'!I'C:
Ii Le:s~ $fllll, "0: s<,Jfle-" 0' perml: 2'1,' 1P'"n9 ,n 01 .rCu.,o Itle ~rem'5e~ (l~ Bu;IOlnQ !tI;J, c;.;l.1Se5 1"0,,55'''1' ·"t)'1i1'0'1 0" IIClO' loaolrlg II", ant oa~
':;1 tl'1e Olflce SoJilC\T>9 ~Ojltc:.
, C' FUITuhtre, SlElnrlanl Ir:!,;"c iilnd eo ulOIM'Mt slla n bt: mOved 1n10 (If O\r. Cl: .1'11' builC ''''' ~iy Wl~'111>e ;"1'550' 's ~ilO\lloltl'C ~e anC' COn.!len:.II~O ,ubjeo:
to , ... C!'1 reuonabO.e limttatlQnt., Il!'C.n!'\~ue5 InC! (Imong" llli !TO!y tlf! Clt.S,Sr1.al'J::i!l, :.k1SC' L"!>.5~ .. :,.;.il Oil' reSOcnSI!lle Icr IIny aa,.".,.ge l;:' tn.e Ot!'ce
Bu,=o'nQ.PnJ~ClI'r\sJr\9 \rom an,. .s..oc~ .actM1y
, 1 l.e'.ssn shill 1101 emPlOY I!"JI _NiclI! C r CDf'I!riilC1~ lor Hn,III::es a' ... "O,~ 10 bP pertcm,1:!'C ::; !rle 6:;i 10"1;. I'llce 01 IS ! ::;OfO~ Or i.~S5C:
,~ Lessor re5e1"\<!'5 tI1e n~ht 10 elOH-allo IocioIll'le SUlldm~ Or. SaIl.1tCa~, SYIlOB)'S .nd ~;a; nr.I"::ilYS: .an:: or. Olner cayS bf!lorte<'1 tM' novr~:lf
_1 __ ~Iol, and ___ 6 "-IJ 0' t~ 10!10'Wl:':1iii 1::3,' t. U!.s.see IJ5E'-S lne FT •. "T\;U'5 Ounnliii 5ue~ pt':':0<lJ;, L~s~e Shiillr tlt! rt!s:lO"~~e lor see:;reiy lockrn;
any coo"!-t( mlly " .... ., OPIne(! 1.0-ell"y
13 ~DH sr..all r~lJm all klr)'$ al tne lerrnli'la:,o" of liS le.,.,..oy iilMe S!1,ali oe ruoon~bie 10':M :o~~~' reclJ.c,ng CI.n~' '.1'],$ that .rt los;
"1'1
'5 No ~,em.~ 0'; IIlVTt"' 5-'l.iIil ill ~oon the rocl 01 Ii'll! r.uildJn~
, e ll"$$H! S<-.a,'1 ~o: surte-r or PI' 'Ti'111 5mO";"'~ ~, C<I rryln~ 01 j'g-nled eloijl!'5 or ::;--9l1f:t1~i m are as rea~onat;l~" oes.I;;l'l'.alet: O}' :..esser or .to,' ;IIPCIIC.30.e"
,!=~mmeMII! ege-Ilo~ IS 1'IOf>4:Jmc»t.lng .area ..
17 le~ Sf\ol!1 nOI u.sii' ilrl)' ~!;"t;od IJ~ ne;;llns C· ;;11 ocnO;I,ofi.ln.;; Co'r,e' ~h;ln iI.I. ~rc""'etl[) ... ~e5SC;
H ~ Sr\3I' no: ~slClIl 1T',":":C:~m C' cOOi'rate It'!'/' ~r'!>aln~ rnach'!'II!s I-'oor. n'e" ;:-,e-r:1!.s<l:~ ·...,:n::::.;·. ~e$$or s wTltTe~ cor.:5"'~·'
lS ~nt-"'l!"Tll:Se: sr.al. no! DIl' lI~Il'O tar ~Cl:J",tn9 c' m .. "uLa.-=lu"n; eOO'l<'='. c;r IOOC prt=-a ... !'~~
~C' i..e~ ~Ii c-omPl) W"tl'1 .:: S311!1~, I~re protecllon a"d evacUilI,O'r: n!Oil.ltatlOns e$ta.e-I,~l'1e~.to" LI'!~-sor cr i"Y 1~~Ic.abI!! gO'Yerr.~nlal agenC)
21 lesser rt"Ser\le5 to"e "91'1: 10 ..,.111!! ar'1l1 one DI 'Mu rul~5 cr repClI;a1lol11L a~ol'" as I" 01:'1,' tla!tlculi!' i..essee In~ .".1' 1.1Ict1 WOlJ\I't,' snail nal
corlStl1.l.."1e I ""'~r 0: Iny OHlel rule 0' relWu~iJon 0" aIly s"toSI'C;;V,I"·t.aCOIIC<1I:(l1l !"trt01 10 5L'-=~ Ll!ssef!
~, UoILMt 1.S&Jmt:5ii111 ns-O;5 1r0'" Inreh ~ ...andallsm In.:.! i.~rel!~ 10 1o.!!!'e'0 ':5 p,..".rr,lses loelCl"O liS may t>e rl"Qu"O!!'t:
2; /..e'$$cf l"I1Ie!'YE:~ the ng"" 10 maKt I!o"CI'1 Olrot!r re.i.50p\;a~·e ru'tS II"::' re~"'t.I!!'c.r.5 ilS it "'/II)' Iro,.,., lime lC tl:ne ceem neces,ur:-te' tne _;::l:lropdaie
(lPt'.r:al'OI'1 ~C lalelY 01 fl'll!' 0I11~ Eou')Cl'lil FTo.~C", ,; 110 ilS (iecu.p,em:. '...e ~ 5e~ .II "rHOS I:: ).1:<loe tll' 'l'Iue an;;; 5",:;'1 r>J'es /II:'1C reglJl.3ll0l'1ti
Exhibit B
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EXHIBIT C
J~TORI~ SERVICES
The landlord should provide all janitorial services and supplies.
A thorough one-time cleaning ... ·hich include5 all of the
specifications found belo ..... must ce done prior to the city occupying
the space.
Daily:
• • • • • • • •
•
weekly:
Dus~ all furniture, C0unters, cabinets and window sills
Vacuum all rugs and carpets
Damp mop all vinyl floors
E~pty all ash trays and wastebaskets
Remove all spots and spills from rugs and carpets
Clean and sanitize the entire '\rea of the restrooms
S ...... eep sidewalks
Replace toilet paper, paper towe 1, coin-operated s·:!nitary
napkin, 5e~t cover and soap dispensers
Replace light bulbs, tUbes, ballasts and starters
* Dust all vindaw blinds
Monthly: * Spray buff all vinyl floo=s
'twice Yearly:
Wash all:
* Interior and exterior .... ' indc'.Js
REALE.ST ..... TE nJl ILSP2
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EXHIBIT D
CONFIRlIoiA'I'ION OF COMNENCr~MEN'I DATE
TO BE FIJRl'nSHED BY LANDLORD vpaN
COMPLE''l'!ON OF THE IMPROVEMENTS