--------------------------------------------------------------------------------
PACIFIC CORPORATE CENTER
OFFICE LEASE
BETWEEN
TIPAC-I, LP,
A CALIFORNIA LIMITED PARTNERSHIP
(LANDLORD)
AND
CAYENTA, INC.,
A DELAWARE CORPORATION
(TENANT)
DATE: JANUARY 14, 2000
--------------------------------------------------------------------------------
TABLE OF CONTENTS
SUBJECT MATTER PAGE
Article 1 PROJECT, BUILDINGS, AND PREMISES 1
Article 2 SUBSTITUTION OF OTHER PREMISES 2
Article 3 LEASE TERM 2
Article 4 BASIC RENT 3
Article 5 ADDITIONAL RENT 4
Article 6 SECURITY DEPOSIT 7
Article 7 USE 7
Article 8 COMPLIANCE WITH LAWS 8
Article 9 HAZARDOUS MATERIAL 8
Article 10 UTILITIES AND SERVICES 9
Article 11 REPAIRS AND MAINTENANCE 10
Article 12 ALTERATIONS AND ADDITIONS 11
Article 13 COVENANT AGAINST LIENS 12
Article 14 EXCULPATION, INDEMNIFICATION, AND INSURANCE 12
Article 15 DAMAGE AND DESTRUCTION 15
Article 16 CONDEMNATION 16
Article 17 ASSIGNMENT AND SUBLEASING 18
Article 18 SURRENDER OF PREMISES 20
Article 19 HOLDING OVER 20
Article 20 ESTOPPEL CERTIFICATES 20
Article 21 SUBORDINATION, NONDISTURBANCE, AND ATTORNMENT 20
Article 22 DEFAULTS AND REMEDIES 22
Article 23 LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS 23
Article 24 LATE PAYMENTS 23
Article 25 NONWAIVER 23
Article 26 WAIVER OF RIGHT TO JURY TRIAL 24
Article 27 ATTORNEY FEES AND COSTS 24
Article 28 LANDLORD'S ACCESS TO PREMISES 24
Article 29 SIGNS 24
Article 30 TENANT PARKING 25
Article 31 MISCELLANEOUS 25
Exhibit A DIAGRAM OF PREMISES
Exhibit B SITE PLAN OF PROJECT
Exhibit C TENANT IMPROVEMENT AGREEMENT
Exhibit D NOTICE OF BASIC LEASE INFORMATION
Exhibit E RULES AND REGULATIONS
Exhibit F ESTOPPEL CERTIFICATE
Exhibit G GUARANTY OF LEASE
Part I
SUMMARY OF BASIC LEASE INFORMATION
The basic terms of this Lease are:
1. Date of Lease: January 14, 2000
-------------------------------------------------------------
2. Landlord: TIPAC-I, LP, a California limited partnership
------------------------------------------------------------------
3. Tenant: Cayenta, Inc., a Delaware corporation
--------------------------------------------------------------------
4. Premises and Building:
(a) Building Address (Section 1.1): ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇
-----------------------------------
(b) Number of Rentable Square Feet in Building (Section 1.1): 49,704
-------------
(c) Premises (Section 1.1): The entire first floor of the Building
(excluding main lobby of the building and elevator shafts) containing
approximately 15,191 Rentable Square Feet (14,757 Useable Square Feet)
of space, the entire second floor of the Building (excluding elevator
shafts) containing approximately 17,255 Rentable Square Feet (16,762
Useable Square Feet) of space, and a portion of the third floor of the
Building containing approximately 12,582 Rentable Square Feet (10,467
Useable Square Feet) of space, for a total of 45,028 Rentable Square
Feet (41,986 Useable Square Feet) all as depicted on EXHIBITS A-1
THROUGH A-3.
5. Lease Term:
(a) Duration (Section 3.1): Seven(7) years and zero(0) months:
-------------- --------------
(b) Lease Commencement Date (Section 3.1): The earlier of (1) the date on
which Tenant occupies all or part of the Premises (other than in
connection with the construction of the Premises or installation of
Tenant's trade fixtures and equipment) and (2) the date on which the
Tenant Improvements are Substantially Complete subject to acceleration
due to Tenant Delays. The target Lease Commencement Date is
February 1, 2000;
(c) Lease Expiration Date (Section 3.1): The last day of the month in
which the Seventh (7TH) anniversary of the Lease Commencement Date
-------------------
occurs;
(d) Option term extensions (See Section 3.5): Two(2) options to extend for
five (5) years each.
6. Basic Rent (Section 4.1):
MONTHLY BASIC RENT PER
LEASE YEAR MONTHLY BASIC RENT RSF/MO.
---------- ------------------ -------
1 $72,044.80 $1.60
2 $74,296.20 $1.65
3 $76,547.60 $1.70
4 $78,799.00 $1.75
5 $81,050.40 $1.80
6 $83,301.80 $1.85
7 $85,553.20 $1.90
Basic Rent Rebate (Section 4.5): Sixty-five Thousand Dollars ($65,000.00)
------------------------------------------------
7. Additional Rent (Article 5):
(a) Base Year (Subsection 5.2.1): The calender year of 2000
--------------------
(b) Tenant's Share of Direct Expenses (Subsection 5.2.6):
Approximately 91%
---------------------------------------------------------
8. Security Deposit (Section 6.1): $72,044.80
--------------------------------------------
9. Permitted Use (Section 7.1): General office and administrative uses
-----------------------------------------------
including a data center, call center, and training center
---------------------------------------------------------------------------
10. Parking (Section 30.1): Tenant shall be entitled to the use of its Tenant's
Share of available parking at the Project based on a ratio of 4 parking
spaces per 1,000 Usable Square Feet within the Premises.
Page 1 of 2
Part II
LEASE PROVISIONS
Article 1
PROJECT, BUILDING, AND PREMISES
1.1. LEASE OF PREMISES. Landlord leases to Tenant and Tenant leases
from Landlord the premises described in Summary of Basic Lease Information
Section 4 (c) ("Premises"), which are located in the building described in
Summary Section 4 (a) ("Building"), reserving to Landlord the rights described
in Lease Section 1.3. The outline of the Premises is set forth in EXHIBITS A-1
THROUGH A-3. The Rentable Area and Usable Area of the Premises and the Rentable
Area of the Building are set forth in Summary Sections 4 (b) and 4 (c). The
Building and the land on which the Building is located (as shown on the site
plan attached to this Lease as EXHIBIT B) are sometimes collectively referred
to as the "Project". Tenant acknowledges that Landlord has made no
representation or warranty regarding the condition of the Premises, Building
and/or Project except as specifically stated in this Lease.
1.2. APPURTENANT RIGHTS. Tenant is granted the right at all times
during the Lease Term to the nonexclusive use of the main lobby of the
Building, common corridors and hallways, stairwells, elevators, restrooms,
sidewalks and other public or common areas located on the Project. Landlord,
however, has the sole discretion to determine the manner in which those public
and common areas are maintained and operated, and the use of those areas shall
be subject to the Rules and Regulations as defined in Section 7.1.
1.3. LANDLORD'S RESERVATION OF RIGHTS. The following rights are
reserved to Landlord: (a) the right to all of the Building, except for the
space within the Premises; (b) the right to change all elements of the Project;
(c) the rights reserved to Landlord by provisions of this Lease or by operation
of law; (d) the exclusive right to consent to the use or occupancy of the
Premises by anyone other than Tenant; and (e) all rights in the economic value
of the leasehold estate in the Premises, as stated in Articles 16 and 17.
1.4. PREPARATION OF PREMISES: ACCEPTANCE. The rights and obligations
of the parties regarding the construction of the Premises before the
commencement of the Lease Term are stated in the Tenant Improvement Agreement
attached to this Lease as EXHIBIT C. If this Lease conflicts with the Tenant
Improvement Agreement, the Tenant Improvement Agreement shall prevail.
1.5. RENTABLE AREA AND USABLE AREA.
1.5.1. STANDARD OF CALCULATION. For purposes of this Lease,
"Rentable Area", "Rentable Square Feet", "Rentable Square Footage", "Usable
Area", Usable Square Feet", and "Usable Square Footage" shall be calculated
under the American National Standard Method for Measuring Floor Area in Office
Buildings, ANSI 7.65.1C1996 (revised and adopted June 7, 1996) or successor
standard(s), adopted by the Building Owners and Managers Association
International (BOMA).
1.5.2. VERIFICATION OF RENTABLE AREA OF PREMISES AND BUILDING.
The Rentable Area of the Premises and the Building is subject to verification
from time to time by Landlord's space planner or architect. That verification
shall be made in accordance with this Section 1.5, Tenant's space planner or
architect may consult with Landlord's space planner or architect regarding that
verification. The determination of Landlord's space planner or architect,
however, shall be conclusive and binding on the parties.
1.5.3. ADJUSTMENT OF RENT. If Landlord's space planner or
architect determines that the Rentable Area of the Premises or the Building is
different from that stated in this Lease, all Rent that is based on that
incorrect amount shall be modified in accordance with that determination. If
that determination is made, Landlord and Tenant shall confirm it in writing.
1.6. MUST-TAKE SPACE. Tenant agrees to add to the Premises the
approximately 4,676 Rentable Square Feet (approximately 4,138 Useable Square
Feet) of space contiguous to the Premises presently known as Suite 301 of the
Building (the "Must-Take Space"). The Must-Take Space is depicted on EXHIBIT
A-3 attached to this Lease. Landlord shall deliver the Must-Take Space to
Tenant, and Tenant shall accept tender thereof from Landlord, in its then
"as-is" condition and at such time as the existing occupant vacates the
Must-Take Space whether due to the scheduled expiration or earlier termination
of such occupant's lease with Landlord (the "Delivery Date"). Beginning on the
Delivery Date and continuing for the balance of the Lease Term (including any
extensions): (a) the Must-Take Space shall be part of the Premises under this
Lease (so that the term "Premises" in this Lease shall refer to the space in
the Premises immediately before the Delivery Date plus the Must-Take Space),
and (b) Tenant's Share of Direct Expenses shall be adjusted, in accordance with
Subsection 5.2.6 of this Lease, to reflect the increased Rentable Area of the
Premises. Tenant's lease of the Must-Take Space shall be on the same terms and
conditions as affect the Premises provided, however, that upon taking possession
of the Must-Take Space, Tenant shall be entitled to an allowance from Landlord
in an amount equal to Five Dollars ($5.00) per square foot of Useable Area
within the Must-Take Space for use by Tenant in refurbishing the Must-Take Space
(the "Refurbishment Allowance"). The Refurbishment Allowance may only be used
for general cleaning and repairs, installation of new carpet, paint and wall
coverings, and other permanent improvements to the Must-Take Space and must be
used by Tenant, if at all, within one hundred and eighty (180) days following
the Delivery Date. Tenant's failure to use the Refurbishment Allowance within
such one hundred and eighty (180) day period shall constitute Tenant's waiver of
its right to the Refurbishment Allowance. Basic Rent and Tenant's Share of
Direct Expenses shall start to accrue with respect to
Page 1 of 28
the Must-Take Space on the Delivery Date. Landlord shall provide written notice
(the "Must-Take Notice") to Tenant at least ten (10) days before the Delivery
Date. The Must-Take Notice shall indicate the anticipated date of Landlord's
delivery of the Must-Take Space to Tenant. After Landlord delivers the
Must-Take Space to Tenant, Landlord and Tenant shall enter into an amendment to
this Lease specifying that the Must-Take Space is a part of the Premises under
this Lease, that for purposes of calculating the Rentable Area and Useable Area
of the Premises and the Building, the Third floor corridor shall be deemed a
part of the Premises, and containing other appropriate terms and provisions
relating to the Must-Take Space.
Article 2
SUBSTITUTION OF OTHER PREMISES
[Intentionally Omitted]
Article 3
LEASE TERM
3.1. LEASE TERM. The provisions of this Lease shall be effective as
of the date of this Lease. The term of this Lease ("Lease Term") shall be the
period stated in Summary of Basic Lease Information Section 5 (a). The Lease
Term shall commence on the date ("Lease Commencement Date") stated in Summary
Section 5 (b) and shall expire on the date ("Lease Expiration Date") stated in
Summary Section 5 (c) unless this Lease is sooner terminated as provided in
this Lease. The target Lease Commencement Date ("Target Lease Commencement
Date") is also stated in Summary Section 5 (b). Landlord and Tenant agree that,
to the extent reasonably possible, Landlord and Tenant shall cooperate with
each other to accommodate Tenant's installation of Tenant's trade fixtures and
equipment prior to Tenant's taking possession of the Premises.
3.2. CONFIRMATION OF LEASE INFORMATION. At any time during the Lease
Term, Landlord may deliver to Tenant a notice in the form set forth in EXHIBIT
D, attached to this Lease, which Tenant shall execute and return to Landlord
within ten (10) days after receipt.
3.3. LEASE YEAR. For purposes of this Lease, the term "Lease Year"
means each consecutive twelve month (12 month) period during the Lease Term as
long as: (a) the first Lease Year commences on the Lease Commencement Date and
ends on the last day of the eleventh (11th) calendar month thereafter; (b) the
second (2nd) and each succeeding Lease Year commences on the first day of the
next calendar month; and (c) the last Lease Year ends on the Lease Expiration
Date or earlier date of termination.
3.4. DELAY IN DELIVERY OF PREMISES. Landlord shall exercise
commercially reasonable efforts to Substantially Complete the Tenant
Improvements described in the Tenant Improvement Agreement attached to this
Lease as EXHIBIT C and to deliver possession of the Premises to Tenant on or
before the Target Lease Commencement Date. If, however, Landlord is unable to
deliver possession of the Premises to Tenant on or before the Target Lease
Commencement Date, Landlord shall not be subject to any liability for its
failure to do so. This failure shall not affect the validity of this Lease or
the obligations of Tenant under it, but the Lease Term shall commence on the
date on which Landlord delivers possession of the Premises to Tenant.
3.5. OPTION TO EXTEND LEASE TERM. Landlord grants to Tenant the
option to extend the initial Lease Term (the "Extension Option"), subject to
the conditions described in this Section 3.5 for two (2) successive periods of
five (5) years each (the "Option Term"), i.e., from the first day following
expiration of the initial Lease Term and continuing until the last day of the
sixtieth (60th) month thereafter (the "First Option Term") and from the first
day following expiration of the First Option Term until the last day of the
sixtieth (60th) month of the First Option Term (the "Second Option Term").
Tenant shall have no right to extend the initial Lease Term beyond the Second
Option Term.
3.5.1. CONDITIONS OF OPTION. The Extension Option shall be
subject to the following conditions: (a) the Extension Option may be exercised
only by written notice delivered by Tenant to Landlord as provided in
Subsection 3.5.3 below and only if, as of the date of delivery of the notice or
thereafter until commencement of the Option Term. Tenant is not in material
default under this Lease after the expiration of any applicable cure periods;
(b) the rights contained in this Subsection 3.5.1 may be exercised by the
originally named Tenant or by any assignee of Tenant's interest in this Lease
if the assignment has been approved by Landlord under Article 17 or is
otherwise permitted under Article 17; and (c) if Tenant properly exercised the
Extension Option, the Lease Term, as it applies to the entire Premises then
leased by Tenant, shall be extended by the applicable Option Term.
3.5.2. OPTION RENT. The Rent payable during the Option Term
("Option Rent") shall be equal to the "Fair Market Rental Value" of the
Premises as of commencement of the applicable Option Term. For purposes of this
Subsection 3.5.2, Fair Market Rental Value of the Premises shall be the rental
rate, determined in accordance with this Section 3.5, at which tenants lease
comparable space as of the commencement of the applicable Option Term. For this
purpose, "comparable space" shall be office space that is not subleased; not
subject to another tenant's expansion rights, comparable in size, location, and
quality to the Premises; leased for a term comparable to the applicable Option
Term; and located in comparable buildings to the Building. In determining the
rental rate of comparable space, the parties shall include all escalations and
take into account rental abatement concessions, if any, being granted to tenants
in connection with the comparable space and tenant improvements or allowances
provided or to be provided for the comparable space, taking into account the
value of the existing improvements in the Premises, based on the age, quality,
and layout of the improvements. If in determining the Fair Market Rental Value
the parties determine that the economic terms of leases of comparable space
include a tenant improvement allowance, Landlord may, at Landlord's option,
elect to grant some or
Page 2 of 28
all of the value of the tenant improvement allowance as an allowance for the
refurbishment of the Premises and reduce the basic rent component of the Fair
Market Rental Value to be an effective rental rate that takes into
consideration the total dollar value of that portion of the tenant improvement
allowance that Landlord has elected not to grant to Tenant (in which case that
portion of the tenant improvement allowance evidenced in the effective rental
rate shall be granted to Tenant).
3.5.3. EXERCISE OF OPTION. The Extension Option must be
exercised, if at all, only at the time and in the manner provided in this
Subsection 3.5.3. If Tenant wishes to exercise the Extension Option, Tenant
shall deliver written notice ("Interest Notice") to Landlord no less than eight
(8) months before expiration of the initial Lease Term or First Option Term, as
the case may be. After receipt of Tenant's Interest Notice, Landlord shall
deliver notice ("Option Rent Notice") to Tenant no less than seven (7) months
before expiration of the initial Lease Term or First Option Term, as the case
may be, stating the Option Rent, based on Landlord's determination of the Fair
Market Rental value of the Premises as of the commencement of the First Option
Term or Second Option Term, as the case may be. If Tenant wishes to exercise
the Extension Option, Tenant must, on or before the earlier of (a) the date
occurring six (6) months before the expiration of the initial Lease Term or
First Option Term, as the case may be, or (b) the date occurring thirty (30)
days after Tenant's receipt of the Option Rent Notice, exercise the Extension
Option by delivering written notice ("Exercise Notice") to Landlord. If Tenant
wishes to contest the Option Rent stated in Landlord's Option Rent Notice,
Tenant must provide, with the Exercise Notice, written notice to Landlord that
Tenant objects to the stated Option Rent.
3.5.4. RESOLVING DISAGREEMENT OVER FAIR MARKET RENTAL VALUE. If
Tenant timely and effectively objects to Landlord's determination of Fair
Market Rental Value under Subsection 3.5.3, the disagreement shall be resolved
under this Section 3.5.4. Landlord and Tenant shall diligently attempt in good
faith to agree on the Fair Market Rental Value on or before the tenth (10th)
day after Tenant's objection to the Fair Market Rental Value ("Outside
Agreement Date"). If Landlord and Tenant fail to reach agreement on or before
the Outside Agreement Date, Tenant may rescind Tenant's Exercise Notice by
delivering written notice thereof ("Rescission Notice") to Landlord within five
(5) days after the Outside Agreement Date, in which case the Lease Term shall
expire on the Rescission Notice to Landlord, the initial Lease Term or First
Option Term, as the case may be. If Tenant fails to timely and effectively
deliver the Rescission Notice to Landlord, the initial Lease Term or First
Option Term, as the case may be, shall be deemed extended by the Option Term in
question and the Option Rent shall be determined as follows. Landlord and
Tenant shall mutually appoint a certified M.A.I. appraiser that has at least
five (5) years full-time commercial appraisal experience and shall each submit
their separate determination of the Fair Market Rental Value to the appraiser.
If Landlord and Tenant are unable to agree on an appraiser, either of the
parties to this Lease, after giving five (5) days prior written notice to the
other party, may apply to the then President of the San Diego Board of Realtors
for the selection of an appraiser who meets the foregoing qualifications, which
selection shall be made within three (3) days. The appraiser selected by the
President of the Board of Realtors shall be a person who has not previously
acted in any capacity for either party. The appraiser shall, within fifteen
(15) days of his or her appointment, review the Landlord's determination and
the Tenant's determination of the Fair Market Rental Value and such other
information as he or she shall deem necessary and determine which of the two is
closer to the actual Fair Market Rental Value. The appraiser shall be
instructed, in deciding whether the Landlord's determination or Tenant's
determination of the Fair Market Rental Value is closer to the actual Fair
Market Rental Value, to use the criteria as to Fair Market Rental Value set
forth in this Section 3.5. The appraiser shall not establish his or her own
Fair Market Rental Value, and must select either Landlord's or Tenant's
determination and shall immediately notify the parties of his selection. The
Fair Market Rental Value determined by Landlord or Tenant and selected as the
one closer to the actual Fair Market Rental Value by the appraiser shall be the
Fair Market Rental Value used to determine the Rent payable for the Option Term
in question. Each of the parties shall bear one-half the cost of the appraiser.
If the Fair Market Rental Value shall not have been determined by the
commencement of the Option Term, Tenant shall continue to pay the Rent payable
as of the month immediately preceding such commencement until the Fair Market
Rental Value is established at which time there shall be an adjustment between
the parties so that the Rent established for the Option Term using the Fair
Market Rental Value shall be retroactive to the commencement of the Option Term.
Landlord and Tenant agree that notwithstanding anything contained to
the contrary in this Section 3.5, in no event shall the Basic Rent for any
Option Term be less than the Basic Rent payable by Tenant during the calendar
month immediately preceding the commencement of such Option Term.
Article 4
BASIC RENT
4.1. DEFINITION OF "BASIC RENT": NO SET OFF. Tenant shall pay to
Landlord basic rent ("Basic Rent") in equal monthly installments as set forth
in Summary of Basic Lease Information Section 6 in advance on or before the
first day of every calendar month during the Lease Term, without any set-off or
deduction. Payment must be in United States dollars and shall be made at the
management office of the Building or at any other place that Landlord may from
time to time designate in writing.
4.2. INITIAL PAYMENT; PRORATION. The Basic Rent for the first full
calendar month of the Lease Term shall be paid when Tenant executes this Lease.
If any payment date (including the Lease Commencement Date) for "Rent", as
defined in Section 5.1 falls on a day other than the first day of that calendar
month, or if any Rent payment is for a period shorter than one calendar month,
the Rent for that fractional calendar month shall accrue on a daily basis for
each day of that fractional month at a daily rate equal to 1/365 of the total
annual Rent. All other payments or adjustments that are required to be made
under the terms of this Lease and that require proration on a time basis shall
be prorated on the same basis.
Page 3 of 28
4.3. APPLICATION OF PAYMENTS. All payments received by Landlord from
Tenant shall be applied to the oldest payment obligation owed by Tenant to
Landlord. No designation by Tenant, either in a separate writing or on a check
or money order, shall modify this clause or have any force or effect.
4.4. CERTIFIED FUNDS. If any non-cash payment made by the bank or other
institution on which it is drawn does not pay Tenant, Landlord shall have the
right, exercised by notice to Tenant, to require that Tenant make all future
payments by certified funds or cashier's check.
4.5. BASIC RENT REBATE. Provided Tenant is not in material default
under this Lease after the expiration of any applicable cure periods, Tenant
shall be entitled to and shall receive a one-time rent rebate ("Rent Rebate")
in the amount of Sixty-five Thousand and 00/100 Dollars ($65,000.00) upon the
earlier to occur of (i) the sale or other conveyance of the Building by Landlord
to any third party entity other than a "Landlord Affiliate" or (ii) the
expiration of the initial Lease Term. A "Landlord Affiliate" means any entity
that controls, is controlled by, or is under common control with Landlord.
"Control" means the direct or indirect ownership of more than fifty percent
(50%) of the voting securities of any entity or possession of the right to vote
more than fifty percent (50%) of the voting interest in the ordinary direction
of the entity's affairs. The Rent Rebate shall be paid, in cash, on closing of
the escrow in any such sale or other conveyance from the seller's proceeds by
the escrow holder or within thirty (30) days following expiration of the initial
Lease Term, whichever shall first occur.
Article 5
ADDITIONAL RENT
5.1. ADDITIONAL RENT; RENT. In addition to paying the Basic Rent
specified in Article 4, Tenant shall pay as additional rent Tenant's Share of
the annual Direct Expenses (as defined in subsections 5.2.2 and 5.2.6) that are
in excess of the amount of Direct Expenses applicable to the Base Year (as
defined in Subsection 5.2.1). That additional rent, together with other amounts
of any kind (other than Basic Rent) payable by Tenant to Landlord under the
terms of this Lease, shall be collectively referred to in this Lease as
"Additional Rent". Basic Rent and Additional Rent are collectively referred to
in this Lease as "Rent". All amounts due under this Article 5 as Additional Rent
are payable for the same periods and in the same manner, time, and place as the
Basic Rent. Without limitation on other obligations of Tenant that survive the
expiration of the Lease Term, Tenant's obligations to pay the Additional Rent
provided for in this Article 5 survive the expiration of the Lease Term.
5.2. DEFINITIONS. The following definitions apply in this Article 5:
5.2.1. BASE YEAR. "Base Year" means the period stated in Summary
of Basic Lease Information Section 7(a).
5.2.2. DIRECT EXPENSES. "Direct Expenses" mean Operating Expenses
plus Tax Expenses.
5.3.3. EXPENSE YEAR. "Expense Year" means each calendar year in
which any portion of the Lease Term falls through and including the calendar
year in which the Lease Term expires.
5.2.4. OPERATING EXPENSES. "Operating Expenses" means all
expenses, costs, and amounts of every kind that Landlord pays or incurs during
any Expense Year because of or in connection with the ownership, operation,
management, maintenance, or repair of the Common Areas of the Building and the
Project. Operating Expenses includes an allocable percentage of Direct Expenses
Landlord pays or incurs in operating, maintaining and repairing those portions
of the Project other than the Building including any owner's association or
similar fees, assessments or dues presently or hereafter established for the
Project.
5.2.4.1. EXAMPLES OF OPERATING EXPENSES. The definition of
"Operating Expenses" includes but shall not be limited to any amounts paid or
incurred for: (a) the cost of supplying any utilities to the Common Areas of the
Building and the Project, (b) the cost of operating, managing, maintaining, and
repairing the following systems: utility, mechanical, sanitary, storm drainage,
escalator, and elevator, (c) the cost of supplies and tools and of equipment,
maintenance, and service contracts in connection with those systems, (d) the
cost of licenses, certificates, permits, and inspections, (e) the cost of
contesting the validity or applicability of any government enactments that may
affect the Operating Expenses, (f) the costs incurred in connection with the
implementation and operation of a parking or transportation management program
or similar program, (g) the cost of insurance carried by Landlord in amounts
reasonably determined by Landlord, (h) fees, charges, and other costs including
management fees (or amounts in lieu of such fees), consulting fees, legal fees,
and accounting fees of all persons engaged by Landlord or otherwise reasonably
incurred by Landlord in connection with the operation, management, maintenance,
and repair of the Building and the Project, (i) the cost of parking area
maintenance, repair, and restoration, including resurfacing, repainting,
restriping, and cleaning, (j) wages, salaries, and other compensation and
benefits of all persons engaged in the operation, maintenance, or security of
the Building and the Project plus employer's Social Security taxes, unemployment
taxes, insurance, and any other taxes imposed on Landlord that may be levied on
those wages, salaries, and other compensation and benefits. If any of Landlord's
employees provide services for more than one project of Landlord, only the
prorated portion of those employees' wages, salaries, other compensation and
benefits, and taxes reflecting the percentage of their working time devoted to
the Project shall be included in Operating Expenses, (k) payments under any
easement, license, operating agreement, declaration, restrictive covenant, or
instrument relating to the sharing of costs by the Building or the Project,
(l) amortization (including interest on the unamortized cost at a rate equal to
the floating commercial loan rate
Page 4 of 28
announced from time to time by Bank of America as its prime rate plus two (2)
percentage points per annum) of the cost of acquiring or renting personal
property used in the maintenance, repair, and operation of the Building and the
Project, (m) the cost of capital improvements or other costs incurred in
connection with the Building or the Project that (1) are intended as a labor
saving device or to effect other economies in the maintenance or operation of
all or part of the Building or Project or (2) are required under any
governmental law or regulation, other than the Americans With Disabilities Act
("ADA"), but that were not required in connection with the Building or the
Project when permits for the construction of the Building or the Project were
obtained. All permitted capital expenditures shall be amortized (including
interest on the unamortized cost at the rate stated in Subparagraph (l) over
their useful life, as reasonably determined by Landlord.
5.2.4.2. ADJUSTMENT OF OPERATING EXPENSES. Operating Expenses shall be
adjusted as follows:
5.2.4.2.1. GROSS UP ADJUSTMENT WHEN BUILDING IS LESS
THAN FULLY OCCUPIED. If the occupancy of the Building during any part of any
Expense Year (including the Base Year) is less than 95%, Landlord shall make an
appropriate adjustment of the variable components of Operating Expenses for that
Expense Year, as reasonably determined by Landlord using sound accounting and
management principles, to determine the amount of Operating Expenses that would
have been incurred had the Building been 95% occupied. This amount shall be
considered to have been the amount of Operating Expenses for that Expense Year.
For purposes of this Subsection 5.2.4.2.1. "variable components" include only
those component expenses that are affected by variations in occupancy levels.
5.2.4.2.2. ADJUSTMENT WHEN LANDLORD DOES NOT FURNISH
A SERVICE TO ALL TENANTS. If, during any part of any Expense Year (including the
Base Year), Landlord is not furnishing a particular service or work (the cost of
which, if furnished, Landlord, would be included in Operating Expenses) to a
tenant (other than Tenant) that has undertaken to perform such service or work
in lieu of receiving it from Landlord, Operating Expenses for that Expense Year
shall be considered to be increased by an amount equal to the additional
Operating Expenses that Landlord would reasonably have incurred during this
period if Landlord had furnished such service or work to that tenant.
5.2.4.3. EXCLUSIONS FROM OPERATING EXPENSES. Despite
any other provision of Subsection 5.2.4, Operating Expenses shall not include:
(a) depreciation, interest, and amortization on mortgages or ground lease
payments, except as otherwise stated in this Section 5.2, (b) legal fees
incurred in negotiating and enforcing tenant leases, (c) real estate brokers'
leasing commissions, (d) initial improvements or alterations to tenant spaces,
(e) the cost of providing any service directly to and paid directly by any
tenant, (f) any costs expressly excluded from Operating Expenses elsewhere in
this Lease, (g) costs of any items for which Landlord receives reimbursement
from insurance proceeds or a third party. 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, (h) costs of capital improvements, except as otherwise stated in this
Section 5.2.
5.2.5. TAX EXPENSES. "Tax Expenses" means all federal, state,
county, or local government or municipal taxes, fees, charges, or other
impositions of every kind (whether general, special, ordinary, or extraordinary)
that are paid or incurred by Landlord during any Expense Year (without regard to
any different fiscal year used by any government or municipal authority) because
of or in connection with the ownership, leasing, and operation of the Building
and the Project. These expenses include taxes, fees, and charges such as real
property taxes, general and special assessments, transit taxes, leasehold taxes,
and taxes based on the receipt of rent (including gross receipts or sales taxes
applicable to the receipt of rent, unless required to be paid by Tenant);
personal property taxes imposed on the fixtures, machinery, equipment,
apparatus, systems, and equipment, appurtenances, furniture; and other personal
property used in connection with the Building and the Project.
5.2.5.1. ADJUSTMENT OF TAXES. For purposes of this
Lease, Tax Expenses shall be calculated as if the tenant improvements in the
Building were fully constructed and the Project, the Building, and all tenant
improvements in the Building were fully assessed for real estate tax purposes.
Landlord specifically agrees that the gross receipts component of Tax Expenses
for the Base Year and each subsequent year shall be calculated as if the
Building were one hundred percent (100%) occupied with rent paying tenants.
Accordingly, during the portion of any Expense Year occurring after the Base
Year, Tax Expenses shall be considered to be increased appropriately.
5.2.5.2. INCLUDED TAX EXPENSES. Tax Expenses shall
include: (a) any assessment, tax, fee, levy, or charge in addition to, or in
partial or total substitution of, any assessment, tax, fee, levy, or charge
previously included within the definition of "real property tax". Tenant and
Landlord acknowledge that Proposition 13 was adopted by the voters of the State
of California in June 1978 and that assessments, taxes, fees, levies, and
charges may be imposed by government agencies for services such as fire
protection; street, sidewalk, and road maintenance; conservation; refuse
removal; and other government services formerly provided without charge to
property owners or occupants. In further recognition of the decrease in the
level and quality of government services and amenities as a result of
Proposition 13 (or as a result of any other restriction on real property taxes
whether by law or by choice of the applicable legislative or assessing body),
Tax Expenses shall also include any government or private assessments (or the
Building's or Project's contribution toward a government or private cost sharing
agreement) for the purpose of augmenting or improving the quality of services
and amenities normally provided by government agencies. Tenant and Landlord
intend that all 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 the Lease, (b) any assessment,
tax, fee, levy, or charge allocable to, or measured by, the area of the Premises
or the rent payable under this Lease, including any gross income tax with
respect to the receipt
Page 5 of 28
of that rent, or on or relating to the possession, leasing, operating,
management, maintenance, alteration, repair, use, or occupancy by Tenant of the
Premises or any portion of the Premises, (c) any assessment, tax, fee, levy, or
charge on this transaction or any document to which Tenant is a party, creating
or transferring an interest or an estate in the Premises, (d) any possessory
taxes charged or levied in place of real property taxes.
5.2.5.3. CONTEST COSTS; REFUNDS. Any expenses incurred
by Landlord in attempting to protest, reduce, or minimize Tax Expenses shall be
included in Tax Expenses in the Expense Year in which those expenses are paid.
Except for tax refunds resulting from a Proposition & reduction under Subsection
5.2.5.6, tax refunds shall be deducted from Tax Expenses. Such tax refunds shall
be deducted form Tax Expenses in the Expense Year in which Landlord receives
them.
5.2.5.4. EXCLUDED TAXES. Despite any other provision of
Subsection 5.2.5 (except as provided in Subsection 5.2.5.2 or levied entirely or
partially in lieu of Tax Expenses), the following shall be excluded from Tax
Expenses: (a) all excess profits taxes, franchise taxes, gift taxes, capital
stock taxes, inheritance and succession taxes, estate taxes, federal and state
income taxes, and other taxes applied or measured by Landlord's general or net
income (as opposed to rents, receipts, or income attributable to operations at
the Building): (b) any items included as Operating Expenses; and (c) any items
paid by Tenant under Section 5.5.
5.2.6. TENANT'S SHARE. "Tenant's Share" means the percentage
stated in Summary of Basic Lease Information Section 7 (b). Tenant's Share is
calculated by multiplying the number of Rentable Square Feet of the Premises by
100 and dividing the product by the total Rentable Square Feet in the Building.
If either the Premises or the Building are expanded or reduced, Tenant's Share
shall be appropriately adjusted. Tenant's Share for the Expense Year in which
that change occurs shall be determined on the basis of the number of days during
the Expense Year in which each such Tenant's Share was in effect.
5.3. CALCULATION AND PAYMENT OF ADDITIONAL RENT. Tenant's Share of any
Direct Expenses for any Expense Year shall be calculated and paid as follows:
5.3.1. CALCULATION OF EXCESS. If Tenant's Share of Direct Expenses
for any Expense Year ending or beginning within the Lease Term exceeds Tenant's
Share of the amount of Direct Expenses applicable to the Base Year, Tenant shall
pay as Additional Rent to Landlord an amount equal to that excess ("Excess"), in
the manner stated in Subsection 5.3.2.
5.3.2. STATEMENT OF ACTUAL DIRECT EXPENSES AND PAYMENT BY TENANT.
Landlord shall endeavor to give to Tenant on or before the first day of April
following the end of each Expense Year a statement ("Statement") stating the
Direct Expenses incurred or accrued for that preceding Expense Year and
indicating the amount, if any, of any Excess. On receipt of the Statement for
each Expense Year ending during the Lease Term for which an Excess exists,
Tenant shall pay, with its next installment of Basic Rent due, the full amount
of that Excess, less the amounts (if any) paid during the Expense Year as
Estimated Excess (as defined in Subsection 5.3.3). Landlord's failure to furnish
the Statement for any Expense Year in a timely manner shall not prejudice
Landlord from enforcing its rights under this Article 5. Even if the Lease Term
has expired and Tenant has vacated the Premises, if an Excess exists when the
final determination is made of Tenant's Share of the Direct Expenses for the
Expense Year in which this Lease terminates, Tenant shall immediately pay to
Landlord the amount calculated under Subsection 5.3.1. The provisions of this
Subsection 5.3.2 shall survive the expiration or earlier termination of the
Lease Term.
5.3.3. STATEMENT OF ESTIMATED DIRECT EXPENSES. Landlord shall give
Tenant a yearly expense estimate statement ("Estimate Statement") stating: (a)
Landlord's reasonable estimate ("Estimate") of the total amount of Direct
Expenses for the then current Expense Year; and (b) the estimated excess
("Estimated Excess"). The Estimated Excess shall be calculated by comparing
estimated Direct Expenses (which shall be based on the Estimate) to the amount
of Direct Expenses applicable to the Base Year. Landlord's failure to furnish
the Estimate Statement for any Expense Year in a timely manner shall not
preclude Landlord from enforcing its rights to collect any Estimated Excess
under this Article 5. If an Estimated Excess is calculated for the then current
Expense Year, Tenant shall pay, with its next installment of Basic Rent due, a
fraction of that Estimated Excess for the then current Expense Year (reduced by
any amounts paid as provided in the last sentence of this Subsection 5.3.3). The
numerator of that fraction shall be the number of moths that have elapsed in
that current Expense Year (including the month of the payment), and the
denominator shall be twelve (12). Until a new Estimate Statement is furnished,
Tenant shall pay monthly, along with the monthly Basic Rent installments, an
amount equal to one twelfth (1/12th) of the total Estimated Excess stated in the
previous Estimate Statement delivered by Landlord to Tenant.
5.3.4. REFUND OF OVERPAYMENT EXCESS. If the Statement shows that
the Excess for any Expense Year ending or beginning within the Lease Term is
less than the Estimated Excess actually paid by Tenant for that Expense Year,
Landlord shall credit Tenant's next payment of Basic Rent and Estimated Excess
with the amount by which Tenant's payments of Estimated Excess exceed the actual
Excess due for the Expense Year. If that Statement is provided to Tenant after
the end of the Lease Term, Landlord shall include with the Statement a refund in
the amount by which Tenant's payments of Estimated Excess exceed the actual
Excess due for that Expense Year.
5.4. ALLOCATION OF DIRECT EXPENSES. Despite any other provision of this
Article 5, in the calculation of Direct Expenses for the Base Year: (a) Direct
Expenses shall not include any increase in Tax Expenses attributable to (1)
special assessments, charges, costs, or fees; or (2) modifications or changes in
government laws or regulations, including institution of a split tax roll, and
(b) Operating Expenses shall exclude (1) market wide labor rate increases
Page 6 of 28
arising from extraordinary circumstances (such as boycotts and strikes) and
(2) utility rate increases arising from extraordinary circumstances (such as
conservation surcharges, boycotts, embargoes, or other shortages).
5.5 TAXES AND OTHER CHARGES FOR WHICH TENANT IS DIRECTLY
RESPONSIBLE. Tenant shall reimburse Landlord, on demand, as Additional Rent
for any taxes required to be paid by Landlord that are not already included
in 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, regardless of whether such taxes are now
customary or within the contemplation of the parties to this Lease, when
those taxes are: (a) measured by or reasonably attributable to: (1) the
cost or value of Tenant's equipment, furniture, fixtures, and other personal
property located in the Premises; or (2) the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant (to the extent that
the cost or value of those leasehold improvements exceeds the cost or value
of a building standard build out, as determined by Landlord, regardless of
whether title to those improvements is vested in Tenant or Landlord); (b)
assessed on or related to the possession, leasing, operation, management,
maintenance, alteration, repair, use, or occupancy by Tenant of: (1) the
Premises; (2) any portion of the Project; or (3) the parking facility used by
Tenant in connection with this lease; or (c) assessed either on this
transaction or on any document to which Tenant is a party that creates or
transfers an interest or estate in the Premises.
5.6 LANDLORD'S BOOKS AND RECORDS. If Tenant disputes the amount of
Additional Rent stated in the Statement, Tenant may designate, within thirty
(30) days after receipt of that Statement, an independent certified public
accountant to inspect Landlord's records which inspection shall be at
Tenant's sole cost and expense. Tenant is not entitled to request the
inspection, however, if Tenant is then in default under this Lease. The
accountant must be a member of a nationally recognized accounting firm and
must not charge a fee based on the amount of Additional Rent that the
accountant is able to save Tenant by the inspection. Tenant must give
reasonable notice to Landlord of the request for inspection, and the
inspection must be conducted in Landlord's offices at a reasonable time or
times. If, after that inspection, Tenant still disputes the Additional Rent,
a certification of the proper amount shall be made, at Tenant's expense, by
Landlord's independent certified public accountant. That certification shall
be final and conclusive.
Article 6
SECURITY DEPOSIT
6.1. SECURITY DEPOSIT. Concurrently, with Tenant's execution of
this Lease, Tenant shall deposit with Landlord a cash sum in the amount
stated in Summary of Basic Lease Information Section X ("Security Deposit").
Landlord shall hold the Security Deposit as security for the performance of
Tenant's obligations under this Lease. If Tenant defaults on any provision
of this Lease, Landlord may, without prejudice to any other remedy it has,
apply all or part of the Security Deposit to: (a) any Rent or other sum in
default; (b) any amount that Landlord may spend or become obligated to spend
in exercising Landlord's rights under Article 23; or (c) any expense, loss,
or damage that Landlord may suffer because of Tenant's default. Tenant
waives the provisions of California Civil Code Section 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 Rent, to repair damage caused by Tenant, or to clear the Premises.
Landlord and Tenant agree that Landlord may, in addition, claim those sums
reasonably necessary to compensate Landlord for any other foreseeable or
unforseeable loss or damage caused by the act or omission of Tenant or
Tenant's officers, agents, employees, independent contractors, or invitees.
If Landlord disposes of its interest in the Premises, Landlord may deliver or
credit the Security Deposit to Landlord's successor in interest in the
Premises and thereupon be relieved of further responsibility with respect to
the Security Deposit. Tenant may not assign or encumber the Security Deposit
without the 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
Security Deposit, Tenant shall, within thirty (30) days after demand by
Landlord, deposit with Landlord an amount sufficient to restore the Security
Deposit to its original amount. Tenant is not entitled to any interest on
the Security Deposit. If Tenant performs every provision of this Lease to be
performed by Tenant, the unused portion of the Security Deposit shall be
returned to Tenant or the last assignee of Tenant's interest under this Lease
within thirty (30) days following the expiration or termination of the Lease
Term.
Article 7
USE
7.1. PERMITTED USE. Tenant shall use the Premises solely for the
"Permitted Use" as defined in Summary of Basic Lease Information Section 9.
Tenant shall not use or permit the Premises to be used for any other purpose
without Landlord's prior written consent, which may be granted or withheld in
Landlord's sole discretion. Tenant shall comply with the rules attached to
this Lease as EXHIBIT E and any amendments or additions promulgated by
Landlord from time to time for the safety, care, and cleanliness of the
Premises, Building, and Project or for the preservation of good order (Rules
and Regulations). Landlord shall not be responsible to Tenant for the
failure of any other tenants or occupants of the Building to comply with the
Rules and Regulations. In addition to complying with other provisions of
this Lease concerning the use of the Premises: (a) Tenant shall not use or
allow any person to use the Premises for any purpose that is contrary to the
Rules and Regulations, that violates any Laws and Orders, that constitutes
waste or nuisance, or that would unreasonably annoy other occupants of the
Building or the owners or occupants of buildings adjacent to the Building;
and (b) Tenant shall comply with all recorded covenants, conditions, and
restrictions that now or later affect the Project. Landlord hereby discloses
to Tenant that the area located on the second floor of the building above the
main entry to the Building and designated on EXHIBIT A-2 attached to this
Lease as the "Load Restricted Area" is not designed to handle floor loading
in excess of standard
Page 7 of 28
office furniture (i.e. not for use as a file or heavy storage area). Tenant
covenants and agrees not to use Load Restricted Area for file storage or
other heavy load purpose.
Article 8
COMPLIANCE WITH LAWS
8.1. DEFINITION OF "LAWS AND ORDERS". For purposes of this Article
8, the term "Laws and Orders" includes all federal, state, county, city, or
government agency laws, statutes, ordinances, standards, rules, requirements,
or orders now in force or hereafter enacted, promulgated, or issued. The
term also includes government measures regulating or enforcing public access,
occupational, health, or safety standards for employers, employees,
landlords, or tenants.
8.2. REPAIRS, REPLACEMENTS, ALTERATIONS, AND IMPROVEMENTS. Tenant
shall continuously and without exception repair and maintain the Premises,
including tenant improvements, Alterations, fixtures, and furnishings, in an
order and condition in compliance with all Laws and Orders. Tenant, at
Tenant's sole expense, shall promptly make all repairs, replacements,
alterations, or improvements needed to comply with all Laws and Orders to the
extent that the Laws and Orders relate to or are triggered by (a) Tenant's
particular use of the Premises, (b) the tenant improvements located in the
Premises, or (c) any Alterations located in the Premises. Landlord shall
promptly make all repairs, replacements, alterations, or improvements
needed to comply with all Laws and Orders to the extent that the Laws and
Orders relate to the Base Building. The cost of all such repairs,
replacements, alterations, or improvements shall, to the extent permitted by
Article 5 of this Lease, be reimbursed to Landlord as an Operating Expense.
8.3. COLLATERAL ESTOPPEL. The judgment of any court of competent
jurisdiction, or the admission of Tenant in any judicial or administrative
action or proceeding that Tenant has violated any Laws and Orders shall be
conclusive, between Landlord and Tenant, of that fact, whether or not Landlord
is a party to that action or proceeding.
Article 9
HAZARDOUS MATERIAL
9.1. USE OF HAZARDOUS MATERIAL. Tenant shall not cause or permit
any Hazardous Material, as defined in Section 9.6, to be generated, brought
onto, used, stored, or disposed of in or about the Premises or the Building
by Tenant or its agents, employees, contractors, subtenants, or invitees,
except for limited quantities of standard office and janitorial supplies
containing chemicals categorized as Hazardous Material. Tenant shall: (a)
Use, store, and dispose of all such Hazardous Material in strict complicance
with all applicable statutes, ordinances, and regulations in effect during
the Lease Term that relate to public health and safety and protection of the
environment (Environmental Laws), including those Environmental Laws
identified in Section 9.6, and (b) Comply at all times during the Lease Term
with all Environmental Laws.
9.2. NOTICE OF RELEASE OR INVESTIGATION. If, during the Lease Term
(including any extensions), Tenant becomes aware of (a) any actual or
threatened release of any Hazardous Material on, under, or about the Premises
or the Building or (b) any inquiry, investigation, proceeding, or claim by
any government agency or other person regarding the presence of Hazardous
Material on, under, or about the Premises or the Building. Tenant shall give
Landlord written notice of the release or investigation within five (5) days
after learning of it and shall simultaneously furnish to Landlord copies of
any claims, notices of violation, reports, or other writings received by
Tenant that concern the release or investigation.
9.3. INDEMNIFICATION. Tenant shall, at Tenant's sole expense and
with counsel reasonably acceptable to Landlord, indemnify, defend, and hold
harmless Landlord and Landlord's shareholders, directors, officers,
employees, partners, affiliates, and agents with respect to all losses
arising out of or resulting from the release of any Hazardous Material in or
about the Premises or the Building, or the violation of any Environmental
Law, by Tenant or Tenant's agents, contractors, or invitees. This
indemnification includes: (a) losses attributable to diminution in the value
of the Premises or the Building; (b) loss or restriction of use of rentable
space in the Building; (c) adverse effect on the marketing of any space in
the Building; and (d) all other liabilities, obligations, penalties, fines,
claims, actions (including remedial or enforcement actions of any kind and
administrative or judicial proceedings, orders, or judgments), damages
(including consequential and punitive damages), and costs (including
attorney, consultant, and expert fees and expenses) resulting from the
release or violation. This indemnification shall survive the expiration or
termination of this Lease.
9.4. REMEDIATION OBLIGATIONS. If the presence of any Hazardous
Material brought onto the Premises or the Building by Tenant or Tenant's
employees, agents, contractors, or invitees results in contamination of the
Building, Tenant shall promptly take all necessary actions, at Tenant's sole
expense, to return the Premises or the Building to the condition that existed
before the introduction of such Hazardous Material. Tenant shall first obtain
Landlord's approval of the proposed remedial action. This provision does not
limit the indemnification obligation set forth in Section 9.3.
9.5. DEFINITION OF "HAZARDOUS MATERIAL". As used in this Article 9,
the term "Hazardous Material" shall mean any hazardous or toxic
substance, material, or waste that is or becomes regulated by the United
States, the State of California, or any local government authority having
jurisdiction over the Building. Hazardous Material includes: (a) any
"hazardous substance", as that term is defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) (42
United States Code Sections 9601-9675); (b) "Hazardous
Page 8 of 28
waste", as that term is defined in the Resource Conservation and Recovery Act
of 1976 (RCRA) (42 United States Code Sections 6901-6992k); (c) any
pollutant, contaminant, or hazardous, dangerous, or toxic chemical, material,
or substance, within the meaning of any other applicable federal, state, or
local law, regulation, ordinance, or requirement (including consent decrees
and administrative orders imposing liablity or standards of conduct
concerning any hazardous, dangerous, or toxic waste, substance, or material,
now or hereafter in effect); (d) petroleum products; (e) radioactive
material, including any source, special nuclear, or byproduct material as
defined in ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code Sections 2011-2297gB4; (f) Asbestos in any
form or condition; and (g) Polychlorinated biphenyls (PCBs) and substances or
compounds containing PCBs.
Article 10
UTILITIES AND SERVICES
10.1. STANDARD TENANT UTILIITES AND SERVICES. Subject to applicable
government rules, regulations, and guidelines, and the rules or actions of
the public utility furnishing the service, Landlord shall provide the
following utilities and services on all days during the Lease Term, unless
otherwise stated in the Lease:
10.1.1. HEATING AND AIR CONDITIONING. Landlord shall
provide heating and air conditioning when necessary for normal comfort for
normal office use in the Premises, as reasonably determined by Landlord, on
Mondays through Fridays from 7 a.m. through 6 p.m. and on Saturdays from 9
a.m. through 1 p.m. ("Building Hours") except for the dates of observation of
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day, and other locally or nationally recognized holidays
("Holidays") Notwithstanding the foregoing, subject to Tenant's acceptance of
the provisions of Section 10.2 below regarding Over-standard Tenant Use,
Landlord acknowledges that Tenant intends to use a portion of the Premises on
a twenty-four-hour (24-hour), seven-day (7-day) day per week basis.
10.2.2. ELECTRICITY. Landlord shall provide electricity
for lighting and power as required for the comfortable use and occupancy of
the Premises as reasonably determined by Landlord. Landlord shall replace
lamps, starters, and ballasts for Building standard lighting fixtures within
the Premises on Tenant's request as a part of Operating Expenses. Tenant
shall replace lamps, starters, and ballasts for non-Building standard
lighting fixtures within the Premises at Tenant's expense. If Tenant's
electrical consumption in the Premises is separately metered, Tenant shall
pay for such costs directly to the public utility company. If Tenant's
electrical consumption in the Premises is not seperately metered, Tenant
shall pay (i) Tenant's Share of the electrical consumption of the Building
(exluding Common Areas) as estimated by Landlord in Landlord's good faith
judgment and billed by Landlord to Tenant monthly (payment due within ten
(10) days of Tenant's receipt of an invoice therfor from Landlord), and (ii)
Tenant's Share of electrical consumption for the Common Areas which will be
billed to Tenant as a part of Operating Expenses.
10.1.3. WATER. Landlord shall provide city water from
the regular Building outlets for drinking, lavatory, and toilet purposes.
10.1.4. JANITORIAL SERVICES. Landlord shall provide five
(5) days per week janitorial services in and about the Premises. Landlord
shall not be required to provide janitorial services to above standard
improvements installed in the Premises such as kitchens and shower facilities.
10.2. OVER-STANDARD 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 that may
materially and adversely affect the temperature otherwise maintained by the
air conditioning system or that may materially increase the water normally
furnished to the Premises by Landlord under Section 10.1. 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. On billing by Landlord, Tenant
shall pay the cost for such supplementary facilities, including the cost of
(a) installation, operation, and maintenance; (b) increased wear and tear on
existing equipment; and (c) other similar charges. If Tenant uses water,
electricity, heat, or air conditioning in excess of that required to be
supplied by Landlord under Section 10.1, Tenant shall pay to Landlord, on
billing, the cost of (a) the excess service; (b) installation, operation, and
maintenance of equipment installed to supply the excess service; and (c)
increased wear and tear on existing equipment caused by Tenant's excess
consumption. Landlord may install devices to separately meter any increased
use. On demand, Tenant shall pay the increased cost directly to Landlord,
including the cost of the additional metering devices. Tenant's use of
electricity shall never exceed the capacity of the feeders serving the
Building and Premises or the risers or wiring installation. If Tenant wishes
to use heat, ventilation, or air conditioning during hours other than those
for which Landlord is obligated to supply such utilities under Section 10.1,
Tenant shall give Landlord such prior notice as Landlord shall from time to
time establish as appropriate, and Landlord shall supply such utilities to
Tenant at an hourly cost to Tenant as Landlord shall from time to time
establish. Amounts payable by Tenant to Landlord under this Section 10.2 for
use of additional utilities shall be considered Additional Rent under this
Lease and shall be billed on a monthly basis.
10.3. INTERRUPTION OF UTILITIES. 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 diminution in the quality of quantity of
any service when the failure, delay, or diminution is entirely or partially
caused by: (a) breakage, repairs, replacements, or improvements; (b) strike,
lockout, or other labor trouble; (c) inability to secure electricity, gas,
water, or other fuel at the Building after reasonable effort to do so; (d)
accident or casualty; (e) act or default of Tenant or other parties; or (f)
any other cause
Page 9 of 28
beyond Landlord's reasonable control. Such failure, delay, or diminution
shall not be considered to constitute an eviction or a 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. 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 loss of
profits through, in connection with, or incidental to a failure to furnish
any of the utilities or services under this Article 10. Landlord may comply
with mandatory or voluntary controls or guidelines promulgated by any
government entity relating to the use or conservation of energy, water, gas,
light, or electricity or the reduction of automobile or other emissions
without creating any liability of Landlord to Tenant under this Lease as long
as compliance with voluntary controls or guidelines does not materially and
unreasonably interfere with Tenant's use of the Premises.
Article 11
REPAIRS AND MAINTENANCE
11.1 TENANT'S REPAIR AND MAINTENANCE OBLIGATIONS. Tenant shall, at
Tenant's sole expense and in accordance with the terms of this Lease
(including Article 12) keep the Premises (including all Tenant Improvements,
Alterations, fixtures, and furnishings) in good order, repair, and condition
at all times during the Lease Term. Under Landlord's supervision, subject to
Landlord's prior approval, and within any reasonable period specified by
Landlord, Tenant shall, at Tenant's sole expense and in accordance with the
terms of this Lease (including Article 12) promptly and adequately repair all
damage to the Premises and replace or repair all damaged or broken fixtures
and appurtenances. At Landlord's option or if Tenant fails to make such
repairs, Landlord may, but need not, make the repairs and replacements. On
receipt of an invoice from Landlord, Tenant shall pay Landlord Landlord's out
of pocket costs incurred in connection with such repairs and replacements
plus a percentage of such costs, to be uniformly established for the
Building, sufficient to reimburse Landlord for all overhead, general
conditions, fees, and other costs and expenses arising from Landlord's
involvement with such repairs and replacements. Tenant waives and releases
its rights, including its right to make repairs at Landlord's expense, under
California Civil Code Sections 1941-1942 or any similar law, statute, or
ordinance now or hereafter in effect. Landlord and Tenant acknowledge and
agree that Tenant intends to install (i) an emergency backup generator
("Generator") outside the Building in an area reasonably acceptable to
Landlord and (ii) a Building security system ("Security System"). Tenant shall
be solely responsible for all maintenance and repair of the Generator and
Security System and shall, unless Landlord and Tenant agree otherwise, remove
the Generator and Security System upon the expiration or earlier termination
of this Lease and shall make any repairs to the Project occasioned thereby.
Tenant shall provide Landlord with any and all keys, codes, etc. to operate
the Security System in case of emergency and shall cooperate with any tenants
of the Building to ensure access thereto during Building Hours.
11.2 LANDLORD'S REPAIR AND MAINTENANCE OBLIGATIONS. Subject to Articles
15 and 16, Landlord shall, as part of the Operating Expenses (to the extent
permitted by Article 5), repair and maintain in good order and condition
(reasonable wear and tear excepted): (a) the structural portions of the
Premises; (b) the Base Building, (c) the Basic Building Systems located
outside the Premises; (d) the exterior portions of the Building and Project,
and (e) all other common areas located in the Building, or in or on the
Project, including the parking facilities serving the Building. Repairs shall
be made promptly when appropriate to keep the applicable portion of the
Premises, Building, Project, and other items in the condition described in
this clause. Landlord shall not be in default of its repair and maintenance
obligations under this Section 11.2 if Landlord performs the repairs and
maintenance within thirty (30) days after written notice by Tenant to
Landlord of the need for such repairs and maintenance. If, due to the nature
of the particular repair or maintenance obligation, more than thirty (30)
days are reasonably required to complete it, Landlord shall not be in default
under this Section 11.2 if Landlord begins work within this thirty-day
(30-day) period and diligently prosecutes this work to completion. Except as
provided in Section 11.3, no abatement of rent and no liability of Landlord
shall result for any injury to or interference with Tenant's business arising
from the making of or failure to make any repairs, replacements, alterations,
or improvements in or to any portion of the Premises, Building, Project,
fixtures, appurtenances, or equipment. Except as provided in Section 11.3,
Tenant waives and releases its rights, including its right to make repairs at
Landlord's expense, under California Civil Code Sections 1941-1942 or any
similar law, statute, or ordinance now or hereafter in effect.
11.3 TENANT'S RIGHT TO MAKE REPAIRS AND DEDUCT COSTS. If Tenant provides
notice to Landlord of an event or circumstance that requires the action of
Landlord with respect to the repairs or maintenance to the Premises or Base
Building Systems servicing the Premises as set forth in Section 11.2, and
Landlord fails to provide such action as required by the terms of this Lease
within the period specified in Section 11.2, Tenant may take the required
action if, (a) Tenant delivers to Landlord an additional written notice
advising Landlord that Tenant intends to take the required action if Landlord
does not begin the required repair or maintenance within ten (10) days after
written notice, and (b) Landlord fails to begin the required work within the
ten-day (10) period.
If within thirty (30) days after receipt of Tenant's written demand for
payment of Tenant's costs incurred in taking such action on Landlord's
behalf (including a reasonably particularized statement), Landlord has not
paid the invoice or delivered to Tenant a detailed written objection to it,
Tenant may deduct from Rent payable by Tenant under this Lease the amount set
forth in the invoice. Tenant shall not be entitled to this deduction from
Rent, however, if, within thirty (30) days after receipt of Tenant's invoice,
Landlord in good faith delivers to Tenant written objection to its payment,
setting forth with reasonable particularity Landlord's reasons for its claim
that Landlord did not have to take this action under the terms of this Lease
or that the charges are excessive (in which case Landlord shall pay the
amount it contends would not have been excessive). If Landlord and Tenant are
unable to resolve this disagreement, Tenant's sole remedy shall be to
institute legal proceedings against Landlord to collect the amount set forth
in Tenant's invoice.
Page 10 of 28
Article 12
ALTERATIONS AND ADDITIONS
12.1. LANDLORD'S CONSENT TO ALTERATIONS. Tenant may not make any
improvements, alterations, additions, or changes to the Premises
("Alterations") without obtaining Landlord's prior written consent.
12.1.1. CONSENT PROCEDURE: CONDITIONS. Tenant shall request such
consent by written notice to Landlord, which must be accompanied by detailed
and complete plans and specifications for the proposed work. As a condition
of its consent to Alterations, Landlord may impose any requirements that
Landlord considers desirable, including a requirement that Tenant provide
Landlord with a surety bond, a letter of credit, or other financial assurance
that the cost of the Alterations will be paid when due.
12.1.2. REASONABLE CONSENT. Landlord shall not unreasonably
withhold its consent to proposed Alterations. The Alterations for which
Landlord may reasonably withhold consent include those that would or could:
(a) affect the structure of the Building or any portion of the Building other
than the interior of the Premises; (b) affect the Base Building Systems of
the Premises or Building; (c) result in Landlord's being required under Laws
and Orders (other than the ADA) to perform any work that Landlord could
otherwise avoid or defer ("Additional Required Work"); (d) result in an
increase in the demand for utilities or services that Landlord is required to
provide; or (e) cause an increase in the premiums for hazard or liability
insurance carried by Landlord. "Base Building Systems" means all systems and
equipment (including plumbing; heating, ventilation and air conditioning,
electrical; fire/life safety; and elevator but excluding Tenant's Security
System and Generator) that serve all or part of the Building.
12.1.3. COST OF REVIEW. Tenant shall reimburse Landlord for the
reasonable fees and costs of any architects, engineers, or other consultants
retained by Landlord to review the proposed Alterations.
12.2. COMPLIANCE OF ALTERATIONS WITH LAWS AND INSURANCE REQUIREMENTS.
Tenant shall cause all Alterations to comply with the following: (a)
applicable Laws and Orders; (b) applicable requirements of a fire rating
bureau; or (c) applicable requirements of Landlord's hazard insurance carrier
to the extent that Tenant is informed of them. Tenant shall also comply with
those requirements in the course of constructing the Alterations. Before
beginning construction of any Alteration, Tenant shall obtain a valid
building permit and any other permits required by any government entity
having jurisdiction over the Premises. Tenant shall provide copies of those
permits to Landlord before the work begins. Tenant shall, at Tenant's sole
expense, perform any Additional Required Work in the Premises, which shall be
subject to the same requirements as any Alteration. If any Additional
Required Work must be performed outside the Premises, Landlord may elect to
perform that work at Tenant's expense. No consent by Landlord to any proposed
work shall constitute a waiver of Tenant's obligations under this Section
12.2.
12.3. MANNER OF CONSTRUCTION. Tenant shall build Alterations entirely
within the Premises and in conformance with Landlord's construction rules and
regulations, using only contractors and subcontractors approved in writing by
Landlord. All work relating to any Alterations shall be done in a good and
workmanlike manner, using new materials equivalent in quality to those used
in the construction of the initial improvements to the Premises. All work
shall be diligently prosecuted to completion. Tenant shall ensure that all
work is performed in a manner that does not obstruct access to or through the
Building or its common areas and that does not interfere either with other
tenants' use of their premises or with any other work being undertaken in the
Building. Tenant shall take all measures necessary to ensure that labor
peace is maintained at all times. Within twenty (20) days after completion of
any Alterations, Tenant shall deliver to Landlord a reproducible copy of the
drawings of Alterations as built.
12.4. PAYMENT FOR IMPROVEMENTS. Tenant shall promptly pay all charges
and costs incurred in connection with any Alteration, as and when required by
the terms of any agreements with contractors, designers, or suppliers. At
least seven (7) days before beginning construction of any Alteration, Tenant
shall give Landlord written notice of the expected commencement date of that
construction to permit Landlord to post and record a notice of
non-responsibility. On completion of any Alteration, Tenant shall: (a) cause a
timely notice of completion to be recorded in the office of the recorder of
the county in which the Building is located, in accordance with Civil Code
Section 3093 or any successor statute, and (b) deliver to Landlord evidence of
full payment and unconditional final waivers of all liens for labor, services,
or materials.
12.5. CONSTRUCTION INSURANCE. Before construction begins, Tenant shall
deliver to Landlord reasonable evidence that damage to, or destruction of,
the Alterations during construction will be covered either by the policies
that Tenant is required to carry under Article 14 or by a policy of builder's
all risk insurance in an amount approved by Landlord. If Landlord requires
Tenant to provide builder's all risk insurance for the proposed Alterations,
Tenant shall provide a copy of the policy, any endorsements, and an original
certificate of insurance that complies with Subsection 14.8.2. Tenant shall
cause each contractor and subcontractor to maintain all workers' compensation
insurance required by law and liability insurance (including property damage)
in amounts reasonably required by Landlord. Tenant shall provide evidence of
that insurance to Landlord before construction begins.
12.6. LANDLORD'S PROPERTY. All Alterations, signs, fixtures, or
equipment that may be installed or placed in or about the Premises from time
to time shall be and become the property of Landlord on installation. Tenant
may remove any trade fixtures or freestanding kitchen or office equipment
that Tenant can substantiate to Landlord has not been paid for with any
tenant improvement allowance funds provided to Tenant by Landlord. Tenant must
repair any damage to the Premises and Buildings caused by that removal.
Page 11 of 28
[placeholder for missing folio of hard copy]
Page 12 of 28
the Premises or Building, including the violation of or failure to comply
with any applicable laws, statutes, ordinances, standards, rules,
regulations, orders, decrees, or judgments in existence on the Lease
Commencement Date or enacted, promulgated, or issued after the date of this
Lease, except to the extent that compliance with such legal requirements is
expressly made the responsibility of Landlord in Article 8, 11 of 15; and (c)
any breach or default in performance of any obligation on Tenant's part to be
performed under this Lease.
14.2.2. DEFINITION OF CLAIMS. For purposes of this Lease, "Claims"
means any and all claims, losses, costs, damage, expenses, liabilities,
liens, actions, causes of action (whether in tort or contract, law or equity,
or otherwise), charges, assessments, fines, and penalties of any kind
(including consultant and expert expenses, court costs, and attorney fees
actually incurred).
14.2.3. TYPE OF INJURY OR LOSS. This indemnification extends to and
includes Claims for: (a) injury to any persons (including death at any time
resulting from that injury); (b) loss of, injury or damage to, or destruction
of property (including all loss of use resulting from that loss, injury,
damage, or destruction); and (c) all economic losses and consequential or
resulting damage but only to the extent incurred by Landlord in connection
with (1) a holdover of the Premises by Tenant after the expiration or earlier
termination of this Lease or (2) any repair, physical construction, or work
of improvement performed by or on behalf of Tenant in the Building.
14.2.4. ACTIVE OR PASSIVE NEGLIGENCE; STRICT LIABILITY. Tenant's
indemnification in Subsection 14.2.1 shall not apply to any Claim caused by
or arising out of the active or passive negligence of Landlord Parties or to
the extent that a Claim against Landlord Parties actually or allegedly arises
out of the willful misconduct of Landlord Parties, except for damage to the
Tenant Improvements or Tenant's personal property, fixtures, furniture, and
equipment in the Premises to the extent that such damage is covered by
insurance that Tenant is required to carry under this Lease (or would have
been covered had Tenant carried the insurance required under this Lease).
Except as provided in this Subsection 14.2.4, nothing in this Lease shall
impose any obligation on Landlord to be responsible for or liable for, and
Tenant releases Landlord from all liability for consequential damages
suffered by Tenant and nothing in this Lease imposes any obligation on Tenant
to be responsible for or liable for, and Landlord releases Tenant from all
liability for, consequential damages suffered by Landlord.
14.2.5. INDEMNIFICATION INDEPENDENT OF INSURANCE OBLIGATIONS. The
indemnification provided in this Article 14 may not be construed or
interpreted as in any way restricting, limiting, or modifying Tenant's
insurance or other obligations under this Lease and is independent of
Tenant's insurance and other obligations. Tenant's compliance with the
insurance requirements and other obligations under this Lease shall not in
any way restrict, limit, or modify Tenant's indemnification obligations
under this Lease.
14.2.6. ATTORNEY FEES. The prevailing party shall be entitled to
recover its actual attorney fees and court costs incurred in enforcing the
indemnification clauses set forth in this Section 14.2.
14.2.7. SURVIVAL OF INDEMNIFICATION. The clauses of this Section
14.2 shall survive the expiration or earlier termination of this Lease until
all claims against Landlord Parties involving any of the indemnified matters
are fully, finally, and absolutely barred by the applicable statutes of
limitations.
14.2.8. LANDLORD'S INDEMNIFICATION OF TENANT. Landlord shall, with
counsel reasonably acceptable to Tenant, indemnify, defend, and hold harmless
Tenant Parties from and against all Claims resulting from the negligent acts,
omission, or willful misconduct of Landlord Parties in connection with
Landlord Parties' activities in, on, or about the Real property or Building,
except to the extent that such Claim is for damage to the Tenant Improvements
and Tenant's personal property, fixtures, furniture, and equipment in the
Premises and is covered by insurance that Tenant is required to obtain under
this Lease (or would have been covered had Tenant carried the insurance
required under this Lease).
14.3 COMPLIANCE WITH INSURER REQUIREMENTS. Tenant shall, at Tenant's
sole expense, comply with all commercially reasonable requirements,
guidelines, rules, orders, and similar mandates and directives pertaining to
the use of the Premises and the Building, whether imposed by Tenant's
insurers, Landlord's insurers, or both. If Tenant's business operations,
conduct, or use of the Premises or the Building cause any incease in premium
for any insurance policies carried by Landlord, Tenant shall, within ten (10)
business days after receipt of written notice from Landlord, reimburse
Landlord for the increase. Tenant shall, at Tenant's sole expense, comply
with all rules, orders, regulations, or requirements of the American
Insurance Association (formerly the National Board of Fire Underwriters) and
of any similar body.
14.4. TENANT'S LIABILITY COVERAGE. Tenant shall, at Tenant's sole
expense, maintain the coverages set forth in this Section 14.4.
14.4.1. COMMERCIAL GENERAL LIABILITY INSURANCE. Tenant shall obtain
commercial general liability insurance written on an "occurrence" policy form,
covering bodily injury, property damage, personal injury, and advertising
injury arising out of or relating (directly or indirectly) to Tenant's
business operations, conduct, assumed liabilities, or use or occupancy of the
Premises or the Building.
14.4.2. BROAD FORM COVERAGE. Tenant's liability coverage shall
include all the coverages typically provided by the Broad Form Comprehensive
General Liability Endorsement, including broad form property damage coverage
(which shall include coverage for completed operations). Tenant's liability
coverage shall further include premises operations coverage, products
completed operations coverage, owners and contractors protective coverage
(when reasonably required by landlord), and the broadest available form of
contractual liability coverage. It is the
Page 13 of 28
(when reasonably required by landlord), and the broadest available form of
contractual liability coverage. It is the parties' intent that Tenant's
contractual liability coverage provide coverage to the maximum extent possible
of Tenant's indemnification obligations under this Lease.
14.4.3. PRIMARY INSURED. Tenant shall be the first or primary
named insured.
14.4.4. ADDITIONAL INSURED. Landlord Parties and any lender of
Landlord shall be named by endorsement as additional Insured under Tenant's
general liability coverage. The additional insured endorsement must be on ISO
Form CG 20 11 11 85 or an equivalent acceptable to Landlord, with such
modifications as Landlord may require.
14.4.5. CROSS LIABILITY; SEVERABILITY OF INTERESTS. Tenant's
general liability policies shall be endorsed as needed to provide cross
liability coverage for Tenant, Landlord, and any lender of Landlord and to
provide severability of interests.
14.4.6. PRIMARY INSURANCE ENDORSEMENTS FOR ADDITIONAL INSUREDS.
Tenant's general liability policies shall be endorsed as needed to provide that
the insurance afforded by those policies to the additional insured is primary
and that all insurance carried by Landlord Parties is strictly excess and
secondary and shall not contribute with Tenant's liability insurance.
14.4.7. SCOPE OF COVERAGE FOR ADDITIONAL INSUREDS. The coverage
afforded to Landlord and any lender of Landlord must be at least as broad as
that afforded to Tenant and may not contain any terms, conditions, exclusions,
or limitations applicable to Landlord or any lender of Landlord that do not
apply to Tenant.
14.4.8. DELIVERY OF CERTIFICATE, POLICY, AND ENDORSEMENTS. Before
the Lease Commencement Date, Tenant shall deliver to Landlord the endorsements
referred to in this Section 14.4 as well as an original certificate of
insurance, executed by an authorized agent of the insurer or insurers,
evidencing compliance with the liability insurance requirements. The
certificate shall provide for no less than ten (10) days' advance written
notice to Landlord from the insurer or insurers of any cancellation,
non-renewal, or material change in coverage or available limits of liability and
shall confirm compliance with the liability insurance requirements in this
Lease. The "endeavor to" and "failure to mail such notice shall impose no
obligation or liability of any kind upon the Company" language and any similar
language shall be stricken from the certificate.
14.4.9. CONCURRENCY OF PRIMARY, EXCESS, AND UMBRELLA POLICIES.
Tenant's liability insurance coverage may be provided by a combination of
primary, excess, and umbrella policies, but those policies must be absolutely
concurrent in all respects regarding the coverage afforded by the policies.
The coverage of any excess or umbrella policy must be at least as broad as the
coverage of the primary policy.
14.4.10. LIABILITY LIMITS. The minimum acceptable limit of
liability for Tenant's liability insurance is two million dollars ($2,000,000)
(general aggregate other than products and completed operations).
14.4.11. "PER LOCATION" ENDORSEMENT. Tenant shall, at Tenant's sole
expense, procure a "per location" endorsement or equivalent reasonably
acceptable to Landlord so that the general aggregate and other limits apply
separately and specifically to the Premises.
14.5. TENANT'S WORKERS' COMPENSATION AND EMPLOYER LIABILITY COVERAGE.
Tenant shall procure and maintain workers' compensation insurance as required by
law and employer's liability insurance with the limits of no less than one
million dollars ($1,000,000).
14.6. TENANT'S FIRST PARTY INSURANCE. Tenant shall, at Tenant's sole
expense, procure and maintain the first party insurance coverages described in
this Section 14.6.
14.6.1. TENANT'S PROPERTY INSURANCE. Tenant shall procure and
maintain property insurance coverage for all office furniture, trade fixtures,
office equipment, merchandise, and all other items of Tenant's property in, on,
at, or about the Premises and the Building, including property installed by,
for, or at the expense of Tenant but excluding Tenant Improvements, as defined
in the Tenant Improvement Agreement and all other improvements, betterment's,
alterations, and additions to the Premises. Tenant's property insurance must
fulfill the following requirements: (a) it must be written on the broadest
available "all risk" (special causes of loss) policy form or an equivalent form
acceptable to Landlord; (b) it must include an agreed amount endorsement for no
less than one hundred percent (100%) of the full replacement cost (new without
deduction for depreciation) of the covered items and property; and (c) the
amounts of coverage must meet any coinsurance requirements of the policy or
policies. It is the parties' intent that Tenant shall structure its property
insurance program so that no coinsurance penalty shall be imposed and there
shall be no valuation shortfalls or disputes with any insurer or with Landlord.
The property insurance coverage shall include vandalism and malicious mischief
coverage, sprinkler leakage coverage, and earthquake sprinkler leakage coverage.
Landlord shall maintain property insurance coverage for the Tenant Improvements,
as defined in the Tenant Improvement Agreement, and for all other improvements,
betterments, alterations, and additions to the Premises.
14.6.2. BUSINESS INCOME AND EXTRA EXPENSE COVERAGE. Tenant shall
further procure and maintain business income (business interruption) insurance
and extra expense coverage with coverage amounts that shall reimburse Tenant
for all direct or indirect loss of income and charges and costs incurred
arising out of all perils
Page 14 of 28
insured against by Tenant's property insurance coverage, including prevention
of, or denial of use of or access to, all or part of the Premises or the
Building, as a result of those perils. The business income and extra expense
coverage shall provide coverage for no less than three (3) months of the loss
of income, charges, and costs contemplated under the Lease and shall be carried
in amounts necessary to avoid any coinsurance penalty that could apply. The
insurer that issues Tenant's other first party coverage shall issue the business
income and extra expense coverage.
14.7. OTHER TENANT INSURANCE COVERAGE. Tenant shall, at Tenant's own
expense, procure and maintain any other and further insurance coverages that
Landlord or Landlord's lender may reasonably require. Tenant shall not,
however, be required to procure or maintain other and further coverages that
are beyond those typically maintained by similarly situated tenants leasing
reasonably similar amounts and types of space for similar use in comparable
buildings in the same sub-market or not available at commercially reasonable
rates.
14.8. FORM OF POLICIES AND ADDITIONAL REQUIREMENTS.
14.8.1. INSURANCE INDEPENDENT OF EXCULPATION AND INDEMNIFICATION.
The insurance requirements set forth in Sections 14.4-14.9 are independent of
Tenant's exculpation, indemnification, and other obligations under this Lease
and shall not be construed or interpreted in any way to restrict, limit, or
modify Tenant's exculpation, indemnification, and other obligations or to limit
Tenant's liability under this Lease.
14.8.2. FORM OF POLICIES. In addition to the requirements set
forth in Subsection 14.4.8, the insurance required of Tenant under this Article
14 must: (a) name Landlord and any other party Landlord specifies by endorsement
as an additional insured; (b) be issued by an insurance company with a rating of
no less than ABVIII in the current Best's Insurance Guide, or that is otherwise
reasonably acceptable to Landlord, and admitted to engage in the business of
insurance in the State of California; (c) be primary insurance for all claims
under it and provide that any insurance carried by Landlord Parties and
Landlord lenders is strictly excess, secondary, and noncontributing with any
insurance carried by Tenant; and (d) provide that insurance may not be
canceled, non-renewed, or the subject of material change in coverage or
available limits of coverage, except on ten (10) days' prior written notice to
Landlord and Landlord's lenders.
14.8.3. TENANT'S DELIVERY OF POLICY, ENDORSEMENTS, AND
CERTIFICATES. Tenant shall deliver the certificates required by this Article
14, to Landlord: (a) on or before the Lease Commencement Date, (b) at least
thirty (30) days before the expiration date of any policy, and (c) on renewal
of any policy.
14.8.4. DEDUCTIBLE AND SELF INSURED RETENTION'S. All deductibles
and self-insured retention's under Tenant's policies shall be generally
consistent with those typically maintained by similarly situated tenants leasing
reasonably similar amounts and types of space for similar use in comparable
buildings in the same sub-market.
14.9. WAIVER OF SUBROGATION. Landlord and Tenant agree to cause the
insurance companies issuing their respective property (first party) insurance to
waive any subrogation rights that those companies may have against Tenant or
Landlord, respectively, as long as the waiver does not invalidate the insurance.
If the waivers of subrogation are contained in their respective insurance
policies, Landlord and Tenant waive any right that either may have against the
other on account of any loss or damage to their respective property to the
extent that the loss or damage is insured under their respective insurance
policies.
Article 15
DAMAGE AND DESTRUCTION
15.1. REPAIR OF DAMAGE BY LANDLORD. Tenant agrees to notify Landlord in
writing promptly of any damage to the Premises resulting from fire, earthquake,
or any other identifiable event of a sudden, unexpected, or unusual nature
("Casualty"). If the Premises are damaged by a Casualty or any common areas of
the Building providing access to the Premises are damaged to the extent that
Tenant does not have reasonable access to the Premises and if neither Landlord
nor Tenant has elected to terminate this Lease under Section 15.3 or 15.4,
Landlord shall promptly and diligently restore such common areas, the Base
Building of the Premises, and the Tenant Improvements originally constructed by
Landlord to substantially the same condition as existed before the Casualty,
except for modifications required by building codes and other laws and except
for any other modifications to the common areas considered desirable by
Landlord. In making these modifications, Landlord shall not materially impair
Tenant's access to the Premises. Landlord's obligation to restore is subject
to reasonable delays for insurance adjustment and other matters beyond
Landlord's reasonable control and subject to the other clauses of this Article
15. If Tenant requests that Landlord modify the Tenant Improvements in
connection with the rebuilding, Landlord may condition its consent to those
modifications on: (a) Tenant's payment to Landlord before construction is begun
of any sums in excess of the amount of insurance proceeds received by Landlord
that are needed to complete the Tenant Improvements; and (b) Confirmation by
Landlord's architect or contractor that the modifications will not increase the
scope of work or the time necessary to complete the Tenant Improvements.
15.2. REPAIR PERIOD NOTICE. Landlord shall, within the later of (a) sixty
(60) days after the date on which Landlord determines the full extent of the
damage caused by the Casualty or (b) thirty (30) days after Landlord has
determined the extent of the insurance proceeds available to effectuate repairs,
provide written notice to Tenant indicating the anticipated period for
repairing the Casualty ("Repair Period Notice"). The Repair Period Notice shall
also state, if applicable, Landlord's election either to repair or to terminate
the Lease under Section 15.3.
Page 15 of 28
15.3. LANDLORD'S OPTION TO TERMINATE OR REPAIR. Landlord may elect either
to terminate this Lease or to effectuate repairs if: (a) the Repair Period
Notice estimates that the period for repairing the Casualty exceeds two hundred
and ten (210) days from the date of the commencement of the repair; (b) the
estimated repair cost exceeds the insurance proceeds, if any, available for
such repair (not including the deductible, if any, on Landlord's property
insurance), plus any amount that Tenant is obligated or elects to pay for such
repair; (c) the estimated repair cost of the Premises or the Building, even
though covered by insurance, exceeds fifty percent (50%) of the full
replacement cost; or (d) the Building cannot be restored except in a
substantially different structural or architectural form than existed before
the Casualty. Landlord's election shall be stated in the Repair Period Notice.
15.4. TENANT'S OPTION TO TERMINATE. If the Repair Period Notice provided
by Landlord indicates that the anticipated period for repairing the Casualty
exceeds two hundred and ten (210) days, Tenant may elect to terminate this Lease
by providing written notice (Tenant's Termination Notice) to Landlord within ten
(10) days after receiving the Repair Period Notice. If Tenant does not elect to
terminate within this ten-day (10 day) period, Tenant shall be considered to
have waived the option to terminate.
15.5. RENT ABATEMENT DUE TO CASUALTY. Landlord and Tenant agree that, if
the Casualty was not the result of negligence or willful misconduct of Tenant or
Tenant's employees, contractors, licensees, or invitees, Tenant shall be
provided with a proportionate abatement of Rent based on the Rentable Square
Footage of the Premises rendered unusable (due to physical damage to the
Premises or Base Building Systems or the unavailability of access to the
Premises) and not used by Tenant, but only to the extent that Landlord is
reimbursed from the proceeds of rental interruption insurance purchased by
Landlord as a part of Operating Expenses. That proportional abatement, if any,
shall be provided during the period beginning on the later of (a) the date of
the Casualty or (b) the date on which Tenant ceases to occupy the Premises and
ending on the date of Substantial Completion of Landlord's restoration
obligations as provided in this Article 15. Subject to Section 15.4. the Rent
abatement provided in this Section 15.5 is Tenant's sole remedy due to the
occurrence of the Casualty. Landlord shall not be liable to Tenant or any
other person or entity for any direct, indirect, or consequential damage
(including but not limited to lost profits of Tenant or loss of or interference
with Tenant's business), whether or not caused by the negligence of Landlord or
Landlord's employees, contractors, licensees, or invitees, due to, arising out
of, or as a result of the Casualty (including but not limited to the
termination of the Lease in connection with the Casualty). Tenant agrees to
maintain business interruption insurance in amounts and with coverage no less
than that required by Subsection 14.7.2 to provide coverage regarding such
matters.
15.6. DAMAGE NEAR END OF TERM. Despite any other provisions of this
Article 15, if the Premises or the Building is destroyed or damaged by a
Casualty during the last eighteen (18) months of the Lease Term, Landlord shall
have the option to terminate this Lease by giving written notice to Tenant of
the exercise of that option within thirty (30) days after that damage or
destruction.
15.7. EFFECTIVE DATE OF TERMINATION; RENT APPORTIONMENT. If Landlord or
Tenant elects to terminate this Lease under this Article 15 in connection with a
Casualty, this termination shall be effective thirty (30) days after delivery of
notice of such election. Tenant shall pay Rent, properly apportioned up to the
date of the Casualty. After the effective date of this termination, Landlord
and Tenant shall be discharged of all future obligations under this Lease,
except for those provisions that, by their terms, survive the expiration or
earlier termination of the Lease.
15.8. WAIVER OF STATUTORY PROVISIONS. The provisions of this Lease,
including those in this Article 15, constitute an express agreement between
Landlord and Tenant that applies in the event of any Casualty, to the Premises,
Building, or Project. Tenant, therefore, fully waives the provisions of any
statute or regulation, including California Civil Code Sections 1932(2) and
1933(4), for any rights or obligations concerning a Casualty.
Article 16
CONDEMNATION
16.1. DEFINITION OF "CONDEMNATION". As used in this Lease, the term
"Condemnation" means a permanent taking through (a) the exercise of any
government power (by legal proceedings or otherwise) by any public or quasi
public authority or by any other party having the right of eminent domain
("Condemnor") or (b) a voluntary sale or transfer by Landlord to any Condemnor,
either under threat of exercise of eminent domain by a Condemnor or while legal
proceedings for condemnation are pending.
16.2. EFFECT ON RIGHTS AND OBLIGATIONS. If, during the Lease Term or the
period between the date of execution of this Lease and the date on which the
Lease Term begins, there is any Condemnation of all or part of the Premises,
Building, or Project on which the Premises and Building are constructed, the
rights and obligations of the parties shall be determined under this Article 16,
and Rent shall not be affected or abated except as expressly provided in this
Article. Landlord shall notify Tenant in writing of any Condemnation within
thirty (30) days after the later of (a) the filing of a complaint by Condemnor
or (b) the final agreement and determination by Landlord and Condemnor of the
extent of the taking ("Condemnation Notice").
16.3. TERMINATION OF LEASE.
16.3.1. DEFINITION OF "TERMINATION DATE". The "Termination Date"
shall be the earliest of: (a) the date on which Condemnor takes possession of
the property subject to the Condemnation; (b) the date on which title to the
property that is subject to the Condemnation is vested in Condemnor; (c) if
Landlord has elected to terminate, the date on which Landlord requires
possession of the property in connection with the Condemnation, as
Page 16 of 28
specified in written notice delivered to Tenant no less than thirty (30) days
before that date, or (d) if Tenant has elected to terminate, thirty (30) days
after Landlord's receipt of written notice of termination from Tenant. If both
Landlord and Tenant have elected to terminate under this Article 16, the
Termination Date shall be the earliest of the dates described in (a) - (c)
above.
16.3.2. AUTOMATIC TERMINATION. If the Premises are totally
taken by Condemnation, this Lease shall terminate as of the Termination Date,
and the Condemnation Award shall be allocated between Landlord and Tenant in
accordance with Section 16.5.
16.3.3. LANDLORD'S RIGHT TO TERMINATE. Landlord shall have
the option to terminate this Lease if: (a) ten percent (10%) or more of the
Rentable Square Feet of the Building or the Premises is taken through
Condemnation; (b) any portion of the Building or Project necessary for
Landlord to operate the Building efficiently is taken through Condemnation;
or (c) any other areas providing access to the Premises or Building are taken
through Condemnation. To elect to terminate the Lease under this Subsection
16.3.3. Landlord must provide written notice of its election ("Landlord's
Taking Termination Notice") to Tenant within thirty (30) days after the later
of (a) the filing of a complaint by Condemnor or (b) the final agreement and
determination by Landlord and Condemnor of the extent of the taking. In that
event, this Lease shall be terminated on the Termination Date, and all Rent
shall be prorated to that date. If Landlord does not elect to terminate under
this Subsection 16.3.3. Landlord shall, subject to Subsection 16.3.4. be
obligated to the extent of severance damages received by Landlord to
reasonably restore (to the extent feasible) the Premises or access to the
Premises, subject to Landlord's obtaining all necessary approvals, permits,
and authorizations relating to such work.
16.3.4. TENANT'S RIGHT TO TERMINATE.
16.3.4.1. GROUNDS; TERMINATION NOTICE. Tenant
shall have the option to terminate this Lease by providing thirty (30) days'
written notice to Landlord if one or both of the following are taken through
Condemnation: (a) twenty five percent (25%) or more of the Usable Square Feet
of the Premises; or (b) any portion of the Building that provides Tenant with
its access to the Premises and that, if taken, would eliminate Tenant's
access to the Premises. Tenant's notice must be given within thirty (30) days
after Tenant's receipt of the Condemnation Notice required by Section 16.2.
16.3.4.2. LANDLORD'S RESTORATION NOTICE. Despite
Tenant's termination right, this Lease shall continue in full force and
effect if Landlord gives Tenant written notice ("Restoration Notice") within
thirty (30) days after the date on which the nature and extent of the
Condemnation are finally determined, stating that: (a) Landlord shall, at
Landlord's sole expense, reconfigure the remaining Premises or provide
alternative, reasonable access to Tenant so that the area of the Premises
shall be substantially the same after the Condemnation and Tenant shall have
reasonable access to the Premises after the Condemnation; (b) Landlord shall
begin the restoration as soon as reasonably practicable; and (c) Landlord has
reasonably determined that such restoration can be completed within ninety
(90) days after the date of the notice.
16.3.5. TENANT'S WAIVER. Tenant agrees that its rights to
terminate this Lease due to partial Condemnation are governed by this Article
16. Tenant waives all rights it may have under California Code of Civil
Procedure Section 1265.130, or otherwise, to terminate this Lease based on a
partial Condemnation.
16.3.6. PRORATION OF RENT. If this Lease is terminated
under this Article 16, the termination shall be effective on the Termination
Date, and Landlord shall prorate Rent to that date. Tenant shall be obligated
to pay Rent for the period up to, but not including, the Termination Date as
prorated by Landlord. Landlord shall return to Tenant prepaid Rent allocable
to any period on or after the Termination Date.
16.4. EFFECT OF CONDEMNATION IF LEASE IS NOT TERMINATED If any part
of the Premises is taken by Condemnation and this Lease is not terminated.
Rent shall be proportionately reduced based on the Rentable Square Footage of
the Premises taken. Landlord and Tenant agree to enter into an amendment to
this Lease within thirty (30) days after the partial taking, confirming the
reduction in Rentable Square Footage of the Premises and the reduction in
Rent. If Landlord gives Tenant a timely Restoration Notice under Subsection
16.3.4.2. this Lease shall continue in full force and effect without any
reduction of Rent (unless the Premises as restored are smaller than the
existing Premises, in which case Rent shall be proportionally reduced based
on the reduced Rentable Square Footage), except that Rent shall be abated for
the portion of the Premises not usable by Tenant until Landlord completes the
restoration as provided in the Restoration Notice.
16.5 ALLOCATION OF AWARD.
16.5.1. LANDLORD'S RIGHT TO AWARD. Except as provided in
Subsection 16.5.2 in connection with a Condemnation: (a) Landlord shall be
entitled to receive all compensation and anything of value awarded, paid, or
received in settlement or otherwise ("Award"); and (b) Tenant irrevocably
assigns and transfers to Landlord all rights to and interests in the Award
and fully releases and relinquishes any claim to, right to make a claim on,
or interest in the Award, including any amount attributable to any excess of
the market value of the Premises for the remainder of the Lease Term over the
present value as of the Termination Date of the Rent payable for the
remainder of the Term (commonly referred to as the "bonus value" of the
Lease).
16.5.2. TENANT'S RIGHT TO COMPENSATION. Despite 16.5.1. Tenant
shall have the right to make a separate claim in the Condemnation proceeding, as
long as the Award payable to Landlord is not reduced
Page 17 of 28
thereby, for: (a) the taking of the unamortized or under appreciated value of
any leasehold improvements owned by Tenant that Tenant has the right to
remove at the end of the Lease Term and that Tenant elects not to remove; (b)
reasonable removal and relocation costs for any leasehold improvements that
Tenant has the right to remove and elects to remove (if Condemnor approves of
the removal); and (c) relocation costs under Government Code Section 7262,
the claim for which Tenant may pursue by separate action independent of this
Lease.
16.6. TEMPORARY TAKING. If a temporary taking of part of the
Premises occurs through (a) the exercise of any government power (by legal
proceedings or otherwise) by Condemnor or (b) a voluntary sale or transfer by
Landlord to any Condemnor, either under threat of exercise or eminent domain
by a Condemnor or while legal proceedings for condemnation are pending. Rent
shall ▇▇▇▇▇ during the time of such taking in proportion to the portion of
the Premises taken. The entire Award relating to the temporary taking shall
be and remain the property of Landlord. Tenant irrevocably assigns and
transfers to Landlord all rights to and interest in the Award and fully
releases and relinquishes any claim to, right to make a claim on, and any
other interest in the Award.
Article 17
ASSIGNMENT AND SUBLEASING
17.1. RESTRICTED TRANSFERS.
17.1.1. CONSENT REQUIRED; DEFINITION OF "TRANSFER". Except as
otherwise provided in this Article 17, Tenant shall obtain Landlord's written
consent before entering into or permitting any Transfer. A "Transfer" consists
of any of the following, whether voluntary or involuntary and whether effected
by death, operation of law, or otherwise, (a) any assignment, mortgage, pledge,
encumbrance, or other transfer of any interest in this Lease; (b) any sublease
or occupancy of any portion of the Premises by any persons other than Tenant and
its employees; and (c) any of the changes (e.g., a change of ownership or
reorganization) included in the definition of Transfer in Section 17.7. Any
person to whom any Transfer is made or sought to be made is a "Transferee".
17.1.2. LANDLORD'S REMEDIES. If a Transfer fails to comply
with this Article 17, Landlord may, at its option, do either or both of the
following: (a) void the Transfer or (b) declare Tenant in material and incurable
default under Section 22.1 notwithstanding any cure period specified in Section
22.1.
17.2. TRANSFER PROCEDURE. Before entering into or permitting any
transfer, Tenant shall provide to Landlord a written "Transfer Notice" at
least forty-five (45) days before the proposed effective date of the
Transfer. The Transfer Notice shall include all of the following: (a)
information regarding the proposed Transferee, including the name, address,
and ownership of Transferee; the nature of Transferee's business;
Transferee's character and reputation; and Transferee's current financial
statements (certified by an officer, a partner, or an owner of Transferee);
(b) all the terms of the proposed Transfer, including the consideration
payable by Transferee, the portion of the Premises that is subject to the
Transfer ("Subject Space"): a general description of any planned alterations or
improvements to the Subject Space; the proposed use of the Subject Space: the
effective date of the Transfer; a calculation of the "Transfer Premium", as
defined in Subsection 17.4.1. payable in connection with the Transfer, and a
copy of all documentation concerning the proposed Transfer (c) any other
information or documentation reasonably requested by Landlord: and (d) an
executed estoppel certificate from Tenant in the form attached to this Lease
as EXHIBIT F. As a condition to the effectiveness of the Transfer Notice,
Tenant shall, when providing a Transfer Notice, pay an application fee of
$500.00 toward Landlord's administrative and other costs in reviewing and
processing the Transfer Notice. In addition, within thirty (30) days after
Landlord's written request, Tenant shall pay as Additional Rent any
reasonable legal fees that Landlord incurs in reviewing and processing the
Transfer Notice ("Transfer Fee"). Tenant shall pay the Transfer Fee whether
or not Landlord consents to the Transfer. If Landlord consents to any
Transfer and does not exercise its rights under Section 17.5. the following
limits apply: (a) Landlord does not agree to waive or modify the terms and
conditions of this Lease, (b) Landlord does not consent to any further
Transfer by either Tenant or Transferee, (c) Tenant remains liable under this
Lease, and any guarantor of the Lease remains liable under the guaranty, (d)
Tenant may enter into that Transfer in accordance with this Article 17 if:
(1) the Transfer occurs within six (6) months after Landlord's consent: (2)
the Transfer is on substantially the same terms as specified in the Transfer
Notice; and (2) Tenant delivers to Landlord, promptly after execution, an
original, executed copy of all documentation pertaining to the Transfer in a
form reasonably acceptable to Landlord (including Transferee's agreement to
be subject and subordinate to the Lease and to assume Tenant's obligations
under the Lease to the extent applicable to the Subject Space), (c) if the
Transfer occurs after six (6) months or the terms of the Transfer have
materially changed from those in the Transfer Notice, Tenant shall submit a
new Transfer Notice under this Section 17.2. requesting Landlord's consent,
and the Subject Space shall again be subject to Landlord's rights, if any,
under Section 17.5. A material change is one the terms of which would have
entitled Landlord to refuse to consent to the Transfer initially or would
cause the proposed Transfer to be more favorable to Transferee than the terms
in the original Transfer Notice.
17.3. LANDLORD'S CONSENT.
17.3.1. REASONABLE CONSENT. Landlord may not unreasonably
withhold its consent to any proposed Transfer that complies with this Article
17. Reasonable grounds for denying consent include any of the following: (a)
Transferee's character, reputation, credit history, or business is not
consistent with the character or quality of the Building; (b) Transferee is
either a government agency or an instrumentality of one; (c) Transferee's
intended use of the Premises is inconsistent with the Permitted Use or will
materially and adversely affect Landlord's interest; (d) Transferee's financial
condition is or may be inadequate to support the Lease obligations of Transferee
under the Transfer document; (e) the Transfer would cause Landlord to violate
another lease or agreement to which Landlord
Page 18 of 28
is a party or would give a Building tenant the right to cancel its lease; (f)
Transferee occupies space in the Building and such space is not contiguous to
the Premises, is negotiating with Landlord to lease space in the Building, or
has negotiated with Landlord during the six (6) months immediately preceding the
Transfer Notice; or (g) Transferee does not intend to occupy the entire Premises
and conduct business there for a substantial portion of the term of the
Transfer.
17.3.2. LANDLORD'S WRITTEN RESPONSE. Within a reasonable time
after receipt of a Transfer Notice that complies with Section 17.2. Landlord
shall approve or disapprove the proposed Transfer in writing.
17.3.3. TENANT'S REMEDIES. If Landlord wrongfully denies or
conditions its consent, Tenant may seek only declaratory and injunctive relief.
Tenant specifically waves any damage claims against Landlord in connection with
the withholding of consent.
17.3.4. TENANT'S INDEMNITY. Tenant shall indemnify, defend,
and hold harmless Landlord from and against all Claims by any third party
(including the proposed Transferee) arising out of or relating (directly or
indirectly) to a proposed Transfer. If a judicial determination is made that any
of the Claims were caused solely by Landlord's breach of this Article 17,
however, Tenant's indemnity obligation shall not extend to those Claims.
17.4. TRANSFER PREMIUM.
17.4.1. TRANSFER PREMIUM. As a reasonable condition to
Landlord's consent to any Transfer, Tenant shall pay to Landlord fifty
percent (50%) of any Transfer Premium, as defined in this Subsection 17.4.1.
"Transfer Premium" means an Basic Rent, additional rent, and other
consideration payable by Transferee to Tenant (including key money and bonus
money and any payment in excess of fair market value for services rendered by
Tenant to Transferee or assets, fixtures, inventory, equipment, or furniture
transferred by Tenant to Transferee in connection with the Transfer
("Transferee Rent")), after deducting the Rent payable by Tenant under this
Lease (excluding the Transfer Premium) for the Subject Space ("Tenant Rent").
If part of the Transfer Premium is payable by Transferee other than in cash,
Landlord's share of that non-cash consideration shall be in a form reasonably
satisfactory to Landlord. Tenant shall pay the Transfer Premium on a monthly
basis, together with its payment of Additional Rent under Article 5. In
calculating the Transfer Premium, Tenant Rent, Transferee Rent, and Quoted
Rent, the parties shall first adjust the rent to the actual effective rent to
be paid, taking into consideration any and all leasehold concessions,
including any rent credit and tenant improvement allowance. For purposes of
calculating the effective rent, all those concessions shall be amortized on a
straight-line basis over the relevant term. On Landlord's request, Tenant
shall furnish a complete statement, certified by an independent certified
public accountant or Tenant's chief financial officer, describing in detail
the computation of any Transfer Premium that Tenant has derived or will
derive from the Transfer. If Landlord's independent certified public
accountant finds that the Transfer Premium for any Transfer has been
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency and Landlord's costs of that audit. If Tenant has understated the
Transferee Premium by more than ten percent (10%), Landlord may, at it
option, declare Tenant in material and incurable default under Section 22.1
notwithstanding any cure period specified in Section 22.1.
17.5 LANDLORD'S OPTION TO RECAPTURE SPACE.
17.5.1. LANDLORD'S RECAPTURE RIGHT. Despite any other
provision of this Article 17, Landlord has the option by written notice to
Tenant ("Recapture Notice") within thirty (30) days after receiving any
Transfer Notice, to recapture the Subject Space by terminating this Lease for
the Subject Space or taking an assignment of a sublease of the Subject Space
from Tenant. A timely Recapture Notice terminates this Lease or creates an
assignment or a sublease for the Subject Space for the same term as the
proposed Transfer effective as of the date specified in the Transfer Notice.
If Landlord declines or fails timely to deliver a Recapture Notice, Landlord
shall have no further right under this Section 17.5 to the Subject Space
unless it becomes available again after Transfer by Tenant.
17.5.2. CONSEQUENCES OF RECAPTURE. To determine the new
Basic Rent under this Lease if Landlord recaptures the Subject Space, the
original Basic Rent under the Lease shall be multiplied by a fraction, the
numerator of which is the Rentable Square Feet of the Premises retained by
Tenant after Landlord's recapture and the denominator of which is the total
Rentable Square Feet of the Premises before Landlord's recapture. The
Additional Rent, to the extent that it is calculated on the basis of the
Rentable Square Feet within the Premises, shall be reduced to reflect
Tenant's proportionate share based on the Rentable Square Feet of the
Premises retained by Tenant after Landlord's recapture. This Lease as so
amended shall continue thereafter in full force and effect. Either party may
require written confirmation of the amendments to this Lease necessitated by
Landlord's recapture of the Subject Space. If Landlord recaptures the Subject
Space, Landlord shall, at Landlord's sole expense, construct any partitions
required to segregate the Subject Space from the remaining Premises retained
by Tenant. Tenant shall, however, pay for painting, covering, or otherwise
decorating the surfaces of the partitions facing the remaining Premises
retained by Tenant.
17.6. EFFECT OF TRANSFER. If this Lease is assigned, Landlord may
collect Rent directly from Transferee. If all or part of the Premises is
subleased and Tenant defaults, Landlord may collect Rent directly from
Transferee. Landlord may then apply the amount collected from Transferee to
Tenant's monetary obligations under this Lease. Collecting Rent from a
Transferee or applying that Rent to Tenant's monetary obligations does not
waive any provisions of this Article 17.
Page 19 of 28
17.7. TRANSFERS OF OWNERSHIP INTERESTS AND OTHER ORGANIZATIONAL
CHANGES.
17.7.1. CHANGE OF OWNERSHIP; REORGANIZATION. For purposes of
this Article 17, "Transfer" also includes: (a) if Tenant is a partnership or
limited liability company: (1) a change in ownership effected voluntarily,
involuntarily, or by operation of law within a twelve month (12 month)
period, of twenty five percent (25%) or more of the partners or members or
twenty five percent (25%) or more of the partnership or membership interests;
or (2) the dissolution of the partnership or limited liability company
without its immediate reconstitution, (b) if Tenant is a closely held
corporation (i.e., one whose stock is not publicly held and not traded
through an exchange or over the counter): (1) the sale or other transfer,
within a twelve month (12 month) period, of more than an aggregate of twenty
five percent (25%) of the voting shares of Tenant (other than to immediate
family members by reason of gift or death); (2) the sale, mortgage,
hypothecation, or pledge, within a twelve month (12 month) period, of more
than an aggregate of twenty five percent (25%) of the value of Tenant's
unencumbered assets; or (3) the dissolution, merger, consolidation, or other
reorganization of Tenant.
17.7.2. TRANSFER TO AFFILIATE. Despite any other provision
of this Lease, Landlord's consent is not required for any Transfer to an
Affiliate, as defined in Subsection 17.7.3, as long as the following
conditions are met: (a) at least ten (10) business days before the Transfer,
Landlord receives written notice of the Transfer (as well as any documents or
information reasonably requested by Landlord regarding the Transfer or
Transferee); (b) the Transfer is not a subterfuge by Tenant to avoid its
obligations under the Lease; (c) if the Transfer is an assignment, Transferee
assumes in writing all of Tenant's obligations under this Lease relating to
the Subject Space; and (d) Transferee has a tangible net worth, as evidenced
by financial statements delivered to Landlord and certified by an independent
certified public accountant in accordance with generally accepted accounting
principles that are consistently applied ("Net Worth"), at least equal to
Tenant's Net Worth either immediately before the Transfer or as of the date
of this Lease, whichever is greater.
17.7.3. DEFINITION OF "AFFILIATE". An "Affiliate" means any
entity that controls, is controlled by, or is under common control with
Tenant. "Control" means the direct or indirect ownership of more than fifty
percent (50%) of the voting securities of an entity or possession of the
right to vote more than fifty percent (50%) of the voting interest in the
ordinary direction of the entity's affairs.
Article 18
SURRENDER OF PREMISES
18.1. SURRENDER OF PREMISES. No act of Landlord or its authorized
representatives shall constitute Landlord's acceptance of a surrender of the
Premises by Tenant unless that intent is specifically acknowledged in a
writing signed by Landlord. At the option of Landlord, a surrender and
termination of this Lease shall operate as an assignment to Landlord of all
subleases or sub-tenancies. Landlord shall exercise this option by giving
notice of that assignment to all subtenants within ten (10) days after the
effective date of the surrender and termination.
18.2. REMOVAL OF TENANT PROPERTY BY TENANT. On the expiration or
earlier termination of the Lease Term, Tenant shall quit the Premises and
surrender possession to Landlord in accordance with this Section 18.2. Tenant
shall leave the Premises in as good order and condition as when Tenant took
possession of the Premises except for reasonable wear and tear and repairs
that are specifically made the responsibility of Landlord. On expiration or
termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises: (a) all debris and rubbish; (b) any items of
furniture, equipment, freestanding cabinet work, and other articles of
personal property owned by Tenant or installed or placed by Tenant at its
expense in the Premises; (c) any similar articles of any other persons
claiming under Tenant that Landlord, in Landlord's sole discretion, requires
to be removed; and (d) any alterations and improvements that Tenant is
required to remove under Article 12. Tenant shall, at Tenant's sole expense,
repair all damage or injury that may occur to the Premises or the Building
caused by Tenant's removal of those items and shall restore the Premises and
Building to their original condition.
Article 19
HOLDING OVER
19.1. HOLDOVER RENT. If Tenant remains in possession of the
Premises after expiration or earlier termination of this Lease with
Landlord's express written consent, Tenant's occupancy shall be a month to
month tenancy at a rent agreed on by Landlord and Tenant but in no event less
than the Basic Rent and Additional Rent payable under this Lease during the
last full month before the date of expiration or earlier termination of this
Lease. The month to month tenancy shall be on the terms and conditions of
this Lease except as provided in (a) the preceeding sentence and (b) the
lease clauses (if any) concerning lease term, expansion rights, purchase
option, and extension rights. Landlord's acceptance of rent after such
holding over with Landlord's written consent shall not result in any other
tenancy or in a renewal of the original term of this Lease. If Tenant remains
in possession of the Premises after expiration or earlier termination of this
Lease without Landlord's consent, Tenant's continued possession shall be on
the basis of a tenancy at sufferance and Tenant shall pay as rent during the
holdover period an amount equal to one hundred and fifty percent (150%) of
the Basic Rent and Additional Rent payable under this Lease for the last full
month before the date of expiration or termination.
19.2. NO CONSENT OR WAIVER IMPLIED. Landlord shall construe nothing
in this Article 19 as implied consent to any holding over by Tenant. Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease on expiration or other
termination of this Lease. The provisions of this Article 19 shall not be
considered to limit or constitute a waiver of any other rights or remedies of
Landlord provided in this Lease or at law.
Page 20 of 28
Article 20
ESTOPPEL CERTIFICATES
20.1. TENANT'S OBLIGATION TO PROVIDE ESTOPPEL CERTIFICATES. Within
ten (10) days after a written request by Landlord, Tenant shall execute and
deliver to Landlord an estoppel certificate, substantially in the form of
EXHIBIT F (or other form required by any existing or prospective lender,
mortgagee, or purchaser of all or part of the Building), indicating in the
certificate any exceptions to the statements in the certificate that may
exist at the time. The certificate shall also contain any other information
reasonably requested by Landlord or any existing or prospective lender,
mortgagee, or purchaser.
20.2. ADDITIONAL REQUESTED DOCUMENTS OR INSTRUMENTS. Within ten
(10) days after a written request by Landlord, Tenant shall execute and
deliver whatever other documents or instruments may be reasonably required
for sale or financing purposes, including (if requested by Landlord) a current
financial statement and financial statements for the two (2) years preceeding
the current financial statement year. Those statements shall be prepared in
accordance with generally accepted accounting principles and shall be audited
by an independent certified public accountant.
20.3. FAILURE TO DELIVER. Tenant's failure to execute or deliver
an estoppel certificate in the required time period shall constitute an
acknowledgment by Tenant that the statements included in the estoppel
certificate are true and correct, without exception. Tenant's failure to
execute or deliver an estoppel certificate or other document or instrument
required under this Article 20 in a timely manner shall be a material breach
of this Lease.
Article 21
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
21.1. AUTOMATIC SUBORDINATION. This Lease is subject and
subordinate to: (a) the lien of any mortgages, deeds of trust, or other
encumbrances ("Encumbrances") of the Building and Project; (b) all present
and future ground or underlying leases ("Underlying Leases") of the Building
and Project now or hereafter in force against the Building and Project; (c)
all renewals, extensions, modifications, consolidations, and replacements of
the items described in subparagraphs (a) - (b); and (d) all advances made or
hereafter to be made on the security of the Encumbrances. Despite any other
provision of this Article 21, any Encumbrance holder or lessor may elect that
this Lease shall be senior to and have priority over that Encumbrance or
Underlying Lease whether this Lease is dated before or after the date of the
Encumbrance or Underlying Lease. No such subordination shall be effective
unless and until Tenant has received a non disturbance agreement from the
holder of the Encumbrance or the lessor of the Underlying Lease in a
recordable, commercially reasonable form.
21.2. SUBORDINATION AGREEMENT; AGENCY. This subordination is
self-operative, and no further instrument of subordination shall be required
to make it effective. To confirm this subordination, however, Tenant shall,
within five (5) days after Landlord's request, execute any further
instruments or assurances in recordable form that Landlord reasonably
considers necessary to evidence or confirm the subordination or superiority
of this Lease to any such Encumbrances or Underlying Leases. Tenant
irrevocably appoints the President, Managing General Partner or Manager of
Landlord, as Tenant's agent to execute and deliver in the name of Tenant any
such instrument(s) if Tenant fails to do so. This authorization shall in no
way relieve Tenant of the obligation to execute such instrument(s) of
subordination or superiority. Tenant's failure to execute and deliver such
instrument(s) shall constitute a default under this Lease.
21.3. ATTORNMENT. Tenant convenants and agrees to attorn to the
transferee of Landlord's interest in the Building and/or Project by
foreclosure, deed in lieu of foreclosure, exercise of any remedy provided in
any Encumbrance or Underlying Lease, or operation of law (without any
deductions or setoffs), if requested to do so by the transferee, and to
recognize the transferee as the lessor under this Lease. The transferee shall
not be liable for: (a) any acts, omissions, or defaults of Landlord that
occurred before the sale or conveyance; or (b) the return of any security
deposit except for deposits actually paid to the transferee.
21.4. NOTICE OF DEFAULT; RIGHT TO CURE. Tenant agrees to give
written notice of any default by Landlord to the holder of any prior
Encumbrance or Underlying Lease. Tenant agrees that, before it exercises any
rights or remedies under the Lease, the lien-holder or lessor shall have the
right, but not the obligation, to cure the default within the same time, if
any, given to Landlord to cure the default, plus an additional thirty (30)
days. Tenant agrees that this cure period shall be extended by the time
necessary for the lien-holder to begin foreclosure proceedings and to obtain
possession of the Building or Project, as applicable.
Page 21 of 28
Article 22
DEFAULTS AND REMEDIES
22.1. TENANT'S DEFAULT. The occurrence of any of the following shall
constitute a default by Tenant under this Lease: (a) Tenant's failure to pay
when due any Rent required to be paid under this Lease if the failure
continues for three (3) days after written notice of the failure from
Landlord to Tenant; (b) Tenant's failure to provide any instrument or
assurance as required by Section 21.2 or estoppel certificate as required by
Section 20.1 if the failure continues for five (5) days after written notice
of the failure from Landlord to Tenant; (c) Tenant's failure to perform any
other obligation under this Lease if the failure continues for fifteen (15)
days after written notice of the failure from Landlord to Tenant; (d)
Tenant's abandonment of the Premises while in default of any provision of
this Lease; (e) to the extent permitted by law: (1) a general assignment by
Tenant or any guarantor of the Lease for the benefit of creditors; (2) the
filing by or against Tenant, or any guarantor, of any proceeding under an
insolvency or bankruptcy law, unless (in the case of an involuntary
proceeding) the proceeding is dismissed within sixty (60) days; (3) the
appointment of a trustee or receiver to take possession of all or
substantially all the assets of Tenant or any guarantor, unless possession is
unconditionally restored to Tenant or that guarantor within thirty (30) days
and the trusteeship or receivership is dissolved; (4) any execution or other
judicially authorized seizure of all or substantially all the assets of
Tenant located on the Premises, or of Tenant's interest in this Lease, unless
that seizure is discharged within thirty (30) days; or (f) the committing of
waste on the Premises.
22.2. REPLACEMENT OF STATUTORY NOTICE REQUIREMENTS. When this Lease
requires service of a notice, that notice shall replace rather than
supplement any equivalent or similar statutory notice, including any notices
required by Code of Civil Procedure Section 1161 or any similar or successor
statute. When a statute requires service of a notice in a particular manner,
service of that notice (or a similar notice required by this Lease) in the
manner required by Section 31.11 shall replace and satisfy the statutory
service of notice procedures, including those required by Code of Civil
Procedure Section 1162 or any similar or successor statute.
22.3. LANDLORD'S REMEDIES ON TENANT'S DEFAULT. On the occurrence of
a default by Tenant, Landlord shall have the right to pursue any one or more
of the following remedies in addition to any other remedies now or later
available to Landlord at law or in equity. These remedies are not exclusive
but cumulative.
22.3.1. TERMINATION OF LEASE. Landlord may terminate this
Lease and recover possession of the Premises. Once Landlord has terminated
this Lease, Tenant shall immediately surrender the Premises to Landlord. On
termination of this Lease, Landlord may recover from Tenant all of the
following: (a) the worth at the time of the award of any unpaid Rent that had
been earned at the time of the termination, to be computed by allowing
interest at the rate set forth in Article 24 but in no case greater than the
maximum amount of interest permitted by law; (b) the worth at the time of the
award of the amount by which the unpaid Rent that would have been earned
between the time of the termination and the time of the award exceeds the
amount of unpaid Rent that Tenant proves could reasonably have been avoided,
to be computed by allowing interest at the rate set forth in Article 24 but
in no case greater than the maximum amount of interest permitted by law; (c)
the worth the time of the award of the amount by which the unpaid Rent for
the balance of the Lease Term after the time of the award exceeds the amount
of unpaid Rent that Tenant proves could reasonably have been avoided, to be
computed by discounting that amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award plus one percent (1%);
(d) Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform obligations under this
Lease, including brokerage commissions and advertising expenses, expenses of
remodeling the Premises for a new tenant (whether for the same or a different
use), and any special concessions made to obtain a new tenant; and (e) any
other amounts, in addition to or in lieu of those listed above, that may be
permitted by applicable law.
22.3.2. CONTINUATION OF LEASE IN EFFECT. Landlord shall have
the remedy described in Civil Code Section 1951.4 which provides that, when a
tenant has the right to sublet or assign (subject only to reasonable
limitations), the landlord may continue the lease in effect after the
Tenant's breach and abandonment and recover Rent as it becomes due.
Accordingly, if Landlord does not elect to terminate this Lease on account of
any default by Tenant, Landlord may enforce all of Landlord's rights and
remedies under this Lease, including the right to recover all Rent as it
becomes due.
22.3.3. TENANT'S SUBLEASES. Whether or not Landlord elects
to terminate this Lease on account of any default by Tenant, Landlord may: (a)
terminate any sublease, license, concession, or other consensual arrangement
for possession entered into by Tenant and affecting the Premises, (b) choose
to succeed to Tenant's interest in such an arrangement. If Landlord elects
to succeed to Tenant's interest in such an arrangement, Tenant shall, as of
the date of notice by Landlord of that election, have no further right to, or
interest in, the Rent or other consideration receivable under that arrangement.
22.4. FORM OF PAYMENT AFTER DEFAULT. If Tenant fails to pay any
amount due under this Lease within three (3) days after the due date or if
Tenant draws a check on an account with insufficient funds, Landlord shall
have the right to require that any subsequent amounts paid by Tenant to
Landlord under this Lease (to cure a default or otherwise) by paid in the
form of cash, money order, cashier's or certified check drawn on an
institution acceptable to Landlord, or other form approved by Landlord
despite any prior practice of accepting payments in a different form.
22.5. EFFORTS TO RELET. For purposes of this Article 22, Tenant's
right to possession shall not be considered to have been terminated by
Landlord's efforts to relet the Premises, by Landlord's acts of maintenance or
Page 22 of 28
preservation with respect to the Premises, or by appointment of a receiver to
protect Landlord's interests under this Lease. This list is merely
illustrative of acts that may be performed by Landlord without terminating
Tenant's right to possession.
22.6. ACCEPTANCE OF RENT WITHOUT WAIVING RIGHTS. Under Article 25,
Landlord may accept Tenant's payments without waiving any rights under this
Lease, including rights under a previously served notice of default. If
Landlord accepts payments after serving a notice of default, Landlord may
nevertheless commence and pursue an action to enforce rights and remedies
under the previously served notice of default without giving Tenant any
further notice or demand.
22.7. TENANT'S REMEDIES ON LANDLORD'S DEFAULT. Tenant waives any right
to terminate this Lease and to vacate the Premises on Landlord's default
under this Lease. Tenant's sole remedy on Landlord's default is an action for
damages or injunctive or declaratory relief.
Article 23
LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS
23.1. LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS. All
obligations to be performed by Tenant under this Lease shall be performed by
Tenant at Tenant's expense and without any reduction of Rent. If Tenant's
failure to perform an obligation continues for five (5) days after notice to
Tenant, Landlord may perform the obligation on Tenant's behalf, without
waiving Landlord's rights for Tenant's failure to perform any obligations
under this Lease and without releasing Tenant from such obligations.
23.2. REIMBURSEMENT BY TENANT. Within fifteen (15) days after
receiving a statement from Landlord, Tenant shall pay to Landlord the amount
of expense reasonably incurred by Landlord, under Section 23.1, in performing
Tenant's obligation.
Article 24
LATE PAYMENTS
24.1. LATE CHARGES. If any Rent payment is not received by Landlord or
Landlord's designee within five (5) days after that Rent is due, Tenant shall
pay to Landlord a late charge equal to the greater of (i) One Hundred Dollars
($100), and (ii) two and one-half percent (2.5%) of the overdue amount for
any first or second late payment in any twelve (12) month period and ten
percent (10%) of the overdue amount for any third or subsequent late payment
in any twelve (12) month period, as liquidated damages, in lieu of actual
damages (other than interest under Section 24.2 and attorney fees and costs
under Section 27.1). Tenant shall pay this amount for each calendar month in
which all or any part of any Rent payment remains delinquent for more than
five (5) days after the due date. The parties agree that this late charge
represents a reasonable estimate of the expenses that Landlord will incur
because of any late payment of Rent (other than interest and attorney fees
and costs). Landlord's acceptance of any liquidated damages shall not
constitute a waiver of Tenant's default with respect to the overdue amount or
prevent Landlord from exercising any of the rights and remedies available to
Landlord under this Lease. Tenant shall pay the late charge as Additional
Rent with the next installment of Rent.
24.2. INTEREST. If any Rent payment is not received by Landlord or
Landlord's designee within five (5) days after that Rent is due, Tenant shall
pay to Landlord interest on the past due amount, from the date due until
paid, at the rate of eighteen percent (18%) per annum from the due date of
such amount ("Interest Rate"). Despite any other provision of this Lease, the
total liability for interest payments shall not exceed the limits, if any,
imposed by the usury laws of the State of California. Any interest paid in
excess of those limits shall be refunded to Tenant by application of the
amount of excess interest paid against any sums outstanding in any order that
Landlord requires. If the amount of excess interest paid exceeds the sums
outstanding, Landlord shall refund the portion exceeding those sums in cash
to Tenant. To ascertain whether any interest payable exceeds the limits
imposed, any non-principal payment (including late charges) shall be
considered to the extent permitted by law to be an expense or a fee, premium,
or penalty rather than interest.
Article 25
NONWAIVER
25.1. NON-WAIVER. No waiver of any provision of this Lease shall be
implied by any failure of Landlord to enforce any remedy for the violation of
that provision, even if that violation continues or is repeated. Any waiver
by Landlord of any provision of this Lease must be in writing. Such written
waiver shall affect only the provision specified and only for the time and in
the manner stated in the writing.
25.2. ACCEPTANCE AND APPLICATION OF PAYMENT, NOT ACCORD AND
SATISFACTION. No receipt by Landlord of a lesser payment than the Rent
required under this Lease shall be considered to be other than on account of
the earliest amount due, and no endorsement or statement on any check or
letter accompanying a payment or check shall be considered an accord and
satisfaction. Landlord may accept checks or payments without prejudice to
Landlord's right to recover all amounts due and pursue all other remedies
provided for in this Lease. Landlord's receipt of monies from Tenant after
giving notice to Tenant terminating this Lease shall in no way reinstate,
continue, or extend the Lease Term or affect the Termination Notice given by
Landlord before the receipt of those monies. After serving notice terminating
this Lease, filing an action, or obtaining final judgment for possession of
the Premises,
Page 23 of 28
Landlord may receive and collect any Rent due, and the payment of that Rent
shall not waive or affect such prior notice, action, or judgment.
Article 26
WAIVER OF RIGHT TO JURY TRIAL
26.1. WAIVER OF RIGHT TO JURY TRIAL. Landlord and Tenant waive their
respective rights to trial by jury of any contract or tort claim,
counterclaim, cross complaint, or cause of action in any action, proceeding,
or hearing brought by either party against the other on any matter arising
out of or in any way connected with this Lease, the relationship of Landlord
and Tenant, or Tenant's use or occupancy of the Premises, including any claim
of injury or damage or the enforcement of any remedy under any current or
future law, statute, regulation, code, or ordinance.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
----------------------------- -----------------------------
Landlord's Initials Tenant's Initials
Article 27
ATTORNEY FEES AND COSTS
27.1. LEGAL COSTS. If either party incurs any costs or expenses in
connection with any action instituted by either party by reason of any
dispute pursuant to this Lease or for the recovery of any sum due under this
Lease, or because of the breach of any provisions of this Lease by either
party, or for any other relief pursuant to this Lease, or in the event of any
other litigation between the parties with respect to this Lease, then all
costs and expenses, including without limitation, its actual professional
fees such as appraisers', accountants, and attorneys' fees, incurred by the
prevailing party therein shall be paid by the other party, which obligation
on the part of the other party shall be deemed to have accrued on the date of
the commencement of such action or dispute and shall be enforceable whether
or not the action is prosecuted to judgment. The provisions contained in this
Section 27.1 shall survive the expiration or earlier termination of this
Lease, and in the event any action or proceeding is instituted to recover
possession of the Premises following the expiration or earlier termination of
this Lease, the provisions contained in this Section 27.1 shall be applicable.
Article 28
LANDLORD'S ACCESS TO PREMISES
28.1. LANDLORD'S ACCESS TO PREMISES. Landlord and its agents shall
have the right at all reasonable times to enter the Premises to: (a) inspect
the Premises; (b) show the Premises to prospective purchasers, mortgagees, or
tenants or to ground lessors or underlying lessors; (c) serve, post, and keep
posted notices required by law or that Landlord considers necessary for the
protection of Landlord or the Building; or (d) make repairs, replacements,
alterations, or improvements to the Premises or Building that Landlord
considers necessary or desirable. Despite any other provision of this Article
28, Landlord may enter the Premises at any time to: (a) perform services
required of Landlord; (b) take possession due to any breach of this Lease; or
(c) perform any covenants of Tenant that Tenant fails to perform.
28.2. TENANT'S WAIVER. Landlord may enter the Premises without the
abatement of Rent and may take steps to accomplish the stated purposes.
Tenant waives any claims for damages caused by Landlord's entry, including
damage claims for: (a) injuries; (b) inconvenience to or interference with
Tenant's business; (c) lost profits; and (d) loss of occupancy or quiet
enjoyment of the Premises.
Article 29
SIGNS
29.1. BUILDING NAME; LANDLORD'S SIGNAGE RIGHTS. Subject to Tenant's
signage rights under this Article 29, Landlord may at any time change the
name of the Building and install, affix, and maintain all signs on the
exterior and interior of the Building as Landlord may, in Landlord's sole
discretion, desire. Tenant shall not have or acquire any property right or
interest in the name of the Building. Tenant may use the name of the Building
or pictures or illustrations of the Building in advertising or other
publicity during the Lease Term.
29.2. TENANT'S SIGNAGE RIGHTS WITHIN BUILDING.
29.2.1. SINGLE TENANT FLOOR. If the Premises comprise an entire
floor of the Building, Tenant may, at Tenant's sole expense, install
identification signs (including its logo) anywhere in the Premises, including
the elevator lobby of the Premises, subject to the following requirements:
(a) Tenant must obtain Landlord's prior written approval for such signs,
which Landlord may, in Landlord's sole discretion, grant or deny; (b) all
signs must be in keeping with the quality, design, and style of the Building;
and (c) no sign may be visible from the exterior of the Building.
29.2.2. MULTI TENANT FLOOR. If other tenants occupy space on the
floor on which the Premises are located, Landlord shall provide Tenant's
identifying signs at Tenant's expense. The signs shall be comparable to those
used by Landlord for other similar floors in the Building and shall comply
with Landlord's Building standard signage program.
Page 24 of 28
29.2.3. MONUMENT AND BUILDING SIGNAGE. Landlord agrees that, for
so long as Tenant leases not less than ninety percent (90%) of the Rentable
Area of the Premises as described in Part I, Section 4 (c), and provided
Tenant shall not be in default under this Lease, Tenant shall have the sole
and exclusive right to (i) use of the existing monument sign located in front
of the Building (the "Monument Sign") and (ii) place one (1) top parapet
level tenant identification sign on the fascia of the Building (the "Building
Sign"). Landlord shall have the right to review and approve the design,
dimensions, construction and exact location of the Monument Sign and the
Building Sign prior to its fabrication or installation on the Monument Sign
and Building. Tenant's rights hereunder are further conditioned upon (i) the
Monument Sign and the Building Sign being permitted by applicable code,
ordinance, statute, rule or regulation or by any action or rule of any
governmental authority having jurisdiction over such matters, (ii) all
consents necessary from all governmental authorities having jurisdiction over
such matters having been obtained by Tenant, and (iii) the Monument Sign and
Building Sign being permitted by any recorded instrument affecting the
Project. Tenant will bear the entire cost associated with creating,
designing, manufacturing, and installing its sign on the Monument Sign and
the Building Sign and all costs of illuminating (if Tenant chooses to
illuminate), operating, maintaining and insuring the Monument Sign and
Building Sign ("Lighting Cost"). If any Lighting Cost is invoiced to
Landlord, such cost shall become Additional Rent due upon invoice therefrom
by Landlord. Upon the expiration or earlier termination of this Lease or
Tenant's right to possession of the Premises Tenant shall, at Tenant's sole
cost and expense, cause Tenant's sign on the Monument Sign and the Building
Sign to be removed and shall repair and restore those portions of the
Monument Sign and Building affected by the installation or removal of
Tenant's signage thereon, to the condition existing prior to their
installation or to a condition otherwise satisfactory to Landlord.
Article 30
TENANT PARKING
30.1. TENANT PARKING. Tenant shall be entitled to use of the number of
parking spaces set forth in Summary of Basic Lease Information Section 12.
Landlord specifically reserves the right to designate and to change the
location, size, configuration, design, layout, and all other aspects of the
parking facility. Landlord may close off or restrict access to the parking
facility from time to time to facilitate construction, alteration, or
improvements, without incurring any liability to Tenant and without any
abatement of Rent under this Lease. Tenant's use of the parking facility is
conditioned on Tenant's abiding by all rules and regulations prescribed from
time to time for the orderly operation and use of the parking facility.
Tenant shall use all reasonable efforts to ensure that Tenant's employees and
visitors also comply with such rules and regulations.
Article 31
MISCELLANEOUS
31.1. CAPTIONS. The captions of articles and sections and the table of
contents of this Lease are for convenience only and have no effect on the
interpretation of the provisions of this Lease.
31.2. WORD USAGE. Unless the context clearly requires otherwise, the
plural and singular numbers shall each be considered to include the other;
the masculine, feminine, and neuter genders shall each be considered to
include the others; "shall", "will", "must", "agrees", and "covenants" are
each mandatory; "may" is permissive; "or" is not exclusive; and "includes"
and "including" are not limiting.
31.3. COUNTING DAYS. Days shall be counted by excluding the first day
and including the last day. If the last day is a Saturday, Sunday, or legal
holiday as described in Government Code Sections 6700-6701, it shall be
excluded. Any act required by this Lease to be performed by a certain day
shall be timely performed if completed before 5 p.m. local time on that date.
If the day for performance of any obligation under this Lease is a Saturday,
Sunday, or legal holiday, the time for performance of that obligation shall
be extended to 5 p.m. local time on the first following date that is not a
Saturday, Sunday, or legal holiday.
31.4. ENTIRE AGREEMENT; AMENDMENTS. This Lease and all exhibits
addenda, schedules, and agreements referred to in this Lease constitute the
final, complete, and exclusive statement of the terms of the agreement
between Landlord and Tenant pertaining to Tenant's lease of space in the
Building and supersede all prior and contemporaneous understandings or
agreements of the parties. Neither party has been induced to enter into this
Lease by, and neither party is relying on, any representation or warranty
outside those expressly set forth in this Lease. This Lease may be amended
only by an agreement in writing signed by Landlord and Tenant.
31.5. EXHIBITS. The Exhibits and Addendum, if applicable, attached to
this Lease are a part of this Lease and incorporated into this Lease by
reference.
31.6. REASONABLENESS AND GOOD FAITH. Except as limited elsewhere in
this Lease, whenever this Lease requires Landlord or Tenant to give its
consent or approval to any action on the part of the other, such consent or
approval shall not be unreasonably withheld or delayed.
31.7. PARTIAL INVALIDITY. If a court or arbitrator of competent
jurisdiction holds any Lease clause to be invalid or unenforceable in whole
or in part for any reason, the validity and enforceability of the remaining
clauses, or portions of them, shall not be affected unless an essential
purpose of this Lease would be defeated by loss of the invalid or
unenforceable provision.
Page 25 of 28
31.8 BINDING EFFECT. Subject to Article 17 and Sections 31.16-31,17,
this Lease shall bind and benefit the parties to this Lease and their legal
representatives and successors in interest.
31.9. INDEPENDENT COVENANTS. This Lease shall be construed as though
the covenants between Landlord and Tenant are independent and not dependent.
Tenant expressly waives the benefit of any statute to the contrary and agrees
that if Landlord fails to perform its obligations under this Lease. Tenant
shall not, except as set forth in Section 11.3 above, be entitled: (a) to
make any repairs or perform any acts at Landlord's expense; or (b) to any
setoff of the Rent or other amounts owing under this Lease against Landlord.
The foregoing, however, shall in no way impair Tenant's right to bring a
separate action against Landlord for any violation by Landlord of the
provisions of this Lease if notice is first given to Landlord and any lender
of whose address Tenant has been notified, and an opportunity is granted to
Landlord and that lender to correct those violations as provided in Section
21.4 and Subsection 22.7.1
31.10. GOVERNING LAW. This Lease shall be construed and enforced in
accordance with the laws of the State of California.
31.11. NOTICES. All notices (including requests, demands, approvals,
or other communications) under this Lease shall be in writing.
31.11.1. METHOD OF DELIVERY. Notice shall be sufficiently given
for all purposes as follows: (a) when personally delivered to the recipient,
notice is effective on delivery, (b) when mailed first class to the last
address of the recipient known to the party giving notice, notice is
effective on delivery, (c) when mailed by certified mail with return receipt
requested, notice is effective on receipt if delivery is confirmed by a
return receipt, (d) when delivered by overnight delivery,
FedEx/Airborne/United Parcel Service/DHL WorldWide Express with charges
prepaid or charged to the sender's account, notice is effective on delivery
if delivery is confirmed by the delivery service, (c) when sent by telex or
fax to the last telex or fax number of the recipient known to the party
giving notice, notice is effective on receipt as long as (1) a duplicate copy
of the notice is promptly given by first class or certified mail or by
overnight delivery or (2) the receiving party delivers a written confirmation
of receipt. Any notice given by telex or fax shall be considered to have been
received on the next business day if it is received after 5 p.m. (recipient's
time) or on a non-business day.
31.11.2. REFUSED, UNCLAIMED, OR UNDELIVERABLE NOTICES. Any
correctly addressed notice that is refused, unclaimed, or undeliverable
because of an act or omission of the party to be notified shall be considered
to be effective as of the first date that the notice was refused, unclaimed,
or considered undeliverable by the postal authorities, messenger, or
overnight delivery service.
31.11.3. ADDRESSES. Addresses for purposes of giving notice are
set forth in Section 13 of the Summary of Basic Lease Information. Either
party may change its address or telex or fax number by giving the other party
notice of the change in any manner permitted by this Section 31.11.
31.11.4 LENDERS AND GROUND LESSOR. If Tenant is notified of the
identity and address of Landlord's lender or ground or underlying lessor,
Tenant shall give to that lender or ground or underlying lessor written
notice of any default by Landlord under the terms of this Lease.
31.12. FORCE MAJEURE. If performance by a party of any portion of this
Lease is made impossible by any prevention, delay, or stoppage caused by
strikes; lockouts; labor disputes; acts of God; inability to obtain services,
labor or materials or reasonable substitutes for those items; government
actions; civil commotion, fire or other casualty; or other causes beyond the
reasonable control of the party obligated to perform, performance by that
party for a period equal to the period of that prevention, delay, or stoppage
is excused. Tenant's obligation to pay Rent, however, is not excused by this
Section 31.12.
31.13. TIME OF THE ESSENCE. Time is of the essence of this Lease and
each of its provision.
31.14. MODIFICATIONS REQUIRED BY LANDLORD'S LENDER. If any lender of
Landlord or ground lessor of the Building and/or Project requires a
modification of this Lease that will not increase Tenant's cost or expense or
materially or adversely change Tenant's rights and obligations, this Lease
shall be so modified and Tenant shall execute whatever documents are required
and deliver them to Landlord within ten (10) days after the request.
31.15. RECORDING; MEMORANDUM OF LEASE. Except as provided in this
Section 31.15, neither this Lease nor any memorandum, affidavit, or other
writing relating to this Lease may be recorded by Tenant or anyone acting
through, under, or on behalf of Tenant. Recordation in violation of this
provision constitutes an act of default by Tenant. On request by Landlord or
any lender or ground lessor, Tenant shall execute a short form of Lease for
recordation, containing (among other customary provisions) the names of the
parties and a description of the Premises and the Lease Term. Tenant shall
execute, acknowledge before a notary public and deliver that form to Landlord
within ten (10) days after the request.
31.16. LIABILITY OF LANDLORD. Except as otherwise provided in this
Lease or applicable law, for any breach of this Lease the liability of
Landlord (including all persons and entities that comprise Landlord, and any
successor landlord) and any recourse by Tenant against Landlord shall be
limited to the interest of Landlord and Landlord's successors in interest in
and to the Building and Project. On behalf of itself and all persons claiming
by, through, or under Tenant, Tenant expressly waives and releases Landlord
from any personal liability for breach of this Lease.
Page 26 of 28
31.17. TRANSFER OF LANDLORD'S INTEREST. Landlord has the right to
transfer all or part of its interest in the Building and Project and in this
Lease. On such a transfer, Landlord shall automatically be released from all
liability accruing under this Lease, and Tenant shall look solely to that
transferee for the performance of Landlord's obligations under this Lease
after the date of transfer, subject to Section 6.2. Landlord may assign its
interest in this Lease to a mortgage lender as additional security. This
assignment shall not release Landlord from its obligations under this Lease,
and Tenant shall continue to look to Landlord for the performance of its
obligations under this Lease.
31.18. JOINT AND SEVERAL OBLIGATIONS OF TENANT. If more than one
individual or entity comprises Tenant, the obligations imposed on each
individual or entity that comprised Tenant under this Lease shall be joint
and several.
31.19. SUBMISSION OF LEASE. Submission of this document for
examination or signature by the parties does not constitute an option or
offer to lease the Premises on the terms in this document or a reservation of
the Premises in favor of Tenant. This document is not effective as a lease or
otherwise until executed and delivered by both Landlord and Tenant.
31.20. LEGAL AUTHORITY
31.20.1. CORPORATE AUTHORITY. If Tenant is a corporation, each
individual executing this Lease on behalf of that corporation represents and
warrants that: (a) the individual is authorized to execute and deliver this
Lease on behalf of that corporation in accordance with a duly adopted
resolution of the corporation's board of directors and in accordance with
that corporation's articles of incorporation or charter and bylaws; (b) this
Lease is binding on that corporation in accordance with its terms; (c) the
corporation is a duly organized and legally existing corporation in good
standing in the State of California; and (d) the execution and delivery of
this Lease by that corporation shall not result in any breach of or
constitute a default under any mortgage, deed of trust, lease loan, credit
agreement, partnership agreement, or other contract or instrument in which
that corporation is a party or by which that corporation may be bound. If
Tenant is a corporation, Tenant shall, within fifteen (15) days after the
date of this Lease, deliver to Landlord a copy of a resolution of Tenant's
board of directors authorizing or ratifying the execution and delivery of
this Lease. The secretary or assistant secretary of the corporation must duly
certify that resolution. If Tenant fails to comply with this Subsection
31.20.1. each individual execution this Lease on behalf of the corporation
shall be personally liable for all of Tenant's obligations under this Lease.
31.20.2. PARTNERSHIP AUTHORITY. If Tenant is a partnership,
each individual executing this Lease on behalf of the partnership represents
and warrants that: (a) the individual is duly authorized to execute and
delivery this Lease on behalf of the partnership in accordance with the
partnership agreement, or an amendment to the partnership agreement, now in
effect; (b) this Lease is binding on that partnership; (c) the partnership is
a duly organized and legally existing partnership and has filed all
certificates required by law; and (d) the execution and delivery of this
Lease shall not result in any breach of or constitute a default under any
mortgage, deed of trust, lease, loan, credit agreement, partnership
agreement, or other contract or instrument to which the partnership is a
party or by which the partnership may be found.
31.20.3. LIMITED LIABILITY COMPANY AUTHORITY. If Tenant is a
limited liability company, each individual executing this Lease on behalf of
that company represents and warrants that: (a) the individual(s) executing
this Lease on behalf of the company has/have full power and authority under
the company's governing documents to execute and deliver this Lease in the
name of and on behalf of the company and to cause the company to perform its
obligations under this Lease; (b) the company is a limited liability company
duly organized and validly existing under the laws of the State of
California; and (c) the company has the power and authority under applicable
law and its governing documents to execute and deliver this Lease and to
perform its obligations under this Lease.
31.21. RIGHT TO LEASE. Landlord reserves the absolute right to
contract with any other person or entity to be a tenant in the Building as
Landlord, in Landlord's sole business judgment, determines best to promote
the interests of the Building. Tenant does not rely on the expectation, and
Landlord does not represent, that any specific tenant or type or number of
tenants will, during the Lease Term, occupy any space in the Building.
31.22. NO AIR RIGHTS. No rights to any view from the Premises or to
exterior light or air to the Premises are created under this Lease.
31.23. BROKERS. Landlord and Tenant each represents to the other that
it has had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, except for the real estate brokers or
agents specified in Summary of Basic Lease Information Section 12 ("Brokers")
and that they know of no other real estate broker or agent who is entitled to
a commission or finder's fee in connection with this Lease. Each party shall
indemnify, protect, defend, and hold harmless the other party against all
claims, demands, losses, liabilities, lawsuits, judgments, and costs and
expenses (including reasonable attorney fees) for any leasing commission,
finder's fee, 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. The terms of this Section 31.23 shall survive the
expiration or earlier termination of the Lease Term.
31.24. TRANSPORTATION MANAGEMENT. Tenant shall fully comply with all
current or future compulsory programs imposed by any public authority,
intended to manage parking, transportation, or traffic in and around the
Page 27 of 28
Building. In connection with this compliance, Tenant shall take responsible
action for the transportation planning and management of all employees
located at the Premises by working directly with Landlord, any government
transportation management organization, or other transportation related
committees or entities. This provision includes programs such as the
following: (a) restrictions on the number of peak hour vehicle trips
generated by Tenant; (b) encouragement of increased vehicle occupancy through
employer sponsored financial or in-kind incentives; (c) implementation of an in
house or area wide ridesharing program and appointment of an employee
transportation coordination; and (d) flexible work shifts for employees.
31.25. LEASE TERMINATION AND TENANT RELOCATION COSTS. To enable
Landlord to enter into this Lease and to accommodate Tenant's desire to lease
and occupy the Premises as provided herein, Landlord was required to
terminate its Lease with an existing tenant of the Building known as
▇▇▇▇▇▇▇▇▇.▇▇▇ ("Megashops") and to relocate a second existing tenant of the
Building known as MDL Information systems, Inc. ("MDL") to the third floor of
the Building. Tenant covenants and agrees to reimburse Landlord, or at
Landlord's option, to pay directly to Megashops and MDL, all costs and
expenses associated with terminating the Megashops lease and to relocate MDL
to the third floor of the Building including, but not limited to construction
costs, construction management fees to Landlord's property management firm,
space planning fees, engineering costs and legal fees. Notwithstanding.
Landlord agrees to be responsible for the costs and expenses associated with
the tenant improvements to the space MDL was originally intended to occupy on
the first floor of the Building totaling Forty-one Thousand Three Hundred
Fifty and 00/1000 Dollars ($41,350,000).
Executed as of the date stated in Summary of Basic Lease Information
Section 1.
LANDLORD TENANT
TIPAC-LLP Cayenta, Inc.,
a California limited partnership a Delaware corporation
By: Pacific Corporate Associates, III By: /s/ [ILLEGIBLE]
a California limited partnership --------------------------------
(Sole General Partner) Name: [ILLEGIBLE]
---------------------------
Title: SVP
---------------------------
By: ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc.,
a California corporation
(Sole General Partner)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:
---------------------------------- --------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name:
Title: Vice President ---------------------------
Title:
---------------------------
Page 28 of 28
EXHIBIT A-1
DIAGRAM OF THE FIRST FLOOR OF THE PREMISES
This EXHIBIT A-1 is intended to show the general configuration of the first
floor of the Premises as of the Lease Commencement Date and is not a
representation or warranty by Landlord as to the size, nature or exact
configuration of the Premises.
[DIAGRAM]
EXHIBIT A-2
DIAGRAM OF THE SECOND FLOOR OF THE PREMISES
This EXHIBIT A-2 is intended to show the general configuration of the second
floor of the Premises as of the Lease Commencement Date and is not a
representation or warranty by Landlord as to the size, nature or exact
configuration of the Premises.
[DIAGRAM]
EXHIBIT A-3
DIAGRAM OF THE THIRD FLOOR OF THE PREMISES
This EXHIBIT A-3 is intended to show the general configuration of the third
floor of the Premises as of the Lease Commencement Date and is not a
representation or warranty by Landlord as to the size, nature or exact
configuration of the Premises.
[DIAGRAM]
IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of
the day and year first above written.
Address of Guarantor: GUARANTOR
Titan Corporation Titan Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ a Delaware corporation
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:______________________
By:___________________________
Address of Landlord: Name:______________________
Title:_____________________
TIPAC-LP
c/o Meissner & ▇▇▇▇▇▇▇ Investment Management By:___________________________
Services Name:______________________
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Title:_____________________
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
With copy to:
TIPAC-1, LP
c/▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Page 3 of 3
Allowance. Tenant shall be entitled to apply any remaining Common Area
Improvement Allowance toward the cost of any Tenant Extra Work.
12. CONFLICTS. In the event of any conflict between the terms of this
Agreement and the Lease, the terms of this Agreement shall control.
Executed as of the date stated in Summary of Basic Lease Information
contained in Section 1 of the Lease.
LANDLORD TENANT
TIPAC-1, LP, Cayenta, Inc.,
a California limited partnership a Delaware corporation
By: Pacific Corporate Associates, III, By: /s/ [ILLEGIBLE]
a California limited partnership -------------------------------
(Sole General Partner) Name: [ILLEGIBLE]
--------------------------
Title: SVP
-------------------------
By: ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc.,
a California corporation
(Sole General Partner)
By: ___________________________________ By:_______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name:__________________________
Title: Vice President Title:_________________________
Page 3 of 3
EXHIBIT F
ESTOPPEL CERTIFICATE
The undersigned certifies as follows:
1. The undersigned ("Tenant") and ______________________ ("Landlord")
entered into a written office lease dated ____________________, in which
Landlord leased to Tenant and Tenant leased from Landlord premises in the
office building located at ____________________ ("Building"). The Building is
described in Lease Article I (Building and Premises). The Lease has been
amended, modified, and supplemented as follows: ______________________________.
The lease, as amended, modified and supplemented, is referred to in this
Certificate as the "Lease".
2. Under the Lease, Tenant has leased approximately _________
rentable square feet of space ("Premises") in the Building and has paid to
Landlord a security deposit of ______________. The term of the Lease began on
___________ and expires on ____________, subject to any options to extend
identified in Section 4 of this EXHIBIT F. Tenant has paid Basic Rent through
______________. The next payment of Basic Rent in the amount of ___________
is due on ______________. Tenant is required to pay __________ percent of the
direct expenses (as defined in Lease Article 5) for the Building and Project,
in excess of direct expenses for base year ___________.
3. Tenant is entitled to ___________ unreserved parking spaces free
of charge and ___________ parking spaces at a charge of ___________ per month
per space.
4. The Lease provides for ____________ option(s) to extend the term
of the Lease for ____________ years each. The rental rate for each extension
term is as follows: _____________________________
5. There are no oral or written amendments, modifications, or
supplements to the Lease except as stated in Section 1 of this Certificate. A
true, correct, and complete copy of the Lease, including all amendments,
modifications, and supplements, is attached to this Certificate. The Lease,
as amended, modified and supplemented, is in full force and effect and
represents the entire agreement between Landlord and Tenant pertaining to the
Premises, the Building, and the Project.
6. All space and improvements leased by Tenant have been completed
and furnished in accordance with the provisions of the lease, and Tenant has
accepted and taken possession of the Premises. All contributions required to
be paid by Landlord to date for improvements to the Premises have been paid
in full.
7. Landlord is not in default in the performance of any of the terms
or provisions of the Lease. Tenant is not in default in the performance of
any of the terms or provisions of the Lease and has not assigned,
transferred, or hypothecated the Lease or any interest in the Lease or
subleased all or part of the Premises.
8. There are no setoffs or credits against Rent payable under the
Lease. No free periods or rental abatements, rebates, or concessions have
been granted to Tenant, except as follows: ____________________________.
9. Tenant has no actual or constructive knowledge of any processing,
use, storage, disposal, release, or treatment of any hazardous or toxic
material or substance on the Premises or the Project except as follows:
_______________________________________________________.
10. There are no pending actions, voluntary or involuntary, under any
bankruptcy or insolvency laws of the United States or any state against
Tenant or any guarantor of Tenant's obligations under the Lease.
This Certificate is given to __________________ as [LENDER OR PURCHASER]
with the understanding that he/she/it or his/her/its assignee shall rely on
it in connection with the [ACQUISITION OF THE BUILDING AND/OR PROJECT/MAKING A
LOAN SECURED BY THE BUILDING, THE LAND UPON WHICH THE BUILDING IS LOCATED AND
THE PROJECT]. Following that [ACQUISITION/LOAN]. Tenant agree that the Lease
shall remain in full force and effect and shall bind and inure to the benefit
of the [PURCHASER/LENDER] and its successor in interest.
TENANT
_____________________________________
a____________________________________
By:__________________________________
Name:_____________________________
Title:____________________________
Page 1 of 1
EXHIBIT G
GUARANTY OF LEASE
This Guaranty of Lease ("Guaranty") is made and effective as of
January 14, 2000, by TITAN CORPORATION, A DELAWARE CORPORATION ("Guarantor")
in favor of TIPAC-I I,P, A CALIFORNIA LIMITED PARTNERSHIP ("Landlord") with
reference to the facts set forth below.
RECITALS
--------
A. Landlord has entered into that certain Lease Agreement ("Lease") of
even date herewith with CAYENTA, INC., A DELAWARE CORPORATION ("Tenant"), to
which this Guaranty is attached as an Exhibit for the lease of the premises
("Premises") located in the City of San Diego, State of California, as more
particularly described in the Lease.
B. As a condition to entering into the Lease, Landlord has required
that Guarantor execute this Guaranty guaranteeing performance of all the
covenants on Tenant's part to the performed pursuant to the Lease.
Guarantor's agreement to provide this Guaranty is a material consideration
for Landlord's decision to lease the Premises to Tenant.
NOW, THEREFORE, to induce Landlord to enter into the Lease and in
consideration thereof, Guarantor agrees as set forth below.
1. Guarantor unconditionally guarantees to Landlord, and to Landlord's
successors and assigns, the payment by Tenant of the Rent and all other
charges which accrue under the Lease in the manner and at the time prescribed
therein, and the full and punctual performance and observance, by Tenant, of
all the terms, covenants and conditions contained in the Lease. Guarantor
waives notice of any breach or default by Tenant. Guarantor's obligations
hereunder shall continue in full force and effect with respect to any of
Tenant's obligations under the Lease, which are not performed upon the
termination of this Lease.
2. This Guaranty is continuing guaranty of all of Tenant's obligations
under the Lease, independent of and in addition to any other guaranty,
previously or subsequently given to Landlord, and this Guaranty shall not
affect any of said guaranties.
3. Guarantor hereby expressly waives and relinquishes any and all
rights and remedies, which Guarantor may have or be able to assert by reason
of the laws or decisions of the State of California pertaining to the rights
and remedies of sureties.
4. Guarantor waives any right to require Landlord to (a) proceed
against Tenant or any co-guarantor, (b) proceed against or exhaust any
security (including a security deposit) held by Landlord, or (c) pursue any
remedy in Landlord's power whatsoever. Guarantor waives any defense it may
acquire by reason of Landlord's election of any remedy against it or Tenant
or both, including, but without limitation, the election by Landlord to
exercise its rights to occupy and operate the Premises under the Lease.
5. Guarantor waives any defense based upon the legal disability of
Tenant, or any discharge, release or limitation of the liability of Tenant to
Landlord, or any restraint or stay applicable to actions against Tenant, or
any disaffirmance or abandonment of the Lease by a trustee of Tenant whether
consensual, or by order of a court or other governmental authority, arising
by operation of law or any liquidation, reorganization, receivership,
bankruptcy, insolvency or debtor relief proceeding, or any other cause.
Guarantor further waives any defense based upon any amendment modification,
renewal, extension, assignment, subletting or other alteration (with or
without the consent of Landlord) of the Lease, or the term of the Lease or
obligation of Tenant or Landlord under the Lease, or any other documents
relating to the transactions described therein; any defense based upon the
negligence of Landlord, any defense based upon the forfeiture or termination
of the Lease by Landlord whether by expiration or default; any defense based
upon the failure of Landlord to file a claim in bankruptcy of Tenant; all
rights of subrogation, all rights to enforce any remedy that Landlord may
have against Tenant, and all rights to participate in any security held by
Landlord for the performance and obligations of Tenant under the Lease,
except to the extent such security remains after payment and performance of
Tenant's obligations in full; any defense based upon the impairment of any
subrogation rights that Tenant might have; any defense based upon death,
incapacity, lack of authority or termination of existence or revocation
hereof by any person or entity, or persons or entities, or the substitution
of any party hereto, and any defense based upon or related to Guarantor's lack
of knowledge as to Tenant's financial condition, and any and all rights under
Section 2845 of the California Civil Code and any successor provision.
6. Guarantor waives all presentments, demands, protests and notices of
any kind including notice of acceptance of the Guaranty by Landlord. Any act
of Landlord, or its successors or assigns, consisting of a modification of
the Lease, a waiver of any of the terms or conditions of the Lease, or the
giving of any consent to any manner or thing relating to the Lease, or the
granting of any indulgences or extensions of time to Tenant, are hereby
deemed approved by Guarantor and may be done without notice to Guarantor and
without releasing Guarantor from any of its obligations hereunder.
7. Guarantor assumes full responsibility for keeping fully informed of
the financial condition of Tenant and all other circumstances affecting
Tenant's ability to perform its obligations to Landlord, and agrees that
Landlord
Page 1 of 3
shall have no duty to report to Guarantor any information which Landlord
receives about Tenant's financial condition or any circumstances bearing on
Tenant's ability to perform.
8. The covenants and obligations of Guarantor hereunder are
independent of the Tenant's obligations under the Lease and are binding upon
the Guarantor notwithstanding the fact that the Guarantor is not the
signatory to the Lease; separate action or actions may be brought against any
guarantor hereon, whether or not action is brought against Tenant or any
co-guarantor of Tenant or any co-guarantor be joined in any such action or
actions.
9. Any indebtedness or other obligations of Tenant now or hereafter
held by Guarantor is hereby subordinated to Tenant's obligations to Landlord
and such indebtedness or other obligations of Tenant to Guarantor, if
Landlord so request, shall be collected, enforced and received by Guarantor as
Trustee for Landlord and be paid over to Landlord on account of Tenant's
obligations to Landlord, but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty.
10. This Guaranty shall be enforceable by Landlord in accordance with
the laws of the State of California and shall be construed in accordance
therewith. Guarantor agrees to pay attorney's fees and all other costs and
expenses, which Landlord may incur in enforcement of this Guaranty. Until
paid to Landlord, such sums will bear interest from the date such costs and
expenses are incurred at the maximum rate permitted by law.
11. No delay or failure on the part of Landlord to pursue any right or
remedy hereunder or under the Lease shall constitute a waiver of that right
or remedy. All remedies of Landlord against Guarantor are cumulative.
12. The obligations and promises set forth herein shall be joint and
several undertakings of each of the persons executing this Guaranty as a
Guarantor, and Landlord may proceed hereunder against any one or more of said
persons without waiving its right to proceed against any of the others. The
use of the singular herein shall include the plural.
13. Guarantor acknowledges that its undertakings given hereunder are
given in consideration of Landlord's entering into the Lease and that
Landlord would not consummate the Lease were it not for the execution and
delivery of this Guaranty.
14. The provisions of this Guaranty will bind and benefit the heirs,
executors, administrators, legal representatives, successors and assigns of
Guarantor and Landlord.
15. Guarantor individually represents and warrants that it has all
requisite power and authority to execute, deliver, perform and be legally bound
by this Guaranty on the terms and conditions herein stated and transact any
other business with Landlord as necessary to fulfill the terms of this
Guaranty.
16. No provision of this Guaranty or Landlord's rights hereunder can
be waived or modified nor can Guarantor be released from its obligations
hereunder except by a writing executed by Landlord. No such waiver shall be
applicable except in the specific instance for which given.
17. Guarantor hereby waives its right to trial by jury of any cause of
action, claim, counterclaim or cross-complaint in any action, proceeding
and/or hearing brought by either Landlord against Tenant and/or Guarantor or
Tenant against Landlord and/or Guarantor, or by Guarantor against Landlord
and/or Tenant, on any matter whatsoever arising out of, or in any way
connected with, this Guaranty and/or the Lease, the relationship of Landlord,
Tenant and Guarantor, Tenant's use and occupancy of the Premises or Common
Areas, or any claim of injury or damage, or the enforcement of any remedy
under any law, statute, or regulation, emergency or otherwise, now or
hereafter in effect.
18. The term "Tenant" will mean both the named tenant and any other
person or entity at any time assuming, subleasing or otherwise becoming
primarily liable for all or any part of the tenant's obligations. The term
"Landlord" will mean both the landlord named herein and any future owner or
holder of Landlord's interest in the Premises Landlord may, without notice,
assign this Guaranty in whole or in part without extinguishing or reducing
the liability of the Guarantor.
19. All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be given in the manner required
for giving notices as set forth in Article 26 of the Lease. For purposes of
notice, the addresses of the parties shall be set forth on the signature
page hereof, provided, however, that any party shall have the right to change
its address for notice hereunder to any other location by giving notice to
the other party in the manner set forth above.
Page 2 of 3
GUARANTY OF LEASE
This Guaranty of Lease ("Guaranty") is made and effective as of
January 31, 2000, by TITAN CORPORATION, A DELAWARE CORPORATION ("Guarantor")
in favor of TIPAC-I, LP, A CALIFORNIA LIMITED PARTNERSHIP ("Landlord") with
reference to the facts set forth below.
RECITALS
A. Landlord has entered into that certain Lease Agreement
("Lease") dated January , 2000, with CAYENTA, INC., A DELAWARE CORPORATION
("Tenant"), for the lease of the premises ("Premises") located in the City of
San Diego, State of California, as more particularly described in the Lease.
B. As a condition to entering into the Lease, Landlord has
required that Guarantor execute this Guaranty guaranteeing performance of all
the covenants on Tenant's part to be performed pursuant to the Lease.
Guarantor's agreement to provide this Guaranty is a material consideration
for Landlord's decision to lease the Premises to Tenant.
NOW, THEREFORE, to induce Landlord to enter into the Lease and in
consideration thereof, Guarantor agrees as set forth below.
1. Guarantor unconditionally guarantees to Landlord, and to
Landlord's successors and assigns, the payment by Tenant of the Rent and all
other charges which accrue under the Lease in the manner and at the time
prescribed therein, and the full and punctual performance and observance, by
Tenant, of all the terms, covenants and conditions contained in the Lease.
Landlord agrees to provide Guarantor with notice of any breach or default by
Tenant provided, however, that Landlord's failure to do so shall not release
or in any way diminish the obligations of Guarantor under this Guaranty.
Guarantor's obligations hereunder shall continue in full force and effect
with respect to any of Tenant's obligations under the Lease, which are not
performed upon the termination of this Lease.
2. This Guaranty is a continuing guaranty of all of Tenant's
obligations under the Lease, independent of and in addition to any other
guaranty, previously or subsequently given to Landlord, and this Guaranty
shall not affect any of said guaranties.
3. Guarantor hereby expressly waives and relinquishes any and all
rights and remedies, which Guarantor may have or be able to assert by reason
of the laws or decisions of the State of California pertaining to the rights
and remedies of sureties.
4. Guarantor waives any right to require Landlord to (a) proceed
against Tenant or any co guarantor, (b) proceed against or exhaust any
security (including a security deposit) held by Landlord, or (c) pursue any
remedy in Landlord's power whatsoever. Guarantor waives any defense it may
acquire by reason of Landlord's election of any remedy against it or Tenant
or both, including, but without limitation, the election by Landlord to
exercise its rights to occupy and operate the Premises under the Lease.
5. Guarantor waives any defense based upon the legal disability
of Tenant, or any discharge, release or limitation of the liability of Tenant
to Landlord, or any restraint or stay applicable to actions against Tenant, or
any disaffirmance or abandonment of the Lease by a trustee of Tenant whether
consensual, or by order of a court or other governmental authority, arising
by operation of law or any liquidation, reorganization, receivership,
bankruptcy, insolvency or debtor relief proceeding, or any other cause.
Guarantor further waives any defense based upon any amendment modification,
renewal, extension, assignment, subletting or other alteration (with or
without the consent of Landlord of the Lease, or the term of the Lease or
obligation of Tenant or Landlord under the Lease, or any other documents
relating to the transactions described therein; any defense based upon the
forfeiture or termination of the Lease by Landlord whether by expiration or
default; any defense based upon the failure of Landlord to file a claim in
bankruptcy of Tenant; all rights of subrogation, all rights to enforce any
remedy that Landlord may have against Tenant, and all rights to participate
in any security held by Landlord for the performance and obligations of
Tenant under the Lease, except to the extent such security remains after
payment and performance of Tenant's obligations in full, any defense based
upon the impairment of any subrogation rights that Tenant might have; any
defense based upon death, incapacity, lack of authority or termination of
existence or revocation hereof by any person or entity, or persons or
entities, or the substitution of any party hereto, and any defense based upon
or related to Guarantor's lack of knowledge as to Tenant's financial
condition, and any and all rights under Section 2845 of the California Civil
Code and any successor provision.
6. Guarantor waives all presentments, demands, protests and
notices of any kind including notice of acceptance of the Guaranty by
Landlord. Any act of Landlord, or its successors or assigns, consisting of a
modification of the Lease, a waiver of any of the terms or conditions of the
Lease, or the giving of any consent to any manner or thing relating to the
Lease, or the granting of any indulgences or extensions of time to Tenant,
are hereby deemed approved by Guarantor and may be done without notice to
Guarantor and without releasing Guarantor from any of its obligations
hereunder.
Page 1 of 3
7. Guarantor assumes full responsibility for keeping fully
informed of the financial condition of Tenant and all other circumstances
affecting Tenant's ability to perform its obligations to Landlord, and agrees
that Landlord shall have no duty to report to Guarantor any information which
Landlord receives about Tenant's financial condition or any circumstances
bearing on Tenant's ability to perform.
8. The covenants and obligations of Guarantor hereunder are
independent of the Tenant's obligations under the Lease and are binding upon
the Guarantor notwithstanding the fact that the Guarantor is not the
signatory to the Lease; separate action or actions may be brought against any
guarantor hereon, whether or not action is brought against Tenant or any
co-guarantor or Tenant or any co-guarantor be joined in any such action or
actions.
9. Any indebtedness or other obligations of Tenant now or
hereafter held by Guarantor is hereby subordinated to Tenant's obligations to
Landlord, and such indebtedness or other obligations of Tenant to Guarantor,
if Landlord so request, shall be collected, enforced and received by
Guarantor as Trustee for Landlord and be paid over to Landlord on account of
Tenant's obligations to Landlord, but without reducing or affecting in any
manner the liability of Guarantor under the other provisions of this Guaranty.
10. This Guaranty shall be enforceable by Landlord in accordance
with the laws of the State of California and shall be construed in accordance
therewith. Guarantor agrees to pay attorney's fees and all other costs and
expenses, which Landlord may incur in enforcement of this Guaranty. Until
paid to Landlord, such sums will bear interest from the date such costs and
expenses are incurred at the maximum rate permitted by law.
11. No delay or failure on the part of Landlord to pursue any
right or remedy hereunder or under the Lease shall constitute a waiver of
that right or remedy. All remedies of Landlord against Guarantor are
cumulative.
12. The obligations and promises set forth herein shall be joint
and several undertakings of each of the persons executing this Guaranty as a
Guarantor, and Landlord may proceed hereunder against any one or more of said
persons without waiving its right to proceed against any of the others. The
use of the singular herein shall include the plural.
13. Guarantor acknowledges that its undertakings given hereunder
are given in consideration of Landlord's entering into the Lease and that
Landlord would not consummate the Lease were it not for the execution and
delivery of this Guaranty.
14. The provisions of this Guaranty will bind and benefit the
heirs, executors, administrators, legal representatives, successors and
assigns of Guarantor and Landlord.
15. Guarantor individually represents and warrants that it has
all requisite power and authority to execute, deliver, perform and be legally
bound by this Guaranty on the terms and conditions herein stated and transact
any other business with Landlord as necessary to fulfill the terms of this
Guaranty.
16. No provision of this Guaranty or Landlord's rights hereunder
can be waived or modified nor can Guarantor be released from its obligations
hereunder except by a writing executed by Landlord. No such waiver shall be
applicable except in the specific instance for which given.
17. Guarantor hereby waives its right to trial by jury of any
cause of action, claim, counterclaim or cross complaint in any action,
proceeding and/or hearing brought by either Landlord against Tenant and/or
Guarantor or Tenant against Landlord and/or Guarantor, or by Guarantor
against Landlord and/or Tenant, on any matter whatsoever arising out of, or
in any way connected with, this Guaranty and/or the Lease, the relationship
of Landlord, Tenant and Guarantor, Tenant's use and occupancy of the Premises
or Common Areas, or any claim of injury or damage, or the enforcement of any
remedy under any law, statute, or regulation, emergency or otherwise, now or
hereafter in effect.
18. The term "Tenant" will mean both the named tenant and any
other person or entity at any time assuming, subleasing or otherwise becoming
primarily liable for all or any part of the tenant's obligations. The term
"Landlord" will mean both the landlord named herein and any future owner or
holder of Landlord's interest in the Premises. Landlord may, without notice,
assign this Guaranty in whole or in part without extinguishing or reducing
the liability of the Guarantor.
19. All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be given in the manner
required for giving notices as set forth in Article 26 of the Lease. For
purposes of notice, the addresses of the parties shall be as set forth on the
signature page hereof; provided, however, that any party shall have the right
to change its address for notice hereunder to any other location by giving
notice to the other party in the manner set forth above.
Page 2 of 3
IN WITNESS WHEREOF, the undersigned has executed this Guaranty as
of the day and year first above written.
Address of Guarantor: GUARANTOR
Titan Corporation Titan Corporation,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ a Delaware corporation
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
By: /s/ L.L. ▇▇▇▇▇▇
Address of Landlord: -----------------------------
Name: L.L. ▇▇▇▇▇▇
------------------------
Title: Corp. V.P.
-----------------------
TIPAC-I, LP
c/▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Investment Management By:
Services -----------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Name:________________________
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Title:_______________________
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
With copy to:
TIPAC-I, LP
c/▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Page 3 of 3