1
EXHIBIT 10.01
MULTI-TENANT INDUSTRIAL LEASE
(TRIPLE NET)
LANDLORD:
LBA VF-I, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
TENANT:
EHNC,
A DELAWARE CORPORATION
2
SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS
This SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS ("SUMMARY") is hereby
incorporated into and made a part of the attached Multi-Tenant Industrial Lease
which pertains to the Building described in Section 1.4 below. All references in
the Lease to the "Lease" shall include this Summary. All references in the Lease
to any term defined in this Summary shall have the meaning set forth in this
Summary for such term. Any initially capitalized terms used in this Summary and
any initially capitalized terms in the Lease which are not otherwise defined in
this Summary shall have the meaning given to such terms in the Lease. If there
is any inconsistency between this Summary and the Lease, the provisions of the
Lease shall control.
1.1 LANDLORD'S ADDRESS: LBA VF-I, LLC
c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇ & Associates
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
1.2 TENANT'S ADDRESS: Prior to Commencement Date:
eHNC, a Delaware corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇'▇▇▇▇▇
Telephone:(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:(▇▇▇) ▇▇▇-▇▇▇▇
After Commencement Date:
eHNC, a Delaware corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
1.3 PROJECT: The industrial development known as Pacific Business Park in the
City of San Diego, County of San Diego, State of California, as shown on the
site plan attached hereto as Exhibit "A". The Project includes all buildings,
improvements and facilities, now or subsequently located within such development
from time to time, including, without limitation, the four (4) buildings
(including the Building) currently located within the Project, as depicted on
the site plan attached hereto as Exhibit "A". The aggregate rentable square feet
of all of the buildings (including the Building) located within the Project is
440,745 rentable square feet. Landlord may, from time to time, expand or reduce
the area comprising the Project.
1.4 BUILDING: A multi-tenant industrial building located in the Project,
containing 84,203 rentable square feet, the address of which is ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.5 PREMISES: Those certain premises within the Building consisting of Suite 100
shown on the floor plan attached hereto as Exhibit "B", containing 38,581
rentable square feet.
1.6 TENANT'S SHARE: Tenant's Share is 8.75%, which is the ratio that the
rentable square footage of the Premises bears to the rentable square footage of
the Project. Accordingly, as more particularly set forth in Section 4 of this
Lease, Tenant shall pay to Landlord 8.75% of the Operating Expenses. Tenant's
Share is subject to adjustment in accordance with Section 1.3 of this Lease.
1.7 COMMENCEMENT DATE: The earlier to occur of (i) the date Tenant commences
business in the Premises or (ii) July 1, 2000; provided, however, subject to
Section 11.1, any delay in delivering the Premises by Landlord (which delay is
not caused by Tenant or any Tenant Parties) shall extend the July 1, 2000 date
by one (1) day for each day that the delivery is so delayed. Landlord will
deliver the Premises to Tenant within three (3) business days following the full
execution and delivery of this Lease.
1.8 TERM: Thirty-Seven (37) months.
1.9 Basic Rent:
Months Basic Rent
------ ----------
1-12* $48,226.25
13-24 $50,155.30
25-36 $52,161.51
37 $54,247.97
(i)
3
*Including any partial month at the beginning of the Term if the Commencement
Date is not the first day of the month.
1.10 PARKING: Four and one-half (4 1/2) uncovered, unreserved parking spaces per
1,000 rentable square feet of the Premises. Parking will be provided at no
additional cost to Tenant, other than Tenant's Share of Operating Expenses. At
Tenant's request, Landlord shall designate up to five (5) of Tenant's parking
spaces for the exclusive use by Tenant or Tenant's visitors in a location that
is mutually acceptable to Landlord and Tenant.
1.11 SECURITY DEPOSIT: $48,226.25.
1.12 PERMITTED USE: The Premises may be used only for general office purposes
and for research and development, warehousing, distribution and any other use
permitted under applicable laws and zoning.
1.13 BROKERS: ▇▇▇▇ ▇▇▇▇▇▇▇ & Company representing Landlord and ▇▇▇▇▇▇ ▇▇▇▇▇▇
representing Tenant.
1.14 INTEREST RATE: The lesser of: (a) the prime rate announced from time to
time by ▇▇▇▇▇ Fargo Bank or, if ▇▇▇▇▇ Fargo Bank ceases to exist or ceases to
publish such rate, then the rate announced from time to time by the largest (as
measured by deposits) chartered operating bank operating in California, as its
"prime rate" or "reference rate", plus five percent (5%) per annum; or (b) the
maximum rate permitted by law.
1.15 TENANT IMPROVEMENTS: The tenant improvements to be installed in the
Premises, if any, as described in the Tenant Work Letter attached hereto as
Exhibit "C".
1.16 GUARANTOR(s): HNC Software Inc., a Delaware corporation.
(ii)
4
TABLE OF CONTENTS
1. Premises................................................................1
2. Term....................................................................1
3. Rent....................................................................2
4. Common Area; Operating Expenses.........................................2
5. Security Deposit........................................................6
6. Use.....................................................................6
7. Payments and Notices....................................................9
8. Brokers.................................................................9
9. Surrender; Holding Over.................................................9
10. Taxes..................................................................10
11. Possession; Condition of Premises; Repairs.............................10
12. Alterations............................................................12
13. Liens..................................................................13
14. Assignment and Subletting..............................................13
15. Entry by Landlord......................................................15
16. Utilities and Services.................................................15
17. Indemnification and Exculpation........................................15
18. Damage or Destruction..................................................16
19. Eminent Domain.........................................................17
20. Tenant's Insurance.....................................................18
21. Landlord's Insurance...................................................19
22. Waivers of Subrogation.................................................19
23. Tenant's Default and Landlord's Remedies...............................19
24. Landlord's Default.....................................................22
25. Subordination..........................................................22
26. Estoppel Certificate...................................................22
27. Intentionally Deleted..................................................22
28. Modification and Cure Rights of Landlord's Mortgagees and Lessors......22
29. Quiet Enjoyment........................................................23
30. Transfer of Landlord's Interest........................................23
31. Limitation on Landlord's Liability.....................................23
32. Miscellaneous..........................................................23
33. Lease Execution........................................................25
34. Waiver of Jury Trial...................................................25
EXHIBITS
EXHIBIT "A" Project Site Plan
EXHIBIT "B" Floor Plan
EXHIBIT "C" Work Letter Agreement
EXHIBIT "D" Sample Form of Notice of Lease Term Dates
EXHIBIT "E" Rules and Regulations
EXHIBIT "F" Sample Form of Tenant Estoppel Certificate
EXHIBIT "G" Guaranty of Lease
EXHIBIT "H" Tenant Environmental Questionnaire
(i)
5
INDEX
Pages
-----
Actual Statement....................................................................5
Additional Allowance........................................................Exhibit C
Applicable Requirements............................................................11
Common Area.........................................................................2
Completion Estimate................................................................16
CPI................................................................................14
Declaration.........................................................................3
Environmental Law...................................................................8
Environmental Permits...............................................................8
Estimate Statement..................................................................5
Extension Option....................................................................1
Fair Market Rental..................................................................1
Force Majeure Delays...............................................................24
Hazardous Materials.................................................................8
Indemnified Claims.................................................................15
Interest............................................................................7
Landlord............................................................................1
Landlord Indemnified Parties........................................................8
Landlord's Broker...................................................................9
Lease...............................................................................1
Operating Expenses..................................................................3
Option Period.......................................................................1
PCBs................................................................................8
Permitted Transfer.................................................................14
Permitted Transferee...............................................................14
Pre-Approved Change................................................................12
Real Property Taxes................................................................10
Reimbursement Requirements..........................................................6
Summary.............................................................................1
Systems............................................................................12
Tenant..............................................................................1
Tenant Change......................................................................12
Tenant Changes.....................................................................12
Tenant Indemnified Parties.........................................................16
Tenant Parties.....................................................................15
Tenant's Broker.....................................................................9
Tenant's Monthly Operating Expense Charge...........................................5
Tenant's Parties....................................................................8
Transfer...........................................................................13
Transfer Date......................................................................14
Transfer Notice....................................................................14
Transferee.........................................................................14
(ii)
6
MULTI-TENANT INDUSTRIAL LEASE
This LEASE ("LEASE"), which includes the preceding Summary of Basic Lease
Information and Definitions ("SUMMARY") attached hereto and incorporated herein
by this reference, is made as of the _____ day of April, 2000, by and between
LBA VF-I, LLC, a California limited liability company ("LANDLORD"), and eHNC, a
Delaware corporation ("TENANT").
1. PREMISES.
1.1 PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises upon and subject to the terms, covenants and conditions
contained in this Lease to be performed by each party.
1.2 LANDLORD'S RESERVATION OF RIGHTS. Provided Tenant's use of and access to the
Premises is not interfered with in an unreasonable manner, Landlord reserves the
right from time to time to install, use, maintain, repair, replace and relocate
pipes, ducts, conduits, wires and appurtenant meters and equipment installed by
Landlord above the ceiling surfaces, below the floor surfaces and within the
walls of the Building and the Premises.
1.3 REMEASUREMENT. If a physical change occurs with respect to the Building or
any other building(s) in the Project, Landlord's architect may, at Landlord's
option, determine and redetermine the actual rentable square footage of the
Building and other building(s) in the Project, and thereupon Tenant's Share and
any other terms which vary based on the rentable square footage of the Building
and/or other buildings in the Project, will be adjusted accordingly.
2. TERM.
2.1 TERM; NOTICE OF LEASE DATES. The Term of this Lease shall be for the period
designated in Section 1.8 of the Summary commencing on the Commencement Date,
and ending on the expiration of such period, unless the Term is sooner
terminated or extended as provided in this Lease. Notwithstanding the foregoing,
if the Commencement Date falls on any day other than the first day of a calendar
month then the term of this Lease will be measured from the first day of the
month following the month in which the Commencement Date occurs. Within ten (10)
days after Landlord's written request, Tenant shall execute a written
confirmation of the Commencement Date and expiration date of the Term in the
form of the Notice of Lease Term Dates attached hereto as Exhibit "D". The
Notice of Lease Term Dates shall be binding upon Tenant unless Tenant objects
thereto in writing within such ten (10) day period.
2.2 EARLY OCCUPANCY. If Tenant occupies the Premises prior to the Commencement
Date, such early occupancy shall be subject to all of the terms and conditions
of this Lease, including, without limitation, the provisions of Sections 17, 20
and 22 except that provided Tenant does not commence the operation of business
from the Premises, Tenant will not be obligated to pay rent during the period of
such early occupancy.
2.3 OPTION TO EXTEND. Tenant shall have one (1) option (the "EXTENSION OPTION")
to extend the Term for a period (the "OPTION PERIOD") of five (5) years, upon
the same terms and conditions previously applicable, except for the grant of any
exercised Extension Option and Basic Rent (which shall be determined as set
forth below). The Extension Option may be validly exercised only by notice in
writing received by Landlord not later than two hundred seventy (270) calendar
days prior to commencement of the Option Period; provided, however, that the
Extension Option may be validly exercised only if no Tenant default exists as of
the date of exercise and, at Landlord's option, as of the commencement of the
Option Period. If Tenant does not exercise the Extension Option during the
exercise period set forth above in strict accordance with the provisions hereof,
the Extension Option shall forever terminate and be of no further force or
effect. The Extension Option is personal to the original Tenant, may not be
exercised by any person or entity other than the original Tenant and shall
become null and void if the original Tenant assigns its interest in this Lease
or sublets more than one-half of the Premises, unless such assignment or
sublease is to Permitted Transferee.
Basic Rent during the Option Period shall be equal to Fair Market Rental as of
the commencement of the Option Period. For purposes hereof, "FAIR MARKET RENTAL"
shall mean the base rent that would be payable during the Option Period to a
willing landlord by a willing non-renewing tenant having a similar financial
responsibility, credit rating and capitalization as Tenant then has, taking into
account all other relevant factors for like and comparable space in the Sorrento
Mesa area of San Diego, improved with typical tenant improvements, and having
typical rent increases and commissions. At least eight (8) months prior to the
Option Period, Landlord shall notify Tenant of the Fair Market Rental as
determined by Landlord. Any dispute between the parties hereto with respect to
the amount so determined shall be resolved by arbitration, as set forth below;
provided, however, that there shall be deemed not to be such a dispute unless
Tenant notifies Landlord thereof in writing within one (1) month after Landlord
so notifies Tenant of the Fair Market Rental and Tenant sets forth in such
notice Tenant's determination of Fair Market Rental. If, in the event of a
dispute, the arbitrators have not determined the Fair Market Rental by the
commencement of the Option Period, Tenant shall pay as Basic Rent the amount
determined by Landlord until such time as the Fair Market Rental has been
determined by arbitration, whereupon Tenant
7
shall pay any additional amount due to Landlord based upon such subsequent
determination of Fair Market Rental. If the Basic Rent so paid by Tenant is
higher than that ultimately determined by the arbitration process, then Landlord
shall reimburse such difference to Tenant.
If Tenant timely notifies Landlord in writing of Tenant's dispute regarding
Landlord's determination of the Fair Market Rental, then Fair Market Rental
shall be determined as follows. Landlord and Tenant shall each appoint one
arbitrator who shall by profession be a real estate appraiser active over the
five (5) year period ending on the date of such appointment in the appraisal of
commercial properties in the Sorrento Mesa area of San Diego and who shall not
have been employed or engaged by either party during said five (5) year period.
Each such arbitrator shall be appointed within fifteen (15) days after Tenant
notifies Landlord of Tenant's dispute of Landlord's determination of Fair Market
Rental. The two arbitrators so appointed shall, within fifteen (15) days of the
date of the appointment of the last appointed arbitrator, agree upon and appoint
a third arbitrator who shall be qualified under the same criteria set forth
above. The three arbitrators shall, within thirty (30) days of the appointment
of the third arbitrator, reach a decision as to whether the parties shall use
Landlord's or Tenant's submitted Fair Market Rental for the Premises, and shall
notify Landlord and Tenant thereof. Such decision shall be based upon the
criteria and variables set forth above. The new Basic Rent shall thereafter be
equal to the Fair Market Rental of the Premises so selected by the arbitrators.
The decision of the majority of the three arbitrators shall be binding upon
Landlord and Tenant. If either Landlord or Tenant fails to appoint an arbitrator
within the time period specified hereinabove, the arbitrator appointed by one of
them shall reach a decision, notify Landlord and Tenant thereof, and such
arbitrator's decision shall be binding upon Landlord and Tenant. If the two
arbitrators fail to agree upon and appoint a third arbitrator, both arbitrators
shall be dismissed and the matter to be decided shall be forthwith submitted to
arbitration under the provisions of the American Arbitration Association in
accordance with the method described above. The cost of arbitration shall be
paid by Landlord and Tenant equally.
3. RENT.
3.1 BASIC RENT. Tenant agrees to pay Landlord, as basic rent for the Premises,
the Basic Rent designated in Section 1.9 of the Summary. The Basic Rent shall be
paid by Tenant in advance on the first day of each and every calendar month
during the Term, except that the first full month's Basic Rent shall be paid
upon Tenant's execution and delivery of this Lease to Landlord. Basic Rent for
any partial month shall be prorated in the proportion that the number of days
this Lease is in effect during such month bears to the actual number of days in
such month.
3.2 ADDITIONAL RENT. All amounts and charges payable by Tenant under this Lease
in addition to the Basic Rent described in Section 3.1 above shall be considered
additional rent for the purposes of this Lease, and the word "rent" in this
Lease shall include such additional rent unless the context specifically or
clearly implies that only the Basic Rent is referenced. The Basic Rent and
additional rent shall be paid to Landlord as provided in Section 7, without any
prior demand therefor and without any deduction or offset, in lawful money of
the United States of America.
3.3 LATE PAYMENTS. Late payments of Basic Rent and/or any item of additional
rent will be subject to interest and a late charge as provided in Section 23.7
below.
3.4 TRIPLE-NET LEASE. All rent shall be absolutely net to Landlord so that this
Lease shall yield net to Landlord, the rent to be paid each month during the
Term of this Lease. Accordingly, except as specifically set forth herein, all
costs, expenses and obligations of every kind or nature whatsoever relating to
the Premises, and Tenant's Share of all costs, expenses and obligations of every
kind or nature whatsoever relating to the remaining portion of the Project,
which may arise or become due during the Term of this Lease shall be paid by
Tenant. Nothing herein contained shall be deemed to require Tenant to pay or
discharge any liens or mortgages of any character whatsoever which may exist or
hereafter be placed upon the Project by an affirmative act or omission of
Landlord.
4. COMMON AREA; OPERATING EXPENSES.
4.1 DEFINITION OF COMMON AREA. The term "COMMON AREA" means all areas and the
improvements thereon within the exterior boundaries of the Project now or later
made available for the general use of Landlord, Tenant and other persons
entitled to occupy floor area in the Project and their customers, including,
without limitation, the parking facilities of the Project, loading and unloading
areas, trash areas, roadways, sidewalks, walkways, parkways, driveways,
landscaped areas, and similar areas and facilities situated within the Project
which are not reserved for the exclusive use of any Project occupants. Common
Area also shall include, without limitation, the common entrances, lobbies,
restrooms on multi-tenant floors, elevators, stairways and accessways, loading
docks, ramps, drives and platforms and any passageways and serviceways thereto
to the extent not exclusively serving another tenant or contained within another
tenant's premises, and the common pipes, conduits, wires and appurtenant
equipment serving the Premises. Common Area shall not include (i) the entryway
to a tenant's premises, (ii) any improvements installed by a tenant outside of
its premises, whether with or without Landlord's knowledge or consent, or (iii)
any areas or facilities that are included in the description of premises leased
to a tenant.
4.2 MAINTENANCE AND USE OF COMMON AREA. Landlord shall maintain the Common Area
in good condition and repair. If any owner or tenant of any portion of the
Project maintains Common Area located upon its parcel or demised premises
(Landlord shall have the right in its sole discretion to allow any
-2-
8
purchaser or tenant to so maintain Common Area located upon its parcel or
demised premises and to be excluded from participation in the payment of
Operating Expenses as provided below), Landlord shall not have any
responsibility for the maintenance of that portion of the Common Area and Tenant
shall have no claims against Landlord arising out of any failure of such owner
or tenant to so maintain its portion of the Common Area. The use and occupancy
by Tenant of the Premises shall include the right to use the Common Area (except
areas used in the maintenance or operation of the Project), in common with
Landlord and other tenants of the Project and their customers and invitees,
subject to (i) any covenants, conditions and restrictions now or hereafter of
record (collectively the "DECLARATION"), and (ii) such reasonable,
non-discriminatory rules and regulations concerning the Project as may be
established by Landlord from time to time including, without limitation, the
Rules and Regulations attached hereto as Exhibit "E". Tenant agrees to promptly
comply with all such rules and regulations and any reasonable,
non-discriminatory amendments thereto upon receipt of written notice from
Landlord.
4.3 CONTROL OF AND CHANGES TO COMMON AREA. Landlord shall have the sole and
exclusive control of the Common Area, as well as the right to make reasonable
changes to the Common Area. Provided Landlord does not materially interfere with
Tenant's use of and access to the Premises, Landlord's rights shall include, but
not be limited to, the right to (a) restrain the use of the Common Area by
unauthorized persons; (b) cause Tenant to remove or restrain persons from any
unauthorized use of the Common Area if they are using the Common Area by reason
of Tenant's presence in the Project; (c) utilize from time to time any portion
of the Common Area for promotional, entertainment, and related matters; (d)
temporarily close any portion of the Common Area for repairs, improvements or
alterations, to discourage non-customer use, to prevent public dedication or an
easement by prescription from arising, or for any other reason deemed
appropriate in Landlord's judgment; and (e) reasonably change the shape and size
of the Common Area, add, eliminate or change the location of improvements to the
Common Area, including, without limitation, buildings, lighting, parking areas,
landscaped areas, roadways, walkways, drive aisles and curb cuts.
4.4 OPERATING EXPENSES. Throughout the Term of this Lease, commencing on the
Commencement Date, Tenant agrees to pay Landlord as additional rent in
accordance with the terms of this Section 4, Tenant's Share of Operating
Expenses. As used in this Lease, the term "OPERATING EXPENSES" shall consist of
all costs and expenses for the ownership, operation, maintenance, repair and
replacement of the Project as determined by Landlord utilizing standard
accounting practices and calculated assuming the Project is one hundred percent
(100%) occupied. Operating Expenses shall include the following costs by way of
illustration but not limitation: (i) Real Property Taxes; (ii) any and all
assessments under any covenants, conditions and restrictions affecting the
Project; (iii) water, sewer and other utility charges; (iv) costs of insurance
obtained by Landlord pursuant to Section 21 of this Lease; (v) waste disposal
and janitorial services; (vi) security; (vii) labor; (viii) management costs
including, without limitation: (A) wages, salaries, pension payments, fringe
benefits, uniforms and dry-cleaning thereof (and payroll taxes, insurance and
similar charges ) of property management employees, and (B) management office
rental, supplies, equipment and related operating expenses and commercially
reasonable management/administrative fees; (ix) supplies, materials, equipment
and tools including rental of personal property; (x) repair and maintenance of
all portions of the buildings within the Project, including the plumbing,
heating, ventilating, air-conditioning and electrical systems installed or
furnished by Landlord; (xi) maintenance, sweeping, repairs, resurfacing, and
upkeep of all parking and other Common Areas; (xii) amortization on a straight
line basis over the useful life (together with interest at the Interest Rate on
the unamortized balance) of all capital expenditures which are: (A) reasonably
intended to produce a reduction in operating charges or energy consumption; or
(B) required under any governmental law or regulation that was not applicable to
the Project as of the date hereof; or (C) for replacement or restoration of any
Project equipment and/or improvements needed to operate and/or maintain the
Project at the same quality levels as prior to the replacement or restoration;
(xiii) gardening and landscaping; (xiv) maintenance of signs (other than signs
of tenants of the Project); (xv) personal property taxes levied on or
attributable to personal property used in connection with the Common Areas;
(xvi) reasonable accounting, audit, verification, legal and other consulting
fees; and (xvii) any other costs and expenses of repairs, maintenance, painting,
lighting, cleaning, and similar items, including appropriate reserves.
Notwithstanding the foregoing, Operating Expenses shall not include (i)
management costs in excess of four percent (4%) of all rent received by Landlord
from all tenants leasing space in the Project, (ii) repair and maintenance of
the structural walls, foundations, concrete subflooring, structural elements of
the roof or underground utilities installed by Landlord in any of the buildings
within the Project and (iii) any of the following:
(A) marketing costs, costs of leasing commissions, attorneys'
fees and other costs and expenses incurred in connection with
negotiations or disputes with prospective tenants or other occupants of
the Project;
(B) costs incurred by Landlord in connection with repairs,
capital additions, alterations or replacements made or incurred to
rectify or correct defects in design, materials or workmanship in
connection with the Building shell and other structural portions of the
Building and the other building(s) located in the Project;
(C) costs (including permit, license and inspection costs)
incurred in renovating or otherwise improving, decorating or
redecorating rentable space in the Building or Project for prospective
tenants;
-3-
9
(D) cost of utilities or services sold to Tenant or others for
which Landlord is entitled to and actually receives reimbursement (other
than through any operating cost reimbursement provision identical or
substantially similar to the provisions set forth in this Lease);
(E) except as otherwise specifically provided in Section
4.4(xii) above, costs incurred by Landlord for capital repairs,
improvements, equipment and alterations to the Project which are
considered capital improvements and replacements under generally
accepted accounting principles, consistently applied;
(F) costs incurred due to the violation by Landlord of the
terms, covenants and conditions of any lease covering space in the
Project;
(G) costs of general overhead and general administrative
expenses, not including management fees specifically provided in Section
4.4(viii) above;
(H) costs of any compensation and employee benefits paid to
clerks, attendants or other persons in a commercial concession operated
by Landlord;
(I) marketing costs, legal fees, space planner's fees, and
advertising and promotional expenses and brokerage fees incurred in
connection with the original development, subsequent improvement, or
original or future leasing of the Project;
(J) costs of electrical power for which Tenant directly
contracts with and pays a local public service company
(K) any bad debt loss, rent loss, or reserves for bad debts or
rent loss;
(L) costs associated with the operation of the business of the
entity which constitutes Landlord, as the same are distinguished from
the costs of operation of the Project (which shall specifically include,
but not be limited to, accounting costs associated with the operation of
the Project, costs of accounting and legal matters, costs of defending
any lawsuits with any mortgagee (except to the extent that the actions
of Tenant may be in issue), costs of selling, syndicating, financing,
mortgaging or hypothecating any of the Landlord's interest in the
Project, and costs incurred in connection with any disputes between
Landlord and its employees, between Landlord and Project management, or
between Landlord and other tenants or occupants, and Landlord's general
corporate overhead and general and administrative expenses which are not
specifically included in Section 4.4 (viii) above);
(M) the wages and benefits of any employee who does not devote
substantially all of his or her employed time to the Project unless such
wages and benefits are prorated to reflect time spent on operating and
managing the Project vis-a-vis time spent on matters unrelated to
operating and managing the Project; provided, that in no event shall
Operating Expenses for purposes of this Lease include wages and/or
benefits attributable to personnel above the level of Project manager or
Project engineer;
(N) interest, charges and fees incurred on debt, payments on
mortgages and amounts paid as ground rental for the real property
underlying the Project by Landlord;
(O) costs for acquiring sculpture, paintings, fountains or other
objects of art;
(P) any costs expressly excluded from Operating Expenses
elsewhere in this Lease;
(Q) costs arising from Landlord's charitable or political
contributions;
(R) any gifts provided to any entity whatsoever, including, but
not limited to, Tenant, other tenants, employees, vendors, contractors,
prospective tenants and agents;
(S) any costs covered by any warranty, rebate, guarantee or
service contract which are actually collected by Landlord (which shall
not prohibit Landlord from passing through the costs of any such service
contract if otherwise includable in Operating Expenses);
(T) interest, late charges and tax penalties incurred as a
result of Landlord's gross negligence, inability or unwillingness to
make payments or file returns when due;
(U) all items and services for which Tenant reimburses Landlord;
(V) any expense resulting from the gross negligence of Landlord,
its agents, contractors or employees, or, to the extent Landlord is
entitled to reimbursement for such costs, to remedy damage caused by or
resulting from the gross negligence of any tenants in the Project,
including their agents, contractors and employees;
(W) reserves for anticipated future expenses;
-4-
10
(X) costs or repairs or other work occasioned by fire, casualty
or other risk covered by insurance maintained (or obligated to be
maintained pursuant to Article 20 of this Lease) by Landlord;
(Y) reserves for depreciation, amortization and other expenses;
(Z) costs occasioned by the willful misconduct of Landlord or
penalties incurred as a result of violations of applicable law by
Landlord;
(AA) fines or penalties incurred by Landlord due to Landlord's
violations of any federal, state or local law, statute or ordinance, or
any rule, regulation, judgment or decree of any governmental rule or
authority;
(BB) any costs representing an amount paid to a person, firm,
corporation or other entity related to Landlord which is in excess of
the amount which would have been paid in the absence of such
relationship;
(CC) rentals for items (except when needed in connection with
normal repairs and maintenance of permanent systems) which if purchased,
rather than rented, would constitute a capital item which is
specifically excluded in this Lease (excluding, however, equipment not
affixed to the Building which is used in providing janitorial or similar
services);
(DD) advertising and promotional expenditures, and costs of
signs in or on the Building identifying the owner of the Building; and
(EE) costs of the initial development or construction within the
Project (including, without limitation, such development or construction
costs incurred to comply with any CC&Rs, development permit, design
permit or use permit issued for the Project).
4.5 TENANT'S MONTHLY OPERATING EXPENSE CHARGE. From and after the Commencement
Date, Tenant shall pay to Landlord, on the first day of each calendar month
during the Term of this Lease, Tenant's Share of an amount estimated by Landlord
to be the Monthly Operating Expenses for the Project for that month ("TENANT'S
MONTHLY OPERATING EXPENSE Charge").
4.6 ESTIMATE STATEMENT. Prior to the Commencement Date and on or about March 1st
of each subsequent calendar year during the Term of this Lease, Landlord will
endeavor to deliver to Tenant a statement ("ESTIMATE STATEMENT") wherein
Landlord will estimate both the Operating Expenses and Tenant's Monthly
Operating Expense Charge for the then current calendar year. Tenant agrees to
pay Landlord, as additional rent, Tenant's estimated Monthly Operating Expense
Charge each month thereafter, beginning with the next installment of rent due,
until such time as Landlord issues a revised Estimate Statement or the Estimate
Statement for the succeeding calendar year; except that, concurrently with the
regular monthly rent payment next due following the receipt of each such
Estimate Statement, Tenant agrees to pay Landlord an amount equal to one monthly
installment of Tenant's estimated Monthly Operating Expense Charge (less any
applicable Operating Expenses already paid) multiplied by the number of months
from January, in the current calendar year, to the month of such rent payment
next due, all months inclusive. If at any time during the Term of this Lease,
but not more often than quarterly, Landlord reasonably determines that Tenant's
Share of Operating Expenses for the current calendar year will be greater than
the amount set forth in the then current Estimate Statement, Landlord may issue
a revised Estimate Statement and Tenant agrees to pay Landlord, within ten (10)
days of receipt of the revised Estimate Statement, the difference between the
amount owed by Tenant under such revised Estimate Statement and the amount owed
by Tenant under the original Estimate Statement for the portion of the then
current calendar year which has expired. Thereafter, Tenant agrees to pay
Tenant's Monthly Operating Expense Charge based on such revised Estimate
Statement until Tenant receives the next calendar year's Estimate Statement or a
new revised Estimate Statement for the current calendar year.
4.7 ACTUAL STATEMENT. By March 1st of each calendar year during the Term of this
Lease, Landlord shall endeavor to deliver to Tenant a statement ("ACTUAL
STATEMENT") which states Tenant's Share of the actual Operating Expenses for the
preceding calendar year. If the Actual Statement reveals that Tenant's Share of
the actual Operating Expenses is more than the total Additional Rent paid by
Tenant for Operating Expenses on account of the preceding calendar year, Tenant
agrees to pay Landlord the difference in a lump sum within thirty (30) days of
receipt of the Actual Statement. If the Actual Statement reveals that Tenant's
Share of the actual Operating Expenses is less than the Additional Rent paid by
Tenant for Operating Expenses on account of the preceding calendar year,
Landlord will credit any overpayment toward the next monthly installment(s) of
Tenant's Share of the Operating Expenses due under this Lease. Such obligation
will be a continuing one which will survive the expiration or earlier
termination of this Lease.
4.8 MISCELLANEOUS. Any delay or failure by Landlord in delivering any Estimate
Statement or Actual Statement pursuant to this Section 4 will not constitute a
waiver of its right to require an increase in additional rent for Operating
Expenses nor will it relieve Tenant of its obligations pursuant to this Section
4, except that Tenant will not be obligated to make any payments based on such
Estimate Statement or Actual Statement until ten (10) days after receipt of such
Estimate Statement or Actual Statement. If Tenant does not object to any
Estimate Statement or Actual Statement within thirty (30) days after Tenant
-5-
11
receives any such statement, such statement will be deemed final and binding on
Tenant. Even though the Term has expired and Tenant has vacated the Premises,
when the final determination is made of Tenant's Share of the actual Operating
Expenses for the year in which this Lease terminates, Tenant agrees to promptly
pay any increase due over the estimated expenses paid and, conversely, any
overpayment made in the event said expenses decrease shall promptly be rebated
by Landlord to Tenant. Such obligation will be a continuing one which will
survive the expiration or termination of this Lease. Prior to the expiration or
sooner termination of the Lease Term and Landlord's acceptance of Tenant's
surrender of the Premises, Landlord will have the right to estimate the actual
Operating Expenses for the then current Lease Year and to collect from Tenant
prior to Tenant's surrender of the Premises, Tenant's Share of any excess of
such actual Operating Expenses over the estimated Operating Expenses paid by
Tenant in such Lease Year.
5. SECURITY DEPOSIT. Concurrently with Tenant's execution and delivery of this
Lease to Landlord, Tenant shall deposit with Landlord the Security Deposit
designated in Section 1.11 of the Summary. The Security Deposit shall be held by
Landlord as security for the full and faithful performance by Tenant of all of
the terms, covenants and conditions of this Lease to be performed by Tenant
during the Term. The Security Deposit is not, and may not be construed by Tenant
to constitute, rent for the last month or any portion thereof. If Tenant
defaults with respect to any of its obligations under this Lease, Landlord may
(but shall not be required to) use, apply or retain all or any part of the
Security Deposit for the payment of any rent or any other sum in default, or for
the payment of any other amount, loss or damage which Landlord may spend, incur
or suffer by reason of Tenant's default. If any portion of the Security Deposit
is so used or applied, Tenant shall, within ten (10) days after demand therefor,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount. Landlord shall not be required to keep the
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on the Security Deposit. Provided Tenant is not then in
default and no event exists that with the passage of time or the giving of
notice, or both, would constitute a default under this Lease, the Security
Deposit or any balance thereof shall be returned to Tenant within two (2) weeks
following the expiration of the Lease term. If Landlord sells its interest in
the Building during the Term, Landlord shall deposit with the purchaser the
Security Deposit (or balance thereof), and, upon such sale, Landlord shall be
discharged from any further liability with respect to the Security Deposit. If
Basic Rent increases during the Term, Tenant shall, within ten (10) days
following written request from Landlord, deposit additional sums with Landlord
so that the total amount of the Security Deposit shall at all times bear the
same proportion to the increased Basic Rent as the initial Security Deposit bore
to the initial Basic Rent.
6. USE.
6.1 GENERAL. Tenant shall use the Premises solely for the Permitted Use
specified in Section 1.12 of the Summary, and shall not use or permit the
Premises to be used for any other use or purpose whatsoever. Tenant shall
observe and comply with the "Rules and Regulations" attached hereto as Exhibit
"E", and all reasonable non-discriminatory modifications thereof and additions
thereto from time to time put into effect and furnished to Tenant by Landlord.
Landlord shall endeavor to enforce the Rules and Regulations, but shall have no
liability to Tenant for the violation or non-performance by any other tenant or
occupant of the Project of any such Rules and Regulations. Tenant shall, at its
sole cost and expense except as set forth below, observe and comply with all
requirements of any board of fire underwriters or similar body relating to the
Premises, all recorded covenants, conditions and restrictions now or hereafter
affecting the Premises and all laws, statutes, codes, rules and regulations now
or hereafter in force relating to or affecting the condition, use, occupancy,
alteration or improvement of the Premises (including, without limitation, the
provisions of Title III of the Americans with Disabilities Act of 1990 as it
pertains to Tenant's use, occupancy, improvement and alteration of the
Premises), whether, except as otherwise provided herein, structural or
nonstructural, including unforeseen and/or extraordinary alterations and/or
improvements to the Premises and regardless of the period of time remaining in
the Lease Term. Tenant shall not use or allow the Premises to be used (a) in
violation of the Declaration or any other recorded covenants, conditions and
restrictions affecting the Project or of any law or governmental rule or
regulation, or of any certificate of occupancy issued for the Premises, the
Building and/or the Project, or (b) for any improper, immoral, unlawful or
reasonably objectionable purpose. Tenant shall not do or permit to be done
anything which will obstruct or interfere with the rights of other tenants or
occupants of the Project, or injure or annoy them. Tenant shall not cause,
maintain or permit any nuisance in, on or about the Premises, the Building or
the Project, nor commit or suffer to be committed any waste in, on or about the
Premises. Tenant and Tenant's employees and agents shall not solicit business in
the Common Area, nor shall Tenant distribute any handbills or other advertising
matter in the Common Area.
Notwithstanding the foregoing, if Tenant, in connection with its obligations
under this Section 6.1, is required to make any alterations or improvements to
the Premises and such alterations or improvements (i) are not required as a
result of the specific or unique use or alteration of the Premises by Tenant,
(ii) would normally be capitalized under generally accepted accounting
principles, (iii) will cost in excess of Twenty-Five Thousand Dollars
($25,000.00) and (iv) the useful life of the alteration or improvement (as such
useful life is based on the estimated actual life pursuant to generally accepted
accounting practices) will extend beyond the Term (collectively, the
"REIMBURSEMENT REQUIREMENTS"), then Landlord shall reimburse Tenant for
Landlord's pro rata share of the cost thereof within thirty (30) days following
the expiration or sooner termination of this Lease, provided, however, Landlord
shall have no such reimbursement obligation if this Lease terminates as a result
of an uncured default by Tenant. Landlord's pro rata share shall be a fraction,
the numerator of which is the number of months remaining on the useful life of
the alteration or improvement after the expiration or sooner termination of this
Lease; and the
-6-
12
denominator of which is the total number of months of the useful life of the
alteration or improvement. As a condition precedent to Landlord's obligation to
reimburse Tenant for its pro rata share, Tenant shall first obtain Landlord's
prior written approval of the contractor, the plans and specifications, the cost
of any such alteration or improvement and the useful life of such alteration or
improvement, which approval shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Landlord may elect, in its sole discretion, to
make any required alteration or improvement meeting the Reimbursement
Requirements and charge Tenant, as additional rent, Tenant's pro rata share of
the cost of such alteration or improvement plus Interest, which pro rata share
shall be a fraction, the numerator of which shall be one (1) and the denominator
of which shall be the total number of months of the useful life of the
alteration or improvement. Tenant shall pay such additional rent to Landlord on
the first day of each calendar month during the Term of this Lease (as the same
may be extended pursuant to the terms of this Lease). For purposes of this
Section 6.1, the term "INTEREST" shall mean the prime rate announced from time
to time by ▇▇▇▇▇ Fargo Bank or, if ▇▇▇▇▇ Fargo Bank ceases to exist or ceases to
publish such rate, then the rate announced from time to time by the largest (as
measured by deposits) chartered operating bank operating in California, as its
"prime rate" or "reference rate".
6.2 PARKING.
6.2.1 TENANT'S PARKING PRIVILEGES. During the Term of this Lease, Landlord shall
lease to Tenant, and Tenant shall lease from Landlord, the number of parking
privileges specified in Section 1.10 of the Summary hereof for use by Tenant's
employees in the common parking areas for the Building within the Project, as
designated by Landlord from time to time. Landlord shall at all times have the
right to establish and modify the nature and extent of the parking areas for the
Building and Project (including whether such areas shall be surface, underground
and/or other structures) as long as Tenant is provided the number of parking
privileges designated in Section 1.10 of the Summary. In addition, Landlord may,
in its sole discretion, assign any unreserved and unassigned parking privileges
and/or make all or a portion of such privileges reserved; provided, that the
number of parking privileges that Tenant is entitled to pursuant to Section 1.10
of the Summary is not reduced.
6.2.2 PARKING RULES. The use of the parking areas shall be subject to the
Parking Rules and Regulations contained in Exhibit "E" attached hereto and any
other reasonable, non-discriminatory rules and regulations adopted by Landlord
and/or Landlord's parking operators from time to time, including any system for
controlled ingress and egress and charging visitors and invitees, with
appropriate provision for validation of such charges. Tenant shall not use more
parking privileges than its allotment and shall not use any parking spaces
specifically assigned by Landlord to other tenants of the Building or Project or
for such other uses as visitor parking. Tenant's parking privileges shall be
used only for parking by vehicles no larger than normally sized passenger
automobiles or pick-up trucks. Tenant shall not permit or allow any vehicles
that belong to or are controlled by Tenant or Tenant's employees, suppliers,
shippers, customers or invitees to be loaded, unloaded, or parked in areas other
than those designated by Landlord for such activities. If Tenant permits or
allows any of the prohibited activities described herein, then Landlord shall
have the right, without notice, in addition to such other rights and remedies
that it may have, to remove or tow away the vehicle involved and charge the cost
thereof to Tenant, which cost shall be immediately payable by Tenant upon demand
by Landlord.
6.3 SIGNS, AWNINGS AND CANOPIES. Tenant will not place or suffer to be placed or
maintained on the roof or on any exterior door, wall or window (or within 48
inches of any window) of the Premises any sign, awning or canopy, or advertising
matter on the glass of any window or door of the Premises without Landlord's
prior written consent. Notwithstanding the foregoing, at Tenant's sole cost and
expense, Tenant shall have the right to install (i) one (1) Building top sign on
the exterior of the Building, (ii) one (1) sign adjacent to the main entrance to
the Premises and (iii) to the extent Landlord constructs a monument for the
Project or the Building, a sign on the monument sign; provided Tenant complies
with any covenants of record, obtains approval from all governmental authorities
having jurisdiction over the Premises and obtains approval from Landlord as to
the size, location, fabrication, style and content of such signage, which
approval shall not be unreasonably withheld. Tenant agrees to maintain any such
sign, awning, canopy, decoration, lettering or advertising matter as may be
approved by Landlord in good condition and repair at all times. At the
expiration or earlier termination of this Lease, Tenant shall remove all signs,
awnings, canopies, decorations, lettering and advertising and shall repair any
damage to the Building, the Premises or the Project resulting therefrom all at
Tenant's sole cost and expense. If Tenant fails to maintain any such approved
sign, awning, decoration, lettering, or advertising after ten (10) days' written
notice of such failure, Landlord may do so and Tenant shall reimburse Landlord
for such cost plus a twenty percent (20%) overhead fee. If, without Landlord's
prior written consent, Tenant installs any sign, awning, decoration, lettering
or advertising, or fails to remove any such item(s) at the expiration or earlier
termination of this Lease, Landlord may have such item(s) removed and stored and
may repair any damage to the Building, the Premises or the Project at Tenant's
expense. The removal, repair and/or storage costs shall bear interest until paid
at the Interest Rate.
6.4 HAZARDOUS MATERIALS.
6.4.1 TENANT'S OBLIGATIONS. Tenant will (i) obtain and maintain in full force
and effect all Environmental Permits (as defined below) that may be required
from time to time under any Environmental Laws (as defined below) applicable to
Tenant or the Premises and (ii) be and remain in compliance with all terms and
conditions of all such Environmental Permits and with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in all Environmental Laws applicable to
Tenant or the Premises. As used in this Lease, the
-7-
13
term "ENVIRONMENTAL LAW" means any past, present or future federal, state or
local statutory or common law, or any regulation, ordinance, code, plan, order,
permit, grant, franchise, concession, restriction or agreement issued, entered,
promulgated or approved thereunder, relating to (a) the environment, human
health or safety, including, without limitation, emissions, discharges, releases
or threatened releases of Hazardous Materials (as defined below) into the
environment (including, without limitation, air, surface water, groundwater or
land), or (b) the manufacture, generation, refining, processing, distribution,
use, sale, treatment, receipt, storage, disposal, transport, arranging for
transport, or handling of Hazardous Materials. "ENVIRONMENTAL PERMITS" means,
collectively, any and all permits, consents, licenses, approvals and
registrations of any nature at any time required pursuant to, or in order to
comply with, any Environmental Law. Except for ordinary and general office
supplies, such as copier toner, liquid paper, glue, ink and common household
cleaning materials used and stored in compliance with all Environmental Laws
(some or all of which may constitute Hazardous Materials as defined below),
Tenant agrees not to cause or permit any Hazardous Materials to be brought upon,
stored, used, handled, generated, released or disposed of on, in, under or about
the Premises, the Building, the Common Areas or any other portion of the Project
by Tenant, its agents, employees, subtenants, assignees, licensees, contractors
or invitees (collectively, "TENANT'S PARTIES"), without the prior written
consent of Landlord, which consent Landlord may withhold in its sole and
absolute discretion. Concurrently with the execution of this Lease, Tenant
agrees to complete and deliver to Landlord an Environmental Questionnaire in the
form of Exhibit "H" attached hereto. Upon the expiration or earlier termination
of this Lease, Tenant agrees to promptly remove from the Premises, the Building
and the Project, at its sole cost and expense, any and all Hazardous Materials,
including any equipment or systems containing Hazardous Materials which are
installed, brought upon, stored, used, generated or released upon, in, under or
about the Premises, the Building and/or the Project or any portion thereof by
Tenant or any of Tenant's Parties. To the fullest extent permitted by law,
Tenant agrees to promptly indemnify, protect, defend and hold harmless Landlord
and Landlord's partners, officers, directors, employees, agents, successors and
assigns (collectively, "LANDLORD INDEMNIFIED PARTIES") from and against any and
all claims, damages, judgments, suits, causes of action, losses, liabilities,
penalties, fines, expenses and costs (including, without limitation, clean-up,
removal, remediation and restoration costs, sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees and court costs) which arise or
result from the presence of Hazardous Materials on, in, under or about the
Premises, the Building or any other portion of the Project and which are
installed, brought upon, stored, used, generated or released upon, in, under or
about the Premises, the Building and/or the Project or any portion thereof by
Tenant or any of Tenant's Parties. Tenant agrees to promptly notify Landlord of
any release of Hazardous Materials in the Premises, the Building or any other
portion of the Project which Tenant becomes aware of during the Term of this
Lease, whether caused by Tenant, Tenant's Parties or any other persons or
entities. In the event of any release of Hazardous Materials installed, brought
upon, stored, used, generated or released upon, in, under or about the Premises,
the Building and/or the Project or any portion thereof by Tenant or any of
Tenant's Parties, Landlord shall have the right, but not the obligation, to
cause Tenant to immediately take all steps Landlord deems necessary or
appropriate to remediate such release and prevent any similar future release to
the satisfaction of Landlord and Landlord's mortgagee(s). At all times during
the Term of this Lease, Landlord will have the right, but not the obligation, to
enter upon the Premises to inspect, investigate, sample and/or monitor the
Premises to determine if Tenant is in compliance with the terms of this Lease
regarding Hazardous Materials. Tenant will, upon the request of Landlord at any
time during which Landlord has reason to believe that Tenant is not in
compliance with this Section 6.4.1, cause to be performed an environmental audit
of the Premises at Tenant's expense by an established environmental consulting
firm reasonably acceptable to Landlord. As used in this Lease, the term
"HAZARDOUS MATERIALS" shall mean and include any hazardous or toxic materials,
substances or wastes as now or hereafter designated or regulated under any law,
statute, ordinance, rule, regulation, order or ruling of any agency of the
State, the United States Government or any local governmental authority,
including, without limitation, asbestos, petroleum, petroleum hydrocarbons and
petroleum based products, urea formaldehyde foam insulation, polychlorinated
biphenyls ("PCBS"), and freon and other chlorofluorocarbons. The provisions of
this Section 6.4 will survive the expiration or earlier termination of this
Lease.
6.4.2 LANDLORD'S TERMINATION OPTION FOR CERTAIN ENVIRONMENTAL PROBLEMS. If
Hazardous Materials are present at the Premises that are required by
Environmental Law to be remediated and Tenant is not responsible therefor
pursuant to Section 6.4.1, Landlord may, at its option, either (i) remediate
such Hazardous Materials, at its own expense, in which event this Lease shall
continue in full force and effect or (ii) if the estimated cost to remediate
such Hazardous Materials exceeds twelve (12) times the then Basic Rent or One
Hundred Thousand Dollars ($100,000.00), whichever is greater, give written
notice to Tenant, within thirty (30) days after receipt by Landlord of knowledge
of the existence of such Hazardous Materials, of Landlord's desire to terminate
this Lease as of the date sixty (60) days following the date of such notice. In
the event Landlord elects to give such a termination notice, Tenant may, within
ten (10) days thereafter, give written notice to Landlord of Tenant's commitment
to pay the amount by which the cost of the remediation of such Hazardous
Materials exceeds an amount equal to twelve (12) times the then Basic Rent or
One Hundred Thousand Dollars ($100,000.00), whichever is greater. Tenant shall
provide Landlord with such funds or satisfactory assurance thereof within thirty
(30) days following such commitment. In such event, this Lease shall continue in
full force and effect, and Landlord shall proceed to make such remediation as
soon as reasonably possible after the required funds are available. If Tenant
does not give such notice and provide the required funds or assurance thereof
within the time provided, this Lease shall terminate as the date specified in
Landlord's termination notice.
6.5 REFUSE AND SEWAGE. Tenant agrees not to keep any trash, garbage, waste or
other refuse on the Premises except in sanitary containers and agrees to
regularly and frequently remove same from the Premises. Tenant shall keep all
containers or other equipment used for storage of such materials in a
-8-
14
clean and sanitary condition. Tenant shall properly dispose of all sanitary
sewage and shall not use the sewage disposal system for the disposal of anything
except sanitary sewage. Tenant shall keep the sewage disposal system free of all
obstructions and in good operating condition. If the volume of Tenant's trash
becomes excessive in Landlord's judgment, Landlord shall have the right to
charge Tenant for additional trash disposal services and/or to require that
Tenant contract directly for additional trash disposal services at Tenant's sole
cost and expense.
6.6 PEST CONTROL. Tenant shall, at its own cost, retain a licensed, bonded
professional pest and sanitation control service to perform inspections of the
Premises on an as needed basis for the purpose of eliminating infestation by and
controlling the presence of insects, rodents and vermin and shall promptly cause
any corrective or extermination work recommended by such service to be
performed. Such work shall be performed pursuant to a written contract, a copy
of which shall be delivered to Landlord by Tenant upon request.
6.7 EXTRAORDINARY SERVICES. If Landlord incurs Operating Expenses or other costs
for any increase in services provided to or for the benefit of Tenant above
those services normally provided by Landlord to the other tenants in the Project
and such increased services or costs result from any act, conduct, extraordinary
use and/or special request by Tenant, Tenant agrees to reimburse Landlord for
the costs of such extraordinary services, within thirty (30) days of delivery to
Tenant of written invoice for such extraordinary services. By way of example
only, if Tenant should request extraordinary security services, lighting,
cleaning and/or repair, such extraordinary services may be billed directly to
Tenant as provided in this Section 6.7 and shall be reimbursed by Tenant to
Landlord as provided herein.
7. PAYMENTS AND NOTICES. All rent and other sums payable by Tenant to Landlord
hereunder shall be paid to Landlord at the address designated in Section 1.1 of
the Summary, or to such other persons and/or at such other places as Landlord
may hereafter designate in writing. Any notice required or permitted to be given
hereunder must be in writing and may be given by personal delivery (including
delivery by nationally recognized overnight courier or express mailing service),
facsimile transmission sent by a machine capable of confirming transmission
receipt, with a hard copy of such notice delivered no later than one (1)
business day after facsimile transmission by another method specified in this
Section 7, or by registered or certified mail, postage prepaid, return receipt
requested, addressed to Tenant at the address(es) designated in Section 1.2 of
the Summary, or to Landlord at the address(es) designated in Section 1.1 of the
Summary. Either party may, by written notice to the other, specify a different
address for notice purposes. Notice given in the foregoing manner shall be
deemed given (i) upon confirmed transmission if sent by facsimile transmission,
provided such transmission is prior to 5:00 p.m. on a business day (if such
transmission is after 5:00 p.m. on a business day or is on a non-business day,
such notice will be deemed given on the following business day), (ii) when
actually received or refused by the party to whom sent if delivered by a carrier
or personally served or (iii) if mailed, on the day of actual delivery or
refusal as shown by the certified mail return receipt or the expiration of three
(3) business days after the day of mailing, whichever first occurs. For purposes
of this Section 7, a "business day" is Monday through Friday, excluding holidays
observed by the United States Postal Service.
8. BROKERS. Landlord has entered into an agreement with the real estate broker
specified in Section 1.13 of the Summary as representing Landlord ("LANDLORD'S
BROKER"), and Landlord shall pay any commissions or fees that are payable to
Landlord's Broker with respect to this Lease in accordance with the provisions
of a separate commission contract. Landlord shall have no further or separate
obligation for payment of commissions or fees to any other real estate broker,
finder or intermediary. Tenant represents that it has not had any dealings with
any real estate broker, finder or intermediary with respect to this Lease, other
than Landlord's Broker and the broker specified in Section 1.13 of the Summary
as representing Tenant ("TENANT'S BROKER"). Any commissions or fees payable to
Tenant's Broker with respect to this Lease shall be paid exclusively by
Landlord's Broker. Each party represents and warrants to the other, that, to its
knowledge, no other broker, agent or finder (a) negotiated or was instrumental
in negotiating or consummating this Lease on its behalf, or (b) is or might be
entitled to a commission or compensation in connection with this Lease. Tenant
shall indemnify, protect, defend (by counsel reasonably approved in writing by
Landlord) and hold Landlord harmless from and against any and all claims,
judgments, suits, causes of action, damages, losses, liabilities and expenses
(including attorneys' fees and court costs) resulting from any breach by Tenant
of the foregoing representation, including, without limitation, any claims that
may be asserted against Landlord by any broker, agent or finder undisclosed by
Tenant herein. Landlord shall indemnify, protect, defend (by counsel reasonably
approved in writing by Tenant) and hold Tenant harmless from and against any and
all claims, judgments, suits, causes of action, damages, losses, liabilities and
expenses (including attorneys' fees and court costs) resulting from any breach
by Landlord of the foregoing representation, including, without limitation, any
claims that may be asserted against Tenant by any broker, agent or finder
undisclosed by Landlord herein. The foregoing indemnities shall survive the
expiration or earlier termination of this Lease.
9. SURRENDER; HOLDING OVER.
9.1 SURRENDER OF PREMISES. Upon the expiration or sooner termination of this
Lease, Tenant shall surrender all keys for the Premises to Landlord, and Tenant
shall deliver exclusive possession of the Premises to Landlord broom clean and
in good condition and repair, reasonable wear and tear excepted (and casualty
damage excepted if this Lease is terminated as a result thereof pursuant to
Section 18), with all of Tenant's personal property (and those items, if any, of
Tenant Improvements and Tenant Changes identified by Landlord pursuant to
Section 12.2 below) removed therefrom and all damage caused by such removal
repaired, as required pursuant to Sections 12.2 and 12.3 below. If, for any
-9-
15
reason, Tenant fails to surrender the Premises on the expiration or earlier
termination of this Lease (including upon the expiration of any subsequent
month-to-month tenancy consented to by Landlord pursuant to Section 9.2 below),
with such removal and repair obligations completed, then, in addition to the
provisions of Section 9.3 below and Landlord's rights and remedies under Section
12.4 and the other provisions of this Lease, Tenant shall indemnify, protect,
defend (by counsel reasonably approved in writing by Landlord) and hold Landlord
harmless from and against any and all claims, judgments, suits, causes of
action, damages, losses, liabilities and expenses (including attorneys' fees and
court costs) resulting from such failure to surrender, including, without
limitation, any claim made by any succeeding tenant based thereon. The foregoing
indemnity shall survive the expiration or earlier termination of this Lease.
9.2 HOLDING OVER. If Tenant holds over after the expiration or earlier
termination of the Lease Term, Tenant shall become a tenant at sufferance only,
upon the terms and conditions set forth in this Lease so far as applicable
(including Tenant's obligation to pay all Common Area Expenses and any other
additional rent under this Lease), but at a Basic Rent equal to: (a) one hundred
fifty percent (150%) of the Basic Rent applicable to the Premises immediately
prior to the date of such expiration or earlier termination; or (b) one hundred
fifty percent (150%) of the prevailing market rate excluding any rental or other
concessions (as reasonably determined by Landlord) for the Premises in effect on
the date of such expiration or earlier termination. Acceptance by Landlord of
rent after such expiration or earlier termination shall not constitute a consent
to a hold over hereunder or result in an extension of this Lease. Tenant shall
pay an entire month's Basic Rent calculated in accordance with this Section 9.2
for any portion of a month it holds over and remains in possession of the
Premises pursuant to this Section 9.2.
9.3 NO EFFECT ON LANDLORD'S RIGHTS. The foregoing provisions of this Section 9
are in addition to, and do not affect, Landlord's right of re-entry or any other
rights of Landlord hereunder or otherwise provided at law or in equity.
10. TAXES.
10.1 REAL PROPERTY TAXES. Tenant shall pay Tenant's Share of Real Property Taxes
in accordance with the provisions of Section 4. "REAL PROPERTY TAXES" mean,
collectively, all general and special real property taxes, assessments
(including, without limitation, change in ownership taxes or assessments),
liens, bond obligations, license fees or taxes, commercial rent or gross
receipts taxes, and any similar impositions in-lieu of other impositions now or
previously within the definition of real property taxes or assessments which may
be levied or assessed by any lawful authority against the Project applicable to
the period from the Commencement Date until the expiration or sooner termination
of this Lease. Real Property Taxes are included within Operating Expenses, as
set forth in Section 4.4. Notwithstanding anything to the contrary contained in
this Section 10.1, there shall be excluded from Real Property Taxes (i) 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 to the extent applicable to Landlord's gross or net income from
all sources, and (ii) documentary transfer taxes associated with the sale or
other transfer by Landlord of its interest in the Project.
10.2 PERSONAL PROPERTY TAXES. Tenant shall be liable for, and shall pay before
delinquency, all taxes and assessments (real and personal) levied against (a)
any personal property or trade fixtures placed by Tenant in or about the
Premises (including any increase in the assessed value of the Premises based
upon the value of any such personal property or trade fixtures), (b) any Tenant
Improvements or alterations in the Premises (whether installed and/or paid for
by Landlord or Tenant) and (c) this transaction or any document to which Tenant
is a party creating or transferring an interest in the Premises. If any such
taxes or assessments are levied against Landlord or Landlord's property,
Landlord may, after written notice to Tenant (and under proper protest if
requested by Tenant) pay such taxes and assessments, and Tenant shall reimburse
Landlord therefor within ten (10) business days after demand by Landlord;
provided, however, Tenant, at its sole cost and expense, shall have the right,
with Landlord's cooperation, to bring suit in any court of competent
jurisdiction to recover the amount of any such taxes and assessments so paid
under protest.
11. POSSESSION; CONDITION OF PREMISES; REPAIRS.
11.1 DELIVERY OF POSSESSION. Landlord will deliver possession of the Premises to
Tenant prior to completion of Landlord's Work on the date set forth in Section
1.7 of the Summary; however, if Landlord cannot deliver possession of the
Premises to Tenant by such date, this Lease will not be void or voidable, nor
will Landlord be liable to Tenant for any loss or damage resulting from such
delay. If Landlord has not delivered the Premises to Tenant within thirty (30)
days after the mutual execution of this Lease and such delay is not caused by
Tenant or any Tenant Parties, Tenant shall have the right to terminate this
Lease, in which case all amounts deposited by Tenant with Landlord shall be
refunded to Tenant. If the delay in possession is caused by Tenant (including
delays caused by Tenant's failure to supply any item referred to in the
following sentence), then the Term and Tenant's obligation to pay rent will
commence as of the date the Commencement Date would have occurred but for
Tenant's delay, even though Tenant does not yet have possession. Notwithstanding
the foregoing, Landlord will not be obligated to deliver possession of the
Premises to Tenant until Landlord has received from Tenant all of the following:
(i) a copy of this Lease fully executed by Tenant and the guaranty of Tenant's
obligations under this Lease executed by the Guarantor; (ii) the Security
Deposit and the first installment of Basic Rent; and (iii) copies of policies of
insurance or certificates thereof as required under Section 20 of this Lease.
-10-
16
11.2 CONDITION OF PREMISES. Tenant acknowledges that, except as otherwise
expressly set forth in this Lease, neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises, the
Building or the Project or their condition, or with respect to the suitability
thereof for the conduct of Tenant's business and Tenant shall accept the
Premises in their as-is condition. The taking of possession of the Premises by
Tenant shall conclusively establish that the Premises were at such time complete
and in good, sanitary and satisfactory condition and repair without any
obligation on Landlord's part to make any alterations, upgrades or improvements
thereto.
Notwithstanding the foregoing, Landlord warrants that the Building, the parking
areas and any existing improvements in the Premises comply with all applicable
laws, covenants or restrictions of record, building codes, regulations and
ordinances including but not limited to the Americans with Disabilities Act of
1990 ("APPLICABLE REQUIREMENTS") in effect and as interpreted on the date
Landlord delivers possession of the Premises to Tenant pursuant to Section 1.7
of the Summary. Said warranty does not apply to the use to which Tenant will put
the Premises or to any alterations made or to be made by Tenant. Tenant is
responsible for determining whether or not the zoning is appropriate for
Tenant's intended use. If the Premises do not comply with said warranty,
Landlord shall, as Tenant's sole remedy and promptly after receipt of written
notice from Tenant setting forth with specificity the nature and extent of such
non-compliance, rectify the same at Landlord's sole cost and expense; provided,
however, if Tenant does not give Landlord written notice of a non-compliance
with this warranty within thirty (30) days following the date Landlord delivers
possession of the Premises, correction of that non-compliance shall be the
obligation of Tenant at Tenant's sole cost and expense.
In addition, Landlord warrants that the existing electrical and mechanical
systems and equipment in the Premises shall be in good operating condition on
the date Landlord delivers possession of the Premises to Tenant pursuant to
Section 1.7 of the Summary. If the Premises do not comply with said warranty,
Landlord shall, as Tenant's sole remedy and promptly after receipt of written
notice from Tenant setting forth with specificity the nature and extent of such
non-compliance, rectify the same at Landlord's sole cost and expense; provided,
however, if Tenant does not give Landlord written notice of a non-compliance
with this warranty within thirty (30) days following the date Landlord delivers
possession of the Premises, correction of that non-compliance shall be the
obligation of Tenant at Tenant's sole cost and expense.
11.3 LANDLORD'S REPAIR OBLIGATIONS. Landlord shall, at its sole cost and
expense, repair, maintain and replace, as necessary the Building shell and other
structural portions of the Building (including the roof, exterior walls and
foundations). In addition, as part of the Operating Expenses, Landlord shall
repair, maintain and replace, as necessary (a) the basic plumbing, heating,
ventilating, air conditioning, sprinkler and electrical systems within the
Building core (but not any conduits or connections thereto or distribution
systems thereof within the Premises or any other tenant's premises or those
systems exclusively serving the Premises or any other premises), and (b) the
Common Areas of the Project. Notwithstanding the foregoing, to the extent any
maintenance, repairs or replacements required to be performed by Landlord
pursuant to this Section 11.3 are required as a result of any act, neglect,
fault or omission of Tenant or any of Tenant's agents, employees, contractors,
licensees or invitees, Tenant shall pay to Landlord, as additional rent, the
costs of such maintenance, repairs or replacements. Landlord shall not be liable
to Tenant for failure to perform any such repairs, maintenance or replacements,
unless Landlord shall fail to make such repairs, maintenance or replacements and
such failure shall continue for an unreasonable time following written notice
from Tenant to Landlord of the need therefor. Without limiting the foregoing,
Tenant waives the right to make repairs at Landlord's expense under any law,
statute or ordinance now or hereafter in effect (including the provisions of
California Civil Code Section 1942 and any successive sections or statutes of a
similar nature).
11.4 TENANT'S REPAIR OBLIGATIONS. Except for Landlord's obligations specifically
set forth in Sections 11.3, 18.1 and 19.2 hereof, Tenant shall at all times and
at Tenant's sole cost and expense, keep, maintain, clean, repair and preserve
and replace, as necessary, the Premises and all parts thereof including, without
limitation, all Tenant Improvements, Tenant Changes, utility meters, pipes and
conduits, all heating, ventilating and air conditioning systems located within
the Premises or exclusively serving the Premises, all fixtures, furniture and
equipment, Tenant's storefront and signs, if any, locks, closing devices,
security devices, windows, window sashes, casements and frames, floors and floor
coverings, shelving, restrooms, if any, and any alterations, additions and other
property located within the Premises in good condition and repair, reasonable
wear and tear excepted. Tenant shall replace, at its expense, any and all plate
and other glass in and about the Premises which is damaged or broken from any
cause whatsoever except due to the gross negligence or willful misconduct of
Landlord, its agents or employees. Such maintenance and repairs shall be
performed with due diligence, lien-free and in a good and workmanlike manner, by
licensed contractor(s) which are selected by Tenant and approved by Landlord,
which approval Landlord shall not unreasonably withhold or delay. In addition,
Tenant agrees to procure and maintain maintenance contracts for all heating,
ventilating and air conditioning systems with reputable contractors reasonably
approved by Landlord. Except as otherwise expressly provided in this Lease,
Landlord shall have no obligation to alter, remodel, improve, repair, renovate,
redecorate or paint all or any part of the Premises.
-11-
17
12. ALTERATIONS.
12.1 TENANT CHANGES; CONDITIONS.
(a) Tenant shall not make any alterations, additions, improvements or
decorations to the Premises (collectively, "TENANT CHANGES," and
individually, a "TENANT CHANGE") unless Tenant first obtains Landlord's
prior written approval thereof, which approval Landlord shall not
unreasonably withhold. Notwithstanding the foregoing, Landlord's prior
approval shall not be required for any Tenant Change which satisfies all
of the following conditions (hereinafter a "PRE-APPROVED CHANGE"): (i)
the costs of such Tenant Change does not exceed Ten Thousand Dollars
($10,000.00) individually; (ii) the costs of such Tenant Change when
aggregated with the costs of all other Tenant Changes made by Tenant
during the Term of this Lease do not exceed Fifty Thousand Dollars
($50,000.00); (iii) Tenant delivers to Landlord final plans,
specifications and working drawings for such Tenant Change at least ten
(10) days prior to commencement of the work thereof; (iv) the Tenant
Change does not affect the mechanical, electrical, plumbing or life
safety systems of the Premises, the Building and/or the Project
(collectively, the "SYSTEMS"), the roof or structural components of the
Premises or the exterior of the Premises; and (v) Tenant and such Tenant
Change otherwise satisfy all other conditions set forth in this Section
12.1.
(b) After Landlord has approved the Tenant Changes and the plans,
specifications and working drawings therefor (or is deemed to have
approved the Pre-Approved Changes as set forth in Section 12.1(a)
above), Tenant shall: (i) enter into an agreement for the performance of
such Tenant Changes with licensed and bondable contractors and
subcontractors selected by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld; (ii) before proceeding with
any Tenant Change, provide Landlord with ten (10) days' prior written
notice thereof; and (iii) pay to Landlord, within ten (10) days after
written demand, the costs of any increased insurance premiums incurred
by Landlord to include such Tenant Changes in the fire and extended
coverage insurance obtained by Landlord pursuant to Section 21 below, if
Landlord elects in writing to insure such Tenant Changes; provided,
however, that Landlord shall not be required to include the Tenant
Changes under such insurance. If such Tenant Changes are not included in
Landlord's insurance, Tenant shall insure the Tenant Changes under its
casualty insurance pursuant to Section 20.1(a) below. In addition,
before proceeding with any Tenant Change, Tenant's contractors shall
obtain, on behalf of Tenant and at Tenant's sole cost and expense: (A)
all necessary governmental permits and approvals for the commencement
and completion of such Tenant Change; and (B) at Landlord's request, a
completion and lien indemnity bond, or other surety, satisfactory to
Landlord for such Tenant Change. Landlord's approval of any
contractor(s) and subcontractor(s) of Tenant shall not release Tenant or
any such contractor(s) and/or subcontractor(s) from any liability for
any conduct or acts of such contractor(s) and/or subcontractor(s).
Further, Landlord's approval of Tenant Changes and the plans therefor
will create no liability or responsibility on Landlord's part concerning
the completeness of same or their design sufficiency or compliance with
laws.
(d) All Tenant Changes shall be performed: (i) in accordance with the
approved plans, specifications and working drawings; (ii) lien-free and
in a good and workmanlike manner; (iii) in compliance with all laws,
rules and regulations of all governmental agencies and authorities
including, without limitation, applicable building permit requirements
and the provisions of Title III of the Americans with Disabilities Act
of 1990; (iv) in such a manner so as not to unreasonably interfere with
the occupancy of any other tenant in the Building or any other building
located within the Project, nor impose any additional expense upon nor
delay Landlord in the maintenance and operation of the Building or any
other building located within the Project; and (v) at such times, in
such manner and subject to such rules and regulations as Landlord may
from time to time reasonably designate.
(e) Throughout the performance of the Tenant Changes, Tenant shall obtain,
or cause its contractors to obtain, workers compensation insurance and
commercial general liability insurance in compliance with the provisions
of Section 20 of this Lease.
12.2 REMOVAL OF TENANT CHANGES AND TENANT IMPROVEMENTS. All Tenant Changes and
the initial Tenant Improvements in the Premises paid for by Tenant shall remain
the property of Tenant during the Term of this Lease and the initial Tenant
Improvements in the Premises paid for by Landlord shall remain the property of
Landlord during the Term of the Lease, but all Tenant Changes and Tenant
Improvements (whether installed or paid for by Landlord or Tenant) shall become
the property of Landlord and shall remain upon and be surrendered with the
Premises at the end of the Term of this Lease; provided, however, Landlord may,
by written notice delivered to Tenant in connection with its approval of the
initial Tenant Improvements pursuant to the Work Letter or any Tenant Changes
pursuant to Section 12.1, identify those items of the initial Tenant
Improvements or Tenant Changes which Landlord shall require Tenant to remove at
the end of the Lease Term. However, Landlord's failure to specify at that time
whether Tenant shall be required to remove the Tenant Improvements or any Tenant
Changes will only be deemed an election not to require such removal if Tenant
informed Landlord in its request for approval that Landlord's failure to
identify such items would result in Tenant having no obligation to remove the
same at the expiration of the Lease Term (or upon any sooner termination of this
Lease). If Landlord requires Tenant to remove any such items as described above,
Tenant shall, at its sole cost, remove the identified items on or before the
expiration or sooner termination of this Lease and repair any damage to
-12-
18
the Premises caused by such removal (or, at Landlord's option, shall pay to
Landlord all of Landlord's costs of such removal and repair).
12.3 REMOVAL OF PERSONAL PROPERTY. All articles of personal property owned by
Tenant or installed by Tenant at its expense in the Premises (including business
and trade fixtures, furniture and movable partitions) shall be, and remain, the
property of Tenant, and shall be removed by Tenant from the Premises, at
Tenant's sole cost and expense, on or before the expiration or sooner
termination of this Lease. Tenant shall repair any damage caused by such
removal.
12.4 TENANT'S FAILURE TO REMOVE. If Tenant fails to remove by the expiration or
sooner termination of this Lease all of its personal property, or any items of
Tenant Improvements or Tenant Changes identified by Landlord for removal
pursuant to Section 12.2 above, Landlord may, (without liability to Tenant for
loss thereof), at Tenant's sole cost and in addition to Landlord's other rights
and remedies under this Lease, at law or in equity: (a) remove and store such
items in accordance with applicable law; and/or (b) upon ten (10) days' prior
notice to Tenant, sell all or any such items at private or public sale for such
price as Landlord may obtain as permitted under applicable law. Landlord shall
apply the proceeds of any such sale to any amounts due to Landlord under this
Lease from Tenant (including Landlord's attorneys' fees and other costs incurred
in the removal, storage and/or sale of such items), with any remainder to be
paid to Tenant.
13. LIENS. Tenant shall not permit any mechanic's, materialmen's or other liens
to be filed against all or any part of the Project, the Building or the
Premises, nor against Tenant's leasehold interest in the Premises, by reason of
or in connection with any repairs, alterations, improvements or other work
contracted for or undertaken by Tenant or any other act or omission of Tenant or
Tenant's agents, employees, contractors, licensees or invitees. Tenant shall, at
Landlord's request, provide Landlord with enforceable, conditional and final
lien releases (and other reasonable evidence reasonably requested by Landlord to
demonstrate protection from liens) from all persons furnishing labor and/or
materials with respect to the Premises. Landlord shall have the right at all
reasonable times to post on the Premises and record any notices of
non-responsibility which it deems necessary for protection from such liens. If
any such liens are filed, Tenant shall, at its sole cost, immediately cause such
lien to be released of record or bonded so that it no longer affects title to
the Project, the Building or the Premises. If Tenant fails to cause such lien to
be so released or bonded within twenty (20) days after filing thereof, Landlord
may, without waiving its rights and remedies based on such breach, and without
releasing Tenant from any of its obligations, cause such lien to be released by
any means it shall deem proper, including payment in satisfaction of the claim
giving rise to such lien. Tenant shall pay to Landlord within five (5) days
after receipt of invoice from Landlord, any sum paid by Landlord to remove such
liens, together with interest at the Interest Rate from the date of such payment
by Landlord. Notice is hereby given that Landlord shall not be liable for any
labor, services or materials furnished or to be furnished to Tenant, or to
anyone holding the Premises through or under Tenant, and that no mechanics' or
other liens for any such labor, services or materials shall attach to or affect
the interest of Landlord in the Premises.
14. ASSIGNMENT AND SUBLETTING.
14.1 RESTRICTION ON TRANSFER. Tenant will not assign this Lease in whole or in
part, nor sublet all or any part of the Premises (collectively and individually,
a "TRANSFER"), without the prior written consent of Landlord, which consent
Landlord will not unreasonably withhold, condition or delay. In no event may
Tenant encumber or hypothecate this Lease. The consent by Landlord to any
Transfer shall not constitute a waiver of the necessity for such consent to any
subsequent Transfer. This prohibition against Transfers shall be construed to
include a prohibition against any assignment or subletting by operation of law.
If this Lease is transferred by Tenant, or if the Premises or any part thereof
are transferred or occupied by any person or entity other than Tenant, Landlord
may collect rent from the assignee, subtenant or occupant, and apply the net
amount collected to the rent herein reserved, but no such Transfer, occupancy or
collection shall be deemed a waiver on the part of Landlord, or the acceptance
of the assignee, subtenant or occupant as Tenant, or a release of Tenant from
the further performance by Tenant of covenants on the part of Tenant herein
contained unless expressly made in writing by Landlord. Irrespective of any
Transfer, Tenant shall remain fully liable under this Lease and shall not be
released from performing any of the terms, covenants and conditions of this
Lease. Without limiting in any way Landlord's right to withhold its consent on
any reasonable grounds, it is agreed that Landlord will not be acting
unreasonably in refusing to consent to a Transfer if, in Landlord's opinion, (i)
the net worth or financial capabilities of such assignee or subtenant is less
than that of Tenant at the date hereof, (ii) the proposed assignee or subtenant
does not have the financial capability to fulfill the obligations imposed by the
Transfer, (iii) the proposed Transfer involves a change of the then-current use
of the Premises, or (iv) the proposed assignee or subtenant is not, in
Landlord's reasonable opinion, of reputable or good character or consistent with
Landlord's desired tenant mix for the Project. Subject to Section 14.5 below, if
Tenant is a corporation, or is an unincorporated association or partnership, the
transfer, assignment or hypothecation of any stock or interest in such
corporation, association or partnership in the aggregate in excess of forty-nine
percent (49%) shall be deemed an assignment within the meaning and provisions of
this Section 14.1, unless (a) at least twenty (20) days prior to such transfer,
assignment or hypothecation or if such proposed transfer, assignment or
hypothecation is not publicly known, promptly after such proposed transfer,
assignment or hypothecation is made public, Tenant delivers to Landlord the
financial statements and other financial and background information of the
person or entity acquiring such stock or interest; (b) the financial net worth
of the Tenant immediately following such transfer, assignment or hypothecation
equals or exceeds that of Tenant as of the date of execution of this Lease; (c)
the use of
-13-
19
the Premises remains unchanged; and (d) such transaction is not entered into as
a subterfuge to avoid the restrictions and provisions of this Section 14.
14.2 TRANSFER NOTICE. If Tenant desires to effect a Transfer, then at least
thirty (30) days prior to the date when Tenant desires the Transfer to be
effective (the "TRANSFER DATE"), Tenant agrees to give Landlord a notice (the
"TRANSFER NOTICE"), stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as
"TRANSFEREE"), reasonable information (including references) concerning the
character, ownership, and financial condition of the proposed Transferee, the
Transfer Date, any ownership or commercial relationship between Tenant and the
proposed Transferee, and the consideration and all other material terms and
conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require.
14.3 LANDLORD'S OPTIONS. Within fifteen (15) days of Landlord's receipt of any
Transfer Notice, and any additional information requested by Landlord concerning
the proposed Transferee's financial responsibility, Landlord will notify Tenant
of its election to do one of the following: (i) consent to the proposed Transfer
subject to such reasonable conditions as Landlord may impose in providing such
consent; (ii) refuse such consent, which refusal shall be on reasonable grounds;
or (iii) except if such Transfer Notice is delivered in connection with a
Permitted Transfer, terminate this Lease as to all or such portion of the
Premises which is proposed to be sublet or assigned and recapture all or such
portion of the Premises for reletting by Landlord.
14.4 ADDITIONAL CONDITIONS. A condition to Landlord's consent to any Transfer of
this Lease will be the delivery to Landlord of a true copy of the fully executed
instrument of assignment, sublease, transfer or hypothecation, in form and
substance reasonably satisfactory to Landlord. If the Transferee is other than a
Permitted Transferee, Tenant agrees to pay to Landlord, as additional rent,
fifty percent (50%) of all sums and other consideration payable to and for the
benefit of Tenant by the Transferee in excess of the rent payable under this
Lease for the same period and portion of the Premises. In calculating excess
rent or other consideration which may be payable to Landlord under this Section
14.4, Tenant will be entitled to deduct commercially reasonable third party
brokerage commissions and attorneys' fees and other amounts reasonably and
actually expended by Tenant in connection with such assignment or subletting if
acceptable written evidence of such expenditures is provided to Landlord. No
Transfer will release Tenant of Tenant's obligations under this Lease or alter
the primary liability of Tenant to pay the rent and to perform all other
obligations to be performed by Tenant hereunder. Landlord may require that any
Transferee remit directly to Landlord on a monthly basis, all monies due Tenant
by said Transferee, and each sublease shall provide that if Landlord gives the
sublessee written notice that Tenant is in default under this Lease, the
sublessee will thereafter make all payments due under the sublease directly to
or as directed by Landlord, which payments will be credited against any payments
due under this Lease. Tenant hereby irrevocably and unconditionally assigns to
Landlord all rents and other sums payable under any sublease of the Premises;
provided, however, that Landlord hereby grants Tenant a license to collect all
such rents and other sums so long as Tenant is not in default under this Lease.
Tenant shall, within ten (10) days after the execution and delivery of any
assignment or sublease, deliver a duplicate original copy thereof to Landlord.
Consent by Landlord to one Transfer will not be deemed consent to any subsequent
Transfer. In the event of default by any Transferee of Tenant or any successor
of Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such Transferee or successor. If Tenant effects a Transfer or requests the
consent of Landlord to any Transfer (whether or not such Transfer is
consummated), then, upon demand, and as a condition precedent to Landlord's
consideration of the proposed assignment or sublease, Tenant agrees to pay
Landlord a non-refundable administrative fee of Five Hundred Dollars ($500.00),
plus an amount not to exceed Fifteen Hundred Dollars ($1,500.00) (which amount
shall be subject to annual increases in accordance with the CPI) to cover
Landlord's reasonable attorneys' fees and other costs incurred by Landlord in
reviewing such proposed assignment or sublease (whether attributable to
Landlord's in-house attorneys or paralegals or otherwise). Acceptance of the
Five Hundred Dollar ($500.00) administrative fee and/or reimbursement of
Landlord's attorneys' and/or paralegal fees shall in no event obligate Landlord
to consent to any proposed Transfer. Notwithstanding any contrary provision of
this Lease, if Tenant or any proposed Transferee claims that Landlord has
unreasonably withheld or delayed its consent to a proposed Transfer or otherwise
has breached its obligations under this Section 14, Tenant's and such
Transferee's only remedy shall be to seek a declaratory judgment and/or
injunctive relief, and Tenant, on behalf of itself and, to the extent permitted
by law, such proposed Transferee waives all other remedies against Landlord,
including without limitation, the right to seek monetary damages or to terminate
this Lease; provided, however, that such waiver shall not apply to the extent
that Landlord has acted in bad faith. For purposes of this Section 14.4, the
term "CPI" shall mean the Consumer Price Index, All Cities, All Items, All Urban
Consumers (1982-84=100) published by the Bureau of Labor Statistics or other
governmental agency then publishing the CPI (or if such CPI is no longer
published, the index most comparable to the CPI).
14.5 PERMITTED TRANSFERS. Notwithstanding the provisions of this Section 14 to
the contrary, Tenant may assign this Lease or sublet the Premises or any portion
thereof (herein, a "PERMITTED TRANSFER"), without Landlord's consent to any
entity that controls, is controlled by or is under common control with Tenant,
or to any entity resulting from a merger or consolidation with Tenant, or to any
person or entity which acquires all the assets of Tenant's business as a going
concern (each, a "PERMITTED TRANSFEREE"), provided that: (a) at least twenty
(20) days prior to such assignment or sublease or, if such assignment or
sublease is as a result of a merger, consolidation or an acquisition of all of
Tenant's assets as a going concern, promptly after such merger, consolidation or
acquisition is made public, Tenant delivers to Landlord the financial statements
and other financial and background information of the assignee or
-14-
20
sublessee as described in Section 14.2 above; (b) in the case of an assignment,
the assignee assumes, in full, the obligations of Tenant under this Lease (or if
a sublease, the sublessee of a portion of the Premises or Term assumes, in full,
the obligations of Tenant with respect to such portion) pursuant to a
commercially reasonable assumption agreement, a fully executed copy of which is
delivered to Landlord within twenty (20) days following the effective date of
such assignment or subletting; (c) the financial net worth of the assignee or
sublessee equals or exceeds that of Tenant and any guarantor hereof as of the
date of execution of this Lease; (d) Tenant remains fully liable under this
Lease; (e) the use of the Premises remains unchanged; and (f) such transaction
is not entered into as a subterfuge to avoid the restrictions and provisions of
this Section 14.
15. ENTRY BY LANDLORD. Landlord and its employees and agents shall at all
reasonable times have the right to enter the Premises to inspect the same, to
supply any service required to be provided by Landlord to Tenant under this
Lease, to exhibit the Premises to prospective lenders or purchasers (or during
the last nine (9) months of the Term, to prospective tenants), to post notices
of non-responsibility, and/or to alter, improve or repair the Premises or any
other portion of the Building, all without being deemed guilty of or liable for
any breach of Landlord's covenant of quiet enjoyment or any eviction of Tenant,
and without abatement of rent. In exercising such entry rights, Landlord shall
endeavor to minimize, to the extent reasonably practicable, the interference
with Tenant's business, and shall provide Tenant with reasonable advance written
notice of such entry (except in emergency situations and for providing scheduled
services, if any). Landlord shall have the means which Landlord may deem proper
to open Tenant's doors in an emergency in order to obtain entry to the Premises.
Any entry to the Premises obtained by Landlord by any of said means or otherwise
shall not under any circumstances be construed or deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises or any portion thereof, or grounds for any abatement or
reduction of rent and Landlord shall not have any liability to Tenant for any
damages or losses on account of any such entry by Landlord except, subject to
the provisions of Section 22.1, to the extent of Landlord's gross negligence or
willful misconduct.
16. UTILITIES AND SERVICES. The Premises shall be separately metered by Landlord
for electricity and gas, the charges for which Tenant shall pay directly to the
utility companies, and Landlord shall not impose any restriction on Tenant's use
thereof, except to the extent required by law. Landlord shall deliver the
Premises with separate HVAC systems for the Premises, which systems may be used
by Tenant without restriction so long as Tenant maintains and repairs the same
in accordance with this Lease. Tenant shall be solely responsible for and shall
promptly pay all charges for heat, air conditioning, water, gas, electricity or
any other utility used, consumed or provided in, furnished to or attributable to
the Premises at the rates charged by the supplying utility companies and/or
Landlord. Should Landlord elect to supply any or all of such utilities, Tenant
agrees to purchase and pay for the same as additional rent as apportioned by
Landlord. The rate to be charged to Landlord to Tenant shall not exceed the rate
charged to Landlord by any supplying utility. Tenant shall reimburse Landlord
within ten (10) days of billing for fixture charges and/or water tariffs, if
applicable, which are charged to Landlord by local utility companies. Landlord
will notify Tenant of this charge as soon as it becomes known. This charge will
increase or decrease with current charges being levied against Landlord, the
Premises or the Building by the local utility company, and will be due as
additional rent. In no event shall Landlord be liable for any interruption or
failure in the supply of any such utility services to Tenant.
17. INDEMNIFICATION AND EXCULPATION.
17.1 TENANT'S ASSUMPTION OF RISK AND WAIVER. Except to the extent such matter is
not covered by the insurance required to be maintained by Tenant under this
Lease and such matter is attributable to the gross negligence or willful
misconduct of Landlord, Landlord shall not be liable to Tenant, Tenant's
employees, agents or invitees for: (i) any damage to property of Tenant, or of
others, located in, on or about the Premises, (ii) the loss of or damage to any
property of Tenant or of others by theft or otherwise, (iii) any injury or
damage to persons or property resulting from fire, explosion, falling plaster,
steam, gas, electricity, water, rain or leaks from any part of the Premises or
from the pipes, appliance of plumbing works or from the roof, street or
subsurface or from any other places or by dampness or by any other cause of
whatsoever nature, or (iv) any such damage caused by other tenants or persons in
the Premises, occupants of adjacent property of the Project, or the public, or
caused by operations in construction of any private, public or quasi-public
work. Landlord shall in no event be liable for any consequential damages or loss
of business or profits and Tenant hereby waives any and all claims for any such
damages. All property of Tenant kept or stored on the Premises shall be so kept
or stored at the sole risk of Tenant and Tenant shall hold Landlord harmless
from any claims arising out of damage to the same, including subrogation claims
by Tenant's insurance carriers, unless such damage shall be caused by the gross
negligence or willful misconduct of Landlord. Landlord or its agents shall not
be liable for interference with the light or other intangible rights.
17.2 INDEMNIFICATIONS. Tenant shall be liable for, and shall indemnify, defend,
protect and hold Landlord and Landlord's partners, officers, directors,
employees, agents, successors and assigns (collectively, "LANDLORD INDEMNIFIED
PARTIES") harmless from and against, any and all claims, damages, judgments,
suits, causes of action, losses, liabilities and expenses, including attorneys'
fees and court costs (collectively, "INDEMNIFIED CLAIMS"), arising or resulting
from (a) any occurrence at the Premises following the date Landlord delivers
possession of the Premises to Tenant, unless caused by the gross negligence or
willful misconduct of Landlord or its agents, employees or contractors, (b) any
act or omission of Tenant or any of Tenant's agents, employees, contractors,
subtenants, assignees, licensees or, with respect to acts or omissions within
the Premises only, Tenant's invitees (collectively, "TENANT
-15-
21
PARTIES"); (c) the use of the Premises and Common Areas and conduct of Tenant's
business by Tenant or any Tenant Parties, or any other activity, work or thing
done, or caused by Tenant or any Tenant Parties, in or about the Premises, the
Building or elsewhere on the Project; and/or (d) any default by Tenant of any
obligations on Tenant's part to be performed under the terms of this Lease or
the terms of any contract or agreement to which Tenant is a party or by which it
is bound, affecting this Lease or the Premises. In case any action or proceeding
is brought against Landlord or any Landlord Indemnified Parties by reason of any
such Indemnified Claims, Tenant, upon notice from Landlord, shall defend the
same at Tenant's expense by counsel approved in writing by Landlord, which
approval shall not be unreasonably withheld. Subject to Section 22 hereof,
Landlord will be liable for, and shall indemnify, protect, defend and hold
harmless Tenant and Tenant's partners, officers, directors, employees, agents,
successors and assigns (collectively, "TENANT INDEMNIFIED PARTIES") from and
against any and all Indemnified Claims (but excluding claims for consequential
damages or lost profits) that arise or result solely from (a) any negligent or
willful act or omission of Landlord, Landlord's agents, employees or
contractors, or (b) any occurrence in the Common Area not caused by Tenant or
the Tenant Parties, but only to the extent covered by the liability insurance
maintained or required to be maintained by Landlord pursuant to this Lease.
17.3 SURVIVAL; NO RELEASE OF INSURERS. The indemnification obligations under
Section 17.2, shall survive the expiration or earlier termination of this Lease.
The covenants, agreements and indemnification in Sections 17.1 and 17.2 above,
are not intended to and shall not relieve any insurance carrier of its
obligations under policies required to be carried pursuant to the provisions of
this Lease.
18. DAMAGE OR DESTRUCTION.
18.1 LANDLORD'S RIGHTS AND OBLIGATIONS. In the event the Premises are damaged by
fire or other casualty to an extent not exceeding twenty-five percent (25%) of
the full replacement cost thereof, and Landlord's contractor estimates in a
writing delivered to the parties that the damage thereto is such that the
Premises may be repaired, reconstructed or restored to substantially its
condition immediately prior to such damage within one hundred twenty (120) days
from the date of such casualty, and Landlord will receive insurance proceeds
sufficient to cover the costs of such repairs, reconstruction and restoration
(including proceeds from Tenant and/or Tenant's insurance which Tenant is
required to deliver to Landlord pursuant to Section 18.2 below) (or would have
received sufficient proceeds if Landlord carried the insurance required of it
hereunder), then Landlord shall commence and proceed diligently with the work of
repair, reconstruction and restoration and this Lease shall continue in full
force and effect. If, however, the Premises are damaged to an extent exceeding
twenty-five percent (25%) of the full replacement cost thereof, or Landlord's
contractor estimates that such work of repair, reconstruction and restoration
will require longer than one hundred twenty (120) days to complete, or Landlord
will not receive insurance proceeds (and/or proceeds from Tenant, as applicable)
sufficient to cover the costs of such repairs, reconstruction and restoration
(or would not have received sufficient proceeds if Landlord carried the
insurance required of it hereunder), then Landlord may elect to either:
(a) repair, reconstruct and restore the portion of the Premises damaged by
such casualty (including the Tenant Improvements, the Tenant Changes
that Landlord elects to insure pursuant to Section 12.1(b) and, to the
extent of insurance proceeds received from Tenant, the Tenant Changes
that Tenant insures pursuant to Section 12.1(b) and/or 20.1(a)), in
which case this Lease shall continue in full force and effect; or
(b) terminate this Lease effective as of the date which is thirty (30) days
after Tenant's receipt of Landlord's election to so terminate.
Under any of the conditions of this Section 18.1, Landlord shall give written
notice to Tenant of its intention to repair or terminate within the later of
sixty (60) days after the occurrence of such casualty, or fifteen (15) days
after Landlord's receipt of the estimate from Landlord's contractor.
Notwithstanding the foregoing, if the Premises are damaged by fire or other
casualty and Landlord does not elect to terminate this Lease or is not entitled
to terminate this Lease pursuant to this Article 18, then, as soon as reasonably
practicable, Landlord shall furnish Tenant with the written opinion of
Landlord's architect or construction consultant as to when the restoration work
required of Landlord is estimated to be complete (the "COMPLETION ESTIMATE").
If: (i) the time estimated to substantially complete the restoration exceeds
fifteen (15) months from and after the date the Completion Estimate is delivered
to Tenant or (ii) the fire or other casualty occurred within twelve (12) months
prior to the last day of the Lease Term and the time estimated to substantially
complete the restoration exceeds one hundred eighty (180) days from and after
the date such restoration is commenced, Tenant shall have the option to
terminate this Lease upon delivery to Landlord of a written notice of Tenant's
election to so terminate within seven (7) days after Tenant receives the
Completion Estimate.
18.2 TENANT'S COSTS AND INSURANCE PROCEEDS. In the event of any damage or
destruction of all or any part of the Premises, Tenant shall immediately: (a)
notify Landlord thereof; and (b) deliver to Landlord all insurance proceeds
received by Tenant with respect to the Tenant Improvements and Tenant Changes to
the extent paid for by Landlord in the Premises to the extent such items are not
covered by Landlord's casualty insurance obtained by Landlord pursuant to
Section 21 below (excluding proceeds for Tenant's furniture and other personal
property), whether or not this Lease is terminated as permitted in this Section
18, and Tenant hereby assigns to Landlord all rights to receive such insurance
proceeds.
-16-
22
18.3 ABATEMENT OF RENT. In the event that as a result of any such damage,
repair, reconstruction and/or restoration of the Premises, Tenant is prevented
from using, and does not use, the Premises or any portion thereof, then the rent
shall be abated or reduced, as the case may be, during the period that Tenant
continues to be so prevented from using and does not use the Premises or portion
thereof, in the proportion that the rentable square feet of the portion of the
Premises that Tenant is prevented from using, and does not use, bears to the
total rentable square feet of the Premises, but only to the extent of the
proceeds that Landlord receives from the rental loss insurance maintained by
Landlord. Notwithstanding the foregoing to the contrary, if the damage is due to
the negligence or willful misconduct of Tenant or any Tenant Parties, there
shall be no abatement of rent. Except for abatement of rent as provided
hereinabove, Tenant shall not be entitled to any compensation or damages from
Landlord for loss of, or interference with, Tenant's business or use or access
of all or any part of the Premises resulting from any such damage, repair,
reconstruction or restoration.
18.4 INABILITY TO COMPLETE. Notwithstanding anything to the contrary contained
in this Section 18, if Landlord is obligated or elects to repair, reconstruct
and/or restore the damaged portion of the Premises pursuant to Section 18.1
above, but is delayed from completing such repair, reconstruction and/or
restoration beyond the date which is six (6) months after the date estimated by
Landlord's contractor for completion thereof pursuant to Section 18.1, by reason
of any causes beyond the reasonable control of Landlord (including, without
limitation, any delay due to Force Majeure as defined in Section 32.16, and
delays caused by Tenant or any Tenant Parties), then Landlord or Tenant (but
only if the delay is not caused by Tenant or any Tenant Parties) may elect to
terminate this Lease upon thirty (30) days' prior written notice to the other
party.
18.5 DAMAGE TO THE PROJECT. If there is a total destruction of the Project or a
partial destruction of the Project, the cost of restoration of which would
exceed one-half (1/2) of the then replacement value of the Project, by any cause
whatsoever, whether or not insured against and whether or not the Premises are
partially or totally destroyed, Landlord may within a period of one hundred
eighty (180) days after the occurrence of such destruction, notify Tenant in
writing that it elects not to so reconstruct or restore the Project, in which
event this Lease shall cease and terminate as of the date of such destruction.
18.6 DAMAGE NEAR END OF TERM. In addition to its termination rights in Sections
18.1 and 18.4 above, Landlord shall have the right to terminate this Lease if
any damage to the Building or Premises occurs during the last twelve (12) months
of the Term of this Lease and Landlord's contractor estimates in a writing
delivered to the parties that the repair, reconstruction or restoration of such
damage cannot be completed within the earlier of (a) the scheduled expiration
date of the Lease Term, or (b) sixty (60) days after the date of such casualty.
18.7 WAIVER OF TERMINATION RIGHT. This Lease sets forth the terms and conditions
upon which this Lease may terminate in the event of any damage or destruction.
Accordingly, the parties hereby waive the provisions of California Civil Code
Section 1932, Subsection 2, and Section 1933, Subsection 4 (and any successor
statutes thereof permitting the parties to terminate this Lease as a result of
any damage or destruction).
19. EMINENT DOMAIN.
19.1 SUBSTANTIAL TAKING. Subject to the provisions of Section 19.4 below, in
case the whole of the Premises, or such part thereof as shall substantially
interfere with Tenant's use and occupancy of the Premises as reasonably
determined by Landlord, shall be taken for any public or quasi-public purpose by
any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, either party
shall have the right to terminate this Lease effective as of the date possession
is required to be surrendered to said authority.
19.2 PARTIAL TAKING; ABATEMENT OF RENT. In the event of a taking of a portion of
the Premises which does not substantially interfere with the conduct of Tenant's
business, then, except as otherwise provided in the immediately following
sentence, neither party shall have the right to terminate this Lease and
Landlord shall thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Landlord receives proceeds
therefor from the condemning authority), and rent shall be abated with respect
to the part of the Premises which Tenant shall be so deprived on account of such
taking. Notwithstanding the immediately preceding sentence to the contrary, if
any part of the Building or the Project shall be taken (whether or not such
taking substantially interferes with Tenant's use of the Premises), Landlord may
terminate this Lease upon thirty (30) days' prior written notice to Tenant as
long as Landlord also terminates leases of all other tenants leasing comparably
sized space within the Building for comparable lease terms.
19.3 CONDEMNATION AWARD. Subject to the provisions of Section 19.4 below, in
connection with any taking of the Premises or the Building, Landlord shall be
entitled to receive the entire amount of any award which may be made or given in
such taking or condemnation, without deduction or apportionment for any estate
or interest of Tenant, it being expressly understood and agreed by Tenant that
no portion of any such award shall be allowed or paid to Tenant for any
so-called bonus or excess value of this Lease, and such bonus or excess value
shall be the sole property of Landlord. Tenant shall not assert any claim
against Landlord or the taking authority for any compensation because of such
taking (including any claim for bonus or excess value of this Lease); provided,
however, if any portion of the Premises is taken, Tenant shall be granted the
right to recover from the condemning authority (but not from Landlord) any
compensation as may be separately awarded or recoverable by Tenant for the
taking of Tenant's
-17-
23
furniture, fixtures, equipment and other personal property within the Premises,
for Tenant's relocation expenses, and for any loss of goodwill or other damage
to Tenant's business by reason of such taking.
19.4 TEMPORARY TAKING. In the event of a taking of the Premises or any part
thereof for temporary use, (a) this Lease shall be and remain unaffected thereby
and rent shall not ▇▇▇▇▇, and (b) Tenant shall be entitled to receive for itself
such portion or portions of any award made for such use with respect to the
period of the taking which is within the Term, provided that if such taking
shall remain in force at the expiration or earlier termination of this Lease,
Tenant shall perform its obligations under Section 9 with respect to surrender
of the Premises and shall pay to Landlord the portion of any award which is
attributable to any period of time beyond the Term expiration date. For purpose
of this Section 19.4, a temporary taking shall be defined as a taking for a
period of two hundred seventy (270) days or less.
19.5 WAIVER OF TERMINATION RIGHT. This Lease sets forth the terms and conditions
upon which this Lease may terminate in the event of a taking. Accordingly, the
parties waive the provisions of the California Code of Civil Procedure Section
1265.130 and any successor or similar statutes permitting the parties to
terminate this Lease as a result of a taking.
20. TENANT'S INSURANCE.
20.1 TYPES OF INSURANCE. On or before the earlier of the Commencement Date or
the date Landlord delivers possession of the Premises to Tenant, and continuing
thereafter until the expiration of the Term, Tenant shall obtain and keep in
full force and effect, the following insurance:
(a) Special Form (fka All Risk) insurance, including fire and extended
coverage, sprinkler leakage (including earthquake sprinkler leakage),
vandalism and malicious mischief coverage upon property of every
description and kind owned by Tenant and located in the Premises or the
Building, or for which Tenant is legally liable or installed by or on
behalf of Tenant including, without limitation, furniture, equipment and
any other personal property, and any Tenant Changes (but excluding the
Tenant Improvements and any Tenant Changes that Landlord elects to
insure pursuant to Section 12.1(b) above) , in an amount not less then
the full replacement cost thereof. In the event that there shall be a
dispute as to the amount which comprises full replacement cost, the
decision of Landlord or the mortgagees of Landlord shall be presumptive.
(b) Commercial general liability insurance coverage, on an occurrence basis,
including personal injury, bodily injury (including wrongful death),
broad form property damage, operations hazard, owner's protective
coverage, contractual liability (including Tenant's indemnification
obligations under this Lease, including Section 17 hereof), liquor
liability (if Tenant serves alcohol on the Premises), products and
completed operations liability, and owned/non-owned auto liability, with
a general aggregate of not less than Three Million Dollars ($3,000,000)
and with "umbrella" or "excess liability" coverage of not less than Five
Million Dollars ($5,000,000). The limits of such commercial general
liability insurance shall be increased every three (3) years during the
Term of this Lease to an amount reasonably required by Landlord.
(c) Worker's compensation and employer's liability insurance, in statutory
amounts and limits, covering all persons employed in connection with any
work done in, on or about the Premises for which claims for death or
bodily injury could be asserted against Landlord, Tenant or the
Premises.
(d) Loss of income, extra expense and business interruption insurance in
such amounts as will reimburse Tenant for direct or indirect loss of
earnings attributable to all perils commonly insured against by prudent
tenants or attributable to prevention of access to the Premises,
Tenant's parking areas or to the Building as a result of such perils.
(e) Any other form or forms of insurance as Tenant or Landlord or the
mortgagees of Landlord may reasonably require from time to time, in
form, amounts and for insurance risks against which a prudent tenant
would protect itself, but only to the extent (i) such risks and amounts
are available in the insurance market at commercially reasonable costs,
and (ii) such insurance is then-customarily required of similarly
situated tenants in similarly situated markets.
20.2 REQUIREMENTS. Each policy required to be obtained by Tenant hereunder
shall: (a) be issued by insurers which are approved by Landlord and/or
Landlord's mortgagees and are authorized to do business in the state in which
the Building is located and rated not less than financial class X, and not less
than policyholder rating A in the most recent version of Best's Key Rating Guide
(provided that, in any event, the same insurance company shall provide the
coverages described in Sections 20.1(a) and 20.1(d) above); (b) be in form
reasonably satisfactory from time to time to Landlord; (c) name Tenant as named
insured thereunder and shall name Landlord and, at Landlord's request, such
other persons or entities of which Tenant has been informed in writing, as
additional insureds thereunder, all as their respective interests may appear;
(d) not have a deductible amount exceeding Five Thousand Dollars ($5,000.00),
which deductible amount shall be deemed self-insured with full waiver of
subrogation; (e) specifically provide that the insurance afforded by such policy
for the benefit of additional insureds shall be primary, and any insurance
carried by the additional insureds shall be excess and non-contributing; (f)
contain an endorsement that the insurer waives its right to subrogation as
described in Section 22 below; (g) require the insurer to notify Landlord and
the other additional insureds in writing not less than thirty (30) days prior to
any material change, reduction in coverage, cancellation or other termination
thereof;
-18-
24
(h) contain a cross liability or severability of interest endorsement; (i) be in
amounts sufficient at all times to satisfy any coinsurance requirements thereof
and (j) provide that any loss otherwise payable thereunder shall be payable
notwithstanding any act or omission of Landlord or Tenant which might, absent
such provision, result in a forfeiture of all or a part of such insurance
payment. Tenant agrees to deliver to Landlord, as soon as practicable after the
placing of the required insurance, but in no event later than the date Tenant is
required to obtain such insurance as set forth in Section 20.1 above,
certificates from the insurance company evidencing the existence of such
insurance and Tenant's compliance with the foregoing provisions of this Section
20. Tenant shall cause replacement certificates to be delivered to Landlord not
less than thirty (30) days prior to the expiration of any such policy or
policies. If any such initial or replacement certificates are not furnished
within the time(s) specified herein, Tenant shall be deemed to be in material
default under this Lease without the benefit of any additional notice or cure
period provided in Section 23.1 below, and Landlord shall have the right, but
not the obligation, to procure such policies and certificates at Tenant's
expense.
20.3 EFFECT ON INSURANCE. Tenant shall not do or permit to be done anything
which will (a) violate or invalidate any insurance policy maintained by Landlord
or Tenant hereunder, or (b) increase the costs of any insurance policy
maintained by Landlord pursuant to Section 21 or otherwise with respect to the
Building or the Project. If Tenant's occupancy or conduct of its business in or
on the Premises results in any increase in premiums for any insurance carried by
Landlord with respect to the Building or the Project, Tenant shall pay such
increase as additional rent within ten (10) days after being billed therefor by
Landlord. If any insurance coverage carried by Landlord pursuant to Section 21
or otherwise with respect to the Building or the Project shall be cancelled or
reduced (or cancellation or reduction thereof shall be threatened) by reason of
the use or occupancy of the Premises by Tenant or by anyone permitted by Tenant
to be upon the Premises, and if Tenant fails to remedy such condition within
five (5) days after notice thereof and such notice informed Tenant that such
failure would result in Tenant being in default under this Lease, Tenant shall
be deemed to be in default under this Lease, without the benefit of any
additional notice or cure period specified in Section 23.1 below, and Landlord
shall have all remedies provided in this Lease, at law or in equity, including,
without limitation, the right (but not the obligation) to enter upon the
Premises and attempt to remedy such condition at Tenant's cost.
21. LANDLORD'S INSURANCE. During the Term, Landlord shall insure the Common Area
improvements, the Building, the Premises and the Tenant Improvements (excluding,
however, Tenant's furniture, equipment and other personal property and Tenant
Changes, unless Landlord otherwise elects to insure the Tenant Changes pursuant
to Section 12.1(b) above) against damage by fire and standard extended coverage
perils and with vandalism and malicious mischief endorsements, rental loss
coverage, at Landlord's option, earthquake damage coverage, and such additional
coverage as Landlord deems appropriate. Landlord shall also carry commercial
general liability insurance, in such reasonable amounts and with such reasonable
deductibles as would be carried by a prudent owner of a similar building in the
state in which the Building is located. At Landlord's option, all such insurance
may be carried under any blanket or umbrella policies which Landlord has in
force for other buildings and projects. In addition, at Landlord's option,
Landlord may elect to self-insure all or any part of such required insurance
coverage provided that Landlord has a net worth of at least Fifty Million
Dollars ($50,000,000.00) and if Landlord so elects to self-insure, for purposes
of this Lease Landlord shall be deemed to have carried that portion of the
insurance that it has elected to self-insure. Landlord may, but shall not be
obligated to, carry any other form or forms of insurance as Landlord or the
mortgagees or ground lessors of Landlord may reasonably determine is advisable.
The cost of insurance obtained by Landlord pursuant to this Section 21
(including self-insured amounts and deductibles) shall be included in Operating
Expenses.
22. WAIVERS OF SUBROGATION.
22.1 MUTUAL WAIVER OF PARTIES. Landlord and Tenant hereby waive their rights
against each other with respect to any claims or damages or losses which are
caused by or result from (a) occurrences insured against under any insurance
policy (other than commercial general liability insurance) carried by Landlord
or Tenant (as the case may be) pursuant to the provisions of this Lease and
enforceable at the time of such damage or loss, or (b) occurrences which would
have been covered under any insurance (other than commercial general liability
insurance) required to be obtained and maintained by Landlord or Tenant (as the
case may be) under Sections 20 and 21 of this Lease (as applicable) had such
insurance been obtained and maintained as required therein. The foregoing
waivers shall be in addition to, and not a limitation of, any other waivers or
releases contained in this Lease.
22.2 WAIVER OF INSURERS. Each party shall cause each insurance policy (other
than commercial general liability insurance) required to be obtained by it
pursuant to Sections 20 and 21 to provide that the insurer waives all rights of
recovery by way of subrogation against either Landlord or Tenant, as the case
may be, in connection with any claims, losses and damages covered by such
policy. If either party fails to maintain any such insurance required hereunder,
such insurance shall be deemed to be self-insured with a deemed full waiver of
subrogation as set forth in the immediately preceding sentence.
23. TENANT'S DEFAULT AND LANDLORD'S REMEDIES.
23.1 TENANT'S DEFAULT. The occurrence of any one or more of the following events
shall constitute a default under this Lease by Tenant:
(a) intentionally omitted;
-19-
25
(b) the failure by Tenant to make any payment of rent or additional rent or
any other payment required to be made by Tenant hereunder, where such
failure continues for three (3) days after written notice thereof from
Landlord that such payment was not received;
(c) the failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in Sections 23.1(a) or (b)
above, where such failure shall continue for a period of ten (10) days
after written notice thereof from Landlord to Tenant; provided, however,
that if the nature of Tenant's default is such that it may be cured but
more than ten (10) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant shall commence
such cure within said ten (10) day period and thereafter diligently
prosecute such cure to completion, which completion shall occur not
later than sixty (60) days from the date of such notice from Landlord;
and
(d) (i) the making by Tenant or any guarantor hereof of any general
assignment for the benefit of creditors, (ii) the filing by or against
Tenant or any guarantor hereof of a petition to have Tenant or any
guarantor hereof adjudged a bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of
a petition filed against Tenant or any guarantor hereof, the same is
dismissed within sixty (60) days), (iii) the appointment of a trustee or
receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease or of
substantially all of guarantor's assets, where possession is not
restored to Tenant or guarantor within sixty (60) days, or (iv) the
attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of substantially all of
guarantor's assets or of Tenant's interest in this Lease where such
seizure is not discharged within sixty (60) days.
(e) any material representation or warranty made by Tenant or guarantor in
this Lease or any other document delivered in connection with the
execution and delivery of this Lease or pursuant to this Lease proves to
be incorrect in any material respect; or
(f) Tenant or any guarantor hereof shall be liquidated or dissolved or shall
begin proceedings towards its liquidation or dissolution.
Any notice sent by Landlord to Tenant pursuant to this Section 23.1 shall be in
lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161.
23.2 LANDLORD'S REMEDIES; TERMINATION. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall have the immediate option to
terminate this Lease and all rights of Tenant hereunder. In the event that
Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:
(a) the worth at the time of award of any unpaid rent which had been earned
at the time of such termination; plus
(b) the worth at the time of the award of the amount by which the unpaid
rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; plus
(c) the worth at the time of award of the amount by which the unpaid rent
for the balance of the term after the time of award exceeds the amount
of such rental loss that Tenant proves could be reasonably avoided; plus
(d) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under
this Lease or which, in the ordinary course of things, would be likely
to result therefrom including, but not limited to: unamortized Tenant
Improvement costs; attorneys' fees; unamortized brokers' commissions;
the costs of refurbishment, alterations, renovation and repair of the
Premises; and removal (including the repair of any damage caused by such
removal) and storage (or disposal) of Tenant's personal property,
equipment, fixtures, Tenant Changes, Tenant Improvements and any other
items which Tenant is required under this Lease to remove but does not
remove.
As used in Sections 23.2(a) and 23.2(b) above, the "worth at the time of award"
is computed by allowing interest at the Interest Rate set forth in Section 1.14
of the Summary. As used in Section 23.2(c) above, the "worth at the time of
award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
23.3 LANDLORD'S REMEDIES; RE-ENTRY RIGHTS. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall also have the right, with or without
terminating this Lease, to re-enter the Premises and remove all persons and
property from the Premises; such property may be removed, stored and/or disposed
of pursuant to Section 12.4 of this Lease or any other procedures permitted by
applicable law. No re-entry or taking possession of the Premises by Landlord
pursuant to this Section 23.3, and no acceptance of surrender of the Premises or
other action on Landlord's part, shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.
-20-
26
23.4 LANDLORD'S REMEDIES; CONTINUATION OF LEASE. In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord shall have the right to continue this
Lease in full force and effect, whether or not Tenant shall have abandoned the
Premises. The foregoing remedy shall also be available to Landlord pursuant to
California Civil Code Section 1951.4 and any successor statute thereof in the
event Tenant has abandoned the Premises. In the event Landlord elects to
continue this Lease in full force and effect pursuant to this Section 23.4, then
Landlord shall be entitled to enforce all of its rights and remedies under this
Lease, including the right to recover rent as it becomes due. Landlord's
election not to terminate this Lease pursuant to this Section 23.4 or pursuant
to any other provision of this Lease, at law or in equity, shall not preclude
Landlord from subsequently electing to terminate this Lease or pursuing any of
its other remedies.
23.5 LANDLORD'S RIGHT TO PERFORM. Except as specifically provided otherwise in
this Lease, all covenants and agreements by Tenant under this Lease shall be
performed by Tenant at Tenant's sole cost and expense and without any abatement
or offset of rent. If Tenant shall fail to pay any sum of money (other than
Basic Rent) or perform any other act on its part to be paid or performed
hereunder and such failure shall continue for three (3) days with respect to
monetary obligations (or ten (10) days with respect to non-monetary obligations
(except in case of emergencies, in which such case, such shorter period of time
as is reasonable under the circumstances)) after Tenant's receipt of written
notice thereof from Landlord, Landlord may, without waiving or releasing Tenant
from any of Tenant's obligations, make such payment or perform such other act on
behalf of Tenant. All sums so paid by Landlord and all necessary incidental
costs incurred by Landlord in performing such other acts shall be payable by
Tenant to Landlord within five (5) days after demand therefor as additional
rent.
23.6 INTEREST. If any monthly installment of Basic Rent or Common Area Expenses,
or any other amount payable by Tenant hereunder is not received by Landlord by
the date when due, it shall bear interest at the Interest Rate set forth in
Section 1.14 of the Summary from the date due until paid. All interest, and any
late charges imposed pursuant to Section 23.7 below, shall be considered
additional rent due from Tenant to Landlord under the terms of this Lease.
23.7 LATE CHARGES. Tenant acknowledges that, in addition to interest costs, the
late payments by Tenant to Landlord of any rent or other sums due under this
Lease will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of such costs being extremely difficult and impractical to fix.
Such other costs include, without limitation, processing, administrative and
accounting charges and late charges that may be imposed on Landlord by the terms
of any mortgage, deed of trust or related loan documents encumbering the
Premises, the Building or the Project. Accordingly, if any rent or any other
amount payable by Tenant hereunder is not received by Landlord by the due date
thereof, Tenant shall pay to Landlord an additional sum of ten percent (10%) of
the overdue amount as a late charge, but in no event more than the maximum late
charge allowed by law; provided, however, for the first two (2) times in any
consecutive twelve (12) month period, such late charge shall not be payable
unless Tenant fails to make such payment within three (3) days following the
date Tenant receives written notice from Landlord that such Rent is past due.
The parties agree that such late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of any late payment as
hereinabove referred to by Tenant, and the payment of late charges and interest
are distinct and separate in that the payment of interest is to compensate
Landlord for the use of Landlord's money by Tenant, while the payment of late
charges is to compensate Landlord for Landlord's processing, administrative and
other costs incurred by Landlord as a result of Tenant's delinquent payments.
Acceptance of a late charge or interest shall not constitute a waiver of
Tenant's default with respect to the overdue amount or prevent Landlord from
exercising any of the other rights and remedies available to Landlord under this
Lease or at law or in equity now or hereafter in effect.
23.8 INTENTIONALLY DELETED.
23.9 RIGHTS AND REMEDIES CUMULATIVE. All rights, options and remedies of
Landlord contained in this Section 23 and elsewhere in this Lease shall be
construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law or in
equity, whether or not stated in this Lease. Nothing in this Section 23 shall be
deemed to limit or otherwise affect Tenant's indemnification of Landlord
pursuant to any provision of this Lease.
23.10 TENANT'S WAIVER OF REDEMPTION. Tenant hereby waives and surrenders for
itself and all those claiming under it, including creditors of all kinds, (i)
any right and privilege which it or any of them may have under any present or
future law to redeem any of the Premises or to have a continuance of this Lease
after termination of this Lease or of Tenant's right of occupancy or possession
pursuant to any court order or any provision hereof, and (ii) the benefits of
any present or future law which exempts property from liability for debt or for
distress for rent.
23.11 COSTS UPON DEFAULT AND LITIGATION. Tenant shall pay to Landlord and its
mortgagees as additional rent all the expenses incurred by Landlord or its
mortgagees in connection with any default by Tenant hereunder or the exercise of
any remedy by reason of any default by Tenant hereunder, including reasonable
attorneys' fees and expenses. If Landlord or its mortgagees shall be made a
party to any litigation commenced against Tenant or any litigation pertaining to
this Lease or the Premises, at the option of Landlord and/or its mortgagees,
Tenant, at its expense, shall provide Landlord and/or its mortgagees with
counsel approved by Landlord and/or its mortgagees and shall pay all reasonable
costs incurred or paid by Landlord and/or its mortgagees in connection with such
litigation.
-21-
27
24. LANDLORD'S DEFAULT. Landlord shall not be in default in the performance of
any obligation required to be performed by Landlord under this Lease unless
Landlord has failed to perform such obligation within thirty (30) days after the
receipt of written notice from Tenant specifying in detail Landlord's failure to
perform; provided however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, then Landlord
shall not be deemed in default if it commences such performance within such
thirty (30) day period and thereafter diligently pursues the same to completion.
Upon any such uncured default by Landlord, Tenant may exercise any of its rights
provided in law or at equity; provided, however: (a) Tenant shall have no right
to offset or ▇▇▇▇▇ rent in the event of any default by Landlord under this
Lease, except to the extent offset rights are specifically provided to Tenant in
this Lease; (b) Tenant shall have no right to terminate this Lease; (c) Tenant's
rights and remedies hereunder shall be limited to the extent (i) Tenant has
expressly waived in this Lease any of such rights or remedies and/or (ii) this
Lease otherwise expressly limits Tenant's rights or remedies, including the
limitation on Landlord's liability contained in Section 31 hereof and (d) in no
event shall Landlord be liable for consequential damages or loss of business
profits.
25. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee of a mortgage or a beneficiary of a deed
of trust now or hereafter encumbering all or any portion of the Building or the
Project, or any lessor of any ground or master lease now or hereafter affecting
all or any portion of the Building or the Project, this Lease shall be subject
and subordinate at all times to such ground or master leases (and such
extensions and modifications thereof), and to the lien of such mortgages and
deeds of trust (as well as to any advances made thereunder and to all renewals,
replacements, modifications and extensions thereof); provided that with regard
to any future deed of trust or ground lease, such subordination shall be
conditioned upon Tenant's possession of the Premises not being disturbed so long
as Tenant is not in default under this Lease. Notwithstanding the foregoing,
Landlord shall have the right to subordinate or cause to be subordinated any or
all ground or master leases or the lien of any or all mortgages or deeds of
trust to this Lease. In the event that any ground or master lease terminates for
any reason or any mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, at the election of Landlord's
successor in interest, Tenant shall attorn to and become the tenant of such
successor. Tenant hereby waives its rights under any current or future law which
gives or purports to give Tenant any right to terminate or otherwise adversely
affect this Lease and the obligations of Tenant hereunder in the event of any
such foreclosure proceeding or sale. Tenant covenants and agrees to execute and
deliver to Landlord within ten (10) days after receipt of written demand by
Landlord and in the form reasonably required by Landlord, any additional
documents evidencing the priority or subordination of this Lease with respect to
any such ground or master lease or the lien of any such mortgage or deed of
trust or Tenant's agreement to attorn. Should Tenant fail to sign and return any
such documents within said ten (10) day period, Tenant shall be in default
hereunder without the benefit of any additional notice or cure periods specified
in Section 23.1 above.
26. ESTOPPEL CERTIFICATE.
26.1 TENANT'S OBLIGATIONS. Within ten (10) days following Landlord's
written request, Tenant shall execute and deliver to Landlord an
estoppel certificate, in a form substantially similar to the
form of Exhibit "F" attached hereto, certifying: (a) the
Commencement Date of this Lease; (b) that this Lease is
unmodified and in full force and effect (or, if modified, that
this Lease is in full force and effect as modified, and stating
the date and nature of such modifications); (c) the date to
which the rent and other sums payable under this Lease have been
paid; (d) that there are not, to the best of Tenant's knowledge,
any defaults under this Lease by either Landlord or Tenant,
except as specified in such certificate; and (e) such other
matters as are reasonably requested by Landlord. Any such
estoppel certificate delivered pursuant to this Section 26.1 may
be relied upon by any mortgagee, beneficiary, purchaser or
prospective purchaser of any portion of the Project, as well as
their assignees.
26.2 TENANT'S FAILURE TO DELIVER. Tenant's failure to deliver such estoppel
certificate within such time shall constitute a default hereunder without the
applicability of the notice and cure periods specified in Section 23.1 above and
shall be conclusive upon Tenant that: (a) this Lease is in full force and effect
without modification, except as may be represented by Landlord; (b) there are no
uncured defaults in Landlord's or Tenant's performance (other than Tenant's
failure to deliver the estoppel certificate); and (c) not more than one (1)
month's rental has been paid in advance.
27. INTENTIONALLY DELETED.
28. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS.
28.1 MODIFICATIONS. If, in connection with Landlord's obtaining or entering into
any financing or ground lease for any portion of the Building or the Project,
the lender or ground lessor shall request modifications to this Lease, Tenant
shall, within ten (10) days after request therefor, execute an amendment to this
Lease including such modifications, provided such modifications are reasonable,
do not increase the obligations of Tenant hereunder, or adversely affect the
leasehold estate created hereby or Tenant's rights hereunder.
28.2 CURE RIGHTS. In the event of any default on the part of Landlord, Tenant
will give notice by registered or certified mail to any beneficiary of a deed of
trust or mortgagee covering the Premises or ground lessor of Landlord whose
address shall have been furnished to Tenant, and shall offer such beneficiary,
mortgagee or ground lessor a reasonable opportunity to cure the default
(including with
-22-
28
respect to any such beneficiary or mortgagee, time to obtain possession of the
Premises, subject to this Lease and Tenant's rights hereunder, if such should
prove necessary to effect a cure).
29. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that, upon Tenant
performing all of the covenants and provisions on Tenant's part to be observed
and performed under this Lease (including payment of rent hereunder), Tenant
shall and may peaceably and quietly have, hold and enjoy the Premises in
accordance with and subject to the terms and conditions of this Lease as against
all persons claiming by, through or under Landlord.
30. TRANSFER OF LANDLORD'S INTEREST. The term "Landlord" as used in this Lease,
so far as covenants or obligations on the part of the Landlord are concerned,
shall be limited to mean and include only the owner or owners, at the time in
question, of the fee title to, or a lessee's interest in a ground lease of, the
Project. In the event of any transfer or conveyance of any such title or
interest (other than a transfer for security purposes only), the transferor
shall be automatically relieved of all covenants and obligations on the part of
Landlord contained in this Lease arising after the date of such transfer or
conveyance. Landlord and Landlord's transferees and assignees shall have the
absolute right to transfer all or any portion of their respective title and
interest in the Project, the Building, the Premises and/or this Lease without
the consent of Tenant, and such transfer or subsequent transfer shall not be
deemed a violation on Landlord's part of any of the terms and conditions of this
Lease.
31. LIMITATION ON LANDLORD'S LIABILITY. Notwithstanding anything contained in
this Lease to the contrary, the obligations of Landlord under this Lease
(including any actual or alleged breach or default by Landlord) do not
constitute personal obligations of the individual partners, directors, officers
or shareholders of Landlord or Landlord's partners, and Tenant shall not seek
recourse against the individual partners, directors, officers or shareholders of
Landlord or Landlord's partners, or any of their personal assets for
satisfaction of any liability with respect to this Lease. In addition, in
consideration of the benefits accruing hereunder to Tenant and notwithstanding
anything contained in this Lease to the contrary, Tenant hereby covenants and
agrees for itself and all of its successors and assigns that, except for any
security deposit, insurance proceeds or condemnation proceeds actually paid to
and received by Landlord, the liability of Landlord for its obligations under
this Lease (including any liability as a result of any actual or alleged
failure, breach or default hereunder by Landlord), shall be limited solely to,
and Tenant's and its successors' and assigns' sole and exclusive remedy shall be
against, Landlord's interest in the Project, and no other assets of Landlord.
32. MISCELLANEOUS.
32.1 GOVERNING LAW. This Lease shall be governed by, and construed pursuant to,
the laws of the state in which the Premises are located.
32.2 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 30 above, and
except as otherwise provided in this Lease, all of the covenants, conditions and
provisions of this Lease shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective heirs, personal representatives and
permitted successors and assigns; provided, however, no rights shall inure to
the benefit of any Transferee of Tenant unless the Transfer to such Transferee
is made in compliance with the provisions of Section 14, and no options or other
rights which are expressly made personal to the original Tenant hereunder or in
any rider attached hereto shall be assignable to or exercisable by anyone other
than the original Tenant under this Lease.
32.3 NO MERGER. The voluntary or other surrender of this Lease by Tenant or a
mutual termination thereof shall not work as a merger and shall, at the option
of Landlord, either (a) terminate all or any existing subleases, or (b) operate
as an assignment to Landlord of Tenant's interest under any or all such
subleases.
32.4 PROFESSIONAL FEES. If either Landlord or Tenant should bring suit or
arbitration against the other with respect to this Lease, including for unlawful
detainer or any other relief against the other hereunder, then all costs and
expenses incurred by the prevailing party therein (including, without
limitation, its actual appraisers', accountants', attorneys' and other
professional fees, expenses and court costs), shall be paid by the other party.
32.5 WAIVER. The waiver by either party of any breach by the other party of any
term, covenant or condition herein contained shall not be deemed to be a waiver
of any subsequent breach of the same or any other term, covenant and condition
herein contained, nor shall any custom or practice which may become established
between the parties in the administration of the terms hereof be deemed a waiver
of, or in any way affect, the right of any party to insist upon the performance
by the other in strict accordance with said terms. No waiver of any default of
either party hereunder shall be implied from any acceptance by Landlord or
delivery by Tenant (as the case may be) of any rent or other payments due
hereunder or any omission by the non-defaulting party to take any action on
account of such default if such default persists or is repeated, and no express
waiver shall affect defaults other than as specified in said waiver. The
subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding breach by Tenant of any term, covenant or condition of
this Lease other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.
-23-
29
32.6 TERMS AND HEADINGS. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. Words used in any gender include
other genders. The Section headings of this Lease are not a part of this Lease
and shall have no effect upon the construction or interpretation of any part
hereof. Any deletion of language from this Lease prior to its execution by
Landlord and Tenant shall not be construed to raise any presumption, canon of
construction or implication, including, without limitation, any implication that
the parties intended thereby to state the converse of the deleted language.
32.7 TIME. Time is of the essence with respect to performance of every provision
of this Lease in which time or performance is a factor. All references in this
Lease to "days" shall mean calendar days unless specifically modified herein to
be "business" days.
32.8 PRIOR AGREEMENTS; AMENDMENTS. This Lease, including the Summary and all
Exhibits and Riders attached hereto contains all of the covenants, provisions,
agreements, conditions and understandings between Landlord and Tenant concerning
the Premises and any other matter covered or mentioned in this Lease, and no
prior agreement or understanding, oral or written, express or implied,
pertaining to the Premises or any such other matter shall be effective for any
purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective successors
in interest. The parties acknowledge that all prior agreements, representations
and negotiations are deemed superseded by the execution of this Lease to the
extent they are not expressly incorporated herein.
32.9 SEPARABILITY. The invalidity or unenforceability of any provision of this
Lease (except for Tenant's obligation to pay Basic Rent and Operating Expenses
under Sections 3 and 4 hereof) shall in no way affect, impair or invalidate any
other provision hereof, and such other provisions shall remain valid and in full
force and effect to the fullest extent permitted by law.
32.10 RECORDING. Neither Landlord nor Tenant shall record this Lease. In
addition, neither party shall record a short form memorandum of this Lease.
32.11 EXHIBITS AND RIDERS. All Exhibits and Riders attached to this Lease are
hereby incorporated in this Lease for all purposes as though set forth at length
herein.
32.12 AUCTIONS. Tenant shall have no right to conduct any auction in, on or
about the Premises, the Building or the Project.
32.13 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of a
lesser amount than the rent payment herein stipulated shall be deemed to be
other than on account of the rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such rent or pursue any
other remedy provided in this Lease. Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by any statute or at common law.
32.14 FINANCIAL STATEMENTS. Upon ten (10) days prior written request from
Landlord (which Landlord may make at any time during the Term but no more often
than once in any calendar year), Tenant shall deliver to Landlord a current
financial statement of Tenant and any guarantor of this Lease. Such statements
shall be prepared in accordance with generally acceptable accounting principles
and certified as true in all material respects by Tenant (if Tenant is an
individual) or by an authorized officer of Tenant (if Tenant is a corporation or
limited liability company) or a general partner of Tenant (if Tenant is a
partnership).
32.15 NO PARTNERSHIP. Landlord does not, in any way or for any purpose, become a
partner of Tenant in the conduct of its business, or otherwise, or joint
venturer or a member of a joint enterprise with Tenant by reason of this Lease.
32.16 FORCE MAJEURE. In the event that either party hereto shall be delayed or
hindered in or prevented from the performance of any act required hereunder by
reason of strikes, lock-outs, labor troubles, inability to procure materials,
failure of power, governmental moratorium or other governmental action or
inaction (including failure, refusal or delay in issuing permits, approvals
and/or authorizations), injunction or court order, riots, insurrection, war,
fire, earthquake, flood or other natural disaster or other reason of a like
nature not the fault of the party delaying in performing work or doing acts
required under the terms of this Lease (but excluding delays due to financial
inability) (herein collectively, "FORCE MAJEURE DELAYS"), then performance of
such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay. The provisions of this Section 32.16 shall not apply to
nor operate to excuse Tenant from the payment of Basic Rent, Operating Expenses,
percentage rent, if any, additional rent or any other payments strictly in
accordance with the terms of this Lease.
32.17 COUNTERPARTS. This Lease may be executed in one or more counterparts, each
of which shall constitute an original and all of which shall be one and the same
agreement.
32.18 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees that the
terms of this Lease are confidential and constitute proprietary information of
Landlord. Disclosure of the terms could adversely affect the ability of Landlord
to negotiate other leases and impair Landlord's relationship with
-24-
30
other tenants. Accordingly, Tenant agrees that it, and its partners, officers,
directors, employees, agents and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any newspaper or
other publication or any other tenant or apparent prospective tenant of the
Building or other portion of the Project, or real estate agent, either directly
or indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease, or if required by law or applicable legal process, including,
without limitation, any regulations of the Securities and Exchange Commission.
32.19 NON-DISCRIMINATION. Tenant acknowledges and agrees that there shall be no
discrimination against, or segregation of, any person, group of persons, or
entity on the basis of race, color, creed, religion, age, sex, marital status,
national origin, or ancestry in the leasing, subleasing, transferring,
assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.
33. LEASE EXECUTION.
33.1 TENANT'S AUTHORITY. If Tenant executes this Lease as a limited liability
company, partnership or corporation, then Tenant and the persons and/or entities
executing this Lease on behalf of Tenant represent and warrant that: (a) Tenant
is a duly organized and validly existing limited liability company, partnership
or corporation, as the case may be, and is qualified to do business in the state
in which the Premises are located; (b) such persons and/or entities executing
this Lease are duly authorized to execute and deliver this Lease on Tenant's
behalf in accordance with the Tenant's operating agreement (if Tenant is a
limited liability company), Tenant's partnership agreement (if Tenant is a
partnership), or a duly adopted resolution of Tenant's board of directors and
Tenant's by-laws (if Tenant is a corporation); and (c) this Lease is binding
upon Tenant in accordance with its terms. Concurrently with Tenant's execution
and delivery of this Lease to Landlord and/or at any time during the Lease Term
within ten (10) days of Landlord's request, Tenant shall provide to Landlord a
copy of any documents reasonably requested by Landlord evidencing such
qualification, organization, existence and authorization.
33.2 JOINT AND SEVERAL LIABILITY. If more than one person or entity executes
this Lease as Tenant: (a) each of them is and shall be jointly and severally
liable for the covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant; and (b) the act or signature of, or
notice from or to, any one or more of them with respect to this Lease shall be
binding upon each and all of the persons and entities executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or
signed, or given or received such notice.
33.3 GUARANTY. This Lease is subject to and conditional upon Tenant's delivery
to Landlord, concurrently with Tenant's execution and delivery of this Lease, of
a Guaranty in the form of and upon the terms contained in Exhibit "G" attached
hereto and incorporated herein by this reference, which shall be fully executed
by the Guarantor specified in Section 1.16 of the Summary.
33.4 NO OPTION. The submission of this Lease for examination or execution by
Tenant does not constitute a reservation of or option for the Premises and this
Lease shall not become effective as a Lease until it has been executed by
Landlord and delivered to Tenant.
34. WAIVER OF JURY TRIAL. Each Party hereby waives any right to a trial by jury
in any action seeking specific performance of any provision of this Lease, for
damages for any breach under this Lease, or otherwise for enforcement of any
right or remedy hereunder.
[signatures on next page]
-25-
31
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.
"TENANT" eHNC,
a Delaware corporation
*By:
----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
*By:
----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
"LANDLORD" LBA VF-I, LLC, a California limited
liability company
By: LBA, Inc., a California
corporation, its authorized
agent
*By:
---------------------------------
Name:
----------------------------
Title:
----------------------------
--------
*NOTE:
IF TENANT IS A CALIFORNIA CORPORATION, then one of the following alternative
requirements must be satisfied:
(A) This Lease must be signed by two (2) officers of such corporation: one
being the chairman of the board, the president or a vice president, and
the other being the secretary, an assistant secretary, the chief
financial officer or an assistant treasurer. If one (1) individual is
signing in two (2) of the foregoing capacities, that individual must
sign twice; once as one officer and again as the other officer.
(B) If there is only one (1) individual signing in two (2) capacities, or if
the two (2) signatories do not satisfy the requirements of (A) above,
then Tenant shall deliver to Landlord a certified copy of a corporate
resolution in the form reasonably acceptable to Landlord authorizing the
signatory(ies) to execute this Lease.
IF TENANT IS A CORPORATION INCORPORATED IN A STATE OTHER THAN CALIFORNIA, then
Tenant shall deliver to Landlord a certified copy of a corporate resolution in
the form reasonably acceptable to Landlord authorizing the signatory(ies) to
execute this Lease.
-26-
32
PROJECT SITE
[MAP]
EXHIBIT "A"
-1-
33
FLOOR PLAN
[MAP]
EXHIBIT "B"
-1-
34
TENANT WORK LETTER
1. Tenant shall, at Tenant's sole cost and expense (but subject to
reimbursement by Landlord pursuant to Paragraph 6 below), improve the Premises
in accordance with plans and specifications approved in writing by Landlord and
in accordance with the requirements of all laws. It is contemplated by the
parties that the improvements to the Premises (the "TENANT IMPROVEMENTS") will
be as described or depicted on Schedule 1 attached hereto (the "PRELIMINARY
PLANS"). Within thirty (30) days following the date of the Lease, Tenant shall
provide to Landlord working drawings for the Tenant Improvements (and any
signage) based upon and conforming with the Preliminary Plans and prepared by a
licensed architect or engineer reasonably approved by Landlord. If Tenant
chooses to use ▇▇▇▇▇▇ ▇▇▇▇ as its architect, such architect is approved by
Landlord. Within five (5) business days of Landlord's receipt of such working
drawings, Landlord shall notify Tenant of any required changes to the working
drawings. Landlord's failure to so notify Tenant of any such required changes to
the working drawings within said fifteen (15) day period shall be deemed to
constitute Landlord's approval thereof. Tenant shall revise the working drawings
in accordance with Landlord's comments and deliver the same to Landlord within
ten (10) days of Tenant's receipt of Landlord's comments. Tenant shall, at its
sole cost and expense, be responsible for obtaining all permits and approvals
from governmental authorities necessary for the construction of such
improvements and the operation of Tenant's business. Landlord will reasonably
cooperate with Tenant (at no cost to Landlord) in Tenant's efforts to obtain all
such permits and approvals. Landlord makes no representation concerning the
availability of such permits or approvals.
2. No improvement of any kind to the Premises shall be erected or
maintained unless and until the plans, specifications and proposed location of
such improvement have been approved in writing by Landlord, which approval shall
not be unreasonably withheld or delayed. Landlord's review and approval of the
plans and specifications for the improvements shall create no liability or
responsibility on the part of Landlord for the completeness of such plans or
their design sufficiency or compliance with Laws.
3. Except for Landlord's reimbursement pursuant to Paragraph 6 below,
Landlord shall not be responsible for any costs associated with Tenant's
construction of any improvements and Tenant acknowledges that Tenant is
accepting the Premises in their "as-is" and "where-is" state, subject to
Landlord's obligations under Sections 11.2 and 11.3 of the Lease.
4. No work of any kind shall be commenced on and no building or other
material shall be delivered until at least five (5) business days after written
notice has been given by Tenant to Landlord of the commencement of such work or
the delivery of such materials.
5. The improvements shall be constructed, and all work performed on the
Premises, shall be in accordance with all laws. All work performed on the
Premises shall be done in a good, workmanlike and lien free manner and only with
new materials of good quality and high standards. All work required in the
construction of the improvements shall be performed only by competent
contractors duly licensed as such under the laws of the State of California and
reasonably approved by Landlord. Tenant will competitively bid the general
conditions and fees for the construction with contractors approved by Landlord.
Tenant shall then enter into a construction contract approved by Landlord (which
approval shall not be unreasonably withheld or delayed) with the selected
contractor to construct the Tenant Improvements, which contract will (i) name
Landlord as a third party beneficiary (ii) permit an assignment to Landlord, at
Landlord's election, upon a default by Tenant under the Lease and (iii) provide
that the contractor will guarantee that the Tenant Improvements will be free
from any defects in workmanship and materials for at lease one (1) year
following substantial completion. Tenant shall be responsible for all aspects of
coordinating the construction management, including obtaining and paying for
utilities consumed during construction.
6. Landlord agrees to contribute the sum ("ALLOWANCE") of up to Five
Hundred Thirty Thousand Dollars ($530,000.00) toward the cost of the Tenant
Improvements. Landlord shall only be obligated to make disbursements from the
Allowance to the extent costs are incurred by Tenant for the following items and
costs (collectively, the "TENANT IMPROVEMENT ALLOWANCE ITEMS"):
(a) Payment of the fees of Tenant's architect and engineers in connection
with the preparation of the plans and specifications and final working
drawings;
(b) The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements; and
(c) The cost of construction of the Tenant Improvements.
Provided Tenant is not in default under the Lease (and no circumstance
exists that would, with notice or lapse of time, or both, constitute a default
under the Lease), Landlord shall make periodic disbursements (but no more often
than monthly) of the Allowance for Tenant Improvements. Landlord may, at its
election, make disbursement checks payable jointly to Tenant and the contractor
or other payee, as applicable. As to each disbursement, the appropriate portion
of the Allowance shall be disbursed to Tenant (less 10% retention) only when
Landlord has received the following ("EVIDENCE OF COMPLETION"):
EXHIBIT "C"
-1-
35
(a) Tenant has delivered to Landlord a draw request ("DRAW REQUEST") in the
form of AIA Document G702 and G703 (or other form acceptable to
Landlord) specifying that the requisite portion of Tenant Improvements
has been completed, together with invoices, receipts and bills
evidencing the costs and expenses set forth in such Draw Request. The
Draw Request shall constitute a representation by Tenant that the Tenant
Improvements identified therein have been completed in a good and
workmanlike manner and in accordance with the approved plans;
(b) The architect for the Tenant Improvements has certified to Landlord that
the Tenant Improvements have been completed to the level indicated in
the Draw Request in accordance with the approved plans;
(c) Tenant has delivered to Landlord conditional lien releases from the
contractor and all relevant subcontractors and materialmen with respect
to work covered by the current Draw Request and unconditional lien
releases from the contractor and all relevant subcontractors and
materialmen with respect to work covered by prior Draw Requests;
(d) Landlord or Landlord's architect or construction representative has
inspected the Tenant Improvements and determined that the portion of the
Tenant Improvements covered by the Draw Request has been completed in a
good and workmanlike manner, and Landlord is satisfied, in its
reasonable judgment, that the cost to complete the Tenant Improvements
does not exceed the remaining Allowance and other sums available to
Tenant for the payment of such costs.
The final disbursement of the balance of the Allowance (i.e., the
retention) shall be disbursed only when Landlord has received Evidence of
Completion as to all of the Tenant Improvements as provided hereinabove and the
following conditions have been satisfied:
(i) Sixty-five (65) days shall have elapsed following the filing of a valid
notice of completion by Tenant for the Tenant Improvements;
(ii) A final or temporary certificate of occupancy for the Premises (if a
temporary certificate, the conditions set forth therein shall be
satisfactory to Landlord in its reasonable judgment) has been issued by
the appropriate governmental body;
(iii) Tenant shall have delivered to Landlord one set of reproducible "As
Built" plans for the Tenant Improvements as prepared by Tenant's
architect;
(iv) A complete list of the names, addresses, telephone numbers and contract
amount for all contractors, subcontractors, vendors and/or suppliers
providing materials and/or labor for the Tenant Improvements;
(v) No claim of lien shall be of record respecting the Tenant Improvements;
(vi) Tenant shall have delivered to Landlord conditional or unconditional
lien releases, as applicable, in accordance with California Civil Code
Section 3262 as to all of the Tenant Improvements;
(vii) Tenant shall have delivered to Landlord copies of all building permits,
indicating inspection and approval of the Premises by the issuer of said
permits; and
(viii) Tenant is not in default under the Lease and no circumstance exists that
would, with notice or lapse of time, or both, constitute a default under
the Lease.
Landlord, at any time after completion of the Tenant Improvements and
upon at least five (5) business days prior written notice to Tenant, may cause
an audit to be made of Tenant's books and records relating to Tenant's
expenditures in connection with the construction of the Tenant Improvements.
Tenant shall maintain complete and accurate books and records in accordance with
generally accepted accounting principles of these expenditures during the term.
Tenant shall make available to Landlord's auditor within three (3) business days
following Landlord's notice requiring the audit, all books and records
maintained by Tenant pertaining to the construction and completion of the Tenant
Improvements. In addition to all other remedies which Landlord may have pursuant
to the Lease, Landlord may recover from Tenant the reasonable cost of its audit
if the audit discloses that Tenant falsely reported to Landlord expenditures
which were not in fact made or falsely reported a material amount of any
expenditure or the aggregate expenditures.
8. If the cost of the Tenant Improvement Allowance Items does not exceed
the Allowance, Tenant shall be entitled to reimbursement for the actual and
documented costs incurred by Tenant for (i) installation of signage, (ii)
network cabling and (iii) moving expenses ("ADDITIONAL WORK") so long as the
Tenant Improvements have been completed. Upon completion of the Additional Work,
Landlord shall disburse to Tenant the appropriate portion of the Allowance only
when the conditions in Section 7 above have been satisfied to the extent that
such conditions are applicable to the Additional Work. If the cost of the Tenant
Improvements Allowance Items and the Additional Work does not, in the aggregate,
exceed the Allowance, Landlord shall retain the difference.
9. In addition to the Allowance, Landlord agrees to contribute an amount
not to exceed Eighty Thousand Dollars ($80,000.00) less any costs incurred by
Landlord to date in connection with
EXHIBIT "C"
-2-
36
Landlord's current plans for the elevator (the "ADDITIONAL ALLOWANCE"), which
plans shall be made available for Tenant's use, towards the actual and
documented costs incurred by Tenant in connection with its installation of an
elevator in the Premises in a location to be mutually and reasonably acceptable
to Landlord and Tenant. All work required in connection with the installation of
the elevator shall be subject to the terms of Section 5 of this Exhibit "C" and
the Additional Allowance shall be disbursed in accordance with Sections 6, 7 and
8 of this Exhibit "C"; provided, however, that if the cost of the elevator is
less than the Additional Allowance, Tenant shall not be entitled to the
difference between the Additional Allowance and the cost of the elevator nor
shall such difference, if any, be applied toward the Rent due under the Lease.
EXHIBIT "C"
-3-
37
SCHEDULE 1
[SPACE PLAN AND CORRESPONDENCE DATED AS OF MARCH 30, 2000 FROM ▇▇▇▇▇ ▇▇▇▇ TO
▇▇▇ ▇▇▇▇▇▇▇ TO BE ATTACHED HERETO AS SCHEDULE 1]
SCHEDULE 1
-1-
38
SAMPLE FORM OF NOTICE OF LEASE TERM DATES
To:_________________________________ Date: __________________________
_________________________________
Re: Project Lease dated __________________, 19__ between ___________________,
Landlord, and __________________________________, Tenant, concerning Suite
____________ ("PREMISES") located at __________________________________.
Gentlemen:
In accordance with the above-referenced Lease, we wish to advise and/or confirm
as follows:
1. That the Premises have been accepted by Tenant as being substantially
complete in accordance with the Lease, and that there is no deficiency in
construction.
2. That Tenant has accepted and is in possession of the Premises, and
acknowledges that under the provisions of the Lease, the Term of the Lease is
for ______________ (___) years, with ______________ (___) options to renew for
______________ (___) years each, and commenced upon the Commencement Date of
________________, 19__ and is currently scheduled to expire on
________________________, subject to earlier termination as provided in the
Lease.
3 That in accordance with the Lease, rental payment has commenced (or
shall commence) on ______________.
4. If the Commencement Date of the Lease is other than the first day of
the month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.
5. Rent is due and payable in advance on the first day of each and every
month during the Term of the Lease. Your rent checks should be made payable to
_________________________ at _______________________________.
6. The exact number of rentable square feet within the Premises is
____________ square feet.
7. Tenant's Monthly Operating Expense Charge is currently
$________________________.
AGREED AND ACCEPTED
TENANT: LANDLORD:
------------------------------------ ------------------------------------
By: By:
--------------------------------- ---------------------------------
By:
---------------------------------
SAMPLE ONLY [NOT FOR EXECUTION]
EXHIBIT "D"
-1-
39
RULES AND REGULATIONS
1. No sign, advertisement, name or notice shall be installed or
displayed on any part of the outside or inside of the Building or in any part of
the Common Area without the prior written consent of Landlord. Landlord shall
have the right to remove, at Tenant's expense and without notice, any sign
installed or displayed in violation of this rule. All approved signs or
lettering on doors and walls shall be printed, painted, affixed or inscribed at
the expense of Tenant by a person approved by Landlord, using materials and in a
style and format approved by Landlord.
2. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door, partition or wall which may appear unsightly from
outside the Premises, in Landlord's reasonable discretion. No awnings or other
projection shall be attached to the outside walls of the Building without the
prior written consent of Landlord.
3. Tenant shall not obstruct any sidewalks, halls, passages, exits,
entrances, or loading docks of the Building. Neither Tenant nor any employee,
invitee, agent, licensee or contractor of Tenant shall go upon or be entitled to
use any portion of the roof of the Building.
4. Unless expressly set forth to the contrary in Tenant's Lease, Tenant
shall have no right or entitlement to the display of Tenant's name or logo on
any Project sign, monument sign or pylon sign.
5. All cleaning and janitorial services for the Premises shall be
provided, at Tenant's sole cost and expense, exclusively by or through Tenant or
Tenant's janitorial contractors in accordance with the provisions of Tenant's
Lease. Tenant shall not cause any unnecessary labor by carelessness or
indifference to the good order and cleanliness of the Premises.
6. Landlord will furnish Tenant, free of charge, with two keys to each
door lock in the Premises. Landlord may impose a reasonable charge for any
additional keys. Tenant, upon termination of its tenancy, shall deliver to
Landlord the keys of all doors which have been furnished to, or otherwise
procured by Tenant.
7. Tenant shall not use or keep in the Premises any kerosene, gasoline
or inflammable or combustible fluid or material other than those limited
quantities necessary for the operation or maintenance of office equipment,
subject to any express provisions of Tenant's Lease to the contrary. Tenant
shall not use or permit to be used in the Premises any foul or noxious gas or
substance, or permit or allow the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by
reason of noise, odors or vibrations, nor shall Tenant bring into or keep in or
about the Premises any birds or animals.
8. Landlord reserves the right from time to time, in Landlord's sole and
absolute discretion, exercisable without prior notice and without liability to
Tenant: (a) to name or change the name of the Building or Project; (b) to change
the address of the Building, and/or (c) to install, replace or change any signs
in, on or about the Common Areas, the Building or Project (except for Tenant's
signs, if any, which are expressly permitted by Tenant's Lease).
9. Tenant shall close and lock all doors of its Premises and entirely
shut off all water faucets or other water apparatus, unless otherwise needed for
Tenant's business and, except with regard to Tenant's computers and other
equipment, if any, which reasonably require electricity on a 24-hour basis, all
electricity, gas or air outlets before Tenant and its employees leave the
Premises. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or by Landlord for noncompliance with
this rule.
10. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed, and no foreign substances of any kind whatsoever shall be thrown
therein.
11. Tenant shall not make any room-to-room solicitation of business from
other tenants in the Building. Tenant shall not use the Premises for any
business or activity other than that specifically provided for in the Lease.
12. Tenant shall not install any radio or television antenna,
loudspeaker or other device on the roof or exterior walls of the Building.
Tenant shall not interfere with radio or television broadcasting or reception
from or in the Building or elsewhere.
13. Canvassing, soliciting and distribution of handbills or any other
written material, and peddling in the Common Area and other portions of the
Project are expressly prohibited, and each tenant shall cooperate to prevent
same.
14. Landlord reserves the right to exclude or expel from the Project any
person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the Rules and Regulations of
the Project.
EXHIBIT "E"
-1-
40
15. Tenant shall store all its trash and garbage within its Premises or
in designated trash containers or enclosures within the Project. Tenant shall
not place in any trash box or receptacle any material which cannot be disposed
of in the ordinary and customary manner of trash and garbage disposal. All
garbage and refuse disposal shall be made in accordance with directions
reasonably issued from time to time by Landlord.
16. The Premises shall not be used for lodging or for manufacturing of
any kind.
17. Tenant agrees that it shall comply with all fire and security
regulations that may be issued from time to time by Landlord, and Tenant also
shall provide Landlord with the name of a designated responsible principal or
employee to represent Tenant in all matters pertaining to such fire or security
regulations. Tenant shall cooperate fully with Landlord in all matters
concerning fire and other emergency procedures.
18. Tenant assumes any and all responsibility for protecting its
Premises from theft, robbery and pilferage. Such responsibility shall include
keeping doors locked and other means of entry to the Premises closed.
19. The requirements of Tenant will be attended to only upon the
appropriate application to Landlord or Landlord's designated representative by
an authorized individual. Employees of Landlord shall not perform any work or do
anything outside of their regular duties unless under special instructions from
Landlord.
20. Landlord may waive any one or more of these Rules and Regulations
for the benefit of Tenant or any other tenant, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of Tenant
or any other such tenant, nor prevent Landlord from thereafter enforcing any
such Rules and Regulations against any and all of the tenants in the Building.
21. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of premises in the Project.
22. Landlord reserves the right to make such other and reasonable Rules
and Regulations as, in its judgment, may from time to time be needed for safety,
security, care and cleanliness of the Project and for the preservation of good
order therein. Tenant agrees to abide by all such Rules and Regulations
hereinabove stated and any additional rules and regulations which are adopted.
23. Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant's employees, agents, clients, customers, invitees or
guests.
PARKING RULES AND REGULATIONS
In addition to the foregoing rules and regulations and the parking
provisions contained in the Lease to which this Exhibit "E" is attached, the
following rules and regulations shall apply with respect to the use of the
Project's parking areas.
1. Every ▇▇▇▇▇▇ is required to park and lock his/her own vehicle. All
responsibility for damage to or loss of vehicles is assumed by the ▇▇▇▇▇▇ and
Landlord shall not be responsible for any such damage or loss by water, fire,
defective brakes, the act or omissions of others, theft, or for any other cause.
2. Tenant and its employees shall only park in parking areas designated
by Landlord. Tenant shall not leave vehicles in the parking areas overnight nor
park any vehicles in the parking areas other than automobiles, motorcycles,
motor driven or non-motor driven bicycles or four wheeled trucks.
3. No overnight or extended term storage of vehicles shall be permitted.
4. Vehicles must be parked entirely within painted stall lines of a
single parking stall.
5. All directional signs and arrows must be observed.
6. The speed limit within all parking areas shall be five (5) miles per
hour.
7. Parking is prohibited: (a) in areas not striped for parking; (b) in
aisles; (c) where "no parking" signs are posted; (d) on ramps; (e) in
cross-hatched areas; and (f) in reserved spaces and in such other areas as may
be designated by Landlord.
8. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.
9. Landlord may refuse to permit any person who violates these rules to
park in the parking areas, and any violation of the rules shall subject the
vehicle to removal, at such vehicle owner's expense.
EXHIBIT "E"
-2-
41
SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE
The undersigned ("Tenant") hereby certifies to
______________________________ ("Landlord"), and ____________________________,
as follows:
1. Attached hereto is a true, correct and complete copy of that certain
Project Lease dated ________________________, 19__ between Landlord and Tenant
(the "Lease"), which demises Premises which are located at
________________________________________________. The Lease is now in full force
and effect and has not been amended, modified or supplemented, except as set
forth in Section 6 below.
2. The term of the Lease commenced on ________________, 19__.
3. The term of the Lease is currently scheduled to expire on
________________, 19__.
4. Tenant has no option to renew or extend the Term of the Lease except:
________________________________.
5. Tenant has no preferential right to purchase the Premises or any
portion of the Building or Project upon which the Premises are located, and
Tenant has no rights or options to expand into other space in the Building
except: ____________________________________________________________________.
6. The Lease has: (Initial One)
( ) not been amended, modified, supplemented, extended, renewed or
assigned.
( ) been amended, modified, supplemented, extended, renewed or assigned
by the following described agreements, copies of which are attached hereto:
__________________________________________________________________.
7. Tenant has accepted and is now in possession of the Premises and has
not sublet, assigned or encumbered the Lease, the Premises or any portion
thereof except as follows: .
8. The current Basic Rent is $______________; and current monthly
parking charges are $____________.
9. Tenant's Monthly Operating Expense Charge currently payable by Tenant
is $____________ per month.
10. The amount of security deposit (if any) is $________________. No
other security deposits have been made.
11. All rental payments payable by Tenant have been paid in full as of
the date hereof. No rent under the Lease has been paid for more than thirty (30)
days in advance of its due date.
12. All work required to be performed by Landlord under the Lease has
been completed and has been accepted by Tenant, and all tenant improvement
allowances have been paid in full.
13. As of the date hereof, there are no defaults on the part of Landlord
or Tenant under the Lease.
14. Tenant has no defense as to its obligations under the Lease and
claims no set-off or counterclaim against Landlord.
15. Tenant has no right to any concession (rental or otherwise) or
similar compensation in connection with renting the space it occupies, except as
expressly provided in the Lease.
16. All insurance required of Tenant under the Lease has been provided
by Tenant and all premiums have been paid.
17. There has not been filed by or against Tenant a petition in
bankruptcy, voluntary or otherwise, any assignment for the benefit of creditors,
any petition seeking reorganization or arrangement under the bankruptcy laws of
the United States or any state thereof, or any other action brought pursuant to
such bankruptcy laws with respect to Tenant.
18. Tenant pays rent due Landlord under the Lease to Landlord and does
not have any knowledge of any other person who has any right to such rents by
collateral assignment or otherwise.
The foregoing certification is made with the knowledge that
________________________ is about to [FUND A LOAN TO LANDLORD OR PURCHASE THE
BUILDING FROM LANDLORD], and that
EXHIBIT "F"
-1-
42
________________________ is relying upon the representations herein made in
[FUNDING SUCH LOAN OR PURCHASING THE BUILDING].
Dated: ________________, 19__.
"TENANT"
------------------------------------
By:
---------------------------------
By:
---------------------------------
SAMPLE ONLY (NOT FOR EXECUTION)
EXHIBIT "F"
-2-
43
LEASE GUARANTY
THIS LEASE GUARANTY ("GUARANTY") is made by HNC Software Inc., a
Delaware corporation ("GUARANTOR") in favor of LBA VF-I, LLC, a California
limited liability company ("LANDLORD") in connection with that certain
Multi-Tenant Industrial Lease dated April ___, 2000 (the "LEASE") pursuant to
which Landlord is to lease to eHNC Software, a Delaware corporation ("TENANT") a
portion of those premises generally referred to as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "PREMISES").
A. Landlord requires this Guaranty as a condition to its execution of
the Lease and the performance of the obligations to be performed under the Lease
by Landlord.
B. Guarantor has agreed to provide this Guaranty to induce Landlord to
enter into the Lease with Tenant and perform its obligations under the Lease.
C. All capitalized terms contained herein which are not otherwise
defined herein shall have the meanings ascribed to such terms in the Lease.
In consideration of Landlord's agreement to execute the Lease and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Guarantor does hereby agree with Landlord as follows:
1. The Lease is hereby incorporated into and made a part of this
Guaranty by this reference.
2. Guarantor hereby unconditionally guarantees, as a primary obligor and
not as a surety, without deduction by reason of setoff, defense or counterclaim,
the full and punctual payment of all sums of rent and other amounts payable
under the Lease and the full and punctual performance of all terms, covenants
and conditions in the Lease to be kept, performed and/or observed by Tenant.
Guarantor's obligations under this Guaranty are continuing and unconditional.
Notwithstanding the foregoing, (a) with respect to any obligations accruing
under the Lease during the first two (2) years of the Term, Guarantor's
liability to Landlord pursuant to this Section 2 shall be limited to an amount
equal to one (1) year's worth of Basic Rent and Additional Rent; and (b) with
respect to any obligations accruing under the Lease during the remainder of the
Lease Term , Guarantor's liability to Landlord pursuant to this Section 2 shall
be limited to an amount equal to nine (9) month's worth of Basic Rent and
Additional Rent; provided, however that Guarantor shall not be entitled to any
reduction in its liability as contemplated in this subparagraph (b) if, at the
time that such reduction is to occur, either (i) a Tenant default exists under
the Lease or (ii) an event has occurred, which, with the passage of time, or the
giving of notice, or both, would become a default under the Lease. All
Additional Rent shall, for the purposes of calculating any amount due under the
provisions of this Section 2, be computed on the basis of the average monthly
amount thereof accruing during the immediately preceding twelve (12) month
period, except that, if it becomes necessary to compute such Additional Rent
before such a twelve (12) month period has occurred, then such Additional Rent
shall be computed on the basis of the average monthly amount thereof accruing
during such shorter period.
3. Guarantor hereby agrees that, without the consent of or notice to
Guarantor and without affecting any of the obligations of Guarantor hereunder:
(a) the Lease may be extended and any other term, covenant or condition of the
Lease may be amended, compromised, released or otherwise altered by Landlord and
Tenant, and Guarantor does guarantee and promise to perform all the obligations
of Tenant under the Lease as so extended, amended, compromised, released or
altered; (b) any guarantor of or party to the Lease may be released, substituted
or added; (c) any right or remedy under the Lease may be exercised, not
exercised, impaired, modified, limited, destroyed, or suspended; (d) Landlord or
any other person may deal in any manner with Tenant, any guarantor, any party to
the Lease or any other person; (e) Landlord may permit Tenant to holdover the
Premises beyond the Lease Term; and (f) all or any part of the Premises or of
Tenant's rights or liabilities under the Lease may be sublet, assigned or
assumed. Without in any way limiting the foregoing, Guarantor agrees not to
unreasonably withhold its consent to any sublease, assignment of the Lease or
other modification of the Lease which is agreed to by Landlord and Tenant.
4. Guarantor hereby waives and agrees not to assert or take advantage
of: (a) any right to require Landlord to proceed against Tenant, or any other
guarantor or person or to pursue any other security or remedy before proceeding
against Guarantor; (b) any defense based on the genuineness, validity,
regularity or enforceability of the Lease; (c) any right or defense that may
arise by reason of the incapacity, lack of authority, death or disability of
Tenant or any other person; and (d) any right or defense arising by reason of
the absence, impairment, modification, limitation, destruction or cessation (in
bankruptcy, by an election of remedies, or otherwise) of the liability of
Tenant, of the subrogation rights of Guarantor or of the right of Guarantor to
proceed against Tenant for reimbursement. Without limiting the generality of the
foregoing, Guarantor hereby waives any and all benefits of the provisions of
Sections 2809, 2810 and 2845 of the California Civil Code and any similar or
analogous statutes of California or any other jurisdiction.
5. Guarantor hereby waives and agrees not to assert or take advantage of
(a) any right or defense based on the absence of any or all presentments,
demands (including demands for performance), notices (including notices of any
adverse change in the financial status of Tenant, notices
EXHIBIT "G"
-1-
44
of any other facts which increase the risk to Guarantor, notices of
non-performance and notices of acceptance of this Guaranty) and protests of each
and every kind; (b) the defense of any statute of limitations in any action
under or related to this Guaranty or the Lease; (c) any right or defense based
on a lack of diligence or failure or delay by Landlord in enforcing its rights
under this Guaranty or the Lease.
6. Guarantor hereby waives and agrees not to assert or take advantage of
any right to (a) exoneration if Landlord's actions shall impair any security or
collateral of Guarantor; (b) any security or collateral held by Landlord; (c)
require Landlord to proceed against or exhaust any security or collateral before
proceeding against Guarantor; (d) require Landlord to pursue any right or remedy
for the benefit of Guarantor. Without limiting the generality of the foregoing,
Guarantor hereby waives any and all benefits of the provisions of Sections 2819,
2849 and 2850 of the California Civil Code and any similar or analogous statutes
of California or any other jurisdiction.
7. Guarantor shall not, without the prior written consent of Landlord,
commence, or join with any other person in commencing, any bankruptcy,
reorganization or insolvency proceeding against Tenant. Guarantor's obligations
under this Guaranty shall in no way be affected by any bankruptcy,
reorganization or insolvency of Tenant or any successor or assignee of Tenant or
by any disaffirmance or abandonment of the Lease or any payment under this
Guaranty by a trustee of Tenant in any bankruptcy proceeding including, without
limitation, any impairment, limitation, or modification of the liability of
Tenant or the estate of Tenant in bankruptcy, or of any remedy for the
enforcement of Tenant's liability under the Lease resulting from the operation
of any present or future provision of any federal or state bankruptcy or
insolvency law or other statute or from the decision of any court. Guarantor
shall file in any bankruptcy or other proceeding in which the filing of claims
is required or permitted by law all claims which Guarantor may have against
Tenant relating to any indebtedness of Tenant to Guarantor and will assign to
Landlord all rights of Guarantor thereunder. Landlord shall have the sole right
to accept or reject any plan proposed in such proceeding and to take any other
action which a party filing a claim is entitled to do. In all such cases,
whether in administration, bankruptcy or otherwise, the person or persons
authorized to pay such claim shall pay to Landlord the amount payable on such
claim and, to the full extent necessary for that purpose, Guarantor hereby
assigns to Landlord all of Guarantor's rights to any such payments or
distributions to which Guarantor would otherwise be entitled; provided, however,
that Guarantor's obligations hereunder shall not be satisfied except to the
extent that Landlord receives cash by reason of any such payment or
distribution. If Landlord receives anything hereunder other than cash, the same
shall be held as collateral for amounts due under this Guaranty.
8. Until all the Tenant's obligations under the Lease are fully
performed, Guarantor: (a) shall have no right of subrogation or reimbursement
against the Tenant by reason of any payments or acts of performance by Guarantor
under this Guaranty; (b) subordinates any liability or indebtedness of the
Tenant now or hereafter held by Guarantor to the obligations of the Tenant
under, arising out of or related to the Lease or Tenant's use of the Premises;
and (c) acknowledges that the actions of Landlord may affect or eliminate any
rights of subrogation or reimbursement of Guarantor as against Tenant without
any liability or recourse against Landlord. Without limiting the generality of
the foregoing, Guarantor hereby waives any and all benefits of the provisions of
Section 2848 of the California Civil Code and any similar or analogous statutes
of California or any other jurisdiction.
9. Prior to the execution of this Guaranty and at any time during the
Term of the Lease upon ten (10) days prior written notice from Landlord,
Guarantor agrees to provide Landlord with a current financial statement for
Guarantor and financial statements for Guarantor for the two (2) years prior to
the current financial statement year to the extent not previously delivered to
Landlord. Guarantor's financial statements are to be prepared in accordance with
generally accepted accounting principles and, if such is the normal practice of
Guarantor, audited by an independent certified public accountant. Guarantor
represents and warrants that all such financial statements shall be true and
correct statements of Guarantor's financial condition.
10. The liability of Guarantor and all rights, powers and remedies of
Landlord hereunder and under any other agreement now or at any time hereafter in
force between Landlord and Guarantor relating to the Lease shall be cumulative
and not alternative and such rights, powers and remedies shall be in addition to
all rights, powers and remedies given to Landlord by law.
11. This Guaranty applies to, inures to the benefit of and binds all
parties hereto, their heirs, devisees, legatees, executors, administrators,
representatives, successors and assigns. This Guaranty may be assigned by
Landlord voluntarily or by operation of law.
12. This Guaranty shall constitute the entire agreement between
Guarantor and the Landlord with respect to the subject matter hereof. No
provision of this Guaranty or right of Landlord hereunder may be waived nor may
any guarantor be released from any obligation hereunder except by a writing duly
executed by an authorized officer, director or trustee of Landlord. The waiver
or failure to enforce any provision of this Guaranty shall not operate as a
waiver of any other breach of such provision or any other provisions hereof. No
course of dealing between Landlord and Tenant shall alter or affect the
enforceability of this Guaranty or Guarantor's obligations hereunder.
13. Guarantor hereby agrees to indemnify, protect, defend and hold
Landlord harmless from and against, all losses, costs and expenses including,
without limitation, all interest, default interest, post-petition bankruptcy
interest and other post-petition obligations, late charges, court costs and
attorneys'
EXHIBIT "G"
-2-
45
fees, which may be suffered or incurred by Landlord in enforcing or compromising
any rights under this Guaranty or in enforcing or compromising the performance
of Tenant's obligations under the Lease.
14. The term "Landlord" whenever hereinabove used refers to and means
the Landlord in the foregoing Lease specifically named and also any assignee of
said Landlord, whether by outright assignment or by assignment for security, and
also any successor to the interest of said Landlord or of any assignee of such
Lease or any part thereof, whether by assignment or otherwise. The term "Tenant"
whenever hereinabove used refers to and means the Tenant in the foregoing Lease
specifically named and also any assignee or subtenant of said Lease and also any
successor to the interests of said Tenant, assignee or sublessee of such Lease
or any part thereof, whether by assignment, sublease or otherwise including,
without limitation, any trustee in bankruptcy and any bankruptcy estate of
Tenant, Tenant's assignee or sublessee.
15. If any or all Guarantors shall become bankrupt or insolvent, or any
application shall be made to have any or all Guarantors declared bankrupt or
insolvent, or any or all Guarantors shall make an assignment for the benefit of
creditors, or any or all Guarantors shall enter into a proceeding for the
dissolution of marriage, or in the event of death of any or all Guarantors,
notice of such occurrence or event shall be promptly furnished to Landlord by
such Guarantor or such Guarantor's fiduciary. This Guarantee shall extend to and
be binding upon each Guarantor's successors and assigns, including, but not
limited to, trustees in bankruptcy and Guarantor's estate.
16. Any notice, request, demand, instruction or other communication to
be given to any party hereunder shall be in writing and sent by registered or
certified mail, return receipt requested in accordance with the notice
provisions of the Lease. The Tenant shall be deemed Guarantor's agent for
service of process and notice to Guarantor delivered to the Tenant at the
address set forth in the Lease shall constitute proper notice to Guarantor for
all purposes. Notices to Landlord shall be delivered to Landlord's address set
forth in the Lease. Landlord, at its election, may provide an additional notice
to Guarantor at the address provided under Guarantor's signature below.
17. If either party hereto participates in an action against the other
party arising out of or in connection with this Guaranty, the prevailing party
shall be entitled to have and recover from the other party reasonable attorneys'
fees, collection costs and other costs incurred in and in preparation for the
action. Guarantor hereby waives any right to trial by jury and further waives
and agrees not to assert or take advantage of any defense based on any claim
that any arbitration decision binding upon Landlord and Tenant is not binding
upon Guarantor.
18. Guarantor agrees that all questions with respect to this Guaranty
shall be governed by, and decided in accordance with, the laws of the State of
California.
19. Should any one or more provisions of this Guaranty be determined to
be illegal or unenforceable, all other provisions shall nevertheless be
effective.
20. This Guaranty shall terminate and be of no further force and effect
upon the date that is six (6) months following the date that Tenant first
achieves and continuously maintains a tangible net worth of at least Forty
Million Dollars ($40,000,000.00), as determined in accordance with generally
accepted accounting principles.
21. Time is strictly of the essence under this Guaranty and any
amendment, modification or revision hereof.
22. If more than one person signs this Guaranty, each such person shall
be deemed a guarantor and the obligation of all such guarantors shall be joint
and several. When the context and construction so requires, all words used in
the singular herein shall be deemed to have been used in the plural. The word
"PERSON" as used herein shall include an individual, company, firm, association,
partnership, corporation, trust or other legal entity of any kind whatsoever.
23. If Guarantor is a corporation, each individual executing this
Guaranty on behalf of said corporation represents and warrants that he is duly
authorized to execute and deliver this Guaranty on behalf of said corporation,
in accordance with a duly adopted resolution of the Board of Directors of said
corporation or in accordance with the by-laws of said corporation, and that this
Guaranty is binding upon said corporation in accordance with its terms. If
Guarantor is a corporation, Landlord, at its option, may require Guarantor to
concurrently, with the execution of this Guaranty, deliver to Landlord a
certified copy of a resolution of the Board of Directors of said corporation
authorizing or ratifying the execution of this Guaranty.
24. If (a) this Guaranty shall terminate pursuant to Section 20 above,
or (b) upon the expiration or sooner termination of the Lease, Tenant shall have
fully and faithfully performed every provision of the Lease to be performed by
it, Landlord shall, upon Guarantor's written request received following the
earlier to occur of (a) or (b) above, provide written notice to Guarantor that
the Guaranty is of no further force or effect.
EXHIBIT "G"
-3-
46
THE UNDERSIGNED HAS READ AND UNDERSTANDS THE TERMS AND CONDITIONS
CONTAINED IN THIS GUARANTY INCLUDING, WITHOUT LIMITATION, ALL WAIVERS CONTAINED
IN THIS GUARANTY.
Executed on this _______ day of April, 2000.
HNC Software Inc.,
a Delaware corporation
* By:
------------------------------
Print Name:
-------------------------
Print Title:
------------------------
* By:
------------------------------
Print Name:
-------------------------
Print Title:
------------------------
Address of Guarantor:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
----------
**NOTE:
IF GUARANTOR IS A CALIFORNIA CORPORATION, then one of the following alternative
requirements must be satisfied:
(A) This Guaranty must be signed by two (2) officers of such corporation:
one being the chairman of the board, the president or a vice president,
and the other being the secretary, an assistant secretary, the chief
financial officer or an assistant treasurer. If one (1) individual is
signing in two (2) of the foregoing capacities, that individual must
sign twice; once as one officer and again as the other officer.
(B) If there is only one (1) individual signing in two (2) capacities, or if
the two (2) signatories do not satisfy the requirements of (A) above,
then Guarantor shall deliver to Landlord a certified copy of a corporate
resolution in the form reasonably acceptable to Landlord authorizing the
signatory(ies) to execute this Guaranty.
IF GUARANTOR IS A CORPORATION INCORPORATED IN A STATE OTHER THAN CALIFORNIA,
then Guarantor shall deliver to Landlord a certified copy of a corporate
resolution in the form reasonably acceptable to Landlord authorizing the
signatory(ies) to execute this Guaranty.
EXHIBIT "G"
-4-
47
TENANT ENVIRONMENTAL QUESTIONNAIRE
The purpose of this form is to obtain information regarding the use or proposed
use of hazardous materials at the premises. Prospective tenants should answer
the questions in light of their proposed operations at the premises. Existing
tenants should answer the questions as they relate to ongoing operations at the
premises and should update any information previously submitted. If additional
space is needed to answer the questions, you may attach separate sheets of paper
to this form.
Your cooperation in this matter is appreciated.
1. GENERAL INFORMATION
Name of Responding Company:____________________________________________________.
Check the Applicable Status: Prospective Tenant _____ Existing Tenant _____
Mailing Address:________________________________________________________________
Contact Person and Title:_______________________________________________________
Telephone Number: (_____) ________________________
Address of Leased Premises:_____________________________________________________
Length of Lease Term:___________________________________________________________
Describe the proposed operations to take place on the premises, including
principal products manufactured or services to be conducted. Existing tenants
should describe any proposed changes to ongoing operations.
________________________________________________________________________________
________________________________________________________________________________
2. STORAGE OF HAZARDOUS MATERIALS
2.1 Will any hazardous materials be used or stored on-site?
Wastes Yes _____ No _____
Chemical Products Yes _____ No _____
2.2 Attach a list of any hazardous materials to be used or stored,
the quantities that will be on-site at any given time, and the
location and method of storage (e.g., 55-gallon drums on
concrete pad).
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel or
other hazardous substances in tanks or sumps proposed or
currently conducted at the premises?
Yes ______ No _____
If yes, describe the materials to be stored, and the type, size
and construction of the sump or tank. Attach copies of any
permits obtained for the storage of such substances.
________________________________________________________________
________________________________________________________________
3.2 Have any of the tanks or sumps been inspected or tested for
leakage?
Yes ______ No _____
If so, attach the results.
3.3 Have any spills or leaks occurred from such tanks or sumps?
Yes ______ No _____
If so, describe.
________________________________________________________________
________________________________________________________________
EXHIBIT "H"
-1-
48
3.4 Were any regulatory agencies notified of the spill or leak?
Yes ______ No _____
If so, attach copies of any spill reports filed, any clearance
letters or other correspondence from regulatory agencies
relating to the spill or leak.
3.5 Have any underground storage tanks or sumps been taken out of
service or removed?
Yes ______ No _____
If yes, attach copies of any closure permits and clearance
obtained from regulatory agencies relating to closure and
removal of such tanks.
4. SPILLS
4.1 During the past year, have any spills occurred at the premises?
Yes ______ No _____
If yes, please describe the location of the spill.
________________________________________________________________
________________________________________________________________
4.2 Were any agencies notified in connection with such spills?
Yes ______ No _____
If yes, attach copies of any spill reports or other
correspondence with regulatory agencies.
4.3 Were any clean-up actions undertaken in connection with the
spills?
Yes ______ No _____
Attach copies of any clearance letters obtained from any
regulatory agencies involved and the results of any final soil
or groundwater sampling done upon completion of the clean-up
work.
5. WASTE MANAGEMENT
5.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number?
Yes ______ No _____
5.2 Has your company filed a biennial report as a hazardous waste
generator?
Yes ______ No _____
If so, attach a copy of the most recent report filed.
5.3 Attach a list of the hazardous wastes, if any, generated or to
be generated at the premises, its hazard class and the quantity
generated on a monthly basis.
5.4 Describe the method(s) of disposal for each waste. Indicate
where and how often disposal will take place.
_____ On-site treatment or recovery __________________
_____ Discharged to sewer __________________
_____ Transported and disposed of off-site __________________
_____ Incinerator __________________
5.5 Indicate the name of the person(s) responsible for maintaining
copies of hazardous waste manifests completed for off-site
shipments of hazardous waste.
________________________________________________________________
5.6 Is any treatment of processing of hazardous wastes currently
conducted or proposed to be conducted at the premises:
Yes ______ No _____
EXHIBIT "H"
-2-
49
If yes, please describe any existing or proposed treatment
methods.
________________________________________________________________
5.7 Attach copies of any hazardous waste permits or licenses issued
to your company with respect to its operations at the premises.
6. WASTEWATER TREATMENT/DISCHARGE
6.1 Do you discharge wastewater to:
_____ storm drain? _____ sewer?
_____ surface water? _____ no industrial discharge
6.2 Is your wastewater treated before discharge?
Yes ______ No _____
If yes, describe the type of treatment conducted.
________________________________________________________________
________________________________________________________________
6.3 Attach copies of any wastewater discharge permits issued to your
company with respect to its operations at the premises.
7. AIR DISCHARGES
7.1 Do you have any filtration systems or stacks that discharge into
the air?
Yes ______ No _____
7.2 Do you operate any of the following types of equipment or any
other equipment requiring an air emissions permit?
_____ Spray booth
_____ Dip tank
_____ Drying oven
_____ Incinerator
_____ Other (please describe)____________________________
_____ No equipment requiring air permits
7.3 Are air emissions from your operations monitored?
Yes ______ No _____
If so, indicate the frequency of monitoring and a description of
the monitoring results.
________________________________________________________________
7.4 Attach copies of any air emissions permits pertaining to your
operations at the premises.
8. HAZARDOUS MATERIALS DISCLOSURES
8.1 Does your company handle hazardous materials in a quantity equal
to or exceeding an aggregate of 500 pounds, 55 gallons, or 200
cubic feet per month?
Yes ______ No _____
8.2 Has your company prepared a hazardous materials management plan
pursuant to any applicable requirements of a local fire
department or governmental agency?
Yes ______ No _____
If so, attach a copy of the business plan.
8.3 Has your company adopted any voluntary environmental, health or
safety program?
EXHIBIT "H"
-3-
50
Yes _____ No _____
If so, attach a copy of the program. No formal program. We
recycle paper, aluminum cans, and scrap aluminum.
9. ENFORCEMENT ACTIONS, COMPLAINTS
9.1 Has your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees?
Yes ______ No _____
If so, describe the actions and any continuing compliance
obligations imposed as a result of these actions.
________________________________________________________________
9.2 Has your company ever received requests for information, notice
or demand letters, or any other inquiries regarding its
operations?
Yes ______ No _____
9.3 Have there ever been, or are there now pending, any lawsuits
against the company regarding any environmental or health and
safety concerns?
Yes ______ No _____
9.4 Has an environmental audit ever been conducted at your company's
current facility?
Yes ______ No _____
If so, identify who conducted the audit and when it was
conducted.
________________________________________________________________
"TENANT"
eHNC,
a Delaware corporation
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
Date:
----------------------------
EXHIBIT "H"
-3-