Exhibit 10.2
STANDARD OFFICE LEASE-GROSS
1. BASIC LEASE PROVISIONS ("Basic Lease Provisions")
1.1 Parties: This Lease, dated, for reference purposes only JUNE 11,
1998, is made by and between ASSET GROWTH PARTNERS, LTD. (herein called
"Lessor") and PHARSIGHT CORPORATION, INC., (herein called "Lessee").
1.2 Premises: Suite Number(s) 200 ON THE SECOND floor(s), consisting of
approximately 16,000 rentable square feet, more or less, as defined in
paragraph 2 and as shown on Exhibit "A" hereto (the "Premises").
1.3 Building: Commonly described as being located at 800 W. EL CAMINO
REAL in the City of MOUNTAIN VIEW County of SANTA CLARA State of CALIFORNIA
as more particularly described in Exhibit A hereto, and as defined in
paragraph 2.
1.4: Use: GENERAL OFFICE, RESEARCH & DEVELOPMENT, LABORATORY AND OTHER
RELATED LEGAL USES subject to paragraph 6.
1.5 Term: FIVE YEARS commencing ON THE LATER TO OCCUR OF TENDER OF
POSSESSION, OR SEPTEMBER 1, 1998 ("Commencement Date") and ending as defined
in paragraph 3.
1.6 Base Rent: $3.40 PER RENTABLE SQUARE FOOT per month. payable on the
FIRST day of each month, per paragraph 4.1.
1.7 Base Rent Increase: Base Rent payable under paragraph 1.6 above
shall be adjusted as provided in paragraph 51 below.
1.8 Rent Paid Upon Execution: FIFTY FOUR THOUSAND FOUR HUNDRED & NO/100
DOLLARS ($54,400.00).
1.9 Security Deposit: FIFTY FOUR THOUSAND FOUR HUNDRED & NO/100
DOLLARS ($54,400.00). ADDITIONALLY, LESSEE TO PROVIDE LESSOR UPON MUTUAL LEASE
EXECUTION A STAND-BY LETTER OF CREDIT OR OTHER INSTRUMENT REASONABLY ACCEPTABLE
TO LESSOR IN THE AMOUNT OF ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($150,000.00). THE BALANCE OF THE LETTER OF CREDIT WOULD BE REDUCED ANNUALLY IN
ACCORDANCE WITH A STRAIGHT-LINE AMORTIZATION OVER THE LEASE TERM.
1.10 Lessee's Share of Operating Expense Increase: 13.64% as defined in
paragraph 4.2.
2. PREMISES, PARKING AND COMMON AREAS.
2.1 Premises: The Premises are a portion of a building, herein sometimes
referred to as the "Building" identified in paragraph 1.3 of the Basic Lease
Provisions. "Building" shall include adjacent parking structures used in
connection therewith. The Premises, the Building, the Common Areas, the land
upon which the same are located, along with all other buildings and improvements
thereon or thereunder, are herein collectively referred to as the "Office
Building Project". Lessor hereby leases to Lessee and Lessee leases from Lessor
for the term, at the rental, and upon all of the conditions set forth herein,
the real property referred to in the Basic Lease Provisions, paragraph 1.2 as
the "Premises," including rights to the Common Areas as hereinafter specified.
2.2 Vehicle Parking: , and subject to the rules and regulations attached
hereto, and as established by Lessor from time to time, Lessee shall be entitled
to rent and use UNDERGROUND RESERVED SPACES AND ADDITIONAL SURFACE SPACES NOT TO
EXCEED A TOTAL OF 3.4 TOTAL SPACES PER 1,000 SQUARE FEET OF PREMISES in the
Office Building Project. THROUGHOUT THE TERM, AND ANY EXTENSIONS THEREOF,
LESSEE SHALL HAVE THE RIGHT TO THE NONEXCLUSIVE AND UNRESERVED USE OF NO LESS
THAN 54 PARKING SPACES FREE OF CHARGE. HOWEVER, LESSOR RESERVES THE RIGHT TO
CHARGE FOR PARKING IN THE EVENT OF A GOVERNMENT IMPOSED PARKING/TRANSIT TAX OR
FEE.
2.2.1 If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect, then Lessor 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
to Lessee, which cost shall be immediately payable upon demand by Lessor.
2.2.2 The monthly parking rate per parking space will be $ --0--
per month at the commencement of the term of this Lease, and is subject to
change ONLY PURSUANT TO THE TERMS OF PARAGRAPH 2.2 ABOVE upon five (5) days
prior written notice to Lessee. Monthly parking fees shall be payable one month
in advance prior to the first day of each calendar month.
2.3 Common Areas-Definition. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Office Building Project that are provided and designated by the Lessor
from time to time for the general non-exclusive use of Lessor, Lessee and of
other lessees of the Office Building Project and their respective employees,
suppliers, shippers, customers and invitees, including but not limited to common
entrances, lobbies, corridors, stairways and stairwells, public restrooms,
elevators, escalators,
Initials ____
Initials ____
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parking areas to the extent not otherwise prohibited by this Lease, loading
and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
ramps, driveways, landscaped areas and decorative walls.
2.4 Common Areas-Rules and Regulations. Lessee agrees to abide by and
conform to the rules and regulations attached hereto as Exhibit B with
respect to the Office Building Project and Common Areas, and to cause its
employees, suppliers, shippers, customers, and invitees to so abide and
conform. Lessor or such other person(s) as Lessor may appoint shall have the
exclusive control and management of the Common Areas and shall have the
right, from time to time, to modify, amend and enforce said rules and
regulations IN A REASONABLE AND NON-DISCRIMINATORY MANNER. Lessor shall not
be responsible to Lessee for the non-compliance with said rules and
regulations by other lessees, their agents, employees and invitees of the
Office Building Project. FOLLOWING A WRITTEN REQUEST FROM LESSEE, LESSOR
SHALL USE COMMERCIALLY REASONABLE EFFORTS TO ENFORCE THE RULES AND
REGULATIONS AGAINST OTHER LESSEES OF THE BUILDING.
2.5 Common Areas-Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Building interior and exterior and Common
Areas, including, without limitation, changes in the location, size, shape.
number, and appearance thereof, including but not limited to the lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms, driveways,
entrances, parking spaces, parking areas, loading and unloading areas,
ingress, egress, direction of traffic, decorative walls, landscaped areas and
walkways; provided, however, Lessor shall at all times provide the parking
facilities required by applicable law;
(b) To close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available;
(c) To designate other land and improvements outside the boundaries of the
Office Building Project to be a part of the Common Areas, provided that such
other land and improvements have a reasonable and functional relationship to the
Office Building Project;
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Office Building Project, or any
portion thereof;
(f) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Office Building Project as Lessor
may, in the exercise of sound business judgment deem to be appropriate.
LESSOR'S RIGHT PURSUANT TO THIS SECTION 2.5 SHALL BE SUBJECT TO THE CONDITION
THAT EXERCISE OF ANY OF SUCH RIGHTS SHALL NOT UNREASONABLY INTERFERE WITH
LESSEE'S USE OF THE PREMISES.
3. TERM.
3.1 Term. The term and Commencement Date of this Lease shall be as
specified in paragraph 1.5 of the Basic Lease Provisions.
3.2 Delay in Possession. Notwithstanding said Commencement Date, if for
any reason Lessor cannot deliver possession of the Premises to Lessee on said
date and subject to paragraph 3.2.2, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of Lessee hereunder or extend the term hereof; but, in such
case, Lessee shall not be obligated to pay rent or perform any other obligation
of Lessee under the terms of this Lease, except as may be otherwise provided in
this Lease, until possession of the Premises is tendered to Lessee, as
hereinafter defined; provided, however, that if Lessor shall not have delivered
possession of the Premises within sixty (60) days following said Commencement
Date, as the same may be extended under the terms of a Work Letter executed by
Lessor and Lessee, Lessee may, at Lessee's option, by notice In writing to
Lessor cancel this Lease, in which event the parties shall be discharged from
all obligations hereunder; provided, however, that, as to Lessee's obligations,
Lessee first reimburses Lessor for all costs incurred for Non-Standard
Improvements and, as to Lessor's obligations, Lessor shall return any money
previously deposited by Lessee (less any offsets due Lessor for Non-Standard
Improvement).
3.2.1 Possession Tendered-Defined. Possession of the Premises shall be
deemed tendered to Lessee ("Tender of Possession") when (1) the improvements to
be provided by Lessor under this Lease are substantially completed, (2) the
Building utilities are ready for use in the Premises, (3) Lessee has reasonable
access to the Premises, (4) A CERTIFICATE OF OCCUPANCY HAS BEEN ISSUED BY THE
APPROPRIATE GOVERNMENTAL AUTHORITY, and (5) ten (10) days shall have expired
following advance written notice to Lessee of the occurrence of the matters
described in (1), (2), (3), AND (4) above of this paragraph 3.2.1.
3.2.2 Delays Caused by Lessee. There shall be no abatement of rent,
and the sixty (60) day period following the Commencement Date before which
Lessee's right to cancel this Lease accrues under paragraph 3.2, shall be
deemed extended to the extent of any delays caused by acts or omissions of
Lessee, Lessee's agents, employees and contractors.
3.3 Early Possession. If Lessee occupies the Premises prior to said
Commencement Date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not change the termination date, and Lessee shall
pay rent for such occupancy.
3.4 Uncertain Commencement. In the event commencement of the Lease term
is defined as the completion of the improvements, Lessee and Lessor shall
execute an amendment to this Lease establishing the date of Tender of
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Possession (as defined in paragraph 3.2.1) or the actual taking of possession
by Lessee, whichever first occurs, as the Commencement Date.
3.5 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION 3.2, IF
LESSOR HAS NOT DELIVERED POSSESSION BY SEPTEMBER 1, 1998, THEN LESSEE SHALL
RECEIVE CREDIT FOR ONE (1) DAY OF FREE RENT FOR EACH SUBSEQUENT DAY, UNTIL SUCH
DELIVERY OF POSSESSION.
4. RENT.
4.1 Base Rent. Subject to adjustment as hereinafter provided in paragraph
4.3, and except as may be otherwise expressly provided in this Lease, Lessee
shall pay to Lessor the Base Rent for the Premises set forth in paragraph 1.6 of
the Basic Lease Provisions, without offset or deduction. Lessee shall pay Lessor
upon execution hereof the advance Base Rent described in paragraph 1.8 of the
Basic Lease Provisions. Rent for any period during the term hereof which is for
less than one month shall be prorated based upon the actual number of days of
the calendar month involved. Rent shall be payable in lawful money of the United
States to Lessor at the address slated herein or to such other persons or at
such other places as Lessor may designate in writing.
4.2 Operating Expense Increase. Lessee shall pay to Lessor during the term
hereof, in addition to the Base Rent, Lessee's Share, as hereinafter defined, of
the amount by which all Operating Expenses, as hereinafter defined, for each
Comparison Year exceeds the amount of all Operating Expenses for the Base Year,
such excess being hereinafter referred to as the "Operating Expense Increase,"
in accordance with the following provisions:
(a) "Lessee's Share" is defined, for purposes of this Lease, as the
percentage set forth in paragraph 1.10 of the Basic Lease Provisions, which
percentage has been determined by dividing the approximate square footage of the
Premises by the total approximate square footage of the rentable space contained
in the Office Building Project. It is understood and agreed that the square
footage figures set forth in the Basic Lease Provisions are approximations which
Lessor and Lessee agree are reasonable and shall not be subject to revision
except in connection with an actual change in the size of the Premises or a
change in the space available for lease in the Office Building Project.
(b) "Base Year" is defined as 1999.
(c) "Comparison Year" is defined as each calendar year during the term of
this Lease subsequent to the Base Year; provided, however, Lessee shall have no
obligation to pay a share of the Operating Expense Increase applicable to the
first twelve (12) months of the Lease Term (other than such as are mandated by a
governmental authority, as to which government mandated expenses Lessee shall
pay Lessee's Share, notwithstanding they occur during the first twelve (12)
months). Lessee's Share of the Operating Expense Increase for the first and
last Comparison Years of the Lease Term shall be prorated according to that
portion of such Comparison Year as to which Lessee is responsible for a share of
such increase.
(d) "Operating Expenses" is defined, for purposes of this Lease, to
include all costs, if any, incurred by Lessor in the exercise of its
reasonable discretion, for:
(i) The operation, repair, maintenance, and replacement, in neat,
clean, safe, good order and condition, of the Office Building Project, including
but not limited to, the following:
(aa) The Common Areas, including their surfaces, coverings,
decorative items, carpets, drapes and window coverings, and including parking
areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways,
stairways, parkways, driveways, landscaped areas, striping, bumpers, irrigation
systems, Common Area lighting facilities, building exteriors and roofs, fences
and gates;
(bb) All heating, air conditioning, plumbing, electrical systems,
life safety equipment, telecommunication and other equipment used in common by,
or for the benefit of, lessees or occupants of the Office Building Project,
including elevators and escalators, tenant directories, fire detection systems
including sprinkler system maintenance and repair.
(ii) Trash disposal, janitorial and security services;
(iii) Any other service to be provided by Lessor that is elsewhere in
this Lease stated to be an "Operating Expense";
(iv) The cost of the premiums for the liability and property
insurance policies to be maintained by Lessor under paragraph 8 hereof;
(v) The amount of the real property taxes to be paid by Lessor
under paragraph 10 1 hereof;
(vi) The cost of water, sewer, gas, electricity, and other publicly
mandated services to the Office Building Project;
(vii) Labor, salaries and applicable fringe benefits and costs,
materials, supplies and tools, used in maintaining and/or cleaning the Office
Building Project and accounting and a management fee attributable to the
operation of the Office Building Project;
(viii) Replacing and/or adding improvements mandated by any
governmental agency and any repairs or removals necessitated thereby amortized
over its useful life according to Federal income tax regulations or guidelines
for depreciation thereof (including interest on the unamortized balance as is
then reasonable in the judgment of Lessor's accountants);
(ix) Replacements of equipment or improvements that have a useful
life for depreciation purposes according to Federal income tax guidelines of
five (5) years or less, as amortized over such life.
(e) Operating Expenses shall not include the costs of replacements
of equipment or improvements
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that have a useful life for Federal income tax purposes in excess of five (5)
years unless it is of the type described in paragraph 4.2(d)(viii}, in which
case their cost shall be included as above provided.
(f) Operating Expenses shall not include any expenses paid by any
lessee directly to third parties, or as to which Lessor is otherwise reimbursed
by any third party, other tenant, or by insurance proceeds.
(g) Lessee's Share of Operating Expense Increase shall be payable by
Lessee within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to time in advance of Lessee's Share
of the Operating Expense Increase for any Comparison Year, and the same shall be
payable monthly or quarterly, as Lessor shall designate, during each Comparison
Year of the Lease term, on the same day as the Base Rent is due hereunder. In
the event that Lessee pays Lessor's estimate of Lessee's Share of Operating
Expense Increase as aforesaid, Lessor shall deliver to Lessee within sixty (60)
days after the expiration of each Comparison Year a reasonably detailed
statement showing Lessee's Share of the actual Operating Expense Increase
incurred during such year. If Lessee's payments under this paragraph 4.2(g)
during said Comparison Year exceed Lessee's Share as indicated on said
statement, Lessee shall be entitled to credit the amount of such overpayment
against Lessee's Share of Operating Expense Increase next falling due. If
Lessee's payments under this paragraph during said Comparison Year were less
than Lessee's Share as indicated on said statement, Lessee shall pay to Lessor
the amount of the deficiency within ten (10) days after delivery by Lessor to
Lessee of said statement. Lessor and Lessee shall forthwith adjust between them
by cash payment any balance determined to exist with respect to that portion of
the last Comparison Year for which Lessee is responsible as to Operating Expense
Increases, notwithstanding that the Lease term may have terminated before the
end of such Comparison Year.
(h) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE,
THE FOLLOWING SHALL NOT BE INCLUDED WITHIN OPERATING EXPENSES:
LEASING COMMISSIONS, ATTORNEYS' FEES, COSTS, DISBURSEMENTS AND OTHER EXPENSES
INCURRED IN CONNECTION WITH NEGOTIATIONS OR DISPUTES WITH LESSEES, OR IN
CONNECTION WITH LEASING, RENOVATING, OR IMPROVING SPACE FOR LESSEES OR OTHER
OCCUPANTS OR PROSPECTIVE LESSEES OR OTHER OCCUPANTS OF THE BUILDING. THE COST
OF ANY SERVICE SOLD TO ANY LESSEE (INCLUDING LESSEE) OR OTHER OCCUPANT FOR WHICH
LESSOR IS ENTITLED TO BE REIMBURSED AS AN ADDITIONAL CHARGE OR RENTAL OVER AND
ABOVE THE BASIC RENT AND ESCALATIONS PAYABLE UNDER THE LEASE WITH THAT LESSEE.
ANY DEPRECIATION ON THE BUILDING OR PROPERTY.
COSTS OF A CAPITAL NATURE, INCLUDING BUT NOT LIMITED TO CAPITAL IMPROVEMENTS
AND ALTERATIONS, CAPITAL REPAIRS, CAPITAL EQUIPMENT, AND CAPITAL TOOLS AS
DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
EXPENSES IN CONNECTION WITH SERVICES OR OTHER BENEFITS OF A TYPE THAT ARE NOT
PROVIDED TO LESSEE BUT WHICH ARE PROVIDED ANOTHER LESSEE OR OCCUPANT OF THE
BUILDING OR PROPERTY.
COSTS INCURRED DUE TO LESSOR'S VIOLATION OF ANY TERMS OR CONDITIONS OF THIS
LEASE OR ANY OTHER LEASE RELATING TO THE BUILDING OR PROPERTY.
OVERHEAD PROFIT INCREMENTS PAID TO LESSOR'S SUBSIDIARIES OR AFFILIATES FOR
MANAGEMENT OR OTHER SERVICES ON OR TO THE BUILDING OR FOR SUPPLIES OR OTHER
MATERIALS TO THE EXTENT THAT THE COST OF THE SERVICES, SUPPLIES, OR MATERIALS
EXCEEDS THE COST THAT WOULD HAVE BEEN PAID HAD THE SERVICES, SUPPLIES OR
MATERIALS BEEN PROVIDED BY UNAFFILIATED PARTIES ON A COMPETITIVE BASIS.
ALL INTEREST, LOAN FEES, AN OTHER CARRYING COSTS RELATED TO ANY MORTGAGE OR
DEED OF TRUST OR RELATED TO ANY CAPITAL ITEM, AND ALL RENTAL AND OTHER PAYABLE
DUE UNDER ANY GROUND OR UNDERLYING LEASE, OR ANY LEASE FOR ANY EQUIPMENT
ORDINARILY CONSIDERED TO BE OF A CAPITAL NATURE (EXCEPT JANITORIAL EQUIPMENT
WHICH IS NO AFFIXED TO THE BUILDING).
ANY COMPENSATION PAID TO CLERKS, ATTENDANTS, OR OTHER PERSONS IN COMMERCIAL
CONCESSIONS OPERATED BY LESSOR.
ADVERTISING AND PROMOTIONAL EXPENDITURES.
COSTS OF REPAIRS AND OTHER WORK OCCASIONED BY FIRE, WINDSTORM, OR OTHER
CASUALTY OF AN INSURABLE NATURE.
ANY COSTS, FINES, OR PENALTIES INCURRED DUE TO VIOLATIONS BY LESSOR OF ANY
GOVERNMENTAL RULE OR AUTHORITY, THIS LEASE OR ANY OTHER LEASE IN THE PROPERTY,
OR DUE TO LESSOR'S NEGLIGENCE OR WILLFUL MISCONDUCT.
MANAGEMENT COSTS TO THE EXTEND THEY EXCEED MANAGEMENT COSTS CHARGED FOR
SIMILAR FACILITIES IN THE AREA AND IN ANY EVENT, TO THE EXTEND THEY EXCEED 3% OF
GROSS RENTAL INCOME.
COSTS FOR SCULPTURE, PAINTINGS OR OTHER OBJECTS OF ART (NOR INSURANCE THEREON
OR EXTRAORDINARY SECURITY IN CONNECTION THEREWITH).
WAGES, SALARIES OR OTHER COMPENSATION PAID TO ANY EXECUTIVE EMPLOYEES ABOVE
THE GRADE OF BUILDING MANAGER.
THE COST OF CORRECTING ANY BUILDING CODE OR OTHER VIOLATIONS WHICH WERE
VIOLATIONS PRIOR TO THE COMMENCEMENT DATE.
THE COST OF CONTAINING, REMOVING, OR OTHERWISE REMEDIATING ANY CONTAMINATION
OF THE PROPERTY (INCLUDING THE UNDERLYING LAND AND GROUND WATER) BY ANY TOXIC OR
HAZARDOUS MATERIALS (INCLUDING, WITHOUT
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LIMITATION, ASBESTOS AND "PCB'S") WHERE SUCH CONTAMINATION WAS NOT CAUSED BY
LESSEE.
ANY OTHER EXPENSE THAT UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND
PRACTICE CONSISTENTLY APPLIED WOULD NOT BE CONSIDERED A NORMAL MAINTENANCE OR
OPERATING EXPENSE.
(i) WITHIN 90 DAYS AFTER RECEIPT OF LESSOR'S STATEMENT SETTING FORTH
ACTUAL OPERATING EXPENSES (THE "STATEMENT"). LESSEE SHALL HAVE THE RIGHT TO
AUDIT AT LESSOR'S LOCAL OFFICES, AT LESSEE'S EXPENSE, LESSOR'S ACCOUNTS AND
RECORDS RELATING TO OPERATING EXPENSES. SUCH AUDIT SHALL BE CONDUCTED BY A
CERTIFIED PUBLIC ACCOUNTANT APPROVED BY LESSOR, WHICH APPROVAL SHALL NOT BE
UNREASONABLE WITHHELD. IF SUCH AUDIT REVEALS THAT LESSOR HAS OVERCHARGED
LESSEE, THE AMOUNT OVERCHARGED SHALL BE PAID TO LESSEE WITHIN 30 DAYS AFTER
THE AUDIT IS CONCLUDED, TOGETHER WITH INTEREST THEREON AT THE RATE OF 10% PER
ANNUM, FROM THE DATE THE OVERCHARGE WAS PAID BY LESSEE. UNTIL REFUND OF THE
OVERCHARGES IS MADE TO LESSEE. IN ADDITION, IF THE STATEMENT EXCEEDS THE
ACTUAL OPERATING EXPENSES AND REAL PROPERTY TAXES WHICH SHOULD HAVE BEEN
CHARGED TO LESSEE BY MORE THAN 15%, THE COST OF THE AUDIT SHALL BE PAID BY
LESSOR.
4.3 Rent Increase. SEE PARAGRAPH 51.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the security deposit set forth in paragraph 1.9 of the Basic Lease Provisions
as security for Lessee's faithful performance of Lessee's obligations
hereunder. If Lessee fails to pay rent or other charges due hereunder, or
otherwise defaults with respect to any provision of this Lease, Lessor may
use, apply or retain all or any portion of said deposit for the payment of
any rent or other charge in default for the payment of any other sum to which
Lessor may become obligated by reason of Lessee's default, or to compensate
Lessor for any loss or damage which Lessor may suffer thereby. If Lessor so
uses or applies all or any portion of said deposit, Lessee shall within ten
(10) days after written demand therefor deposit cash with Lessor in an amount
sufficient to restore said deposit to the full amount then required of
Lessee. Lessor shall not be required to keep said security deposit separate
from its general accounts. If Lessee performs all of Lessee's obligations
hereunder, said deposit, or so much thereof as has not heretofore been
applied by Lessor, shall be returned, without payment of interest or other
increment for its use, to Lessee (or, at Lessor's option, to the last
assignee, it any, of Lessee's interest hereunder) at the expiration of the
term hereof, and after Lessee has vacated the Premises. No trust relationship
is created herein between Lessor and Lessee with respect to said Security
Deposit.
6. USE.
6.1 Use. The Premises shall be used and occupied only for the purpose set
forth in paragraph 1.4 of the Basic Lease Provisions or any other use which is
reasonably comparable to that use and for no other purpose.
6.2 Compliance with Law.
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(a) Lessor warrants to Lessee that the Premises, in the state existing on
the date that the Lease term commences but without regard to alterations or
improvements made by Lessee or the use for which Lessee will occupy the
Premises, does not violate any covenants or restrictions of record, or any
applicable building code, regulation or ordinance in effect on such Lease term
Commencement Date. In the event it is determined that this warranty has been
violated, then it shall be the obligation of the Lessor, after written notice
from Lessee, to promptly, at Lessor's sole cost and expense, rectify any such
violation.
(b) Except as provided in paragraph 6.2(a) Lessee shall, at Lessee's
expense, promptly comply with all applicable statutes, ordinances, rules,
regulations, orders, covenants and restrictions of record, and requirements of
any fire insurance underwriters or rating bureaus, now in effect or which may
hereafter come into effect, whether or not they reflect a change in policy from
that now existing, during the term or any part of the term hereof, relating in
any manner to the Premises and the occupation and use by Lessee of the Premises.
Lessee shall conduct its business in a lawful manner and shall not use or permit
the use of the Premises or the Common Areas in any manner that will tend to
create waste or a nuisance or shall tend to disturb other occupants of the
Office Building Project. NOTWITHSTANDING THE FOREGOING OR ANYTHING TO THE
CONTRARY CONTAINED IN THIS LEASE, LESSEE SHALL NOT BE RESPONSIBLE FOR COMPLIANCE
WITH ANY LAWS, CODES, ORDINANCES OR OTHER GOVERNMENTAL DIRECTIVES WHERE SUCH
COMPLIANCE IS NOT RELATED SPECIFICALLY TO LESSEE'S USE AND OCCUPANCY OF THE
PREMISES. FOR EXAMPLE, IF ANY GOVERNMENTAL AUTHORITY SHOULD REQUIRE THE
BUILDING OR THE PREMISES TO BE STRUCTURALLY STRENGTHENED AGAINST EARTHQUAKE, OR
SHOULD REQUIRE THE REMOVAL OF ASBESTOS FROM THE PREMISES AND SUCH MEASURES ARE
IMPOSED AS A GENERAL REQUIREMENT APPLICABLE TO ALL LESSEES RATHER THAN AS A
CONDITION TO LESSEE'S SPECIFIC USE OR OCCUPANCY OF THE PREMISES, SUCH WORK SHALL
BE PERFORMED BY AND AT THE SOLE COST OF LESSOR.
6.3 Condition of Premises.
(a) Lessor shall deliver the Premises to Lessee in a clean condition on
the Lease Commencement Date (unless Lessee is already in possession) and
Lessor warrants to Lessee that the plumbing, lighting, air conditioning, and
heating systems in the Premises shall be in good operating condition. In the
event that it is determined that this warranty has been violated, then it
shall be the obligation of Lessor, after receipt of written notice from
Lessee setting forth with specificity the nature of the violation, to
promptly, at Lessor's sole cost, rectify such violation.
(b) Except as otherwise provided in this Lease, Lessee hereby accepts
the Premises and the Office Building Project in their condition existing as
of the Lease Commencement Date or the date that Lessee takes possession of
the Premises, whichever is earlier, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations governing and
regulating the use of the Premises, and any easements, covenants or
restrictions of record, and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto. Lessee
acknowledges that it has satisfied itself by its own independent
investigation that the Premises are suitable for its intended use, and that
neither Lessor nor Lessor's agent or agents has made any representation or
warranty as to the present or future suitability of the Premises, Common
Areas, or Office Building Project for the conduct of Lessee's business.
6.4 LESSEE'S ACCESS.
LESSEE SHALL HAVE ACCESS TO THE PREMISES 24 HOURS PER DAY, SEVEN DAYS PER
WEEK.
7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.
7.1 Lessors Obligations. Lessor shall keep the Office Building Project,
including the Premises interior and exterior walls, roof, and common areas, and
the equipment whether used exclusively for the Premises or in common with other
premises, in good condition and repair; provided, however, Lessor shall not be
obligated to paint, repair or replace wall coverings. or to repair or replace
any improvements that are not ordinarily a part of the Building or are above the
Building standards. Except as provided in paragraph 9.5, there shall be no
abatement of rent or liability of Lessee on account of any injury or
interference with Lessee's business with respect to any improvements,
alterations or repairs made by Lessor to the Office Building Project or any part
thereof. Lessee expressly waives the benefits of any statute now or hereafter in
effect which would otherwise afford Lessee the right to make repairs at Lessor's
expense because of Lessor's failure to keep the Premises in good order,
condition and repair. NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH 7.1, IF
LESSOR FAILS TO TIMELY PERFORM ITS MAINTENANCE AND REPAIR OBLIGATIONS HEREUNDER,
AND, AS A CONSEQUENCE, LESSEE'S USE OF THE PREMISES IS SUBSTANTIALLY IMPAIRED,
LESSEE SHALL HAVE THE RIGHT TO CAUSE SUCH REPAIR OR MAINTENANCE TO BE PERFORMED
AT LESSOR'S EXPENSE AND TO DEDUCT THE COSTS THEREOF, TOGETHER WITH INTEREST
THEREON AT THE HIGHEST RATE PERMITTED BY LAW, FROM THE RENT PAYABLE TO LESSOR.
7.2 Lessee's Obligations.
(a) Notwithstanding Lessor's obligation to keep the Premises in good
condition and repair, Lessee shall be responsible for payment of the cost
thereof to Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Lessee or the Premises, to the extent such cost is attributable to
causes beyond normal wear and tear. Lessee shall be responsible for the cost of
painting, repairing or replacing wall coverings, and to repair or replace any
Premises improvements that are not ordinarily a part of the Building or that are
above the Building standards. Lessor may, at its option, upon reasonable notice,
elect to have Lessee perform any particular such maintenance or repairs the
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cost of which is otherwise Lessee's responsibility hereunder.
(b) On the last day of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises to Lessor in the same condition as received,
ordinary wear and tear excepted, clean and free of debris. Any damage or
deterioration of the Premises shall not be deemed ordinary wear and tear if the
same could have been prevented by good maintenance practices by Lessee. Lessee
shall repair any damage to the Premises occasioned by the installation or
removal of Lessee's trade fixtures, alterations, furnishings and equipment.
Except as otherwise stated in this Lease, Lessee shall leave the air lines,
power panels, electrical distribution systems, lighting fixtures, air
conditioning, window coverings, wall coverings, carpets, wall paneling, ceilings
and plumbing on the Premises and in THE SAME CONDITION RECEIVED IN.
7.3 Alterations and Additions.
(a) Lessee shall not, without Lessor's prior written consent make any
alterations, improvements, additions, Utility Installations or repairs in, on,
or about the Premises or the Office Building Project. As used in this paragraph
7.3 the term "Utility Installation" shall mean carpeting, window and wall
coverings, power panels, electrical distribution systems, lighting fixtures, air
conditioning, plumbing, and telephone and telecommunication wiring and
equipment. At the expiration of the term, Lessor may require the removal of any
or all of said alterations, improvements, additions or Utility Installations,
and the restoration of the Premises and the Office Building Project to their
prior condition, at Lessee's expense. Should Lessor permit Lessee to make its
own alterations, improvements, additions or Utility Installations, Lessee shall
use only such contractor as has been expressly approved by Lessor, WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, and Lessor may require Lessee to
provide Lessor, at Lessee's sole cost and expense, a lien and completion bond in
an amount equal to one and one-half times the estimated cost of such
improvements, to insure Lessor against any liability for mechanic's and
materialmen's liens and to insure completion of the work. Should Lessee make any
alterations, improvements, additions or Utility Installations without the prior
approval of Lessor, or use a contractor not expressly approved by Lessor, Lessor
may, at any time during the term of this Lease, require that Lessee remove any
part or all of the same.
(b) Any alterations, improvements, additions or Utility Installations
in or about the Premises or the Office Building Project that Lessee shall
desire to make shall be presented to Lessor in written form, with proposed
detailed plans. If Lessor shall give its consent to Lessee's making such
alteration, improvement, addition or Utility Installation, the consent shall
be deemed conditioned upon Lessee acquiring a permit to do so from the
applicable governmental agencies, furnishing a copy thereof to Lessor prior
to the commencement of the work, and compliance by Lessee with all conditions
of said permit in a prompt and expeditious manner.
(c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, the Building or the Office Building
Project, or any interest therein.
(d) Lessee shall give Lessor not less than ten (10) days' notice prior to
the commencement of any work in the Premises by Lessee, and Lessor shall have
the right to post notices of non-responsibility in or on the Premises or the
Building as provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend itself and Lessor against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, the Building or the Office Building
Project, upon the condition that if Lessor shall require, Lessee shall furnish
to Lessor a surety bond satisfactory to Lessor in an amount equal to such
contested lien claim or demand indemnifying Lessor against liability for the
same and holding the Premises, the Building and the Office Building Project free
from the effect of such lien or claim. In addition, Lessor may require Lessee to
pay Lessor's reasonable attorneys' fees and costs in participating in such
action if Lessor shall decide it is to Lessor's best interest so to do.
(e) All alterations, improvements, additions and Utility Installations
which may be made to the Premises by Lessee, including but not limited to, floor
coverings, paneling, doors, drapes, built-ins, moldings, sound attenuation, and
lighting and telephone or communication systems, conduit, wiring and outlets,
shall be made and done in a good and workmanlike manner and of good and
sufficient quality and materials and shall be the property of Lessor and remain
upon and be surrendered with the Premises at the expiration of the Lease term,
unless Lessor requires their removal pursuant to paragraph 7.3(a).
Notwithstanding the provisions of this paragraph 7.3(e), Lessee's personal
property and equipment, other than that which is affixed to the Premises so that
it cannot be removed without material damage to the Premises or the Building,
and other than Utility Installations, shall remain the property of Lessee and
may be removed by Lessee subject to the provisions of paragraph 7.2.
(f) Lessee shall provide Lessor with as-built plans and specifications for
any alterations. improvements, additions or Utility Installations.
7.4 Utility Additions. Lessor reserves the right to install new or
additional utility facilities throughout the Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building
Project, including, but not by way of limitation, such utilities as plumbing,
electrical systems, communication systems, and fire protection and detection
systems, so long as such installations do not unreasonably interfere with
Lessee's use of the Premises.
7.5 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION 7:
Page 7
(a) LESSEE SHALL BE ENTITLED TO MAKE ALTERATIONS, ADDITIONS, IMPROVEMENTS
AND UTILITY INSTALLATIONS IN OR TO THE PREMISES, WITHOUT THE PRIOR CONSENT OF
LESSOR, SO LONG AS EACH OF THE SAME (i) DO NOT EXCEED THE SUM OF $20,000 IN COST
AND (ii) DO NOT AFFECT ANY STRUCTURAL OR EXTERIOR PORTIONS OF THE BUILDING OR
ADVERSELY AFFECT THE BUILDING ELECTRICAL, PLUMBING OR HVAC SYSTEMS. HOWEVER,
LESSEE MUST NOTIFY LESSOR AT LEAST 5 BUSINESS DAYS IN ADVANCE OF COMMENCEMENT OF
ANY SUCH WORK.
(b) LESSEE SHALL NOT BE REQUIRED TO REMOVE AN ALTERATIONS, ADDITIONS,
IMPROVEMENTS OR UTILITY INSTALLATIONS FOR WHICH LESSEE HAS OBTAINED LESSOR'S
CONSENT, UNLESS LESSOR HAS INDICATED AT THE TIME GRANTING SUCH CONSENT, THAT
SUCH REMOVAL WILL BE REQUIRED AT THE END OF THE LEASE TERM.
(c) LESSEE'S SURRENDER OBLIGATIONS SHALL NOT INCLUDE THE REMOVAL OF ANY OF
THE INITIAL TENANT IMPROVEMENTS OR ANY REPAIRS MADE PURSUANT TO LESSEE'S REPAIR
OBLIGATIONS HEREUNDER.
8. INSURANCE; INDEMNITY.
8.1 Liability Insurance-Lessee. Lessee shall, at Lessee's expense,
obtain and keep in force during the term of this Lease a policy of Commercial
General Liability insurance utilizing an Insurance Services Office standard
form, or equivalent, issued by an insurer with a Best's rating of "A- VII" or
better, in an amount of not less than $2,000,000 per occurrence of bodily
injury and property damage combined or in a greater amount as reasonably
determined by Lessor and shall insure Lessee with Lessor and and Lender of
Lessor as an additional insured against liability arising out of the use,
occupancy or maintenance of the Premises. Compliance with the above
requirement shall not, however, limit the liability of Lessee hereunder.
8.2 Liability Insurance-Lessor. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Broad Form Property Damage Insurance, plus coverage against such other
risks Lessor deems advisable from time to time, insuring Lessor, but not
Lessee, against liability arising out of the ownership, use, occupancy or
maintenance of the Office Building Project in an amount not less than
$5,000,000.00 per occurrence.
8.3 Property Insurance-Lessee. Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease for the benefit of Lessee,
replacement cost fire and extended coverage insurance, with vandalism and
malicious mischief, sprinkler leakage and earthquake sprinkler leakage
endorsements, in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, of all of Lessee's
personal property, fixtures, equipment and tenant improvements.
8.4 Property Insurance-Lessor. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss
or damage to the Office Building Project improvements, but not Lessee's
personal property, fixtures, equipment or tenant improvements, in the amount
of the full replacement cost thereof, as the same may exist from time to
time, utilizing Insurance Services Office standard form, or equivalent,
providing protection against all perils included within the classification of
fire, extended coverage, vandalism, malicious mischief, plate glass, and such
other perils as Lessor deems advisable or may be required by a lender having
a lien on the Office Building Project. In addition, Lessor shall obtain and
keep in force, during the term of this Lease, a policy of rental value
insurance covering a period of one year, with loss payable to Lessor, which
insurance shall also cover all Operating Expenses for said period. Lessee
will not be named in any such policies carried by Lessor and shall have no
right to any proceeds therefrom. The policies required by these paragraphs
8.2 and 8.4 shall contain such deductibles as Lessor or the aforesaid lender
may determine. In the event that the Premises shall suffer an insured loss
as defined in paragraph 9.1(f) hereof, the deductible amounts under the
applicable insurance policies OTHER THAN DEDUCTIBLES ON ANY EARTHQUAKE
INSURANCE CARRIED BY LESSOR shall be deemed an Operating Expense. Lessee
shall not do or permit to be done anything which shall invalidate the
insurance policies carried by Lessor. Lessee shall pay the entirety of any
increase in the property insurance premium for the Office Building Project
over what it was immediately prior to the commencement of the term of this
Lease if the increase is specified by Lessor's insurance carrier as being
caused by the nature of Lessee's occupancy or any act or omission of Lessee.
8.5 Insurance Policies. Lessee shall deliver to Lessor copies of liability
insurance policies required under paragraph 8.1 or certificates evidencing the
existence and amounts of such insurance within seven (7) days prior to the
Commencement Date of this Lease. No such policy shall be cancelable or subject
to reduction of coverage or other modification except after thirty (30) days
prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to
the expiration of such policies, furnish Lessor with renewals thereof.
8.6 Waiver of Subrogation. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against the
other, for direct or consequential loss or damage arising out of or incident
to the perils covered by property insurance carried by such party, whether
due to the negligence of Lessor or Lessee or their agents, employees.
contractors and/or invitees If necessary all property insurance policies
required under this Lease shall be endorsed to so provide.
8.7 Indemnity. Lessee shall indemnify and hold harmless Lessor and its
agents, Lessor's master or ground lessor, partners and lenders, from and against
any and all claims for damage to the person or property of anyone or any entity
arising from Lessee's use of the Office Building Project. or from the conduct of
Lessee's business or from any activity. work or things done, permitted or
suffered by Lessee in or about the Premises or elsewhere and shall
Page 8
further indemnify and hold harmless Lessor from and against any and all
claims, costs and expenses arising from any breach or default in the
performance of any obligation on Lessee's part to be performed under the
terms of this Lease, or arising from any act or omission of Lessee, or any of
Lessee's agents, contractors, employees, or invitees, and from and against
all costs, attorney's fees, expenses and liabilities incurred by Lessor as
the result of any such use, conduct, activity, work, things done, permitted
or suffered, breach, default or negligence, and in dealing reasonably
therewith, including but not limited to the defense or pursuit of any claim
or any action or proceeding involved therein; and in case any action or
proceeding be brought against Lessor by reason of any such matter, Lessee
upon notice from Lessor shall defend the same at Lessee's expense by counsel
reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in
such defense. Lessor need not have first paid any such claim in order to be
so indemnified. Lessee, as a material part of the consideration to Lessor,
hereby assumes all risk of damage to property of Lessee or injury to persons,
in, upon or about the Office Building Project arising from any cause and
Lessee hereby waives all claims in respect thereof against Lessor.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTION 8.7:
(a) LESSEE SHALL NOT BE REQUIRED TO INDEMNIFY, DEFEND, OR HOLD LESSOR
HARMLESS FROM OR AGAINST ANY CLAIMS, LIABILITY, LOSS, COST OR EXPENSE ARISING
OUT OF (i) THE BREACH BY LESSOR, OR LESSOR'S AGENTS, EMPLOYEES, LICENSEES,
INVITEES, OR INDEPENDENT CONTRACTORS (COLLECTIVELY "LESSOR'S AGENTS"), OF ANY
COVENANT, REPRESENTATION OR WARRANTY UNDER THIS LEASE, OR (ii) ANY GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSOR OR LESSOR'S AGENTS.
(b) LESSOR SHALL PROTECT, DEFEND AND HOLD HARMLESS LESSEE AND LESSEE'S
EMPLOYEES, OFFICERS, AGENTS, DIRECTORS AND SHAREHOLDER, AND THE SUCCESSORS AND
ASSIGNS OF EACH OF THE FOREGOING, AGAINST AND FROM ANY AND ALL CLAIMS, DEMANDS,
LOSSES, LIABILITIES, DAMAGES, COSTS AND EXPENSES, (INCLUDING, WITHOUT
LIMITATIONS, ATTORNEYS' AND CONSULTANTS' FEES AND THE COSTS AND EXPENSES OF
DEFENSE) ARISING OR RESULTING FROM (i) LESSOR OR LESSOR'S AGENTS' BREACH OF ANY
COVENANT, REPRESENTATION OR WARRANTY UNDER THIS LEASE, AND (ii) LESSOR OR
LESSOR'S AGENTS' GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE MUTUAL INDEMNITY
OBLIGATIONS OF LESSOR AND LESSEE UNDER THIS LEASE SHALL NOT, HOWEVER, RELEASE
THE RESPECTIVE INSURERS OF LESSOR AND LESSEE FROM SUCH INSURERS' OBLIGATIONS
UNDER ANY POLICIES COVERING THEIR RESPECTIVE INSUREDS.
8.8 Exemption of Lessor from Liability. EXCEPT IN THE CASE OF LESSOR'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, Lessee hereby agrees that Lessor
shall not be liable for injury to Lessee's business or any loss of income
therefrom or for loss of or damage to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers, or any other
person in or about the Premises or the Office Building Project, nor shall
Lessor be liable for injury to the person of Lessee, Lessee's employees,
agents or contractors, whether such damage or injury is caused by or results
from theft, fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether said damage or injury results from conditions arising
upon the Premises or upon other portions of the Office Building Project, or
from other sources or places, or from new construction or the repair,
alteration or improvement of any part of the Office Building Project, or of
the equipment, fixtures or appurtenances applicable thereto, and regardless
of whether the cause of such damage or injury or the means of repairing the
same is inaccessible, Lessor shall not be liable for any damages arising from
any act or neglect of any other lessee, occupant or user of the Office
Building Project, nor from the failure of Lessor to enforce the provisions of
any other lease of any other lessee of the Office Building Project.
8.9 No Representation of Adequate Coverage. Lessor makes no
representation that the limits or forms of coverage of insurance specified in
this paragraph 8 are adequate to cover Lessee's property or obligations under
this Lease.
9. DAMAGE OR DESTRUCTION.
9.1 Definitions.
(a) "Premises Damage" shall mean if the Premises are damaged or destroyed
to any extent.
(b) "Premises Building Partial Damage" shall mean if the Building of which
the Premises are a part is damaged or destroyed to the extent that the cost to
repair is less than fifty percent (50%) of the then Replacement Cost of the
building.
(c) "Premises Building Total Destruction" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is fifty percent (50%) or more of the then Replacement Cost of
the Building.
(d) "Office Building Project Buildings" shall mean all of the buildings
on the Office Building Project site.
(e) "Office Building Project Buildings Total Destruction" shall mean if
the Office Building Project Buildings are damaged or destroyed to the extent
that the cost of repair is fifty percent (50%) or more of the then
Replacement Cost of the Office Building Project Buildings.
(f) "Insured Loss" shall mean damage or destruction which was caused by
an event required to be covered by the insurance described in paragraph 8.
The fact that an Insured Loss has a deductible amount shall not make the loss
an uninsured loss.
(g) "Replacement Cost" shall mean the amount of money necessary to be
spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring, excluding all
Page 9
improvements made by lessees. other than those installed by Lessor at Lessee's
expense.
9.2 Premises Damage; Premises Building Partial Damage.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and 9.5,
if at any time during the term of this Lease there is damage which is an
Insured Loss and which falls into the classification of either Premises
Damage or Premises Building Partial Damage, then Lessor shall, as soon as
reasonably possible and to the extent the required materials and labor are
readily available through usual commercial channels, at Lessor's expense,
repair such damage (but not Lessee's fixtures, equipment or tenant
improvements originally paid for by Lessee) to its condition existing at the
time of the damage, and this Lease shall continue in full force and effect.
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is
not an Insured Loss and which falls within the classification of Premises
Damage or Premises Building Partial Damage, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at
Lessee's expense), which damage prevents Lessee from making any substantial
use of the Premises, Lessor may at Lessor's option either (i) repair such
damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written
notice to Lessee within thirty (30) days after the date of the occurrence of
such damage of Lessor's intention to cancel and terminate this Lease as of
the date of the occurrence of such damage, in which event this Lease shall
terminate as of the date of the occurrence of such damage.
9.3 Premises Building Total Destruction; Office Building Project Total
Destruction. Subject to the provisions of paragraphs 9.4 and 9.5, if at any
time during the term of this Lease there is damage, whether or not it is an
Insured Loss, which falls into the classifications of either (i) Premises
Building Total Destruction or (ii) Office Building Project Total Destruction
then Lessor may at Lessor's option either (i) repair such damage or
destruction as soon as reasonably possible at Lessor's expense (to the extent
the required materials are readily available through usual commercial
channels) to its condition existing at the time of the damage, but not
Lessee's fixtures, equipment or tenant improvements, and this Lease shall
continue in full force and effect, or (ii) give written notice to Lessee
within thirty (30) days after the date of occurrence of such damage of
Lessor's intention to cancel and terminate this Lease, in which case this
Lease shall terminate as of the date of the occurrence of such damage.
9.4 Damage Near End of Term,
(a) Subject to paragraph 9.4(b), if at any time during the last twelve
(12) months of the term of this Lease there is substantial damage to the
Premises, Lessor may at Lessor's option cancel and terminate this Lease as of
the date of occurrence of such damage by giving written notice to Lessee of
Lessor's election to do so within 30 days after the date of occurrence of
such damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an
option to extend or renew this Lease, and the time within which said option may
be exercised has not yet expired, Lessee shall exercise such option, if it is to
be exercised at all, no later than twenty (20) days after the occurrence of an
Insured Loss falling within the classification of Premises Damage during the
last twelve (12) months of the term of this Lease. If Lessee duly exercises such
option during said twenty (20) day period, Lessor shall, at Lessor's expense.
repair such damage, but not Lessee's fixtures, equipment or tenant improvements,
as soon as reasonably possible and this Lease shall continue in full force and
effect. If Lessee fails to exercise such option during said twenty (20) day
period, then Lessor may at Lessor's option terminate and cancel this Lease as of
the expiration of said twenty (20) day period by giving written notice to Lessee
of Lessor's election to do so within ten (10) days after the expiration of said
twenty (20) day period, notwithstanding any term or provision in the grant of
option to the contrary.
9.5 Abatement of Rent; Lessee's Remedies.
(a) In the event any part of the Premises are not usable (including loss
of use due to loss of access or essential services), the rent payable hereunder
(including Lessee's Share of Operating Expense Increase) for the period during
which such damage, repair or restoration continues shall be abated, provided (1)
the damage was not the result of the negligence of Lessee, and (2) such
abatement shall only be to the extent the operation of Lessee's business as
operated from the Premises is adversely affected. Except for said abatement of
rent, if any, Lessee shall have no claim against Lessor for any damage suffered
by reason of any such damage, destruction, repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises or the
Building under the provisions of this Paragraph 9 and shall not commence such
repair or restoration within ninety (90) days after such occurrence, or if
Lessor shall not complete the restoration and repair within six (6) months after
such occurrence, OR IF IN THE EVENT THAT ONLY THE PREMISES ARE DAMAGED SUCH THAT
LESSEE CANNOT CONTINUE OPERATION OF ITS BUSINESS IN THE PREMISES AND LESSOR IS
UNABLE TO SUBSTANTIALLY RESTORE THE PREMISES WITHIN FOUR (4) MONTHS AFTER SUCH
OCCURRENCE, Lessee may at Lessee's option cancel and terminate this Lease by
giving Lessor written notice of Lessee's election to do so at any time prior to
the commencement or completion, respectively, of such repair or restoration. In
such event this Lease shall terminate as of the date of such notice.
(c) Lessee agrees to cooperate with Lessor in connection with any such
restoration and repair, including but not limited to the approval and/or
execution of plans and specifications required.
9.6 Termination-Advance Payments. Upon termination of this Lease
pursuant to this paragraph 9, an equitable adjustment shall be made
concerning advance rent and any advance payments made by Lessee to Lessor.
Lessor
Page 10
shall, in addition, return to Lessee so much of Lessee's security deposit as
has not therefore been applied by Lessor.
9.7 Waiver. Lessor and Lessee waive the provisions of any statute which
relate to termination of leases when leased property is destroyed and agree
that such event shall be governed by the terms of this Lease.
10. REAL PROPERTY TAXES,
10.1 Payment of Taxes. Lessor shall pay the real property tax, as defined
in paragraph 10.3, applicable to the Office Building Project subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with
the provisions of paragraph 4.2, except as otherwise provided in paragraph
10.2.
10.2 Additional Improvements. Lessee shall not be responsible for paying
any increase in real property tax specified in the tax assessor's records and
work sheets as being caused by additional improvements placed upon the Office
Building Project by other lessees or by Lessor for the exclusive enjoyment of
any other lessee. Lessee shall, however. pay to Lessor at the time that
Operating Expenses are payable under paragraph 4.2(c) the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Lessee or at Lessee's request.
10.3 Definition of "Real Property Tax." As used herein, the term "real
property tax" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax {other than inheritance,
personal income or estate taxes) imposed on the Office Building Project or
any portion thereof by any authority having the direct or indirect power to
tax, including any city, county, state or federal government, or any school,
agricultural, sanitary, fire. street, drainage or other improvement district
thereof, as against any legal or equitable interest of Lessor in the Office
Building Project or in any portion thereof, as against Lessor's right to rent
or other income therefrom, and as against Lessor's business of leasing the
Office Building Project. The term "real property tax" shall also include any
tax, fee, levy, assessment or charge (i) in substitution of, partially or
totally, any tax, fee, levy, assessment or charge hereinabove included within
the definition of "real property tax," or (ii) the nature of which was
hereinbefore included within the definition of "real property tax," or (iii)
which is imposed for a service or right not charged prior to June 1, 1978,
or, if previously charged, has been increased since June 1,1978, or (iv)
which is imposed as a result of a change in ownership, as defined by
applicable local statutes for property tax purposes, of the Office Building
Project or which is added to a tax or charge hereinbefore included within the
definition of real property tax by reason of such change of ownership, or (v)
which is imposed by reason of this transaction, any modifications or changes
hereto, or any transfers hereof.
10.4 Joint Assessment. If the improvements or property, the taxes for
which are to be paid separately by Lessee under paragraph 10.2 or 10.5 are
not separately assessed, Lessee's portion of that tax shall be equitably
determined by Lessor from the respective valuations assigned in the
assessor's work sheets or such other information (which may include the cost
of construction) as may be reasonably available. Lessor's reasonable
determination thereof, in good faith, shall be conclusive.
10.5 Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes assessed against and
levied upon trade fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere.
(b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement setting
forth the taxes applicable to Lessee's property.
11. UTILITIES.
11.1 Services Provided by Lessor. Lessor shall provide heating,
ventilation, air conditioning, and janitorial service as reasonably required,
reasonable amounts of electricity for normal lighting and office machines,
water for reasonable and normal drinking and lavatory use, and replacement
light bulbs and/or fluorescent tubes and ballasts for standard overhead
fixtures.
11.2 Services Exclusive to Lessee. Lessee shall pay for all water, gas,
heat, light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee,
together with any taxes thereon. If any such services are not separately
metered to the Premises, Lessee shall pay at Lessor's option, either Lessee's
Share or a reasonable proportion to be determined by Lessor of all charges
jointly metered with other premises in the Building.
11.3 Hours of Service. Said services and utilities shall be provided
during generally accepted business days and hours or such other days or hours
as may hereafter be set forth. Utilities and services required at other times
shall be subject to advance request and reimbursement by Lessee to Lessor of
the ACTUAL cost thereof.
11.4 Excess Usage by Lessee. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water,
lighting or power, or suffer or permit any act that causes extra burden upon
the utilities or services, including but not limited to security services
over standard office usage for the Office Building Project. Lessor shall
require Lessee to reimburse Lessor for any excess expenses or costs that may
arise out of a breach of this subparagraph by Lessee. Lessor may, in its sole
discretion, install at Lessee's expense supplemental equipment and/or
separate metering applicable to Lessee's excess usage or loading.
Page 11
11.5 Interruptions. There shall be no abatement of rent and Lessor shall
not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor's
reasonable control or in cooperation with governmental request or directions,
provided Lessor uses reasonable and diligent efforts to reinstate.
12. ASSIGNMENT AND SUBLETTING.
12.1 Lessor's Consent Required. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the
Premises, without Lessor's prior written consent, which Lessor shall not
unreasonably withhold. Lessor shall respond to Lessee's request for consent
hereunder in a timely manner, and any attempted assignment, transfer,
mortgage, encumbrance or subletting without such consent shall be void, and
shall constitute a material default and breach of this Lease without the need
for notice to Lessee under paragraph 13.1. Prior to any assignment or sublet
of the premises or any portion thereof, Lessee shall notify Lessor in writing
of the name and address of the proposed assignee or sublessee, and deliver to
Lessor financial statements of the proposed assignee or sublessee, a true and
complete copy of the proposed assignment agreement(s) or sublease with said
notice, and shall promptly provide any other information reasonably requested
by Lessor to enable Lessor to evaluate the proposed assignment or sublet.
Lessor shall within five (5) business days of the receipt of complete
information as required above, elect to do one of the following:
(1) consent to such proposed assignment or sublease;
(2) refuse such consent which refusal shall be on reasonable grounds; or
(3) IN THE EVENT LESSEE DESIRES TO ASSIGN OR SUBLEASE MORE THAN 50% OF
THE PREMISES, terminate this lease with respect to the portion of the
premises which Lessee desires to assign or sublease, in which case rental
paid by Lessee to Lessor hereunder shall be reduced in the proportion that
the square feet of the premises that Lessee desires to so assign or sublet
bears to the total square feet of the premises leased by Lessee hereunder,
and thereafter neither party shall have any further obligation or liability
to the other with regard to said portion of the premises except for matters
which arose prior to termination and except for obligations that exist upon
termination. NOTWITHSTANDING THE FOREGOING, LESSEE SHALL HAVE THE RIGHT TO
WITHDRAW ITS PROPOSAL TO ASSIGN OR SUBLET THE PREMISES, IN THE EVENT LESSOR
NOTIFIES IT THAT IT WILL ELECT TO TERMINATE THIS LEASE UNDER THIS
SUBPARAGRAPH (3).
"Transfer" within the meaning of this paragraph 12 shall NOT INCLUDE A
TRANSFER TO ANY ENTITY WHICH ACQUIRES SUBSTANTIALLY ALL OF THE ASSETS OF
LESSEE, AS A GOING CONCERN, WITH RESPECT TO THE BUSINESS THAT IS BEING
CONDUCTED IN THE PREMISES; NOR SHALL "TRANSFER" INCLUDE THE SALE OF STOCK, OR
THE TRANSFER OF THE BENEFICIAL OWNERSHIP OR EFFECTIVE VOTING CONTROL OF
LESSEE FROM THE PERSON(s) HAVING EFFECTIVE VOTING CONTROL AS OF THE DATE OF
LESSEE'S EXECUTION OF THIS LEASE, WHERE SUCH TRANSFER OCCURS IN CONNECTION
WITH ANY BONA FIDE FINANCING OR CAPITALIZATION FOR THE BENEFIT OF LESSEE.
12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by
or is under common control with Lessee, or to any corporation resulting from
the merger or consolidation with Lessee, or to any person or entity which
acquires all the assets of Lessee as a going concern of the business that is
being conducted on the Premises, all of which are referred to as "Lessee
Affiliate"; provided that before such assignment shall be effective, (a) said
assignee shall assume, in full, the obligations of Lessee under this Lease
and (b) Lessor shall be given written notice of such assignment and
assumption. Any such assignment shall not, in any way, affect or limit the
liability of Lessee under the terms of this Lease even if after such
assignment or subletting the terms of this Lease are materially changed or
altered without the consent of Lessee, the consent of whom shall not be
necessary.
12.3 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, no assignment or subletting shall
release Lessee of Lessee's obligations hereunder or alter the primary
liability of Lessee to pay the rent and other sums due Lessor hereunder
including Lessee's Share of Operating Expense Increase, and to perform all
other obligations to be performed by Lessee hereunder.
(b) Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment.
(c) Neither a delay in the approval or disapproval of such assignment or
subletting, nor the acceptance of rent, shall constitute a waiver or estoppel
of Lessor's right to exercise its remedies for the breach of any of the terms
or conditions of this paragraph 12 or this Lease.
(d) If Lessee's obligations under this Lease have been guaranteed by
third parties, then an assignment or sublease, and Lessor's consent thereto,
shall not be effective unless said guarantors give their written consent to
such sublease and the terms thereof.
(e) The consent by Lessor to any assignment or subletting shall not
constitute a consent to any subsequent
Page 12
assignment or subletting by Lessee or to any subsequent or successive
assignment or subletting by the sublessee. However, Lessor may consent to
subsequent sublettings and assignments of the sublease or any amendments or
modifications thereto without notifying Lessee or anyone else liable on the
Lease or sublease and without obtaining their consent and such action shall
not relieve such persons from liability under this Lease or said sublease;
however, such persons shall not be responsible to the extent any such
amendment or modification enlarges or increases the obligations of the Lessee
or sublessee under this Lease or such sublease.
(f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantors or any one else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(g) Lessor's written consent to any assignment or subletting of the
Premises by Lessee shall not constitute an acknowledgment that no default
then exists under this Lease of the obligations to be performed by Lessee nor
shall such consent be deemed a waiver of any then existing default, except as
may be otherwise stated by Lessor at the time.
(h) The discovery of the fact that any financial statement relied upon
by Lessor in giving its consent to an assignment or subletting was materially
false shall, at Lessor's election, render Lessor's said consent null and void.
12.4 Additional Terms and Conditions Applicable to Subletting. Regardless
of Lessor's consent, the following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly
incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee, and Lessor may collect such rent and income and
apply same toward Lessee's obligations under this Lease; provided, however,
that until a default shall occur in the performance of Lessee's obligations
under this Lease, Lessee may receive, collect and enjoy the rents accruing
under such sublease. Lessor shall not, by reason of this or any other
assignment of such sublease to Lessor nor by reason of the collection of the
rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such
sublessee under such sublease Lessee hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Lessor
stating that a default exists in the performance of Lessee's obligations
under this Lease to pay to Lessor the rents due and to become due under the
sublease. Lessee agrees that such sublessee shall have the right to rely upon
any such statement and request from Lessor, and that such sublessee shall pay
such rents to Lessor without any obligation or right to inquire as to whether
such default exists and notwithstanding any notice from or claim from Lessee
to the contrary. Lessee shall have no right or claim against said sublessee
or Lessor for any such rents so paid by said sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective unless and
until it has been approved in writing by Lessor, WHICH APPROVAL SHALL NOT BE
UNREASONABLY DENIED. Such sublease shall not be changed or modified without
Lessor's prior written consent. Any sublease shall, by reason of entering
into a sublease under this Lease, be deemed, for the benefit of Lessor, to
have assumed and agreed to conform and comply with each and every obligation
herein to be performed by Lessee other than such obligations as are contrary
to or inconsistent with provisions contained in a sublease to which Lessor
has expressly consented in writing.
(c) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event
Lessor shall undertake the obligations of Lessee under such sublease from the
time of the exercise of said option to the termination of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or
security deposit paid by such sublessee to Lessee or for any other prior
defaults of Lessee under such sublease.
(d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(e) With respect to any subletting to which Lessor has consented, Lessor
agrees to deliver a copy of any notice of default by Lessee to the sublessee.
Such sublessee shall have the right to cure a default of Lessee within three
(3) days after service of said notice of default upon such sub-lessee, and
the sublessee shall have a right of reimbursement and offset from and against
Lessee for any such defaults cured by the sublessee.
12.5 Lessor's Expenses. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or
if Lessee shall request the consent of Lessor for any act Lessee proposes to
do then Lessee shall pay Lessor's reasonable costs and expenses incurred in
connection therewith, including attorneys', architects', engineers' or other
consultants' fees.
12.6 Conditions to Consent. Lessor reserves the right to condition any
approval to assign or sublet upon Lessor's determination that (a) the
proposed assignee or sublessee shall conduct a business on the Premises of a
quality substantially equal to that of Lessee and consistent with the general
character of the other occupants of the Office Building Project and not in
violation of any exclusives or rights then held by other tenants, and (b) the
proposed assignee or sublessee be at least as financially responsible as
Lessee was expected to be at the time of the execution of this Lease or of
such assignment or subletting, whichever is greater.
Page 13
12.7 Surplus Rent. To the extent that the aggregate amount of any
rental or other payments to be made by the proposed assignee, transferee or
sublessee to Tenant exceeds the sum of (i) the aggregate amount of the
monthly Base Rent payable by Tenant to Landlord during the term of such
sublease, transfer or assignment or the remaining Term of the Lease,
whichever expires earlier, (ii) the amount of any commissions payable in
connection with such sublease, transfer or assignment, (iii) the cost of any
alterations or improvements reasonably requested to be installed in
connection with such sublease, transfer or assignment, AND (iv) LESSEE'S
REASONABLE ATTORNEY'S FEES, such excess amount shall be amortized ratably
over the term of such sublease, transfer or assignment or the remaining Term
of the Lease, whichever expires earlier, and one hundred percent (100%) of
such amortized portion of such excess amount shall be paid by Tenant to
Landlord on the first day of each month during the applicable term.
13. DEFAULT; REMEDIES.
13.1 Default. The occurrence of any one or more of the following
events shall constitute a material default of this Lease by Lessee:
(a) The abandonment of the Premises by Lessee.
(b) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder. as and when due, where such
failure shall continue for a period of FIVE (5) days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
(c) The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Lessee
other than those referenced in subparagraphs (b) and (c). above, where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Lessor to Lessee; provided, however, that if the nature of
Lessee's noncompliance is such that more than thirty (30) days are reasonably
required for its cure, then Lessee shall not be deemed to be in default if
Lessee commenced such cure within said thirty (30) day period and thereafter
diligently pursues such cure to completion. To the extent permitted by law,
such thirty (30) day notice shall constitute the sole and exclusive notice
required to be given to Lessee under applicable Unlawful Detainer statutes.
(d) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becoming a "debtor" as
defined in 11 US.C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Lessee, the same is dismissed within
NINETY (90) days; (iii) the appointment of a trustee or receiver to lake
possession of substantially all of Lessee's assets located at the Premises or
of Lessee's interest in this Lease. where possession is not restored to
Lessee within NINETY (90) days; or (iv) the attachment, execution or other
judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where such seizure is not
discharged within NINETY (90) days. In the event that any provision of this
paragraph 13.1(e) is contrary to any applicable law, such provision shall be
of no force or effect.
(e) The discovery by Lessor that any financial statement given to Lessor
by Lessee, or its successor in interest or by any guarantor of Lessee's
obligation hereunder, was materially false.
13.2 Remedies. In the event of any material default or breach of this
Lease by Lessee, Lessor may at any time thereafter, with or without notice or
demand and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such default:
(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In
such event Lessor shall be entitled to recover from Lessee all damages
incurred by Lessor by reason of Lessee's default including, but not limited
to, the cost of recovering possession of the Premises; expenses of reletting,
including necessary renovation and alteration of the Premises, reasonable
attorneys' fees, and any real estate commission actually paid; the worth at
the time of award by the court having jurisdiction thereof of the amount by
which the unpaid rent for the balance of the term after the time of such
award exceeds the amount of such rental loss for the same period that Lessee
proves could be reasonably avoided; that portion of the leasing commission
paid by Lessor pursuant to paragraph 15 applicable to the unexpired term of
this Lease.
(b) Maintain Lessee's right to possession in which case this Lease shall
continue in effect whether or not Lessee shall have vacated or abandoned the
Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent
as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premises are located.
Unpaid installments of rent and other unpaid monetary obligations of Lessee
under the terms of this Lease shall bear interest from the date due at the
maximum rate then allowable by
Page 14
law.
13.3 Default by Lessor. Lessor shall not be in default unless Lessor fails
to perform obligations required of Lessor within a reasonable time, but in no
event later than thirty (30) days after written notice by Lessee to Lessor
and to the holder of any first mortgage or deed of trust covering the
Premises whose name and address shall have theretofore been furnished to
Lessee in writing, specifying wherein Lessor has failed to perform such
obligation; provided, however, that if the nature of Lessor's obligation is
such that more than thirty (30) days are required for performance then Lessor
shall not be in default if Lessor commences performance within such 30-day
period and thereafter diligently pursues the same to completion.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee
to Lessor of Base Rent, Lessee's Share of Operating Expense Increase or other
sums due hereunder will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting
charges, and late charges which may be imposed on Lessor by the terms of any
mortgage or trust deed covering the Office Building Project. Accordingly, if
any installment of Base Rent, Operating Expense Increase, or any other sum
due from Lessee shall not be received by Lessor or Lessor's designee within
FIVE (5) days notice to Lessee, Lessee shall pay to Lessor a late charge
equal to 6% of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Lessor will
incur by reason of late payment by Lessee. Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Lessee's default with respect
to such overdue amount. nor prevent Lessor from exercising any of the other
rights and remedies granted hereunder.
14. CONDEMNATION. If the Premises or any portion thereof or the Office
Building Project are taken under the power of eminent domain, or sold under
the threat of the exercise of said power (all of which are herein called
"condemnation"), this Lease shall terminate as to the part so taken as of the
date the condemning authority takes title or possession, whichever first
occurs; provided that if so much of the Premises or the Office Building
Project are taken by such condemnation as would substantially and adversely
affect the operation and profitability of Lessee's business conducted from
the Premises, Lessee shall have the option, to be exercised only in writing
within thirty (30) days after Lessor shall have given Lessee written notice
of such taking (or in the absence of such notice, within thirty (30) days
after the condemning authority shall have taken possession), to terminate
this Lease as of the date the condemning authority takes such possession. If
Lessee does not terminate this Lease in accordance with the foregoing, this
Lease shall remain in full force and effect as to the portion of the Premises
remaining, except that the rent and Lessee's Share of Operating Expense
Increase shall be reduced in the proportion that the floor area of the
Premises taken bears to the total floor area of the Premises. Common Areas
taken shall be excluded from the Common Areas usable by Lessee and no
reduction of rent shall occur with respect thereto or by reason thereof.
Lessor shall have the option in its sole discretion to terminate this Lease
as of the taking of possession by the condemning authority, by giving written
notice to Lessee of such election within thirty (30) days after receipt of
notice of a taking by condemnation of any part of the Premises or the Office
Building Project. Any award for the taking of all or any part of the Premises
or the Office Building Project under the power of eminent domain or any
payment made under threat of the exercise of such power shall be the property
of Lessor, whether such award shall be made ascompensation for diminution in
value of the leasehold or for the taking of the fee, or as severance damages;
provided, however, that Lessee shall be entitled to any separate award for
loss of or damage to Lessee's trade fixtures. removable personal property and
unamortized tenant improvements that have been paid for by Lessee. For that
purpose the cost of such improvements shall be amortized over the original
term of this Lease excluding any options. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent of
severance damages received by Lessor in connection with such condemnation,
repair any damage to the Premises caused by such condemnation except to the
extent that Lessee has been reimbursed therefor by the condemning authority.
Lessee shall pay any amount in excess of such severance damages required to
complete such repair.
15. BROKER'S FEE.
(a) The brokers involved in this transaction are
____________________________as "listing broker" and STEVE LEVERE OF TORY
CORPORATE REAL ESTATE ADVISORS as "cooperating broker," licensed real estate
broker(s). A "cooperating broker" is defined as any broker other than the
listing broker entitled to a share of any commission arising under this
Lease. Upon execution of this Lease by both parties, Lessor shall pay to said
brokers jointly, or in such separate shares as they may mutually designate in
writing, a fee as set forth in a separate agreement between Lessor and said
broker(s), or in the event there is no separate agreement between Lessor and
said broker(s), the sum of $ PER SCHEDULE for brokerage services rendered
by said broker(s) to Lessor in this transaction. The commission shall be
paid 50% upon execution of this Lease and 50% upon the commencement of this
Lease. HOWEVER, IN NO EVENT SHALL ANY COMMISSION BE DUE IN THE EVENT LESSEE
EXERCISES ITS RIGHT TO TERMINATE UNDER PARAGRAPH 52 OF THIS LEASE.
(b) Lessor shall have no obligation to pay any additional fee or
commission under any of the following circumstances: (i) if Lessee exercises
any Option, as defined in paragraph 3.9.1 of this Lease, which is granted to
Page 15
Lessee under this Lease, or any subsequently granted option which is
substantially similar to an Option granted to Lessee under this Lease, or
(ii) if Lessee acquires any rights to the Premises or other premises
described in this Lease which are substantially similar to what Lessee would
have acquired had an Option herein granted to Lessee been exercised, or (iii)
if Lessee remains in possession of the Premises after the expiration of the
term of this Lease after having failed to exercise an Option, or (iv) if said
broker(s) are the procuring cause of any other lease or sale entered into
between the parties pertaining to the Premises and/or any adjacent property
in which Lessor has an interest.
(c) Lessor agrees to pay said fee not only on behalf of Lessor but also on
behalf of any person, corporation, association, or other entity having an
ownership interest in said real property or any part thereof, when such fee
is due hereunder. Any transferee of Lessor's interest in this Lease, whether
such transfer is by agreement or by operation of law, shall be deemed to have
assumed Lessor's obligation under this paragraph 15. Each listing and
cooperating broker shall be a third party beneficiary of the provisions of
this paragraph 15 to the extent of their interest in any commission arising
under this Lease and may enforce that right directly against Lessor;
provided, however, that all brokers having a right to any part of such total
commission shall be a necessary party to any suit with respect thereto.
(d) Lessee and Lessor each represent and warrant to the other that neither
has had any dealings with any person. firm, broker or finder (other than the
person(s), if any, whose names are set forth in paragraph 15(a), above) in
connection with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and no other broker or other person, firm or
entity is entitled to any commission or finder's fee in connection with said
transaction and Lessee and Lessor do each hereby indemnify and hold the other
harmless from and against any costs, expenses, attorneys' fees or liability
for compensation or charges which may be claimed by any such unnamed broker,
finder or other similar party by reason of any dealings or actions of the
indemnifying party.
16. ESTOPPEL CERTIFICATE.
(a) Each party (as "responding party") shall at any time upon not less than
ten (10) BUSINESS days' prior written notice from the other party
("requesting party") execute, acknowledge and deliver to the requesting party
a statement in writing (i) certifying that this Lease is unmodified and in
full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to the responding
party's knowledge, any uncured defaults on the part of the requesting party,
or specifying such defaults if any are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Office Building Project or of the business of Lessee.
(b) At the requesting party's option. the failure to deliver such
statement within such time shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it
shall be conclusive upon such party that (i) this Lease is in full force and
effect, without modification except as may be represented by the requesting
party. (it) there are no uncured defaults in the requesting party's
performance, and (iii) if Lessor is the requesting party, not more than one
month's rent has been paid in advance.
(c) If Lessor desires to finance, refinance, or sell the Office Building
Project. or any part thereof, Lessee hereby agrees to deliver to any lender
or purchaser designated by Lessor such financial statements of Lessee as may
be reasonably required by such lender or purchaser. Such statements shall
include the past three (3) years' financial statements of Lessee. All such
financial statements shall be received by Lessor and such lender or purchaser
in confidence and shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the
owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Office Building Project, and except as
expressly provided in paragraph 15, in the event of any transfer of such
title or interest, Lessor herein named (and in case of any subsequent
transfers then the grantor) shall be relieved from and after the date of such
transfer of all liability as respects Lessor's obligations thereafter to be
performed, provided that any funds in the hands of Lessor or the then grantor
at the time of such transfer, in which Lessee has an interest, shall be
delivered to the grantee. The obligations contained in this Lease to be
performed by Lessor shall, subject as aforesaid, be binding on Lessor's
successors and assigns, only during their respective periods of ownership.
18. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of
any other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided,
any amount due to Lessor not paid when due shall bear interest at the maximum
rate then allowable by law or judgments from the date due. Payment of such
interest shall not excuse or cure any default by Lessee under this Lease;
provided, however, that interest shall not be payable on late charges
incurred by Lessee nor on any amounts upon which late charges are paid by
Lessee.
Page 16
20. TIME OF ESSENCE. Time is of the essence with respect to the obligations
to be performed under this Lease.
21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expense Increase and any other expenses payable by Lessee hereunder shall be
deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No
prior or contemporaneous agreement or understanding pertaining to any such
matter shall be effective. This Lease may be modified in writing only, signed
by the parties in interest at the time of the modification. Except as
otherwise stated in this Lease, Lessee hereby acknowledges that neither the
real estate broker listed in paragraph 15 hereof nor any cooperating broker
on this transaction nor the Lessor or any employee or agents of any of said
persons has made any oral or written warranties or representations to Lessee
relative to the condition or use by Lessee of the Premises or the Office
Building Project and Lessee acknowledges that Lessee assumes all
responsibility regarding the Occupational Safety Health Act, the legal use
and adaptability of the Premises and the compliance thereof with all
applicable laws and regulations in effect during the term of this Lease.
23. NOTICES. All notices, demands, requests and other communications
required hereunder (a) shall be in writing, (b) shall be deemed to be
properly addressed and transmitted if mailed by United States registered or
certified mail, with return receipt request, postage prepaid, or by United
States Express Mail, or if sent by a national courier service or if
personally served, and the same if sent to a party at its address set forth
on the signature page hereto. Any notice, demand, request or other
communication required hereunder will be deemed delivered (a) upon personal
delivery, if personally served, or (b) if mailed or if sent by courier, upon
receipt (as reflected in the records of the delivering entity) or upon the
addressee's refusal to accept delivery (as reflected in the records of the
delivering entity). Any party may designate a change of address by written
notice to the other, given at least ten (10) days before such change of
address is to be come effective. Absent delivery to a party of the change of
address of another party, no party shall be required to inquire as to the
continuing correctness of the last address delivered to it for the other
party.
24. WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent
to or approval of any subsequent act by Lessee. The acceptance of rent
hereunder by Lessor shall not be a waiver of any preceding breach by Lessee
of any provision hereof, other than the failure of Lessee to pay the
particular rent so accepted, regardless of Lessor's knowledge of such
preceding breach at the time of acceptance of such rent.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a "short form" memorandum of
this Lease for recording purposes.
26. HOLDING OVER. If Lessee, with Lessor's consent, remains in possession of
the Premises or any part thereof after the expiration of the term hereof,
such occupancy shall be a tenancy from month to month upon all the provisions
of this Lease pertaining to the obligations of Lessee, except that the rent
payable shall be two hundred percent (200%) of the rent payable immediately
preceding the termination date of this Lease, and all Options, if any,
granted under the terms of this Lease shall be deemed terminated and be of no
further effect during said month to month tenancy.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. COVENANTS AND CONDITIONS. Each provision of this Lease performable by
Lessee AND LESSOR shall be deemed both a covenant and a condition.
29. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Lessee and subject to the provisions
of paragraph 17, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State where the Office Building Project is located and any
litigation concerning this Lease between the parties hereto shall be
initiated in the county in which the Office Building Project is located.
30. SUBORDINATION.
(a) This Lease, and any Option or right of first refusal granted hereby,
at Lessor's option, shall be subordinate to any ground lease, mortgage, deed
of trust, or any other hypothecation or security now or hereafter placed upon
the Office Building Project and to any and all advances made on the security
thereof and to all renewals,
Page 17
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, PURSUANT TO PARAGRAPH 55 HEREUNDER,
Lessee's right to quiet possession of the Premises shall not be disturbed if
Lessee is not in default and so Iong as Lessee shall pay the rent and observe
and perform all of the provisions of this Lease, unless this Lease is
otherwise terminated pursuant to its terms. If any mortgagee, trustee or
ground lessor shall elect to have this Lease and any Options granted hereby
prior to the lien of its mortgage, deed of trust or ground lease, and shall
give written notice thereof to Lessee, this Lease and such Options shall be
deemed prior to such mortgage, deed of trust or ground lease, whether this
Lease or such Options are dated prior or subsequent to the date of said
mortgage, deed of trust or ground lease or the date of recording thereof.
(b) Lessee agrees to execute any documents required to effectuate an
attornment, a subordination, or to make this Lease or any Option granted
herein prior to the lien of any mortgage, deed of trust or ground lease, as
the case may be. Lessee's failure to execute such documents within ten (10)
BUSINESS days after written demand shall constitute a material default by
Lessee hereunder without further notice to Lessee or, at Lessor's option,
Lessor shall execute such documents on behalf of Lessee as Lessee's
attorney-in-fact. LESSEE'S OBLIGATIONS PURSUANT TO THIS PARAGRAPH 30(b)
SHALL BE SUBJECT TO THE CONDITION THAT ANY SUCH DOCUMENTS SHALL NOT
MATERIALLY INCREASE ANY OBLIGATIONS OR DECREASE ANY RIGHTS OF LESSEE.
31. ATTORNEYS' FEES.
31.1 If either party or the broker(s) named herein bring an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, trial or appeal thereon, shall be entitled to his reasonable
attorneys' fees to be paid by the losing party as fixed by the court in the
same or a separate suit, and whether or not such action is pursued to
decision or judgment. The provisions of this paragraph shall inure to the
benefit of the broker named herein who seeks to enforce a right hereunder.
31.2 The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys'
fees reasonably incurred in good faith.
31.3 Lessor shall be entitled to reasonable attorneys' fees and all other
costs and expenses incurred in the REASONABLE preparation and service of
notice of default TO LESSEE and consultations in connection therewith,
whether or not a legal transaction is subsequently commenced in connection
with such default.
32. LESSOR'S ACCESS.
32.1 Lessor and Lessor's agents shall have the right to enter the Premises
UPON REASONABLE PRIOR NOTICE for the purpose of inspecting the same,
performing any services required of Lessor, showing the same to prospective
purchasers, lenders, or lessees, taking such safety measures, erecting such
scaffolding or other necessary structures, making such alterations, repairs,
improvements or additions to the Premises or to the Office Building Project
as Lessor may reasonably deem necessary or desirable and the erecting, using
and maintaining of utilities, services, pipes and conduits through the
Premises and/or other premises as long as there is no material adverse effect
to Lessee's use of the Premises. Lessor may at any time place on or about the
Premises or the Building any ordinary "For Sale" signs and Lessor may at any
time during the last 120 days of the term hereof place on or about the
Premises any ordinary "For Lease" signs.
32.2 All activities of Lessor pursuant to this paragraph shall be without
abatement of rent, nor shall Lessor have any liability to Lessee for the same.
32.3 Lessor shall have the right to retain keys to the Premises and to
unlock all doors in or upon the Premises other than to files, vaults and
sales, and in the case of emergency to enter the Premises by any reasonably
appropriate means, and any such entry shall not be deemed a forceable or
unlawful entry or detainer of the Premises or an eviction. Lessee waives any
charges for damages or injuries or interference with Lessee's properly or
business in connection therewith.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common
Areas without first having obtained Lessor's prior written consent.
Notwithstanding anything to the contrary in this Lease, Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether
to grant such consent. The holding of any auction on the Premises or Common
Areas in violation of this paragraph shall constitute a material default of
this Lease.
34. SIGNS. Lessee shall not place any sign upon the Premises or the Office
Building Project without Lessor's prior written consent. Under no
circumstances shall Lessee place a sign on any roof of the Office Building
Project.
35. MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall. at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to
Lessor of any or all of such subtenancies.
36. CONSENTS. Except for paragraphs 33 (auctions) and 34 (signs) hereof,
wherever in this Lease the consent of one
Page 18
party is required to an act of the other party such consent shall not be
unreasonably withheld or delayed.
37. GUARANTOR. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee, under this Lease.
38. QUIET POSSESSION. Upon Lessee paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership interest in the
Office Building Project.
39. OPTIONS.
39.1 Definition. As used in this paragraph the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease
or to renew this Lease or to extend or renew any lease that Lessee has on
other property of Lessor; (2) the option of right of first refusal to lease
the Premises or the right of first offer to lease the Premises or the right
of first refusal to lease other space within the Office Building Project or
other properly of Lessor or the right of first offer to lease other space
within the Office Building Project or other property of Lessor; (3) the right
or option to purchase the Premises or the Office Building Project, or the
right of first refusal to purchase the Premises or the Office Building
Project or the right of first offer to purchase the Premises or the Office
Building Project, or the right or option to purchase other property of
Lessor, or the right of first refusal to purchase other property of Lessor or
the right of first offer to purchase other property of Lessor.
39.2 Options Personal. Each Option granted to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original
Lessee while occupying the Premises who does so without the intent of
thereafter assigning this Lease or subletting the Premises or any portion
thereof, and may not be exercised or be assigned, voluntarily or
involuntarily, by or to any person or entity other than Lessee; provided,
however, that an Option may be exercised by or assigned to any Lessee
Affiliate as defined in paragraph 12.2 of this Lease. The Options, if any,
herein granted to Lessee are not assignable separate and apart from this
Lease, nor may any Option be separated from this Lease in any manner, either
by reservation or otherwise.
39.3 Multiple Options. In the event that Lessee has any multiple options
to extend or renew this Lease a later option cannot be exercised unless the
prior option to extend or renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary, (i) during the time
commencing from the date Lessor gives to Lessee a notice of default pursuant
to paragraph 13.1(c) or 13.1(d) and continuing until the noncompliance
alleged in said notice of default is cured, or (ii) during the period of time
commencing on the day after a monetary obligation to Lessor is due from
Lessee and unpaid (without any necessity 1or notice thereof to Lessee) and
continuing until the obligation is paid, or (iii) In the event that Lessor
has given to Lessee three or more notices of default under paragraph 13.1(c),
or paragraph 13.1(d), whether or not the defaults are cured, during the 12
month period of time immediately prior to the time that Lessee attempts to
exercise the subject Option, (iv) if Lessee has committed any non-curable
breach, or is otherwise in default of any of the terms, covenants or
conditions of this Lease.
(b) The period of time within which an Option may be exercised shall not
be extended or enlarged by reason of Lessee's inability to exercise an Option
because of the provisions of paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due
and timely exercise of the Option, if, after such exercise and during the
term of this Lease, (i) Lessee fails to pay to Lessor a monetary obligation
of Lessee for a period of thirty (30) days after such obligation becomes due
(without any necessity of Lessor to give notice thereof to Lessee), or (ii)
Lessee fails to commence to cure a default specified in paragraph 13.1(d)
within thirty (30) days after the date that Lessor gives notice to Lessee of
such default and/or Lessee fails thereafter to diligently prosecute said cure
to completion, or (iii) Lessor gives to Lessee three or more notices of
default under paragraph 13.1(c) or paragraph 13.1 (d), whether or not the
defaults are cured, or (iv) if Lessee has committed any non-curable breach,
including without limitation those described in paragraph 13.1 (b), or is
otherwise in default of any of the terms, covenants and conditions of this
Lease.
39.5 Exercise Notice. No exercise of any Option right hereunder
shall be effective unless the required notice is received by the party to
whom it is sent strictly in accordance with the provisions of Paragraph 23
herein. The risk of non-delivery shall be on the sender of the Option notice.
40. SECURITY MEASURES-LESSOR'S RESERVATIONS.
40.1 Lessee hereby acknowledges that Lessor shall have no obligation
whatsoever to provide guard service or other security measures for the
benefit of the Premises or the Office Building Project. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's
Page 19
agents and invitees from acts of third parties. Nothing herein contained
shall prevent Lessor, at Lessor's sole option, from providing security
protection for the Office Building Project or any part thereof, in which
event the cost thereof shall be included within the definition of Operating
Expenses, as set forth in paragraph 4.2(b).
40.2 Lessor shall have the following rights:
(a) To change the name, address or title of the Office Building Project
or building in which the Premises are located upon not less than 90 days
prior written notice;
(b) To, at Lessee's expense, provide and install Building standard
graphics on the door of the Premises and such portions of the Common Areas as
Lessor shall reasonably deem appropriate;
(c) To permit any lessee the exclusive right to conduct any business as
long as such exclusive does not conflict with any rights expressly given
herein;
(d) To place such signs, notices or displays as Lessor reasonably deems
necessary or advisable upon the roof, exterior of the buildings or the Office
Building Project or on pole signs in the Common Areas;
40.3 Lessee shall not:
(a) Use a representation (photographic or otherwise) of the Building or
the Office Building Project or their name(s) in connection with Lessee's
business;
(b) Suffer or permit anyone, except in emergency, to go upon the roof of
the Building.
41. EASEMENTS.
41.1 Lessor reserves to itself the right, from time to time, to grant
such easements, rights and dedications that Lessor deems necessary or
desirable, and to cause the recordation of Parcel Maps and restrictions, so
long as such easements, rights, dedications Maps and restrictions do not
unreasonably interfere with the use of the Premises by Lessee. Lessee shall
sign any of the aforementioned documents upon request of Lessor and failure
to do so shall constitute a material default of this Lease by Lessee without
the need for further notice to Lessee.
41.2 The obstruction of Lessee's view, air, or light by any structure
erected in the vicinity of the Building, whether by Lessor or third parties,
shall in no way affect this Lease or impose any liability upon Lessor.
42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such
payment shall not be regarded as a voluntary payment, and there shall survive
the right on the part of said party to institute suit for recovery of such
sum. If it shall be adjudged that there was no legal obligation on the part
of said party to pay such sum or any part thereof, said party shall be
entitled to recover such sum or so much thereof as it was not legally
required to pay under the provisions of this Lease.
43. AUTHORITY. If Lessee is a corporation, trust, or general or limited
partnership, Lessee, and each individual executing this Lease on behalf of
such entity represent and warrant that such individual is duly authorized to
execute and deliver this Lease on behalf of said entity. If Lessee is a
corporation, trust or partnership, Lessee shall, within thirty (30) days
after execution of this Lease, deliver to Lessor evidence of such authority
satisfactory to Lessor.
44. CONFLICT. Any conflict between the printed provisions, Exhibits or
Addenda of this Lease and the typewritten or handwritten provisions, if any.
shall be controlled by the typewritten or handwritten provisions.
45. NO OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lessee to lease
This Lease shall become binding upon Lessor and Lessee only when fully
executed by both parties.
46. LENDER MODIFICATION. Lessee agrees to make such reasonable modifications
to this Lease as may be reasonably required by an institutional lender in
connection with the obtaining of normal financing or refinancing of the
Office Building Project.
47. MULTIPLE PARTIES. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise expressly provided herein, the
obligations of the Lessor or Lessee herein shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or
Lessee, respectively.
48. WORK LETTER. This Lease is supplemented by that certain Work Letter of
even date executed by Lessor and Lessee, attached hereto as Exhibit C, and
incorporated herein by this reference.
Page 20
50. ATTACHMENTS. Attached hereto are the following documents which constitute a
part of this Lease:
- - EXHIBIT A Floor Plan
- - EXHIBIT B Rules & Regulations
- - EXHIBIT C Work Letter
ADDITIONAL PARAGRAPHS
51. RENT INCREASES.
Base rent shall increase per the following schedule:
Months 1-24 $3.40 per rentable square foot
Months 24-36 $3.46 per rentable square foot
Months 37-60 $3.55 per rentable square foot
52. IMPROVEMENT ALLOWANCE.
(a) Lessor shall provide an allowance of $7.25 per square foot to be used
for improvements to the Premises only (the "Allowance'); Lessor shall retain any
unused portion of the Allowance. The contractors bidding on the construction
shall be mutually agreed to by Lessor and Lessee.
(b) Lessor shall be solely responsible for the cost of demising the
Premises and bringing existing improvements into compliance with all applicable
local, state and federal regulations and codes, including without limitation,
ADA and Title 24. It is Lessor's belief that the improvements are currently in
100% compliance with all applicable codes.
(c) Lessor shall be solely responsible for the cost of retrofitting the
building HVAC, energy management and lighting systems as described in the
Executive Summary prepared by Viron Energy Services. Owner will conduct any such
work not completed by the Commencement Date after normal building hours.
(d) Any costs incurred by Lessor pursuant to (b) or (c) above shall not
reduce or modify the Allowance.
53. OPTION TO RENEW.
Lessee is granted two (2) options to extend the Term of the Lease Agreement for
an additional five (5) years each, herein defined as the "Extension Period".
Such extension shall be on the same terms and conditions as provided in the
Lease Agreement with the exception of Base Rent. Base Rent for the Extension
Period shall be a sum equal to:
For the Extension Period(s) the Base Rent will be the fair market rental
for the Leased Premises as of the date six (6) months prior to expiration of the
initial Lease Term or the first Extension Period if so exercised. However, the
Base Rent for the Extension Periods shall not be less than the Base Rent as of
the expiration of the initial lease Term and the Base year will be adjusted to
reflect the year the Extension Period commenced.
It shall be a condition precedent to the exercise of this option that
Tenant shall not be in default under the Lease Agreement at the time of exercise
of the option and at the commencement of the extension term. If Lessee elects
to exercise this option, Lessee shall exercise said option only by written
notice delivered to Lessor at least one hundred eighty (180) days prior the
expiration date of the Initial Term or last Extension Period, as applicable but
not earlier than three hundred sixty (360) days prior to the expiration of the
Initial Term or last Extension Period, as applicable.
In the event that the option rental is based upon the fair market rental
for the Premises, the parties shall thereafter immediately meet and endeavor to
agree upon the fair market rental of the Lease Premises. If the parties are
unable to agree upon the amount of rental for the Extension Period at least
ninety (90) days prior to the commencement of said Extension Period ("Initial
Meeting Period"), then the determination of the rental shall be promptly
submitted to arbitration. Each party hereto will select, within fifteen (15)
days of the expiration of the Initial Meeting Period, referred to above, a
licensed real estate agent with at least five years commercial experience in the
City in which the Lease Premises are located involving properties similar to the
Property under this Lease and said arbitrators shall meet for the purpose of
determining the rental for the Extension Period. If one party fails to so
select an agent the one agent retained shall set the fair market rental.
If the two arbitrators do not agree, within thirty (30) days of their
selection, they shall select a third arbitrator with the qualifications referred
to above, within fifteen (15) days, and if they cannot agree on a third
arbitrator, the third arbitrator shall be appointed by the presiding judge of
the Superior Court in the County in
Initials
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which the Leased Premises are located. Lessor or Lessee may petition such Court
within ten (10) days of the expiration date of the time for the selection of the
third arbitrator requesting the earliest possible determination by the Court.
The three arbitrators shall determine values within a thirty (30) day period of
the appointment of the third arbitrator and if they cannot agree upon a fair
market rental the three values shall be added together and the total shall be
divided by three. If any value is lower or higher than ten percent (10%) from
the middle value such higher or lower value shall be excluded from the
calculations and the two remaining values shall be divided by two or if only one
value remains, such value shall be the value used. Each party shall pay his
own agent and the cost of the third, if necessary, shall be paid equally. The
determination shall be signed by both parties and shall thereupon become a part
of the lease agreement. If the Base Rent for the Extension Period has not been
determined as of the commencement of the Extension Period, Lessee shall pay an
estimated Base Rent of One Hundred Ten percent (110%) of the Base Rent due for
the last month prior to commencement of the Extension Period. Any deficiency
shall be payable by Lessee to Lessor within ten (10) days of the arbitrator's
determination of the Base Rent for the Extension Period. Any surplus shall be a
credit for Base Rent to become thereafter due.
54. RIGHT OF FIRST OFFER.
Lessee shall have the first right to lease any space becoming available on the
first or second floor of the Building during the initial lease term or option
periods. Lessor shall notify Lessee in writing describing the space coming
available and offering it at the fair market rental rate, to be arrived at by
the method described in Paragraph 53 above. Lessee shall have ten (10) business
days from receipt in which to deliver their written acceptance of the offer.
Failure to respond to the offer within the stated response time shall constitute
a rejection of the offer.
55. NON-DISTURBANCE AGREEMENT.
Lessor shall provide non-disturbance agreements from all lenders and ground
lessors on the Building prior to the Commencement Date. In addition, Lessor
shall provide non-disturbance agreements from all future lenders and ground
lessors on the Building as a condition to Lessee's subordination of its
leasehold interest to such lenders.
56. SIGNAGE.
Pharsight will receive building directory and monument signage, subject to
Lessor's reasonable approval.
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LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR
ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS
AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO; THE PARTIES
SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND
TAX CONSEQUENCES OF THIS LEASE.
LESSOR: LESSEE:
ASSET GROWTH PARTNERS, LTD. PHARSIGHT CORPORATION, INC.
BY: EL CAMINO EQUITY MANAGER, INC.
GENERAL PARTNER
By /s/ Thomas J. Rees By /s/ Arthur H. Reidel
-------------------------------- -------------------------------
Thomas J. Rees
Its President Its President
-------------------------------
By By
-------------------------------- -------------------------------
Its Its
--------------------------------
--------------------------------
Date 7/23/98 Date
--------------------------------
--------------------------------
Address for Notices: Address for Notices:
2570 W. El Camino Real Suite 502
-------------------------------
Mountain View, CA 94040
--------------------------------
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[Exhibit A is a picture depicting a floor schematic of the second floor of
the building located at 800 El Camino Real, Mountain View, CA 94040.]
Page 24
EXHIBIT B
RULES AND REGULATIONS FOR STANDARD OFFICE LEASE
GENERAL RULES
1. Lessee shall not suffer or permit the obstruction of any Common Areas,
including driveways walkways and stairways.
2. Lessor reserves the right to refuse access to any persons Lessor in good
faith judges to be a threat to the safety, reputation, or property of the Office
Building Project and its occupants.
3. Lessee shall not make or permit any noise or odors that UNREASONABLY
annoy or interfere with other lessees or persons handling business within the
Office Building Project.
4. Lessee shall not keep animals or birds within the Office Building
Project, and shall not bring bicycles, motorcycles or other vehicles into areas
not designated as authorized for same.
5. Lessee shall not make, suffer or permit litter except in appropriate
receptacles for that purpose.
6. Lessee shall not alter any lock or install new or additional locks or
bolts without written permission from Lessor.
7. Lessee shall be responsible for the inappropriate use of any toilet
rooms, plumbing or other utilities. No foreign substances of any kind are to be
inserted therein.
8. Lessee shall not deface the walls, partitions or other surfaces of the
premises or Office Building Project.
9. Lessee shall not Suffer or permit anything in or around the Premises or
Building that causes excessive vibration or floor loading in any part of the
Office Building Project.
10. Furniture, significant freight, and equipment shall be moved into or
out of the building only with the Lessor's knowledge and consent, and subject to
such reasonable limitations, techniques and timing, as may be designated by
Lessor. Lessee shall be responsible for any damage to the Office Building
Project arising from any such activity.
11. Lessor reserves the right to close and lock the Building on Saturdays,
Sundays and legal holidays, and on other days between the hours of 6:00 P.M. and
8:00 A.M. of the following day. If Lessee uses the Premises during such
periods, Lessee shall be responsible for securely locking any doors it may have
opened for entry.
12. Lessee shall return all keys at the termination of its tenancy and
shall be responsible for the cost of replacing any keys that are lost.
13. No window coverings, shades or awnings shall be installed or used by
Lessee.
14. No Lessee, employee or invitee shall go upon the roof of the Building
without written permission from Lessor.
15. Lessee shall not suffer or permit smoking or carrying of lighted cigars
or cigarettes in areas reasonably designated by Lessor or by applicable
governmental agencies as non-smoking areas.
16. Lessee shall not use any method of heating or air conditioning other
than as provided by Lessor.
17. Lessee shall not install, maintain or operate any vending machines upon
the Premises without Lessor's written consent.
18. The Premises shall not be used for lodging or manufacturing.
19. Lessee shall comply with all safety, fire protection and evacuation
regulations established by Lessor or any applicable governmental agency.
20. Lessor reserves the right to waive any one of these rules or
regulations and/or as to any particular Lessee, and any such waiver shall not
constitute a waiver of any other rule or regulation or any subsequent
application thereof to such Lessee.
21. Lessee assumes all risks from theft or vandalism and agrees to keep its
Premises locked as may be required.
22. Lessor reserves the right to make such other reasonable AND
NON-DISCRIMINATORY rules and regulations as it may from time to time deem
necessary for the appropriate operation and safety of the Office Building
Project and its occupants. Lessee agrees to abide by these and such rules
and regulations.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles herein called "Permitted Size Vehicles."
Vehicles other than Permitted Size Vehicles are herein referred to as "Oversized
Vehicles."
2. Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded or parked in areas other than those REASONABLY
designated by Lessor for such activities.
3. Parking stickers or identification devices shall be the property of
Lessor and be returned to Lessor by the holder thereof upon termination of the
holder's parking privileges. Lessee will pay such replacement charge as is
reasonably established by Lessor for the loss of such devices.
4. Lessor reserves the right to refuse the sale of monthly identification
devices to any person or entry that willfully refuses to comply with the
applicable rules, regulations, laws and/or agreements.
5. Lessor reserves the right to relocate all or a part of parking spaces
from floor to floor, within one floor, and/or to reasonably adjacent offsite
location(s), and to reasonably allocate them between compact and standard size
spaces, as long as the same complies with applicable laws, ordinances and
regulations.
6. Users of the parking area will obey all posted signs and park only in
the areas designated for vehicle parking.
7. Unless otherwise instructed, every person using the parking area is
required to park and lock his own vehicle. Lessor will not be responsible for
any damage to vehicles, injury to persons or loss of property, all of which
risks are assumed by the party using the parking area.
8. VALIDATION, IF ESTABLISHED, WILL BE PERMISSIBLE ONLY BY SUCH METHOD OR
METHODS AS LESSOR AND/OR ITS LICENSEE MAY ESTABLISH AT RATES GENERALLY
APPLICABLE TO VISITOR PARKING.
9. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.
10. Lessee shall be responsible for seeing that all of its employees,
agents and invitees comply with the applicable parking rules, regulations, laws
and agreements.
11. Lessor reserves the right to modify these rules and/or adopt such other
reasonable and non-discriminatory rules and regulations as it may deem necessary
for the proper operation of the parking area.
12. Such parking use as is herein provided is intended merely as a license
only and no bailment is intended or shall be created hereby.
FULL SERVICE-GROSS
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EXHIBIT C
WORK LETTER TO STANDARD OFFICE LEASE
Dated: JULY 16, 1998
By and Between: ASSET GROWTH PARTNERS ("LESSOR") AND PHARSIGHT, INC.
("LESSEE")
The premised shall be constructed in accordance with Lessor's Standard
Improvements, as follows:
1. PARTITIONS
Per Exhibit C-1 attached.
2. WALL SURFACES
Per Exhibit C-1 attached.
3. WINDOW COVERINGS
Lessor to repair or replace to match existing as required.
4. FLOORING
Per Exhibit C-1 attached. Building standard books to be provided by owner.
5. DOORS
Per Exhibit C-1 attached.
6. ELECTRICAL AND TELEPHONE OUTLETS
Two duplex outlets and one mudring with pullstring per new or existing office.
7. CEILING
Per Exhibit C-1 attached.
8. LIGHTING
2x4 and 2x2 Lithonia or comparable magnetic ballast fixtures with 6" paracube
lens installed in accordance with Title 24.
9. HEATING AND AIR CONDITIONING DUCTS
One supply and return in each private office and per 250 square feet of common
area.
10. PLUMBING
All plumbing is an overstandard item to be specified by Lessee.
11. ENTRANCE DOORS
Per Exhibit C-1 attached.
12. COMPLETION OF IMPROVEMENTS
Lessor shall construct and complete improvements to the Premises in accordance
with the plans and specifications prepared by ____________________, dated
__________________ consisting of sheets _________ (the Improvements).
13. PREPARATION OF PLANS AND SPECIFICATIONS
Within FIVE (5) days after the date of this Lease lessor shall prepare at its
cost and deliver to Lessee for its approval THREE (3) copies of preliminary
plans and specifications for the completion of the improvements, which plans and
specifications shall itemize the work to be done by each party, including a cost
estimate of any work required of Lessor in excess of Lessor's Standard
Improvements. Lessee shall approve said preliminary plans and specifications
and preliminary cost estimate or specify with particularity its objection
thereto within THREE (3) days following receipt thereof. Failure to so approve
or disapprove within said period of time shall constitute approval thereof.
14. CONSTRUCTION
If Lessor's costs of constructing the Improvements to the Premises APPROVED BY
LESSEE exceeds AN AMOUNT
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EQUAL TO $7.25 PER SQUARE FOOT OF PREMISES, OR
$116,000.00, Lessee shall pay to Lessor in cash before the commencement of such
construction a sum equal to such excess. If the plans and specifications are
approved by Lessor and Lessee, and Lessee pays Lessor for such excess, then
Lessor shall, at its sole cost and expense, construct the Improvements in
accordance with said approved final plans and specifications and all applicable
rules, regulations, laws or ordinances.
15. COMPLETION
15.1 Lessor shall obtain a building permit to construct the Improvements as
soon as possible.
15.2 Lessor shall complete the construction of the Improvements as soon as
reasonably possible after the obtaining of necessary building permits.
15.3 The term "Completion" as used in the Work Letter, is hereby defined to
mean the date the building department of the municipality having jurisdiction of
the Premises shall have made a final inspection of the Improvements and
authorized a final release of restrictions on the use of public utilities in
connection therewith and the same are in a broom-clean condition, or if no
permit is obtained for the Improvements, the date that Lessee is able to move in
its furniture and equipment and conduct business on the Premises.
15.4 Lessor shall use its best efforts to achieve Completion of the
Improvements on or before the Commencement Date set forth in Paragraph 1.5 of
the Basic Lease Provisions.
15.5 In the event that the Improvements or any portion thereof have not
reached Completion by the Commencement Date, this Lease shall not be invalid,
but rather Lessor shall complete the same as soon thereafter as is possible and
Lessor shall not be liable to Lessee for damages in any respect whatsoever.
15.6 If Lessor shall be delayed at any time in the progress of the
construction of the Improvements or any portion thereof by extra work, changes
in construction ordered by Lessee, or by strikes, lockouts, fire, delay in
transportation, unavoidable casualties, rain or weather conditions, governmental
procedures or delay or by any other cause beyond Lessor's control, the
Commencement date established in paragraph 1.5 of the Lease shall be extended by
the period of such delay.
16. TERM
Upon Completion of the Improvements as defined in paragraph 15.3 above, Lessor
and Lessee shall execute an amendment to the Lease setting forth the date of
Tender of Possession as defined in paragraph 3.2.1 of the Lease of actual taking
possession, whichever first occurs, as the Commencement date of this Lease.
17. WORK DONE BY LESSEE
Any work done by Lessee shall be done only with Lessor's prior written consent
and in conformity with a valid building permit and all applicable rules,
regulations, laws and ordinances, and be done in a good and workmanlike manner
with good and sufficient materials. All work shall be done only by contractors
approved by Lessor, it being understood that all plumbing, mechanical,
electrical wiring and ceiling work are to be done only by contractors designated
by Lessor.
18. TAKING OF POSSESSION OF PREMISES
Lessor shall notify Lessee of the Estimated Completion Date at least ten (10)
days before said date. Lessee shall thereafter have the right to enter the
Premises to commence construction of any Improvements Lessee is to construct and
to equip and fixturize the Premises, as long as such entry does not interfere
with Lessor's work. Lessee shall take possession of the Premises upon the
tender thereof as provided in paragraph 3.2.1 of the Lease to which this Work
Letter is attached. Any entry by Lessee of the Premises under this paragraph
shall be under all of the terms and provisions of the Lease to which this Work
Letter is attached.
19. ACCEPTANCE OF PREMISES
Lessee shall notify Lessor in writing of any items that Lessee deems incomplete
or incorrect in order for the Premises to be acceptable to Lessee within ten
(10) days following Tender of Possession as set forth in paragraph 3.2.1 of the
Lease to which this Work Letter is attached. Lessee shall be deemed to have
accepted the Premises and approved construction if Lessee does not deliver such
a list to Lessor within said number of days.
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EXHIBIT C-1
01045 CUTTING AND PATCHING
DESCRIPTION: Contractor will be responsible for inspection of the existing
condition an all cutting, fitting and patching required to complete the
work or to:
Make its several parts fit together properly.
Uncover portions of the work to provide for installation of ill-timed work.
Remove and replace defective work.
Remove and replace work not conforming to requirements of Contract
Documents.
Remove samples of installed work as specified for testing.
Provide routine penetrations of non-structural surfaces for
installation of piping and electrical conduit.
- -METHODS: Inspect existing conditions of the project, including elements
subject to damage or to movement during cutting and patching. Execute
cutting and demolition by methods which will prevent damage to other work
and will provide proper surfaces to receive installation of repairs.
Refinish entire surfaces as necessary to provide an even finish to match
adjacent finishes.
01300 SUBMITTALS
DESCRIPTION: Contractor will be required to review submittals for compliance
with Contract Documents prior to submission. Submittals will be required
for finish materials, color selection, fabricated items, equipment and
administrative procedures such as certificates, inspections, etc., as
follows:
Shop Drawings: One sepia transparency and three prints.
Product Data: Number contractor requires to be returned plus two.
Samples: Will vary usually two of sufficient size to represent color,
texture, utility or other qualities.
Maintenance Data: Two copies for inclusion in Owner's Maintenance
Manual for finish materials, equipment, etc., that will be maintained
by Owner.
Certificates, Test Reports, etc.: Number contractor requires plus three.
01410 TESTING LABORATORY SERVICES
DESCRIPTION: Contractor will be required to arrange for all test and
inspections that are required by law, ordinances, rules and regulations,
order of approval of governing authorities. Owner will employ and pay for
the services of an Independent testing Laboratory to perform testing that
will be specified for items such as Structural Bracing, etc.
01500 TEMPORARY FACILITIES AND CONTROLS
DESCRIPTION: Contractor shall provide connections to existing facilities, sized
to provide service required for power, lighting and water. Arrange with
local telephone service company and Owner to provide direct-line telephone
service at construction site if required for use of personnel and
employees. Pay all costs for installation, maintenance and removal and
service charges. Existing sanitary facilities may be used during
construction period by arrangement with and on approval of Owner.
Completely remove temporary materials and equipment when no longer needed
and restore existing facilities to original condition.
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01600 MATERIALS AND EQUIPMENT
DESCRIPTION: Contractor will be required to comply with specified or otherwise
approved make, type, quality, etc., and to manufacture and assemble in
accordance with the best engineering and shop practices.
Handling: Arrange deliveries in accordance with construction
schedule; deliver materials and equipment in undamaged condition,
suitably packaged and identified.
Storage and Protection: Store properly until installed, protect from
damage after installation.
01631 SUBSTITUTIONS AND PRODUCT OPTIONS
DESCRIPTION: Within 30 days of contract date, contractor will be required to
submit list of major products to be used. Architect will consider
substitutions for specified projects in accordance with the following
options, if submitted in writing:
Products Specified in the Contract Documents by Reference Standard Only:
Select any product meeting that standard.
Products Specified in Contract Documents by naming Several Products or
manufacturers: Select any named manufacturer of product that complies
with the specifications.
Products Specified in the Contract Documents by Naming One or More
Manufacturer of Products and "Or Equal": Submit request for
substitution if proposed product or manufacturer is other than those
specifically named.
Products Specified in the Contract Documents by Naming Only One Product and
Manufacturer: There are no options.
01700 CONTRACT CLOSEOUT
DESCRIPTION: When the Contractor considers the work substantially complete, he
shall submit to the Owner a written notice that the work has been completed
in accordance with the Contract Documents and a list of items to be
completed or corrected. Within a reasonable time after receipt of the
notice, Owner and Architect will make a inspection to determine the status
of completion.
Contractor will be required to obtain and process all required certificate
and notices, arrange for all final inspections, and submit final adjustment
of accounts prior to final payment. For a period of one year from the date
of Final Acceptance, the Contractor will be required to provide supervisor,
labor transportation and materials for investigation and correction of
failures of deficiencies in the Work.
01710 CLEANING
DESCRIPTION: Contractor will be required to keep the Work, site and adjacent
properties free from accumulation of trash and debris resulting from
construction operations, and to periodically dispose of trash and debris at
a legal disposal area away from the site. Immediately prior to final
acceptance. Contractor will be required to clean the work, including
removal of all stains and other foreign materials from exposed surfaces,
and washing and polishing of glass and mirrors.
01720 PROJECT RECORD DOCUMENTS
DESCRIPTION: Contractor will be required to maintain project record documents,
recording information as construction progresses. Prior to final
acceptance, the Contractor will be required to transfer information to
sepia transparencies and submit to the Architect.
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DRAWINGS: Legibly mark to record actual construction:
Location of internal utilities and appurtenances concealed in the
construction, including mechanical and electrical systems installed
above furred ceilings, referred to visible and accessible features
of the structure.
Filed changes by Field Order or by Change Order.
Changes made by Filed Order or by Change Order.
Details not on original contract drawings.
SPECIFICATIONS: Legibly mark each section to record:
Addenda.
Manufacturer, trade name, catalog number, and supplier of each product and
item of equipment actually installed.
Changes made by Field Order or by Change Order.
06410 CASEWORK
GENERAL: Provide base and upper plastic laminated faced cabinets, adjustable
shelves, work surfaces, and storage cabinets as shown on drawings.
MATERIALS:
CASEWORK:
Plastic Laminate: WIC Custom Grade, Flush overlay construction,
plastic laminate veneer as manufactured by Wilsonart, Exxon
Chemical (Novamar), LaminArt, or equal.
Grades: As recommended by manufacturer for each application
and in accordance with Reference Standards.
Colors and Finish: As indicated on schedule and drawings.
Painted Finish: WIC Custom Grade, flush overlay construction,
opaque finish unless otherwise shown.
Exposed surfaces of casework scheduled for opaque finish:
a) Face Veneer: White Birch, rotary sliced, "Sound
Grade."
b) Solid Stock White Birch, plain-sawn.
Semi-exposed and concealed surfaces: Any species allowed by
specified Grade or finish system, except that shelf edges exposed
when doors are open shall be edged with close-grain hardwood.
COUNTERTOPS: Plastic laminate conforming to WIC Custom Grade. Minimum 3/4
inch thick hardwood plywood core.
CASEWORK HARDWARE IS AS FOLLOWS:
Hinges:
Grass Self Closing No. 1200 overlay at end panels.
Grass Self Closing No 1201 at intermediate stiles.
Finish: Polished chrome.
PULLS: Stanley #4433-1/2.
Finish: Polished chrome.
SHELVING STANDARDS: Knape & Vogt No. 255 No. 239 support. Polished
chrome.
DRAWER SLIDES:
File Drawers: Full extension, roller side guides: No. 100 pound
capacity; positive out stop: Accuride #3017, Grant No. 527,
KV No. 1429.
TYPICAL DRAWERS. Full extension guides; roller side guides:
75 pound capacity; positive out stop; Accuride No. 3800,
Grass No. V503, KV No. 8300.
INSTALLATION
Set and secure casework in place rigid, plumb and level in accordance with
WIC Section 26.
Use purpose designed fixture attachments at concealed location for wall
mounted components.
Carefully scribe casework which is against other building materials,
leaving gaps of 1/32 inch maximum. Do not use additional overlay trim
for this purpose.
Secure cabinet and counter bases to floor using appropriate angles and
anchorages.
Counter-sink anchorage devices at exposed locations used to wall-mount
components, and conceal with solid plugs of hardwood with finish
to match surround. Finish flush with surrounding surfaces.
DIVISION 7: THERMAL AND MOISTURE PROTECTION
07200 INSULATION
1. GENERAL: Provide Acoustical Insulation as shown on drawings.
Provide Insulation in root/ceiling spaces as shown on
drawings.
Provide Insulation in exterior walls between studs as shown on
drawings.
MATERIALS:
MANUFACTURER: Acceptable manufacturers:
United Stated Gypsum Company (USG).
Manville.
Owens Corning Fiberglass.
MATERIALS:
SOUND ATTENUATION INSULATION: Paperless, semi-rigid spun mineral
fiber mat, 2-1/2 inch thick: United States Gypsum.
"Thermafiber Sound Attenuation Blankets."
BLANKET INSULATION: Glass fiber manufactured by Owens Corning or
Manville or Mineral Wool Manufactured by U.S. gypsum
conforming to Federal Specifications HH-I-521F. All
insulation materials must be certified to meet the
requirements of Sec. 2-5311 (a) and installed to meet the
requirements of Section 2-5311(b) of the BUILDING ENERGY
EFFICIENCY STANDARDS. 1986 edition as published by the
California Energy Commission.
ACCESSORY MATERIALS: Miscellaneous Fastenings, Accessories:
As acceptable to insulation manufacturer.
INSTALLATION:
Install insulation in accordance with manufacturer's
recommendations, securely anchored, complete with all
required fastenings and accessories.
Vapor barrier: Orient to warm side of areas to be
insulated.
Joints: Butt tightly to form a continuous insulated layer
free of voids or open space.
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Do not install insulation until building is sufficiently
enclosed or protected against absorption of moisture by
the insulation, and do not install insulation unless
supporting framing and surrounding construction is
thoroughly dry.
07900 SEALANTS
GENERAL: Seal exterior and interior joints to provide acoustical integrity.
MATERIALS:
ACOUSTICAL TAPE: Type and size required as a detailed, performed PVC
foam tape, adhesive backed, "Norseal V730", Norton Specialty
Plastics Division. Use at acoustical partitions. Locate between
ceiling and top of partition, under floor runners, and as
detailed.
ACOUSTICAL SEALANT PADS: Resilient pads, composed of polybutene-butyl
and inert fillers, "Lowry Outlet Box Pads", Harry A. Lowry &
Associates, Van Nuys, California 91406, or approved equal. Use
at acoustical partitions to seal edges of gypsum wallboard not
being taped and as detailed.
NEOPRENE GASKETS: ASTM D2000, grade BC610; dense neoprene rubber, 60
duro-meter, 1000 psi tensile strength; 1/8 inch thick; Williams
Products, Inc. Series 1200 dense Neoprene rubber or equal product
substituted under provisions of section 01631.
DIVISION 8: DOORS, WINDOWS AND GLASS
08100 STEEL DOORS AND FRAMES
GENERAL:
U.L. LABEL: Where the Underwriters Laboratories, Inc. labeled
openings are called for on the door schedule, doors and frames
shall be constructed in accordance with the U.L. procedure issued
to the manufacturer and shall bear the designated U.L. labels.
MATERIALS:
DOORS: Ceco Corporation, Regent doors fabricated from 2-18 gauge
steel sheets with flush seamless face sheets and honeycomb core.
The top and bottom of the doors shall be closed flush by 16 gauge
channels.
FRAMES: Ceco Corporation 16 gauge steel hot-dipped galvanized frames.
SF (Standard Frame) Series: For concrete and masonry wall
applications.
DWS or DWC Series: For drywall frame construction. Frames shall
be knocked-down field assembled type designed specifically
for installation after drywall partitions are erected.
Glazing Provisions: Window frames shall be provided with glazing
pockets prepared to receive glazing and shall include steel
glazing beads.
EXECUTION:
Doors and frames shall be installed and erected plumb and in true
alignment. Frames shall be rigid and securely in place.
Clearances at top and sides of doors shall be not less than
1/16" and not more than 1/8".
CLEAN-UP: Clean up all debris resulting from the operation.
08200 WOOD DOORS
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GENERAL:
SUBMITTALS: In accordance with Section 01300
For Review:
Manufacturer's Literature of all products.
Shop Drawings: Submit schedule of doors, using the same
reference numbers for openings as those on the contract
drawings, indicating the core type, veneer grade, site,
location, and extent of hardware blocking, and other
pertinent data.
FOR INFORMATION AND RECORD:
Warranty: Submit written agreement on door manufacturer's
standard form signed by Manufacturer, Installer and
Contractor, agreeing to repair or replace defective doors
which have warped (bow, cup or twist) or which show
telegraphing of core construction below in lace veneers, or
do not conform to tolerance limitations of W.I.C.
Warranty shall be in effect for the life of the door.
MATERIALS
TYPE: Wood doors shall be flush panel, solid core and manufactured to
the standard of "Custom Grade" as defined in the manual of
Millwork of the Woodwork Institute of California (W.I.C.).
FLUSH PANEL DOORS:
Core construction particle board.
Veneer for opaque finish, any W.I.C. custom grade, closed grain,
hardwood at mill option.
EXECUTION
SEALING: Insure that top and bottom edges of doors are sealed when
they arrive at the job site.
INSTALLATION: Wood doors and finish hardware installed under section
06200 Finish Carpentry.
08710 FINISH HARDWARE
GENERAL: Finish Hardware within tenant suite.
MATERIALS:
FINISH HARDWARE SCHEDULE: all finishes to match existing building
hardware U.O.N.
HARDWARE GROUPS: To Be Determined
08800 GLASS AND GLAZING
GENERAL: Full Height Glass Partitions.
MATERIALS:
CLEAR GLASS: Conforming to Reference Standards FS-DD-G-451, Type 1,
Class 1, Quality q3, thickness and shown on drawings, tempered
where shown on drawings, PPG "Clear Glass".
SILICON GLAZING SEALANT: One-part, gun-grade, General Electric
"Silglaze" or equal.
Color: Black
GLAZING GASKETS: types and sizes as required, performed, premoulded
corners, as manufactured by F.H. Moloney, D.S. Brown, Kirkhill
Rubber, or equal.
Full-Density EPDM: Conforming to NAAMM Standard SG-1, 60-70
Shore A hardness, 25% compression set.
Closed-cell Neoprene: Capable of 24% - 40% compression.
GLAZING BLOCKS, SHIMS: Neoprene, 70-9- Shore A hardness.
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GLAZING TAPES: Types and sizes as required, 100% solids,
Polyisobutylene-butyl, preformed sealant tape, as manufactured by
Tremco, Pocora, or equal, black.
GLASS CUTTING: Cut all glass to proper size in accordance with
details, Reference Standards, and manufacturer's recommendations
for technique, tolerances, edge bit, clearance, and climatic
conditions.
EDGE TREATMENT: Edge treatment at butt-joint glazing will be flat
ground with 1/16" ground 45 degree seam and polished unless
otherwise shown on drawings.
DIMENSIONAL TOLERANCES: Glass shall comply with Reference Standard
except for the following:
Edge bow in open or closed joint butt-glazed situation shall not
cause misalignment of adjacent panels in excess of 1/8".
Width of joint dimension shall not vary within any butt-joint by
more than 1/16".
Width of joint dimension shall not vary from nominal dimension by
more than 1/16".
TEMPERING: All tempered glass shall be horizontally tempered and
waves shall be horizontal.
DIVISION 9: FINISHES
09110 METAL SUPPORT SYSTEMS
GENERAL: Interior walls, partitions and ceilings.
MATERIALS:
METAL STUDS: Standard (25) gage, sizes as shown on Drawings, punched
steel type, Milcor "Drywall Steel Studs", unless otherwise noted.
Steel: ASTM C-645, galvanized.
Track and Bridging: Standard (25) gage, unpunched type as
standard with manufacturer of metal studs.
Use at non-bearing partitions as detailed.
METAL STUDS: heavy (20) gage, sizes as shown on the Drawings, punched
steel type, USG "Type CWS", unless noted otherwise.
Steel: ASTM C-645, galvanized.
Track and Bridging: Type CWR, 20 gage, unpunched type as
standard with manufacturer of metal studs.
Use at non-bearing partitions as detailed.
TOP TRACK: Partition Specialties, Inc. "Tapeable Top Track" or
approved equal.
GYPSUM BOARD CEILING SUSPENSION SYSTEM: Direct suspension, United
States Gypsum, or equal.
Main Beam: 1/-1/2" cold rolled, 16 gage, galvanized for exterior
softits.
Furning Channel: 7/8" roll formed, 26 gage-shaped channel,
galvanized.
Miscellaneous Moldings, Clips, fasteners, Hanger Wire, etc.: As
recommended by manufacturer and approved by governing
authorities.
CHANNELS: 16 gage galvanized cold-rolled steel channels, sizes shown,
Milcor "Cold-Rolled Channel," or approved equal.
Deflection Channel at Partition Heads: 1-3/4" flanges.
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Bridging: Sized to fit stud cells.
FURRING CHANNELS: Standard 25 gage galvanized steel, Milcor "Drywall
Furring Channel", or approved equal.
HANGER AND TILE WIRE: galvanized steel wire conforming to federal
Standard QQ-W-461, finish 5, class 1, soft temper.
Hanger Wire: 10 gage
Diagonal Bracing Wire: 16 gage
Double-Strand Tie Wire: 18 gage
EXECUTION
Comply with the requirements of ASTM C 754 for installation of framing
to receive gypsum wallboard.
Full Height Partitions: Secure top and bottom runners at 24 inch
centers. Align to configuration required.
Install studs vertically at 24 inch centers and not more than 2 inches
from abutting construction, each side of openings, and at
corners.
Fit runners under and above openings secure intermediate studs at
spacing of wall studs.
09250 GYPSUM WALLBOARD SYSTEMS
GENERAL: Interior walls, partition and ceilings.
MATERIALS
GYPSUM BOARD: Paper-faced, type "SW" edges, ASTM C36, USG "Sheetrock
Firecode" (type "x") at non-fire-rated and fire-rated
construction.
MISCELLANEOUS ACCESSORIES:
Expansion Joint: USG #093.
Corner Bead: Metal reinforced paper, Beadex manufacturing Co.,
"Paper Bead".
Metal Trim: USG #200B.
Column Furring Clips: Parker Devices Inc., "PDI Single Step
Clips," or approval equal.
Miscellaneous Clips, Screed, and Fastenings: As recommended by
manufacturer of gypsum board and as approved by governing
authorities.
Caulk: Acrylic Latex type.
09510 ACOUSTICAL CEILING SYSTEM
DESCRIPTION: Provide new Suspended acoustical tile system as shown on drawings.
MATERIALS:
EXPOSED SUSPENSION SYSTEM: Direct suspension, double web T-bulb steel
construction; Donn Corporation "Supraline Grid".
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Size of Panel: 2 x 4
Perimeter Trim: Shadow Molding.
Finish: Manufacturer's standard white enamel finish, with white
painted recess.
ACOUSTICAL PANELS: Mineral fiberboard lay-in panels. Armstrong
"Second Look IV Supraline Score", No. 2767B, Tapered edge,
compatible with Donn ceiling system.
Size: 24 inches x 48 inches x 3/4 inch.
Flame Spread: UL labeled, 25 or under.
Noise reduction Coefficient: .50-.60.
Color: White
PLENURN BARRIER: Lead Sheet, 1/64" thickness, 1 pound per sq. ft.
weight, Acoustilead "Sound barrier".
09650 RESILIENT FLOORING
GENERAL: Flooring as indicated on drawings.
MATERIALS:
RESILIENT STRAIGHT BASE: Burke Rubber, 1/8" thickness, 2 1/2 high,
"Covered Base" at hard surfaces, "Carpet Base" at carpet areas.
RESILIENT TILE: Vinyl Composition, FS SS-T-312, Type IV, 12 x 12
inch, 1/8" gage. Armstrong Excelon, Imperial texture or approved
equal.
CARPET REDUCER STRIP: Mercer Plastics, "Royal Custom Edge #1" color
as shown on drawings.
EXECUTION:
Mix tiles from containers to ensure share variations are consistent.
Clean, seal and wax floor and base surface in accordance with
manufacturer's instructions.
09680 CARPET
GENERAL: Flooring as indicated on drawings. Manufacturer as listed on the
drawings or substitutions under provisions of section 01631.
FOR REVIEW:
Seaming diagram indicating carpet configuration in a manner to
show proper seams and pattern match.
Submit (2) samples of each type of carpet for Architect's
approval. 9" x9" minimum.
FOR INFORMATION AND RECORDS:
Warranty: submit a written warranty including, but not limited
to:
10 year wear warranty (including manufacturing defects such
as edge ravel and delamination)
Static Warranty
Tip Shear Warranty
MATERIALS:
Carpets as specified on the drawings.
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Provide 5% overage plus 110 additional square yards of each carpet
type for the owner's future use.
ACCESSORY MATERIALS
Sub-floor filler: Cementitions type recommended by carpet
manufacturer.
Primer and adhesives: Types recommended by carpet manufacturer
to suit application and expected service.
Edge strips:
Carpet to resilient and resinous floorings; rubber
tile/carpet joiner, Roppe Stock number 50; color #100
"Black."
Carpet to ceramic tile: Rubber tile/carpet joiner Roppe
Stock number 56; color #100 "Black".
Carpet Pad: Fairmont Dubl-Bac DB 1416.5/32" double stick pad.
Substitutions under provisions of Section 01631.
INSTALLATION:
Apply carpet and adhesive in accordance with manufacturers
instructions.
Check matching of carpet before cutting and ensure there is no visible
variation between dye lots.
Install carpet in configurations and colors indicated on drawings.
Cut carpet, where required, in manner to allow proper seams and
pattern match. Ensure cuts are straight, true and unfrayed. No
pieces less than 24 inches wide will be permitted.
Where possible and practical, locate seams in areas of least amount of
traffic.
Apply adhesive to edges of carpet at seams and join in manner so as
not to detract from the appearance of the carpet installation and
decrease its life expectancy. Ensure seams are straight, not
overlapped or peaked and free of gaps.
Spread adhesive in quantity recommended by manufacturer after primer
application to ensure proper adhesive over full area of
installation. Apply only enough adhesive to permit proper
adhesion of carpet before initial set.
Lay carpet on floors with the run of the pile in same direction of
anticipated traffic.
Do not change run of pile in any one room or from one room to next
where continuous through a wall opening.
Cut and fit carpet neatly around projection through floor and to walls
and other vertical surfaces.
Fit carpet snugly to walls or other vertical surfaces, leaving no
gaps.
Entire carpet installation is to be laid tight and flat to subfloor,
well fastened at edges, and present a uniform pleasing
appearance. Ensure monolithic color, pattern and texture match
within any one area.
Install edging strips where carpet terminates at other floor
coverings. Use full length pieces only. Butt tight to vertical
surfaces. Where splicing cannot be avoided butt ends tight and
flush.
Clean and vacuum all debris resulting from this work.
09900 PAINTING
GENERAL
PRIMING: All Millwork items and finish carpentry items (except
materials remaining natural) shall be primed immediately upon
arrival on job.
SUBSTITUTIONS: These specifications set quality standards. Kelley-
Moore Products have been used to give a basis for specifications.
In addition, painting material may be first line products of
Pratt and Lambert, Sherwin-Williams, National Lead, Sinclair, and
W.P. Fuller, providing the
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manufacturer submits a list of substituted items as they relate
to the specified items. Other manufacturers will be required to
submit technical data to the Architect for approval no later than
35 days after award of contract.
SCOPE: It is the intent that work under this section of the
specifications shall include the finishing of all surfaces
normally requiring a paint finish. Interior partitions, trims,
gypsum board ceilings, and all other items that are not factory-
finished and shop primed.
INSPECTIONS: Notify the Architect 24 hours prior to the time each
coat of finish is to be applied. Failure to so notify will cause
the work in question to be recoated or rejected. Obtain
Architect's approval of surface or finish prior to application of
each succeeding coat of finish.
COLOR SELECTION: The Architect will furnish to Contractor a complete
color schedule of paint colors for the project prior to
commencement of the painting operation. Color to be approved in
writing by the Architect prior to commencement of painting.
Colors will be chosen from the paint manufacturer's total range
of color mixes. The Contractor shall provide all requested color
information and samples required by the Architect for color
selection, including test samples of approved colors on the
building.
MATERIALS
PAINT SCHEDULE: Finish surfaces in accordance with the following schedule and
as further shown on the drawings. Material shown is Kelly Moore
unless shown otherwise.
INTERIOR GYPSUM BOARD
1st Coat: 970 Wall Sealer
2nd Coat: 555 acrylic flat wall paint
INTERIOR METAL DOORS AND FRAMES AND ALL EXPOSED FERROUS METALS
1st Coat: (touch up only if already primed) 1777 rust inhibiting
primer
2nd Coat: 1625 Alkyd Eggshell enamel
3rd Coat: (for doors and frames) 1625 Alkyd Eggshell enamel
INTERIOR GALVANIZED METAL
Each treatment:Yosemite Galvan Prime
1st Coat (touch up only if already primed) 1722 Galvanized iron
primer
2nd Coat: 1625 Eggshell enamel
EXECUTION
The workmanship shall be of the very best quality. All materials
shall be applied under adequate illumination, evenly spread, and
smoothly flowed on without runs or sags. Cut paint sharply to
lines. Only skilled mechanics shall be employed. Regardless of
number of coats specified the paint shall completely cover
material surface to Architect's satisfaction.
CLEAN-UP: After all work has been completed, the Contractor shall
clean up all debris resulting from his work and shall clean all
paint from all surfaces adjacent to his work, and leave the
premises in perfect condition, subject to acceptance by the
Owner. Remedy all work that is defective or defaced from any
cause, as directed by the Architect.
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FIRST AMENDMENT TO THE LEASE
DATED JUNE 11, 1998 BY AND BETWEEN
ASSET GROWTH PARTNERS, LTD AS LESSOR
AND PHARSIGHT CORPORATION AS LESSEE
This amendment, executed pursuant to Paragraph 3.4 of the Lease, shall establish
the following:
1) Lessor and Lessee agree that the Rent Commencement Date under the lease is
September 26, 1998.
2) The Expiration Date shall be September 25, 2003.
LESSOR: LESSEE:
ASSET GROWTH PARTNERS, LTD. PHARSIGHT CORPORATION
A CALIFORNIA LIMITED PARTNERSHIP A CALIFORNIA CORPORATION
BY: REES PROPERTIES, INC.
GENERAL PARTNER
/s/ Thomas J. Rees /s/ Robin A. Kehoe
- ----------------------------------- -----------------------------------
Thomas J. Rees By: Robin A. Kehoe
President Its: Chief Financial Officer
Date: 11/24/98 Date: November 19, 1998
---------------------------- ----------------------------
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SECOND AMENDMENT TO THE LEASE
DATED JUNE 11, 1998 BY AND BETWEEN
ASSET GROWTH PARTNERS, LTD AS LESSOR
AND PHARSIGHT CORPORATION AS LESSEE
This amendment dated December 10, 1999, shall amend the lease as follows:
1. As of January 1, 2000, the Premises shall be revised to include Suite 280,
measuring 5,160 rentable square feet and shown on the attached Exhibit A.
2. Rent for Suite 280 shall be per the following schedule:
January 1, 2000 - September 25, 2000 $20,124.00 ($3.90 per square foot)
September 26, 2000 - September 25, 2001 $20,485.20 ($3.97 per square foot)
September 26, 2001 - September 25, 2003 $21,001.20 ($4.07 per square foot)
3. As of the Suite 240 Commencement Date (as defined below), the Premises
shall be revised to include Suite 240, measuring 10,840 rentable square
feet and shown on the attached Exhibit A. Suite 240 is currently occupied
by Blue Pumpkin Software, who is expected to vacate the Premises on or
about January 31, 2000. The Suite 240 Commencement Date shall be ten (10)
calendar days after the space is vacated, which date shall be confirmed by
Lessor in writing to Lessee.
4. Rent for Suite 240 shall be per the following schedule:
Suite 240 Commencement Date -
September 25, 2000 $42,276.00 ($3.90 per square foot)
September 26, 2000 - September 25, 2001 $43,034.80 ($3.97 per square foot)
September 26, 2001 - September 25, 2003 $44,118.80 ($4.07 per square foot)
5. Operating Expense pass-throughs for Suite 240 and 280 will be based on
actual increases in building operating expenses over the Base Year 2000.
6. Lessee shall provide additional security deposit in the amount of
$62,400.00 upon the execution of this Amendment.
7. Lessor to repaint and clean carpets. Any other improvements to the
expansion premises shall be at Lessee's sole expense, and shall be subject
to Lessor's prior written approval as provided in the Lease. Lessor
warrants that all building systems in Suites 240 and 280 are in good repair
and operational.
8. All other terms and conditions of the Lease shall remain unchanged.
LESSOR: LESSEE:
ASSET GROWTH PARTNERS, LTD. PHARSIGHT CORPORATION
A CALIFORNIA LIMITED PARTNERSHIP A CALIFORNIA CORPORATION
BY: REES PROPERTIES, INC.
GENERAL PARTNER
/s/ Thomas J. Rees /s/ Robin A. Kehoe
- ----------------------------------- -----------------------------------
Thomas J. Rees By: Robin A. Kehoe
President Its: Chief Financial Officer
Date: 12/21/99 Date: 12/23/99
---------------------------- ------------------------------
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