STANDARD OFFICE LEASE
BY AND BETWEEN
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
AS LANDLORD,
AND
E-PERCEPTION TECHNOLOGIES, INC.
a Delaware corporation,
AS TENANT
SUITE 203
TOWER PLAZA 1
INDEX
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Page(s)
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Additional Rent..............................................................3
Alterations.................................................................11
Base Year....................................................................3
Basic Rental.................................................................1
Brokers......................................................................1
Commencement Date............................................................1
Direct Costs.................................................................3
Estimate.....................................................................6
Estimate Statement...........................................................6
Estimated Excess.............................................................6
Event of Default............................................................22
Excess.......................................................................6
Expiration Date..............................................................1
First Month's Rent...........................................................2
Force Majeure...............................................................27
Hazardous Material..........................................................28
Interest Notice.............................................................36
Landlord.....................................................................1
Laws........................................................................29
Lease........................................................................1
Lease Year...................................................................2
Market Rent.................................................................36
Operating Costs..............................................................4
Option......................................................................36
Option Rent.................................................................36
Option Rent Notice..........................................................36
Option Term.................................................................36
Original Tenant.............................................................36
Parking Passes...............................................................2
Partnership Tenant..........................................................34
Permitted Use................................................................2
Premises.....................................................................1
Project......................................................................1
Real Property................................................................4
Representative..............................................................27
Review Period................................................................7
Security Deposit.............................................................2
Square Footage...............................................................1
Statement....................................................................6
Tax Costs....................................................................3
Tenant.......................................................................1
Tenant Improvements.........................................................10
Tenant's Acceptance.........................................................36
Tenant's Proportionate Share.................................................2
Tenant's Signage............................................................37
Tenant's Work...............................................................10
Term.........................................................................1
Transfer....................................................................18
Transfer Premium............................................................18
Transferee..................................................................18
STANDARD OFFICE LEASE
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This Standard Office Lease ("Lease") is made and entered into as of this
18th day of May, 2000, by and between ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership ("Landlord"), and E-PERCEPTION TECHNOLOGIES, INC.,
a Delaware corporation ("Tenant").
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
premises described as Suite No. 203, as designated on the plan attached hereto
and incorporated herein as Exhibit "A" ("Premises"), of the project ("Project")
now known as Tower Plaza I whose address is 27555 Ynez Road, Temecula,
California for the Term and upon the terms and conditions hereinafter set forth,
and Landlord and Tenant hereby agree as follows:
ARTICLE I
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BASIC LEASE PROVISIONS
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A. Term: Four (4) years
Commencement Date: June 1, 2000
Expiration Date: May 31, 2004
B. Square Footage: 4,011 rentable square feet
C. Basic Rental:
Annual Monthly Monthly Basic Rental
Period Basic Rental Basic Rental Per Rentable Square Foot
------ ------------ ------------ ------------------------
6/1/2000 - $74,604.60 $6,217.05 $1.55
5/31/2001
*6/1/2001 - $77,011.20 $6,417.60 $1.60
5/31/2002
**6/1/2001 - $79,417.80 $6,618.15 $1.65
5/31/2003
6/1/2003 - $81,824.40 $6,818.70 $1.70
5/31/2004
* The Base Rent for the thirteenth (13th) month of the Lease Term is subject
to partial abatement pursuant to the terms of Section 3(a) of this Lease.
** Subject to the terms and conditions of Article 4, below, a portion of the
Security Deposit shall be applied to Monthly Basic Rental for the 25th
month of the Term.
D. Base Year: 2000
E. Tenant's Proportionate Share: 5.54%
F. Security Deposit: A security deposit of $13,637.40
shall be due and payable by Tenant
to Landlord upon Tenant's execution
of this Lease.
G. Permitted Use: General office use.
H. Brokers: WestMar Commercial Real Estate
I. Parking Passes: Tenant shall have the use of sixteen
(16) unreserved parking passes, at
the rate provided in Article 23
hereof.
J. First Month's Rent: The first full month's rent of
$6,217.05 shall be due and payable
by Tenant to Landlord upon Tenant's
execution of this Lease.
ARTICLE II
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TERM/PREMISES
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The Term of this Lease shall commence on the Commencement Date as set forth
in Article 1.A. of the Basic Lease Provisions and shall end on the Execution
Date set forth in Article 1.A. of the Basic Lease Provisions. For purposes of
this Lease, the term "Lease Year" shall mean each consecutive twelve (12) month
period during the Lease Term, with the first Lease Year commencing on the
Commencement Date; however, (a) if the Commencement Date falls on a day other
than the first day of a calendar month, the first Lease Year shall end on the
last day of the eleventh (11th) month after the Commencement Date and the second
(2nd) and each succeeding Lease year shall commence on the first day of the next
calendar moth, and (b) the last Lease Year shall end on the Expiration Date. If
Landlord does not deliver possession of the Premises to Tenant on or before the
Commencement Date (as set forth in Article 1.A, above), Landlord shall not be
subject to any liability for its failure to do so, and such failure shall not
affect the validity of this Lease nor the obligations of Tenant hereunder,
provided the Tenant shall not be obligated to pay Basic Rental until possession
of the Premises is to be delivered to Tenant. Landlord and Tenant hereby
stipulate that the Premises contains the number of square feet specified in
Article 1.B. of the Basic Lease Provisions. Landlord may deliver to Tenant a
Commencement Letter in a form substantially similar to that attached hereto as
Exhibit "C", which Tenant shall execute and return to Landlord within five (5)
days of receipt thereof. Failure of Tenant to timely execute and deliver the
Commencement Letter shall constitute acknowledgement by Tenant that the
statements included in such notice are true and correct, without exception.
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ARTICLE III
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RENTAL
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(a) Basic Rental. Tenant agrees to pay to Landlord during the Term hereof,
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at Landlord's office or to such other person or at such other place as directed
from time to time by written notice to Tenant from Landlord, the initial monthly
and annual sums as set forth in Article 1.C of the Basic Lease Provisions,
payable in advance on the first day of each calendar month, without demand,
setoff or deduction, and in the event this Lease commences or the date of
expiration of this Lease occurs other than on the first day or last day of a
calendar month, the rent for such month shall be prorated. Notwithstanding
anything to the contrary contained herein and provided that Tenant is not in
default in any of its monetary obligations under this Lease as of the expiration
of the twelfth (12th) month of the Term, Landlord hereby agrees to abate
Tenant's obligation to pay monthly Basic Rental for the thirteenth (13th) month
of the initial Lease Term by fifty percent (50%). During such abatement period,
Tenant shall still be responsible for the payment of the remaining fifty percent
(50%) of monthly Basic Rental and all of its other monetary obligations under
the Lease. In the event of a default by Tenant under the terms of this Lease
that results in early termination pursuant to the provisions of Section 20(a) of
this Lease, then as a part of the recovery of the monthly Basic Rental that was
abated under the provisions of this Article 3. Notwithstanding the foregoing,
the first full month's rent shall be paid to Landlord in accordance with Article
1.J. of the Basic Lease Provisions.
(b) Increase in Direct Costs. The term "Base Year" means the calendar year
------------------------
set forth in Article 1.D. of the Basic Lease Provisions. If, in any calendar
year during the Term of this Lease, the "Direct Costs" (as hereinafter defined)
paid or incurred by Landlord shall be higher than the Direct Costs for the Base
Year, Tenant shall pay an additional sum for such and each subsequent calendar
year equal to the product of the amount set forth in Article 1.E. of the Basic
Lease Provisions multiplied by such increased amount of "Direct Costs." In the
event either the Premises and/or the Project is expanded or reduced, then
Tenant's Proportionate Share shall be appropriately adjusted, and as to the
calendar year in which such change occurs, Tenant's Proportionate Share for such
year shall be determined on the basis of the number of days during that
particular calendar year that such Tenant's Proportionate Share was in effect.
In the event this Lease shall terminate on any date other than the last day of a
calendar year, the additional sum payable hereunder by Tenant during the
calendar year in which this Lease terminates shall be prorated on the basis of
the relationship which the number of days which have elapsed from the
commencement of said calendar year to and including said date on which this
Lease terminates bears to three hundred sixty-five (365). Any and all amounts
due and payable by Tenant pursuant to Article 3(b), (c) and (d) hereof shall be
deemed "Additional Rent" and Landlord shall be entitle to exercise the same
rights and remedies upon default in these payments as Landlord is entitled to
exercise with respect to defaults in monthly Basic Rental payments.
(c) Definitions. As used herein the term "Direct Costs" shall mean the sum
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of the following:
(i) "Tax Costs," which shall mean any and all real estate taxes and
other similar charges on real property or improvements, assessments, water and
sewer charges,
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and all other charges assessed, reassessed or levied upon the Project and
appurtenances thereto and the parking or other facilities thereof, or the real
property thereunder (collectively the "Real Property") or attributable thereto
or on the rents, issues, profits or income received or derived therefrom which
assessed, reassessed or levied by the United States, the State of California or
any local government authority or agency or any political subdivision thereof,
and shall include Landlord's reasonable legal fees, costs and disbursements
incurred in connection with proceeding for reduction of Tax Costs or any part
thereof; provided, however, if at any time after the date of this Lease the
methods of taxation now prevailing shall be altered so that in lieu of or as a
supplement to or a substitute for the whole or any part of any Tax Costs, there
shall be assessed, reassessed or levied (a) a tax, assessment, reassessment,
levy, imposition or charge wholly or partially as a net income, capital or
franchise levy or otherwise on the rents, issues, profits or income derived
therefrom, or (b) a tax, assessment, reassessment, levy (including but not
limited to any municipal, state or federal levy), imposition or charge measured
by or based in whole or in part upon the Real Property and imposed upon
Landlord, or (c) a license fee measured by the rent payable under this Lease,
then all such taxes, assessments, reassessments or levies or the part thereof so
measured or based, shall be deemed to be included in the term "Direct Costs." In
no event shall Tax Costs included in Direct Costs for any year subsequent to the
Base Year be less than the amount of Tax Costs included in Direct Costs for the
Base Year. In addition, when calculating Tax Costs for the Base Year, special
assessments shall only be deemed included in Tax Costs for the Base Year to the
extent that such special assessments are included in Tax Costs for the
applicable subsequent calendar year during the Term. Notwithstanding anything to
the contrary contained in this Section 3(c)(i), there shall be excluded from Tax
Costs (i) all excess profits taxes, franchise taxes, gift taxes, capital stock
taxes to the extent applicable to Landlord's general or net income, (ii) any
items included as Operating Costs, and (iii) any items paid by Tenant under
Article 6 of this Lease.
(ii) "Operating Costs", which shall mean all costs and expenses incurred
by Landlord in connection with the maintenance, operation, replacement,
ownership and repair of the Project, the equipment, the intrabuilding network
cable, adjacent walks, malls and landscaped and common areas and the parking
structure, areas and facilities of the Project, including, but not limited to,
salaries, wages, medical, surgical and general welfare benefits and pension
payments, payroll taxes, fringe benefits, employment taxes, workers'
compensation, uniforms and dry cleaning thereof for all persons who perform
duties connected with the operation, maintenance and repair of the Project, its
equipment, the intrabuilding network cable and the adjacent walks and landscaped
areas, including janitorial, gardening, security, parking, operating engineer,
elevator, painting, plumbing, electrical, carpentry, heating, ventilation, air
conditioning, window washing, hired services, a reasonable allowance for
depreciation of the cost of acquiring or the rental expense of personal property
used in the maintenance, operation and repair of the Project, accountant's fees
incurred in the preparation of rent adjustment statements, legal fees, real
estate tax consulting fees, personal property taxes on property used in the
maintenance and operation of the Project, fees, costs, expenses or dues payable
pursuant to the terms of any covenants, conditions or restrictions or owners'
associations pertaining to the Project, capital expenditures incurred to effect
economies of operation of, or stability of services to, the Project and capital
expenditures required by government regulations, laws, or ordinances in effect
as of the date of this Lease, including, but not limited to the Americans with
Disabilities Act; the cost of all charges for electricity, gas, water and other
utilities furnished to the Project, including any taxes thereon; the cost of all
charges for fire and extended coverage, liability and
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all other insurance for the Project carried by Landlord; the cost of all
building and cleaning supplies and materials; the cast of all charges for
cleaning, maintenance and service contracts and other services with independent
contractors and administrations fees; a property management fee (which fee may
be imputed if Landlord has internalized management or otherwise acts as its own
property manager) and license, permit and inspection fees relating to the
Project. In the event, during any calendar year, the Project is less than
ninety-five percent (95%) occupied at all times, Operating Costs shall be
adjusted to reflect the Operating Costs of the Project as though ninety-five
percent (95%) were occupied at all times, and the increase or decrease in the
sums owed hereunder shall be based upon such Operating Costs as so adjusted.
Notwithstanding anything to the contrary set exclude (a) market-wide labor-rate
increases due to extraordinary circumstances including, but not limited to,
conservation surcharges, boycotts, embargoes or other shortages, and (c)
amortization of any capital items including, but not limited to, capital
improvements, capital repairs and capital replacements (including such amortized
costs where the actual improvement, repair or replacement was made in prior
years).
Notwithstanding anything above to the contrary, Operating Costs shall not
include (1) the cost of providing any service directly to and paid directly by
any tenant (outside of such tenant's Direct Cost payments); (2) the cost of any
items for which Landlord is reimbursed by insurance proceeds, condemnation
awards, a tenant of the Project, or otherwise to the extent so reimbursed; (3)
any real estate brokerage commissions or other costs incurred in procuring
tenants, or any fee in lieu of commission; (4) depreciation, amortization of
principal and interest on mortgages or ground lease payments (if any); (5) costs
of items considered capital repairs, replacements, improvements and equipment
under generally accepted accounting principles consistently applied except as
expressly included in Operating Costs pursuant to the definition above; (6)
costs incurred by Landlord due to the violation by Landlord or any tenant of the
terms and conditions of any lease of space in the Project or any law, code,
regulation, ordinance or the like; (7) Landlord's general corporate overhead and
general and administrative expenses; (8) any compensation paid to clerks,
attendants or other persons in commercial concessions operated by Landlord
(other than in the parking facility for the Project); (9) costs incurred in
connection with upgrading the Project to comply with disability, like, seismic,
fire and safety codes, ordinances, statutes, or other laws in effect prior to
the Commencement Date, including, without limitation, the ADA, including
penalties or damages incurred due to such non-compliance; and (10) costs
incurred to (i) comply with laws relating to the removal of any "Hazardous
Material," as that term is defined in Article 28 of this Lease, which was in
existence on the Project prior to the Commencement Date, and was of such a
nature that a federal, state or municipal governmental authority, if it had then
had knowledge of the presence of such Hazardous Material, in the state, and
under the conditions that it then existed on the Project, would have then
required the removal of such Hazardous material or other remedial or containment
action with respect thereto, and (ii) to remove, remedy, contain, or treat any
Hazardous Material, which Hazardous Material is brought onto the Project after
the date hereof by Landlord or any other tenant of the Project and is of such a
nature, at that time, that a federal, state or municipal governmental authority,
if it had then had knowledge of the presence of such Hazardous Material, in the
state, and under the conditions, that it then exists on the Project, would have
then required the removal of such Hazardous Material or other remedial or
containment action with respect thereto.
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(d) Determination of Payment.
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(i) If for any calendar year ending or commencing within the Term,
Tenant's Proportionate Share of Direct Costs for such calendar year exceeds
Tenant's Proportionate Share of Direct Costs for the Base Year, then Tenant
shall pay to Landlord, in the manner set forth in Sections 3(d)(ii) and (iii),
below, and as additional rent, an amount equal to the excess (the "Excess").
(ii) Landlord shall give Tenant a yearly expense estimate statement (the
"Estimate Statement") which shall set forth Landlord's reasonable estimate (the
"Estimate") of what the total amount of Direct Costs for the then-current
calendar year shall be and the estimated Excess (the "Estimated Excess") as
calculated by comparing Tenant's Proportionate Share of Direct Costs for such
calendar year, which shall be based upon the Estimate, to Tenant's Proportionate
Share of Direct Costs for the Base Year. The failure of Landlord to timely
furnish the Estimate Statement for any calendar year shall not preclude Landlord
from enforcing its rights to collect any Estimated Excess under this Article 3.
If pursuant to the Estimate Statement an Estimated Excess is calculated for the
then-current calendar year, Tenant shall pay, with its next installment of
Monthly Basic Rental due, a fraction of the Estimated Excess for the
then-current calendar year (reduced by any amounts paid pursuant to the last
sentence of this Section 3(d)(ii)). Such fraction shall have as its numerator
the number of months which have elapsed in such current calendar year to the
month of such payment, both months inclusive, and shall have twelve (12) as its
denominator. Until a new Estimate Statement is furnished, Tenant shall pay
monthly, with the Monthly Basic Rental installments, an amount equal to
one-twelfth (1/12) of the total Estimated Excess set forth in the previous
Estimate Statement delivered by Landlord to Tenant.
(iii) In addition, Landlord shall endeavor to give to Tenant on or
before the first day of April following the end of each calendar year, a
statement (the "Statement") which shall state the Direct Costs incurred or
accrued for such preceding calendar year, and which shall indicate the amount,
if any, of the Excess. Upon receipt of the Statement for each calendar year
during the Term, if amounts paid by Tenant as Estimated Excess are less than the
actual Excess as specified on the Statement, Tenant shall pay, with its next
installment of Monthly Basic Rental due, the full amount of the Excess for such
calendar year, less the amounts, if any, aid during such calendar year as
Estimated Excess. If, however, the Statement indicates that amounts paid by
Tenant as Estimated Excess are greater than the actual Excess as specified on
the Statement, such overpayment shall be credited against Tenant's next
installments of Estimated Excess. The failure of Landlord to timely furnish the
Statement for any calendar year shall not prejudice Landlord from enforcing its
rights under this Article 3. Even though the Term has expired and Tenant has
vacated the Premises, when the final determination is made of Tenant's
Proportionate Share of the Direct Costs for the calendar year in which this
Lease terminates, if (a) an Excess is present, Tenant shall immediately pay to
Landlord an amount as calculated pursuant to the provisions of this Article
3(d), or (b) such final determination indicates that amounts paid by Tenant as
Estimated Excess are greater than the actual Excess for such calendar year,
Landlord shall refund such overpayment to Tenant within sixty (60) days after
Landlord's delivery of the final determination. The provisions of this Section
3(d)(iii) shall survive the expiration or earlier termination of the Term.
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(iv) Within one hundred twenty (120) days after receipt of a Statement
by Tenant ("Review Period"), if Tenant disputes the amount set forth in the
Statement, Tenant's employees or an independent certified public accountant
(which accountant is a member of a nationally or regionally recognized
accounting firm and is hired on a non-contingency fee basis), designated by
Tenant, may, after reasonable notice to Landlord and at reasonable times,
inspect Landlord's records at Landlord's offices, provided that Tenant is not
then in default after expiration of all applicable cure periods of any
obligation under this Lease (including, but not limited to , the payment of the
amount in dispute) and provided further that Tenant and such efforts to cause
their respective agents and employees to, maintain all information contained in
Landlord's records in strict confidence. Notwithstanding the foregoing, Tenant
shall only have the right to review Landlord's records one (1) time during any
twelve (12) month period. Tenant's failure to dispute the amounts set forth in
any Statement within the Review Period shall be deemed to be Tenant's approval
of such Statement and Tenant, thereafter, waives the right or ability to dispute
the amounts set forth in such Statement. If after such inspection, but within
thirty (30) days after the Review Period, Tenant notifies Landlord in writing
that Tenant still disputes such amounts, a certification as to the proper amount
shall be made in accordance with Landlord's standard accounting practices, at
Tenant's expenses, by an independent certified public accountant selected by
Landlord and who is a member of a nationally or regionally recognized accounting
firm, which certification shall be binding upon Landlord and Tenant. Landlord
shall cooperate in good faith with Tenant and the accountant to show Tenant and
the accountant the information upon which the certification is to be based.
However, if such certification by the accountant proves that the Direct Costs
set forth in the Statement were overstated by more than ten percent (10%), then
the cost of the accountant and the cost of such certification shall be paid for
by Landlord. Promptly following the parties receipt of such certification, the
parties shall make such appropriate payments or reimbursements, as the case may
be, to each other, as are determined to be owing pursuant to such certification.
Tenant agrees that this section shall be the sole method to be used by Tenant to
dispute the amount of any Direct Costs payable by Tenant pursuant to the terms
of this Lease, and Tenant hereby waives any other rights at law or in equity
relating thereto.
(v) If the Project is a part of a multi-building development, those
Direct Costs attributable to such development as a whole ( and not attributable
solely to any individual building therein) shall be allocated by Landlord to the
Project and to the other buildings within such development on an equitable
basis.
ARTICLE IV
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SECURITY DEPOSIT
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Tenant has deposited with Landlord the sum set forth in Article 1.F. of
the Basic Lease Provisions as security for the full and faithful performance of
every provision of this Lease to be performed by Tenant. If Tenant breaches any
provision of this Lease, including but not limited to the payment of rent,
Landlord may use all or any part of this security deposit for the payment of any
rent or any other sums in default, or to compensate Landlord for any other loss
or damage which Landlord may suffer by reason of Tenant's default. If any
portion of said deposit is so used or applied, Tenant shall, within ten (10)
days after written demand therefore, deposit cash with Landlord in an amount
sufficient to restore the security deposit to its original amount.
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Tenant agrees that Landlord shall not be required to keep the security deposit
in trust, segregated it or keep it separate from Landlord's general funds but
Landlord may commingle the security deposit with its general funds and Tenant
shall not be entitle to interest on such deposit. Notwithstanding anything to
the contrary contained in this Article 4, in the event that Tenant, at the
expiration of the twenty-fourth (24th) month of the initial Lease Term, is not
then in default of any of its monetary obligations under this Lease, Landlord
shall reduce the amount of the Security Deposit by the amount of the Monthly
Basic Rental due and payable to Landlord for the twenty-fifth (25th) month of
the initial Lease Term, and provided there exists no default by Tenant
hereunder, the security deposit or any balance thereof shall be returned to
Tenant (or, at Landlord's option, to Tenant's assignee), provided that
subsequent to the expiration of this Lease, Landlord may retain from said
security deposit (i) an amount reasonably estimated by Landlord to cover
potential Direct Cost reconciliation payments due with respect to the calendar
year in which this Lease terminates or expires (such amount so retained shall
not, in any event, exceed ten percent (10%) of estimated Direct Cost payments
due from Tenant for such calendar year through the date of expiration or earlier
termination of this Lease and any amounts so retained and not applied to such
reconciliation shall be returned to Tenant within thirty (30) days after
Landlord's delivery of the Statement for such calendar year), (ii) any and all
amounts reasonably estimated by Landlord to cover the anticipated costs to be
incurred by Landlord to remove any signage provided to Tenant under this Lease
and to repair any damage caused by such removal (in which case any excess amount
so retained by Landlord shall be returned to Tenant within thirty (30) days
after such removal and repair) and (iii) any and all amounts permitted by law or
this Article 4. Tenant herby waives the provisions of Section 1950,7 of the
California Civil Code and all other provisions of law, now or hereafter in
effect, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of rent, to repair
damage caused by Tenant or to clean the Premises, it being agreed that Landlord
may, in addition, claim those sums specified in this Article 4 above and/or
those sums reasonably necessary to compensate Landlord for any other loss or
damage, foreseeable or unforeseeable, caused by the acts or omissions of Tenant
or any officer, employee, agent, contractor or invitee of Tenant.
ARTICLE V
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HOLDING OVER
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Should Tenant, without Landlord's written consent, hold over after
termination of this Lease, Tenant shall become a tenant from month to month,
only upon each and all of the terms herein provided as may be applicable to a
month to month tenancy and any such holding over shall not constitute an
extension of this Lease. During such holding over, Tenant shall pay in advance,
monthly, Basic Rental at two hundred percent (200%) of the rate in effect for
the last month of the Term of this Lease, in addition to, and not in lieu of,
all other payments required to be made by Tenant hereunder including but not
limited to Tenant's Proportionate Share of any increase in Direct Costs. Nothing
contained in this Article 5 shall be construed as consent by Landlord to any
holding over of the Premises by Tenant, and Landlord expressly reserves the
right to require Tenant to surrender possession of the Premises to Landlord as
provided in this Lease upon the expiration or earlier termination of the Term.
If Tenant fails to surrender the Premises upon the expiration or termination of
this Lease, Tenant agrees to indemnify, defend and hold Landlord harmless from
all costs, loss, expenses or liability, including without
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limitation, claims made by any succeeding tenant and real estate brokers claims
and attorney's fees and costs.
ARTICLE VI
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PERSONAL PROPERTY TAXES
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Tenant shall pay, prior to delinquency, all taxes assessed against or
levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant located in the Premises. In the event any or all of Tenant's
trade fixtures, furnishings, equipment and other personal property shall be
assessed and taxed with property of Landlord, or if the cost or value of any
leasehold improvements in the Premises exceeds the cost or value of a
Project-standard buildout as determined by Landlord and, as a result, real
property taxes for the Project are increased, Tenant shall pay Landlord its
share of such taxes within ten (10) days after delivery to Tenant by Landlord of
a statement in writing setting forth the amount of such taxes applicable to
Tenant's property or above-standard improvements. Tenant shall assume and pay to
Landlord at the time of paying Basic Rental any excise, sales, use, rent,
occupancy, garage, parking, gross receipts or other taxes (other than net income
taxes) which may be imposed on or on account of letting of the Premises or the
payment of Basic Rental or any other sums due or payable hereunder, and which
Landlord may be required to pay or collect under any law now in effect or
hereafter enacted. Tenant shall pay directly to the party or entity entitled
thereto all business license fees, gross receipts taxes and similar taxes and
impositions which may from time to time be assessed against or levied upon
Tenant, as and when the same become due and before delinquency. Notwithstanding
anything to the contrary contained herein, any sums payable by Tenant under this
Article 6 shall not be included in the computations of "Tax Costs."
ARTICLE VII
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USE
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Tenant shall use and occupy the Premises only for the use set forth in
article 1.G. of the Basic Lease Provisions and shall not use or occupy the
Premises or permit the same to be used or occupied for any other purpose without
the prior written consent of Landlord, which consent may be given or withheld in
Landlord's sole and absolute discretion, and Tenant agrees that it will use the
Premises in such a manner so as not to interfere with or infringe the rights of
other tenants in the Project. Tenant shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances and governmental regulations
or requirements now in force or which may hereafter be in force relating to or
affecting (i) the condition, use or occupancy of the Premises or the Project
excluding structural changes to the Project not related to Tenant's particular
use of the Premises, and (ii) improvements installed or constructed in the
Premises by or for the benefit of Tenant. Tenant shall not do or permit to be
done anything which would invalidate or increase the cost of any fire and
extended coverage insurance policy covering the Project and/or the property
located therein and Tenant shall comply with all rules, orders, regulations and
requirements of any organization which sets out standards, requirements or
recommendations commonly referred to by major fire insurance underwriters.
Tenant shall promptly upon demand reimburse Landlord for any additional premium
charges for any such insurance policy assessed or increased by reason of
Tenant's failure to comply with the provisions of this Article.
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ARTICLE VIII
------------
CONDITION OF PREMISES
---------------------
Subject to Landlord's review and approval of (a) the paint and carpet
selected by Tenant and (b) the contractors retained by Tenant to install such
paint and carpet, Tenant shall be entitle to repaint the painted walls in the
Premises and re-carpet the Premises (collectively, "Tenant's Work"). Landlord
shall allow Tenant to access to the Premises beginning on May 22, 2000 for the
purpose of Tenant performing such Tenant's Work in the Premises. Prior to
Tenant's entry into the Premises as permitted by the terms of this Article 8,
Tenant shall submit a schedule to Landlord, for Landlord's approval, which
schedule shall detail the timing and purpose of Tenant's entry. Tenant shall
hold Landlord harmless from and indemnify, protect and defend Landlord against
any loss or damage to the Project or Premises and against injury to any persons
caused by Tenant's actions pursuant to this Article 8. In addition, Tenant
hereby acknowledges that Tenant may perform Tenant's Work during the Term, and
that Tenant shall not be deemed constrictively evicted nor shall Tenant be
entitled to any abatement of rent due to any interference with Tenant's business
and/or operations resulting from the performance of Tenant's Work. Landlord
shall reimburse Tenant for costs incurred in connection with the performance of
Tenant's Work up to One Thousand Dollars ($1,000.00) within thirty (30) days
after Landlord's receipt of an invoice therefore. Tenant hereby agrees that the
Premises shall be taken "as is", "with all faults", "without any representations
or warranties", and Tenant hereby agrees and warrants that it has investigated
and inspected the conditions of the Premises and the suitability of same for
Tenant's purposes, and Tenant does hereby waive and disclaim any objection to,
cause of action based upon, or claim that its obligations hereunder should be
reduced or limited because of the conditions of the Premises or the Project or
the suitability of same for Tenant's purposes. Tenant acknowledges that neither
Landlord nor any agent nor any employee of Landlord has made any representations
or warranty with respect to the Premises or the Project or with respect to the
suitability of either for the conduct of Tenant's business and Tenant expressly
warrants and represents that Tenant has relied solely on its own investigation
and inspection of the Premises and the Project in its decision to enter into
this Lease and let the Premises in an "As Is" condition. The existing leasehold
improvements in the Premises as of the date of this Lease, together with
Tenant's Work pursuant to the first sentence of this Article 8, may be
collectively referred to herein as the "Tenant Improvements." The taking of
possession of the Premises by Tenant shall conclusively establish that the
Premises and the Project were at such time in satisfactory condition latent
defects excepted. Tenant hereby waives subsection 1 of Section 1932 and Sections
1941 and 1942 of the Civil Code of California or any successor provision of law.
Landlord reserves the right from time to time, but subject to payment by
and/or reimbursement from Tenant as otherwise provided herein: (i) to install
use, maintain, repair, replace and relocate for service to the Premises and/or
other parts of the Projects pipes, ducts, conduits, wires, appurtenant fixtures,
and mechanical systems, wherever located in the Premises or the Project, (ii) to
alter, close or relocate any facility in the Premises or the Common Areas or
otherwise conduct any of the above activities for the purpose of complying with
a general plan for fire/life safety for the Project or otherwise and (iii) to
comply with any federal, state or local law, rule or order with respect thereto
or the regulation thereof not currently in effect. Landlord shall attempt to
perform any such work with the least inconvenience to Tenant as possible, but in
10
not event shall Tenant be permitted to withhold or reduce Basic Rental or other
charges due hereunder as a result of same, make any claim for constructive
eviction or otherwise make claim against Landlord for interruption or
interference with Tenant's business and/or operations.
ARTICLE IX
----------
REPAIRS AND ALTERATIONS
-----------------------
Landlord shall maintain the structural portions of the Project including
the foundation, floor/ceiling slabs, roof, curtain wall, exterior glass,
columns, beams, shafts, stairs, stairwells, elevator cabs and common areas and
shall also maintain and repair the basic mechanical, electrical, life safety,
plumbing, sprinkler systems and heating, ventilating and air conditioning
systems. Except as expressly provided as Landlord's obligation in this Article
9, Tenant shall keep the Premises in good condition and repair. All damage or
injury to the Premises or the Project resulting from the act or negligence of
Tenant, its employees, agents or visitors, guests invitees or licensees or by
the use of the Premises shall be promptly repaired by Tenant, at its sole cost
and expense, to the satisfaction of Landlord; provided, however, that for damage
to the Project as a result of casualty or for any repairs that may impact the
mechanical, electrical, plumbing, heating, ventilation or air-conditioning
systems of the Project, Landlord shall have the right (but not the obligation)
to select the contractor and oversee all such repairs. Landlord may make any
repairs which are not promptly made by Tenant after Tenant's receipt of written
notice and the reasonable opportunity of Tenant to make said repair within five
(5) business days from receipt of said written notice, and charge Tenant for the
cost thereof, which cost shall be paid by Tenant within five (5) days from
invoice from Landlord. Tenant shall be responsible for the design and function
of all non-standard improvements of the Premises, whether or not installed by
Landlord at Tenant's request. Tenant waives all rights to make repairs at the
expense of Landlord, or to deduct the cost thereof from the rent. Tenant shall
make no alterations, changes or additions in or to the Premises (collectively
"Alterations") without Landlord's prior written consent, and then only by
contractors or mechanics approved by Landlord in writing and upon the approval
by Landlord in writing of fully detailed and dimensioned plans and
specifications pertaining to the Alterations in question, to be prepared and
submitted by Tenant at its sole cost and expense. Tenant shall at its sole cost
and expense obtain all necessary approvals and permits pertaining to any
Alterations approved by Landlord. Tenant shall construct such Alterations in a
good and workmanlike manner, in conformance with all applicable federal, state,
county and municipal laws, rules, and regulations, pursuant to a valid building
permit, and in conformance with Landlord's construction rules and regulations.
If Landlord, in approving any Alterations, Tenant shall provide Landlord with
evidence that Tenant carries "Builder's All Risk" insurance in an amount
approved by Landlord covering the construction of such Alterations, and such
other insurance as Landlord may reasonably require, it being understood that all
such Alterations, shall be insured by Tenant pursuant to Article 14 of this
Lease immediately upon completion thereof. In addition, Landlord may in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien free completion of such Alterations and naming Landlord as a
co-obligee. If permitted Alterations are made, they shall be made at Tenant's
sole cost and expense and shall be and become the property of Landlord, except
that Landlord may, by written notice to Tenant given at least thirty (30) days
prior to the end of the Term, require Tenant as Tenant's expense to remove all
partitions, counters, railings and other Alterations installed by Tenant, and to
repair any
11
damages to the Premises caused by such removal. Any and all costs attributable
to or related to having jurisdiction over the Project) arising from Tenant's
plans, specifications, improvements, alterations or otherwise shall be paid by
Tenant at its sole cost and expense. With regard to repairs, Alterations or any
other work arising from or related to this Article 9, Landlord shall be entitled
to receive an administrative/supervision fee (which fee shall vary depending
upon whether or not Tenant orders the work directly from Landlord but shall in
no event exceed three percent (3%) of the cost of such work) sufficient to
compensate Landlord for all overhead, general conditions, fees and other costs
and expenses arising from Landlord's involvement with such work.
ARTICLE X
---------
LIENS
-----
Tenant shall keep the Premises and the Project free from any mechanics'
liens, vendors liens or any other liens arising out of any work performed,
materials furnished or obligations incurred by Tenant, and agrees to defend,
indemnify and hold harmless Landlord from and against any such lien or claim or
action thereon, together with costs of suit and reasonable attorney's fees
incurred by Landlord in connection with any such claim or action. Before
commencing any work of alteration, addition or improvement to the Premises,
Tenant shall give Landlord at least ten (10) business days' written notice of
the Proposed commencement of such work (to afford Landlord an opportunity to
post appropriate notices of non-responsibility). In the event that there shall
be recorded against the Premises or the Project or the property of which the
Premises is a part any claim or lien arising out of any such work performed,
materials furnished or obligations incurred by Tenant and such claim or lien
shall not be removed or discharged within ten (10) days of filing, Landlord
shall have the right but not the obligation to pay and discharge said lien
without regard to whether such lien shall be lawful or correct or to require
that Tenant deposit with Landlord in cash, lawful money of the United States, on
hundred fifty percent (150%) of the amount of such claim, which sum may be
retained by Landlord until such claim shall have been removed of record or until
judgment shall have been rendered on such claim and such judgment shall have
become final, at which time Landlord shall have the right to apply such deposit
in discharge of the judgment on said claim and any costs, including attorney's
fees and costs incurred by Landlord, and shall remit the balance thereof to
Tenant.
ARTICLE XI
----------
PROJECT SERVICES
----------------
(a) Landlord agrees to furnish to the Premises, at a cost to be included in
Operating Costs, from 8:00 a.m. to 6:00 p.m. Mondays through Fridays and 9:00
a.m. to 1:00 p.m. on Saturdays, excepting local and national holidays, air
conditioning and heat all in such reasonable quantities as in the judgment of
Landlord is reasonably necessary for the comfortable occupancy of the Premises.
In addition, Landlord shall provide electric current for normal lighting and
normal office machines, elevator service and water on the same floor as the
Premises for lavatory and drinking purposes in such reasonable quantities as in
the reasonable judgment of Landlord is reasonably necessary for general office
use. Janitorial and maintenance services shall be furnished five (5) days per
week, excepting local and national holidays. Tenant
12
shall comply with all rules and regulations which Landlord may reasonably
establish for the proper functioning and protection of the common area air
conditioning, heating, elevator, electrical intrabuilding network cable and
plumbing systems. Landlord shall not be liable for, and there shall be no rent
abatement as a result of, any stoppage, reduction or interruption of any such
services caused by governmental rules, regulations or ordinances, riot, strike,
labor disputes, breakdowns, accidents, necessary repairs or other cause. Except
as specifically provided in this Article 11, Tenant agrees to pay for all
utilities and other services utilized by Tenant and additional building services
furnished to Tenant not uniformly furnished to all tenants of the Project at the
rate generally charged by Landlord to tenants of the Project.
(b) Tenant will not, without prior written consent of Landlord, use any
apparatus or device in the Premises which will in any way increase the amount of
electricity of water usually furnished or supplied for use of the Premises as
general office space; nor connect any apparatus, machine or device with water
pipes or electric current (except through existing electrical outlets in the
Premises), for the purpose of using electric current or water.
(c) If Tenant shall require electric current in excess of that which
Landlord is obligated to furnish under Article 11(a) above, Tenant shall first
obtain the written consent of Landlord, which Landlord may refuse in its sole
and absolute discretion, to the use thereof and Landlord may cause an electric
current meter or submeter to be installed in the Premises to measure the amount
of such excess electric current consumed by Tenant in the Premises. The cost of
any such meter and of installation, maintenance and repair thereof shall be paid
for by Tenant and Tenant agrees to pay to Landlord, promptly upon demand
therefore by Landlord, for all such excess electric current consumed by any such
use as shown by said meter at the rates charged for such service by the city in
which the Project is located or the local public utility, as the case may be,
furnishing the same, plus any additional expense incurred by Landlord in keeping
account of the electric current so consumed.
(d) If any lights, machines or equipment (including but not limited to
computers) are used by Tenant in the Premises which materially affect the
temperature otherwise maintained by the air conditioning system, or generate
substantially more heat in the Premises that would be generated by the building
standard lights and usual office equipment, Landlord shall have the right to
install any machinery and equipment which Landlord reasonably deems necessary to
restore temperature balance, including but not limited to modifications to the
standard air conditioning equipment, and the cost thereof, including the cost of
installation and any additional cost of operation and maintenance occasioned
thereby, shall be paid by Tenant to Landlord upon demand by Landlord. Landlord
shall not be liable under any circumstances for loss of or injury to property or
injury to, or interference with, Tenant's business (including, but not limited
to, loss of profits), however occurring, through or in connection with or
incidental to failure to furnish any of the services or utilities specified in
this Article 11.
(e) If Tenant requires heating, ventilation and/or air conditioning during
times other than the times provide in Article 11 (a) above, Tenant shall give
Landlord such advance notice as Landlord shall reasonably require and shall pay
Landlord's standard charge for such after-hours use.
13
(f) Landlord may impose a reasonable charge for any utilities or services
(other than electric current and heating, ventilation and/or air conditioning
which shall be governed by Articles 11(c) and (e) above) utilized by Tenant in
excess of the amount or type that Landlord reasonably determines is typical for
general office use.
ARTICLE XII
-----------
RIGHTS OF LANDLORD
------------------
Landlord and its agents shall have the right to enter the Premises at all
reasonable times for the purpose of cleaning the Premises, examining or
inspecting the same, serving or posting and keeping posted thereon notices as
provided by law, or which Landlord deems necessary for the protection of
Landlord or the Property, showing the same to prospective tenants, lenders or
purchasers of the Project, in the case of an emergency, and for making such
alterations, repairs, improvements or additions to the Premises or to the
Project as Landlord may deem necessary or desirable. If Tenant shall not be
personally present to open and permit an entry into the Premises at any time
when such an entry by landlord is necessary or permitted hereunder, Landlord may
enter by means of a master key or may enter forcibly, only in the case of an
emergency, without liability to Tenant and without affecting this Lease.
ARTICLE XIII
------------
INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY
-----------------------------------------------
(a) Indemnity. Tenant shall indemnify, defend and hold Landlord harmless
---------
from any and all claims arising from Tenant's use of the Premises or the Project
or from the conduct of its business or from any activity, work or thing which
may be permitted or suffered by Tenant in or about the Premises or the Project
and shall further indemnify, defend and hold Landlord harmless from and against
any and all claims arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under this Lease or arising from any
negligence or willful misconduct of Tenant or any of its agents, contractors,
employees or invitees, patrons, customers or members in or about the Project and
from any and all costs, attorney's fees and costs, expenses and liabilities
incurred in the defense of any claim or any action or proceeding brought
thereon, including negotiations in connection therewith. Tenant hereby assumes
all risk of damage to property or injury to persons in or about the Premises
form any cause, and Tenant hereby waives all claims in respect thereof against
Landlord, excepting where the damages is caused solely by the gross negligence r
willful misconduct of Landlord or its agent.
(b) Exemption of Landlord from Liability. Landlord shall not be liable for
------------------------------------
injury to Tenant's business, or loss of income therefrom, or, except in
connection with damage or injury resulting from the gross negligence or willful
misconduct of Landlord, or its authorized agents for damage that may be
sustained by the person, goods, wares, merchandise or property of Tenant, its
employees, invitees, customers, agents, or contractors, or any other person, on
or about the Premises directly or indirectly caused by or resulting from fire,
steam, electricity, gas, water, or rain which may leak or flow from or into any
part of the Premises, or from the breakage, leakage, obstruction or other
defects of the pipes, sprinklers, wires, appliances,
14
plumbing, air conditioning, light fixtures or mechanical or electrical systems
or from intrabuilding network cable, whether such damage or injury results from
conditions arising upon the Premises or upon other portions of the Project or
from other sources or places and regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible to Tenant. Landlord
shall not be liable to Tenant for any damages arising from any act or neglect of
any other tenant of the building.
Tenant acknowledges that Landlord `s election to provide mechanical
surveillance or to post security personnel in the Project is solely within
Landlord `s discretion; Landlord shall have no liability in connection with the
decision whether or not to provide such services and Tenant hereby waives all
claims based thereon. Landlord shall not be liable for losses due to theft,
vandalism, or like causes.
ARTICLE XIV
-----------
INSURANCE
---------
(a) Tenant's Insurance. Tenant, shall at all times during the Term of this
------------------
Lease, and at its own cost and expense, procure and continue in force the
following insurance coverage: (i) Commercial General Liability Insurance with a
combined single limit for bodily injury and property damages of not less than
Two Million Dollars ($2,000,000) per occurrence and Three Million Dollars
($3,000,000) in the annual aggregate, including products liability coverage if
applicable, covering the insuring provisions of this Lease and the performance
of Tenant of the indemnity and exemption of Landlord from liability agreements
set forth in Article 13 hereof; (ii) a policy of standard fire, extended
coverage and special extended coverage insurance (all risks), including a
vandalism and malicious mischief endorsement and sprinkler leakage coverage
where sprinklers are provided in an amount equal to the full replacement value
new without deduction for depreciation of all (A) Tenant Improvements,
Alterations, fixtures and other improvements in the Premises and (B) trade
fixtures, furniture, equipment and other personal property installed by or at
the expense of Tenant; (iii) Worker `s Compensation coverage as required by law;
and (iv) business interruption, loss of income and extra expense insurance
covering failure of Tenants telecommunications equipment and covering all other
perils, failures or interruptions. Tenant shall carry and maintain during the
entire Lease Term (including any option periods, if applicable), at Tenant `s
sole cost and expense, increased amounts of the insurance required to be carried
by Tenant pursuant to this Article 14 and such other reasonable types of
insurance coverage and in such reasonable amounts covering the Premises and
Tenant `s operations therein, as may be reasonably required by Landlord, so long
as such increased amounts and other types of insurance are then being
customarily required by landlords of comparable buildings. Notwithstanding
anything to the contrary contained herein, the Original Tenant (and not any
assignee, subtenant or other transferee) may, subject to the provisions of this
Section 14(a), fulfill its insurance obligations under Section 14(a)(iv) above
by self-insurance. Any self-insurance so maintained by Tenant shall be deemed to
contain all of the terms and conditions applicable to such insurance as required
in this Article 14, including, without limitation, a deemed waiver of
subrogation; consequently, Landlord shall be treated, for all purposes, as if
Tenant had actually purchased such insurance from a third party. If Tenant
elects to so self-insure, then with respect to any claims which may result from
incidents occurring during the Lease Term, such self-insurance obligation shall
survive the expiration or
15
earlier termination of this Lease to the same extent as the insurance required
hereunder would survive.
(b) Form of Policies. The aforementioned minimum limits of policies and
----------------
Tenant`s procurement and maintenance thereof shall in no event limit the
liability of Tenant hereunder; provided that notwithstanding the foregoing,
nothing contained herein shall be construed to nullify the provisions of Section
14(d) hereof. The Commercial General Liability Insurance policy shall name
Landlord, Landlord `s property manager, Landlord `s lender(s) and such other
persons or firms as Landlord specifies from time to time, as additional insureds
with an appropriate endorsement to the policy(s). All such insurance policies
carried by Tenant shall be with companies having a rating of not less than
A-VIII in Best `s Insurance Guide. Tenant shall furnish to Landlord, from the
insurance companies, or cause the insurance companies to furnish, certificates
of coverage. No such policy shall be cancelable or subject to reduction of
coverage or other modification or cancellation except after thirty (30) days
prior written notice to Landlord by the insurer. All such policies shall be
endorsed to agree that Tenant `s policy is primary and that any insurance
carried by Landlord is excess and not contributing with any Tenant insurance
requirement hereunder. Tenant shall, at least twenty (20) days prior to the
expiration of such policies, furnish Landlord with renewals or binders. Tenant
agrees that if Tenant does not take out and maintain such insurance or furnish
Landlord with renewals or binders, Landlord may (but shall not be required to)
procure said insurance on Tenant `s behalf and charge Tenant the cost thereof,
which amount shall be payable by Tenant upon demand with interest (at the rate
set forth in Section 20(e) below) from the date such sums are extended. Tenant
shall have the right to provide such insurance coverage pursuant to blanket
policies obtained by Tenant, provided such blanket policies expressly afford
coverage to the Premises and to Tenant as required by this Lease.
(c) Landlord's Insurance. Landlord shall, as a cost to be included in
---------------------
Operating Costs, procure and maintain at all times during the Term of this
Lease, a policy or policies of insurance covering loss or damage to the Project
in the amount of the full replacement costs without deduction for depreciations
thereof (exclusive of Tenant's trade fixtures, inventory, personal property and
equipment), providing protection against all perils included within the
classification of fire and extended coverage, vandalism coverage and malicious
mischief, sprinkler leakage, water damage, and special extended coverage on
building. Additionally, Landlord may (but shall not be required to) carry: (i)
Bodily Injury and Property Damage Liability Insurance and/or Excess Liability
Coverage Insurance; and (ii) Earthquake and/or Flood Damage Insurance; and (iii)
Rental Income Insurance at its election or if required by its lender from time
to time during the Term hereof, in such accounts and with such limits as
Landlord or its lender may deem appropriate. The costs of such insurance shall
be included in Operating Costs.
(d) Waiver of Subrogation. Landlord and Tenant each agree to have their
----------------------
respective insurers issuing the insurance described in Sections 14(a)(ii),
14(a)(iv) and the first sentence of Section 14(c) waive any rights of
subrogation that such companies may have against the other party. Tenant hereby
waives any right that Tenant may have against Landlord and Landlord hereby
waives any right that Landlord may have against Tenant as a result of any loss
or damage to the extent such loss or damage is insurable under such policies.
16
(e) Compliance with Law. Tenant agrees that it will not, at any time,
--------------------
during the Term of this Lease, carry any stock of goods or do anything in or
about the Premises that will in any way tend to increase the insurance rates
upon the Project. Tenant agrees to pay Landlord forthwith upon demand the amount
of any increase in premiums for insurance against loss by fire that may be
charged during the Term of this Lease on the amount of insurance to be carried
by Landlord on the Project resulting from the foregoing, or from Tenant doing
any act in or about said Premises that does so increase the insurance rates,
whether or not Landlord shall have consented to such act on the part of Tenant.
If Tenant installs upon the Premises any electrical equipment which constitutes
an overload of electrical lines of the Premises, Tenant shall at its own cost
and expense in accordance with all other Lease provisions, and subject to the
provisions of Article 9, 10 and 11, hereof, make whatever changes are necessary
to comply with requirements of the insurance underwriters and any governmental
authority having jurisdiction thereover, but nothing herein contained shall be
deemed to constitute Landlord's consent to such overloading. Tenant shall, at
its own expense, comply with all requirements of the insurance authority having
jurisdiction over the Project necessary for the maintenance of reasonable fire
and extended coverage insurance for the Premises, including without limitation
thereto, the installation of fire extinguishers or an automatic dry chemical
extinguishing system.
ARTICLE XV
----------
ASSIGNMENT AND SUBLETTING
-------------------------
Tenant shall have no power to, either voluntarily, involuntarily, by
operation of law or otherwise, sell, assign, transfer or hypothecate this Lease,
or sublet the Premises or any part thereof, or permit the Premises or any part
thereof to be used or occupied by anyone other than Tenant or Tenant's employees
without the prior written consent of Landlord which shall not be unreasonably
withheld. Tenant may transfer its interest pursuant to this Lease only upon the
following conditions, which conditions agreed by Landlord and Tenant to be
reasonable:
(a) That the proposed transferee shall be subject to the prior written
consent of Landlord, which consent will not be unreasonably withheld but,
without limiting the generality of the foregoing, it shall be reasonable for
Landlord to deny such consent if:
(i) The use to be made of the Premises by the proposed transferee is (a)
not generally consistent with the character and nature of all other tenancies in
the Project, or (b) a use which conflicts with any so-called "exclusive" then in
favor of, or for any use which is the same as that stated in any percentage rent
lease to, another tenant of the Project or any other buildings which are in the
same complex as the Project, or (c) a use which would be prohibited b any other
portion of this Lease (including but not limited to any Rules and Regulations
then in effect);
(ii) The financial responsibility of the proposed transferee is not
reasonably satisfactory to Landlord or in any event not at least equal to those
which were possessed by Tenant as of the date of execution of this Lease;
(iii) The proposed transferee is either a governmental agency or
instrumentality thereof; or
17
(iv) Either the proposed transferee or any person or entity which
directly or indirectly controls, is controlled by or is under common control
with the proposed transferee (A) occupies space in the Project at the time of
the request for consent, or (B) is negotiating with Landlord or has negotiated
with Landlord during the six (6) month period immediately preceding the date of
the proposed transfer, to lease space in the Project.
(b) Whether or not Landlord consents to any such transfer, Tenant shall pay
to Landlord Landlord's then standard processing fee and reasonable attorneys'
fees and costs incurred in connection with the proposed transfer up to the
aggregate sum of $1,500.00;
(c) That the proposed transferee shall execute an agreement pursuant to
which it shall agree to perform faithfully and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease applicable to
that portion of the Premises so transferred; and
That an executed duplicate original of said assignment and assumption agreement
or other transfer on a form reasonably approved by Landlord, shall be delivered
to Landlord within five (5) days after the execution thereof, and that such
transfer shall not be binding upon Landlord until delivery thereof to Landlord
and the execution and delivery of Landlord's consent thereto. It shall be a
condition to Landlord's consent to any subleasing, assignment or other transfer
of part or all of Tenant's interest in the Premises (hereinafter referred to as
a "Transfer") that (i) upon Landlord's consent to any Transfer, Tenant shall pay
and continue to pay fifty percent (50%) of any "Transfer Premium" (defined
below), received by Tenant from the transferee; (ii) any sublease of part or all
of Tenant's interest in the Premises shall agree that in the event Landlord give
such sublessee notice that Tenant is in default under this Lease, such sublessee
shall thereafter make all sublease or other payments directly to Landlord, which
will be received by Landlord without liability whether to honor the sublease or
otherwise (except to credit such payments against sums due under this Lease),
and any sublessee shall agree to attorn to Landlord or its successors and
assigns at their request should this Lease be terminated for any reason, except
that in no event shall Landlord or its successors or assigns to be obligated to
accept such attornment; (iii) any such Transfer and consent shall be effected on
forms supplied by Landlord and/or its legal counsel; (iv) Landlord may require
that Tenant not then be in default hereunder in any respect; and (v) Tenant or
the proposed subtenant or assignee (collectively, "Transferee") shall agree to
pay Landlord, upon demand, as additional rent, a sum equal to the additional
costs, if any, incurred by Landlord for maintenance and repair as a result of
any change in the nature of occupancy caused by such subletting or assignment.
"Transfer Premium" shall mean all rent, additional rent or other consideration
payable by a Transferee in connection with a Transfer in excess of the rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer and if such Transfer is less than all of the Premises, the Transfer
Premium shall be calculated on a rentable square foot basis. In any event, the
Transfer Premium shall be calculated after deducting the reasonable expenses
incurred by Tenant for (1) any changes, alterations and improvements to the
Premises paid for by Tenant in connections with the Transfer, (2) any other
out-of-pocket monetary concessions provided by Tenant to the Transferee, and (3)
any brokerage commissions paid for by Tenant in connection with the Transfer.
"Transfer Premium" shall also include, but not be limited to, key money, bonus
money or other cash consideration paid by a transferee to Tenant in connection
with such Transfer, and any payment in excess of fair market value for services
rendered by Tenant to the Transferee and
18
any payment in excess of fair market value for assets, fixtures, inventory,
equipment, or furniture transferred by Tenant to the Transferee in connection
with such Transfer. Any sale, assignment, hypothecation, transfer or subletting
of this Lease which is not in compliance with the provisions of this Article 15
shall be void and shall, at the option of Landlord, terminate this Lease. In no
event shall the consent by Landlord to an assignment or subletting be construed
as relieving Tenant, any assignee, or sublessee from obtaining the express
written consent of Landlord to any further assignment or subletting, or as
releasing Tenant from any liability or obligation hereunder whether or not then
accrued and Tenant shall continue to be fully liable therefor. No collection or
acceptance of rent by Landlord from any person other than Tenant shall be deemed
a waiver of any provision of this Article 15 or the acceptance of any assignee
or subtenant hereunder, or a release of Tenant (or of any successor of Tenant or
any subtenant). Notwithstanding anything to the contrary in this Lease, if
Tenant or any proposed Transferee claims that Landlord has unreasonably withheld
or delayed its consent under this Article 15 or otherwise has breached or acted
unreasonably under this Article 15, their sole remedies shall be a declaratory
judgment, an injunction for the relief sought and/or monetary damages, and
Tenant hereby waives all other remedies, including, without limitation, any
right at law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable laws, on behalf of the proposed
Transferee.
Notwithstanding anything to the contrary contained in this Article 15,
Landlord shall have the option, by giving written notice to Tenant within thirty
(30) days after Landlord's receipt of a request for consent to a proposed
Transfer, to terminate this Lease as to the portion of the Premises that is the
subject of the Transfer. If this Lease is so terminated with respect to less
than the entire Premises, the Basic Rental and Tenant's Proportionate Share
shall be prorated based on the number of rentable square feet retained by Tenant
as compared to the total number of rentable square feet contained in the
original Premises, and this Lease as so amended shall continue thereafter in
full force and effect, and upon the request of either party, the parties shall
execute written confirmation of the same.
ARTICLE XVI
-----------
DAMAGE OR DESTRUCTION
---------------------
If the Project is damaged by tire or other insured casualty and the
insurance proceeds have been made available therefor by the holder or holders of
any mortgages or deeds of trust covering the Premises or the Project, the damage
shall be repaired by Landlord to the extent such insurance proceeds are
available therefor and provided such repairs can, in Landlord's sole opinion, be
completed within one hundred eighty (180) days after the necessity for repairs
as a result of such damage becomes known to Landlord without the payment of
overtime or other premiums, and until such repairs are completed rent shall be
abated in proportion to the part of the Premises which is unusable by Tenant in
the conduct of its business (but there shall be no abatement of rent by reason
of any portion of the Premises being unusable for a period equal to one (1) day
or less). However, if the damage is due to the fault or neglect of Tenant, its
employees, agents, contractors, guests, invitees and the like, there shall be no
abatement of rent, unless and to the extent Landlord receives rental income
insurance proceeds. Upon the occurrence of any damage to the Premises, Tenant
shall assign to Landlord (or to any party designated by Landlord) all insurance
proceeds payable to Tenant under Section 14(a)(ii)(A)
19
above; provided, however, that if the cost of repair of improvements within the
Premises by Landlord exceeds the amount of insurance proceeds received by
Landlord from Tenant's insurance carrier, as so assigned by Tenant, such excess
costs shall be paid by Tenant to Landlord prior to Landlord's repair of such
damage. If repairs cannot, in Landlord's opinion, be completed within one
hundred eighty (180) days after the necessity for repairs as a result of such
damage becomes known to Landlord without the payment of overtime or other
premiums, Landlord may, at its option, either (i) make them in a reasonable time
and in such event this Lease shall continue in effect and the rent shall be
abated, if at all, in the manner provided in this Article 16, or (ii) elect not
to effect such repairs and instead terminate this Lease, by notifying Tenant in
writing of such termination within sixty (60) days after Landlord learns of the
necessity for repairs as a result of damage, such notice to include a
termination date giving Tenant sixty (60) days to vacate the Premises. In
addition, Landlord may elect to terminate this Lease if the Project shall be
damaged by fire or other casualty or cause, whether or not the Premises are
affected, and the damage is not fully covered, except for deductible amounts, by
Landlord's insurance policies. Finally, if the Premises or the Project is
damaged to any substantial extent during the last twelve (12) months of the
Term, then notwithstanding anything contained in this Article 16 to the
contrary, Landlord shall have the option to terminate this Lease by giving
written notice to Tenant of the exercise of such option within sixty (60) days
after Landlord learns of the necessity for repairs as the result of such damage.
A total destruction of the Project shall automatically terminate this Lease.
Except as provided in this Article 16, there shall be no abatement of rent and
no liability of Landlord by reason of my injury to or interference with Tenant's
business or property arising from such damage or destruction or the making of
any repairs, alterations or improvements in or to any portion of the Project or
the Premises or in or to fixtures, appurtenances and equipment therein. Tenant
understands that Landlord will not carry insurance of any kind on Tenant's
furniture, furnishings, trade fixtures or equipment, and that Landlord shall not
be obligated to repair any damage thereto or replace the same. Except for
proceeds relating to Tenant's furniture, furnishings, trade fixtures and
equipment, Tenant acknowledges that Tenant shall have no right to any proceeds
of insurance relating to property damage. With respect to any damage which
Landlord is obligated to repair or elects to repair, Tenant, as a material
inducement to Landlord entering into this Lease, irrevocably waives and releases
its rights under the provisions of Sections 1932 and 1933 of the California
Civil Code.
ARTICLE XVII
------------
SUBORDINATION
-------------
This Lease is subject and subordinate to all ground or underlying leases,
mortgages and deeds of trust which affect the property or the Project, including
all renewals, modifications, consolidations, replacements and extensions
thereof; provided, however, if the lessor under any such lease or the holder or
holders of any such mortgage or deed of trust shall advise Landlord that they
desire or require this Lease to be prior and superior thereto, upon written
request of Landlord to Tenant, Tenant agrees to promptly execute, acknowledge
and deliver any and all documents or instruments which Landlord or such lessor,
holder or holders deem necessary or desirable for purposes thereof. Landlord
shall have the right to cause this Lease to be and become and remain subject and
subordinate to any and all ground or underlying leases, mortgages or deeds of
trust which may hereafter be executed covering the Premises, the Project
20
or the property or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof; provided, however, that Landlord obtains from the lender or other party
in question a written undertaking in favor of Tenant to the effect that such
lender or other party will not disturb Tenant's right of possession under this
Lease if Tenant is not then or thereafter in breach of any covenant or provision
of this Lease. Tenant agrees, within ten (10) days after Landlord `s written
request therefor, to execute, acknowledge and deliver upon request any and all
documents or instruments requested by Landlord which are necessary or proper to
assure the subordination of this Lease to any such mortgages, deed of trust, or
leasehold estates. Tenant agrees that in the event any proceedings are brought
for the foreclosure of any mortgage or deed of trust or any deed in lieu
thereof, to attorn to the purchaser or any successors thereto upon any such
foreclosure safe or deed in lieu thereof as so requested to do so by such
purchaser and to recognize such purchaser as the lessor under this Lease; Tenant
shall, within ten (10) days after request execute such further instruments or
assurances as such purchaser may reasonably deem necessary to evidence or
confirm such attornment. Tenant agrees to provide copies of any notices of
Landlord `s default under this Lease to any mortgagee or deed of trust
beneficiary whose address has been provided to Tenant and Tenant shall provide
such mortgagee or deed of trust beneficiary a commercially reasonable time after
receipt of such notice within which to cure any such default. Tenant waives the
provisions of any current or future statute, rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely
affect this Lease and the obligations of the Tenant hereunder in the event of
any foreclosure proceeding or sale.
ARTICLE XVIII
-------------
EMINENT DOMAIN
--------------
If the whole of the Premises or the Project or so much thereof as to render
the balance unusable by Tenant shall be taken under power of eminent domain, or
is sold, transferred or conveyed in lieu thereof, this Lease shall automatically
terminate as of the date of such condemnation, or as of the date possession is
taken by the condemning authority, at Landlord's option. No award for any
partial or entire taking shall be apportioned, and Tenant hereby assigns to
Landlord any award which may be made in such taking or condemnation, together
with any and all rights of Tenant now or hereafter arising in or to the same or
any part thereof; provided, however, that nothing contained herein shall be
deemed to give Landlord any interest in or to require Tenant to assign to
Landlord any award made to Tenant for the taking of personal property and trade
fixtures belonging to Tenant and removable by Tenant at the expiration of the
Term hereof as provided hereunder or for the interruption of, or damage to,
Tenant's business. In the event of a partial taking described in this Article
18, or a sale, transfer or conveyance in lieu thereof, which does not result in
a termination of this Lease, the rent shall be apportioned according to the
ratio that the part of the Premises remaining useable by Tenant bears to the
total area of the Premises. Tenant hereby waives of any and all rights it might
otherwise have pursuant to Section 1265.130 of the California Code Civil
Procedure.
21
ARTICLE XIX
-----------
DEFAULT
-------
Each of the following acts or omissions of Tenant or of any guarantor of
Tenant's performance hereunder, or occurrences, shall constitute an "Event of
Default":
(a) Failure or refusal to pay Basic Rental, Additional Rent or any other
amount to be paid by Tenant to Landlord hereunder within five (5) calendar days
after notice that the same is due or payable hereunder; said five (5) day period
shall be in lieu of, and not in addition to, the notice requirements of Section
1161 of the California Code of Civil Procedure or any similar or successor law;
(b) Except as set forth in items (a) above and (c) through and including
(g) below, failure to perform or observe any other covenant or condition of this
Lease to be performed or observed within thirty (30) days following written
notice to Tenant of such failure. Such thirty (30) day notice shall be in lieu
of, and not in addition to, any required under Section 1161 of the California
Code of Civil Procedure or any similar or successor law;
(c) Abandonment or vacating or failure to accept tender of possession of
the Premises or any significant portion thereof;
(d) The taking in execution or by similar process or law (other than by
eminent domain) of the estate hereby created;
(e) The filing by Tenant or any guarantor hereunder in any court pursuant
to any statute of a petition in bankruptcy or insolvency or for reorganization
or arrangement for the appointment of a receiver of all or a portion of Tenant's
property; the filing against Tenant or any guarantor hereunder of any such
petition, or the commencement of a proceeding for the appointment of a trustee,
receiver or liquidator for Tenant, or for any guarantor hereunder, or of any of
the property of either, or a proceeding by any governmental authority for the
dissolution or liquidation of Tenant or any guarantor hereunder, if such
proceeding shall not be dismissed or trusteeship discontinued within thirty (30)
days after commencement of such proceeding or the appointment of such trustee or
receiver; or the making by Tenant or any guarantor hereunder of an assignment
for the benefit of creditors;
(f) Tenant's failure to cause to be released any mechanics liens filed
against the Premises or the Project within twenty (20) days after the date
Tenant receives or refuses notice that the same have been filed or recorded; or
(g) Tenant's failure to observe or perform according to the provisions of
Articles 7, 17 or 25 within five (5) business days after notice from Landlord.
All defaults by Tenant of any covenant or condition of this Lease shall be
deemed by the parties hereto to be material.
22
ARTICLE XX
----------
REMEDIES
--------
(a) Upon the occurrence of an Event of Default under this Lease as provided
in Article 19 hereof, Landlord may exercise all of its remedies as may be
permitted by law, including but not limited to the remedy provided by Section
1951.4 of the California Civil Code, and including without limitation,
terminating this Lease, reentering the Premises and removing all persons and
property therefrom, which property may be stored by Landlord at a warehouse or
elsewhere at the risk, expense and for the account of Tenant. If Landlord elects
to terminate this Lease, Landlord shall be entitled to recover from Tenant the
aggregate of all amounts permitted by law, including but not limited to (i) the
worth at the time of award of the amount of any unpaid rent which had been
earned at the time of such termination; plus (ii) the worth at the time of award
of the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus (iii) the worth at the
time of award of the amount by which the unpaid rent for the balance of the
Lease Term after the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom, specifically
including but not limited to, brokerage commissions and advertising expenses
incurred, expenses of remodeling the Premises or any portion thereof for a new
tenant, whether for the same or a different use, and any special concessions
made to obtain a new tenant; and (v) at Landlord `s election, such other amounts
in addition to or in lieu of the foregoing as may be permitted from time to time
by applicable law. The term "rent" as used in this Article 20(a) shall be deemed
to be and to mean all sums of every nature required to be paid by Tenant
pursuant to the terms of this Lease, whether to Landlord or to others. As used
in items (i) and (ii), above, the "worth at the time of award" shall be computed
by allowing interest at the rate set forth in item (e), below, but in no case
greater than the maximum amount of such interest permitted by law. As used in
item (iii), above, the "worth at the time of award" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
(b) Nothing in this Article 20 shall be deemed to affect Landlord's right
to indemnification for liability or liabilities arising prior to the termination
of this Lease for personal injuries or property damage under the indemnification
clause or clauses contained in this Lease.
(c) Notwithstanding anything to the contrary set forth herein, Landlord's
re-entry to perform acts of maintenance or preservation of or in connection with
efforts to relet the Premises or any portion thereof, or the appointment of a
receiver upon Landlord's initiative to protect Landlord's interest under this
Lease shall not terminate Tenant's right to possession of the Premises or any
portion thereof and, until Landlord does elect to terminate this Lease, this
Lease shall continue in full force and effect and Landlord may enforce all of
Landlord's rights and remedies hereunder including, without limitation, the
remedy described in California Civil Code Section 195 1.4 (lessor may continue
lease in effect after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has the right to sublet or assign, subject only to
23
reasonable limitations). Accordingly, if Landlord does not elect to terminate
this Lease on account of any default by Tenant, Landlord may, from time to time,
without terminating this Lease, enforce all of its rights and remedies under
this Lease, including the right to recover all rent as it becomes due.
(d) All rights, powers and remedies of Landlord hereunder and under any
other agreement now or hereafter in force between Landlord and Tenant shall be
cumulative and not alternative and shall be in addition to all rights, powers
and remedies given to Landlord by law, and the exercise of one or more rights or
remedies shall not impair Landlord `s right to exercise any other right or
remedy.
(e) Any amount due from Tenant to Landlord hereunder which is not paid when
due shall bear interest at the lower of eighteen percent (18%) per annum or the
maximum lawful rate of interest from the due date until paid, unless otherwise
specifically provided herein, but the payment of such interest shall not excuse
or cure any default by Tenant under this Lease. In addition to such interest:
(i) if Basic Rental is not paid within ten (10) days after the same is due, a
late charge equal to five percent (5%) of the amount overdue or $100, whichever
is greater, shall be assessed and shall accrue for each calendar month or part
thereof until such rental, including the late charge, is paid in full, which
late charge Tenant hereby agrees is a reasonable estimate of the damages
Landlord shall suffer as a result of Tenant's late payment and (ii) an
additional charge of $25 shall be assessed for any check given to Landlord by or
on behalf of Tenant which is not honored by the drawee thereof; which damages
include Landlord's additional administrative and other costs associated with
such late payment and unsatisfied checks and the parties agree that, it would be
impracticable or extremely difficult to fix Landlord's actual damage in such
event. Such charges for interest and late payments and unsatisfied checks are
separate and cumulative and are in addition to and shall not diminish or
represent a substitute for any or all of Landlord's rights or remedies under any
other provision of this Lease.
ARTICLE XXI
-----------
TRANSFER OF LANDLORD'S INTEREST
-------------------------------
In the event of any transfer or termination of Landlord's interest in the
Premises or the Project by sale, assignment, transfer, foreclosure, deed-in-lieu
of foreclosure or otherwise whether voluntary or involuntary, Landlord shall be
automatically relieved of any and all obligations and liabilities on the part of
Landlord from and after the date of such transfer or termination, including
furthermore without limitation, the obligation of Landlord under Article 4 and
California Civil Code 1950.7 above to return the security deposit, provided said
security deposit is transferred to said transferee. Tenant agrees to attorn to
the transferee upon any such transfer and to recognize such transferee as the
lessor under this Lease and Tenant shall, within ten (10) days after request,
execute such further instruments or assurances as such transferee may reasonably
deem necessary to evidence or confirm such attornment.
24
ARTICLE XXII
------------
BROKER
------
In connection with this Lease, Tenant warrants and represents that it has
had dealings only with firm(s) set forth in Article 1.H. of the Basic Lease
Provisions and that it knows of no other person or entity who is or might be
entitled to a commission, finder `s fee or other like payment in connection
herewith and does hereby indemnify and agree to hold Landlord, its agents,
members, partners, representatives, officers, affiliates, shareholders,
employees, successors and assigns harmless from and against any and all loss,
liability and expenses that Landlord may incur should such warranty and
representation prove incorrect, inaccurate or false.
ARTICLE XXIII
-------------
PARKING
-------
Tenant shall rent from Landlord, commencing on the Commencement Date, the
number of unreserved parking passes set forth in Section l(I) of the Basic Lease
Provisions, which parking passes shall pertain to the Project parking facility.
Tenant shall not be charged for automobile parking passes during the initial
Lease Term. However, Tenant shall be responsible for the full amount of any
taxes imposed by any governmental authority in connection with the renting of
such parking passes by Tenant or the use of the parking facility by Tenant.
Tenant's continued right to use the parking passes is conditioned upon Tenant
abiding by all rules and regulations which are prescribed from time to time for
the orderly operation and use of the parking facility where the parking passes
are located, including any sticker or other identification system established by
Landlord, Tenant's cooperation in seeing that Tenant's employees and visitors
also comply with such rules and regulations, and Tenant not being in default
under this Lease. Landlord specifically reserves the right to change the size,
configuration, design, layout and all other aspects of the Project parking
facility at any time and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of rent
under this Lease, from time to time, close-off or restrict access to the Project
parking facility for purposes of permitting or facilitating any such
construction, alteration or improvements. Landlord may relocate any reserved
parking spaces rented by Tenant to another location in the Parking project
facility. Landlord may delegate its responsibilities hereunder to a parking
operator or a lessee of the parking facility in which case such parking operator
or lessee shall have all the rights of control attributed hereby to the
Landlord. The parking passes rented by Tenant pursuant to this Article 23 are
provided to Tenant solely for use by Tenant's own personnel and such passes may
not be transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord's prior approval. Tenant may validate visitor parking by such method or
methods as the Landlord may establish, at the validation rate from time to time
generally applicable to visitor parking.
25
ARTICLE XXIV
------------
WAIVER
------
No waiver by Landlord of any provision of this Lease shall be deemed to be
a waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other provision. No provision of this lease may be waived by
Landlord, except by an instrument in writing executed by Landlord. Landlord's
consent to or approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act of Tenant, whether or not similar
to the act so consented to or approval. No act or thing done by Landlord or
Landlord's agents during the Term of this Lease shall be deemed an acceptance of
a surrender of the Premises, and no agreement to accept such surrender shall be
valid unless in wiring and signed by Landlord. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent. Any payment by Tenant or receipt by Landlord of an amount less than the
total amount then due hereunder shall be deemed to be in partial payment only
thereof and not a waiver of the balance due or an accord and satisfaction,
notwithstanding any statement or endorsement to the contrary on any check or any
other instrument delivered concurrently therewith or in reference thereto.
Accordingly, Landlord may accept any such amount and negotiate any such check
without prejudice to Landlord's right to recover all balances due and owning and
to pursue its other rights against Tenant under this Lease regardless of whether
Landlord makes any notation on such instrument of payment or otherwise notifies
Tenant that such acceptance or negotiation is without prejudice to Landlord's
rights.
ARTICLE XXV
-----------
ESTOPPEL CERTIFICATE
--------------------
Tenant shall, at any time and from time to time, upon not less than ten
(10) days' prior written notice from Landlord, execute, acknowledge and deliver
to Landlord a statement in writing certifying the following information, (but
not limited to the following information in the event further information is
requested by Landlord): (i) 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 modified, is in full force and effect); (ii) the dates to
which the rental and other charges are paid in advance, if any; (iii) the amount
of Tenant's security deposit, if any; and (iv) acknowledging that there are not,
to Tenant's knowledge, any uncured defaults o the part of Landlord hereunder,
and no events or conditions then in existence which, with the passage of time or
notice or both, would constitute a default on the part of Landlord hereunder, or
specifying such defaults, events or conditions, if any are claimed. It is
expressly understood and agreed that any such statement may be relied upon by
any prospective purchaser or encumbracer of all or any portion of the Real
Property. Tenant's failure to deliver such statement within such time shall
constitute an admission by Tenant that all statements contained therein are true
and correct. Tenant agrees to execute all documents required in accordance with
this Article 25 within ten (10) days after delivery of said documents. Tenant
hereby irrevocably appoints
26
landlord as Tenant's attorney-in-fact and in Tenant's name, place and stead to
execute any and all documents described in this Article 25 if Tenant fails to do
so with the specified time period.
ARTICLE XXVI
------------
LIABILITY OF LANDLORD
---------------------
Notwithstanding anything in this Lease to the contrary, any remedy of
Tenant for the collection of a judgment (or other judicial process) requiring
the payment of money by Landlord in the event of any default by Landlord
hereunder or any claim, cause of action or obligation, contractual, statutory or
otherwise by Tenant against Landlord concerning, arising out of or relating to
any matter relating to this Lease and all of the covenants and conditions or any
obligations, contractual, statutory, or otherwise set forth herein, shall be
limited solely and exclusively to an amount which is equal to the lesser of (i)
the interest of Landlord in and to the Project, and (ii) the interest Landlord
would have in the Project if the Project were encumbered by third party debt in
an amount equal to ninety percent (90%) of the then current value of the Project
(as such value is reasonably determined by Landlord). No other property or
assets of Landlord, or any member, officer, director, shareholder, partner,
trustee, agent, servant or employee of Landlord (the "Representative") shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Tenant's remedies under or with respect to this Lease, Landlord's obligations
to Tenant, whether contractual, statutory or otherwise, the relationship of
Landlord and Tenant hereunder, or Tenant's use or occupancy of the Premises.
Tenant further understands that any liability, duty or obligation of Landlord to
Tenant, shall automatically cease and terminate as of the date that Landlord or
any of Landlord's Representatives no longer have any right, title or interest in
or to the Project. Notwithstanding anything to the contrary in this Lease,
Landlord shall not be liable under any circumstances for injury or damage to, or
interference with, Tenant `s business, including but not limited to, loss of
Profits, loss of rents or other revenues, loss of business opportunity, loss of
goodwill or loss of use, in each case, however occurring.
ARTICLE XXVII
-------------
INABILITY TO PERFORM
--------------------
This Lease and the obligations of Tenant hereunder shall not be affected or
impaired because Landlord is unable to fulfill any of its obligations hereunder
or is delayed in doing so, if such inability or delay is caused by reason of any
prevention, delay, stoppage due to strikes, lockouts, acts of God, or any other
cause previously, or at such time, beyond the reasonable control or anticipation
of Landlord (collectively, a "Force Majeure") and Landlord's obligations under
this Lease shall be forgiven and suspended by any such Force Majeure.
27
ARTICLE XXVIII
--------------
HAZARDOUS WASTE
---------------
(a) Tenant shall not cause or permit any Hazardous Material (as defined in
Article 28(d) below) to be brought, kept or used in or about the Project by
Tenant, its agents, employees, contractors, or invitees, except for general
office supplies typically used in the ordinary course of business (e.g., copier
toner, liquid paper, glue, ink, and cleaning solvents). Tenant indemnifies
Landlord from and against any breach by Tenant of the obligations stated in the
preceding sentence, and agrees to defend and hold Landlord harmless from and
against any and all claims, judgments, damages, penalties, fines, costs,
liabilities, or losses (including, without limitation, diminution in value of
the Project, damages for the loss or restriction or use of rentable or usable
space or of any amenity of the Project, damages arising from any adverse impact
or marketing of space in the-Project, and sums paid in settlement of claims,
attorneys' fees and costs, consultant fees, and expert fees) which arise during
or after the Term of this Lease as a result of such breach. This indemnification
of Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal, state, or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Project. Without limiting the foregoing, if the
presence of any Hazardous Material on the Project caused or permitted by Tenant
results in any contamination of the Project and subject to the provisions of
Articles 9, 10 and 11, hereof, Tenant shall promptly take all actions at its
sole expense as are necessary to return the Project to the condition existing
prior to the introduction of any such Hazardous Material and the contractors to
be used by Tenant for such work must be approved by Landlord, which approval
shall not be unreasonably withheld so long as such actions would not potentially
have any material adverse long-term or short-term effect on the Project and so
long as such actions do not materially interfere with the use and enjoyment of
the Project by the other tenants thereof.
(b) It shall not be unreasonable for Landlord to withhold its consent to
any proposed Transfer if (i) the proposed transferee's anticipated use of the
Premises involves the generation, storage, use treatment, or disposal of
Hazardous Material; (ii) the proposed Transferee has been required by any prior
landlord, lender, or governmental authority to take remedial action in,
connection with Hazardous Material contaminating a property if the contamination
resulted from such Transferee's actions or use of the property in question; or
(iii) the proposed Transferee is subject to an enforcement order issued by any
governmental authority in connection with the use, disposal, or storage of a
Hazardous Material.
(c) As used herein, the term "Hazardous Material" means any hazardous or
toxic substance, material, or waste which is or becomes regulated by any local
governmental authority, the State of California or the United States Government.
The term "Hazardous Material" includes, without limitation, any material or
substance which is (i) defined as "Hazardous Waste," "Extremely Hazardous
Waste," or "Restricted Hazardous Waste" under Sections 25115, 25117 or 25122.7,
or listed pursuant to Section 25140, of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a
"Hazardous Substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance
Account Act), (iii) defined as a
28
"Hazardous Material," "Hazardous Substance," or "Hazardous Waste" under Section
25501 of the California Health and Safety Code, Division 20, Chapter 6.95
(Hazardous Materials Release Response Plans and Inventory), (iv) defined as a
"Hazardous Substance" under Section 25281 of the California Health and Safety
Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances),
(v) petroleum, (vi) asbestos, (vii) listed under Article 9 or defined as
Hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the
California Administrative Code, Division 4, Chapter 20, (viii) designated as a
"Hazardous Substance" pursuant to Section 311 of the Federal Water Pollution
Control Act (33 U.S.C. ss. 1317), (ix) defined as a "Hazardous Waste" pursuant
to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C.
ss. 6901 et seq. (42 U.S.C. ss. 6903) or (x) defined as a "Hazardous Substance"
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq. (42 U.S.C. ss. 9601).
(d) As used herein, the term "Laws" mean any applicable federal, state or
local laws, ordinances, or regulations relating to any Hazardous Material
affecting the Project, including, without limitation, the laws, ordinances, and
regulations referred to in Article 28(c) above.
ARTICLE XXIX
------------
SURRENDER OF PREMISES: REMOVAL OF PROPERTY
------------------------------------------
(a) The voluntary or other surrender of this Lease by Tenant to Landlord,
or a mutual termination hereof, shall not work a merger, and shall at the option
of Landlord, operate as an assignment to it of any or all subleases or
subtenancies affecting the Premises.
(b) Upon the expiration of the Term of this Lease, or upon any earlier
termination of this Lease, Tenant shall quit and surrender possession of the
Premises to Landlord in as good order and condition as the same are now and
hereafter may be improved by Landlord or Tenant, reasonable wear and tear and
repairs which are Landlord's obligation excepted, and shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, all furniture, equipment, business and trade fixtures, free-standing
cabinet work, moveable partitioning, telephone and data cabling and other
articles of personal property owned by Tenant or installed or placed by Tenant
at its own expense in the Premises, and all similar articles of any other
persons claiming under Tenant unless Landlord exercises its option to have any
subleases or subtenancies assigned to it, and Tenant shall repair all damage to
the Premises resulting from the installation and removal of such items to be
removed.
(c) Whenever Landlord shall reenter the Premises as provided in Article 20
hereof, or as otherwise provided in this Lease, any property of Tenant not
removed by Tenant upon the expiration of tire Term of this Lease (or within
forty-eight (48) hours after a termination by reason of Tenant `s default), as
provided in this Lease, shall be considered abandoned and Landlord may remove
any or ail of such items and dispose of the same in any manner or store the same
in a public warehouse or elsewhere for the account and at the expense and risk
of Tenant, and if Tenant shall fail to pay the cost of storing any such property
after it has been stored for a period of ninety (90) days or more, Landlord may
sell any or all of such property at public or private sale, in such manner and
at such times and places as Landlord, in its sole
29
discretion, may deem proper, without notice to or demand upon Tenant, for the
payment of all or any part of such charges or the removal of any such property,
and shall apply the proceeds of such sale as follows: first, to the cost and
expense of such sale, including reasonable attorneys' fees for services
rendered; second, to the payment of the cost of or charges for storing any such
property; third, to the payment of any other sums of money which may then or
thereafter be due to Landlord from Tenant under any of the terms hereof; and
fourth, the balance, if any, to Tenant.
(d) All fixtures, equipment, leasehold improvements, Alterations and/or
appurtenances attached to or built into the Premises prior to or during the
Term, whether by Landlord or Tenant and whether at the expense of Landlord or
Tenant, or of both, shall be and remain part of the Premises and shall not be
removed by Tenant at the end of the Term unless otherwise expressly provided for
in this. Lease or unless such removal is required by Landlord. Such fixtures,
equipment, leasehold improvements, Alterations, additions, improvements and/or
appurtenances shall include but not be limited to: all floor coverings, drapes,
paneling, built-in cabinetry, molding, doors, vaults (including vault doors),
plumbing systems, security systems, electrical systems, lighting systems,
silencing equipment, communication systems, all fixtures and outlets for the
systems mentioned above and for all telephone, radio, telegraph and television
purposes, and any special flooring or ceiling installations.
ARTICLE XXX
-----------
MISCELLANEOUS
-------------
(a) Severability: Entire Agreement. Any provision of this Lease which shall
------------------------------
prove to be invalid, void, or illegal shall in no way affect, impair or
invalidate any other provision hereof and such other provisions shall remain in
full force and effect. This Lease and the Exhibits and any Addendum attached
hereto constitute the entire agreement between the parties hereto with respect
to the subject matter hereof, and no prior agreement or understanding pertaining
to any such-matter shall be effective for any purpose. No provision of this
Lease may be amended or supplemented except by an agreement in writing signed by
the parties hereto or their successor in interest.
(b) Attorneys' Fees; Waiver of Jury Trial.
--------------------------------------
(i) In any action to enforce the terms of this Lease, including any
suit by Landlord for the recovery of rent or possession of the Premises, the
losing party shall pay the successful party a reasonable sum for attorneys' fees
and costs in such suit and such attorneys' fees and costs shall be deemed to
have accrued prior to the commencement of such action and shall be paid whether
or not such action is prosecuted to judgment.
(ii) Should Landlord, without fault on Landlord's part, be made a
party to any litigation instituted by Tenant or by any third party against
Tenant, or by or against any person holding under or using the Premises by
license of Tenant, or for the foreclosure of any lien for labor or material
furnished to or for Tenant or any such other person or otherwise arising out of
or resulting from any act or transaction of Tenant or of any such other person,
Tenant
30
covenants to save and hold Landlord harmless from any judgment rendered against
Landlord or the Premises or any part thereof and from all costs and expenses,
including reasonable attorneys `fees and costs incurred by Landlord in
connection with such litigation.
(iii) When legal services are rendered by an attorney at law who is
an employee of a party, attorneys' fees and costs incurred by that party shall
be deemed to include an amount based upon the number of hours spent by such
employee on such matters multiplied by an appropriate billing rate determined by
taking into consideration the same factors, including but not limited by, the
importance of the matter, time applied, difficulty and results, as are
considered when an attorney not in the employ of a party is engaged to render
such service.
(iv) EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR DAMAGES
FOR ANY BREACH UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY RIGHT OR
REMEDY HEREUNDER.
(c) Time of Essence. Each of Tenant's covenants herein is a condition and
---------------
time is of the essence with respect to the performance of every provision of
this Lease.
(d) Headings: Joint and Several. The article headings contained in this
----------------------------
Lease are for convenience only and do not in any way limit or amplify any term
or provision hereof. The terms "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular, the neuter shall include the
masculine and feminine genders and the obligations herein imposed upon Tenant
shall be joint and several as to each of the persons, firms or corporations of
which Tenant may be composed.
(e) Reserved Area. Tenant hereby acknowledges and agrees that the exterior
--------------
walls of the Premises and the area between the finished ceiling of the Premises
and the slab of the floor of the project thereabove have not been demised hereby
and the use thereof together with the right to install, maintain, use, repair
and replace pipes, ducts, conduits and wires leading through, under or above the
Premises in locations which will not materially interfere with Tenant's use of
the Premises and serving other parts of the Project are hereby excepted and
reserved unto Landlord.
(f) NO OPTION. THE SUBMISSION OF THIS LEASE BY LANDLORD, 1% AGENT OR
----------
REPRESENTATIVE FOR EXAMINATION OR EXECUTION BY TENANT DOES NOT CONSTITUTE AN
OPTION OR OFFER TO LEASE THE PREMISES UPON THE TERMS AND CONDITIONS CONTAINED
HEREIN OR A RESERVATION OF THE PREMISES IN FAVOR OF TENANT, IT BEING INTENDED
HEREBY THAT THIS LEASE SHALL ONLY BECOME EFFECTIVE UPON THE EXECUTION HEREOF BY
LANDLORD AND TENANT AND DELIVERY OF A FULLY EXECUTED LEASE TO TENANT.
(g) Use of Project Name; Improvements. Tenant shall not be allowed to use
----------------------------------
the name, picture or representation of the Project, or words to that effect, in
connection with any business carried on in the Premises or otherwise (except as
Tenant `s address) without the prior
31
written consent of Landlord. In the event that Landlord undertakes any
additional improvements on the Real Property including but not limited to new
construction or renovation or additions to the existing improvements, Landlord
shall not be liable to Tenant for any noise, dust, vibration or interference
with access to the Premises or disruption in Tenant `s business caused thereby.
(h) Rules and Regulations. Tenant shall observe faithfully and comply
----------------------
strictly with the Rules and Regulations attached to this Lease as Exhibit "B"
and made a part hereof, and such other Rules and Regulations as Landlord may
from time to time reasonably adopt for the safety, care and cleanliness of the
Project, the facilities thereof, or the preservation of good order therein.
Landlord shall not be liable to Tenant for violation of any such Rules and
Regulations, or for the breach of any covenant or condition in any lease by any
other tenant in the Project. A waiver by Landlord of any Rule or Regulation for
any other tenant shall not constitute nor be deemed a waiver of the Rule or
Regulation for this Tenant.
(i) Quiet Possession. Upon Tenant's paying the Basic Rent, Additional Rent
----------------
and other sums provided hereunder and observing and performing all of the
covenants, conditions and provisions on Tenant's part to be observed and
performed hereunder, Tenant shall have quiet possession of the Premises for the
entire Term hereof, subject to all of the provisions of this Lease.
(j) Rent. All payments required to be made hereunder to Landlord shall be
----
deemed to be rent, whether or not described as such.
(k) Successors and Assigns. Subject to the provisions of Article 15 hereof,
----------------------
all of the covenants, conditions and provisions of this Lease shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, persona! representatives, successors and assigns.
(l) Notices. Any notice required or Notices permitted to be given hereunder
-------
shall be in writing and may be given by personal service evidenced by a signed
receipt or sent by registered or certified mail, return receipt requested, or
via overnight courier, and shall be effective upon proof of delivery, addressed
to Tenant at the Premises or to Landlord at the management office for the
Project, with a copy to Landlord, c/o Arden Realty, Inc., 11601 Wilshire
Boulevard, Fourth Floor, Los Angeles, California 90025, Attn: Legal Department.
Either party may by notice to the other specify a different address for notice
purposes except that, upon Tenant's taking possession of the Premises, the
Premises shall constitute Tenant's address for notice purposes. A copy of all
notices to be given to Landlord hereunder shall be concurrently transmitted by
Tenant to such party hereafter designated by notice from Landlord to Tenant. Any
notices sent by Landlord regarding or relating to eviction procedures, including
without limitation three day notices, may be sent by regular mail.
(m) Persistent Delinquencies. In the event that Tenant shall be delinquent
------------------------
by more than fifteen (15) days in the payment of rent on three (3) separate
occasions in any twelve (12) month period, Landlord shall have the right to
terminate this Lease by thirty (30) days written notice given by Landlord to
Tenant within thirty (30) days of the last such delinquency.
(n) Right of Landlord to Perform. All covenants and agreements to be
------------------------------
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of rent. If
Tenant shall fail to pay any sum of money, other than rent required to be paid
by it hereunder or shall fail to perform any other act on its part to be
performed hereunder, and such failure shall continue beyond any applicable cure
period set forth in this Lease, Landlord may, but shall not be obligated to,
without waiving or releasing Tenant from any obligations of Tenant, make any
such payment or perform any such other act on Tenant's part to be made or
performed as is in this Lease provided. All sums so paid by Landlord and all
reasonable incidental costs, together with interest thereon at the rate of ten
percent (10%) per annum from the date of such payment by Landlord, shall be
payable to Landlord on demand and Tenant covenants to pay any such sums, and
Landlord shall have (in addition to any other right or remedy of Landlord) the
same rights and remedies in the event of the nonpayment thereof by Tenant as in
the case of default by Tenant in the payment of the rent.
(o) Access. Changes in Project, Facilities, Name.
---------------------------------------------
(i) Every part of the Project except the inside surfaces of all walls,
windows and doors bounding the Premises (including exterior building walls, core
corridor walls and doors and any core corridor entrance), and any space in or
adjacent to the Premises used for shafts, stacks, pipes, conduits, fan rooms,
ducts, electric or other utilities, sinks or other building facilities, and the
use thereof, as well as access thereto through the Premises for the purposes of
operation, maintenance, decoration and repair, are reserved to Landlord.
(ii) Tenant shall permit Landlord to install, use and maintain pipes,
ducts and conduits within the walls, columns and ceilings of the Premises.
(iii) Landlord reserves the right, without incurring any liability to
Tenant therefor, to make such changes in or to the Project and the fixtures and
equipment thereof, as well as in or to the street entrances, halls, passages,
elevators, stairways and other improvements thereof, as it may deem necessary or
desirable.
(iv) Landlord may adopt any name for the Project and Landlord reserves
the right to change the name or address of the Project at any time.
(p) Signing Authority. If Tenant is a corporation, partnership or limited
-----------------
liability company, each individual executing this Lease on behalf of said entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said entity in accordance with: (i) if Tenant is a
corporation, a duly adopted resolution of the Board of Directors of said
corporation or in accordance with the By-laws of said corporation, (ii) if
Tenant is a partnership, the terms of the partnership agreement, and (iii) if
Tenant is a limited liability company, the terms of its operating agreement, and
that this Lease is binding upon said entity in accordance with its terms.
Concurrently with Tenant's execution of this Lease, Tenant shall provide to
Landlord a copy of: (i) if Tenant is a corporation, such resolution of Directors
authorizing the execution of this Lease on behalf such corporation, resolution
shall be duly certified by the secretary or assistant secretary of the
corporation a true copy of a resolution duly adopted by t he Board of Directors
of said corporation and shall be in the form of " Exhibit E"
33
or in some other form reasonably acceptable to Landlord, (ii) if Tenant is a
partnership, a copy of the provisions of the partnership agreement granting the
requisite authority to each individual executing this Lease on behalf of said
partnership, and (iii) if Tenant is a limited liability company, a copy of the
provisions of its operating agreement granting the requisite authority to each
individual executing this Lease on behalf of said limited liability company. In
the event Tenant fails to comply with the requirements set forth in this
subparagraph (p), then each individual executing this Lease shall be personally
liable for all of Tenant's obligations in this Lease.
(q) Identification of Tenant.
------------------------
(i) If Tenant constitutes more than of one person of or entity, (A )
each of them shall be jointly and severally liable for the keeping all,
observing and performing covenants, conditions and provisions of this Lease to
be kept, observed and performed by Tenant, (B) the term "Tenant" as used in this
L ease shall mean and include each of them jointly and severally, and (C) the
act of or notice from, or notice or refund to, or the signature of, any one or
more of them, with respect to the tenancy of this Lease, including , but not
limited to, any renewal, extension, expiration , termination or modification of
this Lease, shall be binding upon each and all of the persons or entities
executing this Lease as Tenant with the same effect as if each and all of them
had so acted or so given or received such notice or refund or signed .
(ii) If Tenant is a partnership (or is comprised of two or more
persons, individually and as co-partners of a partnership) or if Tenant's
interest in this Lease assigned to a partnership (or to two or more persons,
individually and as co-part partnership) pursuant to Article 15 here of (any
such partnership and such persons hereinafter referred to in this Article
30(q)(ii) as "Partnership Tenant"), the following provisions of this Lease shall
apply to such Partnership Tenant:
(A) The liability of each of the parties comprising Partnership
Tenant shall be joint and several.
(B) Each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by, any written instrument which
may hereafter be executed, changing, modifying or discharging this Lease, in
whole or in part, or surrendering or any part of the Premises to the Landlord,
and by notices, demands, requests or other communication which may hereafter be
given, by the to individual or individuals authorized to execute this Lease on
behalf of Partnership Tenant under Subparagraph (p) above.
(C) Any bills, statements, notices, demands, requests or other
communications given or rendered to Partnership Tenant or to any of the parties
compromising Partnership Tenant shall be deemed given or rendered to Partnership
Tenant and to all such parties and shall be binding upon Partnership Tenant and
all such parties.
(D) If Partnership Tenant admits new partners, all of such new
partners shall, by their admission to Partnership Tenant, be deemed to have
assumed performance of the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed.
34
(E) Partnership Tenant shall give prompt notice to Landlord of the
admission of any such new partners, and, upon demand of Landlord, shall cause
each such new partner to execute and deliver to Landlord an agreement in form
satisfactory to Landlord, where in each such new partner shall assume
performance of all of the terms, covenants and conditions of this Lease on
Partnership Tenant's part to be observed and performed (but neither Landlord's
failure to request any such agreement nor the failure of any such new partner to
execute or deliver any such agreement to Landlord shall terminate the provisions
of clause (D) of this Article 30(q)(ii) or relieve any such new partner of its
obligations thereunder).
(r) Substitute Premises. Landlord shall have the at right any time during
--------------------
the Term hereof, upon giving Tenant not less than sixty (60) days prior notice,
to provide and furnish Tenant with space elsewhere in the Project of
approximately the same size as the Premises and remove and place Tenant in such
space, with Landlord to pay all verified and previously approved costs and
expenses incurred as a result of such movement to such new space. Landlord moves
Tenant to such new space, this Lease and each and all of its terms, covenants
and conditions shall remain in full force and effect and shall be deemed
applicable to such new space and such new space shall thereafter be deemed to be
the "Premises" as though Landlord and Tenant had entered into an express written
amendment of this Lease with respect thereto.
(s) Survival of Obligations. Any obligations of Tenant occurring prior to
-----------------------
the expiration or earlier termination of this Lease shall survive such
expiration or earlier termination.
(t) Intentionally Deleted.
---------------------
(u) Governing Law. This Lease shall be governed by and construed in
--------------
accordance with the laws of the State of California. No conflicts of law rules
of any state or country (including, without limitation, California conflicts of
la w rules) shall be applied to result in the application of any substantive or
procedural laws of any state or country other than California. All
controversies, claims, actions or causes of action arising between the parties
hereto and/or their respective successors and assigns, shall be brought, heard
and adjudicated by the courts of the State of California, with venue in the
County of Riverside. Each of the parties hereto hereby consents to personal
jurisdiction by the courts of the State of California in connection with any
such controversy, claim, action or cause of action, and each of the parties
hereto consents to service of process by any means authorized by California law
and consent to the enforcement of any judgment so obtained in the courts of the
State of California on the same terms and conditions as if such controversy,
claim , action or cause of action had been originally heard and adjudicated to a
final judgment in such courts. Each of the parties hereto further acknowledges
that the laws and courts of California were freely and voluntarily chosen to
govern this Lease and to adjudicate any claims or disputes hereunder.
(v) Exhibits and Addendum. The Exhibits and Addendum, if applicable,
----------------------
attached hereto are incorporated herein by this reference as if fully set forth
herein.
35
ARTICLE XXXI
------------
OPTION TO EXTEND
----------------
(a) Option Right. Landlord hereby grants the Tenant named in this Lease
------------
(the "Original Tenant") one (1) option ("Option") to extend the Lease Term for
the entire Premises for a period of three (3) years (an "Option Term"), which
option shall be exercisable only by written notice delivered by Tenant to
Landlord set forth below. The rights contained in this Article 31 shall be
personal to the Original Tenant and may only be exercised by the Original Tenant
(and not any assignee, sublessee or other transferee of the Original Tenant `s
interest in this Lease) if the Original Tenant occupies the entire Premises as
of the date of Tenant's Acceptance (as defined in Section 31(c) below).
(b) Option Rent. The rent payable by Tenant during the Option Term ("Option
-----------
Rent") shall be equal to the "Market Rent" (defined below ), but in now event
shall the Option Rent be less than Tenant is paying under the Lease on the month
immediately preceding the Option Term for Monthly Basic Rental, including all
escalations, Direct Costs, additional rent and other charges. "Market Rent"
shall mean the applicable Monthly Basic Rental, including all escalations,
Direct Costs, additional rent and other charges at which tenants, as of the time
of Landlord's "Option Rent Notice" (as defined below), are entering into leases
for non-sublease, non-encumbered, space comparable in size, location and quality
to the Premises in renewal transactions for a term comparable to the Option Term
which comparable space is located in office buildings comparable to the Project
in Temecula, California taking, into consideration the value of the existing
improvements in the Premises to Tenant, as compared to the value of the existing
improvements in such comparable space, w it h such value to be based upon the
age, quality and layout of the improvements and the extent to which the same
could be utilized by Tenant with consideration given to the fact that the
improvements existing in the Premises are specifically suitable to Tenant.
(c) Exercise of Option. The Option shall be exercised by Tenant only in the
------------------
following manner: (i) Tenant shall not be in default, and shall not have been in
default under this Lease more than once, on the delivery date of the Interest
Notice and Tenant's Acceptance; (ii) Tenant shall deliver written notice
("Interest Notice") to Landlord not more than ten (10) months nor less than six
(6) months prior to the expiration of the Lease Term, stating that Tenant is
interested in exercising the Option, (iii) within fifteen (15) business days of
Landlord's receipt of Tenant's written notice, Landlord shall deliver notice
("Option Rent Notice") to Tenant setting forth the Option Rent; and (iv) if
Tenant desires to exercise such Option, Tenant shall provide Landlord written
notice within five (5) business days after receipt of the Option Rent Notice
("Tenant's Acceptance"). Tenant's failure to deliver the Interest Notice or
Tenant's Acceptance on or before the dates specified above shall be deemed to
constitute Tenant's election not to exercise the Option. If Tenant timely and
properly exercises its Option, the Lease Term shall be extended for the Option
Term upon all of the terms and conditions set forth in this Lease, except that
the rent for the Option Term shall be as indicated in the Option Rent Notice.
36
ARTICLE XXXII
-------------
SIGNAGE/DIRECTORY
-----------------
Provided Tenant is not in default hereunder, Tenant, at Tenant's cost sole
and expense, shall have the right to one (1) line in the lobby directory during
the Lease Term. If other tenants occupy space on the floor on which the Premises
is located, Tenant's identifying signage shall be provided by Landlord, at
Landlord's cost, and such signage shall be comparable to that used by Landlord
for other similar floors in the Project and shall comply with Landlord's Project
standard signage program. Provided Tenant is not in default hereunder, Tenant
shall have the right, at Tenant `s sole cost and expense, to install signage in
the elevator lobby of the floor on which the Premises is located ("Tenant's
Signage"). Tenant's Signage shall be subject to Landlord's approval as to size,
design, location, graphics, materials, colors and similar specifications and
shall be consistent with the exterior design, materials and appearance of the
Project and the Project's signage program. Tenant's Signage shall be personal to
the Original Tenant and may not be assigned to any assignee or sublessee, or any
other person or entity. Landlord has the right, but not the obligation, to
oversee the installation of Tenant's Signage. The cost to maintain Tenant's
Signage shall be paid for by Tenant. Upon the expiration of the Lease Term, or
other earlier termination of this Lease, Tenant shall be responsible for any and
all costs associated with the removal of Tenant `s Signage, including, but not
limited to, the cost to repair and restore the Project to its original
condition, normal wear and tear excepted,
37
IN WITNESS WHEREOF, the parties have executed this Lease, consisting of the
foregoing provisions and Articles, including all exhibits and other attachments
referenced therein, as of the date first above written.
"LANDLORD" ARDEN REALTY LIMITED PARTNERSHLP,
a Maryland limited partnership
By: ARDEN REALTY, INC.,
a Maryland corporation
Its: Sole General Partner
By:
--------------------------------------------
VICTOR J. COLEMAN
Its: President and COO
"TENANT" E-PERCEPTION TECHNOLOGIES.,
a Delaware corporation
By:
-------------------------------------------
Print Name:
-------------------------------
Title:
------------------------------------
By:
--------------------------------------------
Print Name:
-------------------------------
Title:
------------------------------------
38
EXHIBIT "A"
-----------
PREMISES
--------
EXHIBIT "B"
-----------
[FIRST PAGE OF EXHIBIT B MISSING]
---------------------------------
7. Tenant shall not use or keep in the Premises or Project any
kerosene, gasoline or inflammable, explosive or combustible fluid or material,
or use any method of heating or air conditioning other than that supplied by
Landlord.
8. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by Landlord.
9. Tenant shall not install or use any blinds, shades, awnings or
screens in, connection with any window or door of the Premises and shall not use
any drape or window covering facing any exterior glass surface other than the
standard drapes, blinds or other window covering established by Landlord.
10. Tenant shall cooperate with Landlord in obtaining maximum
effectiveness of the cooling system by closing window coverings when the sun's
rays fall directly on windows of the Premises. Tenant shall not obstruct, alter,
or in any way impair the efficient operation of Landlord's heating, ventilating
and air-conditioning system. Tenant shall not tamper with or change the setting
of any thermostats or control valves.
11. The Premises shall not be used for manufacturing or for the storage
of merchandise except as such storage may be incidental to the permitted use of
the Premises. Tenant shall not, without Landlord `s prior written consent,
occupy or permit any portion of the Premises to be occupied or used for the
manufacture or sale of liquor or tobacco in any form, or a barber or manicure
shop, or as an employment bureau. The Premises shall not be used for lodging or
sleeping or for any improper, objectionable or immoral purpose. No auction shall
be conducted on the Premises.
12. Tenant shall not make, or permit to be made, any unseemly or
disturbing noises, or disturb or interfere with occupants of Project or
neighboring buildings or premises or those having business with it by the use of
any musical instrument, radio, phonographs or unusual noise, or in any other
way.
13. No bicycles, vehicles or animals of any kind shall be brought into
or kept in or about the Premises, and no cooking shall be done or permitted by
any tenant in the Premises, except that the preparation of coffee, tea, hot
chocolate and similar items for tenants, their employees and visitors shall be
permitted. No tenant shall cause or permit any unusual or objectionable odors to
be produced in or permeate from or throughout the Premises. The foregoing
notwithstanding, Tenant shall have the right to use a microwave and to heat
microwavable items typically heated in an office. No hot plates, toasters,
toaster ovens or similar open element cooking apparatus shall be permitted in
the Premises.
14. The sashes, sash doors, skylights, windows and doors that reflect
or admit light and air into the halls, passageways or other public places in the
Project shall not be covered or obstructed by any tenant, nor shall any bottles,
parcels or other articles be placed on the window sills.
15. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by any tenant, nor shall any changes be made in existing
locks or the mechanisms thereof unless Landlord is first notified thereof, gives
written approval, and is furnished a key therefor. Each tenant must, upon the
termination of his tenancy, give to Landlord all keys and key cards of stores,
offices, or toilets or toilet rooms, either furnished to, or otherwise procured
by, such tenant, and in the event of the loss of any keys so furnished, such
tenant shall pay Landlord the cost of replacing the same or of changing the lock
or locks opened by such lost key if Landlord shall deem it necessary to make
such change. If more than two keys for one lock are desired, Landlord will
provide them upon payment therefor by Tenant. Tenant shall not key or re-key any
locks. All locks shall be keyed by Landlord `s locksmith only.
16. Landlord shall have the right to prohibit any advertising by any
tenant which, in Landlord `s opinion, tends to impair the reputation of the
Project or its desirability as an office building and upon written notice from
Landlord any tenant shall refrain from and discontinue such advertising.
17. Landlord reserves the right to control access to the Project by all
persons after reasonable hours of generally recognized business days and at all
hours on Sundays and legal holidays. Each tenant shall be responsible for all
persons for whom it requests after hours access and shall be liable to Landlord
for all acts of such persons. Landlord shall have the right from time to time to
establish reasonable rules pertaining to freight elevator usage, including the
allocation and reservation of such usage for tenants `initial their move-in to
premises, and final departure therefrom.
18. Any person employed by any tenant to do janitorial work shall,
while in the Project and outside of the Premises, be subject to and under the
control and direction of the Office of the Project or its designated
representative such as security personnel (but not as an agent or servant of
Landlord, and the Tenant shall be responsible for al! acts of such persons).
19. All doors opening on to public corridors shall be kept closed
except when being used for ingress and egress. Tenant shall cooperate and comply
with any reasonable safety or security programs, including fire drills and air
raid drills, and the appointment of "fire wardens" developed by Landlord for the
Project, or required by law. Before leaving the Premises unattended, Tenant
shall close and securely lock all doors or other means of entry to the Premises
and shut off all lights and water faucets in the Premises.
20. The requirements of tenants will be attended to only upon
application
to the Office of the Project.
21. Canvassing, soliciting and peddling in the Project are prohibited
and each tenant shall cooperate to prevent the same.
22. All office equipment of any electrical or mechanical nature shall
be placed by tenants in the Premises in settings approved by Landlord, to absorb
or prevent any vibration, noise or annoyance.
23. No air-conditioning unit or other similar apparatus shall be
installed or used by any tenant without the prior written consent of Landlord.
Tenant shall pay the cost of all electricity used for air-conditioning in the
Premises if such electrical consumption exceeds normal office requirements,
regardless of whether additional apparatus is installed pursuant to the
preceding sentence.
24. There shall not be used in any space, or in the public halls of the
Project, either by any tenant or others, any hand trucks except those equipped
with rubber tires and side guards.
25. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Project must be fluorescent and/or of a quality, type, design
and bulb color approved by Landlord. Tenant shall not permit the consumption in
the Premises of more than 2 1/2 watts per net usable square foot in the Premises
in respect of office lighting nor shall Tenant permit the consumption in the
Premises of more than 1 1/2 watts per net usable square foot of space in the
Premises in respect of the power outlets therein, at any one time. In the event
that such limits are exceeded, Landlord shall have the right to require Tenant
to remove lighting fixtures and equipment and/or to charge Tenant for the cost
of the additional electricity consumed.
26. Parking.
(a) Project parking facility hours shall be 7:00 a.m. to 7:00
p.m., Monday through Friday, and closed on weekends, state and federal holidays
excepted, as such hours may be revised from time to time by Landlord.
(b) Automobiles must be parked entirely within the stall lines on
the floor.
(c) All directional signs and arrows must be observed.
(d) The speed limit shall be 5 miles per hour.
(e) Parking is prohibited in areas not striped for parking.
(f) Parking cards or any other device or form of identification
supplied by Landlord (or its operator) shall remain the property of Landlord (or
its operator). Such parking identification device must be displayed as requested
and may not be mutilated in any manner. The serial number of the parking
identification device may not be obliterated. Devices are not transferable or
assignable and any device in the possession of an unauthorized holder will be
void. There will be a replacement charge to the Tenant or person designated by
Tenant of $25.00 for loss of any parking card. There shall be a security deposit
of $25.00 due at issuance for each card key issued to Tenant.
(g) The monthly rate for parking is payable one (1) month in
advance and must be paid by the third business day of each month. Failure to do
so will automatically cancel parking privileges and a charge at the prevailing
daily rate will be due. No deductions or allowances from the monthly rate will
be made for days parker does not use the parking facilities.
(h) Tenant may validate visitor parking by such method or methods
as the Landlord may approve, at the validation rate from time to time generally
applicable to visitor parking.
(i) Landlord (and its operator) may refuse to permit any person
who violates the within rules to park in the Project parking facility, and any
violation of the rules shall subject the automobile to removal from the Project
parking facility at the parker's expense. In either of said events, Landlord (or
its operator) shall refund a prorata portion of the current monthly parking rate
and the sticker or any other form of identification supplied by Landlord (or its
operator) will be returned to Landlord (or its operator).
(j) Project parking facility managers or attendants are not
authorized to make or allow any exceptions to these Rules and Regulations.
(k) All responsibility for any loss or damage to automobiles or
any personal property therein is assumed by the parker.
(l) Loss or theft of parking identification devices from
automobiles must be reported to the Project parking facility manager
immediately, and a lost or stolen report must be filed by the parker at that
time.
(m) The Parking facilities are for the sole purpose of parking one
automobile per space. Washing, waxing, cleaning or servicing of any vehicles by
the parker or his agents is prohibited.
(n) Landlord (and its operator) reserves the right to refuse the
issuance of monthly stickers or other parking identification devices to any
Tenant and/or its employees who refuse to comply with the above Rules and
Regulations and al! City, State or Federal ordinances, laws or agreements.
(o) Tenant agrees to acquaint all employees with these Rules and
Regulations.
(p) No vehicle shall be stored in the Project parking facility for
a period of more than one (1) week.
27. The Project is a non-smoking Project. Smoking or carrying lighted
cigars or cigarettes in the Premises or the Project, including the elevators in
the Project, is prohibited.
EXHIBIT "C"
-----------
NOTICE OF LEASE TERM DATES
AND TENANT'S PROPORTIONATE SHARE
--------------------------------
TO: DATE:
------------------------------ --------------------------
RE: Lease dated ___________, 2000, between _____________________ ("Landlord"),
and __________________ ("Tenant"), concerning Suite ______, located at
____________.
Ladies and Gentlemen:
In accordance with the Lease, Landlord wishes to advise and/or confirm
the following:
1. That the Premises have been accepted herewith by the Tenant as being
substantially complete in accordance with the Lease and that there is no
deficiency in construction.
2. That the Tenant has taken possession of the Premises and acknowledges
that under the provisions of the Lease the Term of said Lease shall commence as
of ______________ for a term of _______________________ ending on
_______________________.
3. That in accordance with the Lease, Basic Rental commenced to accrue on
______________________.
4. If the Commencement Date of the Lease is other than the first day of the
month, the first billing will contain a prorata adjustment. Each billing
thereafter shall be for the full amount of the monthly installment as provided
for in said Lease.
5. Rent is due and payable in advance on the first day of each and every
month during the Term of said Lease. Your rent checks should be made payable to
________________ at _____________________________________.
6. The exact number of rentable square feet within the Premises is
____________ square feet.
7. Tenant's Proportionate Share, as adjusted based upon the exact number of
rentable square feet within the Premises is _________%.
AGREED AND ACCEPTED:
TENANT:
- --------------------------------------------,
a
------------------------------------------
By:
----------------------------------------
Its:
---------------------------------
EXHIBIT ONLY
***DO NOT SIGN -INITIAL ONLY***
EXHIBIT "D"
-----------
INTENTIONALLY DELETED
---------------------
EXHIBIT "E"
-----------
CERTIFIED COPY OF
BOARD OF DIRE'CTORS RESOLUTIONS
OF
E-PERCEPTION TECHNOLOGIES, INC.
The undersigned, being the duly elected Corporate Secretary of
E-PERCEPTION TECHNOLOGIES, INC., a Delaware corporation ("Corporation"), hereby
certifies that the ` following is a true, full and correct copy o f `the
resolutions adopted by the Corporation by unanimous written consent in lieu of a
special meeting, of its Board of Directors, and that said resolutions have not
been amended or revoked as of the date hereof.
RESOLVED, that the Corporation, is hereby authorized to execute,
deliver and fully perform that certain document entitled Standard Office Lease
("Lease") by and between the Corporation and Arden Realty Limited Partnership, a
Maryland limited partnership, for the lease of space at Tower Plaza I.
RESOLVED FURTHER, that the Corporation is hereby authorized and
directed to make, execute and deliver any and all, consents, certificates,
documents, instruments, amendments, confirmations, guarantees, papers or
writings as may be required in connection with or in furtherance of the Lease
(collectively with the Lease, the "Documents") or any transactions described
therein, and to do any and all other acts necessary or desirable to effectuate
the foregoing resolution.
RESOLVED FURTHER, that the following officers acting together:
_____________ as _____________; and _____________ as _____________ are
authorized to execute and deliver the Documents on behalf of the Corporation,
together with any other documents and/or instruments evidencing or ancillary to
the Documents, and in such forms and on such terms as such officer(s) shall
approve, the execution thereof to be conclusive evidence of such approval and to
execute and deliver on behalf of the Corporation all other documents necessary
to effectuate said transaction in conformance with these resolutions.
Date___________, 2000
-------------------------------------,
Corporate Secretary
EXHIBIT ONLY
***DO NOT SIGN -INITIAL ONLY***
TABLE OF CONTENTS
Page
ARTICLE I BASIC LEASE PROVISIONS.............................................1
ARTICLE II TERM/PREMISES.....................................................2
ARTICLE III RENTAL...........................................................3
(a) Basic Rental.......................................3
(b) Increase in Direct Costs...........................3
(c) Definitions........................................3
(d) Determination of Payment...........................6
ARTICLE IV SECURITY DEPOSIT..................................................7
ARTICLE V HOLDING OVER.......................................................8
ARTICLE VI PERSONAL PROPERTY TAXES...........................................9
ARTICLE VII USE..............................................................9
ARTICLE VIII CONDITION OF PREMISES..........................................10
ARTICLE IX REPAIRS AND ALTERATIONS..........................................11
ARTICLE X LIENS.............................................................12
ARTICLE XI PROJECT SERVICES.................................................12
ARTICLE XII RIGHTS OF LANDLORD..............................................14
ARTICLE XIII INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY................14
(a) Indemnity.........................................14
(b) Exemption of Landlord from Liability..............14
ARTICLE XIV INSURANCE.......................................................15
(a) Tenant's Insurance................................15
(b) Form of Policies..................................16
(c) Landlord's Insurance..............................16
(d) Waiver of Subrogation.............................16
(e) Compliance with Law...............................17
ARTICLE XV ASSIGNMENT AND SUBLETTING........................................17
ARTICLE XVI DAMAGE OR DESTRUCTION...........................................19
ARTICLE XVII SUBORDINATION..................................................20
ARTICLE XVIII EMINENT DOMAIN................................................21
TABLE OF CONTENTS
(continued)
Page
ARTICLE XIX DEFAULT.........................................................22
ARTICLE XX REMEDIES.........................................................23
ARTICLE XXI TRANSFER OF LANDLORD'S INTEREST.................................24
ARTICLE XXII BROKER.........................................................25
ARTICLE XXIII PARKING.......................................................25
ARTICLE XXIV WAIVER.........................................................26
ARTICLE XXV ESTOPPEL CERTIFICATE............................................26
ARTICLE XXVI LIABILITY OF LANDLORD..........................................27
ARTICLE XXVII INABILITY TO PERFORM..........................................27
ARTICLE XXVIII HAZARDOUS WASTE..............................................28
ARTICLE XXIX SURRENDER OF PREMISES: REMOVAL OF PROPERTY.....................29
ARTICLE XXX MISCELLANEOUS...................................................30
(a) Severabilitv: Entire Agreement....................30
(b) Attorneys' Fees; Waiver of Jury Trial.............30
(c) Time of Essence...................................31
(d) Headings: Joint and Several.......................31
(e) Reserved Area.....................................31
(f) NO OPTION.........................................31
(g) Use of Project Name; Improvements.................31
(h) Rules and Regulations.............................32
(i) Quiet Possession..................................32
(j) Rent..............................................32
(k) Successors and Assigns............................32
(l) Notices...........................................32
(m) Persistent Delinquencies..........................32
(n) Right of Landlord to Perform......................33
(o) Access. Changes in Project, Facilities, Name.....33
(p) Signing Authority.................................33
(q) Identification of Tenant..........................34
(r) Substitute Premises...............................35
(s) Survival of Obligations...........................35
(t) Intentionally Deleted.............................35
(u) Governing Law.....................................35
(v) Exhibits and Addendum.............................35
ARTICLE XXXI OPTION TO EXTEND...............................................36
TABLE OF CONTENTS
(continued)
Page
(a) Option Right......................................36
(b) Option Rent.......................................36
(c) Exercise of Option................................36
ARTICLE XXXII SIGNAGE/DIRECTORY.............................................37