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STANDARD OFFICE LEASE
FOR
CALABASAS COMMERCE CENTER
BY AND BETWEEN
ARDEN REALTY LIMITED PARTNERSHIP,
A MARYLAND LIMITED PARTNERSHIP,
AS LANDLORD,
AND
DIGITAL INSIGHT CORPORATION,
A DELAWARE CORPORATION,
AS TENANT
<PAGE>
TABLE OF CONTENTS
PAGES
-----
ARTICLE 1 BASIC LEASE PROVISIONS 1
ARTICLE 2 TERM/PREMISES 2
ARTICLE 3 RENTAL 2
(a) Basic Rental 2
(b) Increase in Direct Costs 2
(c) Definitions 3
(d) Determination of Payment 4
ARTICLE 4 SECURITY DEPOSIT 5
ARTICLE 5 HOLDING OVER 6
ARTICLE 6 PERSONAL PROPERTY TAXES 6
ARTICLE 7 USE 7
ARTICLE 8 CONDITION OF PREMISES 7
ARTICLE 9 REPAIRS AND ALTERATIONS 8
ARTICLE 10 LIENS 9
ARTICLE 11 PROJECT SERVICES 10
ARTICLE 12 RIGHTS OF LANDLORD 10
ARTICLE 13 INDEMNITY; EXEMPTION OF LANDLORD FROM
LIABILITY 11
(a) Indemnity 11
(b) Exemption of Landlord from Liability 11
ARTICLE 14 INSURANCE 11
(a) Tenant's Insurance 11
(b) Form of Policies 11
(c) Landlord's Insurance 12
(d) Waiver of Subrogation 12
(e) Compliance with Law 12
ARTICLE 15 ASSIGNMENT AND SUBLETTING 13
ARTICLE 16 DAMAGE OR DESTRUCTION 15
ARTICLE 17 SUBORDINATION 16
ARTICLE 18 EMINENT DOMAIN 16
ARTICLE 19 DEFAULT 17
ARTICLE 20 REMEDIES 17
ARTICLE 21 TRANSFER OF LANDLORD'S INTEREST 19
ARTICLE 22 BROKER 19
ARTICLE 23 PARKING 19
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<PAGE>
ARTICLE 24 WAIVER 19
ARTICLE 25 ESTOPPEL CERTIFICATE 20
ARTICLE 26 LIABILITY OF LANDLORD 20
ARTICLE 27 INABILITY TO PERFORM 21
ARTICLE 28 HAZARDOUS WASTE 21
ARTICLE 29 SURRENDER OF PREMISES; REMOVAL OF
PROPERTY 22
ARTICLE 30 MISCELLANEOUS 23
(a) Severability; Entire Agreement 23
(b) Attorneys' Fees; Waiver of Jury Trial 23
(c) Time of Essence 24
(d) Headings 24
(e) Reserved Area 24
(f) No Option 24
(g) Use of Project Name; Improvements 24
(h) Rules and Regulations 24
(i) Quiet Possession 24
(j) Rent 24
(k) Successors and Assigns 24
(l) Notices 25
(m) Persistent Delinquencies 25
(n) Right of Landlord to Perform 25
(o) Access, Changes in Project, Facilities, Name 25
(p) Corporate Authority 25
(q) Identification of Tenant 26
(r) Intentionally Deleted 26
(s) Survival of Obligations 26
(t) Confidentiality 26
(u) Exhibits and Addendum 27
(v) Americans With Disabilities Act 27
ARTICLE 31 OPTION TO EXTEND 27
(a) Option Right 27
(b) Option Rent 27
(c) Exercise of Option 27
(d) Determination of Market Rent 28
ARTICLE 32 RIGHT OF FIRST OFFER 28
(a) Procedure for Offer 28
(b) Procedure for Acceptance 29
(c) Construction of First Offer Space 29
(d) Lease of First Offer Space 29
(e) No Defaults 29
ARTICLE 33 DIRECTORY 29
Exhibit "A" Premises
Exhibit "B" Rules and Regulations
Exhibit "C" Notice of Lease Term Dates and Tenant's Proportionate Share
Exhibit "D" Tenant Work Letter
-ii-
<PAGE>
INDEX OF DEFINED TERMS
----------------------
DEFINED TERMS PAGE
------------- ----
Additional Rent 2
Alterations 8
Approved Working Drawings Exhibit D
Architect Exhibit D
Base Year 1
Base, Shell and Core Exhibit D
Basic Rental 1
Brokers 1
Code Exhibit D
Commencement Date 1
Construction Drawings Exhibit D
Contractor Exhibit D
Control 14
Cosmetic Alterations 8
Cost Proposal Exhibit D
Cost Proposal Delivery Date Exhibit D
Designated Portion Exhibit D
Direct Costs 3
Economic Terms 29
Engineers Exhibit D
Estimate 4
Estimate Statement 4
Estimated Direct Costs 4
Event of Default 17
Expiration Date 1
Final Space Plan Exhibit D
Final Working Drawings Exhibit D
First Month's Rent 2
First Offer Notice 28
First Offer Space 28
Force Majeure 21
Hazardous Material 22
HVAC System 10
Landlord 1
Landlord Supervision Fee Exhibit D
Laws 22
Lease 1
Lease Year 2
Operating Costs 3
Over-Allowance Amount Exhibit D
Parking Passes 2
Partnership Tenant 26
Permits Exhibit D
Permitted Assignee 14
Permitted Use 1
Premises 1
Project 1
Real Property 3
Representative 20
Review Period 5
Security Deposit 1
Specifications Exhibit D
Square Footage 1
Standard Improvement Package Exhibit D
Statement 4
Substantial Completion Exhibit D
Superior Lease 28
Superior Rights 28
Tax Costs 3
Tenant 1
Tenant Delays Exhibit D
Tenant Improvement Allowance Exhibit D
Tenant Improvement Allowance Items Exhibit D
Tenant Improvements 7
Tenant's Proportionate Share 1
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Term 1
Termination Effective Date Exhibit D
Termination Notice Exhibit D
Time Deadlines Exhibit D
Transfer 13
Transfer Premium 14
Transferee 14
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<PAGE>
STANDARD OFFICE LEASE
---------------------
This Standard Office Lease ("LEASE") is made and entered into as of this
4th day of August, 1997, by and between ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership ("LANDLORD"), and DIGITAL INSIGHT CORPORATION, a
Delaware corporation ("TENANT").
Landlord here by leases to Tenant and Tenant hereby leases from Landlord
the premises designated on the plan attached hereto and incorporated herein as
Exhibit "A" ("PREMISES"), located in the project ("PROJECT") now known as the
Calabases Commerce Center whose address is 26025 Maureau Road, Calabases,
California for the Term and upon the terms and conditions hereinafter set forth,
and Landlord and Tenant hereby agree as follows:
ARTICLE 1
---------
BASIC LEASE PROVISIONS
----------------------
A. TERM: Five (5) years.
COMMENCEMENT DATE: The earlier of (i) the date Tenant first
commences to conduct business in the Premises, or
(ii) the date of Substantial Completion of Tenant
Improvements in the Premises. The Commencement
Date is anticipated to occur on September 1,
1997. Upon Tenant's occupancy of the Premises,
Landlord and Tenants agree to execute and deliver
a Commencement Letter in a form substantially
similar to that attached hereto as Exhibit "C".
EXPIRATION DATE: The last day of the month which is sixty (60)
months after the month in which the Commencement
Date falls, unless extended or earlier terminated
pursuant to this Lease.
B. SQUARE FOOTAGE: 30,385 rentable square feet.
C. BASIC RENTAL:
Annual Monthly Monthly Basic Rental
Lease Year Basic Rental Basic Rental Per Rentable Square Foot
---------- ------------ ------------ ------------------------
1 $240,649.20 $20,054.10 $0.66
2-3 $401,082.00 $33,423.50 $1.10
4-5 $437,544.00 $36,462.00 $1.20
D. BASE YEAR: Not applicable (Triple Net Lease)
E. TENANT'S PROPORTIONATE SHARE: 65.60%
F. SECURITY DEPOSIT: A security deposit of $240,000.00 shall be
due and payable by Tenant to Landlord upon
Tenant's execution of this Lease.
G. PERMITTED USE: General office use
H. BROKERS: Grubb & Ellis Company; TOLD Partners, Inc.
<PAGE>
I. PARKING PASSES: Tenant shall have the use of three point seven
(3.7) unreserved parking passes for each 1,000
rentable square feet continued in the Premises,
which equals one hundred twelve (112) passes, at
the rate provided in Article 23 hereof.
J. FIRST MONTH'S RENT: The first full month's rent of $20,054.10 shall be
due and payable by Tenant to Landlord upon
Tenant's execution of this Lease.
ARTICLE 2
---------
TERM/PREMISES
-------------
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 Expiration
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 month, and (b) the last Lease year shall end on the Expiration Date. If
Landlord is unable to deliver possession of the Premises to Tenant on or before
the anticipated Commencement Date as a result of the failure of the existing
occupant to surrender all or any portion of such space or for any other reason,
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. Landlord and Tenant hereby stipulate that the Premises
contains the number of rentable square feet specified in Section 1.B of the
Basic Lease Provisions.
ARTICLE 3
---------
RENTAL
------
(a) Basic Rental. Tenant agrees to pay to Landlord during the Term hereof,
------------
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 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. Tenant shall pay an additional sum for each
------------------------
subsequent calendar year equal to the product of the amount set forth in Article
1.E. of the Basic Lease Provisions multiplied by the 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 (360). 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 entitled 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.
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<PAGE>
(c) Definitions. As used herein the term "DIRECT COSTS" shall mean the sum
-----------
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, 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 are 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 proceedings 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."
(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, capital expenditures incurred to
effect economies of operation and capital expenditures required by government
regulations, laws, or ordinances including, but not limited to the American 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 all other insurance for
the Project carried by Landlord; the cost of all building and cleaning supplies
and materials; the cost of all charges for cleaning, maintenance and service
contracts and other services with independent contractors and administration
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. In no event shall costs for any
item of utilities included in Direct Costs for any year subsequent to the Base
Year be less than the amount included in Direct Costs for the Base Year for such
utility item. Notwithstanding anything to the contrary set forth in this Article
3, when calculating Operating Costs for the Base Year, Operating Costs shall
exclude (a) market-wide labor-rate increases due to extraordinary circumstances
including, but not limited to, boycotts and strikes, (b) utility 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).
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<PAGE>
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, life, 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.
(d) Determination of Payment.
------------------------
(i) 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 the "ESTIMATED DIRECT COSTS". 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 Direct Costs under
this Article 3. Tenant shall pay, with its next installment of Monthly Basic
Rental due, a fraction of the Estimated Direct Costs 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 Direct Costs set forth in the previous Estimate Statement
delivered by Landlord to Tenant.
(ii) 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. Upon receipt of the Statement for each
calendar year during the Term, if amounts paid by Tenant as Estimated Direct
Costs are less than Tenant's actual Proportionate Share of Direct Costs as
specified on the Statement, Tenant shall pay, with its next installment of
Monthly Basic Rental due, the full amount of Tenant's Proportionate Share of
Direct Costs for such calendar year, less the amounts, if any, paid during such
calendar year as Estimated Direct Costs. If, however, the Statement indicates
that amounts paid by Tenant as Estimated Direct Costs are greater than Tenant's
actual Proportionate Share of Direct Costs as specified on the Statement, such
overpayment shall be credited against Tenant's next installments of Estimated
Basic Rental. 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
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<PAGE>
Costs for the calendar year in which this Lease terminates, if Tenant has
underpaid Direct Costs, Tenant shall immediately pay to Landlord an amount as
calculated pursuant to the provisions of this Article 3(d), and if Tenant has
overpaid Direct Costs, such excess shall be immediately refunded to Tenant. The
provisions of this Section 3(d)(iii) shall survive the expiration or earlier
termination of the Term.
(iii) 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), 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 and provided further that Tenant and such accountant or
representative shall, and each of them shall use their commercially reasonable
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, at Tenant's
expense, by an independent certified public accountant selected by Landlord and
who is a member of a nationally or regionally recognized accounting firm.
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.
(iv) 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 4
---------
SECURITY DEPOSIT
----------------
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. Upon the following
dates, the amount of the Security Deposit shall be reduced to the following
amounts, with the excess amount (plus interest earned thereon) being refunded by
Landlord to Tenant:
Upon expiration of the 1st $ 160,000.00
Lease Year
Upon expiration of the 2nd $ 80,000.00
Lease Year
Upon expiration of the 3rd $ 33,423.50
Lease Year
However, if (i) a default by Tenant occurs under this Lease, or (ii)
circumstances exist that would, with notice or lapse of time, or both,
constitute a default by Tenant, and Tenant has received notice but failed to
cure such default within the time period permitted by Article 19 or such lesser
time as may remain before the relevant date for any scheduled reduction of the
Security Deposit as provided above, the Security Deposit shall not thereafter be
reduced, unless
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<PAGE>
and until such default shall have been fully cured pursuant to the terms of this
Lease, at which time the Security Deposit shall be reduced as hereinabove
described.
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 five (5) days after written demand therefore,
deposit cash with Landlord in an amount sufficient to restore the security
deposit to its original amount. Tenant agrees that Landlord shall not be
required to keep the security deposit in trust, segregate it or keep it separate
from Landlord's general funds but Landlord may commingle the security deposit
with its general funds and Tenant shall be entitled to simple interest at the
rate of three percent (3%) per annum on such deposit. At the expiration of the
Lease Term, and provided there exists no default by Tenant hereunder, the
security deposit or any balance thereof, plus any interest earned thereon, 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 any and all amounts permitted by California Civil Code Section
1950.7 or any successor or replacement statute. Tenant hereby 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
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 5
---------
HOLDING OVER
------------
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, rent at one hundred fifty percent (150%) 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, expense or liability, including without limitation, claims made
by any succeeding tenant and real estate brokers claims and attorney's fees.
ARTICLE 6
---------
PERSONAL PROPERTY TAXES
-----------------------
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 to 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.
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<PAGE>
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 computation of "Tax Costs."
ARTICLE 7
---------
USE
---
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 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. Tenant hereby
acknowledges that the City of Calabasas, as of the date of this Lease first
above written, regulates and restricts shipping and receiving from the North
side of the Project and Tenant shall be responsible for complying with such
regulations and/or restrictions.
ARTICLE 8
---------
CONDITION OF PREMISES
---------------------
Landlord shall, at its sole cost and expense, utilizing Project-standard
materials only, install in the Premises, at a location designated by Landlord
and reasonably approved by Tenant, an elevator that provides service between the
first floor and mezzanine level of the Premises and perform any other work
required by law and resulting from the installation of such elevator. Tenant
hereby acknowledges that Landlord will be installing such elevator during the
Lease Term, and Landlord's performance of such work shall not be deemed a
constructive eviction of Tenant, nor shall Tenant be entitled to any abatement
of Rent in connection therewith. Tenant hereby agrees that, except as otherwise
provided herein and in the Tenant Work Letter attached hereto as Exhibit "D",
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 condition 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 condition 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 Landlord's work pursuant to the first sentence of this
Article 8, and the improvements work to be performed pursuant to the Tenant Work
Letter, 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. Tenant
hereby waives Sections 1941 and 1942 of the Civil Code of California or any
successor provision of law.
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<PAGE>
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 Project 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
no event shall Tenant be permitted to withhold or reduce Basic Rental or other
charges due hereunder as a result of same or otherwise make claim against
Landlord for interruption or interference with Tenant's business and/or
operations.
ARTICLE 9
---------
REPAIRS AND ALTERATIONS
-----------------------
(a) 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, lifesafety, plumbing, sprinkler systems and heating,
ventilating and air-conditioning systems (provided, however, that Landlord's
obligation with respect to any such systems shall be to repair and maintain
those portions of the systems located in the core of the Project or in other
areas outside of the Premises, but Tenant shall be responsible to repair and
maintain any distribution of such systems throughout the Premises, except the
existing HVAC System in the Premises, the responsibility for repair and
maintenance of which shall be as provided in Article 11 hereof). Except as
expressly provided as Landlord's obligation in this Article 9, Tenant shall keep
the Premises in good condition and repair. Subject to the provisions of Article
14 hereof, 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, "ALTERNATIONS") 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. Notwithstanding anything to the contrary contained herein, Tenant
may make strictly cosmetic changes to the finish work in the Premises (the
"COSMETIC ALTERATIONS"), without Landlord's consent, provided that the aggregate
cost of any such alterations does not exceed Ten Thousand Dollars ($10,000.00)
in any twelve (12) month period, and further provided that such alterations do
not (i) require any structural or other substantial modifications to the
Premises, (ii) require any changes to, nor adversely affect, the systems and
equipment, and (iii) affect the exterior appearance of the Project. Tenant shall
give Landlord at least thirty (30) days prior notice of such Cosmetic
Alterations, which notice shall be accompanied by reasonably adequate evidence
that such changes meet the criteria contained in this Article 9. Tenant shall at
its sole cost and expense obtain all necessary approvals and permits pertaining
to any Alterations approved by Landlord. If Landlord, in approving any
Alterations, specifies a commencement date therefor, Tenant shall not commence
any work with respect to such Alterations prior to such date. Tenant hereby
indemnifies, defends and agrees to hold Landlord free and harmless from all
liens and claims of lien, and all other liability, claims and demands arising
out of any work done or material supplied to the Premises by
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<PAGE>
or at the request of Tenant in connection with any Alterations. 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 at Tenant's expense to remove all partitions, counters,
railings and other Alterations installed by Tenant, and to repair any damages to
the Premises caused by such removal. Any and all costs attributable to or
related to the applicable building codes of the city in which the Project is
located (or any other authority having jurisdiction over the Project) arising
from Tenants 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) sufficient to compensate Landlord for all overhead, general
conditions, fees and other costs and expenses arising from Landlord's
involvement with such work.
(b) Backup Generator. Subject to Landlord's prior approval of all plans
----------------
and specifications, which approval shall not be unreasonably withheld, Landlord
shall permit Tenant to install and maintain, at Tenant's sole cost and expense,
a backup diesel-powered generator at a location designated by Landlord. Such
backup generator shall be used by Tenant only during (i) testing and regular
maintenance, and (ii) any period of electrical power outage in the Project.
Tenant shall be entitled to operate the generator for testing and regular
maintenance only upon notice to Landlord and at times reasonably approved by
Landlord. Tenant shall submit the specifications for design, operation,
installation and maintenance of the backup generator for Landlord's consent,
which consent shall not be unreasonably withheld or delayed and may be
conditioned on Tenant complying with such reasonable requirements imposed by
Landlord, based on the advice of Landlord's structural and mechanical engineers,
so that the Project's systems and equipment are not adversely affected. Any
repairs and maintenance of such generator shall be the sole responsibility of
Tenant and Landlord makes no representation or warranty with respect to such
generator. Tenant shall, at Tenant's sole cost and expense, remove such
generator upon the expiration or earlier termination of the Term and repair all
damage to the Project resulting from such removal. Such generator shall be
deemed to be a part of the Premises for purposes of Articles 13 and 14 of this
Lease.
ARTICLE 10
----------
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 attorneys' 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 Tenant's receipt of
notice of such 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, one 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 attorneys' fees incurred by Landlord, and shall remit the
balance thereof to Tenant.
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<PAGE>
ARTICLE II
----------
PROJECT SERVICES
----------------
(a) 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
judgment of Landlord is reasonably necessary for general office use. All such
electricity shall be separately metered at Tenant's sole cost and expense and
Tenant shall make payment directly to the entity providing such electricity.
Tenant shall be responsible for employing a janitorial and maintenance service,
which contractor shall be reasonably approved by Landlord, and Tenant hereby
acknowledges that Landlord shall have no obligation whatsoever to provide such
services in the Premises. Landlord and Tenant hereby acknowledge that an
independent heating, ventilation and air conditioning system ("IIVAC System") is
installed in the Premises and that Landlord shall, as an Operating Cost,
maintain a service and/or maintenance contract for such HVAC System with a
contractor designated by Landlord in its reasonable discretion, which contractor
shall perform all maintenance and repairs 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
utilities 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 the prior written consent of Landlord, use
any apparatus or device in the Premises which will in any way increase the
amount 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 for
the purpose of using water.
(c) 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(a) and (b) above) utilized by Tenant in
excess of the amount or type that Landlord reasonably determines is typical for
general office use.
ARTICLE 12
----------
RIGHTS OF LANDLORD
------------------
Landlord and its agents shall have the right to enter the Premises at all
reasonable times upon twenty-four (24) hours prior notice (except in the case of
an emergency) 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 (during the last nine (9)
months of the Term only), lenders or purchasers of the Project, and for making
such alternations, 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. In
exercising Landlord's rights under this Article 12, Landlord shall use
commercially reasonable efforts not to interfere with Tenant's business
operations.
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<PAGE>
ARTICLE 13
----------
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 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, attorneys' fees, 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 from any cause, and Tenant hereby
waives all claims in respect thereof against Landlord, excepting where the
damage is caused solely by the gross negligence or willful misconduct of
Landlord.
(b) Exemption of Landlord from Liability. Landlord shall not be liable for
------------------------------------
injury to Tenant's business, or loss of income therefrom, or for damage that may
be sustained by the person, goods, wares, merchandise or property of Tenant, its
employees, invites, customers, agents, or contractors, or any other person in,
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, 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 or repairing the same is inaccessible to Tenant, except
in connection with damage or injury resulting from the gross negligence or
willful misconduct of Landlord, or its authorized agents. 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. Tenant shall defend, indemnify, and hold Landlord
harmless from any such claims made by any employee, licensee, invitee,
contractor, agent or, other person whose presence in, on or about the Premises
or the Project is attendant to the business of Tenant.
ARTICLE 14
----------
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, sprinkler leakage coverage and
earthquake sprinkler leakage 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 Tenant's telecommunications
equipment and covering all other perils, failures or interruptions. Tenant shall
carry and maintain during the entire Lease
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<PAGE>
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.
(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. 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 covered 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 depreciation
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 amounts 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.
Notwithstanding to the contrary contained in this Lease, 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, liability
or damage to the extent such loss, liability or damage is or normally would be
insurable under such policies or any other property insurance carried by either
party with respect to the Project.
(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.
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<PAGE>
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 15
----------
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. If Tenant is a corporation, unincorporated association, partnership or
limited liability company, the sale, assignment, transfer or hypothecation of
any class of stock or other ownership interest in such corporation, association,
partnership or limited liability company in excess of twenty-five percent (25%)
in the aggregate shall be deemed an assignment within the meaning and provisions
of this Article 15. Tenant may transfer its interest pursuant to this Lease only
upon the following express conditions, which conditions are 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 by 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
(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 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
(d) 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 the 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
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<PAGE>
transferee; (ii) any sublessee of part or all of Tenant's interest in the
Premises shall agree that in the event Landlord gives 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 any 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 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. "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 assets, rendered by Tenant to
the Transferee and 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 and an injunction for the relief sought without any 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.
(e) Notwithstanding anything to the contrary contained in this Article 15,
an assignment or subletting of all or a portion of the Premises to an affiliate
of Tenant (an entity which is controlled by, controls, or is under common
control with, Tenant) shall not be deemed a Transfer under this Article 15,
provided that Tenant notifies Landlord of any such assignment or sublease and
promptly supplies Landlord with any documents or information requested by
Landlord regarding such assignment or sublease, and further provided that such
assignment or sublease is not a subterfuge by Tenant to avoid its obligations
under this Lease. An assignee to whom Tenant's entire interest in this Lease is
assigned pursuant to this Section 15(e) may be referred to herein as a
"PERMITTED ASSIGNEE." "CONTROL," as used in this Section 15(e), shall mean the
ownership, directly or indirectly, of greater than fifty percent (50%) of the
voting securities of, or possession of the right to vote, in the ordinary
direction of its affairs, of greater than fifty percent (50%) of the voting
interest in, an entity.
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; provided, however, that Tenant shall have the option to
withdraw such request and remain in possession of the Premises by giving written
notice of such election to Landlord within ten (10) days after receipt of
Landlord's election to terminate. 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
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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 16
----------
DAMAGE OR DESTRUCTION
---------------------
If the Project is damaged by fire 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 two hundred seventy (270) 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 except to the extent of any rental loss insurance maintained
by Landlord with respect to the Premises. 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)
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 two
hundred seventy (270) 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;
provided, however, that Landlord shall not have such option if Tenant, at the
time of such damage, has an express option to extend the Term, and Tenant
exercises such option by written notice to Landlord in accordance with the terms
and conditions of Article 31 hereof, within twenty (20) days following Tenant's
receipt of Landlord's notice of termination. 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
any 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.
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ARTICLE 17
----------
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 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 in not disturb Tenant's right of possession under this
Lease if Tenant is not then or thereafter in breach of any covenant or
provisions 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 or 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 sale 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 five (5) 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 18
----------
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 any and all rights it might
otherwise have pursuant to Section 1265.130 of the California Code of Civil
Procedure.
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ARTICLE 19
----------
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 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. Tenant hereby stipulates to the lifting of the
automatic stay in effect and relief from such stay for Landlord in the event
Tenant files a petition under the United States Bankruptcy laws, for the purpose
of Landlord pursuing its rights and remedies against Tenant and/or a guarantor
of this Lease;
(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 that
Tenant receives notice that the same has been filed or recorded; or
(g) Tenant's failure to observe or perform according to the provisions of
Articles 17 or 25 within two (2) 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.
ARTICLE 20
----------
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
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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 1951.4 (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
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:
(a) if Basic Rental is not paid within ten (10) days after the same is due, a
late charge equal to ten percent (10%) 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 (b) 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.
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ARTICLE 21
----------
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 five (5) days after request,
execute such further instruments or assurances as such transferee may reasonably
deem necessary to evidence or confirm such attornment.
ARTICLE 22
----------
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 23
----------
PARKING
-------
Tenant shall rent from Landlord, commencing on the Commencement Date, the
number of unreserved parking passes set forth in Section 1(I) of the Basic Lease
Provisions, which parking passes shall pertain to the Project parking facility.
Landlord shall not charge Tenant for the use of such automobile parking passes
during the initial Lease Term. 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 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.
ARTICLE 24
----------
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
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act so consented to or approved. 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 writing and signed by Landlord. 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 owing 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 25
----------
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 on 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 encumbrancer 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 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 within the specified time period.
ARTICLE 26
----------
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.
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ARTICLE 27
----------
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.
ARTICLE 28
----------
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, employee, contractors, or invitees, except for normal and
customary quantities and types of janitorial and office supplies (including
copier toner, cleaning agents and the like). 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,
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) Landlord and Tenant acknowledge that Landlord may become legally
liable for the costs of complying with Laws (as defined in Article 28(e) (below)
relating to Hazardous Material which are not the responsibility of Landlord or
the responsibility of Tenant, including the following: (i) Hazardous Material
present in the soil or ground water on the Project of which Landlord has no
knowledge as of the effective date of this Lease; (ii) a change in Laws which
relate to Hazardous Material which make that Hazardous Material which is present
on the Real Property as of the effective date of this Lease, whether known or
unknown to Landlord, a violation of such new Laws; (iii) Hazardous Material that
migrates, flows, percolates, diffuses, or in any way moves on to, or under, the
Project after the effective date of this Lease; or Hazardous Material present on
or under the Project as a result of any discharge, dumping or spilling (whether
accidental or otherwise) on the Project by other lessees of the Project or their
agents, employees, contractors, or invitees, or by others. Accordingly, Landlord
and Tenant agree that the cost of complying with Laws relating to Hazardous
Material on the Project for which Landlord is legally liable and which are paid
or incurred by Landlord shall be an Operating Cost (and Tenant shall pay
Tenant's Proportionate Share thereof in accordance with Article 3) unless the
cost of such compliance as between Landlord and Tenant, is made the
responsibility of Tenant pursuant to Article 28(a) above. To the extent any such
Operating Cost relating to Hazardous Material is subsequently recovered or
reimbursed through insurance, or recovery from responsible third parties or
other action, Tenant shall be entitled to a proportionate reimbursement to the
extent it has paid its share of such Operating Cost to which such recovery or
reimbursement relates.
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(c) 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.
(d) 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 "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. Section 1317), (ix) defined as a
"Hazardous Waste" pursuant to Section 1004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 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.
Section 9601 et seq. (42 U.S.C. Section 9601).
(e) 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(d) above.
ARTICLE 29
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SURRENDER OF PREMISES; REMOVAL OF PROPERTY
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(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,
damage caused by casualty or condemnation, Hazardous Materials not released or
emitted by Tenant or its agents, employees or contractors, 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 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 12
hereof, or as otherwise provided in this Lease, any property of Tenant not
removed by Tenant upon the expiration of the 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 all of such items and dispose of the same in any manner or store the same
in a
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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 discretion, may deem proper,
without notice or to 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, 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 pursuant to the provisions of Article 9, above.
Such fixtures, equipment, 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, 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 30
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MISCELLANEOUS
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(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. This Lease shall be governed
by and construed in accordance with the laws of the State of California.
(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
in such suit and such attorneys' fees 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 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 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 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 |
