California-Westlake Village-5601 Lindero Canyon Road Lease - Arden Realty Finance Partnership LP and Digital Insight Corp.
STANDARD OFFICE LEASE
BY AND BETWEEN
ARDEN REALTY FINANCE PARTNERSHIP, L.P.
a California limited partnership,
AS LANDLORD,
AND
DIGITAL INSIGHT CORPORATION,
a Delaware corporation,
AS TENANT
Suite 100
5601 LINDERO CANYON ROAD
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TABLE OF CONTENTS
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Page
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ARTICLE 1 BASIC LEASE PROVISIONS..................................... 1
ARTICLE 2 TERM/PREMISES.............................................. 2
ARTICLE 3 RENTAL..................................................... 2
(a) Basic Rental............................................... 2
(b) Increase in Direct Costs................................... 3
(c) Definitions................................................ 3
(d) Determination of Payment................................... 5
ARTICLE 4 SECURITY DEPOSIT........................................... 6
ARTICLE 5 HOLDING OVER............................................... 8
ARTICLE 6 PERSONAL PROPERTY TAXES.................................... 9
ARTICLE 7 USE........................................................ 9
ARTICLE 8 CONDITION OF PREMISES...................................... 9
ARTICLE 9 REPAIRS AND ALTERATIONS.................................... 10
ARTICLE 10 LIENS...................................................... 11
ARTICLE 11 PROJECT SERVICES........................................... 12
ARTICLE 12 RIGHTS OF LANDLORD......................................... 13
ARTICLE 13 INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY............ 13
(a) Indemnity.................................................. 13
(b) Exemption of Landlord from Liability....................... 14
ARTICLE 14 INSURANCE.................................................. 14
(a) Tenant's Insurance......................................... 14
(b) Form of Policies........................................... 14
(c) Landlord's Insurance....................................... 15
(d) Waiver of Subrogation...................................... 15
(e) Compliance with Law........................................ 15
ARTICLE 15 ASSIGNMENT AND SUBLETTING.................................. 15
ARTICLE 16 DAMAGE OR DESTRUCTION...................................... 18
ARTICLE 17 SUBORDINATION.............................................. 18
ARTICLE 18 EMINENT DOMAIN............................................. 19
ARTICLE 19 DEFAULT.................................................... 19
ARTICLE 20 REMEDIES................................................... 20
ARTICLE 21 TRANSFER OF LANDLORD'S INTEREST............................ 21
ARTICLE 22 BROKER..................................................... 22
ARTICLE 23 PARKING.................................................... 22
ARTICLE 24 WAIVER..................................................... 22
ARTICLE 25 ESTOPPEL CERTIFICATE....................................... 23
ARTICLE 26 LIABILITY OF LANDLORD...................................... 23
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ARTICLE 27 INABILITY TO PERFORM....................................... 23
ARTICLE 28 HAZARDOUS WASTE............................................ 24
ARTICLE 29 SURRENDER OF PREMISES; REMOVAL OF PROPERTY................. 25
ARTICLE 30 MISCELLANEOUS.............................................. 25
(a) Severability; Entire Agreement............................. 26
(b) Attorneys' Fees; Waiver of Jury Trial...................... 26
(c) Time of Essence............................................ 26
(d) Headings................................................... 26
(e) Reserved Area.............................................. 26
(f) NO OPTION.................................................. 26
(g) Use of Project Name; Improvements.......................... 27
(h) Rules and Regulations...................................... 27
(i) Quiet Possession........................................... 27
(j) Rent....................................................... 27
(k) Successors and Assigns..................................... 27
(l) Notices.................................................... 27
(m) Persistent Delinquencies................................... 27
(n) Right of Landlord to Perform............................... 27
(o) Access, Changes in Project, Facilities, Name............... 28
(p) Corporate Authority........................................ 28
(q) Identification of Tenant................................... 28
(r) Intentionally Deleted...................................... 29
(s) Survival of Obligations.................................... 29
(t) Confidentiality............................................ 29
(u) Exhibits and Addendum...................................... 29
(v) Americans With Disabilities Act and Seismic Requirements... 29
(w) Governing Law.............................................. 29
(x) Communication Equipment.................................... 29
ARTICLE 31 OPTION TO EXTEND........................................... 30
(a) Option Right............................................... 30
(b) Option Rent................................................ 30
(c) Exercise of Option......................................... 30
(d) Determination of Market Rent............................... 31
ARTICLE 32 RIGHT OF FIRST OFFER....................................... 31
(a) Procedure for Offer........................................ 32
(b) Procedure for Acceptance................................... 32
(c) Construction of First Offer Space.......................... 32
(d) Lease of First Offer Space................................. 32
(e) No Defaults................................................ 32
ARTICLE 33 SIGNAGE/DIRECTORY.......................................... 33
(a) Premises Identification/Monument Signage................... 33
(b) Building Top Sign.......................................... 33
(c) Miscellaneous Signage Provisions........................... 33
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
Exhibit "E" Letter of Credit
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INDEX
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Page(s)
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Adjustment Dates................................................................ 7
Affiliate....................................................................... 17
Alterations..................................................................... 10
Applicant....................................................................... Exhibit E
Approved Working Drawings....................................................... Exhibit D
Architect....................................................................... Exhibit D
Base Year....................................................................... 1
Base, Shell and Core............................................................ Exhibit D
Basic Rental.................................................................... 1
Beneficiary..................................................................... Exhibit E
Brokers......................................................................... 2
Code............................................................................ Exhibit D
Commencement Date............................................................... 1
Comparison Area................................................................. 30
Construction Drawings........................................................... Exhibit D
Contractor...................................................................... Exhibit D
Control......................................................................... 17
Cosmetic Alterations............................................................ 10
Demolition Allowance............................................................ 1
Deposit Adjustment Dates........................................................ 6
Economic Terms.................................................................. 32
Engineers....................................................................... Exhibit D
Estimate........................................................................ 4
Estimate Statement.............................................................. 4
Estimated Direct Costs.......................................................... 4
Event of Default................................................................ 19
Expiration Date................................................................. 1
Final Retention................................................................. Exhibit D
Final Space Plan................................................................ Exhibit D
Final Working Drawings.......................................................... Exhibit D
First Month's Rent.............................................................. 2
First Offer Notice.............................................................. 31
First Offer Space............................................................... 31
Force Majeure................................................................... 23
Hazardous Material.............................................................. 24
HVAC System..................................................................... 12
Improvement Allowance........................................................... Exhibit D
Improvement Allowance Items..................................................... Exhibit D
Improvements.................................................................... 1
Increased Improvement Allowance................................................. Exhibit D
Interest Notice................................................................. 30
Landlord........................................................................ 1
Landlord Coordination Fee....................................................... Exhibit D
Landlord's Work................................................................. Exhibit D
Laws............................................................................ 24
Lease........................................................................... 1
Lease Year...................................................................... 2
Letter of Credit................................................................ 7
Market Rent..................................................................... 30
Monument Signage................................................................ 33
Operating Costs................................................................. 3
Option Rent..................................................................... 30
Option Rent Notice.............................................................. 30
Option Term..................................................................... 30
Options......................................................................... 30
Original Tenant................................................................. 30
Outside Agreement Date.......................................................... 31
Parking Passes.................................................................. 2
Partnership Tenant.............................................................. 28
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Permits......................................................................... Exhibit D
Permitted Assignee.............................................................. 17
Permitted Use................................................................... 1
Premises........................................................................ 1
Project......................................................................... 1
Real Property................................................................... 3
Rent Start Date................................................................. 2
Representative.................................................................. 23
Review Period................................................................... 5
Security Deposit................................................................ 1
Specifications.................................................................. Exhibit D
Square Footage.................................................................. 1
Standard Improvement Package.................................................... Exhibit D
Stated Amount................................................................... 7
Statement....................................................................... 5
Superior Lease.................................................................. 31
Superior Rights................................................................. 31
Tax Costs....................................................................... 3
Tenant.......................................................................... 1
Tenant Improvements............................................................. 10
Tenant's Acceptance............................................................. 30
Tenant's Agents................................................................. Exhibit D
Tenant's Proportionate Share.................................................... 1
Tenant's Signage................................................................ 33
Term............................................................................ 1
Transfer........................................................................ 16
Transfer Premium................................................................ 16
Transferee...................................................................... 16
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STANDARD OFFICE LEASE
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This Standard Office Lease ("Lease") is made and entered into as of this
6th day of March, 2000, by and between ARDEN REALTY FINANCE PARTNERSHIP, L.P., a
California limited partnership ("Landlord"), and DIGITAL INSIGHT CORPORATION, a
Delaware corporation ("Tenant").
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
premises known as Suite 100, and designated on the plan attached hereto and
incorporated herein as Exhibit "A" ("Premises"), located in the project
("Project") whose address is 5601 Lindero Canyon Road, Westlake Village,
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
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A. Term: The period from the Commencement Date
through the Expiration Date.
Commencement Date: The date of full execution and delivery of
this Lease. Upon Tenant's occupancy of the
Premises, Landlord and Tenant agree to
execute and deliver a Commencement Letter
in a form substantially similar to that
attached hereto as Exhibit "C".
Expiration Date: March 31, 2005 (as such date may be
extended by Section 5.5 of the Tenant Work
Letter).
B. Square Footage: 52,130 rentable square feet.
C. Basic Rental:
Annual Monthly Monthly Basic Rental
Lease Year Basic Rental Basic Rental Per Rentable Square Foot
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1-5 $844,506.00* 70,375.50* $1.35*
* Subject to abatement as set forth in Article 3 below and subject to increase
as provided in Section 2.1 of the Tenant Work Letter.
D. Base Year: Not applicable (Triple Net Lease)
E. Tenant's Proportionate Share: 49.26%
F. Security Deposit: A Letter of Credit or a cash Security
Deposit in the amount of $760,000.00 shall
be provided to Landlord upon Tenant's
execution of this Lease. Tenant will
deposit an additional Letter of Credit or
shall increase the amount of the existing
cash Security Deposit or Letter of Credit
in the event Tenant elects to exercise its
option pursuant to Section 2.1 of the
Tenant Work Letter.
G. Permitted Use: General office use, including data center
operations, storage and other legally
permitted uses attendant thereto so long
as such uses are compatible with an office
building of comparable quality in the
Comparison Area and do not conflict with
the terms of this Lease.
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H. Brokers: Cushman & Wakefield of California, Inc.
I. Parking Passes: Tenant shall have the use of two hundred
(200) unreserved parking passes, as
provided in Article 23 hereof.
J. First Month's Rent: An amount equal to $59,175.50 shall be due
and payable by Tenant to Landlord upon
Tenant's execution of this Lease and shall
be applied to monthly Basic Rental
pursuant to Article 3.
ARTICLE 2
TERM/PREMISES
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The Term of this Lease shall commence on the Commencement Date as set forth
in Article 1.A. of the Basic Lease Provisions and shall end on the Expiration
Date set forth in Article 1.A. of the Basic Lease Provisions. Notwithstanding
the fact that the Commencement Date has occurred, Tenant shall not be
responsible for the payment of rent during the period ("Abatement Period") from
the Commencement Date until the earlier of (i) the date Tenant commences to
conduct business from the Premises or (ii) April 1, 2000. 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 day
after the date of expiration of the Abatement Period; however, (a) if the day
after the date of expiration of the Abatement Period 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 day after the date of expiration of
the Abatement Period 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 date of
expiration of the Abatement Period 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
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(a) Basic Rental. Commencing upon expiration of the Abatement Period,
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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 anything to the contrary contained
herein and provided that Tenant faithfully performs all of the terms and
conditions of this Lease, Landlord hereby agrees to abate Tenant's obligation to
pay monthly Basic Rental through August 31, 2000 ("Rent Start Date") (as such
date may be extended by an "Uncontrollable Delay" and/or by a "Landlord Delay")
as those terms are defined in Section 5.5 of the Tenant Work Letter), and
monthly Basic Rental for the month of September, 2000 (or the month after the
Rent Start Date if such date is extended pursuant to Section 5.5 of the Tenant
Work Letter) shall be partially abated such that the monthly Basic Rental for
September, 2000 (or such later month) shall be reduced by an amount equal to
Eleven Thousand Two Hundred and 00/100 Dollars ($11,200.00) (i.e., in the event
there are no Uncontrollable Delays, Tenant shall pay monthly Basic Rental in the
amount of Fifty-Nine Thousand One Hundred Seventy-Five and 50/100 Dollars
($59,175.50) for the month of September). During such abatement period, Tenant
shall still be responsible for the payment of all of its other monetary
obligations under the Lease including, without limitation, Tenant's
Proportionate Share (based on the full square footage of the Premises) of Direct
Costs.
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Notwithstanding the foregoing, the amount specified in Article 1.J. of the Basic
Lease Provisions shall be paid by Tenant to Landlord concurrently with Tenant's
execution of this Lease and shall be applied to Tenant's first obligations to
pay monthly Basic Rental under this Lease.
(b) Increase in Direct Costs. Tenant shall pay an additional sum for each
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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.
(c) Definitions. As used herein the term "Direct Costs" shall mean the
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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 (for the common areas of the Project only),
gardening, security, parking, operating engineer, elevator, painting, plumbing,
electrical (for the common areas of the Project only), 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
Americans with Disabilities Act, which legal requirements are not in effect as
of the Commencement Date or which are not to cure violations of law which exist
on or prior to the Commencement Date; the cost of all charges for electricity,
gas, water and other utilities
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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. Notwithstanding anything to the
contrary set forth in this Article 3, when calculating Operating Costs for the
Base Year, unless and to the extent Operating Costs for the applicable
subsequent calendar year include the following items, 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).
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 (i.e. the
only capital expenditures which may be included in Operating Costs are those
incurred to effect economies of operation and capital expenditures required by
government regulations, laws, or ordinances including, but not limited to the
Americans with Disabilities Act, which legal requirements are not in effect as
of the Commencement Date or which are not to cure violations of law which exist
on or prior to the Commencement Date); (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.
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(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
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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 Costs for the calendar year in which this Lease terminates, if an Excess
is present 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.
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ARTICLE 4
SECURITY DEPOSIT
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Concurrently with Tenant's execution of this Lease, Tenant shall elect to
do one of the following:
(a) Cash Security Deposit. Tenant may deposit with Landlord cash in the
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amount 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 dates specified below ("Deposit Adjustment
Dates"), the cash Security Deposit may be reduced to the following amounts (and
Landlord shall refund the excess to Tenant):
Month Security Deposit
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March 31, 2001 $608,000.00
March 31, 2002 $456,000.00
March 31, 2003 $304,000.00
March 31, 2004 $152,000.00
Further, in the event Tenant exercises its option to increase the
Improvement Allowance pursuant to Section 2.1 of the Tenant Work Letter, Tenant
shall increase the cash Security Deposit, subject to all terms set forth above
by an amount equal to the Increased Improvement Allowance (as defined in Section
2.1 of the Tenant Work Letter); provided, however, that upon the Deposit
Adjustment Dates specified below, the amount of the increase in cash Security
Deposit may be reduced to the following amounts (and Landlord shall refund the
excess to Tenant):
Amount of Increase in
Month Security Deposit
----- ----------------
March 31, 2001 80% of the amount of the
original increase
March 31, 2002 60% of the amount of the
original increase
March 31, 2003 40% of the amount of the
original increase
March 31, 2004 20% of the amount of the
original increase
However, if (i) an Event of Default by Tenant occurs under this Lease, or
(ii) circumstances exist that would, with notice or lapse of time, or both,
constitute an Event of Default by Tenant, and Tenant has failed to cure such
default within the time period permitted by Section 19 or such lesser time as
may remain before the relevant Deposit Adjustment Dates as provided above, the
cash Security Deposit shall not thereafter be reduced unless and until such
default shall have been fully cured pursuant to the terms of this Lease, at
which time the Security Deposit may 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 the 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 therefor, deposit cash with Landlord
in an amount sufficient to restore the Security Deposit to the amount prior to
such use or application. 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 not be entitled to interest on such deposit.
At the expiration of the Lease Term, and provided there exists no Event of
Default (after expiration of any applicable notice and cure period) by Tenant
hereunder, the Security Deposit or any balance thereof shall be returned to
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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 law or this Article 4. 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 specified in this Article 4 above and/or those sums reasonably
necessary to compensate Landlord for any other loss or damage, foreseeable or
unforeseeable, caused by the acts or omissions of Tenant or any officer,
employee, agent, contractor or invitee of Tenant.
(b) Letter of Credit. In the alternative, Tenant may deliver to Landlord
----------------
an unconditional, irrevocable and renewable letter of credit ("Letter of
Credit") in favor of Landlord in the form attached hereto as Exhibit E, issued
by a bank reasonably satisfactory to Landlord with a branch located in Southern
California, in the principal amount ("Stated Amount") specified below, as
security for the faithful performance and observance by Tenant of the terms,
provisions and conditions of this Lease. Tenant shall pay all expenses, points
and/or fees incurred by Tenant in obtaining the Letter of Credit. The Stated
Amount shall initially be Seven Hundred Sixty Thousand Dollars ($760,000.00);
provided, however, that upon the dates specified below ("Adjustment Dates"), the
Stated Amount may be reduced to the following amounts:
Month Stated Amount
----- -------------
March 31, 2001 $608,000.00
March 31, 2002 $456,000.00
March 31, 2003 $304,000.00
March 31, 2004 $152,000.00
Further, in the event Tenant exercises its option to increase the
Improvement Allowance pursuant to Section 2.1 of the Tenant Work Letter, Tenant
shall deposit with Landlord a second Letter of Credit, subject to all terms set
forth above (or shall increase the amount of the initial Letter of Credit). The
Stated Amount with respect to such second Letter of Credit (or the increased
amount of the initial Letter of Credit) shall initially be equal to the
Increased Improvement Allowance (as defined in Section 2.1 of the Tenant Work
Letter); provided, however, that upon the Adjustment Dates specified below, the
Stated Amount as to such second Letter of Credit (or the increased amount of the
initial Letter of Credit) may be reduced to the following amounts:
Month Stated Amount
----- -------------
March 31, 2001 80% of the
Stated Amount
March 31, 2002 60% of the
Stated Amount
March 31, 2003 40% of the
Stated Amount
March 31, 2004 20% of the
Stated Amount
However, if (i) an Event of Default by Tenant occurs under this Lease, or
(ii) circumstances exist that would, with notice or lapse of time, or both,
constitute an Event of Default by Tenant, and Tenant has failed to cure such
default within the time period permitted by Section 19 or such lesser time as
may remain before the relevant Adjustment Date as provided above, the Stated
Amount(s) shall not thereafter be reduced unless and until such default shall
have been fully cured pursuant to the terms of this Lease, at which time the
Stated Amount(s) may be reduced as hereinabove described. The Letter(s) of
Credit shall state that an authorized officer or other representative of
Landlord may make demand on Landlord's behalf for the Stated
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Amount(s) of the Letter(s) of Credit, or any portion thereof, and that the
issuing bank must immediately honor such demand, without qualification or
satisfaction of any conditions, except the proper identification of the party
making such demand. In addition, the Letter(s) of Credit shall indicate that it
is transferable in its entirety by Landlord as beneficiary and that upon
receiving written notice of transfer, and upon presentation to the issuing bank
of the original Letter(s) of Credit, the issuer or confirming bank will reissue
the Letter(s) of Credit naming such transferee as the beneficiary. If the term
of the Letter(s) of Credit held by Landlord will expire prior to the last day of
the Lease Term and it is not extended, or a new Letter(s) of Credit for an
extended period of time is not substituted, within thirty (30) days prior to the
expiration of the Letter(s) of Credit, and after providing Tenant with at least
three (3) business days prior written notice, Landlord shall be entitled to make
demand for the Stated Amount of said Letter(s) of Credit and, thereafter, to
hold such funds in accordance with this Article 4. The Letter(s) of Credit and
any such proceeds thereof shall be held by Landlord as security for the faithful
performance by Tenant of all of the terms, covenants and conditions of this
Lease. If an Event of Default by Tenant exists with respect to any provision of
this Lease, Landlord may (but shall not be required to) draw upon all or any
portion of the Stated Amount(s) of the Letter(s) of Credit, and Landlord may
then use, apply or retain all or any part of the proceeds for the payment of any
sum which is in default, or for the payment of any other amount which Landlord
may spend or become obligated to spend by reason of such Event of Default or to
compensate Landlord for any loss or damage which Landlord may suffer by reason
of such Event of Default. If any portion of the Letter(s) of Credit proceeds are
so used or applied, Tenant shall, within ten (10) days after demand therefor,
post an additional Letter of Credit in an amount to cause the aggregate amount
of the unused proceeds and such new Letter of Credit to equal the Stated
Amount(s) required in this Article 4 above. Landlord shall not be required to
keep any proceeds from the Letter(s) of Credit separate from its general funds.
Should Landlord sell its interest in the Premises during the Lease Term and if
Landlord deposits with the purchaser thereof the Letter(s) of Credit or any
proceeds of the Letter(s) of Credit, thereupon Landlord shall be discharged from
any further liability with respect to the Letter(s) of Credit and said proceeds.
Any remaining proceeds of the Letter(s) of Credit held by Landlord after
expiration of the Lease Term, after any deductions described in this Article 4
above, shall be returned to Tenant or, at Landlord's option, to the last
assignee of Tenant's interest hereunder, within thirty (30) days following the
expiration of the Lease Term. Notwithstanding anything contained in this Article
4, in the event Tenant initially elects to deposit a cash Security Deposit with
Landlord, Tenant may thereafter provide Landlord with a Letter of Credit meeting
the requirements of this Article 4, and upon delivery of such Letter of Credit,
Landlord shall promptly refund an unused portion of the cash Security Deposit to
Tenant.
(c) Reduction of Security Deposit. Notwithstanding anything to the
-----------------------------
contrary contained herein, in the event that at any time during the term of this
Lease, Tenant provides Landlord with reasonable written evidence which shows
that Tenant has achieved a net worth equal to $125,000,000.00 (exclusive of
goodwill), calculated in accordance with generally accepted accounting
principles, the schedules set forth in Sections 4(a) and 4(b) above shall be
amended to provide that the amount of the cash Security Deposit or the Stated
Amount of the then existing Letter of Credit (as applicable) shall thereafter be
reduced as of the annual dates set forth in such schedules, on a straight line
basis, so that upon expiration of the fourth (4th) Lease Year, the amount of the
cash Security Deposit or the Stated Amount of the Letter of Credit (as
applicable) shall be Seventy Thousand Three Hundred Seventy-Five and 50/100
Dollars ($70,375.50), which amount shall be maintained for the remainder of the
Term.
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 two 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
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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. 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 the Premises or the Project
excluding structural changes to the Project not related to Tenant's particular
use of the Premises, and (ii) improvements installed or constructed in the
Premises by or for the benefit of Tenant. Tenant shall not do or permit to be
done anything which would invalidate or increase the cost of any fire and
extended coverage insurance policy covering the Project and/or the property
located therein and Tenant shall comply with all rules, orders, regulations and
requirements of any organization which sets out standards, requirements or
recommendations commonly referred to by major fire insurance underwriters.
Tenant shall promptly upon demand reimburse Landlord for any additional premium
charges for any such insurance policy assessed or increased by reason of
Tenant's failure to comply with the provisions of this Article.
ARTICLE 8
CONDITION OF PREMISES
---------------------
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
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<PAGE>
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 the improvement 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.
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 (including water leaks), 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. A 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, "Alterations") without Landlord's
prior written consent, and then only by contractors or mechanics approved by
Landlord in writing and upon the approval by Landlord in writing of fully
detailed and dimensioned plans and specifications pertaining to the Alterations
in question, to be prepared and submitted by Tenant at its sole cost and
expense. 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 Fifty Thousand Dollars ($50,000.00) 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
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<PAGE>
(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 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. In
addition, Tenant shall ensure that the backup generator does not result in any
Hazardous Materials being introduced to the Project, and Section 28(a) will
apply to Tenant's use of the backup generator. Further, Tenant shall be
responsible for ensuring that the backup generator does not interfere with the
use of the Project by other tenants. In the event another tenant of the Project
or of a neighboring project complains of problems caused by the generator,
Tenant shall take whatever steps are reasonably necessary to remedy the problem
complained of, including removal of the backup generator if another solution is
not available. Tenant shall ensure that the design and installation of the
backup generator is performed in a manner so as to minimize or eliminate any
noise or vibration cause by such generator. The vent for the generator must be
higher than the roof line of the Project. 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 Lease 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 Article 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
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<PAGE>
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, by bond or otherwise, 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.
ARTICLE 11
PROJECT SERVICES
----------------
(a) Tenant shall be solely responsible for performing due diligence with
regard to all building systems and utilities to ensure the same are adequate for
Tenant's intended use. 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. Effective as of April 1, 2000, 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. All other utilities
used by Tenant in the Premises shall be separately metered at Tenant's sole cost
and expense and Tenant shall make payment directly to the entity providing such
utilities. Tenant shall have the right to reasonably designate the entity which
will provide electricity to the Premises, so long as there is no interference
with, or interruption of, the electricity to other tenants of the Project caused
by such designation or the providing of service by Tenant's designated provider.
Landlord shall have the right to approve any work to be done by such utility
provider prior to the commencement of such work in accordance with the terms and
conditions of Article 9 above. 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 ("HVAC System") is installed in the Premises and that Tenant
shall, at Tenant's sole cost and expense, 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 on the HVAC System, as such maintenance and repairs are reasonably
deemed necessary by Landlord. In addition to separately metered electricity and
the repair and maintenance obligations for such HVAC System, Tenant shall pay to
Landlord the sum of Two Hundred Twenty-Seven and 00/100 Dollars ($227.00) per
month, which sum represents Landlord's reasonable estimate of the amount of
increased wear and tear on the HVAC System caused by Tenant's above-standard
use. The parties hereby acknowledge that the above number is an estimate of the
wear and tear caused by Tenant's intended level of use and Tenant hereby agrees
that Tenant will not use more than one-third (1/3) of the HVAC System on a
twenty-four (24) hour per day, seven (7) day per week schedule, and the
remaining two-thirds (2/3) of the HVAC System capacity shall be used during
normal business hours (e.g. 8:00 a.m. - 6:00 p.m. Monday through Friday and 8:00
a.m. - 1:00 p.m. on Saturday). In the event Tenant's use of the HVAC System
exceeds the referenced amounts, Landlord shall adjust the monthly amount to
reflect such increased usage. Landlord shall cause such HVAC System (but not the
two (2) chillers on the north side of the Project) to be in good working order
as of the Commencement Date. For purposes of this Lease, the two (2) chillers on
the north side of the Project, together with the enclosed area which contains
the chillers shall be a part of the Premises and Tenant shall be responsible, at
Tenant's sole cost and expense, for any and all repairs and maintenance of such
chillers necessary for Tenant's use of such chillers. Neither Landlord nor
Tenant shall have any obligation to replace or retrofit the chillers in the
event such replacement or retrofit is necessary during the Term, or upon
expiration, of this Lease. Further, in the event Tenant desires to remove the
chillers from the Project, Tenant may do so at Tenant's sole cost and expense,
only after first providing written notice to Landlord and allowing Landlord a
reasonable opportunity to remove or take possession of such chillers. In the
event Tenant elects to remove the chillers and Landlord does not elect to remove
or take possession of the chillers, Tenant shall repair any damage to the
Premises or Project caused by
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<PAGE>
such removal. Tenant shall comply with all rules and regulations which Landlord
may reasonably establish for the proper functioning and protection of the common
area air conditioning, heating, elevator, electrical intrabuilding network cable
and plumbing systems. Landlord shall not be liable for, and there shall be no
rent abatement as a result of, any stoppage, reduction or interruption of any
such services caused by governmental rules, regulations or ordinances, riot,
strike, labor disputes, breakdowns, accidents, necessary repairs or other cause.
Except as specifically provided in this Article 11, Tenant agrees to pay for all
utilities and other services utilized by Tenant and additional building services
furnished to Tenant not uniformly furnished to all tenants of the Project at the
rate generally charged by Landlord to tenants of the Project.
(b) Tenant will not, without 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.
(d) Tenant shall have the right to use the existing fiber optic cable in
the Project, or Tenant may elect to install new fiber optic cable; provided that
the installation of such new fiber optic cable does not interfere with any other
tenants of the Project, and further provided that Landlord shall have the right
to approve any work to be done by such fiber optics provider prior to the
commencement of such work in accordance with the terms and conditions of
Article 9 above.
(e) Subject to Landlord's security requirements, repairs made by
Landlord to the Project and Articles 16 and 18 below, Tenant shall have access
to the Premises twenty-four (24) hours per day, seven (7) days per week
throughout the Term.
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, in the case of
an emergency, and for making such alterations, repairs, improvements or
additions to the Premises or to the Project as Landlord may deem necessary or
desirable. If Tenant shall not be personally present to open and permit an
entry into the Premises at any time when such an entry by Landlord is necessary
or permitted hereunder, Landlord may enter by means of a master key or may enter
forcibly, only in the case of an emergency, without liability to Tenant and
without affecting this Lease. In exercising Landlord's rights under this
Article 12, Landlord shall use commercially reasonable efforts not to interfere
with Tenant's business operations.
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
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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, invitees, 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
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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 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
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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 anything 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. 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
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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 reasonable attorneys' fees incurred in connection with the
proposed transfer up to the 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 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
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<PAGE>
also include, but not be limited to, key money, bonus money or other cash
consideration paid by a transferee to Tenant in connection with such Transfer,
and any payment in excess of fair market value for services rendered by Tenant
to the Transferee and 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) The term "Affiliate" shall mean (i) any entity that is controlled by,
controls or is under common control with, Tenant or (ii) any entity that merges
with, is acquired by, or acquires Tenant through the purchase of stock or assets
and where the net worth of the surviving entity as of the date such transaction
is completed is at least equal to the net worth of Tenant as of the date of this
Lease calculated under generally accepted accounting principles. 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 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 in which either (i) the proposed Transfer is for a period of eighteen
(18) months or longer or (ii) the Transfer consists of more than twenty-five
percent (25%) of the rentable square footage of the initial Premises, 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 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
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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.
ARTICLE 17
SUBORDINATION
-------------
Landlord agrees to use commercially reasonable efforts to obtain a
commercially reasonable nondisturbance agreement in favor of Tenant from the
current lender of the Project. 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
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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
subordination, non-disturbance and attornment agreement in favor of Tenant to
the effect that such lender or other party will not disturb Tenant's right of
possession under this Lease if Tenant is not then or thereafter in breach of any
covenant or provision of this Lease. Tenant agrees, within ten (10) days after
Landlord's written request therefor, to execute, acknowledge and deliver upon
request any and all documents or instruments requested by Landlord 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.
ARTICLE 19
DEFAULT
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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
(f) 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;
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(c) The taking in execution or by similar process or law (other than by
eminent domain) of the estate hereby created;
(d) 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;
(e) Tenant's failure to cause to be released, by bond or otherwise, any
mechanics liens filed against the Premises or the Project within twenty (20)
days after the date that Tenant receives notice that the same shall have has
been filed or recorded; or
(f) Tenant's failure to observe or perform according to the provisions of
Articles 17 or 25 within five (5) business days after notice from Landlord.
All defaults by Tenant of any covenant or condition of this Lease shall be
deemed by the parties hereto to be material.
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 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
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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.
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
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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 have the right to use, commencing on the Commencement Date,
the number of unreserved parking spaces set forth in Section 1(I) of the Basic
Lease Provisions, which parking spaces shall pertain to the Project parking
facility and shall be free and in common throughout the initial Term. Tenant
shall be responsible for the payment of any taxes applicable to the use of the
Project parking facility and/or such parking passes in the event any such taxes
are later assessed. In the event Tenant exercises its right of first offer set
forth in this Lease, Tenant shall be given additional parking passes in the same
ratio as those given with regard to the initial Premises 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 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
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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.
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(c) 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
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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) It shall not be unreasonable for Landlord to withhold its consent to
any proposed Transfer if (i) the proposed transferee's anticipated use of the
Premises involves the generation, storage, use, treatment, or disposal of
Hazardous Material; (ii) the proposed Transferee has been required by any prior
landlord, lender, or governmental authority to take remedial action in
connection with Hazardous Material contaminating a property if the contamination
resulted from such Transferee's actions or use of the property in question; or
(iii) the proposed Transferee is subject to an enforcement order issued by any
governmental authority in connection with the use, disposal, or storage of a
Hazardous Material.
(c) As used herein, the term "Hazardous Material" means any hazardous or
toxic substance, material, or waste which is or becomes regulated by any local
governmental authority, the State of California or the United States Government.
The term "Hazardous Material" includes, without limitation, any material or
substance which is (i) defined as "Hazardous Waste," "Extremely Hazardous
Waste," or "Restricted Hazardous Waste" under Sections 25115, 25117 or 25122.7,
or listed pursuant to Section 25140, of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a
"Hazardous Substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance
Account Act), (iii) defined as a "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. (S) 1317), (ix) defined as a
"Hazardous Waste" pursuant to Section 1004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C. (S) 6901 et seq. (42 U.S.C. (S) 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. (S) 9601 et
seq. (42 U.S.C. (S) 9601).
(d) As used herein, the term "Laws" mean any applicable federal, state or
local laws, ordinances, or regulations relating to any Hazardous Material
affecting the Project, including, without limitation, the laws, ordinances, and
regulations referred to in Article 28(c) above.
(e) In the event any Hazardous Materials are found to exist on or about
the Project, Tenant shall not be responsible for the costs incurred for the
removal, remediation, or other actions which are necessary to cause such
Hazardous Materials to comply with applicable Laws, except to the extent such
Hazardous Materials are the responsibility of Tenant pursuant to Section 28(a)
above.
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ARTICLE 29
SURRENDER OF PREMISES; REMOVAL OF PROPERTY
------------------------------------------
(a) The voluntary or other surrender of this Lease by Tenant to Landlord,
or a mutual termination hereof, shall not work a merger, and shall at the option
of Landlord, operate as an assignment to it of any or all subleases or
subtenancies affecting the Premises.
(b) Upon the expiration of the Term of this Lease, or upon any earlier
termination of this Lease, Tenant shall quit and surrender possession of the
Premises to Landlord in as good order and condition as the same are now and
hereafter may be improved by Landlord or Tenant, reasonable wear and tear,
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 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
MISCELLANEOUS
-------------
(a) Severability; Entire Agreement. Any provision of this Lease which
------------------------------
shall prove to be invalid, void, or illegal shall in no way affect, impair or
invalidate any other provision hereof and such other provisions shall remain in
full force and effect. This Lease and the Exhibits and any Addendum attached
hereto constitute the entire agreement between the parties hereto with respect
to the subject matter hereof, and no prior agreement or understanding pertaining
to any such matter shall be effective for any purpose. No provision of this
Lease may be amended or supplemented except by an agreement in writing signed by
the parties hereto or their successor in interest. This Lease shall be governed
by and construed in accordance with the laws of the State of California.
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(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
losingparty 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 is engaged to render such service.
(iv) EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR DAMAGES
FOR ANY BREACH UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY RIGHT OR
REMEDY HEREUNDER.
(c) Time of Essence. Each of Tenant's covenants herein is a condition
---------------
and time is of the essence with respect to the performance of every provision of
this Lease.
(d) Headings. The article headings contained in this Lease are for
--------
convenience only and do not in any way limit or amplify any term or provision
hereof. The terms "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular, the neuter shall include the masculine and
feminine genders and the obligations herein imposed upon Tenant shall be joint
and several as to each of the persons, firms or corporations of which Tenant may
be composed.
(e) Reserved Area. Tenant hereby acknowledges and agrees that the
-------------
exterior walls of the Premises and the area between the finished ceiling of the
Premises and the slab of the floor of the project thereabove have not been
demised hereby and the use thereof together with the right to install, maintain,
use, repair and replace pipes, ducts, conduits and wires leading through, under
or above the Premises in locations which will not materially interfere with
Tenant's use of the Premises and serving other parts of the Project are hereby
excepted and reserved unto Landlord.
(f) NO OPTION. THE SUBMISSION OF THIS LEASE BY LANDLORD, ITS AGENT OR
---------
REPRESENTATIVE FOR EXAMINATION OR EXECUTION BY TENANT DOES NOT CONSTITUTE
AN OPTION OR OFFER TO LEASE THE PREMISES UPON THE TERMS AND CONDITIONS
CONTAINED HEREIN OR A RESERVATION OF THE PREMISES IN FAVOR OF TENANT, IT
BEING INTENDED HEREBY THAT THIS LEASE SHALL ONLY BECOME EFFECTIVE UPON THE
EXECUTION HEREOF BY LANDLORD AND DELIVERY OF A FULLY EXECUTED LEASE TO
TENANT.
(g) Use of Project Name; Improvements. Tenant shall not be allowed to use
---------------------------------
the name, picture or representation of the Project, or words to that effect, in
connection with any business carried on in the Premises or otherwise (except as
Tenant's address) without the prior written consent of Landlord. In the event
that Landlord undertakes any additional improvements on the Real Property
including but not limited to new construction or renovation or additions to the
existing improvements, Landlord shall not be liable to Tenant for any noise,
dust, vibration or interference with access to the Premises or disruption in
Tenant's business caused thereby.
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(h) Rules and Regulations. Tenant shall observe faithfully and comply
---------------------
strictly the Rules and Regulations attached to this Lease as Exhibit "B" and
made a part hereof, and such other Rules and Regulations as Landlord may from
time to time reasonably adopt for the safety, care and cleanliness of the
Project, the facilities thereof, or the preservation of good order therein.
Landlord shall not be liable to Tenant for violation of any such Rules and
Regulations, or for the breach of any covenant or condition in any lease by any
other tenant in the Project. A waiver by Landlord of any Rule or Regulation for
any other tenant shall not constitute nor be deemed a waiver of the Rule or
Regulation for this Tenant.
(i) Quiet Possession. Upon Tenant's paying the Basic Rent, Additional
----------------
Rent and other sums provided hereunder and observing and performing all of the
covenants, conditions and provisions on Tenant's part to be observed and
performed hereunder, Tenant shall have quiet possession of the Premises for the
entire Term hereof, subject to all of the provisions of this Lease.
(j) Rent. All payments required to be made hereunder to Landlord shall be
----
deemed to be rent, whether or not described as such.
(k) Successors and Assigns. Subject to the provisions of Article 15
----------------------
hereof, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
(l) Notices. Any notice required or permitted to be given hereunder shall
-------
be in writing and may be given by personal service evidenced by a signed receipt
or sent by registered or certified mail, return receipt requested, addressed to
Tenant at the Premises or to Landlord at the management office for the Project,
with a copy to Landlord, c/o Arden Realty, Inc., 11601 Wilshire Boulevard,
Fourth Floor, Los Angeles, California 90025, Attn: Legal Department and which
shall be effective upon proof of delivery. Either party may by notice to the
other specify a different address for notice purposes except that, upon Tenant's
taking possession of the Premises, the Premises shall constitute Tenant's
address for notice purposes. A copy of all notices to be given to Landlord
hereunder shall be concurrently transmitted by Tenant to such party hereafter
designated by notice from Landlord to Tenant. Any notices sent by Landlord
regarding or relating to eviction procedures, including without limitation three
day notices, may be sent by regular mail.
(m) Persistent Delinquencies. In the event that Tenant shall be
------------------------
delinquent by more than fifteen (15) days in the payment of rent on three (3)
separate occasions in any twelve (12) month period, Landlord shall have the
right to terminate this Lease by thirty (30) days written notice given by
Landlord to Tenant within thirty (30) days of the last such delinquency.
(n) Right of Landlord to Perform. All covenants and agreements to be
----------------------------
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of rent. If
Tenant shall fail to pay any sum of money, other than rent, required to be paid
by it hereunder or shall fail to perform any other act on its part to be
performed hereunder, and such failure shall continue beyond any applicable cure
period set forth in this Lease, Landlord may, but shall not be obligated to,
without waiving or releasing Tenant from any obligations of Tenant, make any
such payment or perform any such other act on Tenant's part to be made or
performed as is in this Lease provided. All sums so paid by Landlord and all
reasonable incidental costs, together with interest thereon at the rate of ten
percent (10%) per annum from the date of such payment by Landlord, shall be
payable to Landlord on demand and Tenant covenants to pay any such sums, and
Landlord shall have (in addition to any other right or remedy of Landlord) the
same rights and remedies in the event of the nonpayment thereof by Tenant as in
the case of default by Tenant in the payment of the rent.
(o) Access, Changes in Project, Facilities, Name.
--------------------------------------------
(i) Every part of the Project except the inside surfaces of all
walls, windows and doors bounding the Premises (including exterior building
walls, core corridor walls and doors and any core corridor entrance), and any
space in or adjacent to the Premises used for shafts, stacks, pipes, conduits,
fan rooms, ducts, electric or other utilities, sinks or other building
facilities, and the use thereof, as well as access thereto through the Premises
for the purposes of operation, maintenance, decoration and repair, are reserved
to Landlord.
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(ii) Tenant shall permit Landlord to install, use and maintain
pipes, ducts and conduits within the walls, columns and ceilings of the
Premises.
(iii) Landlord reserves the right, without incurring any liability to
Tenant therefor, to make such changes in or to the Project and the fixtures and
equipment thereof, as well as in or to the street entrances, halls, passages,
elevators, stairways and other improvements thereof, as it may deem necessary or
desirable.
(iv) Landlord may adopt any name for the Project and Landlord
reserves the right to change the name or address of the Project at any time.
(p) Corporate Authority. If Tenant is a corporation, each individual
-------------------
executing this Lease on behalf of said corporation represents and warrants that
he or she is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the By-laws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. If Tenant is a corporation, said corporation and each individual
executing this Lease on behalf of said corporation covenants that Tenant shall
provide to Landlord a copy of such resolution of the Board of Directors
authorizing the execution of this Lease on behalf of such corporation, which
copy of resolution shall be duly certified by the secretary or an assistant
secretary of the corporation to be a true copy of a resolution duly adopted by
the Board of Directors of said corporation. In the event Tenant fails to comply
with the requirements set forth in this subparagraph (p), then each individual
executing this Lease shall be personally liable for all of Tenant's obligations
in this Lease.
(q) Identification of Tenant.
------------------------
(i) If Tenant constitutes more than one person or entity, (A) each of
them shall be jointly and severally liable for the keeping, observing and
performing of all of the terms, covenants, conditions and provisions of this
Lease to be kept, observed and performed by Tenant, (B) the term "Tenant" as
used in this Lease shall mean and include each of them jointly and severally,
and (C) the act of or notice from, or notice or refund to, or the signature of,
any one or more of them, with respect to the tenancy of this Lease, including,
but not limited to, any renewal, extension, expiration, termination or
modification of this Lease, shall be binding upon each and all of the persons or
entities executing this Lease as Tenant with the same force and effect as if
each and all of them had so acted or so given or received such notice or refund
or so signed.
(ii) If Tenant is a partnership (or is comprised of two or more
persons, individually and as co-partners of a partnership) or if Tenant's
interest in this Lease shall be assigned to a partnership (or to two or more
persons, individually and as co-partners of a partnership) pursuant to Article
15 hereof (any such partnership and such persons hereinafter referred to in this
Article 30(q)(ii) as "Partnership Tenant"), the following provisions of this
Lease shall apply to such Partnership Tenant:
(A) The liability of each of the parties comprising Partnership
Tenant shall be joint and several.
(B) Each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by, any written instrument which
may hereafter be executed, changing, modifying or discharging this Lease, in
whole or in part, or surrendering all or any part of the Premises to the
Landlord, and by notices, demands, requests or other communication which may
hereafter be given, by Partnership Tenant or any of the parties comprising
Partnership Tenant.
(C) Any bills, statements, notices, demands, requests or other
communications given or rendered to Partnership Tenant or to any of the parties
comprising Partnership Tenant shall be deemed given or rendered to Partnership
Tenant and to all such parties and shall be binding upon Partnership Tenant and
all such parties.
(D) If Partnership Tenant admits new partners, all of such new
partners shall, by their admission to Partnership Tenant, be deemed to have
assumed performance of all
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of the terms, covenants and conditions of this Lease on Tenant's part to be
observed and performed.
(E) Partnership Tenant shall give prompt notice to Landlord of
the admission of any such new partners, and, upon demand of Landlord, shall
cause each such new partner to execute and deliver to Landlord an agreement in
form satisfactory to Landlord, wherein each such new partner shall assume
performance of all of the terms, covenants and conditions of this Lease on
Partnership Tenant's part to be observed and performed (but neither Landlord's
failure to request any such agreement nor the failure of any such new partner to
execute or deliver any such agreement to Landlord shall terminate the provisions
of clause (D) of this Article 30(q)(ii) or relieve any such new partner of its
obligations thereunder).
(r) Intentionally Deleted.
---------------------
(s) Survival of Obligations. Any obligations of Tenant occurring prior to
-----------------------
the expiration or earlier termination of this Lease shall survive such
expiration or earlier termination.
(t) Confidentiality. Tenant acknowledges that the content of this Lease
---------------
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal and space planning consultants and any proposed subtenants or assignees.
(u) Exhibits and Addendum. The Exhibits and Addendum, if applicable,
---------------------
attached hereto are incorporated herein by this reference as if fully set forth
herein.
(v) Americans With Disabilities Act and Seismic Requirements. Landlord
--------------------------------------------------------
shall, at its sole cost and expense, take the necessary steps to comply with
what Landlord reasonably believes are the requirements of the ADA and any
applicable seismic requirements in effect as of the Commencement Date of this
Lease as such laws pertain to the Premises and the common areas of the Project.
Further, Operating Costs shall not include any cost incurred by Landlord in
connection with upgrading the Project or the Premises, to comply with the
requirements of the ADA or any seismic requirements that are in effect as of the
date of this Lease, including penalties or damages incurred due to such
noncompliance.
(w) Governing Law. This Lease shall be governed by and construed in
-------------
accordance with the laws of the State of California. No conflicts of law rules
of any state or country (including, without limitation, California conflicts of
law rules) shall be applied to result in the application of any substantive or
procedural laws of any state or country other than California. All
controversies, claims, actions or causes of action arising between the parties
hereto and/or their respective successors and assigns, shall be brought, heard
and adjudicated by the courts of the State of California, with venue in the
County of Ventura. Each of the parties hereto hereby consents to personal
jurisdiction by the courts of the State of California in connection with any
such controversy, claim, action or cause of action, and each of the parties
hereto consents to service of process by any means authorized by California law
and consent to the enforcement of any judgment so obtained in the courts of the
State of California on the same terms and conditions as if such controversy,
claim, action or cause of action had been originally heard and adjudicated to a
final judgment in such courts. Each of the parties hereto further acknowledges
that the laws and courts of California were freely and voluntarily chosen to
govern this Lease and to adjudicate any claims or disputes hereunder.
(x) Communication Equipment. If Tenant desires to use the roof of the
-----------------------
Project to install communication equipment to be used from the Premises, Tenant
may negotiate with Landlord's rooftop management company (currently APEX) for a
license to install such equipment. Any communication equipment installed by
Tenant shall not exceed three (3) feet in height or diameter, shall be at a
location reasonably designated by Landlord and shall be subject to all
governmental laws, rules and regulations and covenants, conditions and
restrictions. Tenant's communication equipment license will be memorialized
pursuant to a separate license agreement between Tenant and such management
company. Tenant's rights pursuant to this Section 30(x) are contingent upon
availability of space on the roof of the Project and the negotiation of a
mutually acceptable license agreement. The rent payable by Tenant for such
rooftop communication equipment shall be the prevailing rates charged for such
use; provided that in the event Tenant installs equipment measuring (i) up to
eighteen (18) inches in diameter,
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the rent payable shall be One Hundred Fifty Dollars ($150.00) per month, (ii)
more than eighteen (18) and less than twenty-four (24) inches in diameter, the
rent payable shall be Two Hundred Dollars ($200.00) per month, or (iii) twenty-
four (24) up to thirty-six (36) inches in diameter, the rent payable shall be
Three Hundred Dollars ($300.00) per month. Notwithstanding anything to the
contrary contained herein, the communication equipment permitted by this Section
30(x) is equipment for Tenant's own use (e.g. DirectTV and vsats communicating
with home offices), and is not intended to allow Tenant to install communication
equipment which would result in Tenant making a profit from such communication
equipment. In the event Tenant wishes to install communication equipment outside
the scope of the immediately preceding sentence, such as Wireless ISP
installations, such use would be subject to Landlord's approval and Tenant's
negotiation of a separate license agreement directly with the Corporate
Communications Director of Landlord, currently Scott Lyle, and would be subject
to the parties' negotiation of a mutually acceptable license agreement for such
use.
ARTICLE 31
OPTION TO EXTEND
----------------
(a) Option Right. Landlord hereby grants the Tenant named in this Lease
------------
(the "Original Tenant") two (2) options ("Options") to extend the Lease Term for
the entire Premises for a period of five (5) years each (each, an "Option
Term"), which options shall be exercisable only by written notice delivered by
Tenant to Landlord set forth below. The second Option shall only be exercisable
in the event Tenant has properly exercised its first Option pursuant to this
Article 31. The rights contained in this Article 31 shall be personal to the
Original Tenant and any Permitted Assignee and may only be exercised by the
Original Tenant or a Permitted Assignee (and not any other assignee, sublessee
or other transferee of the Original Tenant's interest in this Lease) if the
Original Tenant or such Permitted Assignee occupies the entire Premises as of
the date of Tenant's Acceptance (as defined in Section 31(c) below).
(b) Option Rent. The rent payable by Tenant during the applicable Option
-----------
Term ("Option Rent") shall be equal to the "Market Rent" (defined below), but in
no event shall the Option Rent be less than Tenant is paying under the Lease on
the month immediately preceding the applicable Option Term for monthly Basic
Rental, including all escalations, Direct Costs, additional rent and other
charges. "Market Rent" shall mean the applicable monthly Basic Rental, including
all escalations, Direct Costs, additional rent and other charges at which
tenants, as of the commencement of the applicable Option Term, are leasing non-
sublease, non-encumbered, space comparable in size, location and quality to the
Premises in non-renewal transactions for a term comparable to the Option Term
which comparable space is located in office buildings comparable to the Project
in Calabasas, Agoura Hills, Westlake Village and Thousand Oaks, California ("the
Comparison Area)", taking into consideration the value of the existing
improvements in the Premises to Tenant, as compared to the value of the existing
improvements in such comparable space, with such value to be based upon the age,
quality and layout of the improvements and the extent to which the same could be
utilized by Tenant with consideration given to the fact that the improvements
existing in the Premises are specifically suitable to Tenant.
(c) Exercise of Option. The Options shall be exercised by Tenant only in
------------------
the following manner: (i) Tenant shall not have caused an Event of Default after
the expiration of any applicable notice and cure period, and an Event of Default
shall not have occurred under this Lease more than once after expiration of any
applicable notice and cure period, on the delivery date of the Interest Notice
and Tenant's Acceptance; (ii) Tenant shall deliver written notice ("Interest
Notice") to Landlord not more than twelve (12) months nor less than nine (9)
months prior to the expiration of the Lease Term (or the first Option Term, as
applicable), stating that Tenant is interested in exercising the Option, (iii)
within fifteen (15) business days of Landlord's receipt of Tenant's written
notice, Landlord shall deliver notice ("Option Rent Notice") to Tenant setting
forth the Option Rent (including any improvement allowance being offered as part
of the Market Rent); and (iv) if Tenant desires to exercise such Option, Tenant
shall provide Landlord written notice within five (5) business days after
receipt of the Option Rent Notice ("Tenant's Acceptance") and upon, and
concurrent with such exercise, Tenant may, at its option, object to the Option
Rent contained in the Option Rent Notice. Tenant's failure to deliver the
Interest Notice or Tenant's Acceptance on or before the dates specified above
shall be deemed to constitute Tenant's election not to exercise the Option. If
Tenant timely and properly exercises its Option, the Lease Term (or first Option
Term) shall be extended for the Option
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Term upon all of the terms and conditions set forth in this Lease, except that
the rent for the applicable Option Term shall be as indicated in the Option
Rent Notice unless Tenant, concurrently with Tenant's acceptance, objects
to the Option Rent contained in the Option Rent Notice, in which case the
parties shall follow the procedure and the Option Rent shall be determined,
as set forth in Section 31(d) below.
(d) Determination of Market Rent. If Tenant timely and appropriately
----------------------------
objects to the Market Rent in Tenant's Acceptance, Landlord and Tenant shall
attempt to agree upon the Market Rent using their best good-faith efforts. If
Landlord and Tenant fail to reach agreement within twenty-one (21) days
following Tenant's Acceptance ("Outside Agreement Date"), then each party shall
make a separate determination of the Market Rent which shall be submitted to
each other and to arbitration in accordance with the following items (i)
through (vii):
(i) Landlord and Tenant shall each appoint, within ten (10) days of
the Outside Agreement Date, one arbitrator who shall by profession be a current
real estate broker or appraiser of commercial high-rise properties in the
immediate vicinity of the Project, and who has been active in such field over
the last five (5) years. The determination of the arbitrators shall be limited
solely to the issue of whether Landlord's or Tenant's submitted Market Rent is
the closest to the actual Market Rent as determined by the arbitrators, taking
into account the requirements of item (b), above.
(ii) The two arbitrators so appointed shall within five (5) business
days of the date of the appointment of the last appointed arbitrator agree upon
and appoint a third arbitrator who shall be qualified under the same criteria
set forth hereinabove for qualification of the initial two arbitrators.
(iii) The three arbitrators shall within fifteen (15) days of the
appointment of the third arbitrator reach a decision as to whether the parties
shall use Landlord's or Tenant's submitted Market Rent, and shall notify
Landlord and Tenant thereof.
(iv) The decision of the majority of the three arbitrators shall be
binding upon Landlord and Tenant.
(v) If either Landlord or Tenant fails to appoint an arbitrator
within ten (10) days after the applicable Outside Agreement Date, the
arbitrator appointed by one of them shall reach a decision, notify Landlord
and Tenant thereof, and such arbitrator's decision shall be binding upon
Landlord and Tenant.
(vi) If the two arbitrators fail to agree upon and appoint a third
arbitrator, or both parties fail to appoint an arbitrator, then the appointment
of the third arbitrator or any arbitrator shall be dismissed and the matter to
be decided shall be forthwith submitted to arbitration under the provisions of
the American Arbitration Association, but subject to the instruction set forth
in this item (d).
(vii) The cost of arbitration shall be paid by Landlord and Tenant
equally.
ARTICLE 32
RIGHT OF FIRST OFFER
--------------------
Landlord hereby grants to Tenant a right of first offer with respect to
all space on the second (/2nd/) floor of the Project ("First Offer Space").
Notwithstanding the foregoing (i) such first offer right of Tenant shall
commence only following the expiration or earlier termination of any existing
lease pertaining to the First Offer Space (the "Superior Lease"), including any
renewal or extension of such existing lease, whether or not such renewal or
extension is pursuant to an express written provision in such lease, and
regardless of whether any such renewal or extension is consummated pursuant to a
lease amendment or a new lease, and (ii) such first offer right shall be
subordinate and secondary to all rights of expansion, first refusal, first offer
or similar rights granted to the tenant of the Superior Lease ( the "Superior
Rights"). Tenant's right of first offer shall be on the terms and conditions
set forth in this Section 32.
(a) Procedure for Offer. Landlord shall notify Tenant (the "First Offer
-------------------
Notice") from time to time when Landlord determines that Landlord shall commence
the marketing of any First Offer Space because such space shall become available
for lease to third parties, where no
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holder of a Superior Right desires to lease such space. The First Offer Notice
shall describe the space so offered to Tenant and shall set forth Landlord's
proposed economic terms and conditions applicable to Tenant's lease of such
space (collectively, the "Economic Terms"). Notwithstanding the foregoing,
Landlord's obligation to deliver the First Offer Notice shall not apply during
the last nine (9) months of the initial Lease Term (or first Option Term, as
applicable) unless Tenant has delivered an Interest Notice to Landlord pursuant
to Section 31(c) above nor shall Landlord be obligated to deliver the First
Offer Notice during the last eight (8) months of the initial Lease Term (or
first Option Term, as applicable) unless Tenant has timely delivered Tenant's
Acceptance to Landlord pursuant to Section 31(c) above.
(b) Procedure for Acceptance. If Tenant wishes to exercise Tenant's right
------------------------
of first offer with respect to the space described in the First Offer Notice,
then within five (5) business days after delivery of the First Offer Notice to
Tenant, Tenant shall deliver notice to Landlord of Tenant's intention to
exercise its right of first offer with respect to the entire space described in
the First Offer Notice. If concurrently with Tenant's exercise of the first
offer right, Tenant notifies Landlord that it does not accept the Economic Terms
set forth in the First Offer Notice, Landlord and Tenant shall, for a period of
fifteen (15) days after Tenant's exercise, negotiate in good faith to reach
agreement as to such Economic Terms. If Tenant does not so notify Landlord that
it does not accept the Economic Terms set forth in the First Offer Notice
concurrently with Tenant's exercise of the first offer right, the Economic Terms
shall be as set forth in the First Offer Notice. In addition, if Tenant does not
exercise its right of first offer within the five (5) business day period, or,
if Tenant exercises its first offer right but timely objects to Landlord's
determination of the Economic Terms and if Landlord and Tenant are unable to
reach agreement on such Economic Terms within said fifteen (15) day period, then
Landlord shall be free to lease the space described in the First Offer Notice to
anyone to whom Landlord desires on any terms Landlord desires and Tenant's right
of first offer shall terminate as to the First Offer Space described in the
First Office Notice. Notwithstanding anything to the contrary contained herein,
Tenant must elect to exercise its right of first offer, if at all, with respect
to all of the space offered by Landlord to Tenant at any particular time, and
Tenant may not elect to lease only a portion thereof.
(c) Construction of First Offer Space. Tenant shall take the First Offer
---------------------------------
Space in its "as-is" condition, and Tenant shall be entitled to construct
improvements in the First Offer Space in accordance with the provisions of
Article 9 of this Lease.
(d) Lease of First Offer Space. If Tenant timely exercises Tenant's
--------------------------
right to lease the First Offer Space as set forth herein, Landlord and Tenant
shall execute an amendment adding such First Offer Space to this Lease upon the
same non-economic terms and conditions as applicable to the initial Premises,
and the economic terms and conditions as provided in this Section 32. Tenant
shall commence payment of rent for the First Offer Space and the Lease Term of
the First Offer Space shall commence upon the date of delivery of such space to
Tenant. The Lease Term for the First Offer Space shall expire co-terminously
with Tenant's lease of the initial Premises.
(e) No Defaults. The rights contained in this Section 32 shall be
-----------
personal to the Original Tenant or any Permitted Assignee pursuant to
Article 15, and may only be exercised by the Original Tenant and such Permitted
Assignee (and not any other assignee, sublessee or other transferee of the
Original Tenant's interest in this Lease) if Tenant or such Permitted Assignee
occupies the entire Premises as of the date of the First Offer Notice. Tenant
shall not have the right to lease First Office Space as provided in this Section
32 if, as of the date of the First Offer Notice, or, at Landlord's option, as of
the scheduled date of delivery of such First Offer Space to Tenant, an Event of
Default exists (after the expiration of any applicable notice and cure period),
or there has been an Event of Default under this Lease more than once after
expiration of any applicable notice and cure period.
ARTICLE 33
SIGNAGE/DIRECTORY
-----------------
(a) Premises Identification/Monument Signage. Provided Tenant is not in
----------------------------------------
default hereunder, Tenant shall be entitled, at Tenant's sole cost and
expense, to install (i) a Project-standard suite identification sign at a
location adjacent to Tenant's entry door reasonably designated by Landlord,
(ii) Project-standard signage in the Project lobby reasonably approved
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<PAGE>
by Landlord, and (iii) a Project standard sign at the main entrance to the
Project. In addition, provided Tenant is not in default hereunder, Tenant shall
have the right, at Tenant's sole cost and expense, to install a strip on the
Project's monument sign, which sign shall be at a location at the Project
reasonably designated by Landlord ("Monument Signage") in the event the
conditions set forth below are met. Tenant's Monument Signage is conditioned
upon Landlord obtaining all necessary governmental permits and approvals to
install a multi-tenant monument sign at the Project. The cost of Tenant's strip
on the monument sign shall be paid for by Tenant, and Tenant shall pay its
prorata share of the cost to construct such multi-monument sign (based upon the
number of signs for which the monument is designed); provided that Landlord
shall not charge Tenant any rent for Tenant's Monument Signage. The position of
Tenant's strip on the monument sign shall be reasonably designated by Landlord,
and Tenant's strip may be moved, at Landlord's sole cost, in the event a larger
tenant (measured by number of rentable square feet leased) is granted monument
signage rights.
(b) Building Top Sign. In addition to the Monument Signage, to the extent
-----------------
such signage is available, Tenant shall have the nonexclusive right to install
Project-top signage, subject to the rights of any existing tenants to such
signage. The Project-top sign installed by Tenant shall be subject to all terms
and conditions of this Article 33.
(c) Miscellaneous Signage Provisions. Tenant's Monument Signage
--------------------------------
together with Tenant's Project-top signage and the signage described in Section
33(a) above may be collectively referred to herein as "Tenant's Signage."
Tenant's Signage shall be subject to Landlord's approval as to size, design,
location, graphics, materials, colors and similar specifications and shall be
consistent with the exterior design, materials and appearance of the monument
sign, the Project and the Project's signage program and shall be further subject
to all applicable local governmental laws, rules, regulations, codes and
Tenant's receipt of all permits and other approvals and any applicable
covenants, conditions and restrictions. Tenant's Signage shall be personal to
the Original Tenant and may not be assigned to any assignee or sublessee, or any
other person or entity. Landlord has the right, but not the obligation, to
oversee the installation of Tenant's Signage. The cost to maintain and operate,
if any, Tenant's Signage shall be paid for by Tenant, and if applicable Tenant
shall be separately metered for such expense (the cost of separately metering
any utility usage shall also be paid for by Tenant). Upon the expiration of the
Lease Term, or other earlier termination of this Lease, Tenant shall be
responsible for any and all costs associated with the removal of such signage,
including, but not limited to, the cost to repair and restore the Project to its
original condition, normal wear and tear excepted.
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IN WITNESS WHEREOF, the parties have executed this Lease, consisting of the
foregoing provisions and Articles, including all exhibits and other attachments
referenced therein, as of the date first above written.
"LANDLORD" ARDEN REALTY FINANCE PARTNERSHIP,
L.P., a California limited partnership
By: ARDEN REALTY FINANCE, INC.,
a California corporation
Its sole general partner
By: /s/ Victor J. Coleman
--------------------------------
Victor J. Coleman
Its: President and COO
By: /s/ Robert C. Peddicort
--------------------------------
Its: Senior Vice President
"TENANT" DIGITAL INSIGHT CORPORATION,
a Delaware corporation
By: /s/ Kevin McDonnell
------------------------------------
Print Name: Kevin McDonnell
Its: CFO
By:
-------------------------------------
Print Name:-----------------------------
Its:-----------------------------
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