California-Irvine-4 Park Plaza Lease - Irvine Co. and BPO-US Inc.
OFFICE SPACE LEASE
BETWEEN
THE IRVINE COMPANY
AND
BPO-US, INC.
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OFFICE SPACE LEASE
THIS LEASE is made as of the 28th day of June, 1999, by and between THE
IRVINE COMPANY, a Delaware corporation, hereafter called "Landlord," and BPO-US,
INC., a Delaware corporation, hereinafter called "Tenant."
ARTICLE I. BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean
and refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.
1. TENANT'S TRADE NAME: N/A
2. PREMISES: Suite No. 350 (the Premises are more particularly described in
Section 2.1).
ADDRESS OF BUILDING: 4 Park Plaza, Irvine, CA 92614
PROJECT DESCRIPTION (IF APPLICABLE): Jamboree Center
3. USE OF PREMISES: General Office and for no other use. In no event shall the
Premises be used for purposes substantially and directly involved with mobile
telecommunications (i.e., voice or data transmission to, from or between
mobile users of service, but excluding one-way radio for entertainment
purposes or the provision of computer hardware or software) products and/or
services marketed to the public at large.
4. ESTIMATED COMMENCEMENT DATE: July 1, 1999
5. LEASE TERM: Thirty-six (36) months, plus such additional days as may be
required to cause this Lease to terminate on the final day of the calendar
month.
6. BASIC RENT: Seventeen Thousand One Hundred Seventy-Six Dollars ($17,176.00)
per month.
RENTAL ADJUSTMENTS:
Commencing twelve (12) months following the Commencement Date, the Basic Rent
shall be Seventeen Thousand Nine Hundred Four Dollars ($17,904.00) per month.
Commencing twenty-four (24) months following the Commencement Date, the Basic
Rent shall be Eighteen Thousand Six Hundred Thirty-Two Dollars ($18,632.00)
per month.
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7. PROPERTY TAX BASE: The Property Taxes per rentable square foot actually
incurred by Landlord for the twelve month period ending June 30, 2000.
BUILDING COST BASE: The Building Costs per rentable square foot actually
incurred by Landlord for the twelve month period ending June 30, 2000.
EXPENSE RECOVERY PERIOD: Every twelve month period during the Term (or
portion thereof during the first and last Lease years) ending June 30.
8. FLOOR AREA OF PREMISES: approximately 7,278 rentable square feet
9. SECURITY DEPOSIT: $20,495.00
10. BROKER(s): CB Richard Ellis
11. PLAN APPROVAL DATE: N/A
12. PARKING: Twenty (20) unreserved vehicle parking spaces.
13. ADDRESS FOR PAYMENTS AND NOTICES:
<CAPTION>
LANDLORD TENANT
The Irvine Company BPO-US, Inc.
c/o Tooley & Company 4 Park Plaza
5 Park Plaza, Suite 100 Suite 350
Irvine, CA 92614 Irvine, CA 92614
Attn: Property Manager
with a copy of notices to:
THE IRVINE COMPANY
P.O. Box 6370
Newport Beach, CA 92658-6370
Attn: Vice President, Operations - Office Properties
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ARTICLE II. PREMISES
SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant rents
from Landlord the premises shown in Exhibit A (the "Premises"), containing
approximately the floor area set forth in Item 8 of the Basic Lease Provisions
and known by the suite number identified in Item 2 of the Basic Lease
Provisions. The Premises are located in the building identified in Item 2 of the
Basic Lease Provisions (which together with the underlying real property, is
called the "Building"), and is a portion of the project described in Item 2 (the
"Project").
SECTION 2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that except as
expressly provided in this Lease, neither Landlord nor any representative of
Landlord has made any representation or warranty with respect to the Premises or
the Building or the suitability or fitness of either for any purpose, except as
set forth in this Lease. The taking of possession or use of the Premises by
Tenant for the commencement of its business operations shall conclusively
establish that the Premises were in satisfactory condition and in conformity
with the provisions of this Lease in all respects, except for latent defects of
which Landlord is notified within one (1) year following the Commencement Date
and for those matters which Tenant shall have brought to Landlord's attention on
a written punch list. The punch list shall be delivered to Landlord within
thirty (30) days after the term ("Term") of this Lease commences as provided in
Article III below. Nothing contained in this Section shall affect the
commencement of the Term or the obligation of Tenant to pay rent. Landlord shall
diligently complete all punch list items of which it is notified as provided
above. Notwithstanding the foregoing, Landlord warrants that all building
systems shall be in good working order as of the Commencement Date.
SECTION 2.3. BUILDING NAME AND ADDRESS. Tenant shall not utilize any
name selected by Landlord from time to time for the Building and/or the Project
as any part of Tenant's corporate or trade name. Landlord shall have the right
to change the name, number or designation of the Building or Project without
liability to Tenant.
SECTION 2.4. AVAILABLE SPACE. Upon request by Tenant from time to time,
Landlord will advise Tenant of the suites within the Project that Landlord in
good faith anticipates will become available for lease during the next following
six (6) months. Nothing contained herein, however, shall be deemed to grant
Tenant any option or other right to lease any such space that may become
available.
ARTICLE III. TERM
SECTION 3.1. GENERAL. The Term shall be for the period shown in Item 5
of the Basic Lease Provisions. The Term shall commence ("Commencement Date") on
the earlier of (a) subject to the provisions of Section 3.2 and Exhibit X, the
Estimated Commencement Date as set forth in Item 4 of the Basic Lease
Provisions, or (b) the date Tenant commences its business activities within the
Premises. Promptly following request by Landlord, the parties shall memorialize
on a form provided by Landlord the actual Commencement Date and the expiration
date ("Expiration Date") of this Lease.
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SECTION 3.2. DELAY IN POSSESSION. If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant on or before the
Estimated Commencement Date, this Lease shall not be void or voidable nor shall
Landlord be liable to Tenant for any resulting loss or damage. However, Tenant
shall not be liable for any rent and the Commencement Date shall not occur until
Landlord delivers possession of the Premises and the Premises are in fact ready
for occupancy as defined below, except that if Landlord's failure to so deliver
possession on the Estimated Commencement Date is attributable to any action or
inaction by Tenant (including without limitation any Tenant Delay described in
the Work Letter, if any, attached to this Lease), then the Commencement Date
shall not be advanced to the date on which possession of the Premises is
tendered to Tenant, and Landlord shall be entitled to full performance by Tenant
(including the payment of rent) from the date Landlord would have been able to
deliver the Premises to Tenant but for Tenant's delay(s). The Premises shall be
deemed ready for occupancy upon the tendered date, but only if and when
Landlord, to the extent applicable, (a) has put into operation all building
services (including the parking required herein) essential for the use of the
Premises by Tenant, (b) has provided reasonable access to the Premises for
Tenant so that they may be used without unnecessary interference, (c) has
substantially completed all the work required to be done by Landlord in this
Lease (including Exhibit X hereto) and the Premises are clean and free of debris
from such work, and (d) has obtained requisite governmental approvals to
Tenant's occupancy. Notwithstanding the foregoing, however, if Landlord fails to
deliver possession of the Premises on or before the "Outside Date" (as defined
below), then Tenant may, by thirty (30) days prior written notice to Landlord
thereafter, but prior to Landlord's delivery of the Premises, elect to terminate
this Lease; in such event, this Lease shall terminate at the end of that thirty
(30) day period unless Landlord shall so deliver the Premises within that
period. For purposes of the foregoing, the "Outside Date" shall mean the date
that is two (2) months following the last to occur of (i) Tenant's execution and
delivery of this Lease in final form, (ii) Tenant's written approval of final
construction drawings and pricing, if applicable, for the tenant improvement
work, and (iii) the payment by Tenant of all sums and deposits required
hereunder prior to the commencement of construction; provided that the Outside
Date shall be extended on a day-for-day basis for the period of any Tenant
Delays.
ARTICLE IV. RENT AND OPERATING EXPENSES
SECTION 4.1. BASIC RENT. From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset (except as otherwise provided
herein) Basic Rent for the Premises in the total amount shown (including
subsequent adjustments, if any) in Item 6 of the Basic Lease Provisions. Any
rental adjustment shown in Item 6 shall be deemed to occur on the specified
monthly anniversary of the Commencement Date, whether or not that date occurs at
the end of a calendar month. The rent shall be due and payable in advance
commencing on the Commencement Date (as prorated for any partial month) and
continuing thereafter on the first day of each successive calendar month of the
Term. No demand, notice or invoice shall be required. An installment of rent in
the amount of one (1) full month's Basic Rent at the
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initial rate specified in Item 6 of the Basic Lease Provisions shall be
delivered to Landlord concurrently with Tenant's execution of this Lease and
shall be applied against the Basic Rent first due hereunder.
SECTION 4.2. OPERATING EXPENSE INCREASE.
(a) Commencing on the first day of the thirteenth month of the
Lease Term, Tenant shall compensate Landlord, as additional rent, for Tenant's
proportionate shares of "Building Costs" and "Property Taxes," as those terms
are defined below, incurred by Landlord in the operation of the Building and
Project. Property Taxes and Building Costs are mutually exclusive and may be
billed separately or in combination as reasonably determined by Landlord.
Tenant's proportionate share of Property Taxes shall equal the product of the
rentable floor area of the Premises multiplied by the difference of (i) Property
Taxes per rentable square foot less (ii) the Property Tax Base set forth in Item
7 of the Basic Lease Provisions. Tenant's proportionate share of Building Costs
shall equal the product of the rentable floor area of the Premises multiplied by
the difference of (i) Building Costs per rentable square foot less (ii) the
Building Cost Base set forth in Item 7 of the Basic Lease Provisions. Tenant
acknowledges Landlord's rights to make changes or additions to the Building
and/or Project from time to time pursuant to Section 6.5 below, in which event
the total rentable square footage within the Building and/or Project may be
adjusted. For convenience of reference, Property Taxes and Building Costs may
sometimes be collectively referred to as "Operating Expenses."
(b) Commencing prior to the start of the first full "Expense
Recovery Period" of the Lease (as defined in Item 7 of the Basic Lease
Provisions), and prior to the start of each full or partial Expense Recovery
Period thereafter, Landlord shall give Tenant a written estimate of the amount
of Tenant's proportionate shares of Building Costs and Property Taxes for the
Expense Recovery Period or portion thereof. Commencing on the first day of the
thirteenth month of the Lease Term, Tenant shall pay the estimated amounts to
Landlord in equal monthly installments, in advance, with Basic Rent. If Landlord
has not furnished its written estimate for any Expense Recovery Period by the
time set forth above, Tenant shall continue to pay cost reimbursements at the
rates established for the prior Expense Recovery Period, if any; provided that
when the new estimate is delivered to Tenant, Tenant shall, at the next monthly
payment date, pay any accrued cost reimbursements based upon the new estimate.
Landlord may from time to time change the Expense Recovery Period to reflect a
calendar year or a new fiscal year of Landlord, as applicable, in which event
Tenant's share of Operating Expenses shall be equitably prorated for any partial
year.
(c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual or prorated Property Taxes and Building Costs
incurred by Landlord during the period, and the parties shall within thirty (30)
days thereafter make any payment or allowance necessary to adjust Tenant's
estimated payments, if any, to Tenant's actual proportionate shares as shown by
the annual statement. If Tenant has
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not made estimated payments during the Expense Recovery Period, any amount owing
by Tenant pursuant to subsection (a) above shall be paid to Landlord in
accordance with Article XVI. If actual Property Taxes or Building Costs
allocable to Tenant during any Expense Recovery Period are less than the
Property Tax Base or the Building Cost Base, respectively, Landlord shall not be
required to pay the differential to Tenant. Should Tenant fail to object in
writing to Landlord's determination of actual Operating Expenses within one (1)
year following delivery of Landlord's expense statement, Landlord's
determination of actual Operating Expenses for the applicable Expense Recovery
Period shall be conclusive and binding on the Tenant.
(d) Even though the Lease has terminated and the Tenant has
vacated the Premises, when the final determination is made of Tenant's share of
Property Taxes and Building Costs for the Expense Recovery Period in which the
Lease terminates, Tenant shall within ten (10) days of receipt of written notice
pay the entire increase due over the estimated expenses paid. Conversely, any
overpayment made in the event expenses decrease shall be promptly rebated by
Landlord to Tenant.
(e) If, at any time during any Expense Recovery Period, any one
or more of the Operating Expenses are reasonably increased to a rate(s) or
amount(s) in excess of the rate(s) or amount(s) used in calculating the
estimated expenses for the year, then Tenant's estimated share of Property Taxes
or Building Costs, as applicable, shall be increased for the month in which the
increase becomes effective and for all succeeding months by an amount equal to
Tenant's proportionate share of the increase. Landlord shall give Tenant written
notice of the amount or estimated amount of the increase, the month in which the
increase will become effective, Tenant's monthly share thereof and the months
for which the payments are due. Tenant shall pay the increase to Landlord as a
part of Tenant's monthly payments of estimated expenses as provided in paragraph
(b) above, commencing with the month in which effective.
(f) The term "Building Costs" shall include all reasonable
expenses of operation and maintenance of the Building and the Project, together
with all appurtenant Common Areas (as defined in Section 6.2), and shall include
the following reasonable charges by way of illustration but not limitation:
water and sewer charges; insurance premiums or reasonable premium equivalents
should Landlord elect to self-insure any risk that Landlord is authorized to
insure hereunder; license, permit, and inspection fees; heat; light; power;
janitorial services; repairs; air conditioning; supplies; materials; equipment;
tools; tenant services; programs instituted to comply with transportation
management requirements; amortization of capital investments to the extent they
produce a reduction in operating charges or energy conservation; amortization of
capital investments necessary to bring the Building into compliance with
applicable laws and building codes enacted subsequent to the completion of
construction of the Building; labor; reasonably allocated wages and salaries,
fringe benefits, and payroll taxes for administrative and other personnel
directly applicable to the Building and/or Project, including both Landlord's
personnel and outside personnel; any expense incurred pursuant to Sections 6.1,
6.2, 6.4, 7.2, and 10.2 and Exhibits B and C below; and a commercially
reasonable overhead/management fee. It is understood that Building
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Costs shall include competitive charges for direct services provided by any
subsidiary or division of Landlord. The term "Property Taxes" as used herein
shall include the following: (i) all real estate taxes, as such property taxes
may be reassessed from time to time; and (ii) other taxes, documentary transfer
fees, charges and assessments which are levied with respect to this Lease or to
the Building and/or the Project, and any improvements, fixtures and equipment
and other property of Landlord located in the Building and/or the Project,
except that general net income and franchise taxes imposed against Landlord
shall be excluded; and (iii) any tax, surcharge or assessment which shall be
levied in addition to or in lieu of real estate or personal property taxes,
other than taxes covered by Article VIII; and (iv) reasonable costs and expenses
incurred in contesting the amount or validity of any Property Tax by appropriate
proceedings to the extent of any resulting tax reduction. A copy of Landlord's
unaudited statement of expenses shall be made available to Tenant upon request.
The variable component of Building Costs shall be extrapolated by Landlord to
reflect at least ninety-five percent (95%) occupancy of the rentable area of the
Building.
(g) Notwithstanding the provisions of this Section 4.2 to the
contrary, Operating Expenses shall not include any cost or expense identified as
the responsibility of Landlord and not an Operating Expense by the express terms
of this Lease, and shall not include any of the following:
(1) Leasing commissions, attorneys' fees, costs,
disbursements and other expenses incurred by Landlord or its agents in
connection with negotiations for leases with tenants, other occupants or
prospective tenants or other occupants of the Project, and similar costs
incurred in connection with disputes with and/or enforcement of any lease with
tenants, other occupants, or prospective tenants or other occupants of the
Project;
(2) "Tenant allowances", "tenant concessions", work
letter payments, and other costs or expenses (including permit, license and
inspection fees) incurred in completing, fixturing, furnishing, renovating or
otherwise improving, decorating or redecorating space for other tenants or
occupants of the Project, or vacant, leasable space in the Project, including
space planning/interior design fees for same;
(3) Depreciation and other "non-cash" expense items;
(4) Services, items and benefits for which Tenant or any
other tenant or occupant of the Project specifically reimburses Landlord or for
which Tenant or any other tenant or occupant of the Project pays third persons
or services, and items or benefits which are not generally made available to
Tenant as an occupant of the Building or the Project;
(5) Costs or expenses (including fines, penalties and
legal fees) incurred due to the violation by Landlord of any terms and
conditions of this Lease or of the leases of other tenants in the Project, that
would have incurred but for such violation by Landlord;
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(6) Penalties for late payment of any Operating Expenses
by Landlord, including, without limitation, with respect to taxes, equipment
leases, etc.;
(7) Payments in respect of overhead and/or profit to any
subsidiary or affiliate of Landlord, as a result of a non-competitive selection
process for services (other than the management fee) on or to the Project, or
for goods, supplies or other materials, to the extent that the costs of such
services, goods, supplies or materials exceed the costs that would have been
paid if the services, goods, supplies or materials had been provided by parties
unaffiliated with Landlord, of similar skill, competence and experience, on a
competitive basis;
(8) Payments of principal, finance charges or interest
on debt or amortization on any deed of trust or other debt encumbering the
Project, and rental payments (or increases in same) under any ground or
underlying lease or leases encumbering the Project (except to the extent the
same may be made to pay or reimburse, or may be measured by Property Taxes);
(9) Except for a management fee which is reasonable and
commercially competitive for similar projects in the area of the Project, costs
of Landlord's general overhead and general administrative expenses (individual,
partnership or corporate, as the case may be) and wages, salaries and other
compensation and benefits (as well as adjustments thereto) for all employees and
personnel of Landlord above the level of manager for the Project, which costs
would not be chargeable to Operating Expenses in accordance with generally
accepted accounting principles, consistently applied;
(10) Rentals and other related expenses, if any,
incurred in leasing air conditioning systems or other equipment ordinarily
considered to be of a capital nature, except equipment which is used in
providing janitorial services and Which is not affixed to the Project and
equipment which is leased on a temporary basis in emergency situations;
(11) Advertising and promotional expenses;
(12) Costs or expenses for the acquisition of sculpture,
paintings or other works of art, but not the reasonable expenses of maintaining,
repairing and insuring same;
(13) Costs for which Landlord is compensated through or
reimbursed by insurance;
(14) Contributions to operating expense reserves
(including tax reserves), except for reasonable reserves for the roof of the
Building and as specifically otherwise set forth herein;
(15) Contributions to political or charitable
organizations;
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(16) Costs incurred in removing the property of former
tenants and/or other occupants of the Project;
(17) The costs of any "tap fees" or one-time lump sum
sewer, water or other utility connection fees for the Project;
(18) Costs or fees relating to the defense of Landlord's
title to or interest in the Building and/or the Project, or any part thereof;
and
(19) Except as otherwise authorized herein, capital
expenditures and any other expense which, under generally accepted accounting
principles, consistently applied, would not be considered to be a normal
maintenance or operating expense of the Building and/or the Project.
(h) Provided Tenant is not then in default hereunder, Tenant
shall have the right to cause a certified public accountant to audit Operating
Expenses by inspecting Landlord's general ledger of expenses not more than once
during any Expense Recovery Period. Tenant shall give notice to Landlord of
Tenant's intent to audit within nine (9) months after Tenant's receipt of
Landlord's expense statement which sets forth Landlord's actual Operating
Expenses. Such audit shall be conducted at a mutually agreeable time during
normal business hours at the office of Landlord or its management agent where
such accounts are maintained. If Tenant's audit determines that actual Operating
Expenses have been overstated by more than five percent (5%), then subject to
Landlord's right to review and/or contest the audit results, Landlord shall
reimburse Tenant for the reasonable out-of-pocket costs of such audit. Tenant's
rent shall be appropriately adjusted to reflect any overstatement in Operating
Expenses. In addition, if any component of Operating Expenses is determined to
be either inappropriate or excessive during an Expense Recovery Period, and if
the Building Cost Base or Property Tax Base also included such component, then
the appropriate Base shall concurrently be adjusted if and to the extent
appropriate. In the event of a dispute between Landlord and Tenant regarding the
results of such audit, either party may elect to submit the matter for binding
arbitration pursuant to Section 14.7(b) below. All of the information obtained
by Tenant and/or its auditor in connection with such audit, as well as any
compromise, settlement, or adjustment reached between Landlord and Tenant as a
result thereof, shall be held in strict confidence and, except as may be
required pursuant to litigation, shall not be disclosed to any third party,
directly or indirectly, by Tenant or its auditor or any of their officers,
agents or employees. Landlord may require Tenant's auditor to execute a separate
confidentiality agreement affirming the foregoing as a condition precedent to
any audit. In the event of a violation of this confidentiality covenant in
connection with any audit, then in addition to any other legal or equitable
remedy available to Landlord, Tenant shall forfeit its right to any
reconciliation or cost reimbursement payment from Landlord due to said audit
(and any such payment theretofore made by Landlord shall be promptly returned by
Tenant), and Tenant shall have no further audit rights under this Lease.
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SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant's delivery of
this Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9
of the Basic Lease Provisions (the "Security Deposit"), to be held by Landlord
as security for the full and faithful performance of Tenant's obligations under
this Lease to pay any rent as and when due, including without limitation such
additional rent as may be owing under any provision hereof, and to maintain the
Premises as required by Sections 7.1 and 15.3. Upon any breach of those
obligations by Tenant, Landlord may apply all or part of the Security Deposit as
full or partial compensation. If any portion of the Security Deposit is so
applied, Tenant shall within ten (10) days after receipt of written demand by
Landlord deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount. Landlord shall not be required to keep
this Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on the Security Deposit. If Tenant fully performs its
obligations under this Lease, the Security Deposit or any balance thereof shall
be returned to Tenant or, at Landlord's option, to the last assignee of Tenant's
interest in this Lease.
SECTION 4.4. ADDITIONAL SECURITY DEPOSIT/RENT CREDIT. In addition to the
Security Deposit set forth in Item 9 of the Basic Lease Provisions, and as
additional security hereunder, Tenant shall deliver to Landlord concurrently
with its execution and delivery of this Lease, the sum of One Hundred Thousand
Dollars ($100,000.00) (the "Additional Security Deposit"). In the event that
Tenant is not in default under the Lease at any time, and provided further that
Tenant has not at any time been more than ten (10) days late with respect to any
payments of rent due under the Lease, Landlord shall return a portion of the
Additional Security Deposit in the form of credits in the amount of Twenty-Five
Thousand Dollars ($25,000.00) each against the Basic Rent payable by Tenant
under the Lease for the twelfth (12th) and twenty-fourth (24th) Lease months.
Landlord agrees to deposit the Additional Security Deposit into an interest
bearing account during the Term of this Lease; provided, however, that Landlord
may, in its discretion, instead elect to commingle such funds with its general
accounts, in which event interest shall be imputed thereon at the simple
interest rate of four percent per annum (based on a 365 day year). In the event
of a default by Tenant, Landlord may elect to utilize any accrued interest to
cure any such default before applying the principal balance of the Additional
Security Deposit. Otherwise, the accrued interest shall be delivered to Tenant
concurrently with the delivery of the balance of the Security Deposit pursuant
to Section 4.3 above.
ARTICLE V. USES
SECTION 5.1. USE. Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions. The parties agree that any
contrary use shall be deemed to cause material and irreparable harm to Landlord
and shall entitle Landlord to injunctive relief in addition to any other
available remedy. Tenant shall not do or permit anything to be done in or about
the Premises which will in any way unreasonably interfere with the rights or
quiet enjoyment of other occupants of the Building or the Project, or use or
allow the Premises to be used for any unlawful purpose, nor shall Tenant permit
any nuisance or commit any waste in the Premises or
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the Project. Tenant shall not knowingly do or permit to be done anything which
will invalidate or increase the cost of any insurance policy(ies) covering the
Building, the Project and/or their contents, and shall comply with all
reasonable and applicable insurance underwriters rules and the requirements of
the Pacific Fire Rating Bureau or any other organization performing a similar
function. Tenant shall comply at its expense with all present and future laws,
ordinances and requirements of all governmental authorities that pertain to
Tenant or its use of the Premises, including without limitation all federal and
state occupational health and safety and handicap access requirements, whether
or not Tenant's compliance will necessitate expenditures or interfere with its
use and enjoyment of the Premises. Tenant shall not generate, handle, store or
dispose of hazardous or toxic materials (as such materials may be identified in
any federal, state or local law or regulation) in the Premises or Project
without the prior written consent of Landlord; provided that the foregoing shall
not be deemed to proscribe the use by Tenant of customary office supplies in
normal quantities so long as such use comports with all applicable laws. Tenant
agrees that it shall promptly complete and deliver to Landlord any disclosure
form regarding hazardous or toxic materials that may be required by any
governmental agency. Tenant shall also, from time to time upon reasonable
request by Landlord, execute such affidavits concerning Tenant's best knowledge
and belief regarding the presence of hazardous or toxic materials in the
Premises. Landlord shall have the right upon reasonable prior notice to Tenant
to perform an assessment of the environmental condition of the Premises and of
Tenant's compliance with this Section. As part of any such assessment, Landlord
shall have the right, upon reasonable prior notice to Tenant, to enter and
inspect the Premises and to perform tests, provided those tests are performed in
a manner that minimizes disruption to Tenant. Tenant will reasonably cooperate
with Landlord in connection with any assessment by, among other things, promptly
responding to inquiries and providing relevant documentation and records. The
reasonable cost of the assessment/testing shall be reimbursed by Tenant to
Landlord if such assessment/testing determines that Tenant failed to comply with
the requirements of this Section. In all events Tenant shall indemnify Landlord
in the manner elsewhere provided in this Lease from any release of hazardous or
toxic materials caused by Tenant, its agents, employees, contractors, subtenants
or licensees. Conversely, Landlord hereby represents that to the best of its
knowledge and except for normal office, janitorial and maintenance supplies, the
Premises, Building and Project do not contain materials or substances classified
as hazardous or toxic under any applicable law or regulation. Should any such
material or substance be discovered and should Landlord be required by law to
remediate same, then except to the extent the material or substance was
introduced by Tenant, its agents, contractors or employees, Landlord shall
perform such remediation and shall hold Tenant harmless from any liability or
cost in connection therewith. In addition, should Landlord, its agents or
employees cause the release of any such hazardous or toxic substance as a result
of their negligence or willful misconduct, then in such event Landlord shall
indemnify Tenant against any liability or cost resulting therefrom. The
foregoing covenants shall survive the expiration or earlier termination of this
Lease.
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SECTION 5.2. SIGNS. Tenant, upon obtaining the approval of Landlord in
writing (which approval shall not be unreasonably withheld, conditioned or
delayed), may affix a sign (restricted solely to Tenant's name as set forth
herein or such other name as Landlord may consent to in writing, which consent
shall not be unreasonably withheld, conditioned or delayed) adjacent to the
entry door of the Premises and shall maintain the sign in good condition and
repair during the Term. The sign shall conform to the criteria for signs
established by Landlord and shall be ordered through Landlord at a commercially
reasonable cost. Tenant shall not place or allow to be placed any other sign,
decoration or advertising matter of any kind that is visible from the exterior
of the Premises.
ARTICLE VI. LANDLORD SERVICES
SECTION 6.1. UTILITIES AND SERVICES. Landlord shall furnish to the
Premises the utilities and services described in Exhibit B, subject to the
reasonable conditions and payment obligations and standards set forth in this
Lease. Landlord shall not be liable for any failure to furnish any services or
utilities when the failure is the result of any accident or other cause beyond
Landlord's reasonable control, nor shall Landlord be liable for damages
resulting from power surges or any breakdown in telecommunications facilities or
services. Landlord's temporary inability to furnish any services or utilities
shall not entitle Tenant to any damages, relieve Tenant of the obligation to pay
rent or constitute a constructive or other eviction of Tenant, except that
Landlord shall diligently attempt to restore the service or utility promptly.
Notwithstanding the foregoing, however, in the event the Premises are rendered
untenantable for more than ten (10) consecutive days due to Landlord's failure
to furnish a utility or service, Tenant's rent shall abate following the tenth
day until such matter is rectified. Tenant shall comply with all rules and
regulations which Landlord may reasonably establish for the provision of
services and utilities, and shall cooperate with all reasonable conservation
practices established by Landlord. Landlord shall at all reasonable times have
free access to all electrical and mechanical installations of Landlord.
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate, repair and maintain all Common Areas within the Building
and the Project in a first-class manner comparable to other Class A office
buildings in the vicinity. Landlord shall cause all Common Areas to comply with
any applicable requirements of law, including without limitation the provisions
of Title III of the Americans With Disabilities Act of 1990, as amended, and all
attendant regulations. The term "Common Areas" shall mean all areas within the
Building and other buildings in the Project which are not held for exclusive use
by persons entitled to occupy space, and all other appurtenant areas and
improvements provided by Landlord for the common use of Landlord and tenants and
their respective employees and invitees, including without limitation parking
areas and structures, driveways, sidewalks, landscaped and planted areas,
hallways and interior stairwells not located within the
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premises of any tenant, common entrances and lobbies, elevators, and restrooms
not located within the premises of any tenant.
SECTION 6.3. USE OF COMMON AREAS. The occupancy by Tenant of the
Premises shall include the use of the Common Areas in common with Landlord and
with all others for whose convenience and use the Common Areas may be provided
by Landlord, subject, however, to compliance with all reasonable and
non-discriminatory rules and regulations as are prescribed from time to time by
Landlord. Landlord shall at all times during the Term have exclusive control of
the Common Areas, and may reasonably restrain any use or occupancy, except as
authorized by Landlord's rules and regulations. Tenant shall keep the Common
Areas clear of any obstruction or unauthorized use related to Tenant's
operations. Landlord may temporarily close any portion of the Common Areas for
repairs, remodeling and/or alterations diligently performed, to prevent a public
dedication or the accrual of prescriptive rights, or for any other reasonable
purpose.
SECTION 6.4. PARKING. Landlord hereby leases to Tenant, and Tenant
hereby agrees to lease from Landlord for the Term of this Lease, the number of
vehicle parking spaces set forth in Item 12 of the Basic Lease Provisions (the
"Committed Stalls"). In addition, Tenant shall have the right to lease up to
eight (8) additional unreserved stalls on a month-to-month basis (the
"Additional Stalls"). The parking spaces shall be provided in accordance with
the provisions set forth in Exhibit C to this Lease.
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the
right to make alterations or additions to the Building or the Project, or to the
attendant fixtures, equipment and Common Areas. No change shall entitle Tenant
to any abatement of rent or other claim against Landlord, provided that the
change does not deprive Tenant of reasonable access to or use of the Premises or
its allotted parking. In no event shall Tenant's proportionate share of
Operating Expenses increase as a result of any alteration or addition to the
Project.
ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole expense
shall make all repairs necessary to keep the Premises in the condition as
existed on the Commencement Date (or on any later date that the improvements may
have been installed), excepting ordinary wear and tear. All repairs shall be at
least equal in quality to the original work, shall be made only by a licensed,
bonded contractor reasonably approved in writing in advance by Landlord and
shall be made only at the time or times reasonably approved by Landlord. Any
contractor utilized by Tenant shall be subject to Landlord's reasonable standard
requirements for contractors, as modified from time to time. Landlord may impose
reasonable restrictions and requirements with respect to repairs, as provided in
Section 7.3, and the provisions of Section 7.4 shall apply to all repairs. If
Tenant fails to maintain or repair the Premises as required in this Section 7.1,
then following written notice to Tenant and a reasonable opportunity to
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cure, Landlord may elect to make any such repair on behalf of Tenant and at
Tenant's expense, and Tenant shall promptly reimburse Landlord as additional
rent for all reasonable costs incurred upon submission of an invoice.
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR.
(a) Subject to Section 7.1 and Article XI, Landlord shall
provide service, maintenance and repair, in a manner consistent with other Class
A office buildings in the vicinity of the Project, with respect to any air
conditioning, ventilating or heating equipment which serves the Premises
(exclusive of any supplemental HVAC equipment installed by or at the request of
Tenant) and shall maintain in good repair the roof, foundations, footings, the
exterior surfaces of the exterior walls of the Building, and the structural,
electrical and mechanical systems as provided here and elsewhere in the Lease,
except that Tenant at its expense shall make all repairs (but only within the
Premises) which Landlord deems reasonably necessary as a result of the act or
negligence of Tenant, its agents, employees, invitees, subtenants or
contractors. Landlord shall have the right to employ or designate any reputable
person or firm, including any employee or agent of Landlord or any of Landlord's
affiliates or divisions, to perform any service, repair or maintenance function.
Landlord need not make any other improvements or repairs except as specifically
required under this Lease, and nothing contained in this Section shall limit
Landlord's right to reimbursement from Tenant for reasonable maintenance, repair
costs and replacement costs as provided elsewhere in this Lease. Tenant
understands that it shall not make repairs at Landlord's expense or by rental
offset.
(b) Except as provided in this Lease, there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
alterations or improvements to any portion of the Building, including repairs to
the Premises, nor shall any related activity by Landlord constitute an actual or
constructive eviction; provided, however, that in making repairs, alterations or
improvements, Landlord shall interfere as little as reasonably practicable with
the conduct of Tenant's business in the Premises.
SECTION 7.3. ALTERATIONS. Tenant shall make no alterations, additions or
improvements to the Premises without the prior written consent of Landlord.
Landlord's consent shall not be unreasonably withheld, conditioned or delayed as
long as the proposed changes do not affect the structural, electrical or
mechanical components or systems of the Building and are not visible from the
exterior of the Premises. Landlord may impose, as a condition to its consent,
reasonable requirements as to the manner, time, and contractor for performance
of the work. Without limiting the generality of the foregoing, Tenant shall use
Landlord's designated mechanical and electrical contractors for all work
affecting the mechanical or electrical systems of the Building except as
otherwise provided herein. Tenant shall obtain all required permits for the work
and shall perform the work in compliance with all applicable laws, regulations
and ordinances, and Landlord shall be entitled to a supervision fee in the
amount of five percent (5%) of the cost of the work. Under no
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circumstances shall Tenant make any improvement which incorporates
asbestos-containing construction materials into the Premises. Any request for
Landlord's consent shall be made in writing and shall contain architectural
plans describing the work in detail reasonably satisfactory to Landlord. Unless
Landlord otherwise agrees in writing, all alterations, additions or improvements
affixed to the Premises (excluding moveable trade fixtures and furniture) shall
become the property of Landlord and shall be surrendered with the Premises at
the end of the Term, except that Landlord may, by notice to Tenant given at the
time of Landlord's consent to the alteration or improvement, require Tenant to
remove by the Expiration Date, or sooner termination date of this Lease, all or
any alterations, decorations, fixtures, additions, improvements and the like
installed either by Tenant or by Landlord at Tenant's request and to repair any
damage to the Premises arising from that removal. Landlord may require Tenant to
remove an improvement provided as part of the initial build-out pursuant to
Exhibit X, if any, if and only if the improvement is a non-building standard
item and Tenant is notified of the requirement prior to the build-out. Except as
otherwise provided in this Lease or in any Exhibit to this Lease, should
Landlord make any alteration or improvement to the Premises at the request of
Tenant, Landlord shall be entitled to prompt reimbursement from Tenant for all
reasonable costs incurred.
SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free from
any liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly cause
any such lien to be released by posting a bond in accordance with California
Civil Code Section 3143 or any successor statute. In the event that Tenant shall
not, within thirty (30) days following the imposition of any lien, cause the
lien to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other available remedies, the right to cause the
lien to be released by any reasonable means, including payment of or defense
against the claim giving rise to the lien. All actual and reasonable expenses so
incurred by Landlord, including Landlord's reasonable attorneys' fees, shall be
reimbursed by Tenant promptly following receipt of Landlord's demand, together
with interest from the date of payment by Landlord at the rate of ten percent
(10%) per annum until paid. Tenant shall give Landlord no less than twenty (20)
days' prior notice in writing before commencing construction of any kind on the
Premises so that Landlord may post and maintain notices of nonresponsibility on
the Premises.
SECTION 7.5. ENTRY AND INSPECTION. Landlord shall at all reasonable
times, upon reasonable prior written or oral notice (except in emergencies),
have the right to enter the Premises to inspect them, to supply services in
accordance with this Lease, to protect the interests of Landlord in the
Premises, to make repairs and renovations as reasonably deemed necessary by
Landlord, and to submit the Premises to prospective or actual purchasers or
encumbrance holders (or, during the last one hundred and eighty (180) days of
the Term or when an uncured Tenant default exists, to prospective tenants), all
without being deemed to have caused an eviction of Tenant and without abatement
of rent except as provided elsewhere in this Lease. Landlord shall at all times
have and retain a key which unlocks all of the doors in the Premises,
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excluding Tenant's vaults and safes, and Landlord shall have the right to use
any and all means which Landlord may reasonably deem proper to open the doors in
an emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord pursuant to this Section 7.5 shall not under any
circumstances be deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or any eviction of Tenant from the Premises. Nothing in this
Section 7.5 shall be deemed to relieve Landlord from any liability for the
negligence or willful misconduct of Landlord, its agents or employees.
SECTION 7.6. SPACE PLANNING AND SUBSTITUTION. Landlord shall have the
right, upon providing not less than sixty (60) days written notice, to move
Tenant to other space of comparable size and quality on the third floor or
higher in the Building or in the Project; provided that Landlord shall not cause
Tenant to be relocated pursuant to this Section more than once during the
initial Term of this Lease. The new space shall be provided with improvements of
comparable quality to those within the Premises. Landlord shall pay the
reasonable out-of-pocket costs to relocate and reconnect Tenant's personal
property and equipment within the new space; provided that Landlord may elect to
cause such work to be done by its contractors. Landlord shall also reimburse
Tenant for such other reasonable out-of-pocket costs that Tenant may incur in
connection with the relocation, including without limitation necessary
stationery revisions, provided that a reasonable estimate thereof is given to
Landlord within twenty (20) days following Landlord's notice. In no event,
however, shall Landlord be obligated to incur or fund total relocation costs,
exclusive of tenant improvement expenditures, in an amount in excess of three
(3) months of Basic Rent at the rate then payable hereunder. Within ten (10)
days following receipt of request by Landlord, Tenant shall execute an amendment
to this Lease prepared by Landlord to memorialize the relocation. Should Tenant
fail timely to execute and deliver the amendment to Landlord for any reason
(including without limitation the inability of the parties to reach an agreement
on the proposed relocation), or should Tenant thereafter fail to comply with the
terms thereof, then provided such failure is not cured within five (5) business
days after receipt of written notice from Landlord, Landlord may at its option
elect to terminate this Lease upon not less than ninety (90) days prior written
notice to Tenant. In the event of such termination, Tenant's obligation to pay
Basic Rent during the final two (2) months of the Term shall be waived. Upon the
effective date of any termination of this Lease, Tenant shall vacate the
Premises in accordance with Section 15.3.
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay before delinquency, all taxes
and assessments levied against all personal property of Tenant located in the
Premises. When possible Tenant shall cause its personal property to be assessed
and billed separately from the real property of which the Premises form a part.
If any taxes on Tenant's personal property are levied against Landlord or
Landlord's property and if Landlord pays the same, or if the assessed value of
Landlord's property is increased by the inclusion of a value placed upon the
personal property of Tenant and if Landlord
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pays the taxes based upon the increased assessment, Tenant shall pay to Landlord
the taxes so levied against Landlord or the proportion of the taxes resulting
from the increase in the assessment.
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ARTICLE IX. ASSIGNMENT AND SUBLETTING
SECTION 9.1. RIGHTS OF PARTIES.
(a) Notwithstanding any provision of this Lease to the contrary,
but except for transfers to "Tenant Affiliates" as provided below, Tenant will
not, either voluntarily or by operation of law, assign, sublet, encumber, or
otherwise transfer all or any part of Tenant's interest in this lease, or permit
the Premises to be occupied by anyone other than Tenant, without Landlord's
prior written consent, which consent shall not unreasonably be withheld,
conditioned or delayed in accordance with the provisions of Section 9.1.(c). No
assignment (whether voluntary, involuntary or by operation of law) and no
subletting shall be valid or effective without Landlord's prior written consent
and, at Landlord's election, shall constitute a material default of this Lease.
Landlord shall not be deemed to have given its consent to any assignment or
subletting by any other course of action, including its acceptance of any name
for listing in the Building directory. To the extent not prohibited by
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code"), including Section 365(f)(1), Tenant on behalf of itself and
its creditors, administrators and assigns waives the applicability of Section
365(e) of the Bankruptcy Code unless the proposed assignee of the Trustee for
the estate of the bankrupt meets Landlord's standard for consent as set forth in
Section 9.1 (c) of this Lease. If this Lease is assigned to any person or entity
pursuant to the provisions of the Bankruptcy Code, any and all monies or other
considerations to be delivered in connection with the assignment shall be
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this Lease on and after the
date of the assignment, and shall upon demand execute and deliver to Landlord an
instrument confirming that assumption.
(b) [intentionally omitted]
(c) If Tenant desires to transfer an interest in this Lease, it
shall first notify Landlord of its desire and shall submit in writing to
Landlord: (i) the name and address of the proposed transferee; (ii) the nature
of any proposed subtenant's or assignee's business to be carried on in the
Premises; (iii) the terms and provisions of any proposed sublease or assignment;
and (iv) any other information reasonably requested by Landlord and related to
the transfer. Except as provided in Subsection (d) of this Section, Landlord
shall not unreasonably withhold or condition its consent, provided: (1) the use
of the Premises will be consistent with the provisions of this Lease and with
Landlord's commitment to other tenants of the Building and Project; (2) fifty
percent (50%) of any excess rent received by the Tenant from the assignment or
subletting, whether during or after the Term of this Lease, shall be paid to
Landlord when received; (3) any proposed subtenant or assignee demonstrates that
it is financially responsible by submission to Landlord of all reasonable
information as Landlord may request concerning the proposed subtenant or
assignee, including, but
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not limited to, a balance sheet of the proposed subtenant or assignee as of a
date within ninety (90) days of the request for Landlord's consent and
statements of income or profit and loss of the proposed subtenant or assignee
for the two-year period preceding the request for Landlord's consent; (4) any
proposed subtenant or assignee demonstrates to Landlord's reasonable
satisfaction a record of successful experience in business; (5) the proposed
assignee or subtenant is neither an existing tenant of the Building or Project
nor a prospective tenant with whom Landlord is then actively negotiating; and
(6) the proposed transfer will not impose unreasonable additional burdens or
adverse tax effects on Landlord. If Landlord consents to the proposed transfer,
Tenant may within ninety (90) days after the date of the consent effect the
transfer upon the terms described in the information furnished to Landlord;
provided that any material change in the terms shall be subject to Landlord's
reasonable consent as set forth in this Section. Landlord shall approve or
disapprove any requested transfer within ten (10) business days following
receipt of Tenant's written request and the information set forth above. Tenant
shall pay to Landlord a transfer fee of Five Hundred Dollars ($500.00) if and
when any transfer requested by Tenant is approved.
(d) Notwithstanding the provisions of Subsection (c) above, in
lieu of consenting to a proposed assignment of this Lease or subletting of the
entire Premises to other than a Tenant Affiliate, Landlord may elect to
terminate this Lease effective on the date that the proposed sublease or
assignment would have become effective. Landlord may thereafter, at its option,
assign or re-let any space so recaptured to any third party, including without
limitation the proposed transferee of Tenant.
(e) Notwithstanding the foregoing in this Article IX, Landlord's
consent shall not be required for any of the following transfers (each of which
shall be a "Permitted Transfer": (1) to any person(s) or entity who controls, is
controlled by or is under common control with Tenant, (2) to any entity
resulting from the merger, consolidation or other reorganization with Tenant,
whether or not Tenant is the surviving entity or (3) to any person or legal
entity which acquires all or substantially all of the assets or stock of Tenant
(each of the foregoing is hereafter referred to as a "Tenant Affiliate");
provided that before such assignment shall be effective, (i) said Tenant
Affiliate shall assume, in full, the obligations of Tenant under this Lease,
(ii) Landlord shall be given written notice of such assignment and assumption
and (iii) the use of the Premises by the Tenant Affiliate shall be as set forth
in Item 3 of the Basic Lease Provisions. For purposes of this paragraph, a
public or private offering of Tenant stock is a Permitted Transfer and the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management, affairs and policies of anyone, whether
through the ownership of voting securities, by contract or otherwise. The bonus
rental provisions of Section 9.1(c) and the recapture provisions of Section
9.1(d) of this Lease shall not apply to an assignment or sublease by Tenant to a
Tenant Affiliate.
SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with
the consent of Landlord, shall relieve Tenant, or any successor-in-interest to
Tenant hereunder, of its obligation to pay rent and to perform all its other
obligations
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under this Lease. Moreover, Tenant shall indemnify and hold Landlord harmless,
as provided in Section 10.3, for any act or omission by an assignee or
subtenant. Each assignee, other than Landlord, shall be deemed to assume all
obligations of Tenant under this Lease and shall be liable jointly and severally
with Tenant for the payment of all rent, and for the due performance of all of
Tenant's obligations, under this Lease. Such joint and several liability shall
not be discharged or impaired by any subsequent modification or extension of
this Lease. No transfer to other than a Tenant Affiliate shall be binding on
Landlord unless any document memorializing the transfer is delivered to Landlord
and both the assignee/subtenant and Tenant deliver to Landlord an executed
consent to transfer instrument prepared by Landlord and consistent with the
requirements of this Article. The acceptance by Landlord of any payment due
under this Lease from any other person shall not be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any transfer.
Consent by Landlord to one or more transfers shall not operate as a waiver or
estoppel to the future enforcement by Landlord of its rights under this Lease.
SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises and
shall be included in each sublease:
(a) Tenant hereby irrevocably assigns to Landlord all of
Tenant's interest in all rentals and income arising from any sublease of the
Premises, and Landlord may collect such rent and income and apply same toward
Tenant's obligations under this Lease; provided, however, that until a default
occurs in the performance of Tenant's obligations under this Lease, Tenant shall
have the right to receive and collect the sublease rentals. Landlord shall not,
by reason of this assignment or the collection of sublease rentals, be deemed
liable to the subtenant for the performance of any of Tenant's obligations under
the sublease. Tenant hereby irrevocably authorizes and directs any subtenant,
upon receipt of a written notice from Landlord stating that an uncured default
exists in the performance of Tenant's obligations under this Lease, to pay to
Landlord all sums then and thereafter due under the sublease. Tenant agrees that
the subtenant may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall have
no right or claim against the subtenant or Landlord for any rentals so paid to
Landlord. In the event Landlord collects amounts from subtenants that exceed the
total amount then due from Tenant hereunder, Landlord shall promptly remit the
excess to Tenant.
(b) In the event of the termination of this Lease, Landlord may,
at its sole option, take over Tenant's entire interest in any sublease to a
third party other than a Tenant Affiliate and, upon notice from Landlord, the
subtenant shall attorn to Landlord. In no event, however, shall Landlord be
liable for any previous act or omission by Tenant under the sublease or for the
return of any advance rental payments or deposits under the sublease that have
not been actually delivered to Landlord, nor shall Landlord be bound by any
sublease modification executed without Landlord's consent or for any advance
rental payment by the subtenant in excess of one month's rent. The general
provisions of this Lease, including without limitation those pertaining to
insurance and
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indemnification, shall be deemed incorporated by reference into the sublease
despite the termination of this Lease.
ARTICLE X. INSURANCE AND INDEMNITY
SECTION 10.1. TENANT'S INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in Exhibit D.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.
SECTION 10.2. LANDLORD'S INSURANCE. Landlord shall provide all of the
following types of insurance, with or without deductible and in amounts and
coverages as may be determined by Landlord in its reasonable discretion: "all
risk" property insurance, subject to standard exclusions, covering the Building
or Project, and such other risks as Landlord or its mortgagees may from time to
time deem appropriate, and commercial general liability coverage. Landlord shall
not be required to carry insurance of any kind on Tenant's leasehold
improvements, trade fixtures, furnishings, equipment, interior plate glass,
signs and all other items of personal property, and shall not be obligated to
repair or replace that property should damage occur. All proceeds of insurance
maintained by Landlord upon the Building and Project shall be the property of
Landlord, whether or not Landlord is obligated to or elects to make any repairs.
SECTION 10.3. TENANT'S INDEMNITY. To the fullest extent permitted by
law, but subject to the terms of this Lease, Tenant shall defend, indemnify and
hold harmless Landlord, its agents, lenders, and any and all affiliates of
Landlord, from and against any and all claims, liabilities, costs or expenses
arising either before or after the Commencement Date from Tenant's use or
occupancy of the Premises, the Building or the Common Areas, or from the conduct
of its business, or from any default in the performance of any obligation on
Tenant's part to be performed under this Lease, or from any act or negligence of
Tenant or its agents, employees, subtenants, invitees or licensees.
Notwithstanding the foregoing, Tenant's indemnity obligation shall not apply to
the extent any loss, damage or injury is attributable to the negligence or
willful misconduct of Landlord, its agents, employees or contractors, and
Landlord shall, subject to the terms of this Lease, indemnify Tenant against any
such loss, damage or injury.
SECTION 10.4. LANDLORD'S NONLIABILITY. Except for losses arising from
the negligence or willful misconduct of Landlord, its agents or employees and
not covered by Tenant's insurance, Landlord shall not be liable to Tenant, its
employees, agents and invitees, and Tenant hereby waives all claims against
Landlord, its employees and agents for loss of or damage to any property, or any
injury to any person, or loss or interruption of business or income, resulting
from any condition including, but not limited to, fire, explosion, falling
plaster, steam, gas, electricity, 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, electrical works or other fixtures in the Building,
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whether the damage or injury results from conditions arising in the Premises or
in other portions of the Building. It is understood that any such condition may
require the temporary evacuation or closure of all or a portion of the Building.
Should Tenant elect to receive any service from a concessionaire, licensee or
third party tenant of Landlord, Tenant shall not seek recourse against Landlord
for any breach or liability of that service provider. Neither Landlord nor its
agents shall be liable for interference with light or other similar intangible
interests. Tenant shall immediately notify Landlord in case of fire or accident
in the Premises, the Building or the Project and of defects in any improvements
or equipment.
SECTION 10.5. WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waives all rights of recovery against the other on account of loss and damage
occasioned to the property of such waiving party to the extent that the waiving
party is entitled to proceeds for such loss and damage under any "all risk"
property insurance policies carried or otherwise required to be carried by this
Lease. By this waiver it is the intent of the parties that neither Landlord nor
Tenant shall be liable to any insurance company (by way of subrogation or
otherwise) insuring the other party for any loss or damage insured against under
any "all-risk" property insurance policies, even though such loss or damage
might be occasioned by the negligence of such party, its agents, employees,
contractors or invitees. The foregoing waiver by Tenant shall also inure to the
benefit of Landlord's management agent for the Building.
ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1. RESTORATION.
(a) If the Building of which the Premises are a part and/or the
parking facilities servicing the Building are damaged as the result of an event
of casualty, Landlord shall diligently repair that damage as soon as reasonably
possible unless: (i) Landlord reasonably determines that the cost of repair
would exceed ten percent (10%) of the full replacement cost of the Building
("Replacement Cost") and the damage is not covered by Landlord's fire and
extended coverage insurance (or by a normal extended coverage policy should
Landlord fail to carry that insurance); or (ii) Landlord reasonably determines
that the cost of repair would exceed twenty-five percent (25%) of the
Replacement Cost; or (iii) Landlord reasonably determines that the cost of
repair would exceed ten percent (10%) of the Replacement Cost and the damage
occurs during the final twelve (12) months of the Term. Should Landlord elect
not to repair the damage for one of the preceding reasons, Landlord shall so
notify Tenant in the "Casualty Notice" (as defined below), and this Lease shall
terminate as of the date of delivery of that notice.
(b) As soon as reasonably practicable following the casualty
event but not later than sixty (60) days thereafter, Landlord shall notify
Tenant in writing ("Casualty Notice") of Landlord's election, if applicable, to
terminate this Lease. If this Lease is not so terminated, the Casualty Notice
shall set forth the anticipated period for repairing the casualty damage. If the
anticipated repair period exceeds one hundred
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fifty (150) days and if the damage is so extensive as to reasonably prevent
Tenant's substantial use and enjoyment of the Premises and the attendant parking
facilities, then Tenant may elect to terminate this Lease by written notice to
Landlord within ten (10) days following delivery of the Casualty Notice.
(c) From and after the eleventh day after the casualty event,
the rental to be paid under this Lease shall be abated in the same proportion
that the floor area of the Premises that is rendered unusable by the damage from
time to time bears to the total floor area of the Premises.
(d) The provisions of this Section shall not be deemed to
require Landlord to repair any improvements or fixtures that Tenant is obligated
to repair or insure pursuant to any other provision of this Lease.
SECTION 11.2. LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.
ARTICLE XII. EMINENT DOMAIN
SECTION 12.1. TOTAL OR PARTIAL TAKING. If all or a material portion of
the Premises which materially impairs Tenant's ability to conduct business from
the Premises is taken by any lawful authority by exercise of the right of
eminent domain, or sold to prevent a taking, either Tenant or Landlord may
terminate this Lease effective as of the date possession is required to be
surrendered to the authority. In the event title to a portion of the Building or
Project, other than the Premises, is taken or sold in lieu of taking, and if
Landlord elects to restore the Building in such a way as to alter the Premises
materially, either party may terminate this Lease, by written notice to the
other party, effective on the date of vesting of title. In the event neither
party has elected to terminate this Lease as provided above, then Landlord shall
promptly, after receipt of a sufficient condemnation award, proceed to restore
the Premises to substantially their condition prior to the taking, and a
proportionate allowance shall be made to Tenant for the Basic Rent and Operating
Expenses corresponding to the time during which, and to the part of the Premises
of which, Tenant is deprived on account of the taking and restoration. In the
event of a taking, Landlord shall be entitled to the entire amount of the
condemnation award without deduction for any estate or interest of Tenant;
provided that nothing in this Section shall be deemed to give Landlord any
interest in, or prevent Tenant from seeking any award against the taking
authority for, the taking of personal property and fixtures belonging to Tenant
or for relocation or business interruption expenses recoverable from the taking
authority.
SECTION 12.2. TEMPORARY TAKING. No temporary taking of the Premises
shall terminate this Lease or give Tenant any right to abatement of rent, and
any award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant. A temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period of not to exceed ninety (90)
days.
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SECTION 12.3. TAKING OF PARKING AREA. In the event there shall be a
taking of the parking area such that Landlord can no longer provide sufficient
parking to comply with this Lease, Landlord may substitute reasonably equivalent
parking in a location reasonably close to the Building; provided that if
Landlord fails to make that substitution within ninety (90) days following the
taking and if the taking materially impairs Tenant's use and enjoyment of the
Premises, Tenant may, at its option, terminate this Lease by written notice to
Landlord. If this Lease is not so terminated by Tenant, there shall be no
abatement of rent and this Lease shall continue in effect.
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE
SECTION 13.1. SUBORDINATION. At the option of Landlord or any of its
mortgagees/deed of trust beneficiaries, this Lease shall be either superior or
subordinate to all ground or underlying leases, mortgages and deeds of trust, if
any, which may hereafter affect the Building, and to all renewals,
modifications, consolidations, replacements and extensions thereof; provided,
that so long as Tenant is not in default under this Lease beyond any applicable
cure period, this Lease shall not be terminated or Tenant's quiet enjoyment of
the Premises disturbed in the event of termination of any such ground or
underlying lease, or the foreclosure of any such mortgage or deed of trust, to
which Tenant has subordinated this Lease pursuant to this Section. In the event
of a termination or foreclosure, Tenant shall become a tenant of and attorn to
the successor-in-interest to Landlord upon the same terms and conditions as are
contained in this Lease, and shall promptly execute any instrument reasonably
required by Landlord's successor for that purpose. Tenant shall also, within ten
(10) days following written request of Landlord (or the beneficiary under any
deed of trust encumbering the Building), execute and deliver all instruments as
may be required from time to time by Landlord or such beneficiary (including
without limitation any subordination, nondisturbance and attornment agreement in
the form customarily required by such beneficiary) to subordinate this Lease and
the rights of Tenant under this Lease to any ground or underlying lease or to
the lien of any mortgage or deed of trust; provided, however, that any such
beneficiary may, by written notice to Tenant given at any time, subordinate the
lien of its deed of trust to this Lease. Failure of Tenant to execute any
statements or instruments necessary or desirable to effectuate the provisions of
this Article, within twenty (20) days after Tenant's receipt of written request
by Landlord, shall constitute a default under this Lease. In that event,
Landlord, in addition to any other rights or remedies it might have, shall have
the right, by written notice to Tenant, to terminate this Lease as of a date not
less than thirty (30) days after Tenant's receipt of Landlord's notice.
Landlord's election to terminate shall not relieve Tenant of any liability for
its default. Tenant acknowledges that Landlord's mortgagees and
successors-in-interest and all beneficiaries under deeds of trust encumbering
the Building are intended third party beneficiaries of this Section.
SECTION 13.2. ESTOPPEL CERTIFICATE. Tenant shall, at any time upon not
less than ten (10) business days prior written notice from Landlord, execute,
acknowledge and deliver to Landlord, in any form that Landlord may reasonably
require (so long as such form is factually accurate), a statement in writing in
favor of Landlord
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and/or any prospective purchaser or encumbrancer of the Building (i) certifying
that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of the modification and certifying that this Lease, as
modified, is in full force and effect) and the dates to which the rental,
additional rent and other charges have been paid in advance, if any, and (ii)
acknowledging that, to Tenant's knowledge, there are no uncured defaults on the
part of Landlord, or specifying each default if any are claimed, and (iii)
setting forth all further information that Landlord may reasonably require.
Tenant's statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the Building or Project. Tenant's failure
to deliver any estoppel statement within thirty (30) days of the request shall
constitute a default under this Lease and shall be conclusive upon Tenant as to
any third party (but not Landlord) that (i) this Lease is in full force and
effect, without modification except as may be represented by Landlord, (ii)
there are not uncured defaults in Landlord's performance, and (iii) not more
than one month's rental has been paid in advance.
ARTICLE XIV. DEFAULTS AND REMEDIES
SECTION 14.1. TENANT'S DEFAULTS. In addition to any other event of
default set forth in this Lease, the occurrence of any one or more of the
following events shall constitute a default by Tenant:
(a) The failure by Tenant to make any payment of rent or
additional rent required to be made by Tenant, as and when due, where the
failure continues for a period of five (5) business days after written notice
from Landlord to Tenant; provided, however, that any such notice shall be in
lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 and 1161(a) as amended. For purposes of these
default and remedies provisions, the term "additional rent" shall be deemed to
include all amounts of any type whatsoever other than Basic Rent to be paid by
Tenant pursuant to the terms of this Lease.
(b) Assignment, sublease, encumbrance or other transfer of the
Lease by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means, without the prior
written consent of Landlord except as permitted under Article IX above.
(c) The discovery by Landlord that any financial statement
provided by Tenant, or by any affiliate, successor or guarantor of Tenant, was
materially false.
(d) The failure or inability by Tenant to observe or perform any
of the covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in any other subsection of this Section, where
the failure continues for a period of thirty (30) days after written notice from
Landlord to Tenant; provided, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure Section 1161 and 1161 (a) as amended. However, if the nature of the
failure is such that more than thirty (30) days are reasonably required for its
cure, then Tenant shall not be deemed to be in default if
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Tenant commences the cure within thirty (30) days, and thereafter diligently
pursues the cure to completion.
(e) (i) The making by Tenant of any general assignment for the
benefit of creditors; (ii) the filing by or against Tenant of a petition to have
Tenant adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within sixty (60) days; (iv) the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where the seizure is not
discharged within sixty (60) days; or (v) Tenant's convening of a meeting of its
creditors for the purpose of effecting a moratorium upon or composition of its
debts. Landlord shall not be deemed to have knowledge of any event described in
this subsection unless notification in writing is received by Landlord, nor
shall there be any presumption attributable to Landlord of Tenant's insolvency.
In the event that any provision of this subsection is contrary to applicable
law, the provision shall be of no force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, then in addition to
any other remedies available to Landlord, Landlord may exercise the following
remedies:
(i) Landlord may terminate Tenant's right to possession
of the Premises by any lawful means, in which case this Lease shall terminate
and Tenant shall immediately surrender possession of the Premises to Landlord.
Such termination shall not affect any accrued obligations of Tenant under this
Lease. Upon termination, Landlord shall have the right to reenter the Premises
and remove all persons and property. Landlord shall also be entitled to recover
from Tenant:
(1) The worth at the time of award of the unpaid
rent and additional rent which had been earned at the time of termination;
(2) The worth at the time of award of the amount
by which the unpaid rent and additional rent which would have been earned after
termination until the time of award exceeds the amount of such loss that Tenant
proves could have been reasonably avoided;
(3) The worth at the time of award of the amount
by which the unpaid rent and additional rent for the balance of the Term after
the time of award exceeds the amount of such loss that Tenant proves could be
reasonably avoided;
(4) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations
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under this Lease or which in the ordinary course of things would be likely to
result from Tenant's default, including, but not limited to, the cost of
recovering possession of the Premises, commissions and other expenses of
reletting, including necessary repair, renovation, improvement and alteration of
the Premises for a new tenant, the unamortized portion of any tenant
improvements and brokerage commissions funded by Landlord in connection with
this Lease, reasonable attorneys' fees, and any other reasonable costs; and
(5) At Landlord's election, all other amounts in
addition to or in lieu of the foregoing as may be permitted by law. The term
"rent" as used in this Lease shall be deemed to mean the Basic Rent and all
other sums required to be paid by Tenant to Landlord pursuant to the terms of
this Lease. Any sum, other than Basic Rent, shall be computed on the basis of
the average monthly amount accruing during the twenty-four (24) month period
immediately prior to default, except that if it becomes necessary to compute
such rental before the twenty-four (24) month period has occurred, then the
computation shall be on the basis of the average monthly amount during the
shorter period. As used in subparagraphs (1) and (2) above, the "worth at the
time of award" shall be computed by allowing interest at the rate of ten percent
(10%) per annum. As used in subparagraph (3) above, the "worth at the time of
award" shall be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
(ii) Landlord may elect not to terminate Tenant's right
to possession of the Premises, in which event Landlord may continue to enforce
all of its rights and remedies under this Lease, including the right to collect
all rent as it becomes due. Efforts by the Landlord to maintain, preserve or
relet the Premises, or the appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a termination of the Tenant's
right to possession of the Premises. In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the Premises
subject to the reasonable standards for Landlord's consent as are contained in
this Lease.
(b) The various rights and remedies reserved to Landlord in this
Lease or otherwise shall be cumulative and, except as otherwise provided by
California law, Landlord may pursue any or all of its rights and remedies at the
same time. No delay or omission of Landlord to exercise any right or remedy
shall be construed as a waiver of the right or remedy or of any default by
Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord's knowledge of the preceding breach or default at the time of
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by
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this Lease shall be deemed to be other than a partial payment on account of the
earliest due stipulated rent, nor shall any endorsement or statement on any
check or letter be deemed an accord and satisfaction and Landlord shall accept
the check or payment without prejudice to Landlord's right to recover the
balance of the rent or pursue any other remedy available to it. Tenant hereby
waives any right of redemption or relief from forfeiture under California Code
of Civil Procedure Section 1174 or 1179, or under any other present or future
law, in the event this Lease is terminated by reason of any default by Tenant.
No act or thing done by Landlord or Landlord's agents during the Term shall be
deemed an acceptance of a surrender of the Premises, and no agreement to accept
a surrender shall be valid unless in writing and signed by Landlord. No employee
of Landlord or of Landlord's agents shall have any power to accept the keys to
the Premises prior to the termination of this Lease, and the delivery of the
keys to any employee shall not operate as a termination of the Lease or a
surrender of the Premises.
SECTION 14.3. LATE PAYMENTS. Any rent due under this Lease that is not
paid to Landlord within ten (10) days of the date when due shall bear interest
at the rate of ten percent (10%) per annum from the date due until fully paid.
The payment of interest shall not cure any default by Tenant under this Lease.
In addition, Tenant acknowledges that the late payment by Tenant to Landlord of
rent will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult and impracticable to
ascertain. Those costs may include, but are not limited to, administrative,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any ground lease, mortgage or trust deed covering the
Premises. Accordingly, if any rent due from Tenant shall not be received by
Landlord or Landlord's designee within ten (10) days after the date due, then
Tenant shall pay to Landlord, in addition to the interest provided above, a late
charge in the amount of one hundred dollars ($100.00) for each delinquent
payment. Acceptance of a late charge by Landlord shall not constitute a waiver
of Tenant's default with respect to the overdue amount, nor shall it prevent
Landlord from exercising any of its other rights and remedies.
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements
to be performed by Tenant under this Lease shall be performed at Tenant's sole
cost and expense and without any abatement of rent or right of set-off. If
Tenant fails to pay any sum of money, or fails to perform any other act on its
part to be performed under this Lease, and the failure continues beyond any
applicable grace period set forth in Section 14.1, then in addition to any other
available remedies, Landlord may, at its election make the payment or perform
the other act on Tenant's part. Landlord's election to make the payment or
perform the act on Tenant's part shall not give rise to any responsibility of
Landlord to continue making the same or similar payments or performing the same
or similar acts. Tenant shall, promptly upon demand by Landlord, reimburse
Landlord for all reasonable sums paid by Landlord and all reasonable and
necessary incidental costs, together with interest at the rate of ten percent
(10%) per annum from the date of the payment by Landlord.
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SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion.
SECTION 14.6. EXPENSES AND LEGAL FEES. Should either Landlord or Tenant
bring any action in connection with this Lease, the prevailing party shall be
entitled to recover as a part of the action its reasonable attorneys' fees, and
all other reasonable costs actually incurred. The prevailing party for the
purpose of this paragraph shall be determined by the trier of the facts.
SECTION 14.7. WAIVER OF JURY TRIAL/RIGHT TO ARBITRATE.
(a) LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS
HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT TO TRIAL BY
JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL
SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE,
TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.
(b) SHOULD A DISPUTE ARISE BETWEEN THE PARTIES REGARDING ANY MATTER
DESCRIBED ABOVE, THEN EXCEPT WITH RESPECT TO ACTIONS FOR UNLAWFUL OR FORCIBLE
DETAINER EITHER PARTY MAY CAUSE THE DISPUTE TO BE SUBMITTED TO JAMS/ENDISPUTE OR
ITS SUCCESSOR ("JAMS") IN THE COUNTY IN WHICH THE BUILDING IS SITUATED FOR
BINDING ARBITRATION BEFORE A SINGLE ARBITRATOR. HOWEVER, EACH PARTY RESERVES THE
RIGHT TO SEEK A PROVISIONAL REMEDY BY JUDICIAL ACTION. NO ARBITRATION ELECTION
BY EITHER PARTY PURSUANT TO THIS SUBSECTION SHALL BE EFFECTIVE IF MADE LATER
THAN THIRTY (30) DAYS FOLLOWING SERVICE OF A JUDICIAL SUMMONS AND COMPLAINT BY
OR UPON SUCH PARTY CONCERNING THE DISPUTE. THE ARBITRATION SHALL BE CONDUCTED IN
ACCORDANCE WITH THE RULES OF PRACTICE AND PROCEDURE OF JAMS AND OTHERWISE
PURSUANT TO THE CALIFORNIA ARBITRATION ACT (CODE OF CIVIL PROCEDURE SECTIONS
1280 ET SEQ.). NOTWITHSTANDING THE FOREGOING, THE ARBITRATOR IS SPECIFICALLY
DIRECTED TO LIMIT DISCOVERY TO THAT WHICH IS ESSENTIAL TO THE EFFECTIVE
PROSECUTION OR DEFENSE OF THE ACTION, AND IN NO EVENT
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SHALL SUCH DISCOVERY BY EITHER PARTY INCLUDE MORE THAN ONE NON-EXPERT WITNESS
DEPOSITION UNLESS BOTH PARTIES OTHERWISE AGREE. THE ARBITRATOR SHALL APPORTION
THE COSTS OF THE ARBITRATION, TOGETHER WITH THE ATTORNEYS' FEES OF THE PARTIES,
IN THE MANNER DEEMED EQUITABLE BY THE ARBITRATOR, IT BEING THE INTENTION OF THE
PARTIES THAT THE PREVAILING PARTY ORDINARILY BE ENTITLED TO RECOVER ITS
REASONABLE COSTS AND FEES. JUDGMENT UPON ANY AWARD RENDERED BY THE ARBITRATOR
MAY BE ENTERED BY ANY COURT HAVING JURISDICTION.
ARTICLE XV. END OF TERM
SECTION 15.1. HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after the
expiration shall not constitute a renewal or extension of this Lease, or give
Tenant any rights under this Lease, except when in writing signed by both
parties. If Tenant holds over for any period after the expiration (or earlier
termination) of the Term, Landlord may, at its option, treat Tenant as a tenant
at sufferance only, commencing on the first (1st) day following the termination
of this Lease. Any hold-over by Tenant shall be subject to all of the terms of
this Lease, except that the monthly rental shall be one hundred fifty percent
(150%) of the total monthly rental for the month immediately preceding the date
of termination, subject to Landlord's right to modify same upon thirty (30) days
notice to Tenant. If Tenant fails to surrender the Premises upon the expiration
of this Lease despite demand to do so by Landlord, Tenant shall indemnify and
hold Landlord harmless from all loss or liability, including without limitation,
any claims made by any succeeding tenant relating to such failure to surrender.
Acceptance by Landlord of rent after the termination shall not constitute a
consent to a holdover or result in a renewal of this Lease. The foregoing
provisions of this Section are in addition to and do not affect Landlord's right
of re-entry or any other rights of Landlord under this Lease or at law.
SECTION 15.2. MERGER ON TERMINATION. The voluntary or other surrender of
this Lease by Tenant, or a mutual termination of this Lease, shall terminate any
or all existing subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord's obligation
excepted, and shall, without expense to Landlord, remove or cause to be removed
all wallpapering and voice and/or data transmission cabling installed by or for
Tenant, together with all personal property, telephone systems, equipment, trade
fixtures not permanently attached to the Premises, and debris, except for any
items that Landlord may by written
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authorization allow to remain. Tenant shall repair all damage to the Premises
resulting from the removal, which repair shall include the patching and filling
of holes and repair of structural damage, provided that Landlord may instead
elect to repair any structural damage at Tenant's expense. If Tenant shall fail
to comply with the provisions of this Section, Landlord may effect the removal
and/or make any repairs, and the reasonable cost to Landlord shall be additional
rent payable by Tenant upon demand. If requested by Landlord following
expiration of the Term, Tenant shall execute, acknowledge and deliver to
Landlord an instrument in writing releasing and quitclaiming to Landlord all
right, title and interest of Tenant in the Premises.
ARTICLE XVI. PAYMENTS AND NOTICES
All sums payable by Tenant to Landlord shall be paid, without deduction
or offset (except as otherwise provided herein), in lawful money of the United
States to Landlord at its address set forth in Item 13 of the Basic Lease
Provisions, or at any other place as Landlord may designate in writing. Unless
this Lease expressly provides otherwise, as for example in the payment of rent
pursuant to Section 4.1, all payments shall be due and payable within five (5)
business days after demand. All payments requiring proration shall be prorated
on the basis of a thirty (30) day month and a three hundred sixty (360) day
year. Any notice, election, demand, consent, approval or other communication to
be given or other document to be delivered by either party to the other may be
delivered to the other party, at the address set forth in Item 13 of the Basic
Lease Provisions, by personal service or telegram, telecopier, or electronic
facsimile transmission, or by any courier or "overnight" express mailing
service, or may be deposited in the United States mail, postage prepaid. Either
party may, by written notice to the other, served in the manner provided in this
Article, designate a different address. If any notice or other document is sent
by mail, it shall be deemed served or delivered three (3) business days after
mailing or, if sooner, upon actual receipt. If more than one person or entity is
named as Tenant under this Lease, service of any notice upon any one of them
shall be deemed as service upon all of them.
ARTICLE XVII. RULES AND REGULATIONS
Tenant agrees to comply with the Rules and Regulations attached as
Exhibit E, and any reasonable and nondiscriminatory amendments, modifications
and/or additions as may be adopted and published by written notice to tenants by
Landlord for the safety, care, security, good order, or cleanliness of the
Premises, Building, Project and/or Common Areas. Landlord shall not be liable to
Tenant for any violation of the Rules and Regulations or the breach of any
covenant or condition in any lease or any other act or conduct by any other
tenant, and the same shall not constitute a constructive eviction hereunder. One
or more waivers by Landlord of any breach of the Rules and Regulations by Tenant
or by any other tenant(s) shall not be a waiver of any subsequent breach of that
rule or any other. Tenant's failure to keep and observe the Rules and
Regulations shall constitute a default under this Lease. In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall be
controlling.
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ARTICLE XVIII. BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) unless otherwise provided in this
Lease. Each party warrants that it has had no dealings with any other real
estate broker or agent in connection with the negotiation of this Lease, and
agrees to indemnify and hold the other party harmless from any cost, expense or
liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by the indemnifying party in
connection with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease.
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer of Landlord's interest in the Premises, the
transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that any funds held by the transferor in which Tenant has an interest
shall be turned over, subject to that interest, to the transferee and Tenant is
notified of the transfer as required by law. No holder of a mortgage and/or deed
of trust to which this Lease is or may be subordinate shall be responsible in
connection with the Security Deposit, unless the mortgagee or holder of the deed
of trust or the landlord actually receives the Security Deposit. It is intended
that the covenants and obligations contained in this Lease on the part of
Landlord shall, subject to the foregoing, be binding on Landlord, its successors
and assigns, only during and in respect to their respective successive periods
of ownership. The transferor shall remain liable for all obligations which have
accrued as of the date of the transfer and which are not assumed by the
transferee.
ARTICLE XX. INTERPRETATION
SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.
SECTION 20.2. HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.
SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.
32
<PAGE> 34
SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.
SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to
the performance of every provision of this Lease in which time of performance is
a factor.
SECTION 20.6. CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.
SECTION 20.8. WAIVER. One or more waivers by Landlord or Tenant of any
breach of any term, covenant or condition contained in this Lease shall not be a
waiver of any subsequent breach of the same or any other term, covenant or
condition. Consent to any act by one of the parties shall not be deemed to
render unnecessary the obtaining of that party's consent to any subsequent act.
No breach of this Lease shall be deemed to have been waived unless the waiver is
in a writing signed by the waiving party.
SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall
be delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent.
SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, the Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any representations or promises made by
Landlord or others which are not contained in this Lease. No verbal agreement or
implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.
33
<PAGE> 35
SECTION 20.11. QUIET ENJOYMENT. Upon the observance and performance of
all the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person claiming by or through Landlord.
SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
ARTICLE XXI. EXECUTION AND RECORDING
SECTION 21.1. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation or partnership, each individual executing this Lease on behalf of
the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
partnership, and that this Lease is binding upon the corporation or partnership
in accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises. Execution of
this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.
SECTION 21.4. RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord, shall
execute and acknowledge a "short form" memorandum of this Lease for recording
purposes.
SECTION 21.5. AMENDMENTS. No amendment or mutual termination of this
Lease shall be effective unless in writing signed by authorized signatories of
Tenant and Landlord, or by their respective successors in interest. No actions,
policies, oral or informal arrangements, business dealings or other course of
conduct by or between the parties shall be deemed to modify this Lease in any
respect.
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<PAGE> 36
ARTICLE XXII. MISCELLANEOUS
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms or this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not (unless required by law
or court order) intentionally and voluntarily disclose the terms and conditions
of this Lease to any other tenant or apparent prospective tenant of the Building
or Project, either directly or indirectly, without the prior written consent of
Landlord, provided, however, that Tenant may disclose the terms to prospective
subtenants or assignees under this Lease.
SECTION 22.2. REPRESENTATIONS BY TENANT. The application, financial
statements and tax returns, if any, submitted and certified to by Tenant as an
accurate representation of its financial condition have been prepared, certified
and submitted to Landlord as an inducement and consideration to Landlord to
enter into this Lease. The application and statements are represented and
warranted by Tenant to be correct and to accurately and fully reflect Tenant's
true financial condition as of the date of execution of this Lease by Tenant.
Tenant shall during the Term promptly furnish Landlord with annual financial
statements reflecting Tenant's financial condition upon written request from
Landlord.
SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with
obtaining financing for the Building, the lender shall request reasonable
modifications in this Lease as a condition to the financing, Tenant will not
unreasonably withhold or delay its consent, provided that the modifications do
not materially increase the obligations of Tenant or materially and adversely
affect the leasehold interest created by this Lease.
SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the part
of Landlord which would otherwise entitle Tenant to be relieved of its
obligations hereunder or to terminate this Lease shall result in such a release
or termination unless (a) Tenant has given notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Building
whose address has been furnished to Tenant and (b) such beneficiary is afforded
a reasonable opportunity to cure the default by Landlord, including, if
necessary to effect the cure, time to obtain possession of the Building by power
of sale or judicial foreclosure provided that such foreclosure remedy is
diligently pursued.
SECTION 22.5. DISCLOSURE STATEMENT. Tenant acknowledges that it has
read, understands and, if applicable, shall comply with the provisions of
Exhibit F to this Lease, if that Exhibit is attached.
35
<PAGE> 37
LANDLORD: TENANT:
THE IRVINE COMPANY BPO-US, INC.
By /s/ WILLIAM R. HALFORD By /s/ JAMES C. MADDEN, V
--------------------------------- ----------------------------------
William R. Halford, President,
Irvine Office Company, Printed Name James C. Madden, V
a division of The Irvine Company -----------------------
Title President and CEO
------------------------------
By /s/ VINCENT P. HAYES By /s/ STEPHEN M. UNTERBERGER
--------------------------------- ----------------------------------
Vincent P. Hayes
Assistant Secretary Printed Name Stephen M. Unterberger
-----------------------
Title COO - Chief Operating Officer
------------------------------
36
<PAGE> 38
EXHIBIT A
DIAGRAM OF JAMBOREE CENTER
4 PARK PLAZA
THIRD FLOOR
INDICATING SUITE 350 SITE
<PAGE> 39
EXHIBIT B
UTILITIES AND SERVICES
The following standards for utilities and services shall be in effect at
the Building. Landlord reserves the right to adopt commercially reasonable and
nondiscriminatory modifications and additions to these standards. In the case of
any conflict between these standards and the Lease, the Lease shall be
controlling. Subject to all of the provisions of the Lease, including but not
limited to the restrictions contained in Section 6.1, the following shall apply:
1. Landlord shall furnish to the Premises during the hours of 8:00 a.m.
to 6:00 p.m., Monday through Friday, and 8:00 a.m. to 1:00 p.m. on Saturday,
generally recognized national holidays and Sundays excepted, reasonable air
conditioning, heating and ventilation services. Subject to the provisions set
forth below, Landlord shall also furnish the Building with elevator service (if
applicable), reasonable amounts of electric current for normal lighting by
Landlord's standard overhead fluorescent and incandescent fixtures and for
fractional horsepower office machines, and water for lavatory and drinking
purposes. Tenant will not, without the prior written consent of Landlord,
consume electricity in the Premises at a level in excess of 5 watts per square
foot or otherwise increase the amount of electricity, gas or water usually
furnished or supplied for use of the Premises as general office space; nor shall
Tenant connect any apparatus, machine or device with water pipes or electric
current (except through existing electrical outlets in the Premises) for the
purpose of using electric current or water. This paragraph shall at all times be
subject to applicable governmental regulations.
2. Upon written request from Tenant delivered to Landlord at least 24
hours prior to the period for which service is requested, but during normal
business hours, Landlord will provide any of the foregoing building services to
Tenant at such times when such services are not otherwise available. Tenant
agrees to pay Landlord for those afterhour services at commercially reasonable
rates that Landlord may establish from time to time. If Tenant requires electric
current in excess of that which Landlord is obligated to furnish under this
Exhibit B, Tenant shall first obtain the reasonable consent of Landlord, and
Landlord may cause an electric current meter to be installed in the Premises to
measure the amount of electric current consumed. The cost of installation,
maintenance and repair of the meter shall be paid for by Tenant, and Tenant
shall reimburse Landlord promptly upon demand for all electric current consumed
for any special power use as shown by the meter. The reimbursement shall be at
the rates charged for electrical power by the local public utility furnishing
the current, plus any reasonable additional expense incurred in keeping account
of the electric current consumed.
3. If any lights, machines or equipment (including without limitation
electronic data processing machines) are used by Tenant in the Premises which
materially affect
<PAGE> 40
the temperature otherwise maintained by the air conditioning system, or generate
substantially more heat in the Premises than would be generated by the building
standard lights and usual fractional horsepower office equipment, Landlord shall
have the right, based on its reasonable determination of same, to install or
modify any machinery and equipment to the extent Landlord reasonably deems
necessary to restore temperature balance. The cost of installation, and any
additional cost of operation and maintenance, shall be paid by Tenant to
Landlord promptly upon demand.
4. Landlord shall furnish water for drinking, personal hygiene and
lavatory purposes only. If Tenant requires or uses water for any purposes in
addition to ordinary drinking, cleaning and lavatory purposes, Landlord may,
based on its reasonable determination of same, install a water meter to measure
Tenant's water consumption. Tenant shall pay Landlord for the cost of the meter
and the cost of its installation, and for consumption throughout the duration of
Tenant's occupancy. Tenant shall keep the meter and installed equipment in good
working order and repair at Tenant's own cost and expense, in default of which
Landlord may cause the meter to be replaced or repaired at Tenant's expense.
Tenant agrees to pay for water consumed, as shown on the meter and when bills
are rendered, and on Tenant's default (beyond any applicable cure period) in
making that payment Landlord may pay the charges on behalf of Tenant. Any
reasonable costs or expenses or payments made by Landlord for any of the reasons
or purposes stated above shall be deemed to be additional rent payable by Tenant
to Landlord upon demand.
5. In the event that any utility service to the Premises is separately
metered or billed to Tenant, Tenant shall pay all charges for that utility
service to the Premises and the cost of furnishing the utility to tenant suites
shall be excluded from the Operating Expenses as to which reimbursement from
Tenant is required in the Lease. If any utility charges are not paid when due
Landlord may, upon the expiration of any applicable cure period, pay them, and
any amounts paid by Landlord shall immediately become due to Landlord from
Tenant as additional rent. If Landlord elects to furnish any utility service to
the Premises, Tenant shall purchase its requirements of that utility from
Landlord as long as the rates charged by Landlord do not exceed those which
Tenant would be required to pay if the utility service were furnished it
directly by a public utility.
6. Landlord shall provide janitorial services five days per week,
equivalent to that furnished in comparable first-class buildings, and window
washing as reasonably required; provided, however, that Tenant shall pay for any
additional or unusual janitorial services required by reason of any nonstandard
improvements in the Premises, including without limitation wall coverings and
floor coverings installed by or for Tenant, or by reason of any use of Premises
other than exclusively as offices. The cleaning services provided by Landlord
shall also exclude refrigerators, eating utensils (plates, drinking containers
and silverware), and interior glass partitions. Tenant shall pay to Landlord the
cost of removal of any of Tenant's refuse and rubbish, to the extent
<PAGE> 41
that they unreasonably exceed the refuse and rubbish usually attendant with
general office usage.
7. Tenant shall have access to the Building 24 hours per day, 7 days per
week, 52 weeks per year; provided that Landlord may, with at least 24 hours
written notice to Tenant, install access control systems as it deems advisable
for the Building. Such systems may, but need not, include full or part-time
lobby supervision, the use of a sign-in sign-out log, a card identification
access system, building parking and access pass system, closing hours
procedures, access control stations, fire stairwell exit door alarm system,
electronic guard system, mobile paging system, elevator control system or any
other access controls. In the event that Landlord elects to provide any or all
of those services, Landlord may discontinue providing them at any time with or
without notice. Landlord may impose a reasonable charge for access control cards
and/or keys issued to Tenant. Landlord shall have no liability to Tenant for the
provision by Landlord of improper access control services, for any breakdown in
service, or for the failure by Landlord to provide access control services.
Tenant further acknowledges that Landlord's access systems may be temporarily
inoperative during building emergency and system repair periods. Tenant agrees
to assume responsibility for compliance by its employees with any reasonable
regulations established by Landlord with respect to any card key access or any
other system of building access as Landlord may establish. Tenant shall be
liable to Landlord for any loss or damage resulting from its or its employees
use of any access system.
<PAGE> 42
EXHIBIT C
PARKING
The following parking regulations shall be in effect at the Building.
Landlord reserves the right to adopt reasonable, nondiscriminatory modifications
and additions to the regulations by providing reasonable advance written notice
to Tenant. In the case of any conflict between these regulations and the Lease,
the Lease shall be controlling.
1. Landlord agrees to maintain, or cause to be maintained, an automobile
parking area ("Parking Area") in reasonable proximity to the Building for the
benefit and use of the visitors and patrons and, except as otherwise provided,
employees of Tenant, and other tenants and occupants of the Building. The
Parking Area shall include, whether in a surface parking area or a parking
structure, the automobile parking stalls, driveways, entrances, exits, sidewalks
and attendant pedestrian passageways and other areas designated for parking.
Landlord shall have the right and privilege of reasonably determining the nature
and extent of the automobile Parking Area, whether it shall be surface,
underground or other structure, and of making such changes to the Parking Area
from time to time which in its opinion are desirable and for the best interests
of all persons using the Parking Area. Landlord shall keep the Parking Area in a
neat, clean and orderly condition, and shall repair any damage to its
facilities. Landlord shall not be liable for any damage to motor vehicles of
visitors or employees, for any loss of property from within those motor
vehicles, or for any injury to Tenant, its visitors or employees, unless
ultimately determined to be caused by the sole active negligence or willful
misconduct of Landlord. Unless otherwise instructed by Landlord, every parker
shall park and lock his or her own motor vehicle. Landlord shall also have the
right to establish, and from time to time amend, and to enforce against all
users of the Parking Area all reasonable rules and regulations (including the
designation of areas for employee parking) as Landlord may deem necessary and
advisable for the proper and efficient operation and maintenance of the Parking
Area. Garage managers or attendants are not authorized to make or allow any
exceptions to these regulations.
2. Landlord may, if it deems advisable in its sole discretion, charge
for parking and may establish for the Parking Area a system or systems of permit
parking for Tenant, its employees and its visitors, which may include, but not
be limited to, a system of charges against nonvalidated parking, verification of
users, a set of regulations governing different parking locations, and an
allotment of reserved or nonreserved parking spaces based upon the charges paid
and the identity of users. In no event shall Tenant or its employees park in
reserved stalls leased to other tenants or in stalls within designated visitor
parking zones, nor shall Tenant or its employees utilize more than the number of
parking stalls allotted in this Lease to Tenant. It is understood that Landlord
shall not have any obligation to cite improperly parked vehicles or otherwise
attempt to enforce reserved parking rules during hours when parking attendants
are not present at the Parking Area. Tenant shall comply with such system in its
use (and in the use of its visitors, patrons and employees) of the Parking Area,
1
<PAGE> 43
provided, however, that the system and rules and regulations shall apply to all
persons entitled to the use of the Parking Area, and all charges to Tenant for
use of the Parking Area shall be no greater than Landlord's then current
scheduled charge for parking.
3. Tenant shall, upon request of Landlord from time to time, furnish
Landlord with a list of its employees' names and of Tenant's and its employees'
vehicle license numbers. Tenant agrees to acquaint its employees with these
regulations and assumes responsibility for compliance by its employees with
these parking provisions, and shall be liable to Landlord for all unpaid parking
charges incurred by its employees. Any amount due from Tenant shall be deemed
additional rent. In the event Landlord elects or is required to limit or control
parking by tenants, employees, visitors or invitees of the Building, whether by
validation of parking tickets, parking meters or any other method of assessment,
Tenant agrees to participate in the validation or assessment program under
reasonable rules and regulations as are established by Landlord and/or any
applicable governmental agency.
4. Landlord may establish an identification system for vehicles of
Tenant and its employees which may consist of stickers, magnetic parking cards
or other identification devices supplied by Landlord. All identification devices
shall remain the property of Landlord, shall be displayed as required by
Landlord or upon request and may not be mutilated or obliterated in any manner.
Those devices shall not be transferable and any such device in the possession of
an unauthorized holder shall be void and may be confiscated. Landlord may impose
a reasonable fee for identification devices and a replacement charge for devices
which are lost or stolen. Each identification device shall be returned to
Landlord promptly following the Expiration Date or sooner termination of this
Lease. Loss or theft of parking identification devices shall be reported to
Landlord or its Parking Area operator immediately and a written report of the
loss filed if requested by Landlord or its Parking Area operator.
5. Persons using the Parking Area shall observe all directional signs
and arrows and any posted speed limits. Unless otherwise posted, in no event
shall the speed limit of 5 miles per hour be exceeded. All vehicles shall be
parked entirely within painted stalls, and no vehicles shall be parked in areas
which are posted or marked as "no parking" or on or in ramps, driveways and
aisles. Only one vehicle may be parked in a parking space. In no event shall
Tenant interfere with the use and enjoyment of the Parking Area by other tenants
of the Building or their employees or invitees.
6. Parking Areas shall be used only for parking vehicles. Washing,
waxing, cleaning or servicing of vehicles, or the parking of any vehicle on an
overnight basis, in the Parking Area (other than emergency services) by any
parker or his or her agents or employees is prohibited unless otherwise
authorized by Landlord. Tenant shall have no right to install any fixtures,
equipment or personal property (other than vehicles) in the Parking Area, nor
shall Tenant make any alteration to the Parking Area.
7. It is understood that the employees of Tenant and the other tenants
of Landlord within the Building and Project shall not be permitted to park their
automobiles
2
<PAGE> 44
in the portions of the Parking Area which may from time to time be designated
for patrons of the Building and/or Project and that Landlord shall at all times
have the right to establish reasonable rules and regulations for employee
parking. During the initial thirty-six (36) month Lease Term only, Tenant or its
employees shall pay to Landlord or its agents for the use of employee parking
spaces Fifty Dollars ($50.00) per unreserved stall per month for each of the
Committed Stalls and for five (5) of the Additional Stalls; the remaining
Additional Stalls leased by Tenant, if any, shall be billed at Landlord's
scheduled parking rate from time to time. Thereafter, the stall charge payable
by Tenant's employees for all spaces shall be the amounts as Landlord shall from
time to time determine. Landlord may authorize persons other than those
described above, including occupants of other buildings, to utilize the Parking
Area. In the event of the use of the Parking Area by other persons, those
persons shall pay for that use in accordance with the terms established above;
provided, however, Landlord may allow those persons to use the Parking Area on
weekends, holidays, and at other non-office hours without payment.
8. Notwithstanding the foregoing paragraphs 1 through 7, but except as
otherwise specifically prohibited in the Lease, Landlord shall be entitled to
pass on to Tenant its proportionate share of any charges or parking surcharge or
transportation management costs levied by any governmental agency. The foregoing
parking provisions are further subject to any governmental regulations which
limit parking or otherwise seek to encourage the use of carpools, public transit
or other alternative transportation forms or traffic reduction programs. Tenant
agrees that it will use its best efforts to cooperate, including registration
and attendance, in programs which may be undertaken to reduce traffic. Tenant
acknowledges that as a part of those programs, it may be required to distribute
employee transportation information, participate in employee transportation
surveys, allow employees to participate in commuter activities, designate a
liaison for commuter transportation activities, distribute commuter information
to all employees, and otherwise participate in other programs or services
initiated under a transportation management program.
9. Should any parking spaces be allotted by Landlord to Tenant, either
on a reserved or nonreserved basis, Tenant shall not assign or sublet any of
those spaces, either voluntarily or by operation of law, without the prior
written consent of Landlord, except in connection with an authorized assignment
of this Lease or subletting of the Premises (inclusive of Permitted Transfers
pursuant to Section 9.1(e)).
3
<PAGE> 45
EXHIBIT D
TENANT'S INSURANCE
The following standards for Tenant's insurance shall be in effect at the
Building. Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions to those standards. Tenant agrees to obtain and
present evidence to Landlord that it has fully complied with the insurance
requirements.
1. Tenant shall, at its sole cost and expense, commencing on the date
Tenant is given access to the Premises for any purpose and during the entire
Term, procure, pay for and keep in full force and effect: (i) commercial general
liability insurance with respect to the Premises and the operations of or on
behalf of Tenant in, on or about the Premises, including but not limited to
bodily injury, nonowned automobile, blanket contractual, independent
contractors, broad form property damage, fire legal liability, products
liability (if a product is sold from the Premises), liquor law liability (if
alcoholic beverages are sold, served or consumed within the Premises), and cross
liability and severability of interest clauses, which policy(ies) shall be
written on an "occurrence" basis and for not less than $2,000,000 combined
single limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily injury, death, and property damage liability, or the
current limit of liability carried by Tenant, whichever is greater; (ii)
workers' compensation insurance coverage as required by law, together with
employers' liability insurance coverage; (iii) with respect to improvements,
alterations, and the like required or permitted to be made by Tenant under this
Lease, builder's all-risk insurance, in amounts satisfactory to Landlord; (iv)
insurance against fire, vandalism, malicious mischief and such other additional
perils as may be included in a standard "all risk" form, insuring the leasehold
improvements, trade fixtures, furnishings, equipment and items of personal
property in the Premises, in an amount equal to not less than ninety percent
(90%) of their actual replacement cost (with replacement cost endorsement),
which policy shall also include loss of income/business interruption/extra
expense coverage in an amount not less than nine months loss of income from
Tenant's business in the Premises. In no event shall the limits of any policy be
considered as limiting the liability of Tenant under this Lease.
2. All policies of insurance required to be carried by Tenant pursuant
to this Exhibit shall be written by responsible insurance companies authorized
to do business in the State of California and with a general policyholder rating
of not less than "A" and financial rating of not less than "X" in the most
current Best's Insurance Report. Any insurance required of Tenant may be
furnished by Tenant under any blanket policy carried by it or under a separate
policy. A certificate of insurance, certifying that the policy has been issued,
provides the coverage required by this Exhibit and contains the required
provisions, together with endorsements acceptable to Landlord evidencing the
waiver of subrogation and additional insured provisions required under Paragraph
3
1
<PAGE> 46
below, shall be delivered to Landlord prior to the date Tenant is given the
right of possession of the Premises. Proper evidence of the renewal of any
insurance coverage shall also be delivered to Landlord not less than thirty (30)
days prior to the expiration of the coverage.
3. Unless otherwise provided below, each policy evidencing insurance
required to be carried by Tenant pursuant to this Exhibit shall contain the
following provisions and/or clauses satisfactory to Landlord: (i) with respect
to Tenant's commercial general liability insurance, a provision that the policy
and the coverage provided shall be primary and that any coverage carried by
Landlord shall be excess and noncontributory, together with a provision
including Landlord and any other parties in interest designated by Landlord as
additional insureds; (ii) a waiver by the insurer of any right to subrogation
against Landlord, its agents, employees, contractors and representatives which
arises or might arise by reason of any payment under the policy or by reason of
any act or omission of Landlord, its agents, employees, contractors or
representatives; and (iii) a provision that the insurer will not cancel or
change the coverage provided by the policy without first giving Landlord thirty
(30) days prior written notice.
4. In the event that Tenant fails beyond any applicable cure period to
procure, maintain and/or pay for, at the times and for the durations specified
in this Exhibit, any insurance required by this Exhibit, or fails to carry
insurance required by any governmental authority, Landlord may at its election
procure that insurance and pay the premiums, in which event Tenant shall repay
Landlord all reasonable sums paid by Landlord, together with interest at the
rate of ten percent (10%) per annum and any related costs or expenses reasonably
incurred by Landlord, within ten (10) business days following Landlord's written
demand to Tenant.
NOTICE TO TENANT: IN ACCORDANCE WITH THE TERMS OF THIS LEASE, TENANT
MUST PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD'S MANAGEMENT AGENT
PRIOR TO OCCUPANCY OF THE PREMISES.
2
<PAGE> 47
EXHIBIT E
RULES AND REGULATIONS
The following Rules and Regulations shall be in effect at the Building.
Landlord reserves the right to adopt reasonable nondiscriminatory modifications
and additions at any time. In the case of any conflict between these regulations
and the Lease, the Lease shall be controlling.
1. Except with the prior written consent of Landlord, Tenant shall not
sell, or permit the retail sale of, newspapers, magazines, periodicals, or
theater tickets, in or from the Premises, nor shall Tenant carry on, or permit
or allow any employee or other person to carry on, the business of stenography,
typewriting or any similar business in or from the Premises for the service or
accommodation of occupants of any other portion of the Building. Tenant shall
not allow the Premises to be utilized for any manufacturing of any kind, or the
business of a public barber shop, beauty parlor, or a manicuring and chiropodist
business, or any business other than that specifically provided for in the
Lease.
2. The sidewalks, halls, passages, elevators, stairways, and other
common areas shall not be obstructed by Tenant or used by it for storage or for
any purpose other than for ingress to and egress from the Premises. The halls,
passages, entrances, elevators, stairways, balconies and roof are not for the
use of the general public, and Landlord shall in all cases retain the right to
control and prevent access to those areas of all persons whose presence, in the
reasonable judgment of Landlord, shall be prejudicial to the safety, character,
reputation and interests of the Building and its tenants. Nothing contained in
this Lease shall be construed to prevent access to persons with whom Tenant
normally deals only for the purpose of conducting its business on the Premises
(such as clients, customers, office suppliers and equipment vendors and the
like) unless those persons are engaged in illegal activities. Neither Tenant nor
any employee or contractor of Tenant shall go upon the roof of the Building
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed.
3. The sashes, sash doors, windows, glass lights, solar film and/or
screen, and any lights or skylights that reflect or admit light into the halls
or other places of the Building shall not be covered or obstructed. The toilet
rooms, water and wash closets and other water apparatus shall not be used for
any purpose other than that for which they were constructed, and no foreign
substance of any kind shall be thrown in those facilities, and the reasonable
expense of any breakage, stoppage or damage resulting from the violation of this
rule shall be borne by Tenant.
4. No sign, advertisement or notice visible from the exterior of the
Premises shall be inscribed, painted or affixed by Tenant on any part of the
Building or the Premises without the prior written consent of Landlord. If
Landlord shall have given its
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consent at any time, whether before or after the execution of this Lease, that
consent shall in no way operate as a waiver or release of any of the provisions
of this Lease, and shall be deemed to relate only to the particular sign,
advertisement or notice so consented to by Landlord and shall not be construed
as dispensing with the necessity of obtaining the specific written consent of
Landlord with respect to any subsequent sign, advertisement or notice. If
Landlord, by a notice in writing to Tenant, shall object to any curtain, blind,
tinting, shade or screen attached to, or hung in, or used in connection with,
any window or door of the Premises, the use of that curtain, blind, tinting,
shade or screen shall be immediately discontinued and removed by Tenant. No
awnings shall be permitted on any part of the Premises.
5. Tenant shall not knowingly do or permit anything to be done in the
Premises, or knowingly bring or keep anything in the Premises, which shall in
any way increase the rate of fire insurance on the Building, or on the property
kept in the Building, or obstruct or interfere with the rights of other tenants,
or in any way injure or annoy them, or conflict with the regulations of the Fire
Department or the fire laws, or with any insurance policy upon the Building, or
any portion of the Building or its contents, or with any rules and ordinances
established by the Board of Health or other governmental authority.
6. The installation and location of any unusually heavy equipment in the
Premises, including without limitation file storage units, safes and electronic
data processing equipment, shall require the reasonable prior written approval
of Landlord. Landlord may restrict the weight and position of any equipment that
may exceed the weight load limits for the structure of the Building, and may
further reasonably require, at Tenant's expense, the reinforcement of any
flooring on which such equipment may be placed and/or an engineering study to be
performed to determine whether the equipment may safely be installed in the
Building and the necessity of any reinforcement. The moving of large or heavy
objects shall occur only between those hours as may be designated by, and only
upon previous written notice to, Landlord, and the persons employed to move
those objects in or out of the Building must be reasonably acceptable to
Landlord. No freight, furniture or bulky matter of any description shall be
received into or moved out of the lobby of the Building or carried in any
elevator other than the freight elevator designated by Landlord unless approved
in writing by Landlord.
7. Landlord shall clean the Premises as provided in the Lease, and
except with the written consent of Landlord, no person or persons other than
those approved by Landlord or otherwise provided for in the Lease will be
permitted to enter the Building for that purpose. Tenant shall not cause
unnecessary labor by reason of Tenant's carelessness and indifference in the
preservation of good order and cleanliness. Landlord shall not be responsible to
Tenant or its employees for loss or damage to property in connection with the
provision of janitorial services by third party contractors.
8. Tenant shall not sweep or throw, or permit to be swept or thrown,
from the Premises any dirt or other substance into any of the corridors or halls
or elevators, or
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out of the doors or windows or stairways of the Building, and Tenant shall not
use, keep or permit to be used or kept any foul or noxious gas or substance in
the Premises, or permit or suffer the Premises to be occupied or used in a
manner offensive or objectionable to Landlord or other occupants of the Building
by reason of noise, odors and/or vibrations, or interfere in any way with other
tenants or those having business with other tenants, nor shall any animals or
birds be kept by Tenant in or about the Building. Smoking or carrying of lighted
cigars, cigarettes, pipes or similar products anywhere within the Premises or
Building is strictly prohibited, and Landlord may enforce such prohibition
pursuant to Landlord's leasehold remedies. Smoking is permitted outside the
Building and within the project only in areas designated by Landlord.
9. No cooking shall be done or permitted by Tenant on the Premises,
except pursuant to the normal use of a U.L. approved microwave oven, toaster
oven and coffee maker for the benefit of Tenant's employees and invitees, nor
shall the Premises be used for the storage of merchandise or for lodging.
10. Tenant shall not use or keep in the Building any kerosene, gasoline,
or inflammable fluid or any other illuminating material, or use any method of
heating other than that supplied by Landlord.
11. If Tenant desires telephone, telegraph, burglar alarm or similar
connections, Landlord will direct electricians as to where and how the wires are
to be introduced based on good faith consultation with Tenant. No boring or
cutting for wires or otherwise shall be made without directions from Landlord.
12. Upon the termination of its tenancy, Tenant shall deliver to
Landlord all the keys to offices, rooms and toilet rooms and all access cards
which shall have been furnished to Tenant or which Tenant shall have had made.
13. Tenant shall not mark, drive nails, screw or drill into the
partitions, woodwork or plaster or in any way deface the Premises, except to
install normal wall hangings. Tenant shall not affix any floor covering to the
floor of the Premises in any manner except by a paste, or other material which
may easily be removed with water, the use of cement or other similar adhesive
materials being expressly prohibited. The method of affixing any floor covering
shall be subject to reasonable approval by Landlord. The expense of repairing
any damage resulting from a violation of this rule shall be borne by Tenant.
14. On Saturdays, Sundays and legal holidays, and on other days between
the hours of 6:00 p.m. and 8:00 a.m., access to the Building, or to the halls,
corridors, elevators or stairways in the Building, or to the Premises, may be
refused unless the person seeking access complies with any access control system
that Landlord may establish. Landlord shall in no case be liable for damages for
the admission to or exclusion from the Building of any person whom Landlord has
the right to exclude under Rules 2 or 18 of this Exhibit. In case of invasion,
mob, riot, public excitement, or other commotion, or in the event of any other
situation reasonably requiring the evacuation of
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the Building, Landlord reserves the right at its election and without liability
to Tenant to prevent access to the Building by closing the doors or otherwise,
for the safety of the tenants and protection of property in the Building.
15. Tenant shall be responsible for protecting the Premises from theft,
which includes keeping doors and other means of entry closed and securely
locked. Tenant shall cause all water faucets or water apparatus to be shut off
before Tenant or Tenant's employees leave the Building, and that all
electricity, gas or air shall likewise be shut off, so as to prevent waste or
damage.
16. Tenant shall not alter any lock or install a new or additional lock
or any bolt on any door of the Premises without the prior written consent of
Landlord. If Landlord gives its consent, Tenant shall in each case promptly
furnish Landlord with a key for any new or altered lock.
17. Tenant shall not install equipment, such as but not limited to
electronic tabulating or computer equipment, requiring electrical or air
conditioning service in excess of that to be provided by Landlord under the
Lease except in accordance with Exhibit B.
18. Landlord shall have full and absolute authority to reasonably
regulate or prohibit the entrance to the Premises of any vendor, supplier,
purveyor, petitioner, proselytizer or other similar person. In the event any
such person is a guest or invitee of Tenant, Tenant shall notify Landlord in
advance of each desired entry, and Landlord shall authorize the person so
designated to enter the Premises, provided that in the reasonable judgment of
Landlord, such person will not be involved in general solicitation activities,
or the proselytizing, petitioning, or disturbance of other tenants or their
customers or invitees, or engaged or likely to engage in conduct which may in
Landlord's opinion distract from the use of the Premises for its intended
purpose.
19. Tenant shall be required to utilize the third party contractor
designated by Landlord for the Building to provide any telephone wiring services
from the minimum point of entry of the telephone cable in the Building to the
Premises. Notwithstanding the foregoing, however, in the event Tenant does not
have a telephone switch within the Premises, Tenant may, with Landlord's
approval and supervision, use a trained contractor to provide such wiring
services, but only from the Premises to the telephone room on the floor on which
the Premises are situated.
20. Landlord may from time to time grant tenants individual and
temporary variances from these Rules, provided that any variance does not have a
material adverse effect on the use and enjoyment of the Premises by Tenant.
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EXHIBIT X
WORK LETTER
TENANT IMPROVEMENTS
The tenant improvement work by Landlord shall consist of installing
sidelights and relocating the telephone backboard ("Tenant Improvements"). All
materials and finishes utilized in completing the Tenant Improvements shall be
Landlord's building standard. Landlord's total contribution for the Tenant
Improvements, inclusive of Landlord's construction management fee, shall not
exceed Twenty-Four Thousand Nine Hundred Sixty Dollars ($24,960.00) ("Landlord's
Contribution"). Any excess cost shall be borne solely by Tenant and shall be
paid to Landlord within twenty (20) days following Landlord's billing for such
excess cost.
Landlord shall permit Tenant and its agents to enter the Premises at
least two (2) weeks prior to the Commencement Date in order that Tenant may
perform any work to be performed by Tenant hereunder through its own
contractors, subject to Landlord's prior written approval (which shall not be
unreasonably withheld, conditioned or delayed), and in a manner and upon terms
and conditions and at times reasonably satisfactory to Landlord's
representative. The foregoing license to enter the Premises prior to the
Commencement Date is, however, conditioned upon Tenant's contractors and their
subcontractors and employees working in harmony and not interfering with the
work being performed by Landlord. If at any time that entry shall unreasonably
interfere with the work being performed by Landlord, this license may be
withdrawn by Landlord upon twenty-four (24) hours written notice to Tenant. That
license is further conditioned upon the compliance by Tenant's contractors with
all requirements imposed by Landlord on third party contractors, including
without limitation the maintenance by Tenant and its contractors and
subcontractors of workers' compensation and public liability and property damage
insurance in amounts and with companies and on forms reasonably satisfactory to
Landlord, with certificates of such insurance being furnished to Landlord prior
to proceeding with any such entry. The entry shall be deemed to be under all of
the provisions of the Lease except as to the covenants to pay rent. Landlord
shall not be liable in any way for any injury, loss or damage which may occur to
any such work being performed by Tenant, the same being solely at Tenant's risk.
In no event shall the failure of Tenant's contractors to complete any work in
the Premises extend the Commencement Date of the Lease beyond the date that
Landlord has completed its tenant improvement work and tendered the Premises to
Tenant.
After the Tenant Improvements to the Premises are substantially
completed (excepting punch list items) and prior to the Commencement Date,
Landlord shall cause Landlord's contractor to inspect the Premises with the
Tenant's representative and complete a punch list of unfinished or incorrect
items of the Tenant Improvements. Authorized representatives for the Landlord
and Tenant shall execute said punch list to indicate their approval thereof. The
items listed on such punch list shall be completed
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by Landlord within thirty (30) days after the approval of such punch list or as
soon thereafter as reasonably practicable.
The following costs shall be borne solely by Landlord (and Landlord's
Contribution shall not be used to pay for the same): (1) attorneys' fees and
costs incurred in connection with the negotiation of construction contracts and
architectural agreements or the resolution of any disputes concerning
construction, (2) premiums for any bonds obtained in connection with the
construction, (3) costs associated with financing the construction costs, (4)
costs incurred due to Landlord's or Landlord's employees', agents' or
contractors' delay, negligence or willful misconduct, (5) penalties and late
charges attributable to the failure of Landlord or Landlord's employees, agents
or contractors to pay construction costs.
Tenant hereby designates Steve Unterberger, Telephone No. (949)
476-3732, as its representative, agent and attorney-in-fact for the purpose of
receiving notices, approving submittals and issuing requests for changes, and
Landlord shall be entitled to rely upon authorizations and directives of such
person(s) as if given by Tenant. Tenant may amend the designation of its
construction representative(s) at any time upon delivery of written notice to
Landlord.
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