California-San Diego-6020 Cornerstone Court West Lease - William Properties LLC and HNC Software Inc.
LEASE AGREEMENT
THIS LEASE AGREEMENT is made as of the 17th day of June, 1996, by and
between, Williams Properties I, LLC & Williams Properties II, LLC, California
Limited Liability Companies ("Landlord") and HNC Software, Inc., a Delaware
Corporation ("Tenant"), who agree as follows:
ARTICLE 1. DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 PREMISES: Approximately 31,269 rentable square feet,
consisting of approximately 13,556 rentable square feet with a portion of the
second floor and the entire third floor consisting of approximately 17,713
rentable square feet of the Building (which term is defined in Article 2 hereof)
as depicted on Exhibit A attached hereto and incorporated herein.
1.2 PROPERTY: The real properly which the Building is located as
described in Exhibit A-1 attached hereto and incorporated herein and commonly
referred to as 6020 Cornerstone Court West, San Diego, California 92121.
1.3 TERM: Eighty-one (81) months commencing on the Commencement
Date (which is defined in Article 3 hereof).
1.4 BASIC RENT: Shall refer to a monthly amount of Thirty Five
Thousand Three Hundred Thirty Three and 97/100ths ($35,333.97) Dollars during
the first twelve (12) months of the Lease Term, which is subject to adjustments
as set forth in Article 4 hereof.
1.5 INITIAL DIRECT OPERATING EXPENSES: Tenant's initial Direct
Operating Expenses shall be the actual Direct Operation Expenses incurred for
the Building during the first twelve (12) months after the Commencement Date
which shall be computed as though the Building had been ninety-five percent
(95%) occupied, provided that any Direct Operating Expenses attributable to
improvements to the Premises costing in excess of the Tenant Improvement
Allowance (as defined below) shall not be included as part of the base year
calculation but shall be included for any subsequent years. In addition, any
maintenance, repairs and/or replacement of specialized improvements and/or
improvements not included in Landlord's Tenant Improvement Allowance shall not
be included in defining expenses herein.
1.6 TENANT'S PRO RATA SHARE: 72.24% which percentage represents
the proportion that the number of approximate rentable square feet of the
Premises bears to the total number of rentable square feet of the Building
(31,269 rentable square feet / 43,285 rentable square feet in the Building).
1.7 ESTIMATED COMPLETION DATE: September 1, 1996
1.8 SECURITY DEPOSIT: Thirty Thousand and No/lOOths ($30,000.00)
Dollars
1.9 PERMITTED USE: General Office and software/research &
development purposes only
1.10 TENANT'S NOTICE ADDRESS: For purposes of Article 19 of this
Lease shall be
PRIOR TO OCCUPANCY: AFTER OCCUPANCY:
5930 Cornerstone Court West 5930 Cornerstone Court West
San Diego, CA 92121 San Diego, CA 92121
1.11 LEASE: Shall collectively refer to this Agreement of Lease
together with the fol1owing Exhibits and Addenda, attached hereto and
incorporated herein by this reference:
Exhibit A-1 Premises Floor Plan
Exhibit A-1 Property Legal Description
Exhibit B Rules and Regulations
Exhibit C Work Letter Agreement
Exhibit D Preliminary Space Plan/Final Plans & Specifications
Addenda Addendum
1.12 BROKER: Landlord and Tenant recognize that The Irving Hughes
Group, Inc. represents Tenant and CB Commercial Real Estate Group, Inc.
represents the Landlord.
Initials /s/ EJC
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ARTICLE 2. PREMISES
Subject to the terms, provisions and conditions of this Lease, Landlord
hereby leases to Tenant, and Tenant hereby takes and hires from Landlord, the
Premises located in Landlord's Building 6020 Cornerstone Court West, San Diego,
California ("Building"). The location of the Premises, within the Building, is
more particularly shown on the attached Exhibit A-1.
ARTICLE 3. TERM
3.1 TERM: The term of this Lease ("Term") shall be for the period
specified in Section 1.3 hereof.
3.2 COMMENCEMENT DATE: The Commencement Date shall be the date of
Substantial Completion of the Tenant Improvements (as such terms are defined in
the Work Letter Agreement).
ARTICLE 4. RENT
From and after the Commencement Date, Tenant agrees to pay Landlord, in
advance, on the first day of each and every calendar month during the Term, the
Basic Rent, together with rental adjustments as defined below. Such rent for any
fraction of a month at the beginning of the Term will be prorated and paid at
the Commencement Date. Payment of all such rent and other charges shall be
without offset or demand, shall be in lawful money of the United States of
America and shall be made to Landlord at the following address, or at such place
Landlord may direct from time to time by written notice to Tenant:
William's Properties I & II, LLC
Attention: Elizabeth J. Clarquist
6170 Cornerstone Court East, Suite 140
San Diego, CA 92121
Such rent and other charges shall include the following:
4.1 BASIC RENT: Subject to annual increases pursuant to Section
4.2 below, Tenant agrees to pay Landlord on the first day of each month Basic
Rent in the amount specified in Section 1.4 hereof. Tenant shall pay to
Landlord, immediately upon execution of this Lease (in addition to the Security
Deposit required pursuant to Section 4.7 below), the sum of one (1) month's
prepaid Basic Rent which shall be applied to the first full calendar month of
the Term for which payment of Basic Rent is due.
4.2 ANNUAL INCREASE OF BASIC RENT: Commencing on the first day of
the thirteenth (13th) calendar month immediately following the Commencement
Date, the remaining Term of the Lease shall be divided into consecutive one year
periods (each of which, including the initial twelve (12) calendar months of the
Term, shall be referred to as "Lease Year"). The Basic Rent provided in Section
4.1 above, shall be increased on the first day of each such Lease Year (i.e., on
the first day of the thirteenth (13th), twenty-fifth (25th), thirty seventh
(37th), forty-ninth (49th), sixty-first (61st), seventy-second (72nd), etc.,
months following the Commencement Date or, if the Commencement Date is the first
day of a calendar month, on each anniversary of the Commencement Date
("Adjustment Date"). Each such increase shall be as set forth in Section 1 of
the attached Addendum.
(i) The increase in Basic Rent provided by this Section
4.2 shall be in addition to any Excess Direct Operating Expenses Rent increases
provided in Section 4.3. All references in this Lease to Basic Rent shall
include any increase in Basic Rent.
4.3 EXCESS DIRECT OPERATING EXPENSES RENT:
(a) Subject to any limitations or exceptions stated in
Section 1.5 or elsewhere provided, from and after the Commencement Date, Tenant
agrees to pay to Landlord, as additional rent, Tenant's Pro Rata Share of Excess
Direct Operating Expenses (hereinafter defined) incurred by Landlord ("Excess
Direct Operating Expenses Rent"). Tenant shall pay to Landlord, Tenant's Excess
Direct Operating Expenses Rent pursuant to the following procedures:
(i) Landlord shall provide to Tenant a good
faith estimate of the annual Direct Operating Expenses and the total amount of
annual Excess Direct Operating Expenses Rent with respect to each lease year of
the Term. Each such estimate shall be provided by Landlord to Tenant as soon as
possible following the first day of such lease year;
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(ii) Each estimate of total annual Excess Direct
Operating Expenses Rent determined by Landlord pursuant to this Section, shall
be divided into twelve (12) equal monthly installments. Tenant shall pay to
Landlord such monthly installment of Excess Direct Operating Expenses Rent with
each monthly payment of Basic Rent pursuant to Section 4.1 above. In the event
the estimated amount of Excess Direct Operating Expenses Rent has not yet been
determined for any lease year, Tenant shall pay the monthly installment in the
estimated amount determined for the preceding lease year until the estimate for
the current lease year has been provided to Tenant, at which time Tenant shall,
within thirty (30) days following receipt of the notice pay to Landlord any
existing shortfall and, thereafter, make the monthly installment payment in
accordance with the current estimate;
(iii) As soon as reasonably possible following the
end of each lease year of the term including the end of any initial particular
lease year, Landlord shall determine and provide to Tenant a statement of the
amount of Direct Operating Expenses actually incurred (except in the event that
the Building is less than ninety-five percent (95%) occupied, in which case the
Direct Operating Expenses shall be computed as though the Building had been
ninety-five percent (95%) occupied) and the amount of Excess Direct Operating
Expenses Rent payable by Tenant with respect to such lease year. In the event
the amount of such Excess Direct Operating Expenses Rent exceeds the sum of the
monthly installments actually paid by Tenant, pursuant to Section 4.3(a)(ii)
above, for such lease year, Tenant shall pay to Landlord, on the first day of
the calendar month immediately following receipt of such statement, the
difference. In the event the sum of such installments exceeds the amount of
Excess Direct Operating Expenses Rent actually due and owing, the difference
shall be applied as a credit to Excess Direct Operating Expenses Rent payable by
Tenant pursuant to Section 4.3(a)(ii). In no event shall the adjustment of
Excess Direct Operating Expenses Rent decrease the amount of Basic Rent due and
payable to Landlord under this Lease.
(b) For purposes of this Section, the following terms
shall have the following prescribed meanings:
(i) The term "Building" means the Building as
defined in Article 2, and the parking areas and other structures servicing the
Building, and the Property upon which the Building and parking area such other
structures are located.
(ii) The term "Direct Operating Expenses" as used
herein means all operating costs and expenses associated with the operation and
maintenance of the Building, exterior landscaping for the Building and such
additional facilities relating to operations of the Property as are now in use
or in subsequent years may be determined by Landlord to be reasonably desirable.
Direct Operating Expenses shall include, by way of illustration, but not
limitation, the following:
(1) Reasonable costs of wages and salaries
of all employees engaged in operating and maintenance or security of the
Building, including taxes, insurance and benefits relating thereto, and the
reasonable rental value of the Building office.
(2) All supplies and materials used in
operation and maintenance or security of the Building.
(3) Costs of all utilities other than
separately metered electricity not utilized for common areas, including
surcharges of the Building (including the cost of water, sewer, gas, power,
heating, lighting, air conditioning and ventilating for the Building).
(4) Costs of all reasonable maintenance and
service agreements for the Building, and equipment therein, including, but not
limited to, common area utility and maintenance charges (including, but not
limited to, assessments or contributions to maintenance associations or special
benefit districts); security and energy management services; window cleaning;
road, sidewalk, driveways and parking facility maintenance or cleaning; elevator
maintenance; HVAC equipment maintenance and janitorial services. Tenant shall be
responsible for any costs associated with its specialized equipment or other
improvements not provided in Landlord's Tenant Improvement Allowance including,
but not limited to, any service maintenance or repair costs.
(5) Cost of all insurance relating to the
Building/Property, including the cost of casualty and liability insurance
applicable to the Building together with Landlord's personal property used in
connection therewith. Landlord agrees to commercially insure the
Building/Property with a reputable insurance company at industry acceptable
levels.
(6) Costs of repairs and general maintenance
(excluding repairs and general maintenance paid by proceeds of insurance or by
Tenant or other third parties).
(7) A management fee for the manager of the
Building not to exceed four percent (4%) of the gross annual rent of the
Building.
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(8) The costs of any additional services not
provided to the Building at the Commencement Date but thereafter provided by
Landlord in prudent management of the Building or at the direction of or
resulting from statutes or regulations, or interpretations thereof, promulgated
by any governmental authority in connection with the use or occupancy of the
Building that was not applicable when such improvements were originally
constructed.
(9) The costs of any capital improvements or
alterations made to the Building after the Commencement Date that reduce other
operating expenses or are required at the direction of or resulting from,
statutes or regulations, or interpretations thereof, promulgated by any
governmental authority in connection with the use or occupancy of the Building
that were not applicable when such improvements were originally constructed,
such cost thereof to be amortized over such reasonable period, i.e., generally
acceptable accounting practices, as Landlord shall determine, together with
interest on the unamortized balance at the actual rate paid by Landlord on funds
borrowed for the purpose of constructing said capital improvements plus any
financing costs.
(10) All taxes and assessments levied on the
Building (including, without limitation, the land upon which it is located),
including, but not limited to, real property taxes and assessments, and personal
property taxes and assessments on all personal property of Landlord used in
connection with the maintenance and operation of the Building and the reasonable
costs incurred by Landlord in contesting, in good faith and by appropriate
proceedings the amount or validity of any such tax or assessment.
(iii) The term "Excess Direct Operating Expenses"
shall mean the amount, if any, that Direct Operating Expenses paid or incurred
by Landlord during a lease year, exceeds the Initial Direct Operating Expenses.
4.4 ADDITIONAL RENT: Tenant shall pay to Landlord as additional
rent ("Additional Rent") and without notice, abatement, deduction or set off,
all sums, costs and expenses which Tenant, in any of the provisions of this
Lease, or through a separate agreement relating to the Premises and/or the
Building, assumes or agrees to pay, including, but not limited to, tenant
improvement work, whether or not any of such sums, costs and expenses are
specifically described in Additional Rent. In the event of any nonpayment of
Additional Rent when required under this Lease, the Landlord shall have (in
addition to all other rights and remedies) all the rights and remedies provided
herein or by law in the case of non-payment of Basic Rent and Excess Direct
Operating Expenses Rent. All references in this Lease to Rent shall mean and
collectively refer to Basic Rent, Excess Direct Operating Expenses Rent and
Additional Rent
4.5 LATE CHARGES: Tenant's failure to pay Rent promptly on the
first day of each month may cause Landlord to incur unanticipated costs, the
exact amount of which are impractical or extremely difficult to ascertain. Such
costs may include, but are not limited to, processing and accounting charges and
late charges which may be imposed on Landlord by any ground lease, mortgage or
trust deed encumbering the Building. Therefore, if Landlord does not receive any
Rent payment within ten (10) days after it becomes due, Tenant shall pay
Landlord a late charge equal to six percent (6%) of the overdue amount. The
parties agree that such late charge represents a fair and reasonable estimate of
the costs Landlord will incur by reason of such late payment.
4.6 INTEREST: Any amount owed by Tenant to Landlord which is not
paid when due shall bear interest at the rate of twelve percent (12%) per annum
from the due date of such amount. However, interest shall not be payable on late
charges to be paid by Tenant under this Lease. The payment of interest on such
amounts shall not excuse or cure any default by Tenant under this Lease. If the
interest rate specified in this Lease is higher than the rate permitted by law,
the interest rate is hereby decreased to the maximum legal interest rate
permitted by law.
4.7 SECURITY DEPOSIT: Tenant shall pay to Landlord, immediately
upon execution of this Lease, the Security Deposit, which shall be held by
Landlord as security for the faithful performance by Tenant of all of the terms,
covenants and conditions of this Lease to be kept and performed by Tenant during
the Term hereof. If Tenant defaults with respect to any provision of the Lease,
including but not limited to, the provisions relating to the payment of Rent,
Landlord may (but shall not be required to) use, apply or retain all or any part
of the Security Deposit for the payment of any Rent or any other sum in default,
or for the payment of any other amount which Landlord may spend or become
obligated to spend by reason of Tenant's default or to compensate Landlord for
any other loss or damage which landlord may suffer by reason of Tenant's
default. If any portion of the Security Deposit is so used or applied, Tenant
shall, upon demand therefor, deposit with Landlord cash, in an amount sufficient
to restore the Security Deposit to its original amount and Tenant's failure to
do so shall be a material breach of this Lease. Landlord shall not be required
to keep the Security Deposit separate from its general funds, and Tenant shall
not be entitled to interest on the Security Deposit. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, 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 hereunder) within
thirty (30) days following expiration of the Term, provided that Landlord may
retain the Security Deposit until such time as any amount due from Tenant in
accordance hereof has been determined paid in full.
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ARTICLE 5. USE
5.1 PERMITTED USE: Tenant may use the Premises solely for the
Permitted Use and for no other use without the written consent of Landlord,
which may be withheld in Landlord's sole and absolute discretion.
5.2 COMPLIANCE WITH LAWS: Tenant shall comply with all laws,
ordinances, rules and regulations pertaining to the use of the Premises, and/or
Building. Tenant shall not do or permit anything to be done in or about the
Premises which will, in any way, obstruct or interfere with the rights of other
tenants or occupants of the Building, or injure them, or allow the Premises to
be used for any immoral or unlawful purpose, nor shall Tenant cause, maintain or
permit any nuisance in, on or about the Premises. Tenant agrees to abide by all
reasonable rules and regulations established by Landlord from time to time with
respect to the Building. A copy of the rules and regulations in existence on the
date of this Lease is attached hereto as Exhibit B, but Landlord reserves the
right to amend the rules and regulations at any time by giving notice of
amendment to Tenant, if Landlord determines such amendments to be in the best
interest of the Building and its tenants.
With respect to any floor of the Building that is entirely leased by
Tenant, including initially the third floor, Tenant shall be responsible for
ensuring, at its sole cost and expense, that all areas within such floor
(including restroom and lobby areas) comply with all applicable laws. Landlord
shall be responsible for ensuring that any common areas within the Building
other than on floors that are entirely leased to Tenant comply with all
applicable laws. Notwithstanding the foregoing, Tenant shall be solely
responsible for all costs relating to compliance with legal requirements to the
extent triggered, caused or made applicable by any alteration, addition or
improvement made by Tenant
5.3 INSURANCE USE REQUIREMENTS: Tenant shall neither use nor
occupy the Premises in any manner, nor commit or omit any act, which would
result in a cancellation or reduction of any insurance or increase in premiums
on any insurance policy covering the Premises, or the property or Building.
Tenant shall, at its expense, comply with all requirements of any insurer
pertaining to use of the Premises and any other requirement which are reasonably
necessary for the maintenance of economic and proper fire, liability and other
insurance desired to be carried by Landlord
ARTICLE 6. IMPROVEMENTS TO THE PREMISES
6.1 LANDLORD'S WORK: INTENTIONALLY DELETED.
6.2 TENANT IMPROVEMENTS: Improvements to the Premises beyond that
supplied as part of Landlord's Work, including, but not limited to, closures,
ceilings, partitions, air conditioning components within the Premises, window
coverings, carpet, lighting fixtures, electric systems, fire detection systems
and, if required by Tenant's plans and specifications, modifications to the fire
sprinkler system shall be made by or at the direction of Landlord pursuant to
plans and specifications to be approved in writing by Landlord and Tenant
("Tenant Improvements"). The Tenant Improvements and the responsibility for
preparation of plans and specifications required to construct the same are
described in the Work Letter Agreement, attached hereto as Exhibit C. Landlord
shall have complete and absolute discretion to select such persons and companies
as it reasonably deems proper for designing, constructing or supplying all
Tenant Improvements. By accepting occupancy of the Premises, Tenant acknowledges
completion of all improvements constituting the Premises, including, but not
limited to, Tenant Improvements and Landlord's Work.
6.3 PAYMENT FOR TENANT IMPROVEMENTS: Landlord shall pay, pursuant
to the terms and conditions of the Work Letter Agreement, the cost and expense
of Tenant Improvements in an amount not to exceed the Tenant Improvement
Allowance. The cost and expense of any Tenant Improvements in excess of the
Tenant Improvement Allowance, shall be paid by the Tenant in accordance with the
provisions of the Work Letter Agreement.
6.4 ESTIMATED COMPLETION DATE: The Tenant Improvements shall be
completed on or before the Estimated Completion Date. Landlord shall endeavor to
give Tenant minimum thirty (30) day notice of the Estimated Completion Date. In
the event that the Tenant Improvements are not completed on or before the
Estimated Completion Date, for any cause or reason, Landlord, its agents and
employees, shall not be liable or responsible for any damages or liabilities in
connection therewith incurred by Tenant as a result thereof, nor shall the
obligations of Tenant provided herein be excused by reason of any such delay,
except that the failure to complete construction of the Tenant's Improvements on
the Estimated Completion Date is due solely to the unexcused actions of Landlord
hereunder, then, in such event, Tenant's sole remedy and right shall be to delay
the Commencement Date by the number of days that completion of construction of
the Tenant Improvements were delayed solely by the unexcused actions of
Landlord, but in no event shall the Commencement Date be later than the date on
which Tenant takes possession or
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commences business operations at the Premises or part thereof. Notwithstanding
the foregoing, if Landlord has not completed construction of the Tenant
Improvements and tendered possession of the Premises to Tenant within one
hundred fifty (150) days from the Estimated Completion Date, and such delay was
not the result of either (i) delays caused by force majeure or (ii) act or
omission of Tenant or anyone for whom Tenant is responsible, then Tenant may, at
its option, by notice in writing to Landlord given within thirty (30) days
thereafter, cancel this Lease. If Tenant cancels this Lease in accordance with
the foregoing, the Landlord shall return to Tenant, without interest, the first
installment of Basic Rent, paid pursuant to Section 4.1 above, plus the Security
Deposit (if previously deposited by Tenant) and the parties shall be discharged
from any and all obligations hereunder. Notwithstanding the foregoing, the
Commencement Date shall be the date when Landlord would otherwise have been able
to tender possession of the Premises or complete construction thereof except for
the delay which was caused by the acts or omissions of Tenant or anyone for whom
Tenant is responsible, even though (i) Tenant may not, in fact, occupy the
Premises on such date; (ii) the Tenant Improvements were not, in fact, completed
on the Estimated Completion Date, and (iii) Landlord actually completes the
Tenant Improvements after the Estimated Completion Date and delivers possession
of the Premises after the Commencement Date. See Work Letter Section 5.
6.5 EARLY OCCUPANCY: Provided Landlord gives Tenant a minimum
thirty (30) days prior notice and if Tenant occupies the Premises prior to the
Commencement Date, Tenant's occupancy of the Premises shall be subject to all of
the provisions of this Lease. Early occupancy of the Premises shall not advance
the Termination Date of this Lease. Tenant shall pay Base Rent and all other
charges specified in this Lease for the early occupancy period.
ARTICLE 7. MAINTENANCE, REPAIR AND ALTERATION OF PREMISES
7.1 MAINTENANCE: Subject to Article 6 and Work Letter Agreement,
by taking possession of the Premises, Tenant shall be deemed to have accepted
the Premises as being in good, sanitary order, condition, and repair except for
punch list items. Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises and every part thereof in good condition and repair,
ordinary wear and tear excepted. Except as specifically provided in Section 6.1
of this Lease, Landlord shall have no obligation whatsoever to alter, remodel,
improve, repair, decorate or paint the Premises or any part thereof, and the
parties hereto affirm that Landlord has made no representations to Tenant
respecting the condition of the Premises or the Building.
7.2 REPAIRS: Notwithstanding the provisions of Section 7.1 above,
Landlord shall repair and maintain the structure portions, structural walls,
utilities underground, sewer, roof structure, foundation and sub-flooring of the
Building unless such maintenance and repairs are caused in part or in whole by
the act, neglect, fault, or omission of any duty by the Tenant, its agents,
servants, employees, contractors, licensees or invites, in which case Tenant
shall pay Landlord the reasonable cost of such maintenance and repairs. Landlord
shall not be liable for any such repairs or to perform any maintenance unless
such failure shall persist for an unreasonable time after written notice of the
need of such repairs or maintenance is given to Landlord by Tenant. Except as
provided in Article 13 hereof, there shall be no abatement of any item 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 in or to any portion of the Building or the Premises or in or to
fixtures, appurtenances, and equipment therein. Tenant waives the right to make
repairs at Landlord's expense under any law, statute, or ordinance now or
hereafter in effect.
7.3 ALTERATIONS: Subject to the removal/nonremoval qualifications
stated in Section 7.5, Tenant shall not make any alteration, addition, or
improvement to the Premises (whether structural or nonstructural) without the
prior written consent of Landlord, which consent will not be unreasonably
withheld. Tenant may, with notice to Landlord, make nonstructural
modifications/alterations (to exclude, but not be limited to, base building,
electrical, power, sewer, roof, etc.) if Tenant's expenditure per occurrence is
less than $5,000.00 cumulative. In the event Landlord gives its consent, such
consent may be conditioned upon the requirement that Tenant (i) supply to
Landlord, plans and specifications which must be approved by Landlord in writing
prior to commencement of any work; and (ii) provide, prior to the commencement
of any work, a lien free completion bond in the form and amount satisfactory to
Landlord. Any alteration, addition, or improvement for which Landlord gives its
written consent shall be accomplished by Tenant in a good and workmanlike
manner; in conformity with all applicable laws and regulations and by a
contractor approved by Landlord. Upon completion of any such work, Tenant shall
provide to Landlord "as-built" plans, copies, and proof of payment of all labor
and materials. Tenant shall pay, when due, all claims for such labor and
materials and shall give Landlord at least ten (10) days prior written notice of
the commencement of any such work. Landlord may enter upon the Premises, in such
case, for the purpose of posting appropriate notices, including, but not limited
to, notices of non-responsibility. Any Tenant alterations which cause or trigger
an increase in Landlord's tax assessment shall be incrementally passed directly
through to Tenant. Further, the tax increase shall not be computed in
calculating the Initial Base Operating Expenses per Article 1.5 or as provided.
See Addendum Paragraph 6 for other requirements.
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7.4 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. In the event that Tenant shall not, within ten (10) days
following the imposition of any such lien, cause the same to be released of
record by payment or posting of a proper bond, Landlord shall have, in addition
to all other remedies provided herein and by law, the right, but not the
obligation, to cause the same to be released by such means as it shall deem
proper, including payment of or defense against the claim giving rise to such
lien. All sums paid by Landlord and all expenses incurred by it in connection
therewith shall create automatically an obligation of Tenant to pay an
equivalent amount as additional rent, which additional rent shall be payable by
Tenant on Landlord's demand with interest at the maximum rate per annum
permitted by law until paid.
7.5 CONDITION ON TERMINATION: Upon the expiration, or sooner
termination, of the Lease, Tenant shall surrender the Premises to Landlord,
broom clean, and in the same condition as received, except for ordinary wear and
tear which Tenant was not otherwise obligated to remedy, under any provision of
this Lease. Except for the improvements constructed pursuant to Article 6
hereof, Landlord may require Tenant to remove any alterations, additions or
improvements made by Tenant prior to the termination of the Lease and to restore
the Premises to its prior condition (i.e., the condition as of the Commencement
Date), all at Tenant's expense. All alterations, additions, and improvements
which Landlord does not require Tenant to remove shall become Landlord's
property and shall be surrendered to Landlord upon termination of the Lease. In
no event shall Tenant remove any materials or equipment (excluding trade
fixtures) from the Premises without Landlord's prior written consent, including,
but not limited to, any power wiring or power panels, lighting or lighting
fixtures, wall coverings, window coverings, carpets, other floor coverings,
heaters, air conditioners or any other heating or air conditioning equipment,
fencing or security gates or other similar Building operating equipment and
decorations. Notwithstanding, if Landlord approves a Tenant alteration as
described in Section 7.3, then Landlord, with its consent, shall condition its
approval either (i) to be removed at Lease expiration at Tenant's expense or
(ii) not be removed.
ARTICLE 8. UTILITIES AND SERVICES
8.1 UTILITIES AND SERVICES FURNISHED BY LANDLORD: Provided Tenant
is not in default hereunder, Landlord shall furnish air conditioning and heating
services to the Premises and common areas, i.e., Building cooling/heating tower.
Such services shall be furnished between the hours of 6:00 a.m. and 8:00 p.m.,
Monday through Friday, and 8:00 a.m. to 6:00 p.m. on Saturday (generally
accepted legal holidays excluded but not to exceed New Year's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Day after Thanksgiving, Christmas
Eve and Christmas Day) excepting electricity to the Premises which shall be
furnished by Tenant. All of the foregoing utilities and services provided by
Landlord shall be included in the Direct Operating Expenses. The common area
electrical, air conditioning and heating services furnished by Landlord are not
represented by Landlord to be adequate for any purpose other than the permitted
use. It is acknowledged that the Landlord does not provide an uninterrupted
source of electrical power and other services. Under no circumstance shall
Landlord be liable to Tenant if any utility service to the Premises and/or
Building is interrupted or terminated because of repairs, installations,
improvements or causes beyond Landlord's control, nor shall any such
interruption or termination be construed as an eviction (actual or constructive)
of Tenant, nor entitle Tenant to an abatement of any item of Rent, nor relieve
Tenant from fulfillment of any covenant or condition of this Lease. Tenant
requested services shall be provided by Landlord, at an hourly rate established
by Landlord from time to time, during additional hours on reasonable notice to
Landlord, at Tenant's sole cost and expense, and payable by Tenant, as billed,
as Additional Rent. See Addendum Paragraph 4 for additional utilities. Any
specialized HVAC including, but not limited to, separate package units shall be
one hundred percent (100%) Tenant's responsibility which includes maintenance,
repairs, replacement and/or removal of said equipment. SEE ADDENDUM ATTACHED
HERETO AND MADE A PART HEREOF.
8.2 OTHER UTILITIES AND SERVICES: Except as set forth in Sections
8.1 and 8.3 and the Addendum, Tenant shall furnish and pay to the local utility
vendor, at Tenant's sole expense, all electrical service inside the Premises,
all special electrical and Tenant provided HVAC requirements, telephone, cable
and other services which Tenant requires with respect to the Premises.
8.3 JANITORIAL SERVICES PROVIDED BY LANDLORD: Landlord shall
provide five (5) days per week janitorial services for the Premises and the
common area of the Building consistent with practices found in similar office
buildings. The cost of all such services shall be included in the Direct
Operating Expenses.
ARTICLE 9. TAXES
Tenant shall pay, prior to delinquency, all personal property taxes and
license fees levied, assessed or imposed by reason of Tenant's use of the
Premises, and all taxes on Tenant's personal property located on the Premises.
Landlord shall pay all property taxes or assessment with respect to the
Building, which shall be included in Direct Operating Expenses.
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ARTICLE 10. LANDLORD'S RIGHT TO ALTER BUILDING
10.1 LANDLORD'S RIGHT TO ALTER BUILDING: Landlord reserves and
shall, at any and all times, have the right to alter the Building (including,
but not limited to, the parking garage and/or areas, and adjoining common areas)
or add thereto, and may for the purpose erect scaffolding and all other
necessary structures, and Tenant shall not, in that event, claim or be allowed,
or paid, any damage for any injury or inconveniences occasioned thereby nor
shall there be any abatement in any item of Rent. Landlord also reserves the
right to install, use, maintain, repair and replace pipes, ducts, conduits,
wires and appurtenant meters and equipment for service to other parts of the
Building above the ceiling surfaces, below the floor surfaces, within the walls
and in the central core areas, and to relocate any pipes, ducts, conduits, wires
and appurtenant meters and equipment which are located within the Premises or
outside the Premises.
ARTICLE 11. SIGNS
11.1 Landlord shall paint, attach, or affix tenant's trade name
and/or the individual names of its authorized representatives to the first floor
lobby directory that is the principal entry to the Premises, the cost of the
sign and its installation to be paid by Landlord and contained and accounted for
as an initial operating expense.
11.2 Landlord has the sole right to determine the type of
directory, bulletin board, and sign, and the content of each (including, without
limitation, size of letters, style, color, and whether affixed or painted).
11.3 Tenant shall not place or permit to be placed, any sign,
advertisement, notice or other similar matter on the doors, windows, exterior
walls, roof or other areas of the Premises and/or Building which are open to the
view of persons in the common area of the Building or grounds, except with the
advance written consent of Landlord, which consent may be withheld for any
reason. If any sign, advertisement, notice or similar matter is improperly
placed by Tenant, Landlord shall have the right to remove the same, and Tenant
shall be liable for any and all expenses incurred by Landlord by the removal.
Any signs, advertisement, notice or similar matter (including, but not limited
to, directories and nameplates) approved by Landlord shall be at the sole cost
and expense of Tenant, except as otherwise provided.
ARTICLE 12. LIABILITY INSURANCE AND INDEMNITY
12.1 TENANT INSURANCE: Tenant, at its own expense, shall provide
and keep in force with companies reasonably acceptable to Landlord or Landlord's
lender/beneficiary the following insurance policies:
(a) Broad form commercial general liability insurance, or
equivalent, written on an occurrence form against liability for bodily injury
and property damage arising out of or in connection with the use, occupancy or
maintenance by Tenant of the Premises (including, without limitation, personal
injury coverage and contractual liability insurance specifically covering
liability with respect to the indemnity described in Section 12.4 below) in the
amount of not less than Three Million Dollars ($3,000,000.00) in respect to
injuries or death, and in the amount of not less than Three Hundred Thousand
Dollars ($300,000.00) per occurrence in respect to damage to property;
(b) Fire insurance with standard form extended coverage
endorsement to the extent of at least one hundred percent (100%) of the full
insurable value of the Tenant Improvements, other additions, alterations and
improvements to the Premises, and all trade fixtures, fixtures, equipment and
other personal property which may, from time to time, be located upon the
Premises; and
(c) Such other insurance as Tenant or Landlord or any
beneficiary of any deed of trust encumbering the Building or the Property of
which the Premises are a part, may from time to time, reasonably require, in
form, amount and protecting against such risks as would be obtained by a prudent
person.
Each of the foregoing policies of insurance shall name the Landlord and
any mortgagee as an additional insured. The policy limits herein specified shall
be increased, from time to time, upon written demand from Landlord, if Tenant's
use reasonably justifies such increases and/or Landlord's lender/beneficiary or
other third party requires said increase. Tenant may maintain such insurance as
part of blanket policies containing a "per project, per location" endorsement.
Landlord makes no representation that the minimum insurance amounts specified
above are adequate to protect Tenant, and the amount of insurance obtained by
Tenant shall not limit Tenant's liability under this Lease. Tenant shall furnish
Landlord with a certificate of such policy prior to taking possession of the
Premises or occupying any part thereof and whenever requested shall satisfy
Landlord that such policy is in full force and effect. Each policy shall be
primary and non-contributing with any insurance carried by Landlord. Each policy
shall further provide that it shall not be canceled or materially altered
without thirty (30) days prior written notice to Landlord.
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12.2 LANDLORD INSURANCE: Landlord shall carry such insurance with
respect to the Building, of the type and amounts as Landlord, in its sole
discretion, shall deem reasonably appropriate. The cost of any such insurance
shall be included in the Direct Operating Expenses. In addition, in the event
Tenant fails to provide or keep in force any of the insurance as required
pursuant to Section 12.1 above, Landlord, in its discretion, may provide such
insurance, in which event, the cost thereof shall be payable by Tenant to
Landlord, as additional rent on the first day of the calendar month immediately
following demand therefor from Landlord. Notwithstanding, Landlord agrees to
commercially insure the Building/Property with a reputable insurance company at
industry acceptable levels.
12.3 WAIVER OF LIABILITY OF LANDLORD: Landlord shall not be liable
to Tenant for any injury or damage that may result to any person or property by
or from any cause whatsoever (including, without limiting the generality of the
foregoing, injury or damage due to water leakage of any character from the
walls, basement or other portion of the Premises or Building or caused by gas,
fire, oil, electricity or any use whatsoever, in, on or about the Premises or
Building or any part thereof, or theft), other than injury or damage resulting
from the gross negligence or willful misconduct of Landlord.
12.4 WAIVER OF SUBROGATION: Tenant and Landlord waive any rights or
claims against the other for property damage to the extent covered by any of the
waiving party's insurance policies required to be maintained hereunder and waive
any right of subrogation against Landlord or Tenant under any insurance policy.
Tenant and Landlord shall cause the insurance carriers to waive all such rights
and to so notify Landlord and Tenant
12.5 INDEMNITY BY TENANT OF LANDLORD: Tenant agrees to indemnify,
hold Landlord and its agents, employees, affiliates, officers, directors and
shareholders (collectively, the "Indemnities") harmless from and defend Landlord
and the Indemnities against any and all claims, damages, costs, expenses
(including attorneys' fees and costs incurred in connection therewith or to
enforce this indemnity obligation) and liabilities for any injury or damage to
any person or property (i) occurring in, on or about the Premises or any part
thereof, or (ii) occurring in, on or about any part of the Property (including,
without prejudice to the generality of the term "Property", passageways or
hallways) the use of which Tenant may have in conjunction with other tenants of
the Building, when such injury or damage shall be caused in part or in whole, by
the act, negligence or fault of, or omission of any duty with respect to the
same by Tenant, its agents, servants or employees. In case any action, suit or
proceeding is brought against Landlord and/or the Indemnities for which Tenant
is required to provide indemnity pursuant to this Section, Tenant, upon
Landlord's request and at Tenant's sole cost and expense, will resist and defend
such action, suit or proceeding or cause the same to be resisted and defended by
counsel designated by Tenant and approved by Landlord, or counsel designated by
the insurer whose policy covers the cost, claim, damage or liability. At
Landlord's election, Landlord may select and employ counsel to resist and defend
the action, suit or proceeding and Tenant will reimburse Landlord for any
reasonable legal fees or costs incurred by Landlord in connection therewith. The
obligations of Tenant under this Section will survive the expiration or any
termination of this Lease.
ARTICLE 13. DAMAGE OR DESTRUCTION
13.1 DUTY TO RESTORE: In the event the Premises or the Building of
which the Premises are a part are damaged as a result of any cause, then
Landlord shall forthwith repair the same, provided the extent of the destruction
be less than twenty percent (20%) of the full replacement cost of the Premises
or the Building of which the Premises are a part and the insurance proceeds
available to Landlord are adequate to complete such repairs. In the event the
destruction of the Premises or the Building is to an extent greater than twenty
percent (20%) of the full replacement cost, then Landlord shall have the option
(i) to repair or restore such damage and this Lease will continue in full force
and effect provided such repairs may be completed no more than nine (9) months
after said occurrence, except that Tenant shall be entitled to a proportionate
reduction of Basic Rent while such repairs are being made, such proportionate
reduction to be based upon the extent to which the making of such repairs shall
materially interfere with the business carried on by Tenant in the Premises
(provided, however, that if the damage is due to the fault or neglect of Tenant
or its employees, there shall be no abatement of Basic Rent); or (ii) give
notice to Tenant at any time within sixty (60) days after such damage
terminating this Lease as of the date specified in such notice, which date shall
be no more than thirty (30) days after the giving of such notice. In the event
of giving such notice, this Lease shall expire and all interest of the Tenant in
the Premises shall terminate on the date so specified in such notice and Rent
shall be paid up to date of such termination.
13.2 EXCLUSIONS FROM DUTY TO RESTORE: Notwithstanding anything to
the contrary contained in this Article:
(a) Landlord shall not have any obligation whatsoever to
repair, reconstruct or restore the Premises when the damage resulting from any
casualty covered under this article occurs during the last twelve (12) months of
the term of this Lease or any extension thereof.
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(b) Landlord shall not be required to repair any damage
by fire or other cause, or to make any repairs or replacements of any panels,
decoration, office fixtures, railings, floor covering, partitions, or any other
property installed in the Premises by Tenant.
(c) Tenant shall not be entitled to any compensation or
damages from Landlord for loss of the use of the whole or any part of the
Premises. Tenant's personal property or any inconvenience or annoyance
occasioned by such damage, repair, reconstruction or restoration.
13.3 TOTAL TAKING: If the whole of the Premises or so much thereof
as to render the balance unusable by Tenant shall be taken under power of
eminent domain, this Lease shall automatically terminate as of the date of such
condemnation, or as of the date possession is taken by the condemning authority,
whichever is earlier. If a partial taking so renders the balance of the Premises
unusable by Tenant, Tenant shall give written notice thereof to Landlord within
thirty (30) days of the taking. No award of any partial or entire taking shall
be apportioned and Tenant hereby assigns to Landlord any award which may be made
in such taking or condemnation, together with any and all rights of Tenant now
or hereafter arising in or to the same or any part thereof; provided, however,
Tenant shall be entitled to any award made to Tenant for the taking of personal
property and fixtures belonging to Tenant or for Tenant's relocation costs or
business interruption compensation.
13.4 PARTIAL TAKING: In the event of a partial taking of the
Premises which does not result in a termination of this Lease pursuant to
Section 13.3, rent shall be abated, effective as of the date possession of the
Premises is required to be surrendered, in proportion to the part of the
Premises so made unusable by Tenant. Landlord shall, at its expense, restore the
portion of the Premises remaining usable to as near its former condition as
reasonably possible using that portion of the condemnation award attributable to
such restoration costs.
13.5 TEMPORARY TAKING: No temporary taking of the Premises and/or
of Tenant's rights therein or under this Lease shall terminate this Lease or
give Tenant any right to any abatement of rent hereunder. Any award made to
Tenant by reason of any such temporary taking shall belong entirely to Tenant
and Landlord shall not be entitled to share therein.
13.6 SALE: A sale by Landlord to any authority having the power of
eminent domain, either under threat of condemnation or while condemnation
proceedings are pending, shall be deemed a taking under the power of eminent
domain for all purposes under this Article 13.
13.7 WAIVER: Tenant hereby waives any right under any statutes,
ordinances, court decisions or other application law, whether existing now or in
the future, to terminate this Lease following any taking, condemnation, damage
or destruction of the Premises and/or the Building except as provided in this
Lease.
ARTICLE 14. DEFAULT BY TENANT
14.1 REMEDIES UPON DEFAULT: Tenant agrees that (i) if Tenant fails
to make a payment of any item of Rent and such failure continues for a period of
five (5) days after receipt of written notice thereof; or (ii) if Tenant fails
to faithfully perform or observe this Lease Agreement and such failure continues
for a period of thirty (30) days after written notice thereof; or (iii) if the
Premises be vacated or abandoned; or (iv) if Tenant makes a general assignment
for the benefit of its creditors and becomes unable to pay its debts as they
become due in the normal course, or shall file a petition for bankruptcy or
other reorganization, liquidation, dissolution or similar relief and tenant does
not make payment of any item of rent; or (v) a proceeding is filed against
Tenant seeking any relief mentioned in (iv) above; or (vi) a trustee, receiver
or liquidator shall be appointed for Tenant or a substantial part of its
property; or (vii) if Tenant's lease interest is sold under execution, then any
such events shall constitute a breach of this Lease and Landlord may, at
Landlord's option, exercise any or all rights available to a Landlord under the
laws of the State of California, including, without limitation, the right to do
any of the following:
(a) Terminate the Lease and recover:
(i) The worth at the time of the award of unpaid rent
and other charges which had been earned at the time of such termination; plus
(ii) The worth at the time of the award of the amount
by which the unpaid rent and other charges which would have been earned after
termination until the time of award exceeds the amount of such rental loss,
which Tenant proves could have been reasonably avoided; plus
(iii) The worth at the time of the award of the
amount by which the unpaid rent and other charges for the balance of the term of
this Lease after the time of award exceeds the amount of such rental loss, which
Tenant proves reasonably could be avoided; plus
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(iv) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligation under this Lease or which in the ordinary course of things would
be likely to result therefrom, including but not limited to the cost of
restoring the Premises to the condition required in Article 7.5 of this Lease;
plus
(v) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by
applicable law
(b) Utilize the remedy described in California Civil Code
Section 1951.4 (Landlord may continue this Lease in effect after Tenant's breach
and abandonment and recover rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations), as follows:
(i) Landlord can continue this Lease in full force
and effect without terminating Tenant's right of possession, and Landlord shall
have the right to collect rent and other monetary charges when due and to
enforce all other obligations of Tenant hereunder. Landlord shall have the right
to enter the Premises to do acts of maintenance and preservation of the
Premises, to make alterations and repairs in order to relet the Premises, and /
or to undertake other efforts to relet the Premises. Landlord may also remove
personal property from the Premises and store the same in a public or private
warehouse at Tenant's expense and risk. No act by Landlord permitted under this
Paragraph shall terminate this Lease unless a written notice of termination is
given by Landlord to Tenant or unless the termination is decreed by a court of
competent jurisdiction
(ii) In furtherance of the remedy set forth in this
Section, Landlord may relet the Premises or any part thereof for Tenant's
account, for such term (which may extend beyond the Lease term), at such rent,
and on such other terms and conditions as Landlord may deem advisable in its
sole discretion. Tenant shall be liable immediately to Landlord for all costs
Landlord incurs in reletting the Premises. Any rents received by Landlord from
such reletting shall be applied to the payment of: (a) first, any indebtedness
other than rent due hereunder from Tenant to Landlord; (b) second, the costs of
such reletting, including brokerage and attorney's fees and the cost of any
alterations and repairs to the Premises; and (c) third, the payment of rent due
and unpaid hereunder. Any remainder shall be held by Landlord and applied in
payment of future amounts as the same become due and payable hereunder. In no
event shall Tenant be entitled to any excess rent received by Landlord after a
breach of this Lease by Tenant and the exercise of Landlord's remedies
hereunder. If the rent from such reletting during any month is less than the
rent payable hereunder, Tenant shall pay such deficiency to Landlord immediately
upon demand.
14.2 WORTH AT THE TIME OF AWARD. As used in Sections 14.1(a)(i) and
14.1(a)(ii) above, the "worth at the time of award" shall be computed by
allowing interest at the lesser of twelve percent (12%) per annum or the maximum
rate permitted by law. As used in Section 14.1 (a) (iii), above, the "worth at
the time of award" shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
percentage point.
14.3 NOTIFICATION OF RELETTING: In the event Landlord terminates
this Lease pursuant to Section 14.1(a) above, and Tenant has made an advance
payment of rent as defined in California Civil Code Article 1951.7, and Tenant
has requested in writing that Landlord notify it of any initial reletting of
Premises, then and only then must Landlord notify Tenant pursuant to California
Civil Code Article 1951.7(c) that the Premises have been relet.
14.4 RIGHT OF LANDLORD TO RE-ENTER: In the event of any termination
of this Lease, Landlord shall have the immediate right to enter upon and
repossess the Premises, and any personal property of Tenant may be removed from
the Premises and stored in any public warehouse at the risk and expense of
Tenant.
14.5 LANDLORD'S LIEN: INTENTIONALLY DELETED
14.6 LANDLORD'S RIGHT TO PURSUE OTHER REMEDIES: In the event of any
breach of this Lease, Landlord may pursue any of the foregoing remedies, and
Landlord may consecutively or concurrently therewith pursue any other remedy or
enforce any right to which Landlord may be entitled by law.
ARTICLE 15. SUBORDINATION
15.1 This Lease and the leasehold estate created hereby are and
shall be, at the option and upon written declaration of Landlord, subject,
subordinate and inferior to the lien and estate of any liens, trust deeds and
encumbrances, and all renewals, extensions or replacements thereof, now or
hereafter imposed by Landlord upon the Premises or any part of the Building.
Landlord hereby expressly reserves the right, at its option and declaration, to
place liens, trust deeds and encumbrances upon and against the Premises
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and/or any part thereof and/or the Building, superior in lien and effect to this
Lease and the estate created hereby. The execution by Landlord and the recording
in the Office of the County Recorder of the county in which the Premises are
situated, of a declaration that this Lease and leasehold estate are subject,
subordinate and inferior to any lien, trust deed or encumbrance placed by
Landlord upon or against the Premises, and/or any part thereof and/or the
Building, shall, of and by itself (in favor of any lien or, mortgagee,
beneficiary, trustee or title insurance company insuring the interest of any
such person) and without further notice to or act or agreement of Tenant, make
this Lease and the estate created hereby subject, subordinate and inferior
thereto. Notwithstanding the foregoing, Tenant agrees, on request of Landlord,
to forthwith execute and acknowledge any reasonable subordination agreement or
other documents required to establish of record the priority of any such
encumbrance over this Lease, and also to execute and deliver to Landlord,
promptly on request, any reasonable estoppel certificate or other statement to
be furnished to any prospective purchaser or lender against the Premises stating
the matters specified in Article 27 hereof.
15.2 In the event any proceedings are brought for foreclosure, or
in the event of the exercise of the power of sale under any mortgage or deed of
trust made by the Landlord covering the Premises, the Tenant shall attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as the
Landlord under this Lease.
15.3 The provisions of this Article to the contrary
notwithstanding, and so long as Tenant is not in default hereunder, this Lease
shall remain in full force and effect for the full term hereof.
15.4 Landlord agrees to use reasonable best efforts to obtain and
deliver to Tenant, at Tenant's expense, a commercially reasonable
non-disturbance agreement from any lender with a lien on the Building senior to
this Lease.
ARTICLE 16. ATTORNEY'S FEES
In case any suit shall be brought for any unlawful detainer of the
Premises, for the recovery of any Rent due under this Lease, or because of the
breach or alleged breach of any other covenant herein contained on the part of
either party to be kept or performed, the prevailing party shall recover from
the non-prevailing party all costs and expenses incurred therein, including
reasonable attorney's fees, and reasonable attorney's fees and expenses incurred
in enforcing any judgment. Further, (i) if for any reason Landlord consults
legal counsel or otherwise incurs any reasonable costs or expenses as a result
of its rightful attempt to enforce the provisions of this Lease, even though no
litigation is commenced, or if commenced is not pursued to final judgment or
(ii) Landlord is named as a defendant in any suit brought against Tenant in
connection with or arising out of Tenant's occupancy hereunder, Tenant shall be
obligated to pay to Landlord, in addition to all other amounts for which Tenant
is obligated hereunder, all of Landlord's reasonable costs and expenses incurred
in connection with any such acts, including reasonable attorneys' fees.
ARTICLE 17. ASSIGNMENT AND SUBLETTING
17.1 LANDLORD'S CONSENT REQUIRED: The purpose of this Lease is to
transfer possession of the Premises to Tenant for Tenant's personal use and
Tenant has not entered into this Lease for the purpose of obtaining the right to
convey the leasehold to others. The ability of Tenant to assign or sublet the
Premises is subsidiary and incidental to the underlying purpose of this Lease.
Tenant will not, either voluntarily or by operation of law, assign, transfer,
mortgage, pledge, hypothecate or encumber this Lease or any interest herein, and
will not sublet the Premises or any part thereof or any right or privilege
appurtenant thereto, or allow any other person (the employees, agents, servants
and invitees of Tenant excepted) to occupy or use the Premises or any portion
thereof, without the prior written consent of Landlord, which consent will not
be unreasonably withheld. Provided Tenant has received Landlord's consent
herein, Tenant agrees throughout the term of this Lease not to sublease to more
than four (4) tenants total. Any cumulative transfer of more than thirty percent
(30%) of the voting stock will be deemed to be an assignment by Tenant of this
Lease which requires the prior written notice to Landlord provided the
controlling entity has a consolidated net worth equal to or greater than
Tenant's. If notice is given to Landlord, then the controlling entity shall
submit to Landlord for its approval all reasonably required financial
documentation to support the financial qualifications.
Any transfer or subletting attempted or concluded without Landlord's
prior written consent will be void and will constitute a default under this
Lease. Consent by Landlord to any transfer (including, but not limited to, an
assignment or subletting), shall be limited to the particular transfer approved
by Landlord and shall not be deemed to be Landlord's consent to any subsequent
transfer. Tenant acknowledges Landlord shall have no obligation to sublessees
and Tenant agrees to be responsible for such parties' compliance with all rules,
regulations, and other covenants.
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17.2 LANDLORD'S ELECTION: Tenant's request for consent to any
transfer, described in Section 17.1 above must be accompanied by a written
statement setting forth the details of the proposed transfer, including the
name, type of business and financial condition (supported by financial
statements) of the prospective transferee, financial details of the proposed
transfer (e.g. the terms of the transaction, the rent and security deposit
payable under any assignment or sublease), copies of all agreements and other
writings pertaining in any way to the proposed transfer. Tenant, in addition to
the foregoing information which must be delivered to Landlord at the time Tenant
requests Landlord's consent to the proposed transfer, shall deliver to Landlord
any additional information concerning the proposed transfer or prospective
transferee as Landlord may reasonably request. Landlord will have the right (i)
to reasonably withhold consent; (ii) to grant written consent to the transfer;
or (iii) to terminate this Lease as of the date of the proposed transfer as to
that portion of the Premises affected by the proposed transfer provided the
third party transfer term is greater than thirty-nine (39) months long. Within
fifteen (15) business days after submission of all required information for the
request for consent of proposed transfer, Landlord shall give notice to Tenant
of its election under this Section. If Landlord does waive in writing its right
to terminate this Lease, such waiver shall be effective only for the transfer
specifically covered in Tenant's notice for a period of sixty (60) days after
the date of the waiver. If Landlord elects to terminate this Lease under Section
1 7.2(iii) above, Tenant shall have the right to withdraw its request to the
proposed transfer within fifteen (15) days after Landlord's election to
terminate this Lease, in which case Landlord shall have no right to terminate
this Lease or any portion thereof. If Landlord does duly exercise its rights
under Section 1 7.2(iii) above to terminate this Lease or any portion thereof,
Landlord shall have the right to enter into a lease or other occupancy agreement
directly with the prospective transferee, and Tenant shall have no right to any
of the rents or other consideration payable by such prospective transferee under
such other lease, even if such rents and other consideration exceed the rent
payable under this Lease by Tenant. If Landlord elects to exercise its rights
under Section 17.2(iii), then Landlord shall have the right to lease the
Premises to any other tenant, or not lease the Premises, in its sole discretion.
in the event of a sublease or assignment of a portion of the Premises, to which
Landlord has elected to exercise its rights under Section 1 7.2(iii) above,
Landlord and Tenant shall enter into an amendment of this Lease to effect a
proportionate reduction in the size of the Premises and in the Basic Rent or
other Additional Rent payable hereunder.
17.3 WITHHOLDING CONSENT: Under Section 17.2(i), Landlord may
withhold its consent to the proposed transfer on any reasonable ground. Such
reasonable grounds shall include, without limitation, any one or more of the
following:
(i) That the prospective transferee's financial condition
is or may become insufficient to support all of the financial and other
obligations of this Lease;
(ii) That the use to which the Premises will be put by the
prospective transferee is inconsistent with the terms of this Lease or other
existing leases or is otherwise not suitable for a first class office building;
(iii) That the nature of the prospective transferee's
proposed or likely use of the Premises would involve any increased risk of the
use, release or mishandling of hazardous materials;
(iv) That the prospective transferee is not likely to
conduct on the Property a business of a nature substantially equal to that
conducted by Tenant or other tenants on the Property;
(v) That Landlord has not received assurances acceptable
to Landlord in its sole discretion that all past due amounts owing from Tenant
to Landlord (if any) will be paid and all other defaults on the part of Tenant
(if any) will be cured prior to the effectiveness of the proposed transfer.
If Landlord withholds its consent to the proposed transfer pursuant to
Section 17.2(i), and if Tenant shall so request in writing, Landlord shall
provide to Tenant a statement of the basis on which Landlord denied its consent
within a reasonable time, however, no greater than ten (10) days after the
receipt of Tenant's notice. Landlord and Tenant agree that Tenant shall have the
burden of proving that Landlord's consent to the proposed transfer was withheld
unreasonably, and that such burden may be satisfied if Landlord fails to provide
a statement of a reasonable basis for withholding its consent within a
reasonable time after Tenant's request therefor. Tenant acknowledges and agrees
that each of the rights of Landlord in the event of proposed transfer set forth
in this Article is a reasonable restriction on transfer for purposes of
California Civil Code Section 1951.4.
17.4 TENANT'S OBLIGATIONS CONTINUING: No transfer within the scope
of this article, whether with or without Landlord's consent, will release Tenant
or change Tenant's primary liability to pay Rent and to perform all other
obligations of Tenant under this Lease. Landlord's acceptance of Rent from any
other person is not a waiver of any provision of this Section. If Tenant's
transferee defaults under this Lease, Landlord may proceed directly against
Tenant without pursuing remedies against the transferee. Landlord may consent to
subsequent assignments or modifications of this Lease by Tenant's transferee,
without noticing Tenant or obtaining its consent, and such action will not
relieve Tenant of its liability under this Lease.
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17.5 EXCESS RENTAL: With respect to any sublease entered into by
Tenant with Landlord's consent as herein provided, if the rent and other
compensation paid by the subtenant to Tenant under such sublease, and all
agreements and other instruments pertaining in any way thereto, exceeds the Rent
being paid by Tenant to Landlord computed on a square foot basis (i.e., the
amount by which the rent and other compensation being paid by the subtenant to
Tenant exceeds the Rent being paid by Tenant to Landlord under this Lease for
each square foot leased by such subtenant) then Landlord will be entitled to the
amount of such excess ("Excess Rent") and Tenant will pay to Landlord such
Excess Rent within five (5) days after receipt by Tenant of the same. If Tenant
receives any fee, bonus or other payment (whether payable in one or more
installments) from any assignee or sublessee as partial consideration for the
making of such sublease or assignment ("Bonus Payment"), the entire amount of
such Bonus Payment shall be paid over to Landlord as additional rent hereunder.
Notwithstanding the foregoing, Tenant shall be entitled to receive from any
Excess Rent or Bonus Payment otherwise required to be paid to the Landlord the
amount of out-of-pocket expenses actually incurred by Tenant for reasonable and
customary brokerage commissions, tenant improvements, non-monetary lease
concessions or other expenses in connection with sublease or assignment provided
Tenant delivers sufficient evidence of such expenses to Landlord.
17.6 SECURITY INTEREST: Tenant immediately and irrevocably assigns
to Landlord as security for Tenant's obligations under this Lease all rent from
any subletting of all or a part of the Premises as permitted by this Lease, and
Landlord as assignee and as attorney-in-fact for Tenant, or a receiver for
Tenant appointed on Landlord's application, may collect such rent and apply it
toward Tenant's obligations under this Lease; except that, until the occurrence
of an event of default by Tenant, Tenant will have the right to collect such
rent.
17.7 TRANSFER FEE: In the event Landlord consents to a sublease or
assignment hereunder, Tenant shall reimburse Landlord for all attorney's fees
incurred by Landlord in connection with review and preparation of documents in
connection with such sublease or assignment and will pay Landlord a reasonable
fee, not to exceed $250.00, for Landlord's processing of documents necessary to
the giving of such consent and/or assumption by the assignees.
ARTICLE 18. PARKING
Tenant shall have the right to park automobiles in connection with its
use and occupancy of the Premises as more particularly described in the Addendum
attached hereto.
ARTICLE 19. NOTICES
19.1 MANNER OF SERVICE: All notices, demands or requests from one
party to another shall be personally delivered or sent by mail, certified or
registered, postage prepaid, to the address stated in this Article.
19.2 NOTICE OF LANDLORD: All such notices, demands or requests from
Tenant to Landlord shall be given to Landlord, addressed as follows:
Williams Properties I & II, LLC
Attention: Elizabeth J. Clarquist
6170 Cornerstone Court East, Suite 140
San Diego, CA 92121
with copy to: Fisher Thurber, Ltd.
Attn.: David A. Fisher
4225 Executive Square, Suite 1600
La Jolla, CA 92037
Landlord may change its address for notices by giving written notice of
such change to Tenant in the manner provided by this Article 19.
19.3 NOTICE TO TENANT: All such notices, demands or requests from
Landlord to Tenant shall be given to Tenant, addressed, if prior to the
Commencement Date, to Tenant's Notice Address and, after the Commencement Date,
to 5930 Cornerstone Court West, San Diego, CA 92121.
ARTICLE 20. HOLDING OVER BY TENANT
Tenant agrees upon the expiration or termination of this Lease,
immediately and peaceably to yield up and surrender the Premises, notice to quit
or vacate is hereby expressly waived. Tenant shall be liable to Landlord for any
and all damages incurred by Tenant as the result of any failure by Tenant,
timely, to surrender possession of the Premises as required herein. If Tenant
shall hold over after the expiration of this Lease for any cause, such holding
over shall be deemed a tenancy at sufferance or, at the sole discretion of
Landlord, a tenancy from month-to-month only, in which event such month-to-month
tenancy shall be upon the same terms, conditions and provisions as in this Lease
contained, at one hundred forty percent (140%) of the monthly Rent as was in
effect immediately prior to the termination.
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ARTICLE 21. WAIVER
One or more waivers by Landlord of any breach of any covenant or
condition shall not be construed as a waiver of a subsequent or continuing
breach of the same or of any covenant or condition, and the consent or approval
by Landlord to any act by Tenant requiring Landlord's consent or approval shall
not be deemed to waive or render unnecessary Landlord's consent or approval to
or of any subsequent act. No waiver of any provision of this Lease shall be
deemed to have been made, unless it be in writing and signed by the party to be
charged therewith.
ARTICLE 22. LANDLORD'S RIGHT OF ENTRY
Landlord and its agents may enter upon the Premises at any reasonable
time with prior notice, except in the event of emergencies, to post such notices
as Landlord may reasonably deem necessary to exempt Landlord and Landlord's
title from responsibility on account of any work or repairs done by Tenant upon
or in connection with the Premises; to inspect and examine the Premises and see
that the covenants hereof are being kept and performed; to make such repairs,
additions or improvements as Landlord shall deem necessary; or, to exhibit the
Premises to prospective lessees or purchasers thereof.
ARTICLE 23. TIME OF THE ESSENCE
Time is expressly declared to be of the essence of this Lease, and of
all covenants and conditions herein contained.
ARTICLE 24. SUCCESSORS AND ASSIGNS
The covenants and conditions herein contained shall, subject to the
provisions of Article 17 and this Article, apply to and bind the heirs,
successors, executors, administrators and assigns of the respective parties
hereof. If this Lease is signed by more than one person as Tenant, their
obligation shall be joint and several.
Landlord may freely and fully assign its interest hereunder. The term
"Landlord" shall mean only the owner at the time in question of the Building or
of a lease of the Building, so that in the event of any transfer or transfers of
title to the Building or of Landlord's interest in a lease of the Building, the
transferor shall be and hereby is relieved and freed of all obligation of
Landlord under this Lease accruing after such transfer, and it shall be deemed,
without further agreement, that such transferee has assumed and agreed to
perform and observe all obligations of Landlord herein during the period it is
the holder of Landlord's interest under this Lease. Tenant shall attorn to and
recognize as its landlord under this Lease any transferee of the Building or
Landlord's interest hereunder. In any event, Tenant shall look only to
Landlord's estate and property in the Building and the land on which it is
located for satisfaction of Tenant's remedies for the collection of a judgment
(or other judicial process) requiring the payment of money by Landlord in the
event of any default by Landlord hereunder, and no other property or assets of
Landlord or its partners or principals, disclosed or undisclosed, shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Tenant's remedies under or with respect to this Lease, the relationship of
Landlord and Tenant hereunder or Tenant's use or occupancy of the Premises and
no such parties shall be named in any action or suit by Tenant against Landlord.
ARTICLE 25. BUILDING NAME
Tenant shall not use the name of the Building or words to that effect
in connection with any business on the Premises without the written consent of
Landlord. Landlord may change the name of the Building at any time without
consent of or notice to Tenant.
ARTICLE 26. KEYS
Two (2) keys to the Premises will be furnished to Tenant by Landlord.
Additional keys will be furnished upon Tenant paying Landlord the cost thereof.
No additional lock or locks shall be placed by Tenant on any door in the
Premises or Building unless written consent of Landlord shall have been first
obtained; and, should such consent be so obtained, Landlord shall be supplied
with keys to each such lock. Only the employees of Landlord or those it has
authorized in writing shall work on or modify any lock which is part of the
Premises. Tenant shall not cause or allow any keys to be possessed by any person
other than an authorized agent of Tenant. Tenant agrees, at the termination of
the tenancy, to return all keys of all doors and any security cards.
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ARTICLE 27. ESTOPPEL CERTIFICATES
Tenant agrees, at any time and from time to time, upon not less than
five (5) days prior written notice by Landlord, to execute, acknowledge and
deliver to Landlord, a statement in writing (i) certifying this Lease is
unmodified and in full force and effect, or, if there have been modifications,
this Lease is in full force and effect as modified, and stating any such
modifications; (ii) certifying that Tenant has accepted possession of the
Premises, and that any improvements required by the terms of this Lease to be
made by the Landlord have been completed to the satisfaction of the Tenant;
(iii) stating that no rent under this Lease has been paid more than thirty (30)
days in advance of its due date; (iv) stating the address to which notices to
Tenant should be sent; (v) certifying, if applicable, that Tenant, as of the
date of any such certification, has no charge, lien or claim of set-off under
this Lease, or otherwise, against rents or other charges due or to become due
hereunder, (vi) stating whether or not, to the best of Tenant's knowledge,
Landlord is in default in the performance of any covenant, agreement or
condition contained in this Lease, and, if so, specifying each such default of
which Tenant may have knowledge and (vii) stating such other matters as Landlord
may reasonably request. Any such statement delivered pursuant hereto may be
relied upon by Landlord, any owner of the Building, any prospective purchaser of
the Building, any mortgagee or prospective mortgagee of the Building or of
Landlord's interest, or any prospective assignee of any such mortgagee.
Provided Tenant has received written notice of the mailing address
of any mortgagee of Landlord, Tenant further agrees that, from the date of
execution of this Lease, it will not seek to terminate this Lease by reason of
any act or omission of the Landlord, until the Tenant shall have given written
notice of such act or omission to Landlord's mortgagee and until a reasonable
period of time shall have elapsed following the giving of such notice, during
which period of time Landlord's mortgagee shall have the right, but shall not be
obligated, to remedy such action or omission.
ARTICLE 28. FORCE MAJEURE
Landlord shall not be required to perform any of its obligations under
this Lease, nor be liable for loss or damage for failure to do so, nor shall
Tenant thereby be released from any of its obligations under this Lease, where
such failure arises from or through acts of God, strikes, lockouts, labor
difficulties, explosions, sabotage, accidents, riots, civil commotions, acts of
war, results of any warfare or warlike conditions in this or any foreign
country, fire and casualty, legal requirements, energy shortage, or causes
beyond the reasonable control of Landlord, unless such loss or damage results
solely from willful misconduct or negligence of Landlord or its employees.
ARTICLE 29. NO REPRESENTATIONS BY LANDLORD
Neither Landlord nor any agent or employee of Landlord, has made any
representations or promises, with respect to the Premises or the Building except
as herein expressly set forth, and no rights, privileges, easements or licenses
are acquired by Tenant except as herein set forth.
ARTICLE 30. BROKER
Tenant warrants to Landlord that there are no other brokerage
commissions or fees payable in connection with this Lease except to the Broker
named in Section 1.13 of this Lease, whose commission shall be paid by Landlord.
Tenant agrees to indemnify and hold Landlord harmless from any cost, liability
and expense (including attorney's fees) which Landlord may incur as the result
of any breach of the warranty contained in this Article 30.
ARTICLE 31. ANNOUNCEMENTS
Tenant shall not cause or permit to be disseminated, published or
released, by itself or through any of its brokers, employees, agents or
contractors, any public announcements, advertisements or other communication
which, in any way, describes or refers to the general or specific Lease terms or
conditions hereof, without the prior written consent of Landlord, which consent
may be withheld for any reason, except for those announcements required under
Tenant's securities laws.
ARTICLE 32. COUNTERPARTS
This Lease may be executed in two (2) or more counterparts, each of
which shall be an original, but all of which shall constitute one and the same
instrument.
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ARTICLE 33. GOVERNING LAW AND VENUE
This Lease has been negotiated and entered into in the State of
California, and shall be governed by, construed and enforced in accordance with
the internal laws of the State of California applied to contracts made in
California by California domiciliaries to be wholly performed in California.
Venue for any action by any party pertaining to this Lease shall be in the
appropriate court located in San Diego County, California.
ARTICLE 34. CAPTIONS AND INTERPRETATIONS
Articles, Sections, paragraph titles or other captions contained in
this Lease are inserted as a matter of convenience and for reference and in no
way define, limit, extend or describe the scope of this Lease or any provision
here of No provision in this Lease is to be interpreted for or against either
party because that party or its legal representative drafted such provision.
ARTICLE 35. SEVERABILITY
If any term, covenant, condition or provision of this Lease is held by
a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the provisions shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
ARTICLE 36. LEASE NOT EFFECTIVE UNTIL EXECUTED
Submission by Landlord of this Lease for examination or signature by
Tenant shall not constitute adoption and this Lease shall not become effective
until executed by both Tenant and Landlord and delivery made of the fully
executed instrument to such parties. The Lease shall not be deemed to be
executed by Landlord until signed by an authorized General Partner of Landlord.
ARTICLE 37. LIMITATION OF REMEDIES
Anything herein to the contrary notwithstanding, Tenant shall look
solely to Landlord's interest in the Premises for the satisfaction of any claim,
judgment or decree based upon any default hereunder by Landlord, and no other
property or assets of Landlord shall be subject to levy, execution or other
enforcement procedure for the satisfaction of such claim, judgment or decree and
no partner, master lessor, officer, agent, affiliate or employee of Landlord
shall be sued or earned as a party in any suit or action, or served with
process, or required to answer or otherwise plead to any service of process,
except to the extent required to bring Landlord under the jurisdiction of the
applicable court, nor will any judgment be take against any partner, master
lessor, officer, agent, affiliate or employee of Landlord.
ARTICLE 38. HAZARDOUS SUBSTANCES
38.1 HAZARDOUS SUBSTANCE RESTRICTION: Tenant shall not cause or
permit any Hazardous Substance to be used, stored, generated, or disposed of on
or in the Premises by Tenant, Tenant's agents, employees, contractors,
licensees, or invitees. If Hazardous Substances are used, stored, generated, or
disposed of on or in the Premises in violation of the foregoing sentence, or if
the Premises become contaminated in any manner due to an act or omission of
Tenant, Tenant's agents, employees, contractors, licensees or invitees, Tenant
shall indemnify and hold harmless Landlord from any and all claims, damages,
fumes, judgments, penalties, costs, liabilities, or losses (including, without
limitation, a decrease in value of the Premises, damages caused by loss or
restriction of rentable or usable space), or any damages caused by adverse
impact on marketing of the space, and any and all sums paid for settlement of
claims, litigation expenses, attorney's fees, consultation, and expert fees of
whatever kind or nature, known or unknown, contingent or otherwise arising
therefrom. This indemnification includes, without limitation any and all costs
incurred because of any investigation of the site or any cleanup, removal, or
restoration mandated by a federal, state, or local agency or political
subdivision. Without limitation of the foregoing, if Tenant caused or permits
the presence of any Hazardous Substances on the Premises and that results in
contamination, Tenant shall promptly, at its sole expense, take any and all
actions necessary to return the Premises to the condition existing prior to the
presence of any such Hazardous Substance on the Premises. Tenant shall first
obtain Landlord's approval for any such remedial action. The provisions of the
Paragraph 37.1 shall be in addition to any other obligations and liabilities
Tenant may have to Landlord under this Lease or at law or equity and shall
survive the transactions contemplated herein and shall survive the termination
of this Lease. Landlord, as of the date of this Lease, has no actual knowledge
of the presence of Hazardous Materials.
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38.2 HAZARDOUS SUBSTANCE DEFINED: As used in Section 37.1,
("Hazardous Substance" means any substance that is toxic, ignitable, reactive,
or corrosive and that is regulated by any local government, the State of
California, or the United States Government. "Hazardous Substance" includes any
and all material or substances that are defined as "hazardous waste", "extremely
hazardous waste", or a "hazardous substance" or similar term pursuant to state,
federal, or local governmental law now or hereafter enacted. "Hazardous
Substance" includes, but is not restricted to, asbestos, polychlorobiphenyls
("PCB's), and petroleum products.
ARTICLE 39. RULES AND REGULATIONS
Tenant agrees to abide by all rules and regulations of the Building
imposed by Landlord as set forth in Exhibit B attached to the Lease, as the same
may be reasonably changed from time to time upon reasonable notice to Tenant.
Any violation of such Rules and Regulations which continues after written notice
by Landlord shall constitute a default by Tenant. Landlord shall not be liable
for the failure of any Tenant, or its servants, employees, agents, contractors,
licensees or invitees to conform to and comply with such rules and regulations.
ARTICLE 40. ENTIRE AGREEMENT
This Lease constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof, and no oral statements or
representations or prior written matter not contained or referred to herein
shall have any force or effect. This Lease fully supersedes any and all prior
understandings, representations, warranties and agreements between the parties
hereto, or any of them, pertaining to the subject matter hereof, and may be
modified only by written agreement, signed by all of the parties hereto.
LANDLORD: TENANT:
WILLIAMS PROPERTIES I, LLC HNC Software Inc., a Delaware Corp.
& WILLIAMS PROPERTIES II, LLC,
California Limited Liability Companies
By: /s/ Elizabeth J. Clarquist By: /s/ Raymond V. Thomas
----------------------------- ------------------------
Elizabeth J. Clarquist Raymond V. Thomas
Title: Vice President Title: Chief Financial Officer
<PAGE> 19
ADDENDUM TO OFFICE BUILDING LEASE AGREEMENT DATED JUNE 17, 1996 BY AND BETWEEN
WILLIAMS PROPER'S I, LLC & WILLIAMS PROPERTIES II, LLC, CALIFORNIA LIMITED
LIABILITY COMPANIES, AS LANDLORD AND HNC SOFTWARE, INC., A DELAWARE CORPORATION,
AS TENANT, FOR THAT CERTAIN PROPERTY COMMONLY KNOWN AS 6020 CORNERSTONE COURT
WEST, IN THE CITY OF SAN DEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA.
This Addendum is attached to and forms a part of the Lease. In the event of any
conflict between the terms of the Lease and the terms of this Addendum, the
terms of this Addendum shall govern and control.
1. BASIC RENT:
Tenant's Basic Rent per month shall be adjusted pursuant to Section 4.2
of the Lease as followings:
Months 13-24 $36,747.33 per month net of utilities 11/97 - 10/98
Months 25-36 $38,217.22 per month net of utilities 11/98 - 10/99
Months 37-48 $39,745.91 per month net of utilities 11/99 - 10/00
Months 49-60 $41,335.75 per month net of utilities 11/00 - 10/01
Months 61-72 $42,989.18 per month net of utilities 11/01 - 10/02
Months 73-81 $44,708.74 per month net of utilities 11/02 - 07/03
2. PARKING:
Tenant shall have the right to use four (4) parking spaces per 1,000
square feet of usable area leased, subject to the reasonable rules and
regulations adopted by Landlord from time to time. Parking shall be
free of charge for the initial Term and provided on-site on an
unreserved basis. However, in the event of governmental or governing
agency imposed fees relating to parking, Tenant shall be required to
pay any such fees. Should any violation of parking privileges occur,
Landlord shall notify Tenant and request Tenant to immediately enforce
internal procedures to comply with its parking obligations. If the
Tenant's internal procedures do not resolve the parking violation, then
Landlord, by necessity, may impose reasonable measures to control the
parking obligations at Tenant's expense which payment shall be due upon
invoicing to Tenant.
3. SIGNAGE:
Subject to all governmental laws, ordinances and regulations, any
covenants, conditions and restrictions affecting the Premises, and
space availability Tenant shall have the right, at Tenant's sole cost
and expense, to install and maintain up to two (2) exclusive building
signs at locations to be mutually agreed upon. The sign, its
specifications, size, method of attachment and installation, and design
shall be subject to the Landlord's reasonable approval. The sign shall
not be illuminated at night, it is not transferable and is personal
exclusively to Tenant such that no assignee or sublessee of Tenant
shall be entitled to any such signage rights. All signage shall read'
HNC" or '~NC Software". If eighteen (18) months after the Commencement
Date, Tenant has not installed its sign, Tenant shall have no further
right to install any signs.
4. BUILDING HOURS OF OPERATION (HEATING, VENTILATION & AIR CONDITIONING
[HVAC]).
SECTION 8.1 OF THE LEASE IS MODIFIED AS FOLLOWS:
The hours of operation for the Building will be 6:00 am. to 8:00 p.m.
Monday through Friday and 8:00 am. to 6:00 p.m. on Saturdays, except
holidays. Tenant may request after hour heating, ventilation and air
conditioning (HVAC) service. The minimum request for such service shall
be four (4) hours. Landlord's currently hourly charge to Tenant for
after hours HVAC shall be equal to Twenty-Five and No/lOOths ($25.00)
Dollars per hour, subject to increase from time to time. Tenant agrees
to pay Landlord for such service on the earlier occurrence of: (a)
within five (5) days after the date on which Tenant receives a written
invoice from Landlord for site service or (b) the first day of the
calendar month following the month during which the service is
rendered.
5. OPTION TO RENEW LEASE EXTENSION RIGHT:
Landlord hereby grants to Tenant one (1) option (the "Option") to renew
the Term for a renewal period of five (5) years (the "Extension").
During any Extension, the terms and conditions set forth in this Lease
shall apply, except that Basic Rent for the Extension shall be adjusted
to an amount agreed upon by the parties in their sole and absolute
discretion. If, for any reason, the parties do
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ADDENDUM TO OFFICE BUILDING LEASE AGREEMENT DATED JUNE 17, 1996 BY AND BETWEEN
WILLIAMS PROPERTIES I, LLC & WILLIAMS PROPERTIES II, LLC, CALIFORNIA LIMITED
LIABILITY COMPANIES, AS LANDLORD AND HNC SOFTWARE, INC., A DELAWARE CORPORATION,
AS TENANT, FOR THAT CERTAIN PROPERTY COMMONLY KNOWN AS 6020 CORNERSTONE COURT
WEST, IN THE CITY OF SAN DEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA.
not reach agreement on the amount of Basic Rent applicable during the
Extension within forty-five (45) days after Tenant's notice of exercise
of the Option, then the Option shall be of no further force or effect,
Tenant shall have no right to extend the Term and the Term shall end on
the date specified in Section 3.1 of the Lease. The Option shall be
exercised only by written notice delivered to Landlord at least six (6)
months, but not more than twelve (12) months, before the expiration of
the initial Term of this Lease. If Tenant fails to timely deliver
written notice of exercise of the Option to Landlord, the Option shall
lapse and Tenant shall have no further right to extend the Term of this
Lease. If Tenant so exercises any Option, then, effective on the
commencement date of the Extension, all references herein to the Term
of this Lease shall include such Extension, except for references to
the "initial Term." Tenant's exercise of the Option shall be subject to
the express conditions that (i) at the time of exercise, and at all
times prior to, commencement of the Extension, no Event of Default by
Tenant shall have occurred and (ii) Tenant has not been ten (10) or
more days late in the payment of rent more than a total of three (3)
times during the Term of this Lease and (iii) the Tenant named in this
Lease occupies the entire Premises as of the date of exercise of the
Option and the date the Extension commences. The Option is personal to
Tenant and cannot be transferred to any assignee or sublessee.
6. FIRST RIGHT OF NEGOTIATION:
Provided Tenant is not in material default of the terms and conditions
of this Lease, Tenant shall have a first right of negotiation on the
terms and conditions described below on all available space on the
first and second floors of the Building, subject to any existing
renewal, expansion or similar rights of existing tenants. In the event
Landlord receives an offer to lease any said available space, Landlord
shall notify Tenant of such offer. If Tenant delivers written notice of
Tenant's exercise of the right of first negotiation within five (5)
business days after delivery of Landlord's notice, Landlord and Tenant
shall meet and attempt negotiate in good faith terms which are
acceptable to the parties, each in their sole and absolute discretion.
If, within fifteen (15) days after Landlord's notice of an offer to
Tenant, the parties have not entered into a lease agreement for any
expansion, Tenant's first right of negotiation on available space shall
be of no further force or effect for said space and Landlord shall have
the absolute right at any time thereafter to lease such space free of
any rights of Tenant. If Tenant does not elect to exercise its first
right of negotiation within five (5) business days after delivery of
Landlord's notice, then Tenant's right of first negotiation shall be of
no further force or effect as to such space and Landlord shall have the
absolute right at any time thereafter to lease such space free of any
rights of Tenant.
LANDLORD: TENANT:
WILLIAMS PROPERTIES I, LLC HNC Software Inc., a Delaware Corp.
& WILLIAMS PROPERTIES II, LLC,
California Limited Liability Companies
By: /s/ Elizabeth J. Clarquist By: /s/ Raymond V. Thomas
----------------------------- ------------------------
Elizabeth J. Clarquist Raymond V. Thomas
Title: Vice President Title: Chief Financial Officer
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EXHIBIT "A-1"
SITE PLAN
[DIAGRAM OF SITE PLAN]
SITE PLAN IS FOR ILLUSTRATION PURPOSES ONLY AND ACTUAL SITE PLAN,
PARKING, BUILDINGS, LANDSCAPING ETC MAY VARY FROM TIME TO TIME.
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EXHIBIT "A-1"
3RD FLOOR PLAN & "AS-BUILTS"
[DIAGRAM OF 3RD FLOOR PLAN & "AS-BUILTS"]
"AS-BUILT" PLANS ARE FOR REFERENCE PURPOSES ONLY AND ACTUAL FIELD
CONDITIONS MAY VARY SLIGHTLY. ALL EQUIPMENT, FURNISHINGS, TRADE
FIXTURES ETC BUT NOT LIMITED TO ARE PROVIDED BY TENANT AT ITS COST
AND EXPENSE, IF APPLICABLE.
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EXHIBIT "A-1"
2ND FLOOR PLAN & "AS-BUILTS"
[DIAGRAM OF 2ND FLOOR PLAN & "AS-BUILTS"]
"AS-BUILT" PLANS ARE FOR REFERENCE PURPOSES ONLY AND ACTUAL FIELD
CONDITIONS MAY VARY SLIGHTLY. ALL EQUIPMENT, FURNISHINGS, TRADE
FIXTURES ETC BUT NOT LIMITED TO ARE PROVIDED BY TENANT AT ITS COST AND
EXPENSE, IF APPLICABLE.
Initial /s/ EJC
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EXHIBIT "A-1"
2ND FLOOR "AS-BUILTS"
[DIAGRAM OF 2ND FLOOR "AS-BUILTS"]
"AS-BUILT" PLANS ARE FOR REFERENCE PURPOSES ONLY AND ACTUAL FIELD
CONDITIONS MAY VARY SLIGHTLY. ALL EQUIPMENT, FURNISHINGS, TRADE
FIXTURES ETC BUT NOT LIMITED TO ARE PROVIDED BY TENANT AT ITS COST
AND EXPENSE, IF APPLICABLE.
Initial /s/ EJC
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EXHIBIT B
RULES AND REGULATIONS
Any violation of these rules and regulations, which continues after
written notice by Landlord, shall constitute a default by Tenant.
Landlord may upon request by Tenant, waive the compliance by Tenant
with any of the following rules and regulations, providing that (i) no waiver
shall be effective unless signed by Landlord or Landlord's authorized agent,
(ii) any such waiver shall not relieve Tenant from the obligation to comply with
such rule or regulation in the future unless expressly consented to, in writing,
by Landlord, and (iii) no waiver granted to any other tenant shall relieve
Tenant from the obligation of complying with the following rules and regulations
unless Tenant has received a similar waiver in writing from Landlord.
1. Tenant and Tenants employees, shall not loiter in the entrances or
corridors of the Building, or in any way obstruct the sidewalks, walkways,
stairways and elevators, and shall use same only as a means of ingress and
egress from the Premises.
2. Landlord shall have the right to control and operate the public
portions of the Building, and the facilities furnished for the common use of the
tenants, in such manner as Landlord deems best for the benefit of the tenants
generally. Tenant shall not permit the visit to the Premises of persons in such
numbers or under such conditions as to interfere with the use and enjoyment by
other tenants of the entrances, corridors, elevators and other public portions
or facilities of the Building.
3. The directory board at the entrance to the Building is provided for the
exclusive display of the name and location in the Building of each tenant, and
Landlord reserves the right to exclude any other name therefrom, and to make a
charge for each and every name in addition to the name of Tenant, placed on the
directory board at the request of Tenant.
4. The water and janitor closets and other plumbing fixtures shall not be
used for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown "herein. All
damages resulting from any misuse of the fixtures by Tenant or its tenants,
employees, agents, visitors or licensees shall be borne by Tenant.
5. Tenant shall see that the doors of the Premises are closed and securely
locked before leaving the Premises, and must observe strict care and caution
that all water faucets or water apparatus are shut off before Tenant or Tenant's
employees leave and that all electricity shall likewise be carefully shut off,
so as to prevent waste or damage, and for any default or carelessness Tenant
shall make good all injuries sustained by other tenants or occupants of the
Building or Landlord.
6. All furniture, equipment and freight shall be moved into and out of the
Building only during such hours and pursuant to such rules as shall be
established by Landlord in its reasonable discretion and shall, if Landlord so
requests, be done under the supervision of Landlord. Such moving and deliveries
shall be done through such delivery entrances, and using such freight elevators,
as Landlord may designate from time to time. Landlord will not be responsible
for loss of or damage to any furniture, equipment or freight from any cause.
7. Except for normal office fixtures and decorations customarily utilized,
Tenant shall not mark, paint, drill into or in any way deface or damage walls,
ceilings, partitions, floors, wood, paint, stone or metal work of the Premises
or the Building. Boring, cutting or stringing of wires is not permitted. Tenant
is not permitted to construct, maintain, use or operate, within the Premises, or
elsewhere within or on the outside of the Building, any electrical device,
wiring or apparatus in connection with a loud speaker system or other sound
system audible outside the Premises. Tenant shall not permit noise (whether
mechanically, electrically, or manually created) to emanate from the Premises.
8. All electric and telephone wiring shall be installed in a manner
reasonably acceptable to the Landlord. Boring or cutting of floors and
partitions for wiring will not be permitted, except with written consent of
Landlord.
9. Tenant shall not install or use any machinery in the Premises which may
cause any unreasonable noise, jar or tremor to the floors or walls, or which by
its weight might injure the floors of the Building. Landlord may restrict the
weight, size and position of all files, safes and heavy equipment used in the
Building, and may require such items to be mounted on a wood or metal base
acceptable to Landlord. All damage to the Building caused by installing or
removing any safe, furniture, equipment or other property shall be repaired at
the expense of Tenant.
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<PAGE> 26
10. Bicycles, vehicles, animals, birds, or pets of any kind are not
permitted in the Building except guide dogs for the blind. Bicycles may be
stored in bicycle racks if provided within the Building
11. Tenant shall not use, keep or permit to be used, in the Premises, any
inflammable, combustible or explosive substances, paints, chemicals or any toxic
or hazardous materials or substances or other potentially dangerous or offensive
substances or use or permit the use of dangerous or offensive substances or use
or permit the use of the Premises in a manner offensive or objectionable to the
Landlord or occupants of the Building by reason of noise, odors and/or
vibrations.
12. Tenant shall not use the Building or the Premises for manufacturing or
the storage of merchandise or for the sale of merchandise, goods, or property of
any kind at auction.
13. Removal and disposal of trash, rubbish or other refuse must take place
during the hours and using such procedures which Landlord or its agent may from
time to time determine.
14. Contractors or persons employed by Tenant to perform work within the
Premises must obtain Landlord's consent prior to commencing such work, and such
person shall, while in the Building and outside of said Premises, comply with
all instructions issued by the manager/superintendent of the Building.
15. No more than three (3) vending machines or similar machines of any
description shall be installed, maintained, or operated upon the Premises
without the written consent of the Landlord. Tenant shall not permit any cooking
other than microwave cooking on the Premises.
16. Landlord reserves the right to exclude from the Building any person
who, in the judgment of the Landlord, is intoxicated or under the influence of
liquor or drugs or who is not known or does not property identify himself to the
Building management or watchman on duty. landlord may, at its option, require
all persons admitted to or leaving the Building during secured hours to register
with Building security guards. Each tenant shall be responsible for all persons
for whom he authorizes entry into the Building, and shall be liable to Landlord
for all acts of such persons.
17. Canvassing, soliciting or peddling in the Building is prohibited and
Tenant shall cooperate to prevent same.
18. Landlord shall have the right to prohibit any advertising by Tenant
which in Landlord's reasonable opinion tends to impair the reputation of the
Building or its desirability as a Building for offices, and upon written notice
from Landlord, Tenant shall refrain from or discontinue such advertising.
19. Tenant shall not install blinds, shades, awnings or other form of
inside or outside window coverings, or window ventilators or similar devices
without the prior written consent of Landlord.
20. Tenant shall give Landlord prompt notice of any accidents to or defects
in the water pipes, gas pipes, electric lights and fixtures, heating apparatus
or any other service equipment in the Premises or Building.
21. Landlord reserves the right to close and keep locked all doors of the
Building during hours Landlord may reasonable deem advisable for the adequate
protection of the property. Use of the Building before 7:00 am. or after 6:00
p.m. on Monday through Friday, and before 9:00 a.m. or after 2:00 p.m. on
Saturday, or at any other time during weekends or generally accepted legal
holidays, shall be permissive and subject to the rules and regulations Landlord
may reasonably prescribe. Landlord assumes no responsibility and shall not be
liable for any damage resulting from the entry of any authorized or unauthorized
person to the Building.
22. Tenant's use of the property is governed by a Declaration of
Restrictions which has been recorded in the Official Records, in the Office of
the County Recorder of San Diego County, a copy of which is included as an
Exhibit to this Lease, and Tenant shall comply with the terms thereof.
23. Landlord shall have the right to prohibit any use of the Building by
Tenant which in Landlord's opinion impairs the appearance of the Building.
24. The Building Engineer must be in attendance during all move-ins and
move-outs and for all deliveries of furniture and equipment in order to install
and remove elevator pads, lock off freight elevator, key off security system and
generally oversee moving/delivery operation as appropriate. The hours charge for
the Building Engineer is its actual costs not to exceed Forty Dollars ($40.00)
per hour. This charge does not apply to Tenant's initial move-in. The foregoing
shall also apply to moves of Tenant's subtenants and/for assignees of Tenant.
Initials /s/ EJC
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25. The smoking of cigarettes or use of cigarettes or use of tobacco
products in any form whatsoever is prohibited within the confines of 6020
Cornerstone Court West.
26. Landlord reserves the right, from time to time, to make reasonable
amendments to the foregoing rules and regulations by giving notice to Tenant.
LANDLORD: TENANT:
WILLIAMS PROPERTIES I, LLC HNC SOFTWARE, INC., a Delaware Corp.
& WILLIAMS PROPERTIES II, LLC,
California Limited Liability Companies
By: /s/ Elizabeth J. Clarquist By: /s/ Raymond V. Thomas
----------------------------- ------------------------
Elizabeth J. Clarquist Raymond V. Thomas
Title: Vice President Title: Chief Financial Officer
<PAGE> 28
EXHIBIT C
WORK LETTER AGREEMENT
THIS WORK LETTER AGREEMENT is attached to and forms a part of that
certain Lease dated June 17,1996 (the "Lease"), by and between Williams
Properties I, LLC & Williams Properties II, LLC, California Limited Liability
Companies ("Landlord") and HNC Software, Inc., a Delaware Corporation ("Tenant")
and relates to the construction of certain improvements ("Tenant Improvements")
to the Premises which shall be constructed by Landlord as described below. All
terms not defined herein shall have the respective meanings set forth in the
Lease.
1. TENANT IMPROVEMENT ALLOWANCE
(a) Landlord agrees to provide Tenant with the following tenant
improvement allowance (the "Tenant Improvement Allowance"): (i) Fifteen Dollars
($15) per rentable square foot within the portion of the Premises on the third
floor of the Building, or a total of Two Hundred Sixty-Five Thousand Six Hundred
Ninety-Five Dollars ($265,695), (ii) Twenty Dollars ($20) per usable square foot
within the portion of the Premises on the portion of the second floor of the
Building that is unimproved shell space, or a total of One Hundred Fifty-Six
Thousand Nine Hundred Sixty Dollars ($156,960), and (iii) Seven Dollars ($7) per
usable square foot for the portion of the Premises on the portion of the second
floor of the Building that has been previously improved, or a total of Thirty
Thousand Two Hundred Forty-Seven Dollars ($30,247). The allowances described in
clauses (i), (ii) and (iii) are specifically allocated to the applicable
portions of the Premises and may not be used for Tenant Improvements to any
other portion of the Premises, provided that Tenant may transfer up to five
percent (5%) of the amounts allocated in such clauses from one such portion of
the Premises to another. For example, Tenant may use not more than One Thousand
Five Hundred Twelve Dollars and Thirty-Five Cents ($1,512.35) of the allowance
for previously improved space on the second Door for Tenant Improvements to
other portions of the Premises. Any other transfers of the Tenant Improvement
Allowance from one portion of the Premises to another shall be subject to
Landlord's prior written approval. All soft costs including, but not limited to,
fees, contractor overhead, profit, processing, permits, architectural
engineering and reimbursables attributable directly or indirectly to the Tenant
Improvements shall be allocated between the portions of the Premises described
above based upon their proportional Tenant Improvement Allowance expenditures.
(b) The Tenant Improvement Allowance may be used to pay for the
construction by Landlord's Contractor (as defined below) of Tenant Improvements
permanently installed and incorporated into the realty of the Premises,
including costs of material and labor, fees for permits and licenses paid to any
governmental agency in connection with such construction, and other actual
out-of-pocket costs paid, directly or indirectly, by Landlord for such
construction, but specifically excluding payment for Tenant's fixtures,
furniture, cabling and other personal property, which shall be constructed and
installed at Tenant's sole cost and expense and in accordance with the
requirements of the Lease. Landlord shall not impose any charge upon the Tenant
Improvement Allowance for Landlord's profit, overhead or supervision of the
construction of the Tenant Improvements. Notwithstanding the foregoing, if
Landlord engages any consultants to review specialized or upgraded improvements
requested by Tenant, the reasonable costs incurred by Landlord shall be charged
against the Tenant Improvement Allowance.
(c) The Tenant Improvement Allowance may also be used to pay for
the services of the Space Planner (as defined below) to prepare the Space Plan
and the Plans and Specifications (as such terms are defined below) and to
provide construction administration, millwork plans and other space
planning/architectural services customarily provided for similar projects,
provided that the total amount of the Tenant Improvement Allowance that may be
used to pay the Space Planner shall not exceed One Dollar and Forty-Five Cents
($1.45) per usable square foot within the Premises ("Architectural Cap"). Tenant
shall be solely responsible for any fees or other amounts payable to the Space
Planner in excess of the Architectural Cap.
(d) Tenant shall be solely responsible for the cost of any Tenant
Improvements in excess of the Tenant Improvement Allowance (or in excess of the
portion of the Tenant Improvement Allowance allocated to each portion of the
Premises, subject to Tenant's limited right to reallocate such amounts as
described in (a) above), for the cost of any fees and costs of the Space Planner
in excess of the Architectural Cap and the cost of any decorating devices,
Tenant's fixtures, cabling, such as nonstandard items requested by Tenant to be
incorporated in the Tenant Improvements. Tenant shall pay to Landlord fifty
percent (50%) of any such excess cost upon presentation of an invoice to Tenant
and the remaining fifty percent (50%) upon Substantial Completion (as defined
below). Any such payments shall be collectible as additional obligations of
Tenant pursuant to the Lease and, in default of payment thereof, Landlord shall
(in addition to all other remedies) have the same rights as in the event of
default in payment of rent. Any portion of the Tenant Improvement Allowance that
is not used by Tenant upon Substantial Completion of the Tenant Improvements
shall be retained by Landlord and Tenant shall have no right or claim, then or
in the future, to any unused portion. The parties agree that the intent of the
Tenant Improvement Allowance is to cause to be constructed generic/building
standard Tenant Improvements throughout the Premises.
Initials /s/ EJC
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(e) Tenant hereby agrees to accept the existing improvements
within the previously improved portion of the Premises on the second floor and
entire third floor in an "as-is, where-is" basis subject to Exhibit "A". On
existing improvements, Landlord shall be responsible, at its cost, for the
proper working order of all systems prior to Lease Commencement for only those
improvements which are not to be modified or planned to be modified by the
Landlord provided Tenant Improvement Allowance.
2. SPACE PLANNER
(a) Tenant shall contract directly with Jackson & Bryan (the
"Space Planner") to prepare the Space Plan the Plans and Specifications and
other architectural documentation (collectively, the "Design Documents") and to
provide other space planning services in connection with the Tenant
Improvements.
(b) Tenant and the Space Planner shall be solely responsible for
ensuring that the Design Documents are architecturally sound and fully comply
with all applicable building codes, rules, regulations, ordinances and other
applicable laws. Tenant shall indemnify, defend and hold Landlord and its
Indemnitees harmless from all damages, liabilities, claims, penalties, fines,
costs and expenses (including attorneys' fees and costs incurred in connection
therewith or to enforce this indemnity agreement) arising from or relating to
any defects in the Design Documents or the failure of the Design Documents to
comply with all applicable building codes, rules, regulations, ordinances or
other laws.
(c) Landlord will disburse payments from the Tenant Improvement
Allowance to the Space Planner, subject to the Architectural Cap, within thirty
(30) days after presentation of invoices and lien releases and waivers
reasonably satisfactory to Landlord.
(d) Tenant shall meet with the Space Planner as soon as reasonably
possible following the execution of the Lease for the purpose of advising the
Space Planner of the nature and extent of the Tenant Improvements which Tenant
requests. On or before June 19, 1996, Tenant shall cause the Space Planner to
prepare and deliver to Landlord a space layout and improvement plan for the
Premises which shall have been previously approved by Tenant (the "Space Plan").
The Space Plan and the Final Plans and Specifications shall be attached to the
Lease as Exhibit D.
(e) Within twenty-one (21) days after Landlord's approval of the
Space Plan, Tenant shall cause the Space Planner to prepare and deliver to
Landlord the plans and specifications (the "Plans and Specifications") for the
Tenant Improvements which shall have been previously approved by Tenant. The
Plans and Specifications shall include complete architectural drawings and
specifications required to construct the Tenant Improvements, including detailed
plans for doors, partitioning, reflected ceilings, electrical fixtures, outlets
and switches, telephone and computer outlets, plumbing fixtures, extraordinary
floor loads and other special requirements.
(f) All Design Documents are subject to Landlord's prior written
approval, which the Landlord agrees shall not be unreasonably withheld, delayed
or conditioned. If Landlord disapproves any Design Documents, Tenant shall cause
the Space Planner to deliver revised Design Documents to Landlord within ten
(10) days. Without limiting the foregoing, Landlord may withhold its approval of
any Design Documents which require work which:
(i) exceeds or affects the structural integrity of the
Building or any part of the heating, ventilating, air conditioning, plumbing,
mechanical, electrical, communication or other systems of the Building;
(ii) violates any agreement which affects the Building or
which binds Landlord;
(iii) Landlord reasonably believes will disproportionately
increase the cost of operation or maintenance of any of the systems of the
Building;
(iv) Landlord reasonably believes will materially reduce
the market value of the Building at the end of the Lease Term;
(v) does not conform to applicable building codes or is
not approved by any governmental authority with jurisdiction over the Premises
and/or the Building; or
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(vi) does not conform to the standards prepared by
Landlord, includes designs that are not generic or upgrades which are
specialized, or requires demolition of existing improvements or improvements
that may adversely impact the Building. Any upgrades or specialized improvements
shall be detailed and specified on an initial single line hand sketch to be
approved by Landlord before any such items may charged against the Tenant
Improvement Allowance.
(g) Landlord's review and approval of any Design Documents for the
Tenant Improvements shall create no responsibility or liability on the part of
Landlord for their completeness, design sufficiency, or compliance with laws,
rules, and regulations of governmental agencies or authorities and shall not
relieve Tenant of its obligations under Section 2(b). Landlord makes no warranty
or representation as to the adequacy, efficiency, performance or desirability of
the Tenant Improvements.
(h) After approval of the Plans and Specifications, Tenant may
authorize changes in the work during construction only by written instructions
from Tenant to Landlord on a form approved by Landlord. All such changes shall
be subject to Landlord's prior written approval. Tenant shall be solely
responsible for the cost of any such changes, and such costs shall be chargeable
against the Tenant Improvement Allowance provided Landlord consents to such
requested change. Prior to commencing any change, Landlord shall prepare and
deliver to Tenant, for Tenant's approval, a change order (the "Change Order")
setting forth the additional time required to perform the change and the total
cost of such change, which will include associated architectural, engineering
and construction contractor's fees. If Tenant fails to approve such Change Order
in writing within two (2) business days after such delivery by Landlord, Tenant
shall be deemed to have withdrawn the proposed Change Order and Landlord shall
not proceed to perform the change. Upon Landlord's receipt of Tenant's approval,
Contractor shall proceed to perform the change and Tenant shall pay for such
Change Order in accordance with Section 1 (d) above. Notwithstanding any minor
change order request(s), in the event Tenant substantially changes the scope of
work, Landlord reserves the right to charge a reasonable administration fee not
to exceed Forty and No/1 00ths ($40.00) Dollars per hour relating to the
administration of the change order(s). Upon Landlord's approval of change
orders, it shall state the fee, if applicable, and then Tenant shall pay
Landlord the fee within ten (10) days of written commencement of the change
order. Change orders caused by existing conditions or unknown conditions shall
be excepted from Landlord's fees.
3. TENANT IMPROVEMENT CONTRACTOR
Landlord, based upon approved Plans and Specifications, shall
competitively bid the construction among the following contractors or other
approved contractors: FCC Construction, Bycor and Johnson & Jennings. Landlord
shall select a contractor (the "Contractor") and subcontractors in its
reasonable discretion based upon pricing, reputation and selection of
subcontractors and other factors Landlord deems relevant, and shall seek the
input of Tenant. Landlord will review with Tenant relevant contractor bids.
4. CONSTRUCTION OF IMPROVEMENTS
(a) If the estimated cost ("Estimated Cost") to design and
construct the Tenant Improvements, including the Contractor's bid ("Bid
Amount"), is more than the amount of the Tenant Improvement Allowance, Landlord
shall notify Tenant in writing. Within three (3) business days following receipt
of such notice, Tenant shall either (i) agree in writing to pay the amount by
which the Estimated Cost exceeds the amount of the Tenant Improvement Allowance
in accordance with Section 1 (d) above or (ii) notify Landlord in writing of
Tenant's election to cause the Space Planner to revise the Plans and
Specifications to reduce the Estimated Cost. The revised Plans and
Specifications shall not be rebid, but shall instead be provided to the
Contractor for Contractor to revise the Bid Amount. This procedure shall be
repeated until the Plans and Specifications, the Bid Amount and the Estimated
Cost have been approved by Tenant and Landlord, but all revisions of the Plans
and Specifications and all revised Bid Amounts pursuant to this Section 4.A.
shall be a Tenant delay pursuant to Section 6.4 of the Lease and elsewhere
provided.
(b) Contractor shall construct the Tenant Improvements pursuant to
a contract with Landlord. Following approval of the Plans and Specifications,
the Bid Amount and the Estimated Cost by Landlord and Tenant, Contractor will
cause application to be made to the appropriate governmental authorities for
necessary approvals and building permits. Upon receipt of the necessary
approvals and permits, Contractor shall begin construction of the Tenant
Improvements.
(c) Landlord shall furnish Tenant, as soon as is reasonably
practicable after Substantial Completion (as defined below) of the Tenant
Improvements, a cost breakdown for the Tenant Improvements. Landlord shall also
provide any reasonable supporting data requested by Tenant in writing.
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<PAGE> 31
5. SUBSTANTIAL COMPLETION
As used herein and in the Lease, the terms "Substantial Completion" or
"Substantially Complete" (or any other variant of such terms) with respect to
the Tenant Improvements shall mean that (i) the Premises have been approved to
occupy by the City of San Diego Building Inspection Department, and (ii) it has
been determined by a joint inspection of the Premises by a representative of the
Landlord and the Tenant that the Tenant Improvements have been constructed
substantially in accordance with the Plans and Specifications, except for
finishing details of construction, mechanical and other adjustments and other
items of the type commonly found on an architectural punch list, none of which
materially interfere with Tenant's use or occupancy of the Premises for Tenant's
intended normal business operation. Based on such joint inspection, Landlord
shall present to Tenant a Suite Acceptance Letter in Landlord's standard form
which Tenant shall promptly execute and deliver to Landlord. Any items of work
required by the Plans and Specifications and approved change order(s) that have
not been completed upon Substantial Completion shall be listed in the Suite
Acceptance Letter. Landlord shall promptly proceed to complete such items.
If Substantial Completion is delayed as a result of (a) Tenant's
failure to comply with any time frames set forth herein or in the Lease, (b) any
changes to the approved Plans and Specifications requested by Tenant, (c)
Tenant's failure to furnish any documents required hereby, to approve any item
as required hereby or to perform any other act or obligation imposed on Tenant
by the Lease or this Work Letter as and when required, or (d) any other delay
caused by Tenant, its agents, employees or contractors (collectively, "Tenant
Delay"), then the Commencement Date and Tenant's obligation to pay Rent shall
begin on the date when Substantial Completion would have occurred but for the
Tenant Delay.
6. AMERICANS WITH DISABILITIES ACT (ADA)/TITLE 24/CODE COMPLIANCE
In order to establish a baseline, Landlord agrees that it will be
responsible at its sole cost for ensuring the compliance with applicable laws of
all existing unimproved areas and existing improvements within the common areas
of the Building and Premises, including all restrooms, corridors and access
areas. Landlord shall also be responsible for the cost of compliance with
applicable laws relating to areas affected by the Tenant Improvements to the
extent such Tenant Improvements are standard and generic, and such costs shall
not be charged against the Tenant Improvement Allowance. However, Tenant shall
be responsible for such cost of compliance, and such cost shall be charged
against the Tenant Improvement Allowance, to the extent the Tenant Improvements
(i) include special or upgraded improvements beyond those that are standard and
generic and trigger code compliance obligations for previously conforming areas
of the Building and (ii) require replacement and/or modification of the existing
fire rated corridors on floors two and three of the Building.
7. UNAVOIDABLE DELAYS
Performance by either party hereunder shall not be deemed to be in
default where delays or defaults are due to war, insurrection, strikes,
lock-outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of
the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of
transportation, governmental restrictions, moratoriums, third party litigation,
unusually severe weather, inability to secure necessary labor, materials or
tools, delays of any contractor or subcontractor or supplier, acts of the other
party, acts or failure to act of any public, private or governmental agency or
entity or any other causes beyond the control or without the fault of the party
claiming an extension of time to perform ("Unavoidable Delays").
LANDLORD: TENANT:
WILLIAMS PROPERTIES I, LLC HNC SOFTWARE, INC., a Delaware Corporation
& WILLIAMS PROPERTIES n, LLC,
California Limited Liability Companies
By: /s/ Elizabeth J. Clarquist By: /s/ Raymond V. Thomas
----------------------------- ------------------------
Elizabeth J. Clarquist Raymond V. Thomas
Title: Vice President Title: Chief Financial Officer
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EXHIBIT D
PRELIMINARY SPACE PLAN/FINAL PLANS & SPECIFICATIONS
(TO BE ATTACHED)
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