California-Redwood City-900 Chesapeake Lease - Seaport Centre Associates LLC, CBT Systems Ltd. and CBT Group PLC
LEASE AGREEMENT
between
SEAPORT CENTRE ASSOCIATES, LLC
as "LANDLORD"
and
CBT SYSTEMS USA, LTD. and CBT GROUP, PLC
as "TENANT"
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TABLE OF CONTENTS
SECTION PAGE
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1. PREMISES...............................................................4
2. TERM; POSSESSION.......................................................4
3. RENT...................................................................5
4. SECURITY DEPOSIT.......................................................9
5. USE AND COMPLIANCE WITH LAWS..........................................10
6. TENANT IMPROVEMENTS & ALTERATIONS.....................................13
7. MAINTENANCE AND REPAIRS...............................................15
8. TENANT'S TAXES........................................................17
9. UTILITIES.............................................................17
10. EXCULPATION AND INDEMNIFICATION.......................................18
11. INSURANCE.............................................................19
12. DAMAGE OR DESTRUCTION.................................................21
13. CONDEMNATION..........................................................22
14. ASSIGNMENT AND SUBLETTING.............................................24
15. DEFAULT AND REMEDIES..................................................27
16. LATE CHARGE AND INTEREST..............................................29
17. WAIVER................................................................29
18. ENTRY, INSPECTION AND CLOSURE.........................................29
19. SURRENDER AND HOLDING OVER............................................30
20. ENCUMBRANCES..........................................................31
21. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS........................32
22. NOTICES...............................................................32
23. ATTORNEYS' FEES.......................................................33
24. QUIET POSSESSION......................................................33
25. SECURITY MEASURES.....................................................33
26. FORCE MAJEURE.........................................................33
27. RULES AND REGULATIONS.................................................34
28. LANDLORD'S LIABILITY..................................................34
29. CONSENTS AND APPROVALS................................................34
30. BROKERS...............................................................35
31. RELOCATION OF PREMISES................................................35
32. ENTIRE AGREEMENT......................................................35
33. MISCELLANEOUS.........................................................35
34. AUTHORITY.............................................................36
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INDEX OF DEFINED TERMS
ADDITIONAL RENT................ 7 TENANT IMPROVEMENTS............ 13
ALTERATIONS.................... 14 TERM........................... 4
AWARD.......................... 23 TRADE FIXTURES................. 15
BROKER......................... 35 TRANSFER....................... 24
BUILDING....................... 4 TRANSFEREE..................... 25
BUILDING RULES................. 34 VISITORS....................... 11
BUILDING SYSTEMS............... 10
CLAIMS......................... 18
COMMENCEMENT DATE.............. 4
CONDEMNATION................... 23
CONDEMNOR...................... 23
CONSTRUCTION RIDER............. 4
CONTROLS....................... 17
DATE OF CONDEMNATION........... 23
DEVELOPMENT.................... 4
ENCUMBRANCE.................... 31
ENVIRONMENTAL LOSSES........... 11
ENVIRONMENTAL REQUIREMENTS..... 11
EVENT OF DEFAULT............... 27
EXPIRATION DATE................ 4
HANDLED BY TENANT.............. 11
HANDLING BY TENANT............. 11
HAZARDOUS MATERIALS............ 11
HVAC........................... 10
INTEREST RATE.................. 29
LAWS........................... 5
MORTGAGEE...................... 32
OPERATING COSTS................ 5
PARKING FACILITY............... 4
PERMITTED HAZARDOUS MATERIALS.. 11
PREMISES....................... 4
PROJECT........................ 4
PROPERTY....................... 4
PROPERTY MANAGER............... 19
PROPOSED TRANSFEREE............ 25
RENT........................... 9
RENTAL TAX..................... 17
REPRESENTATIVES................ 11
SCHEDULED COMMENCEMENT DATE.... 4
SECURITY DEPOSIT............... 9
SERVICE FAILURE................ 18
TAXES.......................... 6
TENANT'S SHARE................. 7
TENANT'S TAXES................. 17
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BASIC LEASE INFORMATION
LEASE DATE: For identification purposes only, the date of this Lease
is April 6, 1998
LANDLORD: SEAPORT CENTRE ASSOCIATES, LLC, a California limited
liability company
TENANT: CBT SYSTEMS USA, LTD., a Delaware corporation and CBT
GROUP, PLC a Republic of Ireland public liability company,
jointly and severally
PROJECT: Seaport Centre Phase Three (East)
DEVELOPMENT: Seaport Centre Phases One, Two and Three, consisting of 26
buildings, the underlying land and associated land.
BUILDING ADDRESS: 900 Chesapeake
Redwood City, California
RENTABLE AREA OF
BUILDING: Approximately 40,897 square feet
RENTABLE AREA OF
PROJECT: Approximately 176,392 square feet
PREMISES: Floor: Entire Building
Building Number: 14
Rentable Area: Approximately 40,897 square feet
TERM: 84 full calendar months (plus any partial month at the
beginning of the Term)
SCHEDULED
COMMENCEMENT DATE: June 15, 1998
EXPIRATION DATE: The last day of the 84th full calendar month in the Term
BASE RENT: Months 01-12: $2.65 per rentable square foot per month
Months 13-24: $2.73 per rentable square foot per month
Months 25-36: $2.81 per rentable square foot per month
Months 37-48: $2.90 per rentable square foot per month
Months 49-60: $2.98 per rentable square foot per month
Months 61-72: $3.07 per rentable square foot per month
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Months 72-84: $3.16 per rentable square foot per month
MAINTENANCE,
OPERATING COSTS AND This is a "triple net lease" where Tenant is responsible
TAXES: for maintenance, operating costs and taxes, all in
accordance with the applicable provisions of the
Lease.
TENANT'S SHARE: 23.19%
SECURITY DEPOSIT: $325,131.00
LANDLORD'S ADDRESS
FOR PAYMENT OF RENT: Seaport Centre Associates, LLC
Ten Almaden Boulevard, Suite 430
San Jose, CA 95113
LANDLORD'S ADDRESS Seaport Centre Associates, LLC
FOR NOTICES: c/o William Wilson & Associates
Ten Almaden Boulevard, #430
San Jose, CA 95113
with a copy to:
Seaport Centre Associates, LLC
c/o William Wilson & Associates
2929 Campus Drive, Suite 450
San Mateo, CA 94403
Attn: General Counsel
TENANT'S ADDRESS Before the Commencement Date:
FOR NOTICES: 1005 Hamilton Court
Menlo Park, CA 94025
Attn: CFO and Director of Facilities
After the Commencement Date:
The Premises
BROKER(S): CB Commercial
GUARANTOR(S): (none)
PROPERTY MANAGER: William Wilson & Associates
ADDITIONAL
PROVISIONS: 35. Parking
36. Extension Option
Exhibits:
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Exhibit A: The Premises
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Exhibit B: Construction Rider
Exhibit C: Building Rules
Exhibit D: Additional Provisions
The Basic Lease Information set forth above is part of the Lease. In
the event of any conflict between any provision in the Basic Lease Information
and the Lease, the Lease shall control.
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THIS LEASE is made as of the Lease Date set forth in the Basic Lease
Information, by and between the Landlord identified in the Basic Lease
Information ("LANDLORD"), and the Tenant identified in the Basic Lease
Information ("TENANT"). Landlord and Tenant hereby agree as follows:
1. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, upon the terms and subject to the conditions of this Lease, and
subject to covenants, conditions and restrictions recorded in the real estate
records in the county in which the Property is located, the space identified in
the Basic Lease Information as the Premises (the "PREMISES"), in the Building
located at the address specified in the Basic Lease Information (the
"BUILDING"). The approximate configuration and location of the Premises is
shown on Exhibit A. Landlord and Tenant agree that the rentable area of the
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Premises for all purposes under this Lease shall be the Rentable Area specified
in the Basic Lease Information. The Building, together with the parking
facilities serving the Building (the "PARKING FACILITY"), and the parcel(s) of
land on which the Building and the Parking Facility are situated (collectively,
the "PROPERTY"), is part of the Project identified in the Basic Lease
Information (the "PROJECT"), which is part of the Development identified in the
Basic Lease Information (the "DEVELOPMENT").
2. TERM; POSSESSION. The term of this Lease (the "TERM") shall commence on
the Commencement Date as described below and, unless sooner terminated, shall
expire on the Expiration Date set forth in the Basic Lease Information (the
"EXPIRATION DATE"). The "COMMENCEMENT DATE" shall be the earlier of (a) the
later of (x) June 15, 1998, or (y) thirty-one (31) days after the date Landlord
gives Tenant written notice delivering possession of the Premises to Tenant with
the Existing Tenant's personal property removed , subject to extension for (i)
Landlord Delay, as defined in the Construction Rider (the "CONSTRUCTION RIDER")
attached hereto as Exhibit B, and (ii) Tenant's force majeure, as defined in
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Section 26.2 of this Lease; or (b)the date upon which Tenant, with Landlord's
written permission, actually occupies and conducts business in any portion of
the Premises. The parties anticipate that the Commencement Date will occur on
or about the Scheduled Commencement Date set forth in the Basic Lease
Information (the "SCHEDULED COMMENCEMENT DATE"); provided, however, that
Landlord shall not be liable for any claims, damages or liabilities if the
Premises are not ready for occupancy by the Scheduled Commencement Date. When
the Commencement Date has been established, Landlord and Tenant shall at the
request of either party confirm the Commencement Date and Expiration Date in
writing.
TENANT UNDERSTANDS AND AGREES THAT THE PREMISES ARE CURRENTLY LEASED BY
ANOTHER TENANT (THE "EXISTING TENANT"). LANDLORD ENTERED INTO A TERMINATION OF
LEASE WITH THE EXISTING TENANT. UNDER SUCH TERMINATION OF LEASE THE EXISTING
TENANT HAS UP TO THIRTY (30) DAYS AFTER EXECUTION OF A LEASE FOR THE PREMISES
(INCLUDING THIS LEASE) TO REMOVE THE EXISTING TENANT'S PERSONAL PROPERTY FROM
THE PREMISES. LANDLORD AGREES TO REMOVE ALL PERSONAL PROPERTY NEITHER (A)
REMOVED BY THE EXISTING TENANT FROM THE PREMISES WITHIN THIRTY (30) DAYS AFTER
EXECUTION OF THIS LEASE, NOR (B) PURCHASED BY TENANT FROM THE EXISTING TENANT.
IN ADDITION, THE FORM AND CONTENT OF THIS LEASE ARE SUBJECT TO THE PRIOR
APPROVAL OF THE CURRENT MORTGAGEE (AS HEREINAFTER DEFINED) HAVING AN
ENCUMBRANCE ON THE PROPERTY.
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3. RENT.
3.1 Base Rent. Tenant agrees to pay to Landlord the Base Rent set
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forth in the Basic Lease Information, without prior notice or demand, on the
first day of each and every calendar month during the Term, except that Base
Rent for the first full calendar month in which Base Rent is payable shall be
paid upon Tenant's execution of this Lease and Base Rent for any partial month
at the beginning of the Term shall be paid on the Commencement Date. Base Rent
for any partial month at the beginning or end of the Term shall be prorated
based on the actual number of days in the month.
If the Basic Lease Information provides for any change in Base Rent by
reference to years or months (without specifying particular dates), the change
will take effect on the applicable annual or monthly anniversary of the
Commencement Date (which won't necessarily be the first day of a calendar
month).
3.2 Additional Rent: Operating Costs and Taxes.
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(a) Definitions.
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(1) "OPERATING COSTS" means all costs of managing, operating,
maintaining and repairing the Project, including all costs, expenditures, fees
and charges for: (A) operation, maintenance and repair of the Project
(including maintenance, repair and replacement of glass, the roof covering or
membrane, and landscaping); (B) utilities and services (including
telecommunications facilities and equipment, recycling programs and trash
removal), and associated supplies and materials; (C) compensation (including
employment taxes and fringe benefits) for persons who perform duties in
connection with the operation, management, maintenance and repair of the
Project, such compensation to be appropriately allocated for persons who also
perform duties unrelated to the Project; (D) property (including coverage for
earthquake and flood if carried by Landlord), liability, rental income and other
insurance relating to the Project, and (x) expenditures for deductible amounts
paid under such insurance (excluding earthquake insurance, which shall be
payable pursuant to the following provisions), (y) up to $150,000 in
expenditures paid in any calendar year for deductible amounts paid under
earthquake insurance, and (z) the amortized portion of all expenditures in
excess of $150,000 (the "Excess Deductible") for deductible amounts paid in any
calendar year under earthquake insurance, such expenditures for Excess
Deductible being amortized over a period of seven (7) years commencing in the
calendar year of expenditure, together with interest on the unamortized balance
at the rate paid by Landlord on funds borrowed to finance capital improvements
(or, if Landlord finances capital improvements out of Landlord's funds without
borrowing, the rate that Landlord would have paid to borrow such funds, as
reasonably determined by Landlord); (E) licenses, permits and inspections; (F)
complying with the requirements of any law, statute, ordinance or governmental
rule or regulation or any orders pursuant thereto (collectively "LAWS") either
(i) not in effect as of the Commencement Date or (ii) as any Laws in effect as
of the Commencement Date may be amended, changed, added to, interpreted or re-
interpreted by applicable governmental authority or court decision, or
administrative ruling subsequent to the Commencement Date; (G) amortization of
capital replacements, repairs or improvements to the Project made after the
Commencement Date (except for those capital replacements or repairs which are
the obligation of Landlord to make at
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Landlord' sole cost, as provided in Section 7.2 of this Lease), with interest on
the unamortized balance at the rate paid by Landlord on funds borrowed to
finance such capital improvements (or, if Landlord finances such improvements
out of Landlord's funds without borrowing, the rate that Landlord would have
paid to borrow such funds, as reasonably determined by Landlord), over such
useful life as Landlord shall reasonably determine in accordance with generally
accepted accounting principles; (H) an office for the management of the Project,
including expenses of furnishing and equipping such office and the rental value
of any space occupied for such purposes; (I) property management fees in an
amount customarily charged by owners of commercial projects in the geographical
area of the Project; (J) accounting, legal and other professional services
incurred in connection with the operation of the Project and the calculation of
Operating Costs and Taxes; (K) a reasonable allowance for depreciation on
machinery and equipment used to maintain the Project and on other personal
property owned by Landlord in the Project (including window coverings and
carpeting in common areas); (L) reasonable cost of contesting the validity or
applicability of any Laws that may affect the Project; (M) the Project's share
of any shared or common area maintenance fees and expenses (including costs and
expenses of operating, managing, owning and maintaining the Parking Facility and
the common areas of the Project, any fitness center in the Development, the fees
and charges from the Seaport Centre Owners Association and any other fees and
expenses shared with the Development); (N) and any other cost, expenditure, fee
or charge, whether or not hereinbefore described, which in accordance with
generally accepted property management practices would be considered an expense
of managing, operating, maintaining and repairing the Project. Operating Costs
for any calendar year during which average occupancy of the Project is less than
one hundred percent (100%) shall be calculated based upon the Operating Costs
that would have been incurred if the Project had an average occupancy of one
hundred percent (100%) during the entire calendar year.
Operating Costs shall not include (i) costs of special services rendered to
individual tenants (including Tenant) for which a special charge is made; (ii)
interest and principal payments on loans or indebtedness secured by the
Building; (iii) costs of improvements for Tenant or other tenants of the
Project; (v) costs of services or other benefits of a type which are not
available to Tenant but which are available to other tenants or occupants, and
costs for which Landlord is reimbursed by other tenants of the Project other
than through payment of tenants' shares of Operating Costs and Taxes; (vi)
utility charges paid by Tenant (and other tenants in the Project) directly to
the applicable public utility company; (vii) leasing commissions, attorneys'
fees and other expenses incurred in connection with leasing space in the Project
or enforcing such leases; (viii) depreciation or amortization, other than as
specifically enumerated in the definition of Operating Costs above; (ix) repairs
or other work occasioned by fire, windstorm or other casualty or hazard except
to the extent of any deductible amount for which Tenant is responsible; and (x)
costs, fines or penalties incurred due to Landlord's violation of any Law.
(4) "TAXES" means: all real property taxes and general, special
or district assessments or other governmental impositions, of whatever kind,
nature or origin, imposed on or by reason of the ownership or use of the
Project; governmental charges, fees or assessments for transit or traffic
mitigation (including area-wide traffic improvement assessments and
transportation system management fees), housing, police, fire or other
governmental service or purported benefits to the Project; personal property
taxes assessed on the personal property of Landlord used in the operation of the
Project; service payments in lieu of taxes and taxes and
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assessments of every kind and nature whatsoever levied or assessed in addition
to, in lieu of or in substitution for existing or additional real or personal
property taxes on the Project or the personal property described above; any
increases in the foregoing caused by changes in assessed valuation, tax rate or
other factors or circumstances; and the reasonable cost of contesting by
appropriate proceedings the amount or validity of any taxes, assessments or
charges described above. Taxes shall not include any state and federal personal
or corporate income taxes measured by the income of Landlord from all sources
(other than taxes on rent at the Property), as well as any inheritance, or
estate, succession, gift tax, or documentary transfer tax. Landlord agrees that
for the purpose of this Lease any special assessments or special taxes for
public improvements to the Project will be amortized, with interest at the rate
payable to the assessing or taxing authority, over the maximum time Landlord is
permitted to pay such special assessment or special tax without penalty. To the
extent paid by Tenant or other tenants as "Tenant's Taxes" (as defined in
Section 8 - Tenant's Taxes), "Tenant's Taxes" shall be excluded from Taxes.
(5) "TENANT'S SHARE" means the Rentable Area of the Premises
divided by the total Rentable Area of the Project, as set forth in the Basic
Lease Information. If the Rentable Area of the Project is changed or the
Rentable Area of the Premises is changed by Tenant's leasing of additional space
hereunder or for any other reason, Tenant's Share shall be adjusted accordingly.
(b) Additional Rent.
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(1) Tenant shall pay Landlord as "ADDITIONAL RENT" for each
calendar year or portion thereof during the Term Tenant's Share of the sum of
(x) the amount of Operating Costs, and (y) the amount of Taxes.
(2) Prior to the Commencement Date and each calendar year
thereafter, Landlord shall notify Tenant of Landlord's estimate of Operating
Costs, Taxes and Tenant's Additional Rent for the following calendar year (or
first partial year following the Commencement Date). Commencing on the
Commencement Date, and in subsequent calendar years, on the first day of January
of each calendar year and continuing on the first day of every month thereafter
in such year, Tenant shall pay to Landlord one-twelfth (1/12th) of the
Additional Rent, as reasonably estimated by Landlord for such full calendar
year. If Landlord thereafter estimates that Operating Costs or Taxes for such
year will vary from Landlord's prior estimate, Landlord may, by notice to
Tenant, revise the estimate for such year (and Additional Rent shall thereafter
be payable based on the revised estimate).
(3) As soon as reasonably practicable after the end of each
calendar year, Landlord shall furnish Tenant a statement with respect to such
year, showing Operating Costs, Taxes and Additional Rent for the year, and the
total payments made by Tenant with respect thereto. Unless Tenant raises any
objections to Landlord's statement within ninety (90) days after receipt of the
same, such statement shall conclusively be deemed correct and Tenant shall have
no right thereafter to dispute such statement or any item therein or the
computation of Additional Rent based thereon. If Tenant does object to such
statement, then Landlord shall provide Tenant with reasonable verification of
the figures shown on the statement and the parties shall negotiate in good faith
to resolve any disputes. Any objection of Tenant to Landlord's statement and
resolution of
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any dispute shall not postpone the time for payment of any amounts due Tenant or
Landlord based on Landlord's statement, nor shall any failure of Landlord to
deliver Landlord's statement in a timely manner relieve Tenant of Tenant's
obligation to pay any amounts due Landlord based on Landlord's statement.
(4) If Tenant's Additional Rent as finally determined for any
calendar year exceeds the total payments made by Tenant on account thereof,
Tenant shall pay Landlord the deficiency within ten (10) days of Tenant's
receipt of Landlord's statement. If the total payments made by Tenant on account
thereof exceed Tenant's Additional Rent as finally determined for such year,
Tenant's excess payment shall be credited toward the rent next due from Tenant
under this Lease. For any partial calendar year at the beginning or end of the
Term, Additional Rent shall be prorated on the basis of a 365-day year by
computing Tenant's Share of the Operating Costs and Taxes for the entire year
and then prorating such amount for the number of days during such year included
in the Term. Notwithstanding the termination of this Lease, Landlord shall pay
to Tenant or Tenant shall pay to Landlord, as the case may be, within ten (10)
days after Tenant's receipt of Landlord's final statement for the calendar year
in which this Lease terminates, the difference between Tenant's Additional Rent
for that year, as finally determined by Landlord, and the total amount
previously paid by Tenant on account thereof.
If for any reason Taxes for any year during the Term are reduced, refunded or
otherwise changed, Tenant's Additional Rent shall be adjusted accordingly. The
obligations of Landlord to refund any overpayment of Additional Rent and of
Tenant to pay any Additional Rent not previously paid shall survive the
expiration of the Term.
(c) Tenant's Audit Rights.
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Tenant, at its expense, shall have the right upon fifteen (15)
days prior written notice to Landlord ( "Tenant's Audit Notice") to be given
only within ninety (90) days after Tenant receives the annual statement of
Additional Rent to audit Landlord's books and records relating to such statement
for such immediately preceding calendar year, subject to the following terms and
conditions: (a) No audit shall be conducted at any time that Tenant is in
default of any of the terms of this Lease; (b) any audit shall be conducted only
by independent certified public accountants practicing for an accounting firm of
national prominence, employed by Tenant on an hourly or fixed fee basis, and not
on a contingency fee basis; and (c) Tenant shall not audit Landlord's books and
records more than one (1) time for any calendar year. Tenant acknowledges that
Tenant's right to inspect Landlord's books and records with respect to
Additional Rent for the preceding calendar year is for the exclusive purpose of
determining whether Landlord has complied with the terms of the Lease with
respect to Additional Rent. Tenant shall have ninety (90) days after Tenant's
Audit Notice to complete Tenant's inspection of Landlord's books and records
concerning Additional Rent at Landlord's accounting office. During its
inspection Tenant agrees to request, in writing, all pertinent documents
relating to the inspection. If in Landlord's possession, Landlord will provide
such documents to Tenant within ten (10) days from Landlord's receipt of the
request and Tenant shall not remove such records from Landlord's accounting
office, but Tenant shall have the right to make copies of the relevant documents
at Tenant's expense. Tenant shall deliver to Landlord a copy of the results of
such audit within fifteen (15) days of its receipt by Tenant. The nature and
content of any audit are
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strictly confidential. Tenant, on behalf of its accountant, employees and agents
shall not disclose the information obtained from the audit to any other person
or entity, including, without limitation, any other tenant in the Building, or
any agent, employee, officer, shareholder, partner, accountant or attorney of
such tenant in the Building. A breach of this confidentiality agreement shall
constitute an Event of Default under this Lease. No assignee shall conduct an
audit for any period during which such assignee was not in possession of the
Premises.
3.3 Payment of Rent. All amounts payable or reimbursable by Tenant
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under this Lease, including late charges and interest (collectively, "RENT"),
shall constitute rent and shall be payable and recoverable as rent in the manner
provided in this Lease. All sums payable to Landlord on demand under the terms
of this Lease shall be payable within ten (10) days after notice from Landlord
of the amounts due. All rent shall be paid without offset, recoupment or
deduction in lawful money of the United States of America to Landlord at
Landlord's Address for Payment of Rent as set forth in the Basic Lease
Information, or to such other person or at such other place as Landlord may from
time to time designate.
4. SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit with
Landlord the amount specified in the Basic Lease Information as the Security
Deposit, if any (the "SECURITY DEPOSIT"), as security for the performance of
Tenant's obligations under this Lease. Landlord may (but shall have no
obligation to) use the Security Deposit or any portion thereof to cure any Event
of Default under this Lease or to compensate Landlord for any damage Landlord
incurs as a result of Tenant's failure to perform any of Tenant's obligations
hereunder. In such event Tenant shall pay to Landlord on demand an amount
sufficient to replenish the Security Deposit. If the Security Deposit is placed
in a fixed term instrument, such as a certificate of deposit, then Landlord
shall not be liable for any prepayment penalty if Landlord uses the Security
Deposit, or a portion thereof, in accordance with the provisions of this Section
4.
If Tenant is not in default at the expiration or termination of this
Lease, then within thirty (30) days after the later of (i) the last day of the
Term of this Lease, or (ii) the date Tenant cures all existing defaults under
this Lease Landlord shall return to Tenant the Security Deposit or the balance
thereof then held by Landlord and not applied as provided above.
Landlord shall deposit and maintain the Security Deposit in a
separate, interest bearing account (the "Account") in Landlord's own name at
Bank of America, or such other national bank as Landlord reasonably selects (the
"Bank"). Tenant shall not pledge, hypothecate or place any lien of any form on
the Security Deposit, or use the Security Deposit as collateral or security for
any purpose other than as security for the performance of Tenant's obligations
under this Lease in accordance with the provisions of this Section 4; and Tenant
shall have no rights to the money in the Account, except for (i) the return
rights specified herein and (ii) the right to receive interest on the Account,
as specified herein. Landlord agrees to place on the signature card for the
Account the following language: "[name of Landlord] is holding the funds in the
Account in accordance with a lease dated [date of Lease] between [name of
Landlord] and CBT Systems, USA, Ltd. The rights of [name of Landlord] and CBT
Systems, USA, Ltd. in and to the funds are subject to the terms of such lease."
Within ten (10) Business Days after Landlord signs the signature card (or any
replacement signature card) on the Account Landlord agrees to provide
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Tenant a copy of the signature card for the Account. Landlord agrees to request
the Bank to pay interest on such Account directly to Tenant on a quarterly
basis, and to report to the appropriate taxing authorities that such interest
has been paid to Tenant; provided, however, if despite Landlord's request, the
Bank cannot or will not pay the interest directly to Tenant, then (x) the Bank
shall pay interest on the Account directly to Landlord, in which case, within
ten (10) Business Days after Landlord receives any such payment of interest,
Landlord shall pay to Tenant the interest Landlord receives from the Bank on the
Account, and (y) Landlord shall have the right to report to the appropriate
state and federal taxing authorities that such income is the income of Tenant.
Tenant represents to Landlord that Tenant's Federal Taxpayer Identification
Number is _____________________.
5. USE AND COMPLIANCE WITH LAWS.
5.1 Use. The Premises shall be used and occupied for general
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business office purposes, and for storage, shipping and receiving, and for no
other use or purpose. Tenant shall comply with all present and future Laws
relating to Tenant's use or occupancy of the Premises (and make any repairs,
alterations or improvements as required to comply with all such Laws), and shall
observe the "Building Rules" (as defined in Section 27 - Rules and Regulations);
provided, however, that the foregoing shall not be interpreted to require Tenant
to perform structural or capital work except to the extent required as a result
of Tenant's specific use of the Premises or Tenant's Alterations to the
Premises. Tenant shall not do, bring, keep or sell anything in or about the
Premises that is prohibited by, or that will cause a cancellation of or an
increase in the existing premium for, any insurance policy covering the Property
or any part thereof. Tenant shall not permit the Premises to be occupied or
used in any manner that will constitute waste or a nuisance, or disturb the
quiet enjoyment of or otherwise annoy other tenants in the Building. Without
limiting the foregoing, the Premises shall not be used to manufacture goods or
products, for educational activities, practice of medicine or any of the healing
arts, providing social services, for any governmental use (including embassy or
consulate use), or for personnel agency, customer service office (provided, that
so long as CBT Systems or CBT Group, PLC, or an Affiliate (as hereinafter
defined) of either of them is the Tenant under this Lease, such right being
personal to the original Tenant named herein, then Tenant may use up to fifty
percent [50%] of the rentable area of the Premises for customer technical
support by telephone), studios for radio, television or other media, travel
agency or reservation center operations or uses. Tenant shall not, without the
prior consent of Landlord, (i) bring into the Building or the Premises anything
that may cause substantial noise, odor or vibration, overload the floors in the
Premises or the Building or any of the heating, ventilating and air-conditioning
("HVAC"), mechanical, plumbing, electrical, fire protection, life safety,
security or other systems in the Building ("BUILDING SYSTEMS"), or jeopardize
the structural integrity of the Building or any part thereof; (ii) connect to
the utility systems of the Building any apparatus, machinery or other equipment
other than typical office equipment; or (iii) connect to any electrical circuit
in the Premises any equipment or other load with aggregate electrical power
requirements in excess of 80% of the rated capacity of the circuit.
Tenant shall honor and comply with the terms of all recorded covenants,
conditions and restrictions relating to the Property.
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5.2 Hazardous Materials.
-------------------
(a) Definitions.
-----------
(1) "HAZARDOUS MATERIALS" shall mean any substance: (A) that
now or in the future is regulated or governed by, requires investigation or
remediation under, or is defined as a hazardous waste, hazardous substance,
pollutant or contaminant under any governmental statute, code, ordinance,
regulation, rule or order, and any amendment thereto, including the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.
(S)9601 et seq., and the Resource Conservation and Recovery Act, 42 U.S.C.
-- ---
(S)6901 et seq., or (B) that is toxic, explosive, corrosive, flammable,
-- ---
radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline,
diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
radon and urea formaldehyde foam insulation.
(2) "ENVIRONMENTAL REQUIREMENTS" shall mean all present and
future Laws, orders, permits, licenses, approvals, authorizations and other
requirements of any kind applicable to Hazardous Materials.
(3) "HANDLED BY TENANT" and "HANDLING BY TENANT" shall mean and
refer to any installation, handling, generation, storage, use, disposal,
discharge, release, abatement, removal, transportation, or any other activity of
any type by Tenant or its agents, employees, contractors, licensees, assignees,
sublessees, transferees or representatives (collectively, "REPRESENTATIVES") or
Tenant's guests, customers, invitees, or visitors (collectively, "VISITORS"), at
or about the Premises in connection with or involving Hazardous Materials, other
than by Landlord, its employees and contractors.
(4) "ENVIRONMENTAL LOSSES" shall mean all costs and expenses of
any kind, damages, including foreseeable and unforeseeable consequential
damages, fines and penalties incurred in connection with any violation of and
compliance with Environmental Requirements and all losses of any kind
attributable to the diminution of value, loss of use or adverse effects on
marketability or use of any portion of the Premises or Property.
(b) Tenant's Covenants. No Hazardous Materials shall be Handled by
------------------
Tenant at or about the Premises or Property without Landlord's prior written
consent, which consent may be granted, denied, or conditioned upon compliance
with Landlord's requirements, all in Landlord's absolute discretion.
Notwithstanding the foregoing, normal quantities and use of those Hazardous
Materials customarily used in the conduct of general office activities, such as
copier fluids and cleaning supplies ("PERMITTED HAZARDOUS MATERIALS"), may be
used and stored at the Premises without Landlord's prior written consent,
provided that Tenant's activities at or about the Premises and Property and the
Handling by Tenant of all Hazardous Materials shall comply at all times with all
Environmental Requirements. At the expiration or termination of the Lease,
Tenant shall promptly remove from the Premises and Property all Hazardous
Materials Handled by Tenant at the Premises or the Property. Tenant shall keep
Landlord fully and promptly informed of all Handling by Tenant of Hazardous
Materials other than Permitted Hazardous Materials. Tenant shall be responsible
and liable for the compliance with all of the provisions of this Section by all
of Tenant's Representatives and Visitors, and all of Tenant's obligations under
this Section (including
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its indemnification obligations under paragraph (e) below) shall survive the
expiration or termination of this Lease.
(c) Compliance. Tenant shall at Tenant's expense promptly take all
----------
actions required by any governmental agency or entity in connection with or as a
result of the Handling by Tenant of Hazardous Materials at or about the Premises
or Property, including inspection and testing, performing all cleanup, removal
and remediation work required with respect to those Hazardous Materials,
complying with all closure requirements and post-closure monitoring, and filing
all required reports or plans. All of the foregoing work and all Handling by
Tenant of all Hazardous Materials shall be performed in a good, safe and
workmanlike manner by consultants qualified and licensed to undertake such work
and in a manner that will not interfere with any other tenant's quiet enjoyment
of the Property or Landlord's use, operation, leasing and sale of the Property.
Tenant shall deliver to Landlord prior to delivery to any governmental agency,
or promptly after receipt from any such agency, copies of all permits,
manifests, closure or remedial action plans, notices, and all other documents
relating to the Handling by Tenant of Hazardous Materials at or about the
Premises or Property. If any lien attaches to the Premises or the Property in
connection with or as a result of the Handling by Tenant of Hazardous Materials,
and Tenant does not cause the same to be released, by payment, bonding or
otherwise, within ten (10) days after the attachment thereof, Landlord shall
have the right but not the obligation to cause the same to be released and any
sums expended by Landlord (plus Landlord's administrative costs) in connection
therewith shall be payable by Tenant on demand.
(d) Landlord's Rights. Landlord shall have the right, but not the
-----------------
obligation, to enter the Premises at any reasonable time (i) to confirm Tenant's
compliance with the provisions of this Section 5.2, and (ii) to perform Tenant's
obligations under this Section if Tenant has failed to do so after reasonable
notice to Tenant. Landlord shall also have the right to engage qualified
Hazardous Materials consultants to inspect the Premises and review the Handling
by Tenant of Hazardous Materials, including review of all permits, reports,
plans, and other documents regarding same. Tenant shall pay to Landlord on
demand the costs of Landlord's consultants' fees if their inspection discloses
facts which demonstrate that Tenant has breached its obligations under this
Section 5.2 and all costs incurred by Landlord in performing Tenant's
obligations under this Section. Landlord shall use reasonable efforts to
minimize any interference with Tenant's business caused by Landlord's entry into
the Premises, but Landlord shall not be responsible for any interference caused
thereby.
(e) Tenant's Indemnification. Subject to Section (f) below, Tenant
------------------------
agrees to indemnify, defend, protect and hold harmless Landlord and its partners
or members and its or their partners, members, directors, officers,
shareholders, employees and agents from all Environmental Losses and all other
claims, actions, losses, damages, liabilities, costs and expenses of every kind,
including reasonable attorneys', experts' and consultants' fees and costs,
incurred at any time to the extent arising from or in connection with the
Handling by Tenant of Hazardous Materials at or about the Property or Tenant's
failure to comply in full with all Environmental Requirements with respect to
the Premises.
(f) Landlord's Responsibilities. Landlord shall not use any of the
----------------------------
Project for any activities involving the use, generation, handling, release,
threatened release, treatment, storage,
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<PAGE>
discharge, disposal or transportation of any Hazardous Materials, except in such
quantity or concentration that is customarily used, stored or disposed in the
ordinary course of the business so long as such activity duly complies with
applicable Laws and good business practice. If Landlord violates the foregoing
covenant resulting in an Environmental Claim (as hereinafter defined) with
respect to the Property, then Landlord agrees to (a) notify Tenant immediately
of any such Environmental Claim and (b) clean up, or cause to be cleaned up, any
contamination in full compliance with all applicable Laws and (c) indemnify,
defend and hold harmless Tenant and its directors, officers, shareholders,
employees and agents from and against such Environmental Claim and all
Environmental Losses arising therefrom or in connection with any use,
generation, storage or disposal of Hazardous Materials by Landlord in violation
of applicable Environmental Requirements (and not caused by any Handling by
Tenant of Hazardous Materials). Any Environmental Claim for Hazardous Materials
existing on the Project on the Commencement Date of this Lease or arising from
or in connection with any matter disclosed in that certain Phase I Environmental
Assessment dated November 19, 1997 prepared by Eckland Consultants, Inc. (the
"Phase I") shall not be included in Operating Costs or otherwise be the
responsibility of Tenant. "Environmental Claim" means any claim, demand, action,
cause of action, suit, damage, punitive damage, fine, penalty, expense,
liability, criminal liability, judgment, or governmental investigation relating
to remediation or compliance with requirements of Laws covering Hazardous
Materials . The term "Environmental Claim" also includes any costs incurred in
investigating and remediating any Hazardous Materials and any claim based upon
any asserted or actual breach or violation of any requirements of any Laws
covering Hazardous Materials.
(g) Hazardous Materials not caused by Tenant or Landlord or their
-------------------------------------------------------------
Representatives. If, after the Commencement Date of this Lease (i) there occurs
----------------
any underground migration of any Hazardous Materials to the Property from
outside the Property except with respect to the migration of those Hazardous
Materials which are identified in the Phase I, or (ii) a third party (other than
Tenant, Landlord or their representatives) places Hazardous Materials on the
Property resulting in an Environmental Claim, then Landlord shall be responsible
to clean up, or cause to be cleaned up, any contamination in full compliance
with all applicable Laws, and Landlord shall have the right to include the costs
of such clean up, remediation and removal in Operating Costs, not to exceed (x)
$60,000.00 in any twelve (12) month period, (y) $300,000.00 in the aggregate
during the initial 84 month Term of this Lease, and (z) $400,000.00 in the
aggregate during the initial 84 month Term of this Lease, plus the Extension
Period if the Extension Option is exercised.
6. TENANT IMPROVEMENTS & ALTERATIONS
6.1 Landlord and Tenant shall perform their respective obligations
with respect to design and construction of any improvements to be constructed
and installed in the Premises (the "TENANT IMPROVEMENTS"), as provided in the
Construction Rider. Except for any Tenant Improvements to be constructed by
Tenant as provided in the Construction Rider, Tenant shall not make any
alterations, improvements or changes to the Premises, including installation of
any security system or telephone or data communication wiring, ("ALTERATIONS"),
without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed. Any such Alterations shall be completed by
Tenant at Tenant's sole cost and expense: (i) with due diligence, in a good and
workmanlike manner, using new materials; (ii) in compliance with plans and
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specifications approved by Landlord; (iii) in compliance with the construction
rules and regulations promulgated by Landlord from time to time; (iv) in
accordance with all applicable Laws (including all work, whether structural or
non-structural, inside or outside the Premises, required to comply fully with
all applicable Laws and necessitated by Tenant's work); and (v) subject to all
conditions which Landlord may in Landlord's reasonable discretion impose. Such
conditions may include requirements for Tenant to: (i) provide payment or
performance bonds or additional insurance (from Tenant or Tenant's contractors,
subcontractors or design professionals); (ii) use contractors or subcontractors
designated by Landlord; and (iii) remove all or part of the Alterations prior to
or upon expiration or termination of the Term, as designated by Landlord (which
designation shall be given at the time Landlord's consent to such Alterations is
given). Tenant shall have the right to remove any security system installed by
Tenant. If any work outside the Premises, or any work on or adjustment to any
of the Building Systems, is required in connection with or as a result of
Tenant's work, such work shall be performed at Tenant's expense by any one
contractor selected by Tenant out of at least three (3) contractors designated
by Landlord. Landlord's right to review and approve (or withhold approval of)
Tenant's plans, drawings, specifications, contractor(s) and other aspects of
construction work proposed by Tenant is intended solely to protect Landlord, the
Property and Landlord's interests. No approval or consent by Landlord shall be
deemed or construed to be a representation or warranty by Landlord as to the
adequacy, sufficiency, fitness or suitability thereof or compliance thereof with
applicable Laws or other requirements. Except as otherwise provided in
Landlord's consent, all Alterations shall upon installation become part of the
realty and be the property of Landlord.
6.2 Before making any Alterations, Tenant shall submit to Landlord
for Landlord's prior approval reasonably detailed final plans and specifications
prepared by a licensed architect or engineer, a copy of the construction
contract, including the name of the contractor and all subcontractors proposed
by Tenant to make the Alterations and a copy of the contractor's license.
Tenant shall reimburse Landlord upon demand for any reasonable out-of-pocket
expenses incurred by Landlord in connection with any Alterations made by Tenant,
including reasonable fees charged by Landlord's contractors or consultants to
review plans and specifications prepared by Tenant and to update the existing
as-built plans and specifications of the Building to reflect the Alterations.
Tenant shall obtain all applicable permits, authorizations and governmental
approvals and deliver copies of the same to Landlord before commencement of any
Alterations.
6.3 Tenant shall keep the Premises and the Project free and clear of
all liens arising out of any work performed, materials furnished or obligations
incurred by Tenant. If any such lien attaches to the Premises or the Project,
and Tenant does not cause the same to be released by payment, bonding or
otherwise within ten (10) days after the attachment thereof, Landlord shall have
the right but not the obligation to cause the same to be released, and any sums
expended by Landlord (plus Landlord's administrative costs) in connection
therewith shall be payable by Tenant on demand with interest thereon from the
date of expenditure by Landlord at the Interest Rate (as defined in Section 16.2
- Interest). Tenant shall give Landlord at least ten (10) days' notice prior to
the commencement of any Alterations and cooperate with Landlord in posting and
maintaining notices of non-responsibility in connection therewith.
6.4 Subject to the provisions of Section 5 - Use and Compliance with
Laws and the foregoing provisions of this Section, Tenant may install and
maintain furnishings, equipment,
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movable partitions, business equipment and other trade fixtures ("TRADE
FIXTURES") in the Premises, provided that the Trade Fixtures do not become an
integral part of the Premises or the Building. Tenant shall promptly repair any
damage to the Premises or the Building caused by any installation or removal of
such Trade Fixtures.
7. MAINTENANCE AND REPAIRS.
7.1 By taking possession of the Premises Tenant agrees that the
Premises are then in a good and tenantable condition. Notwithstanding the
foregoing, prior to the Commencement Date Landlord shall cause the Building
Systems to be inspected and placed in good working order and repair. In
addition, Landlord agrees, at Landlord's cost, to promptly commence, and in good
faith pursue to completion within sixty (60) days following the Commencement
Date, the following work at the Building, where necessary: (a) re-caulk the
Building, (b) repaint the exterior of the Building, (c) repair and re-coat the
roof of the Building. If, during the sixty (60) days following the Commencement
Date, any of the Building Systems cease being in good working order and repair,
and Tenant gives Landlord written notice of such failure within such sixty (60)
days following the Commencement Date, then Landlord shall cause such Building
System to be placed in good working condition and repair, at no cost to Tenant,
unless the Building System was installed by Tenant. Except for any repairs and
maintenance which are the responsibility of Landlord pursuant to the immediately
preceding sentence, Tenant shall be responsible for all repairs and maintenance
of the Building System commencing on the sixty-first (61st) day following the
Commencement Date. Tenant shall be responsible to clean, maintain and repair
the Premises, including providing janitorial services and disposal of trash; and
to that end, during the Term, Tenant, at Tenant's expense but under the
direction of Landlord, shall repair and maintain the Premises, including,
without limitation, the heating, ventilating and air conditioning system or
systems serving the Premises, the electrical and plumbing systems serving the
Premises, including the lighting and plumbing fixtures, the restrooms serving
the Premises, interior stairways in the Premises, the interior and exterior
glass, plate glass skylights, interior walls, floor coverings, ceiling (ceiling
tiles and grid), Tenant Improvements, Alterations, fire extinguishers, outlets
and fixtures, and any appliances (including dishwashers, hot water heaters and
garbage disposers) in the Premises, in a first class condition, and keep the
Premises in a clean, safe and orderly condition, reasonable wear and tear and
damage caused by casualty excepted. Tenant shall have the benefit of any
construction or equipment warranties existing in favor of Landlord that would
assist Tenant in correcting any defect in the Premises and in discharging
Tenant's obligations regarding the repair and maintenance of the Premises.
Landlord, at no cost to Landlord, shall cooperate with Tenant in enforcing such
warranties. Prior to the Commencement Date Tenant shall provide Landlord with a
copy of a service contract with a licensed commercial Heating, Ventilating and
Air-conditioning maintenance company (which contract and company shall be
subject to Landlord's prior approval), to maintain, on an ongoing basis (at
least quarterly), the heating, ventilating and air-conditioning system serving
the Premises. In addition to the foregoing, Tenant acknowledges that the sewer
piping at the Development is made of ABS plastic. Accordingly, without
Landlord's prior written consent, which consent may be granted or withheld in
Landlord's sole discretion, Tenant shall allow only ordinary domestic sewage to
be placed in the sewer system from the Premises. UNDER NO CIRCUMSTANCES SHALL
TENANT EVER PLACE, OR ALLOW TO BE PLACED, ANY ESTERS OR KETONES (USUALLY FOUND
IN SOLVENTS TO CLEAN UP PETROLEUM PRODUCTS) IN THE DRAINS OR SEWER SYSTEM, FROM
THE PREMISES.
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7.2 Landlord shall (a) maintain or cause to be maintained in reasonably
good order, condition and repair, the roof membrane and the floors and the
second floor deck, and, exterior windows and the public and common areas outside
of the Building, (b) wash the interior and exterior windows of the Building on a
periodic basis, (c) as needed, caulk exterior window joints and concrete slabs
and (d) as needed, paint the exterior of the Building, all of which shall be
included as a part of Operating Costs, subject to the terms and conditions
contained in Section 3.2 of this Lease. In addition, if any Building System
needs replacement (other than those Building Systems installed by Tenant as part
of Alterations), and such Building Systems have been maintained by Tenant in
accordance with the provisions of Section 7.1 of this Lease, then Landlord shall
be responsible to replace such Building System, the cost of which shall be
included as a capital expenditure, and amortized as part of Operating Costs
pursuant to the provisions of Section 3.2 of this Lease. Landlord shall, at
Landlord's sole cost and expense, maintain or cause to be maintained in
reasonably good order, condition and repair, the structural portions of the
roof, foundations, interior load-bearing walls and exterior walls of the
Building. Landlord shall be under no obligation to inspect the Premises. Tenant
shall promptly report in writing to Landlord any defective condition known to
Tenant which Landlord is required to repair. As a material part of the
consideration for this Lease, Tenant hereby waives any benefits of any
applicable existing or future Law, including the provisions of California Civil
Code Sections 1932(1), 1941 and 1942, that allows a tenant to make repairs at
its landlord's expense.
7.3 Landlord hereby reserves the right, at any time and from time to
time, without liability to Tenant, and without constituting an eviction,
constructive or otherwise, or entitling Tenant to any abatement of rent or to
terminate this Lease or otherwise releasing Tenant from any of Tenant's
obligations under this Lease:
(a) To make alterations, additions, repairs, improvements to, all or
any part of the Building, the fixtures and equipment therein, and the Building
Systems (except that Landlord shall not have any right under this provision to
materially reduce the size of the Premises, or to permanently, materially and
adversely affect Tenant's access to and use of the Building [provided Landlord
agrees to use good faith efforts to promptly restore Tenant's access to and use
of the Building], except only as may be required to comply with Laws or as a
result of any fire or other casualty or Condemnation);
(b) To change the Building's name or street address;
(c) To install and maintain at the Project a leasing/marketing sign
for the Project;
(d) To reduce, increase, enclose or otherwise change at any time and
from time to time the size, number, location, lay-out and nature of the common
areas (including the Parking Facility) and other tenancies and premises in the
Property and to create additional rentable areas through use or enclosure of
common areas (except that Landlord shall not have any right under this provision
to materially reduce the size of the Premises, or to permanently, materially and
adversely affect Tenant's access to and use of the Building [provided Landlord
agrees to use good faith
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<PAGE>
efforts to promptly restore Tenant's access to and use of the Building], except
only as may be required to comply with Laws or as a result of any fire or other
casualty or Condemnation); and
(e) If any governmental authority promulgates or revises any Law or
imposes mandatory or voluntary controls or guidelines on Landlord or the
Property relating to the use or conservation of energy or utilities or the
reduction of automobile or other emissions or reduction or management of traffic
or parking on the Property (collectively "CONTROLS"), to comply with such
Controls, whether mandatory or voluntary, or make any alterations to the
Property related thereto.
(f) In exercising its rights under this Section 7.3, Landlord agrees
to use reasonable efforts to minimize any interruption to or disruption of
Tenant's use of the Premises.
8. TENANT'S TAXES. "TENANT'S TAXES" shall mean (a) all taxes, assessments,
license fees and other governmental charges or impositions levied or assessed
against or with respect to Tenant's personal property or Trade Fixtures in the
Premises, whether any such imposition is levied directly against Tenant or
levied against Landlord or the Property, (b) all rental, excise, sales or
transaction privilege taxes arising out of this Lease (excluding, however, state
and federal personal or corporate income taxes measured by the income of
Landlord from all sources) imposed by any taxing authority upon Landlord or upon
Landlord's receipt of any rent payable by Tenant pursuant to the terms of this
Lease ("RENTAL TAX"), and (c) any increase in Taxes attributable to inclusion of
a value placed on Tenant's personal property, Trade Fixtures or Alterations.
Tenant shall pay any Rental Tax to Landlord in addition to and at the same time
as Base Rent is payable under this Lease, and shall pay all other Tenant's Taxes
before delinquency (and, at Landlord's request, shall furnish Landlord
satisfactory evidence thereof). If Landlord pays Tenant's Taxes or any portion
thereof after ten (10) days notice to Tenant of Landlord's intent to pay
Tenant's Taxes or a portion thereof, Tenant shall reimburse Landlord upon demand
for the amount of such payment, together with interest at the Interest Rate from
the date of Landlord's payment to the date of Tenant's reimbursement.
9. UTILITIES.
9.2 Payment for Utilities and Services.
----------------------------------
(a) If the temperature otherwise maintained in any portion of the
Premises by the HVAC systems of the Building is affected as a result of (i) any
lights, machines or equipment used by Tenant in the Premises, or (ii) the
occupancy of the Premises by more than one person per 150 square feet of
rentable area, then, if Tenant does not remedy the problem within thirty (30)
days after written notice from Landlord, Landlord shall have the right to
install any machinery or equipment reasonably necessary to restore the
temperature, including modifications to the standard air-conditioning equipment.
The cost of any such equipment and modifications, including the cost of
installation and any additional cost of operation and maintenance of the same,
shall be paid by Tenant to Landlord upon demand.
(b) Electricity, water, sanitary sewer and any gas will be separately
metered for the Premises. Tenant shall pay prior to delinquency all charges for
water, gas, electricity, telephone
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and other telecommunication services, janitorial service, trash pick-up, sewer
and all other services consumed on or supplied to the Premises, and all taxes,
levies, fees and surcharges thereon.
9.3 Interruption of Services. In the event of an interruption in or
------------------------
failure or inability to provide any services or utilities to the Premises or
Building for any reason (a "SERVICE FAILURE"), such Service Failure shall not,
regardless of its duration, impose upon Landlord any liability whatsoever,
constitute an eviction of Tenant, constructive or otherwise, entitle Tenant to
an abatement of rent or to terminate this Lease or otherwise release Tenant from
any of Tenant's obligations under this Lease. Tenant hereby waives any benefits
of any applicable existing or future Law, including the provisions of California
Civil Code Section 1932(1), permitting the termination of this Lease due to such
interruption, failure or inability.
10. EXCULPATION AND INDEMNIFICATION.
10.1 Landlord's Indemnification of Tenant. Landlord shall indemnify,
------------------------------------
protect, defend and hold Tenant harmless from and against any claims, actions,
liabilities, damages, costs or expenses, including reasonable attorneys' fees
and costs incurred in defending against the same ("CLAIMS") asserted by any
third party against Tenant for loss, injury or damage, to the extent such loss,
injury or damage is caused by the willful misconduct or negligent acts or
omissions of Landlord or its authorized representatives.
10.2 Tenant's Indemnification of Landlord. Tenant shall indemnify,
------------------------------------
protect, defend and hold Landlord and Landlord's authorized representatives
harmless from and against Claims arising from (a) the acts or omissions of
Tenant or Tenant's Representatives or Visitors in or about the Property, or (b)
any construction or other work undertaken by Tenant on the Premises (including
any design defects), or (c) any breach or default under this Lease by Tenant, or
(d) any loss, injury or damage, howsoever and by whomsoever caused, to any
person or property, occurring in the Premises during the Term, excepting only
Claims described in this clause (d) to the extent they are caused by the willful
misconduct or negligent acts or omissions of Landlord or its authorized
representatives.
10.3 Damage to Tenant and Tenant's Property. Landlord shall not be
--------------------------------------
liable to Tenant for any loss, injury or other damage to Tenant or to Tenant's
property in or about the Premises or the Property from any cause (including
defects in the Property or in any equipment in the Property; fire, explosion or
other casualty; bursting, rupture, leakage or overflow of any plumbing or other
pipes or lines, sprinklers, tanks, drains, drinking fountains or washstands in,
above, or about the Premises or the Property; or acts of other tenants in the
Property). Tenant hereby waives all claims against Landlord for any such loss,
injury or damage and the cost and expense of defending against claims relating
thereto, including any loss, injury or damage caused by Landlord's negligence
(active or passive) or willful misconduct. Notwithstanding any other provision
of this Lease to the contrary, in no event shall Landlord be liable to Tenant
for any punitive or consequential damages or damages for loss of business by
Tenant.
10.4 Survival. The obligations of the parties under this Section 10
--------
shall survive the expiration or termination of this Lease.
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11. INSURANCE.
11.1 Tenant's Insurance.
------------------
(a) Liability Insurance. Tenant shall maintain in full force
-------------------
throughout the Term, commercial general liability insurance providing coverage
on an occurrence form basis with limits of not less than Two Million Dollars
($2,000,000.00) each occurrence for bodily injury and property damage combined,
Two Million Dollars ($2,000,000.00) annual general aggregate, and Two Million
Dollars ($2,000,000.00) products and completed operations annual aggregate.
Tenant's liability insurance policy or policies shall: (i) include premises and
operations liability coverage, products and completed operations liability
coverage, broad form property damage coverage including completed operations,
blanket contractual liability coverage including, to the maximum extent
possible, coverage for the indemnification obligations of Tenant under this
Lease, and personal and advertising injury coverage; (ii) provide that the
insurance company has the duty to defend all insureds under the policy; (iii)
provide that defense costs are paid in addition to and do not deplete any of the
policy limits; (iv) cover liabilities arising out of or incurred in connection
with Tenant's use or occupancy of the Premises or the Property; (v) extend
coverage to cover liability for the actions of Tenant's Representatives and
Visitors; and (iv) designate separate limits for the Property. Each policy of
liability insurance required by this Section shall: (i) contain a cross
liability endorsement or separation of insureds clause; (ii) provide that any
waiver of subrogation rights or release prior to a loss does not void coverage;
(iii) provide that it is primary to and not contributing with, any policy of
insurance carried by Landlord covering the same loss; (iv) provide that any
failure to comply with the reporting provisions shall not affect coverage
provided to Landlord, its partners, property managers and Mortgagees; and (v)
name Landlord, its partners, the Property Manager identified in the Basic Lease
Information (the "PROPERTY MANAGER"), and such other parties in interest as
Landlord may from time to time reasonably designate to Tenant in writing, as
additional insureds. Such additional insureds shall be provided at least the
same extent of coverage as is provided to Tenant under such policies. All
endorsements effecting such additional insured status shall be at least as broad
as additional insured endorsement form number CG 20 11 11 85 promulgated by the
Insurance Services Office.
(b) Property Insurance. Tenant shall at all times maintain in effect
------------------
with respect to any Alterations and Tenant's Trade Fixtures and personal
property, commercial property insurance providing coverage, on an "all risk" or
"special form" basis, in an amount equal to at least 90% of the full replacement
cost of the covered property. Tenant may carry such insurance under a blanket
policy, provided that such policy provides coverage equivalent to a separate
policy. During the Term, the proceeds from any such policies of insurance shall
be used for the repair or replacement of the Alterations so insured. Landlord
shall be provided coverage under such insurance to the extent of its insurable
interest and, if requested by Landlord, both Landlord and Tenant shall sign all
documents reasonably necessary or proper in connection with the settlement of
any claim or loss under such insurance. Landlord will have no obligation to
carry insurance on any Alterations or on Tenant's Trade Fixtures or personal
property.
(c) Requirements For All Policies. Each policy of insurance required
-----------------------------
under this Section 11.1 shall: (i) be in a form, and written by an insurer,
reasonably acceptable to Landlord, (ii) be maintained at Tenant's sole cost and
expense, and (iii) require at least thirty (30) days'
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written notice to Landlord prior to any cancellation, nonrenewal or modification
of insurance coverage. Insurance companies issuing such policies shall have
rating classifications of "A" or better and financial size category ratings of
"VII" or better according to the latest edition of the A.M. Best Key Rating
Guide. All insurance companies issuing such policies shall be admitted carriers
licensed to do business in the state where the Property is located. Subject to
the provisions of Section 11.3 of this Lease, any deductible amount under such
insurance shall not exceed $25,000, provided any risks arising out of or in
connection with such $25,000 deductible shall not result in decreased coverage
from what would have been provided had all such risks been underwritten by an
insurance carrier with a policy containing a deductible of $5,000, including,
but not limited to, coverage provided to the parties named as "additional
insureds". Tenant shall provide to Landlord, upon request, evidence that the
insurance required to be carried by Tenant pursuant to this Section, including
any endorsement effecting the additional insured status, is in full force and
effect and that premiums therefor have been paid.
(d) Updating Coverage. Tenant shall increase the amounts of insurance
-----------------
as required by any Mortgagee, and, not more frequently than once every three (3)
years, as recommended by Landlord's insurance broker, if, in the reasonable
opinion of either of them, the amount of insurance then required under this
Lease is not adequate (based upon the amount of insurance required to be carried
by comparable tenants leasing comparable spaces in the vicinity of the
Premises); provided, however, Tenant shall not be obligated to increase the
amount of insurance more than fifty percent (50%) during any three (3) year
period. Any limits set forth in this Lease on the amount or type of coverage
required by Tenant's insurance shall not limit the liability of Tenant under
this Lease.
(e) Certificates of Insurance. Prior to occupancy of the Premises by
-------------------------
Tenant, and not less than thirty (30) days prior to expiration of any policy
thereafter, Tenant shall furnish to Landlord a certificate of insurance
reflecting that the insurance required by this Section is in force, accompanied
by an endorsement showing the required additional insureds satisfactory to
Landlord in substance and form. Notwithstanding the requirements of this
paragraph, Tenant shall at Landlord's request provide to Landlord a certified
copy of each insurance policy required to be in force at any time pursuant to
the requirements of this Lease or its Exhibits.
11.2 Landlord's Insurance. During the Term, to the extent such
--------------------
coverages are available at a commercially reasonable cost, Landlord shall
maintain in effect insurance on the Building with responsible insurers, on an
"all risk" or "special form" basis, insuring the Building and the Tenant
Improvements in an amount equal to at least 90% of the replacement cost thereof,
excluding land, foundations, footings and underground installations. Landlord
may, but shall not be obligated to, carry insurance against additional perils
and/or in greater amounts.
11.3 Mutual Waiver of Right of Recovery & Waiver of Subrogation.
----------------------------------------------------------
Notwithstanding anything contained herein to the contrary, Landlord and Tenant
each hereby waive any right of recovery against each other and the partners,
managers, members, shareholders, officers, directors and authorized
representatives of each other for any loss or damage that is covered by any
policy of property insurance maintained by either party (or required by this
Lease to be maintained) with respect to the Premises or the Property or any
operation therein, or which would have been covered had the waiving party
carried "all risk" insurance for the full replacement cost of the damaged
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property, regardless of cause, including negligence (active or passive) of the
party benefiting from the waiver. If any such policy of insurance relating to
this Lease or to the Premises or the Property does not permit the foregoing
waiver or if the coverage under any such policy would be invalidated as a result
of such waiver, the party maintaining such policy shall obtain from the insurer
under such policy a waiver of all right of recovery by way of subrogation
against either party in connection with any claim, loss or damage covered by
such policy.
12. DAMAGE OR DESTRUCTION.
12.1 Landlord's Duty to Repair.
-------------------------
(a) If all or a substantial part of the Premises are rendered
untenantable or inaccessible by damage to all or any part of the Property from
fire or other casualty then, unless either party is entitled to and elects to
terminate this Lease pursuant to Sections 12.2 - Landlord's Right to Terminate
and 12.3 - Tenant's Right to Terminate, Landlord shall, at its expense, use
reasonable efforts to repair and restore the Premises and/or the Property, as
the case may be, to substantially their former condition to the extent permitted
by then applicable Laws; provided, however, in no event shall Landlord have any
obligation for repair or restoration: (i) beyond the extent of the sum of (x)
the insurance proceeds received by Landlord for such repair or restoration plus
(y) $10,000, or (ii) for any of Tenant's personal property, Trade Fixtures or
Alterations. Tenant shall not be obligated to repair or restore the Premises
and/or the Property, except to the extent of Alterations.
(b) If Landlord is required or elects to repair damage to the Premises
and/or the Property, this Lease shall continue in effect, but Tenant's Base Rent
and Additional Rent shall be abated with regard to any portion of the Premises
that Tenant is prevented from using by reason of such damage or its repair from
the date of the casualty until substantial completion of Landlord's repair of
the affected portion of the Premises as required under this Lease. In no event
shall Landlord be liable to Tenant by reason of any injury to or interference
with Tenant's business or property arising from fire or other casualty or by
reason of any repairs to any part of the Property necessitated by such casualty.
12.2 Landlord's Right to Terminate. Landlord may elect to terminate
-----------------------------
this Lease following damage by fire or other casualty under the following
circumstances:
(a) If, in the reasonable judgment of Landlord, the Premises and the
Property cannot be substantially repaired and restored under applicable Laws
within one (1) year from the date of the casualty;
(b) If, in the reasonable judgment of Landlord, adequate proceeds are
not, for any reason, made available to Landlord from Landlord's insurance
policies (and up to $10,000 from Landlord's funds made available for such
purpose [which $10,000 amount Landlord shall be obligated to make available], or
from Tenant's funds within thirty [30] days after written notice from Landlord
to Tenant of the amount of the deficiency) to make the required repairs;
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(c) If the Building is damaged or destroyed to the extent that, in the
reasonable judgment of Landlord, the cost to repair and restore the Building
would exceed twenty-five percent (25%) of the full replacement cost of the
Building, whether or not the Premises are at all damaged or destroyed; or
(d) If the fire or other casualty occurs during the last year of the
Term, and would take longer than ninety (90) days to repair, unless Tenant
exercises its Extension Option within ten (10) days after Landlord notifies
Tenant of Landlord's election to terminate pursuant to the provisions of this
subsection (d).
If any of the circumstances described in subparagraphs (a), (b), (c) or (d) of
this Section 12.2 occur or arise, Landlord shall give Tenant notice as soon as
reasonably practicable, given the nature and scope of damage, but in any event
within one hundred and twenty (120) days after the date of the casualty,
specifying whether Landlord elects to terminate this Lease as provided above
and, if not, Landlord's estimate of the time required to complete Landlord's
repair obligations under this Lease.
12.3 Tenant's Right to Terminate. If all or a substantial part of
---------------------------
the Premises are rendered untenantable or inaccessible by damage to all or any
part of the Property from fire or other casualty, and Landlord does not elect to
terminate as provided above, then Tenant may elect to terminate this Lease if
(a) Landlord's estimate of the time required to complete Landlord's repair
obligations under this Lease is greater than one (1) year, in which event Tenant
may elect to terminate this Lease by giving Landlord notice of such election to
terminate within thirty (30) days after Landlord's notice to Tenant pursuant to
Section 12.2 - Landlord's Right to Terminate, or (b) if the fire or other
casualty occurs during the last year of the Term, and would take longer than
ninety (90) days to repair, then Tenant may elect to terminate this Lease during
the last year of the Term by giving Landlord written notice of such election to
terminate within thirty (30) days after it is determined that the repair would
take longer than ninety (90) days.
12.4 Waiver. Landlord and Tenant each hereby waive the provisions of
------
California Civil Code Sections 1932(2), 1933(4) and any other applicable
existing or future Law permitting the termination of a lease agreement in the
event of damage or destruction under any circumstances other than as provided in
Sections 12.2 - Landlord's Right to Terminate and 12.3 - Tenant's Right to
Terminate.
13. CONDEMNATION.
13.1 Definitions.
-----------
(a) "AWARD" shall mean all compensation, sums, or anything of value
awarded, paid or received on a total or partial Condemnation.
(b) "CONDEMNATION" shall mean (i) a permanent taking (or a temporary
taking for a period extending beyond the end of the Term) pursuant to the
exercise of the power of condemnation or eminent domain by any public or quasi-
public authority, private corporation or individual having such power
("CONDEMNOR"), whether by legal proceedings or otherwise, or (ii) a
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voluntary sale or transfer by Landlord to any such authority, either under
threat of condemnation or while legal proceedings for condemnation are pending.
(c) "DATE OF CONDEMNATION" shall mean the earlier of the date that
title to the property taken is vested in the Condemnor or the date the Condemnor
has the right to possession of the property being condemned.
13.2 Effect on Lease.
---------------
(a) If the Premises are totally taken by Condemnation, this Lease
shall terminate as of the Date of Condemnation. If a portion but not all of the
Premises is taken by Condemnation, this Lease shall remain in effect; provided,
however, that if the portion of the Premises remaining after the Condemnation
will be unsuitable for Tenant's continued use, then upon notice to Landlord
within thirty (30) days after Landlord notifies Tenant of the Condemnation,
Tenant may terminate this Lease effective as of the Date of Condemnation.
(b) If twenty-five percent (25%) or more of the Project or of the
parcel(s) of land on which the Building is situated or of the Parking Facility
or of the floor area in the Building is taken by Condemnation, or if as a result
of any Condemnation the Building is no longer reasonably suitable for use as an
office building, whether or not any portion of the Premises is taken, Landlord
may elect to terminate this Lease, effective as of the Date of Condemnation, by
notice to Tenant within thirty (30) days after the Date of Condemnation.
(c) If all or a portion of the Premises is temporarily taken by a
Condemnor for a period not extending beyond the end of the Term, this Lease
shall remain in full force and effect, and to the extent permitted by applicable
law, Tenant shall have the right to receive all condemnation proceeds from a
temporary taking.
13.3 Restoration. If this Lease is not terminated as provided in
-----------
Section 13.2 - Effect on Lease, Landlord, at its expense, shall diligently
---------------
proceed to repair and restore the Premises to substantially its former condition
(to the extent permitted by then applicable Laws) and/or repair and restore the
Building to an architecturally complete office building; provided, however, that
Landlord's obligations to so repair and restore shall be limited to the amount
of any Award received by Landlord and not required to be paid to any Mortgagee
(as defined in Section 20.2 below). In no event shall Landlord have any
obligation to repair or replace any improvements in the Premises beyond the
amount of any Award received by Landlord for such repair or to repair or replace
any of Tenant's personal property, Trade Fixtures, or Alterations.
13.4 Abatement and Reduction of Rent. If any portion of the Premises
-------------------------------
is taken in a Condemnation or is rendered permanently untenantable by repairs
necessitated by the Condemnation, and this Lease is not terminated, the Base
Rent and Additional Rent payable under this Lease shall be proportionally
reduced as of the Date of Condemnation based upon the percentage of rentable
square feet in the Premises so taken or rendered permanently untenantable. In
addition, if this Lease remains in effect following a Condemnation and Landlord
proceeds to repair and restore the Premises, the Base Rent and Additional Rent
payable under this Lease shall
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be abated during the period of such repair or restoration to the extent such
repairs prevent Tenant's use of the Premises.
13.5 Awards. Any Award made shall be paid to Landlord, and Tenant
------
hereby assigns to Landlord, and waives all interest in or claim to, any such
Award, including any claim for the value of the unexpired Term; provided,
however, that Tenant shall be entitled to receive, or to prosecute a separate
claim for, an Award for a temporary taking of the Premises or a portion thereof
by a Condemnor where this Lease is not terminated (to the extent such Award
relates to the unexpired Term), or an Award or portion thereof separately
designated for relocation expenses or the interruption of or damage to Tenant's
business or as compensation for Tenant's personal property, Trade Fixtures or
Alterations.
13.6 Waiver. Landlord and Tenant each hereby waive the provisions of
------
California Code of Civil Procedure Section 1265.130 and any other applicable
existing or future Law allowing either party to petition for a termination of
this Lease upon a partial taking of the Premises and/or the Property.
14. ASSIGNMENT AND SUBLETTING.
14.1 Landlord's Consent Required. Tenant shall not assign this Lease
---------------------------
or any interest therein, or sublet or license or permit the use or occupancy of
the Premises or any part thereof by or for the benefit of anyone other than
Tenant, or in any other manner transfer all or any part of Tenant's interest
under this Lease (each and all a "TRANSFER"), without the prior written consent
of Landlord, which consent (subject to the other provisions of this Section 14)
shall not be unreasonably withheld. Subject to the provisions of Section 14.9
below, if Tenant is a business entity, any direct or indirect transfer of fifty
percent (50%) or more of the ownership interest of the entity (whether in a
single transaction or in the aggregate through more than one transaction) shall
be deemed a Transfer. Notwithstanding any provision in this Lease to the
contrary, Tenant shall not mortgage, pledge, hypothecate or otherwise encumber
this Lease or all or any part of Tenant's interest under this Lease.
14.2 Reasonable Consent.
------------------
(a) Prior to any proposed Transfer, Tenant shall submit in writing to
Landlord (i) the name and legal composition of the proposed assignee, subtenant,
user or other transferee (each a "PROPOSED TRANSFEREE"); (ii) the nature of the
business proposed to be carried on in the Premises; (iii) a current balance
sheet, income statements for the last two years and such other reasonable
financial and other information concerning the Proposed Transferee as Landlord
may request; and (iv) a copy of the proposed assignment, sublease or other
agreement governing the proposed Transfer. Within fifteen (15) Business Days
after Landlord receives all such information it shall notify Tenant whether it
approves or disapproves such Transfer or if it elects to proceed under Section
14.7 - Landlord's Right to Space.
(b) Tenant acknowledges and agrees that, among other circumstances for
which Landlord could reasonably withhold consent to a proposed Transfer, it
shall be reasonable for Landlord to withhold consent where (i) the Proposed
Transferee does not intend itself to occupy the
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entire portion of the Premises assigned or sublet, (ii) Landlord reasonably
disapproves of the Proposed Transferee's business operating ability or history,
reputation or creditworthiness or the nature or character of the business to be
conducted by the Proposed Transferee at the Premises, (iii) the Proposed
Transferee is a governmental agency or unit or an existing tenant in the
Project, unless, in the case of an existing tenant, Landlord does not have space
available in the Project that Landlord is willing to lease to the Proposed
Transferee containing the same or more square feet than the space contained in
the Premises, (iv) the proposed Transfer would violate any "exclusive" rights of
any tenants in the Project, (v) Landlord or Landlord's agent has shown space in
the Project to the Proposed Transferee or responded to any inquiries from the
Proposed Transferee or the Proposed Transferee's agent concerning availability
of space in the Project, at any time within the preceding nine months, unless,
in the case of Proposed Transferee, Landlord does not have space available in
the Project that Landlord is willing to lease to the Proposed Transferee
containing the same or more square feet than the space contained in the
Premises, or (vi) Landlord otherwise determines that the proposed Transfer would
have the effect of materially decreasing the value of the Project or materially
increasing the expenses associated with operating, maintaining and repairing the
Project. In no event may Tenant publicly advertise (but Tenant may offer through
brokers) all or any portion of the Premises for assignment or sublease at a
rental less than that then sought by Landlord for a direct lease (non-sublease)
of comparable space in the Project.
14.3 Excess Consideration. If Landlord consents to the Transfer,
--------------------
Landlord shall be entitled to receive as Additional Rent hereunder, seventy-five
percent (75%) of all "Sublease Profits" (as defined below). "Sublease Profits"
shall mean any consideration paid by the Transferee for the assignment or
sublease and, in the case of a sublease, the excess of the rent and other
consideration payable by the subtenant over the amount of Base Rent and
Additional Rent payable hereunder applicable to the subleased space, less, in
either case, any and all direct, out-of-pocket expenses and cash concessions,
including costs for necessary Alterations and brokerage commissions, paid by
Tenant to procure the assignee or subtenant. Tenant shall pay to Landlord as
additional rent, within ten (10) days after receipt by Tenant, any such excess
consideration paid by any transferee (the "TRANSFEREE") for the Transfer (net of
any portion of the consideration which is paid to Tenant to reimburse Tenant for
actual out-of-pocket expenses incurred by Tenant for maintenance, repair and
operation of the Premises on behalf of the Transferee); provided any capital
expenditures and brokerage commissions in connection with any sublease shall be
amortized over the term of the sublease.
14.4 No Release Of Tenant. No consent by Landlord to any Transfer
--------------------
shall relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether occurring before or after such consent, assignment, subletting or
other Transfer. Each Transferee shall be jointly and severally liable with
Tenant (and Tenant shall be jointly and severally liable with each Transferee)
for the payment of rent (or, in the case of a sublease, rent in the amount set
forth in the sublease) and for the performance of all other terms and provisions
of this Lease. The consent by Landlord to any Transfer shall not relieve Tenant
or any such Transferee from the obligation to obtain Landlord's express prior
written consent to any subsequent Transfer by Tenant or any Transferee. The
acceptance of rent by Landlord from any other person (whether or not such person
is an occupant of the Premises) shall not be deemed to be a waiver by Landlord
of any provision of this Lease or to be a consent to any Transfer.
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14.5 Expenses and Attorneys' Fees. Tenant shall pay to Landlord on
----------------------------
demand all costs and expenses (including reasonable attorneys' fees) incurred by
Landlord in connection with reviewing or consenting to any proposed Transfer
(including any request for consent to, or any waiver of Landlord's rights in
connection with, any security interest in any of Tenant's property at the
Premises).
14.6 Effectiveness of Transfer. Prior to the date on which any
-------------------------
permitted Transfer (whether or not requiring Landlord's consent) becomes
effective, Tenant shall deliver to Landlord a counterpart of the fully executed
Transfer document and Landlord's standard form of Consent to Assignment or
Consent to Sublease executed by Tenant and the Transferee in which each of
Tenant and the Transferee confirms its obligations pursuant to this Lease.
Failure or refusal of a Transferee to execute any such instrument shall not
release or discharge the Transferee from liability as provided herein. The
voluntary, involuntary or other surrender of this Lease by Tenant, or a mutual
cancellation by Landlord and Tenant, shall not work a merger, and any such
surrender or cancellation shall, at the option of Landlord, either terminate all
or any existing subleases or operate as an assignment to Landlord of any or all
of such subleases.
14.7 Landlord's Right to Space. Notwithstanding any of the above
-------------------------
provisions of this Section to the contrary, if Tenant notifies Landlord that it
desires to enter into a Transfer, Landlord, in lieu of consenting to such
Transfer, may elect (x) in the case of an assignment or a sublease of the entire
Premises, to terminate this Lease, or (y) in the case of a sublease of more than
fifty percent (50%) of the entire Premises, to terminate this Lease as it
relates to the space proposed to be subleased by Tenant; provided, however,
Tenant shall have the right to negate Landlord's termination pursuant to the
provisions of this Section 14.7 by giving Landlord written notice of such
negation ("Tenant's Negation Notice") within three (3) Business Days after
Tenant receives Landlord's notice electing to terminate in lieu of consenting to
a Transfer. Upon Tenant's Negation Notice, Tenant shall be deemed to have
withdrawn Tenant's request for a Transfer, the Lease shall not be terminated
with respect to the proposed Transfer, and the proposed Transferee shall have no
right in and to the portion of the Premises which was included in the proposed
Transfer. Upon any such termination pursuant to the provisions of this Section
14.7, this Lease will terminate (or the space proposed to be subleased will be
removed from the Premises subject to this Lease and the Base Rent and Tenant's
Share under this Lease shall be proportionately reduced) on the date the
Transfer was proposed to be effective, and Landlord may lease such space to any
party, including the prospective Transferee identified by Tenant.
14.8 Assignment of Sublease Rents. Tenant hereby absolutely and
----------------------------
irrevocably assigns to Landlord any and all rights to receive rent and other
consideration from any sublease and agrees that Landlord, as assignee or as
attorney-in-fact for Tenant for purposes hereof, or a receiver for Tenant
appointed on Landlord's application may (but shall not be obligated to) collect
such rents and other consideration and apply the same toward Tenant's
obligations to Landlord under this Lease; provided, however, that Landlord
grants to Tenant at all times prior to occurrence of any breach or default by
Tenant a revocable license to collect such rents (which license shall
automatically and without notice be and be deemed to have been revoked and
terminated immediately upon any Event of Default).
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14.9 Transfer to Affiliate. Notwithstanding any provision contained
---------------------
in the Section 14 to the contrary, Tenant shall have the right, without the
consent of Landlord, upon ten (10) days prior written notice to Landlord, to
transfer Tenant's interest in this Lease to an "Affiliate" of Tenant, and the
provisions of Sections 14.2, 14.3 and 14.7 shall not apply with respect to the
transfer to the Affiliate, but the transfer to the Affiliate shall be subject to
all other terms and conditions of this Lease, including the provisions of this
Section 14.9. Tenant shall remain liable under this Lease after any such
transfer. For the purposes of this Article 14, the term "Affiliate" of Tenant
shall mean and refer to any entity controlling, controlled by or under common
control with Tenant or Tenant's parent, as the case may be or to any corporation
or other entity resulting from a merger or consolidation with Tenant, or to any
person or entity which acquires at least ninety percent (90%) of all the assets
of Tenant as a going concern. "Control" as used herein shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of such controlled entity; and the ownership, or
possession of the right to vote, in the ordinary direction of its affairs, of at
least fifty percent (50%) of the voting interest in any entity. Notwithstanding
Tenant's right to Transfer to an Affiliate pursuant to the provisions of this
Section 14.9, Tenant may not, through use of its rights under this Article 14 in
two or more transactions (whether separate transactions or steps or phases of a
single transaction), at one time or over time, whether by first assigning this
Lease to a subsidiary and then merging the subsidiary into another entity or
selling the stock of the subsidiary or by other means, assign or sublease the
Premises, or transfer control of Tenant, to any person or entity which is not a
subsidiary, affiliate or controlling corporation of the original Tenant, as then
constituted, existing prior to the commencement of such transactions, without
first obtaining Landlord's prior written consent pursuant to the provisions of
Section 14.2.
15. DEFAULT AND REMEDIES.
15.1 Events of Default. The occurrence of any of the following shall
-----------------
constitute an "EVENT OF DEFAULT" by Tenant:
(a) Tenant fails to make any payment of rent when due, or any amount
required to replenish the security deposit as provided in Section 4 above, if
payment in full is not received by Landlord within three (3) days after written
notice that it is due.
(b) Tenant abandons the Premises.
(c) Tenant fails timely to deliver any subordination document,
estoppel certificate or financial statement requested by Landlord within the
applicable time period specified in Sections 20 - Encumbrances - and 21 -
Estoppel Certificates and Financial Statements - below.
(d) Tenant violates the restrictions on Transfer set forth in Section
14 - Assignment and Subletting.
(e) Tenant ceases doing business as a going concern; makes an
assignment for the benefit of creditors; is adjudicated an insolvent, files a
petition (or files an answer admitting the material allegations of a petition)
seeking relief under any under any state or federal bankruptcy or other statute,
law or regulation affecting creditors' rights; all or substantially all of
Tenant's assets
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are subject to judicial seizure or attachment and are not released within 30
days, or Tenant consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for Tenant or for all or any substantial part of Tenant's
assets.
(f) Tenant fails, within ninety (90) days after the commencement of
any proceedings against Tenant seeking relief under any state or federal
bankruptcy or other statute, law or regulation affecting creditors' rights, to
have such proceedings dismissed, or Tenant fails, within ninety (90) days after
an appointment, without Tenant's consent or acquiescence, of any trustee,
receiver or liquidator for Tenant or for all or any substantial part of Tenant's
assets, to have such appointment vacated.
(g) Tenant fails to perform or comply with any provision of this Lease
other than those described in (a) through (f) above, and does not fully cure
such failure within fifteen (15) days after notice to Tenant or, if such failure
cannot be cured within such fifteen (15)-day period, Tenant fails within such
fifteen (15)-day period to commence, and thereafter diligently proceed with, all
actions necessary to cure such failure as soon as reasonably possible but in all
events within ninety (90) days of such notice.
15.2 Remedies. Upon the occurrence of an Event of Default, Landlord
--------
shall have the following remedies, which shall not be exclusive but shall be
cumulative and shall be in addition to any other remedies now or hereafter
allowed by law:
(a) Landlord may terminate Tenant's right to possession of the
Premises at any time by written notice to Tenant. Tenant expressly acknowledges
that in the absence of such written notice from Landlord, no other act of
Landlord, including re-entry into the Premises, efforts to relet the Premises,
reletting of the Premises for Tenant's account, storage of Tenant's personal
property and Trade Fixtures, acceptance of keys to the Premises from Tenant or
exercise of any other rights and remedies under this Section, shall constitute
an acceptance of Tenant's surrender of the Premises or constitute a termination
of this Lease or of Tenant's right to possession of the Premises. Upon such
termination in writing of Tenant's right to possession of the Premises, as
herein provided, this Lease shall terminate and Landlord shall be entitled to
recover damages from Tenant as provided in California Civil Code Section 1951.2
and any other applicable existing or future Law providing for recovery of
damages for such breach, including the worth at the time of award of the amount
by which the rent which would be payable by Tenant hereunder for the remainder
of the Term after the date of the award of damages, including Additional Rent as
reasonably estimated by Landlord, exceeds the amount of such rental loss as
Tenant proves could have been reasonably avoided, discounted at the discount
rate published by the Federal Reserve Bank of San Francisco for member banks at
the time of the award plus one percent (1%).
(b) Landlord shall have 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).
(c) Landlord may cure the Event of Default at Tenant's expense. If
Landlord pays any sum or incurs any expense in curing the Event of Default,
Tenant shall reimburse
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Landlord upon demand for the amount of such payment or expense with interest at
the Interest Rate from the date the sum is paid or the expense is incurred until
Landlord is reimbursed by Tenant.
(d) Landlord may remove all Tenant's property from the Premises, and
such property may be stored by Landlord in a public warehouse or elsewhere at
the sole cost and for the account of Tenant. If Landlord does not elect to
store any or all of Tenant's property left in the Premises, Landlord may
consider such property to be abandoned by Tenant, and Landlord may thereupon
dispose of such property in any manner deemed appropriate by Landlord. Any
proceeds realized by Landlord on the disposal of any such property shall be
applied first to offset all expenses of storage and sale, then credited against
Tenant's outstanding obligations to Landlord under this Lease, and any balance
remaining after satisfaction of all obligations of Tenant under this Lease shall
be delivered to Tenant.
16. LATE CHARGE AND INTEREST.
16.1 Late Charge. If any payment of rent is not received by Landlord
-----------
when due, Tenant shall pay to Landlord on demand as a late charge an additional
amount equal to four percent (4%) of the overdue payment. A late charge shall
not be imposed more than once on any particular installment not paid when due,
but imposition of a late charge on any payment not made when due does not
eliminate or supersede late charges imposed on other (prior) payments not made
when due or preclude imposition of a late charge on other installments or
payments not made when due.
16.2 Interest. In addition to the late charges referred to above,
--------
which are intended to defray Landlord's costs resulting from late payments, any
payment from Tenant to Landlord not paid when due shall at Landlord's option
bear interest from the date due until paid to Landlord by Tenant at the rate of
fifteen percent (15%) per annum or the maximum lawful rate that Landlord may
charge to Tenant under applicable laws, whichever is less (the "INTEREST RATE").
Acceptance of any late charge and/or interest shall not constitute a waiver of
Tenant's default with respect to the overdue sum or prevent Landlord from
exercising any of its other rights and remedies under this Lease.
17. WAIVER. No provisions of this Lease shall be deemed waived by Landlord
unless such waiver is in a writing signed by Landlord. The waiver by Landlord
of any breach of any provision of this Lease shall not be deemed a waiver of
such provision or of any subsequent breach of the same or any other provision of
this Lease. No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant shall impair such right or remedy or be
construed as a waiver. Landlord's acceptance of any payments of rent due under
this Lease shall not be deemed a waiver of any default by Tenant under this
Lease (including Tenant's recurrent failure to timely pay rent) other than
Tenant's nonpayment of the accepted sums, and no endorsement or statement on any
check or payment or in any letter or document accompanying any check or payment
shall be deemed an accord and satisfaction. Landlord's consent to or approval
of any act by Tenant requiring Landlord's consent or approval shall not be
deemed to waive or render unnecessary Landlord's consent to or approval of any
subsequent act by Tenant.
18. ENTRY, INSPECTION AND CLOSURE. Upon reasonable oral or written notice to
Tenant (and without notice in emergencies), Landlord and its authorized
representatives may enter
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<PAGE>
the Premises at all reasonable times to: (a) determine whether the Premises are
in good condition, (b) determine whether Tenant is complying with its
obligations under this Lease, (c) perform any maintenance or repair of the
Premises or the Building that Landlord has the right or obligation to perform,
(d) if Tenant has sublet any portion of the Premises, install or repair
improvements for other tenants where access to the Premises is required for such
installation or repair, (e) serve, post or keep posted any notices required or
allowed under the provisions of this Lease, (f) show the Premises to prospective
brokers, agents, buyers, transferees, or Mortgagees, or (g) do any other act or
thing necessary for the safety or preservation of the Premises or the Building.
In addition, upon prior oral or written notice to Tenant, Landlord shall have
the right during the last twelve (12) months of the Term, to show the Premises
to prospective tenants. Landlord's entry shall be subject to Tenant's reasonable
security precautions, and the right of Tenant to accompany Landlord at all
times; provided, that Tenant shall make someone available to accompany Landlord
during Landlord's entry. When reasonably necessary Landlord may temporarily
close entrances, doors, corridors, or other facilities in the Building without
liability to Tenant by reason of such closure. Landlord shall conduct its
activities under this Section in a manner that will minimize inconvenience to
Tenant without incurring additional expense to Landlord. In no event shall
Tenant be entitled to an abatement of rent on account of any entry by Landlord,
and Landlord shall not be liable in any manner for any inconvenience, loss of
business or other damage to Tenant or other persons arising out of Landlord's
entry on the Premises in accordance with this Section. No action by Landlord
pursuant to this paragraph shall constitute an eviction of Tenant, constructive
or otherwise, entitle Tenant to an abatement of rent or to terminate this Lease
or otherwise release Tenant from any of Tenant's obligations under this Lease.
19. SURRENDER AND HOLDING OVER.
19.1 Surrender. Upon the expiration or termination of this Lease,
---------
Tenant shall surrender the Premises and all Tenant Improvements and Alterations
to Landlord broom-clean and in their original condition, except for reasonable
wear and tear, damage from casualty or condemnation and any changes resulting
from approved Alterations; provided, however, that prior to the expiration or
termination of this Lease Tenant shall remove all telephone and other cabling
installed in the Building by Tenant and remove from the Premises all Tenant's
personal property and any Trade Fixtures and all Alterations that Landlord has
elected to require Tenant to remove as provided in Section 6.1 - Tenant
Improvements & Alterations, and repair any damage caused by such removal. If
such removal is not completed before the expiration or termination of the Term,
Landlord shall have the right (but no obligation) to remove the same, and Tenant
shall pay Landlord on demand for all costs of removal and storage thereof and
for the rental value of the Premises for the period from the end of the Term
through the end of the time reasonably required for such removal. Landlord
shall also have the right to retain or dispose of all or any portion of such
property if Tenant does not pay all such costs and retrieve the property within
ten (10) days after notice from Landlord (in which event title to all such
property described in Landlord's notice shall be transferred to and vest in
Landlord). Tenant waives all Claims against Landlord for any damage or loss to
Tenant resulting from Landlord's removal, storage, retention, or disposition of
any such property. Upon expiration or termination of this Lease or of Tenant's
possession, whichever is earliest, Tenant shall surrender all keys to the
Premises or any other part of the Building and shall deliver to Landlord all
keys for or make known to Landlord the combination of locks on all safes,
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<PAGE>
cabinets and vaults that may be located in the Premises. Tenant's obligations
under this Section shall survive the expiration or termination of this Lease.
19.2 Holding Over. If Tenant (directly or through any Transferee or
------------
other successor-in-interest of Tenant) remains in possession of the Premises
after the expiration or termination of this Lease, Tenant's continued possession
shall be on the basis of a tenancy at the sufferance of Landlord. No act or
omission by Landlord, other than its specific written consent, shall constitute
permission for Tenant to continue in possession of the Premises, and if such
consent is given or declared to have been given by a court judgment, Landlord
may terminate Tenant's holdover tenancy at any time upon seven (7) days written
notice. In such event, Tenant shall continue to comply with or perform all the
terms and obligations of Tenant under this Lease, except that the monthly Base
Rent during Tenant's holding over shall be twice the Base Rent payable in the
last full month prior to the termination hereof. Acceptance by Landlord of rent
after such termination shall not constitute a renewal or extension of this
Lease; and nothing contained in this provision shall be deemed to waive
Landlord's right of re-entry or any other right hereunder or at law. Tenant
shall indemnify, defend and hold Landlord harmless from and against all Claims
arising or resulting directly or indirectly from Tenant's failure to timely
surrender the Premises, including (i) any rent payable by or any loss, cost, or
damages claimed by any prospective tenant of the Premises, and (ii) Landlord's
damages as a result of such prospective tenant rescinding or refusing to enter
into the prospective lease of the Premises by reason of such failure to timely
surrender the Premises.
20. ENCUMBRANCES.
20.1 Subordination. This Lease is expressly made subject and
-------------
subordinate to any mortgage, deed of trust, ground lease, underlying lease or
like encumbrance affecting any part of the Property or any interest of Landlord
therein which is now existing or hereafter executed or recorded ("ENCUMBRANCE");
provided, however, that such subordination shall only be effective, as to future
Encumbrances, if the holder of the Encumbrance agrees that this Lease shall
survive the termination of the Encumbrance by lapse of time, foreclosure or
otherwise so long as Tenant is not in default under this Lease beyond any
applicable cure period. Provided the conditions of the preceding sentence are
satisfied, Tenant shall execute and deliver to Landlord, within ten (10) days
after written request therefor by Landlord and in a form reasonably requested by
Landlord, any additional documents evidencing the subordination of this Lease
with respect to any such Encumbrance and the nondisturbance agreement of the
holder of any such Encumbrance. If the interest of Landlord in the Property is
transferred pursuant to or in lieu of proceedings for enforcement of any
Encumbrance, Tenant shall immediately and automatically attorn to the new owner,
and this Lease shall continue in full force and effect as a direct lease between
the transferee and Tenant on the terms and conditions set forth in this Lease.
Landlord agrees to use reasonable good faith efforts to obtain within 60 days
after execution of this Lease, a Subordination, Attornment and Non-Disturbance
Agreement (the "SNDA") from the holder of any Encumbrance existing at the date
of this Lease pursuant to the provisions contained above; provided, Landlord's
failure to obtain an SNDA shall not affect the validity of this Lease. Tenant
shall be responsible for all costs and fees charged by any holder of an
Encumbrance to prepare or negotiate an SNDA.
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<PAGE>
20.2 Mortgagee Protection. Tenant agrees to give any holder of any
--------------------
Encumbrance covering any part of the Property ("MORTGAGEE"), by registered mail,
a copy of any notice of default served upon Landlord, provided that prior to
such notice Tenant has been notified in writing (by way of notice of assignment
of rents and leases, or otherwise) of the address of such Mortgagee. If
Landlord shall have failed to cure such default within thirty (30) days from the
effective date of such notice of default, then the Mortgagee shall have an
additional thirty (30) days within which to cure such default or if such default
cannot be cured within that time, then such additional time as may be necessary
to cure such default (including the time necessary to foreclose or otherwise
terminate its Encumbrance, if necessary to effect such cure), and this Lease
shall not be terminated so long as such remedies are being diligently pursued.
21. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS.
21.1 Estoppel Certificates. Within ten (10) days after written
---------------------
request therefor, Tenant shall execute and deliver to Landlord, in a form
provided by or satisfactory to Landlord, a certificate stating that this Lease
is in full force and effect, describing any amendments or modifications hereto,
acknowledging that this Lease is subordinate or prior, as the case may be, to
any Encumbrance and stating any other information Landlord may reasonably
request, including the Term, the monthly Base Rent, the date to which Rent has
been paid, the amount of any security deposit or prepaid rent, whether either
party hereto is in default under the terms of the Lease, and whether Landlord
has completed its construction obligations hereunder (if any). If Tenant fails
timely to execute and deliver such certificate as provided above, then Landlord
and the addressee of such certificate shall be entitled to rely upon the
information contained in the certificate submitted to Tenant as true, correct
and complete, and Tenant shall be estopped from later denying, contradicting or
taking any position inconsistent with the information contained in such
certificate. Any person or entity purchasing, acquiring an interest in or
extending financing with respect to the Property shall be entitled to rely upon
any such certificate. If Tenant fails to deliver such certificate within ten
(10) days after Landlord's second written request therefor, Tenant shall be
liable to Landlord for any damages incurred by Landlord including any profits or
other benefits from any financing of the Property or any interest therein which
are lost or made unavailable as a result, directly or indirectly, of Tenant's
failure or refusal to timely execute or deliver such estoppel certificate.
21.2 Financial Statements. Within ten (10) days after written request
--------------------
therefor, but not more than once a year, Tenant shall deliver to Landlord a copy
of the financial statements (including at least a year end balance sheet and a
statement of profit and loss) of Tenant (and of each guarantor of Tenant's
obligations under this Lease) for each of the three most recently completed
years, prepared in accordance with generally accepted accounting principles
(and, if such is Tenant's normal practice, audited by an independent certified
public accountant), all then available subsequent interim statements, and such
other financial information as may reasonably be requested by Landlord or
required by any Mortgagee. So long as Tenant is publicly traded, Tenant can
satisfy the requirements for financial statements by providing the publicly
available financial statements.
22. NOTICES. Any notice, demand, request, consent or approval that either
party desires or is required to give to the other party under this Lease shall
be in writing and shall be served
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<PAGE>
personally, delivered by messenger or courier service, or sent by U.S. certified
mail, return receipt requested, postage prepaid, addressed to the other party at
the party's address for notices set forth in the Basic Lease Information. Any
notice required pursuant to any Laws may be incorporated into, given
concurrently with or given separately from any notice required under this Lease.
Notices shall be deemed to have been given and be effective on the earlier of
(a) receipt (or refusal of delivery or receipt); or (b) one (1) day after
acceptance by the independent service for delivery, if sent by independent
messenger or courier service, or three (3) days after mailing if sent by mail in
accordance with this Section. Either party may change its address for notices
hereunder, effective fifteen (15) days after notice to the other party complying
with this Section. If Tenant sublets the Premises, notices from Landlord shall
be effective on the subtenant when given to Tenant pursuant to this Section.
23. ATTORNEYS' FEES. In the event of any dispute between Landlord and
Tenant in any way related to this Lease, the non-prevailing party shall pay to
the prevailing party all reasonable attorneys' fees and costs and expenses of
any type incurred by the prevailing party in connection with any action or
proceeding (including any appeal and the enforcement of any judgment or award),
whether or not the dispute is litigated or prosecuted to final judgment. The
"prevailing party" shall be determined based upon an assessment of which party's
major arguments or positions taken in the action or proceeding could fairly be
said to have prevailed (whether by compromise, settlement, abandonment by the
other party of its claim or defense, final decision, after any appeals, or
otherwise) over the other party's major arguments or positions on major disputed
issues.
24. QUIET POSSESSION. Subject to Tenant's full and timely performance of all
of Tenant's obligations under this Lease and subject to the terms of this Lease,
including Section 20 - Encumbrances, Tenant shall have the quiet possession of
------------
the Premises throughout the Term as against any persons or entities lawfully
claiming by, through or under Landlord.
25. SECURITY MEASURES. Tenant shall be responsible for all security measures
for the Premises, such as the registration or search of all persons entering or
leaving the Building, requiring identification for access to the Building,
evacuation of the Building for cause, suspected cause, or for drill purposes,
the issuance of magnetic pass cards or keys for Building or elevator access to
prevent any threat of property loss or damage, bodily injury or business
interruption. Landlord shall have no security responsibility for the Premises
or the Project. Landlord, its agents and employees shall have no liability to
Tenant or its Representatives or Visitors for the implementation or exercise of,
or the failure to implement or exercise, any security measures for the Premises
or the Project, or for any resulting disturbance of Tenant's use or enjoyment of
the Premises.
26. FORCE MAJEURE.
26.1 Landlord's Force Majeure. If Landlord is delayed, interrupted
-------------------------
or prevented from performing any of its obligations under this Lease, including
its obligations under the Construction Rider (if any), and such delay,
interruption or prevention is due to fire, act of God, governmental act or
failure to act, labor dispute, unavailability of materials or any cause outside
the reasonable control of Landlord, then the time for performance of the
affected obligations of
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<PAGE>
Landlord shall be extended for a period equivalent to the period of such delay,
interruption or prevention.
26.2 Tenant's Force Majeure. If Tenant is delayed, interrupted or
-----------------------
prevented from performing any of its obligations under this Lease (other than,
with respect to Tenant the payment of Base Rent, Additional Rent or any other
charge payable by Tenant to Landlord under this Lease following the Commencement
Date), including Tenant's obligations under the Construction Rider and such
delay, interruption or prevention is due to fire, act of God, governmental act
or failure to act, or labor dispute (but not due to the failure of Tenant's
architect to draw plans, or the failure of Tenant's contractor to otherwise
perform its construction obligations in a timely manner, which failure shall not
constitute force majeure under this Lease), then the time for performance of the
affected obligations of Tenant shall be extended for a period equivalent to the
period of such delay, interruption or prevention. The inability to pay money
shall in no event constitute force majeure.
27. RULES AND REGULATIONS. Tenant shall be bound by and shall comply with
the rules and regulations attached to and made a part of this Lease as Exhibit C
---------
to the extent those rules and regulations are not in conflict with the terms of
this Lease, as well as any reasonable rules and regulations hereafter adopted by
Landlord for all tenants of the Building, upon notice to Tenant thereof
(collectively, the "BUILDING RULES"). Landlord shall not be responsible to
Tenant or to any other person for any violation of, or failure to observe, the
Building Rules by any other tenant or other person.
28. LANDLORD'S LIABILITY. The term "Landlord," as used in this Lease, shall
mean only the owner or owners of the Building at the time in question. In the
event of any conveyance of title to the Building, then from and after the date
of such conveyance, the transferor Landlord shall be relieved of all liability
with respect to Landlord's obligations to be performed under this Lease after
the date of such conveyance provided the transferee agrees to recognize this
Lease, and be bound by the terms contained herein. Notwithstanding any other
term or provision of this Lease, the liability of Landlord for its obligations
under this Lease is limited solely to Landlord's interest in the Building as the
same may from time to time be encumbered, and no personal liability shall at any
time be asserted or enforceable against any other assets of Landlord or against
Landlord's partners or members or its or their respective partners,
shareholders, members, directors, officers or managers on account of any of
Landlord's obligations or actions under this Lease.
29. CONSENTS AND APPROVALS.
29.1 Determination in Good Faith. Wherever the consent, approval,
---------------------------
judgment or determination of Landlord is required or permitted under this Lease,
Landlord may exercise its good faith business judgment in granting or
withholding such consent or approval or in making such judgment or determination
without reference to any extrinsic standard of reasonableness, unless the
specific provision contained in this Lease providing for such consent, approval,
judgment or determination specifies that Landlord's consent or approval is not
to be unreasonably withheld, or that such judgment or determination is to be
reasonable, or otherwise specifies the standards under which Landlord may
withhold its consent. If it is determined that Landlord failed to give its
consent where it was required to do so under this Lease, Tenant shall be
entitled to injunctive relief
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<PAGE>
but shall not to be entitled to monetary damages or to terminate this Lease for
such failure. If Landlord withholds any consent to a Transfer following Tenant's
request for such consent to a Transfer, then within five (5) Business Days after
any request by Tenant, a representative of Landlord or Landlord's agent (at or
above the level of Property Manager) shall meet with Tenant to discuss and
provide Landlord's reasons for the same.
29.2 No Liability Imposed on Landlord. The review and/or approval by
--------------------------------
Landlord of any item or matter to be reviewed or approved by Landlord under the
terms of this Lease or any Exhibits or Addenda hereto shall not impose upon
Landlord any liability for the accuracy or sufficiency of any such item or
matter or the quality or suitability of such item for its intended use. Any
such review or approval is for the sole purpose of protecting Landlord's
interest in the Property, and no third parties, including Tenant or the
Representatives and Visitors of Tenant or any person or entity claiming by,
through or under Tenant, shall have any rights as a consequence thereof.
30. BROKERS. Landlord shall pay the fee or commission of the broker or
brokers identified in the Basic Lease Information (the "BROKER") in accordance
with Landlord's separate written agreement with the Broker, if any. Tenant
warrants and represents to Landlord that in the negotiating or making of this
Lease neither Tenant nor anyone acting on Tenant's behalf has dealt with any
broker or finder who might be entitled to a fee or commission for this Lease
other than the Broker. Tenant shall indemnify and hold Landlord harmless from
any claim or claims, including costs, expenses and attorney's fees incurred by
Landlord asserted by any other broker or finder for a fee or commission based
upon any dealings with or statements made by Tenant or Tenant's Representatives.
31. RELOCATION OF PREMISES. [Intentionally Deleted].
32. ENTIRE AGREEMENT. This Lease, including the Exhibits and any Addenda
attached hereto, and the documents referred to herein, if any, constitute the
entire agreement between Landlord and Tenant with respect to the leasing of
space by Tenant in the Building, and supersede all prior or contemporaneous
agreements, understandings, proposals and other representations by or between
Landlord and Tenant, whether written or oral, all of which are merged herein.
Neither Landlord nor Landlord's agents have made any representations or
warranties with respect to the Premises, the Building, the Project or this Lease
except as expressly set forth herein, and no rights, easements or licenses shall
be acquired by Tenant by implication or otherwise unless expressly set forth
herein. The submission of this Lease for examination does not constitute an
option for the Premises and this Lease shall become effective as a binding
agreement only upon execution and delivery thereof by Landlord to Tenant.
33. MISCELLANEOUS. This Lease may not be amended or modified except by a
writing signed by Landlord and Tenant. Subject to Section 14 - Assignment and
Subletting and Section 28 - Landlord's Liability, this Lease shall be binding on
and shall inure to the benefit of the parties and their respective successors,
assigns and legal representatives. The determination that any provisions hereof
may be void, invalid, illegal or unenforceable shall not impair any other
provisions hereof and all such other provisions of this Lease shall remain in
full force and effect. The unenforceability, invalidity or illegality of any
provision of this Lease under particular
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<PAGE>
circumstances shall not render unenforceable, invalid or illegal other
provisions of this Lease, or the same provisions under other circumstances. This
Lease shall be construed and interpreted in accordance with the laws (excluding
conflict of laws principles) of the State in which the Building is located. The
provisions of this Lease shall be construed in accordance with the fair meaning
of the language used and shall not be strictly construed against either party,
even if such party drafted the provision in question. When required by the
context of this Lease, the singular includes the plural. Wherever the term
"including" is used in this Lease, it shall be interpreted as meaning
"including, but not limited to" the matter or matters thereafter enumerated. The
captions contained in this Lease are for purposes of convenience only and are
not to be used to interpret or construe this Lease. If more than one person or
entity is identified as Tenant hereunder, the obligations of each and all of
them under this Lease shall be joint and several. Time is of the essence with
respect to this Lease, except as to the conditions relating to the delivery of
possession of the Premises to Tenant. Neither Landlord nor Tenant shall record
this Lease.
34. AUTHORITY. If Tenant is a corporation, partnership, limited liability
company or other form of business entity, each of the persons executing this
Lease on behalf of Tenant warrants and represents that Tenant is a duly
organized and validly existing entity, that Tenant has full right and authority
to enter into this Lease and that the persons signing on behalf of Tenant are
authorized to do so and have the power to bind Tenant to this Lease. Tenant
shall provide Landlord upon request with evidence reasonably satisfactory to
Landlord confirming the foregoing representations.
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<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as of
the date first above written.
TENANT: LANDLORD:
CBT SYSTEMS USA, LTD., SEAPORT CENTRE ASSOCIATES, LLC
a Delaware corporation a California limited liability company
By: /s/ Richard Y. Okumoto By: OPPORTUNITY CAPITAL
---------------------- PARTNERS IV, LLC,
Name: Richard Y. Okumoto a California limited liability
------------------ company Manager
Title: Vice President, Finance
and Chief Financial By: /s/ Stephen Pilch
Officer -----------------
Name: Stephen Pilch
By: /s/ James J. Buckley -------------
-------------------- Title: Senior Vice President.
Name: James J. Buckley Investment Management,
----------------
Title: Chief Executive Officer
and President By: /s/ William Wilson III
----------------------
And Name: William Wilson III
--------------------
CBT GROUP, PLC, Title: Chief Executive Officer
a Republic of Ireland public and President
liability company
By: /s/ Richard Y. Okumoto
------------------
Name: Richard Y. Okumoto
------------------
Title: Vice President, Finance
and Chief Financial
Officer
By: /s/ James J. Buckley
--------------------
Name: James J. Buckley
----------------
Title: Chief Executive Officer
and President
JOINTLY AND SEVERALLY
---------------------
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<PAGE>
EXHIBIT A
---------
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF APRIL 6, 1998
BETWEEN
SEAPORT CENTRE ASSOCIATES, LLC, AS LANDLORD,
AND
CBT SYSTEMS, LTD., and CBT GROUP, PLC, AS TENANT ("LEASE")
THE PREMISES
------------
[FLOOR PLAN SHOWING LOCATION
AND CONFIGURATION OF PREMISES
TO BE INSERTED.]
INITIALS:
Landlord ______
Tenant ______
Exhibit A, Page 1
<PAGE>
EXHIBIT B
---------
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF APRIL 6, 1998
BETWEEN
SEAPORT CENTRE ASSOCIATES, LLC, AS LANDLORD,
AND
CBT SYSTEMS, LTD., and CBT GROUP, PLC, AS TENANT ("LEASE")
CONSTRUCTION RIDER
------------------
1. Tenant Improvements. Tenant shall with reasonable diligence
-------------------
through Commercial Interior Contractors ("CIC") construct and install in the
Premises the improvements and fixtures provided for in this Construction Rider
("TENANT IMPROVEMENTS"). Tenant recognizes and agrees that CIC is an affiliate
of Landlord. Upon request by Landlord, Tenant shall designate in writing an
individual authorized to act as Tenant's Representative with respect to all
approvals, directions and authorizations pursuant to this Construction Rider.
1.1. Plans. The Tenant Improvements shall be constructed
-----
substantially as shown on the conceptual space plan ("SPACE PLAN") for the
Premises to be prepared by a space planner who will be retained by Tenant as the
space planner for the Premises ("SPACE PLANNER"). The Space Plan shall be
subject to Landlord's approval prior to commencement of the construction of
Tenant Improvements Landlord shall respond to the Space Plan within three (3)
Business Days after receipt thereof.
After approval of the Space Plan the Space Planner will prepare
and deliver to Landlord and Tenant detailed plans and specifications sufficient
to permit the construction of the Tenant Improvements by CIC ("CONSTRUCTION
DOCUMENTS"). The Tenant Improvements shall not affect the Commencement Date. CIC
will provide Landlord and Tenant with a cost estimate for the work shown in the
Construction Documents. Landlord shall respond to the Construction Documents
within three (3) Business Days after receipt thereof, specifying any changes or
modifications Landlord desires in the Construction Documents. The Space Planner
will then revise the Construction Documents and resubmit them to Landlord and
Tenant within three (3) Business Days for their approval and CIC will provide
Landlord and Tenant with a revised cost estimate. The revised Construction
Documents and cost estimate, as approved by Tenant and Landlord, are hereinafter
referred to as the "FINAL CONSTRUCTION DOCUMENTS" and "FINAL COST ESTIMATE,"
respectively.
Additional interior decorating services and advice on the
furnishing and decoration of the Premises, such as the selection of fixtures,
furnishings or design of mill work, shall be provided by Tenant at its expense,
but shall be subject to the reasonable approval of Landlord.
Exhibit B, Page 1
<PAGE>
1.2. Construction. Upon approval by Landlord and Tenant of the
------------
Final Construction Documents and the Final Cost Estimate, Tenant shall cause CIC
to Substantially Complete the Tenant Improvements. CIC will construct the Tenant
Improvements at competitive prices, with a fee not to exceed the market rate for
other similar sized and type of construction contracts in the Redwood City,
California area. Except for the fees charged by CIC pursuant to the preceding
sentence, Landlord shall not charge Tenant any other management fee for
supervising the construction of Tenant Improvements. Tenant agrees to cooperate
with Landlord and CIC in planning and scheduling the construction of Tenant
Improvements to allow CIC to proceed with construction of Tenant Improvements in
an efficient manner. The Tenant Improvements shall be deemed to be
"SUBSTANTIALLY COMPLETED" when they have been completed in accordance with the
Final Construction Documents except for finishing details, minor omissions,
decorations and mechanical adjustments of the type normally found on an
architectural "punch list". (The definition of Substantially Completed shall
also define the terms "SUBSTANTIAL COMPLETION" and "SUBSTANTIALLY COMPLETE.").
If Landlord fails to give its written response to the foregoing
items (Space Plans, Working Drawings, etc.) within the time specified
hereinabove, then each day of delay beyond the time specified hereinabove for
Landlord's response shall be one (1) day of "Landlord Delay." The Commencement
Date shall be extended day for day for each day of Landlord Delay and for each
day of Tenant's force majeure described in Section 26.2 of the Lease, so that
the Commencement Date shall be the earlier of (a) the later of (x) June 15,
1998, or (y) thirty-one (31) days after the date Landlord gives Tenant written
notice delivering possession of the Premises to Tenant with the Existing
Tenant's personal property removed, as extended day for day for each day of
Landlord Delay, and for each day of Tenant's force majeure described in Section
26.2 of the Lease; or (b) the date upon which Tenant, with Landlord's written
permission, actually occupies and conducts business in any portion of the
Premises.
1.3. Cost of Tenant Improvements. Landlord shall contribute (the
---------------------------
"ALLOWANCE") up to $6.00 per rentable square foot in the Premises toward the
cost of the design (including preparation of space plans and Construction
Documents), construction and installation of the Tenant Improvements. The
balance, if any, of the cost of the Tenant Improvements ("ADDITIONAL COST"),
including, but not limited to, usual markups for overhead, supervision and
profit, shall be paid by Tenant. Within thirty (30) days after Landlord
receives from Tenant a request for payment of the Allowance, which request shall
be accompanied by "Supporting Information," Landlord shall disburse the
Allowance to Tenant based upon an invoice from CIC for work completed in
construction of Tenant Improvements. The "Supporting Information" shall include
(a) an invoice from CIC based upon completed work, (b) a cost breakdown of the
work completed by trade or category, and (c) unconditional lien releases from
CIC and all subcontractors and suppliers.
1.4. Changes. If Tenant requests any change, addition or alteration in
-------
or to any Final Construction Documents ("CHANGES") Tenant shall cause the Space
Planner to prepare additional Plans implementing such Change. Tenant shall pay
the cost of preparing additional Plans, subject to the Allowance. As soon as
practicable after CIC receives such additional Construction Documents, CIC shall
notify Tenant of the estimated cost of the Changes, including
Exhibit B, Page 2
<PAGE>
a breakdown of the estimated cost by trade, with an estimate of the number of
days, if any, by which Substantial Completion of the Tenant Improvements would
be delayed as a result of such proposed Changes. Within three (3) Business Days
after receipt of such cost estimate, Landlord shall notify Tenant in writing
whether Landlord approves or disapproves the Change. If Landlord approves the
Change, CIC may, at Tenant's request, proceed with the Change and Tenant shall
be liable for any Additional Cost resulting from the Change. If Landlord fails
to approve or disapprove the Change within such three (3) day period, then
Landlord shall be deemed to have approved the Change.
2. Delivery of Premises. Landlord shall deliver possession of the Premises
--------------------
to Tenant in accordance with the provisions of Section 2 of the Lease.
3. Access to Premises. Landlord shall allow Tenant and Tenant's
------------------
Representatives to enter the Premises prior to the Commencement Date to permit
Tenant to make the Premises ready for its use and occupancy; provided, however,
that prior to such entry of the Premises, Tenant shall provide evidence
reasonably satisfactory to Landlord that Tenant's insurance, as described in
Section 11.1 - Tenant's Insurance of the Lease, shall be in effect as of the
time of such entry.
Tenant agrees that Landlord shall not be liable in any way for any injury,
loss or damage which may occur to any of Tenant's property placed upon or
installed in the Premises prior to the Commencement Date, the same being at
Tenant's sole risk, and Tenant shall be liable for all injury, loss or damage to
persons or property arising as a result of such entry into the Premises by
Tenant or its Representatives.
4. Ownership of Tenant Improvements. All Tenant Improvements, whether
--------------------------------
installed by Landlord or Tenant, shall become a part of the Premises, shall be
the property of Landlord and, subject to the provisions of the Lease, shall be
surrendered by Tenant with the Premises, without any compensation to Tenant, at
the expiration or termination of the Lease in accordance with the provisions of
the Lease. In no event shall Tenant be required to remove Tenant Improvements,
except those Tenant Improvements identified by Landlord when Landlord approves
the Construction Documents.
INITIALS:
Landlord ______
Tenant ______
Exhibit B, Page 3
<PAGE>
EXHIBIT C
---------
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF APRIL 6, 1998
BETWEEN
SEAPORT CENTRE ASSOCIATES, LLC, AS LANDLORD,
AND
CBT SYSTEMS, LTD., and CBT GROUP, PLC, AS TENANT ("LEASE")
BUILDING RULES
--------------
The following Building Rules are additional provisions of the foregoing Lease
to which they are attached. The capitalized terms used herein have the same
meanings as these terms are given in the Lease.
1. Use of Common Areas. Tenant will not obstruct the sidewalks, halls,
-------------------
passages, exits, entrances, elevators or stairways of the Building ("COMMON
AREAS"), and Tenant will not use the Common Areas for any purpose other than
ingress and egress to and from the Premises. The Common Areas, except for the
sidewalks, are not open to the general public and Landlord reserves the right to
control and prevent access to the Common Areas of any person whose presence, in
Landlord's opinion, would be prejudicial to the safety, reputation and interests
of the Building and its tenants.
2. No Access to Roof. Tenant has no right of access to the roof of the
-----------------
Building and will not install, repair or replace any antenna, aerial, aerial
wires, fan, air-conditioner or other device on the roof of the Building, without
the prior written consent of Landlord. Any such device installed without such
written consent is subject to removal at Tenant's expense without notice at any
time. In any event Tenant will be liable for any damages or repairs incurred or
required as a result of its installation, use, repair, maintenance or removal of
such devices on the roof and agrees to indemnify and hold harmless Landlord from
any liability, loss, damage, cost or expense, including reasonable attorneys'
fees, arising from any activities of Tenant or of Tenant's Representatives on
the roof of the Building.
3. Signage. Tenant shall have the right, at Tenant's sole cost and expense,
-------
to install a sign upon a monument to be located in front of the Building,
subject to Landlord's reasonable approval, and subject to ordinances,
regulations and any approval from the City of Redwood City. Landlord shall, at
Landlord's sole cost and expense, construct a monument, subject to approval of
the City of Redwood City. No sign, placard, picture, name, advertisement or
notice visible from the exterior of the Premises will be inscribed, painted,
affixed or otherwise displayed by Tenant on or in any part of the Building
without the prior written consent of Landlord. Landlord reserves the right to
adopt and furnish Tenant with general guidelines relating to signs in or on the
Building. All approved signage will be inscribed, painted or affixed
Exhibit C, Page 1
<PAGE>
at Tenant's expense by a person approved by Landlord, which approval will not be
unreasonably withheld.
4. Prohibited Uses. The Premises will not be used for manufacturing, for the
---------------
storage of merchandise held for sale to the general public, for lodging or for
the sale of goods to the general public. Tenant will not permit any food
preparation on the Premises except that Tenant may use Underwriters' Laboratory
approved equipment for brewing coffee, tea, hot chocolate and similar beverages
and all of the equipment that exists in the kitchen of the Premises as of the
date of this Lease, so long as such use is in accordance with all applicable
federal, state and city laws, codes, ordinances, rules and regulations.
5. Janitorial Services. Tenant will be responsible, at Tenant's expense, to
-------------------
keep the Premises clean, including daily janitorial service. Tenant enter into
an agreement with a janitorial service to clean the Premises during week-days,
which contract and janitorial company shall be subject to Landlord's prior
written consent.
6. Keys and Locks. Landlord will furnish Tenant, free of charge, two keys to
--------------
each door or lock in the Premises. Landlord may make a reasonable charge for
any additional or replacement keys. Tenant will not duplicate any keys, alter
any locks or install any new or additional lock or bolt on any door of its
Premises or on any other part of the Building without the prior written consent
of Landlord and, in any event, Tenant will provide Landlord with a key for any
such lock. On the termination of the Lease, Tenant will deliver to Landlord all
keys to any locks or doors in the Building which have been obtained by Tenant.
7. Freight. Tenant shall not transport freight in loads exceeding the weight
-------
limitations of any elevator in the Building. Landlord reserves the right to
prescribe the weight, size and position of all equipment, materials, furniture
or other property brought into the Building, and no property will be received in
the Building except through such doors, and from such parking areas, as
reasonably designated by Landlord. Landlord reserves the right to require that
heavy objects will stand on wood strips of such length and thickness as is
necessary to properly distribute the weight. Landlord will not be responsible
for loss of or damage to any such property from any cause, and Tenant will be
liable for all damage or injuries caused by moving or maintaining such property.
8. Nuisances and Dangerous Substances. Tenant will not conduct itself or
----------------------------------
permit Tenant's Representatives or Visitors to conduct themselves, in the
Premises or anywhere on or in the Property in a manner which is offensive or
unduly annoying to any other Tenant or Landlord's property managers. Tenant
will not install or operate any phonograph, radio receiver, musical instrument,
or television or other similar device in any part of the Common Areas and shall
not operate any such device installed in the Premises in such manner as to
disturb or annoy other tenants of the Building. Tenant will not use or keep in
the Premises or the Property any kerosene, gasoline or other combustible fluid
or material other than limited quantities thereof reasonably necessary for the
maintenance of office equipment, or, without Landlord's prior written approval,
use any method of heating or air conditioning other than that supplied by
Landlord. Tenant will not use or keep any foul or noxious gas or substance in
the Premises or
Exhibit C, Page 2
<PAGE>
permit or suffer the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by
reason of noise, odors or vibrations, or interfere in any way with other tenants
or those having business therein. Tenant will not bring or keep any animals in
or about the Premises or the Property.
9. Building Name and Address. Without Landlord's prior written consent,
-------------------------
Tenant will not use the name of the Building in connection with or in promoting
or advertising Tenant's business except as Tenant's address.
10. Building Directory. A directory for the Building will be provided for
------------------
the display of the name and location of tenants. Landlord reserves the right to
approve any additional names Tenant desires to place in the directory and, if so
approved, Landlord may assess a reasonable charge for adding such additional
names.
11. Window Coverings. No curtains, draperies, blinds, shutters, shades,
----------------
awnings, screens or other coverings, window ventilators, hangings, decorations
or similar equipment shall be attached to, hung or placed in, or used in or with
any window of the Building without the prior written consent of Landlord, and
Landlord shall have the right to control all lighting within the Premises that
may be visible from the exterior of the Building.
12. Floor Coverings. Tenant will not lay or otherwise affix linoleum, tile,
---------------
carpet or any other floor covering to the floor of the Premises in any manner
except as approved in writing by Landlord. Tenant will be liable for the cost
of repair of any damage resulting from the violation of this rule or the removal
of any floor covering by Tenant or its contractors, employees or invitees.
13. Wiring and Cabling Installations. Landlord will direct Tenant's
--------------------------------
electricians and other vendors as to where and how data, telephone, and
electrical wires and cables are to be installed. No boring or cutting for wires
or cables will be allowed without the prior written consent of Landlord. The
location of burglar alarms, smoke detectors, telephones, call boxes and other
office equipment affixed to the Premises shall be subject to the written
approval of Landlord.
14. Office Closing Procedures. Tenant will see that the doors of the
-------------------------
Premises are closed and locked and that all water faucets, water apparatus and
utilities are shut off before Tenant or its employees leave the Premises, so as
to prevent waste or damage. Tenant will be liable for all damage or injuries
sustained by other tenants or occupants of the Building or Landlord resulting
from Tenant's carelessness in this regard or violation of this rule. Tenant
will keep the doors to the Building corridors closed at all times except for
ingress and egress.
15. Plumbing Facilities. The toilet rooms, toilets, urinals, wash bowls and
-------------------
other apparatus shall not be used for any purpose other than that for which they
were constructed and no foreign substance of any kind whatsoever shall be
disposed of therein. Tenant will be liable for any breakage, stoppage or damage
resulting from the violation of this rule by Tenant, its employees or invitees.
Exhibit C, Page 3
<PAGE>
16. Use of Hand Trucks. Tenant will not use or permit to be used in the
------------------
Premises or in the Common Areas any hand trucks, carts or dollies except those
equipped with rubber tires and side guards or such other equipment as Landlord
may approve.
17. Refuse. Tenant shall store all Tenant's trash and garbage within the
------
Premises or in other facilities designated By Landlord for such purpose. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of removing and disposing of
trash and garbage in the city in which the Building is located without being in
violation of any law or ordinance governing such disposal. All trash and
garbage removal shall be made in accordance with directions issued from time to
time by Landlord, only through such Common Areas provided for such purposes and
at such times as Landlord may designate. Tenant shall be responsible for
removing trash from the Premises. Tenant shall comply with the requirements of
any recycling program adopted by Landlord for the Building.
18. Soliciting. Canvassing, peddling, soliciting and distribution of
----------
handbills or any other written materials in the Building are prohibited, and
Tenant will cooperate to prevent the same.
19. Parking. Tenant will use, and cause Tenant's Representatives and
-------
Visitors to use, any parking spaces to which Tenant is entitled under the Lease
in a manner consistent with Landlord's directional signs and markings in the
Parking Facility. Specifically, but without limitation, Tenant will not park,
or permit Tenant's Representatives or Visitors to park, in a manner that impedes
access to and from the Building or the Parking Facility or that violates space
reservations for handicapped drivers registered as such with the California
Department of Motor Vehicles. Landlord may use such reasonable means as may be
necessary to enforce the directional signs and markings in the Parking Facility,
including but not limited to towing services, and Landlord will not be liable
for any damage to vehicles towed as a result of non-compliance with such parking
regulations.
20. Fire, Security and Safety Regulations. Tenant will comply with all
-------------------------------------
safety, security, fire protection and evacuation measures and procedures
established by Landlord or any governmental agency.
21. Responsibility for Theft. Tenant assumes any and all responsibility for
------------------------
protecting the Premises from theft, robbery and pilferage, which includes
keeping doors locked and other means of entry to the Premises closed.
22. Sales and Auctions. Tenant will not conduct or permit to be conducted
------------------
any sale by auction in, upon or from the Premises or elsewhere in the Property,
whether said auction be voluntary, involuntary, pursuant to any assignment for
the payment of creditors or pursuant to any bankruptcy or other insolvency
proceeding.
Exhibit C, Page 4
<PAGE>
23. Waiver of Rules. Landlord may waive any one or more of these Building
---------------
Rules for the benefit of any particular tenant or tenants, but no such waiver by
Landlord will be construed as a waiver of such Building Rules in favor of any
other tenant or tenants nor prevent Landlord from thereafter enforcing these
Building Rules against any or all of the tenants of the Building.
24. Effect on Lease. These Building Rules are in addition to, and shall not
---------------
be construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease. Violation of these Building
Rules constitutes a failure to fully perform the provisions of the Lease, as
referred to in Section 15.1 - "Events of Default".
25. Non-Discriminatory Enforcement. Subject to the provisions of the Lease
------------------------------
(and the provisions of other leases with respect to other tenants), Landlord
shall use reasonable efforts to enforce these Building Rules in a non-
discriminatory manner, but in no event shall Landlord have any liability for any
failure or refusal to do so (and Tenant's sole and exclusive remedy for any such
failure or refusal shall be injunctive relief preventing Landlord from enforcing
any of the Building Rules against Tenant in a manner that discriminates against
Tenant).
26. Additional and Amended Rules. Landlord reserves the right to rescind or
----------------------------
amend these Building Rules and/or adopt any other and reasonable rules and
regulations as in its judgment may from time to time be needed for the safety,
care and cleanliness of the Building and for the preservation of good order
therein.
INITIALS:
Landlord ______
Tenant ______
Exhibit C, Page 5
<PAGE>
EXHIBIT D
---------
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF APRIL 6, 1998
BETWEEN
SEAPORT CENTRE ASSOCIATES, LLC, AS LANDLORD,
AND
CBT SYSTEMS, LTD., and CBT GROUP, PLC, AS TENANT ("LEASE")
ADDITIONAL PROVISIONS RIDER
---------------------------
35. PARKING.
(a) Tenant's Parking Rights. Landlord shall provide Tenant, on an
-----------------------
unassigned and non-exclusive basis, for use by Tenant and Tenant's
Representatives and Visitors, at the users' sole risk, one (1) parking space in
the Parking Facility (including parking on the public street) for each three
hundred three (303) rentable square feet of space leased to Tenant. The parking
spaces to be made available to Tenant hereunder may contain a reasonable mix of
spaces for compact cars and up to ten percent (10%) of the unassigned spaces may
also be designated by Landlord as Building visitors' parking.
(b) Availability of Parking Spaces. Landlord shall take reasonable
------------------------------
actions to ensure the availability of the parking spaces leased by Tenant, but
Landlord does not guarantee the availability of those spaces at all times
against the actions of other tenants of the Building and users of the Parking
Facility. Access to the Parking Facility may, at Landlord's option, be
regulated by card, pass, bumper sticker, decal or other appropriate
identification issued by Landlord. Landlord retains the right to revoke the
parking privileges of any user of the Parking Facility who violates the rules
and regulations governing use of the Parking Facility (and Tenant shall be
responsible for causing any employee of Tenant or other person using parking
spaces allocated to Tenant to comply with all parking rules and regulations).
(c) Assignment and Subletting. Notwithstanding any other provision of
-------------------------
the Lease to the contrary, Tenant shall not assign its rights to the parking
spaces or any interest therein, or sublease or otherwise allow the use of all or
any part of the parking spaces to or by any other person, except either (i) to a
person occupying all or a portion of the Premises in compliance with this Lease,
or (ii) with Landlord's prior written consent, which may be granted or withheld
by Landlord in its sole discretion. In the event of any separate assignment or
sublease of parking space rights that is approved by Landlord, Landlord shall be
entitled to receive, as additional Rent hereunder, one hundred percent (100%) of
any profit received by Tenant in connection with such assignment or sublease of
parking spaces.
Exhibit D, Page 1
<PAGE>
(d) Condemnation, Damage or Destruction. In the event the Parking
-----------------------------------
Facility is the subject of a Condemnation, or is damaged or destroyed, and this
Lease is not terminated, and if in such event the available number of parking
spaces in the Parking Facility is permanently reduced, then Tenant's rights to
use parking spaces hereunder may, at the election of Landlord, thereafter be
reduced in proportion to the reduction of the total number of parking spaces in
the Parking Facility. In such event, Landlord reserves the right to reduce the
number of parking spaces to which Tenant is entitled or to relocate some or all
of the parking spaces to which Tenant is entitled to other areas in the Parking
Facility.
36. EXTENSION OPTION.
Provided that CBT Systems, Ltd. and CBT Group, PLC. have not assigned
this Lease or sublet more than one (1) entire floor of the Premises, other than
to an Affiliate (it being intended that all rights pursuant to this provision
are and shall be personal to the original Tenant under this Lease and its
Affiliates and shall not be transferable or exercisable for the benefit of any
Transferee), and provided Tenant is not in default under this Lease beyond any
applicable notice and cure periods at the time of exercise or at any time
thereafter until the beginning of any such extension of the Term, Tenant shall
have the option (the "EXTENSION OPTION") to extend the Term for one additional
consecutive period of five (5) years (the "EXTENSION PERIOD"), by giving written
notice to Landlord of the exercise of any such Extension Option at least twelve
(12) months, but not more than eighteen (18) months, prior to the expiration of
the initial Term. The exercise of any Extension Option by Tenant shall be
irrevocable and shall cover the entire Premises leased by Tenant pursuant to
this Lease; provided, however, if Tenant has subleased any portion of the
Premises which is equal to or less than one (1) entire floor, then by written
notice to Tenant to be given by Landlord within sixty (60) days after Landlord
receives Tenant's notice exercising its Extension Option, Landlord may elect to
either (i) terminate this Lease with respect to such subleased space, or (ii)
receive seventy-five percent (75%) of Sublease Profits (as defined in Section
14.3 of this Lease) during the Extension Period. Notwithstanding the foregoing,
if on or before five (5) Business Days after Tenant receives Landlord's notice
of such election, Tenant notifies Landlord in writing that any such sublease
will be terminated or expire on or before the commencement of the Extension
Period, then (x) Landlord's election pursuant to the immediately preceding
sentence shall become void and of no force or effect, and (y) such sublease
space shall be included in the Premises leased by Tenant during the Extension
Period. Upon Tenant effectively exercising the Extension Option, the term of
the Lease shall automatically be extended for the applicable Extension Period
without the execution of any further instrument by the parties; provided that
Landlord and Tenant shall, if requested by either party, execute and acknowledge
an instrument confirming the exercise of the Extension Option. Any Extension
Option shall terminate if not exercised precisely in the manner provided herein.
Any extension of the Term shall be upon all the terms and conditions set forth
in this Lease and all Exhibits thereto, except that: (i) Tenant shall have no
further option to extend the Term of the Lease, other than as specifically set
forth herein; (ii) Landlord shall not be obligated to contribute funds toward
the cost of any remodeling, renovation, alteration or improvement work in the
Premises; and (iii) Base Rent for any such Extension Period shall be the then
Fair Market Base
Exhibit D, Page 2
<PAGE>
Rental (as defined below) for the Premises for the space and term involved,
which shall be determined as set forth below.
(a) "FAIR MARKET BASE RENTAL" shall mean the "fair market" Base Rent
at the time or times in question for the applicable space, based on the
prevailing rentals then being charged to tenants in the Project and tenants in
other similar type buildings in the general vicinity of the Project of
comparable size, location, quality and age as the Building for leases with terms
equal to the Extension Period, taking into account the creditworthiness and
financial strength of the tenant, the financial guaranties provided by the
tenant (if any), the value of market concessions (including the value of
construction, renovation, moving and other allowances or rent credits), the
desirability, location in the building, size and quality of the space, tenant
finish allowance and/or tenant improvements, included services, operating
expenses and tax and expense stops or other escalation clauses, and brokerage
commissions, for the space in the Building for which Fair Market Base Rental is
being determined and for comparable space in the buildings which are being used
for comparison. Fair Market Base Rental shall also reflect the then prevailing
rental structure for comparable buildings in the general vicinity of the
Property, so that if, for example, at the time Fair Market Base Rental is being
determined the prevailing rental structure for comparable space and for
comparable lease terms includes periodic rental adjustments or escalations, Fair
Market Base Rental shall reflect such rental structure.
(b) Landlord and Tenant shall endeavor to agree upon the Fair Market
Base Rental. If they are unable to so agree within thirty (30) days after
receipt by Landlord of Tenant's notice of exercise of the Extension Option,
Landlord and Tenant shall mutually select a licensed real estate broker. If
Landlord and Tenant are unable to agree upon the name of a licensed real estate
within such thirty (30) day period, then within fifteen (15) days after the
expiration of the thirty (30) day period, Landlord shall select a licensed real
estate broker, and Tenant shall select a licensed real estate broker. The two
(2) licensed real estate brokers shall then within fifteen (15) days thereafter
mutually select a third licensed real estate broker (the "Arbitrator"). All
licensed real estate brokers selected pursuant to the provisions of this
paragraph must be actively leasing space similar to the Building in the general
vicinity of the Project, and have at least five (5) years experience in the
leasing of space similar to the Building in the general vicinity of the Project.
After selection of the broker or brokers in accordance with the provisions of
this paragraph, Landlord shall submit Landlord's determination of Fair Market
Base Rental and Tenant shall submit Tenant's determination of Fair Market Base
Rental to such broker, or brokers, at such time or times and in such manner as
Landlord and Tenant shall agree (or as directed by the broker; or if Landlord
and Tenant do not agree on one broker and an Arbitrator is appointed, then as
directed by the Arbitrator, if Landlord and Tenant do not promptly agree). If
Landlord and Tenant have agreed upon one broker, the broker shall select either
Landlord's or Tenant's determination as the Fair Market Base Rental, and such
determination shall be binding on
Exhibit D, Page 3
<PAGE>
Landlord and Tenant. If Tenant's determination is selected as the Fair Market
Base Rental, then Landlord shall bear all of the broker's cost and fees. If
Landlord's determination is selected as the Fair Market Base Rental, then Tenant
shall bear all of the broker's cost and fees. If Landlord and Tenant have not
agreed upon one broker, and there is an Arbitrator appointed, then the
Arbitrator shall select either Landlord's or Tenant's determination as the Fair
Market Base Rental, and such determination shall be binding on Landlord and
Tenant. If Tenant's determination is selected as the Fair Market Base Rental,
then Landlord shall bear all costs and fees of all of the brokers (including the
Arbitrator). If Landlord's determination is selected as the Fair Market Base
Rental, then Tenant shall bear all of all costs and fees of all of the brokers
(including the Arbitrator). The broker or Arbitrator may select only between the
two (2) determinations of Fair Market Base Rental submitted by Landlord and
Tenant, and shall not have the right to average the two determinations of Fair
Market Base Rental, or to make any determination of Fair Market Base Rental
other than between the two determinations submitted by Landlord and Tenant.
(c) In the event the Fair Market Base Rental for any Extension Period
has not been determined at such time as Tenant is obligated to pay Base Rent for
such Extension Period, Tenant shall pay as Base Rent pending such determination,
the Base Rent in effect for such space immediately prior to the Extension
Period; provided, that upon the determination of the applicable Fair Market Base
Rental, any shortage of Base Rent paid, together with interest at the rate
specified in the Lease, shall be paid to Landlord by Tenant.
(d) In no event shall the Base Rent during any Extension Period be
less than the Base Rent in effect immediately prior to such Extension Period.
(e) The term of this Lease, whether consisting of the Initial Term
alone or the Initial Term as extended by any Extension Period (if any Extension
Option is exercised), is referred to in this Lease as the "Term."
INITIALS:
Landlord ______
Tenant ______
Exhibit D, Page 4