STANDARD OFFICE LEASE
BROOKHOLLOW OFFICE PARK
By and Between
John Hancock Mutual Life Insurance Company, as Lessor
and
Sangui Bio Tech, Inc., as Lessee
Dated: September 4,1996
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TABLE OF CONTENTS
Page
l. Basic Lease Provisions ("Basic Lease Provisions") 1
2. Premises, Parking and Common Areas 1
3. Term 2
4. Rent 3
5. Security Deposit 6
6. Permitted Use 6
7. Maintenance, Repairs, Alterations and Common Area Services 6
8. Insurance; Indemnity 8
9. Damage or Destruction 10
10. Real Property Taxes 11
11. Utilities 12
12. Assignment and Subletting 12
13. Default; Remedies 14
14. Condemnation 16
15. Broker's Fee 17
16. Estoppel Certificate 17
17. Lessor's Liability 17
18. Severability 17
19. Interest on Past-due Obligations 17
20. Time of Essence 17
21. Additional Rent 18
22. Incorporation of Prior Agreements; Amendments 18
23. Notices 18
24. Waivers 18
25. Recording 18
26. Holding Over 18
27. Covenants and Conditions 18
28. Binding Effect; Choice of Law 18
29. Subordination 18
30. Attorneys' Fees 19
31. Lessor's Access 19
32. Auctions 19
33. Signs 19
34. Merger 19
35. Consents 19
36. Guarantor 20
37. Quiet Possession 20
38. Security Measures--Lessor's Reservations 20
39. Easements 20
40. Building Planning 20
41. Lessor's Right to Perform 21
42. Limitation on Lessor's Liability 21
43. Toxic Materials 21
44. Authority 23
45. Conflict 23
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46. No offer 23
47. Lender Modification 23
48. Multiple Parties 23
49. Work Letter 23
50. Waiver of Jury Trial 23
51. Attachments 24
EXHIBIT A PREMISES FLOOR PLAN
EXHIBIT B OFFICE BUILDING PROJECT
EXHIBIT C RULES AND REGULATIONS
EXHIBIT D WORK LETTER
EXHIBIT E OMITTED
ADDENDUM OPTION TO EXTEND
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STANDARD OFFICE LEASE
BROOKHOLLOW OFFICE PARK
1. Basic Lease Provisions ("BASIC LEASE PROVISIONS").
1.1 Parties. Thus Lease is dated for reference purposes only September 4.
1996, by and between John Hancock Mutual Life Insurance Company,
a Massachusetts corporation (herein called "Lessor" or "Landlord"),
and Sangui BioTech. Inc.a Delaware corporation, (herein called
"Lessee" or "Tenant").
1.2 Premises. A total of approximately 3,360rentable square feet, more or
less, of the building described in paragraph 1.3, as defined further
in paragraph 2 and as shown on Exhibit A hereto and known as Suite
354(the "Premises").
1.3 BuildinG. Commonly described as being located at 1508Brookhollow Drive,
in the City of Santa Ana, County of Orange, State of California,
the legal description of which is set forth in Exhibit B hereto, and
as further defined in paragraph 2.
1.4 Permitted Use. Diagnostic laboratory, research arid development and
related office uses, subject to paragraph 6.
1.5 Term. Thirty eight (38) months, commencing as set forth in paragraph
3.1.
1.6 Base Rent. $2,520.00 , per month, payable on the 1st day of each month,
in advance, as provided in paragraph 4.1.
1.7 Base Rent Increase. The monthly Base Rent payable under paragraph 1.6
above shall be adjusted as provided in paragraph 4.1 below.
1.8 Rent Paid Upon Execution. The first month's Base Rent, $2,520.00 .
1.9 Security Deposit. $2,520.00.
1.10 Lessee's Expense Share And Lessee's Tax Share. .927%, subject to
paragraph 4.2, and subject to adjustment to the actual rentable
square footage of the Premises.
1.11 Expense Base Year. Calendar year 1996.
1.12 Tax Base Year. Calendar Year 1996.
1.13 Target Commencement DatE. October 1,1996.
1.14 Payee. "Brookhollow Office Park Operating Account"
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1.15 Landlord's Address. c/o Tooley & Company
1522 Brookhollow Drive, Suite 3
Santa Ana, CA 92705
46. Premises, Parking and Common Areas.
2.1 Premises. The Premises are a portion of a building, herein sometimes
referred to as the "Building" identified in paragraph 1.3 of the Basic
Lease Provisions. "Building" shall include adjacent parking facilities
used in connection therewith. The Premises, the Building, the Common Areas,
the land upon which the same are located, along with all other buildings
and improvements thereon or thereunder, are herein collectively referred
to as the "Office Building Project." Lessor hereby leases to Lessee and
Lessee leases from Lessor for the term, at the rental, and upon all of the
conditions set forth herein, the real property referred to in the Basic
Lease Provisions, paragraph 1.2, as the "Premises," including rights,
to the Common Areas as hereinafter specified.
2.2 Vehicle Parking. So long as Lessee is not in default of the rules and
regulations attached hereto as Exhibit C, and as established by Lessor from
time to time, Lessee shall be entitled to use, for parking for its
employees and guests, Ten (10) parking spaces, which shall be unreserved
spaces. If Lessee commits, permits or allows any of the prohibited activities
described in the Lease or the rules then in effect with regard to the use of
parking, then Lessor shall have the right and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand of Lessor.
2.3 Common Areas - Definition. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior
boundary line of the Office Building Project that are provided and
designated by the Lessor from time to time for the general non-exclusive use of
Lessor, Lessee and of other lessees of the Office Building Project and their
respective employees, suppliers, shippers, customers and invitees, including,
but not limited lo, common entrances, lobbies, corridors, stairways and
stairwells, public restrooms, elevators, escalators, parking areas to the
extent not otherwise prohibited by this Lease, loading and unloading areas,
trash areas, roadways, sidewalks, walkways, parkways, ramps, driveways,
landscaped areas and decorative walls.
2.4 Common Areas - Rules And Regulations. Lessee agrees to abide by and
conform to the rules and regulations attached hereto as Exhibit C with
respect to the Office Building Project and Common Areas, and to cause its
employees, suppliers, shippers, customers, and invitees to so abide and
conform. Lessor or such other person(s) as Lessor may appoint shall have the
exclusive control and management of the Common Areas and shall have the
right, from time to time, to modify, amend and enforce said rules and
regulations. Lessor shall not be responsible to Lessee for the non-compliance
with said rules and regulations by other lessees, their agents, employees and
invitees of the Office Building Project.
2.5 Common Areas - ChangeS. Lessor shall have the right, in Lessor's sole
discretion, front time to time:
2.5.1 To make changes to the Building interior and exterior and Common
Areas, including,
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without limitation, changes in the location, size, shape, number and appearance
thereof, including but not limited to the lobbies, windows, stairways, air
shafts, elevators, escalators, restrooms, driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, decorative walls, landscaped areas and walkways; provided, however,
Lessor shall at all times provide the parking facilities required by applicable
law;
2.5.2 To close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available;
2.5.3 To designate other land and improvements outside the boundaries of the
Office Building Project to be a part of the Common Areas, provided that
such other land and improvements have a reasonable and functional
relationship to the Office Building Project;
2.5.4 To add additional buildings and improvements to the Common Areas;
2.5.5 To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Office Building Project, or
any portion thereof;
2.5.6 To do and perform such other acts and make such other changes in, to
or with respect to the Common Areas and Office Building Project as Lessor
tray, in the exercise of sound business judgment, deem to be appropriate.
47. Term
3.1 Term. The Term of this Lease shall be as specified in paragraph 1.5
of the Basic Lease Provisions, commencing upon the Commencement Date. The
"Commencement Date" of this Lease shall be (lie earlier of (i) the date
on which Lessee lakes possession of or commences business operations upon the
Premises or any portion thereof; or (ii) the date of the Tender of
Possession under paragraph 3.2.1 below.
3.2 Delay In Possession. Notwithstanding the Target Commencement Date, as
specified in paragraph 1.13 of the Basic Lease Provisions, if for any reason
Lessor cannot deliver possession of the Premises to Lessee in the condition
called for by the work letter of even date herewith being entered into by and
between Lessor and Lessee, a copy of which is attached hereto as Exhibit D
(the "Work Letter"), on said date and subject to paragraph 3.2.2, Lessor
shall not be subject to any liability therefor, nor shall such failure affect
the validity of this Lease or the obligations of Lessee hereunder or extend the
Term hereof: but in such case, Lessee shall not be obligated to pay rent or
perform any other obligation of lessee under the terms of this lease, except
as may be otherwise provided in this Lease, until possession of the
Premises is tendered to Lessee, as hereinafter defined. Lessor and
Lessee shall mutually establish a reasonable target date for occupancy based
upon a mutually agreed upon schedule for planning., construction and
substantial completion of Lessee's interior improvements. The current Target
Commencement Date is as specified in paragraph 1.13 of the Basic Lease
Provisions. During the construction of Lessee's improvements, Lessee
shall be granted access during reasonable times, in order to install equipment
and telephones, provided that Lessee shall not interfere with the construction
of such improvements.
3.2.1 Possession Tendered- Defined. Possession of the Premises shall be
deemed tendered to Lessee
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("Tender of Possession") when (1) the improvements to be provided by Lessor
under this Lease and the work letter are substantially completed, (2) the
Building utilities are ready for use in the premises, (3) lessee has reasonable
access to the premises, and (4) ten (10) days shall have expired following
advance written notice to lessee of the occurrence of the matters described in
(1), (2) and (3), above of this paragraph 3.2.1. notwithstanding the foregoing,
if the lessee is leasing the premises in its "as-is" condition, then the tender
of possession shall be deemed to occur on the target commencement date.
32.2 Delays Caused By Lessee. there shall be no abatement of rent, to the
extent of any delays caused by acts or omissions of lessee, its agents,
employees and contractors.
3.3 Early Possession. if lessee occupies the premises prior to said target
commencement date, such occupancy shall be subject to all provisions of this
lease, such occupancy shall not change the expiration date, and lessee shall
pay prorated rent for such occupancy based on the actual number of days in
the applicable month.
3.4 Uncertain Commencement. upon the determination of the actual
commencement date, lessee and lessor shall, upon request by lessor, execute a
(this verbatim was omitted) acceptance of office space hereto establishing
(lie commencement date pursuant to paragraph 3.1 above.
48. Rent.
4.1 Base Rent. except as may be otherwise expressly provided in thus lease,
lessee shall pay to lessor the base rent for the premises set forth in paragraph
1.6 of the basic lease provisions, without offset or deduction. lessee shall pay
lessor upon execution hereof the advance base rent described in paragraph 1.8 of
the basic lease provisions. rent for any period during the term hereof which is
for less than one month shall be prorated based upon the actual number of days
of the calendar month involved. rent shall be payable in lawful money of the
united states to the payee specified in paragraph 1.14 of the basic lease
provisions and at the address specified in paragraph 1.15 of the basic lease
provisions or to such other persons or at such other places as lessor may
designate in writing. the monthly base rent shall be as follows:
Starting Rent Per Month Rent Per Year
10/01/96 $2,520.00
11/01/96-12/31/96 $-0
01/01-97-09/30/97 $2,520.00 $25,200.00
10/01/97-09/30/98 $2,620.80 $31,449.60
10/01/98-11/30/99 $2,721.60 $38,102.40
TOTAL: $94,752.00
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4.3 Definitions. the following definitions shall apply to this
article 4:
4.2.1 "Expense Base Year" shall be as specified in paragraph 1.11
of the basic lease provisions.
4.2.2 "Tax Base Year" shall be as specified in paragraph 1.12 of the
basic lease provisions.
4.2.3 "Expense Comparison Year" shall mean each successive calendar
year after the expense base year during the lease term.
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4.2.4 "Tax Comparison Year" shall mean each successive calendar year
after the tax base year during the lease term.
4.2.5 "Lessee's Expense Share" shall mean the percentage set fords in
paragraph 1.10 of the basic lease provisions, which percentage has been
determined by dividing the approximate rentable square footage of the
premises by the total approximate rentable square footage contained in
the Office Building Project. It is understood and agreed that the square
footage set forth in the Basic Lease Provisions are approximations which
Lessor and Lessee agree are reasonable and shall not be subject to revision
except in connection with an unusual change in the size of the Premises or a
change in the space available for lease in the Office Building Project.
It is further agreed that Lessee shall in no event be entitled to a credit to
or adjustment of Lessee's Expense Share payable hereunder, even if the radio
of Operating Expenses actually paid by Lessee compared to total
Operating expenses actually paid by other lessees of the Office Building
Project exceeds Lessee's Expense Share (as it might, by way of example
only and not limitation, if some leases of the Office Building Project
are made on a full-gross basis, in which case the lesssees under such leases
would not directly pay any portion of the Operating Expenses or
increase therein.).
4.2.6 "Lessee's Tax Share" shall mean the percentage specified in
paragraph 1.10 of the Basic Lease Provisions, which percentage has been
determined by dividing the approximate rentable square footage of the
Premises by the total approximate rentable square footage contained in the
Office Building Project. It is understood and agreed that the square
footage figures set forth in the Basic Lease Provisions are approximations
which Lessor and Lessee agree are reasonableand shall not be subject to
revision except in connection with an actual change in the size
of the Premises or a change in the space available for lease in the Office
Building Project. It is agreed that Lessee shall in no event be entitled
to a credit to or adjustment of Lessee's Tax Share payable hereunder,
even if the ratio of Applicable Taxes actually paid by Lessee compared
to total applicable Taxes actually paid by other lessees of the Office
Building Project exceeds Lessee's Tax Share.
4.2.7.1 "Operating Expenses" is defined, for purposes of thus Lease,
to include all costs, if any, incurred by Lessor in the exercise of its
reasonable discretion, for:
4.2.7.1 The operation, management, repair, maintenance, and replacement,
in neat, clean, safe, good order and condition, of the Office Building Project,
including, but not limited to, the following::
4.2.7.1.1. The Common Areas, including, but not limited to, their surfaces,
coverings, decorative items, carpets, drapes and window coverings, and including
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, stairways, parkways, driveways, landscaped areas, striping bumpers,
irrigation systems, Common Area lighting facilities, building exteriors
(including exterior glass) and roofs, fences and gates;
4.2.7.1.2 All heating, air conditioning, plumbing,electrical systems, life
safety equipment, telecommunication and other equipment used in common
by, or for the benefit of, lessees or occupants of the Office Building
Project, including elevators and escalators, lessee directories, fire
detection systems including sprinkler system maintenance and repair.
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4.2.7.2 Trash disposal, janitorial and security services;
4.2.7.3 Any other service to be provided by Lessor that is
elsewhere in this Lease stated to be an "Operating Expense";
4.2.7.4 The cost of the premiums for the liability and property insurance
policies to be maintained by Lessor under paragraph 8 hereof;
4.2.7.5 The cost of water, sewer, gas, electricity, and other
publicly mandated services to the Office Building Project;
4.2.7.6 Labor, salaries and applicable fringe benefits and costs,
materials, supplies and tools, used in managing, operating, maintaining and/or
cleaning the Office Building Project and accounting and a management fee
attributable to the operation of the Office Building Project.
4.2.7.7 Replacing and/or adding improvements mandated by any
governmental agency and any repairs or removals necessitated thereby,
including without limitation, for seismic safety or compliance with the
Americans with Disabilities Act, such costs to be amortized over its useful life
according to Federal income tax regulations or guidelines for
depreciation thereof (including interest on the unamortized balance as is
then reasonable in the judgment of Lessor's accountants);
4.2.7.8 Replacements of equipment or improvements, as amortized
over such equipment or improvement's useful life for depreciation
purposes according to federal income tax guidelines;
4.2.7.9 Environmental Damages (as hereinafter defined) to the extent
not recovered by Lessor directly from any lessees of the Office
Building Project.
For purposes of this Lease, Operating Expenses shall not include taxes
covered under paragraph 4.2.8 below, interest expense (except as provided
in paragraph 4.2.7.7 above), leasing commissions, depreciation on the
improvements contained in the Building (except as provided in paragraph
4.2.7.7 above), the cost of capital expenditures not included within
paragraphs 4.2.7.7 or 4.2.7.8 above or any costs which are paid by tenant
directly to third parties or as to which Lessor is otherwise reimbursed by
any other tenant, third party or by insurance proceeds. The computation of
Operating Expenses shall be made in accordance with fair and reasonable
accounting principles customarily applied by owners of similar properties
in Orange County, California.
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4.2.8 "Applicable Taxes" shall mean all taxes,
assessments and charges levied on or with respect to the Building, the Office
Building Project, or any personal property of Lessor used in the operation
thereof and payable by Lessor. Applicable Taxes shall include, without
limitation, all general real property taxes and general and special assessments,
fees, assessments or charges for transit, police, fire, housing, other
governmental services, or purported benefits of the Building, service payments
in lieu of taxes, and any tax, fee or excise on the act of entering into this
Lease or on the use or occupancy of the Building or any part thereof, or on the
rent payable under any lease or in connection with the business of renting space
in the Building, that are now or hereafter levied on or assessed against Lessor
by, or payable by Lessor as a result of, the requirements of the United States
of America, the Stale of California, or any political subdivision, public
corporation, district or other political or public entity, and shall also
include any other tax, fee or other excise, however described, that may be
levied or assessed as a substitute for, or as an addition lo, in whole or in
part, any other taxes. Applicable Taxes shall not include franchise, Transfer,
inheritance or capital stock taxes or income taxes measured by the net income of
Lessor from all sources, unless, due to a change in the method of taxation, any
of such taxes are levied or assessed against Lessor as a substitute for, in
whole or in part, any other tax which would otherwise constitute an Applicable
Tax. Applicable Taxes shall also include reasonable legal fees, costs and
disbursements incurred in connection with proceedings to contest, determine or
reduce Applicable Taxes. Notwithstanding, anything to the contrary in this
Lease, in the event that any Applicable Taxes are payable, or may at the option
of tire taxpayer be paid in installments, such Applicable Taxes shall be deemed
to have been paid in installments, regardless of the method of actual payment by
Lessor, and Lessee's Tax Share of such Applicable Taxes shall only include those
installments which would become due and payable during the Term.
4.3 Payment Of Increases.
4.3.1 If, with respect to any Expense Comparison Year, the
Operating Expenses shall be greater than the Operating Expenses for the Expense
Base Year, Lessee shall pay to Lessor as additional rent Lessee's Expense Share
of any such increase in Operating Expenses, in the manner provided herein. In
the event the Operating Expenses for any Expense Comparison Year are less than
the Operating Expenses for the Expense Base Year, Lessee shall not be entitled
to any credit or reduction in the .Base Rent. Furthermore, in no event shall
Lessee be entitled to any credit or offset against any increase which may be due
pursuant to paragraph 4.3.2 hereinbelow as a result of any such decrease in
Operating Expenses.
4.3.2 If, with respect to any Tax Comparison Year, the
Applicable Taxes shall be greater than the Applicable Taxes for the Tax Base
Year, Lessee shall pay to Lessor as additional rent Lessee's Tax Share of any
such increase in Applicable Taxes, in the manner provided herein. In the event
the Applicable Taxes for any Tax Comparison Year are less than the Applicable
Taxes for the Tax Base Year, Lessee shall not be entitled to any credit or
reduction in the Base Rent. Furthermore, in no event shall Lessee be entitled to
any credit or offset against any increase which may be due pursuant to paragraph
4.3.1 hereinabove as a result of any such decrease in Applicable Taxes.
4.4 Time For Payment. The payments contemplated under paragraph 4.3 shall be
made as follows:
4.4.1 During each month of each Expense Comparison Year and Tax
Comparison Year, Lessee shall pay to Lessor, with each installment of Base Rent,
one-twelfth (1/12th) of the amounts as are estimated by Lessor to be payable
pursuant to paragraph 4.3 with respect to each Tax Comparison Year and Expense
Comparison Year; provided, however, that Lessor may, by written notice to
Lessee, revise its estimates for such year and subsequent payments shall be
based upon such revised estimate.
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4.4.2 Sometime alter the end of each Tax and/or Expense
Comparison Year, Lessor shall deliver to Lessee a statement setting forth tire
actual Operating Expenses and Applicable Taxes for lite respective Comparison
Year, a comparison with (lie Operating Expenses and Applicable Taxes for the
Base Year and a comparison of any amounts payable under paragraph 4.3 with the
estimated payments made by Lessee. If the amounts payable under paragraph 4.3
are less than the estimated payments made by Lessee with respect to such
Comparison Year, tire statement shall be accompanied by a refund of the excess
by Lessor, or, at Lessor's election, a notice that Lessor shall credit the
excess to the next succeeding monthly installments of the Base Rent. If the
amounts payable under paragraph 4.3 are more than the estimated payments made by
Lessee with respect to such Comparison. Year, Lessee shall pay the deficiency to
Lessor within thirty (30) days after delivery of such statement. Statements
provided by Lessor shall be final and binding upon Lessee, if Lessee fails to
contest (lie same within ninety (90) days after the date of delivery to Lessee.
4.5 Partial Year. If this Lease expires or terminates on date other than
the last day of a Comparison Year, Lessee's Tax Share and Lessee's Expense Share
for such Comparison Year shall be prorated according to the ratio that the
number of days during said Comparison Year that the lease was in effect bears to
365.
4.6 Vacancy Adjustment. Notwithstanding anything to the contrary in the
Lease, if during the Expense Base Year or any Expense Comparison Year the
Building is less than 100% occupied, for the purposes of computing Lessee's
Expense Share for said year, those Operating Expenses which vary based upon
occupancy levels shall be adjusted as though the Building were 100% occupied;
provided, however, in no event shall the aggregate amount collected by Lessor
from all tenants in the Building exceed the actual Operating Expenses for said
year.
4.7 Lessee's Right To Audit. If, within thirty (30) days following Lessee's
receipt of Lessor's annual statement of actual Operating Expenses pursuant to
paragraph 4.4, Lessee notifies Lessor that Lessee desires to audit Lessor's
statement, Lessor shall cooperate with Lessee to permit such audit during normal
business hours, at Lessor's office where the business records are normally kept,
at Lessee's sole cost and expense.
5. Security Deposit. Lessee shall deposit with Lessor upon execution
hereof the Security Deposit set forth in paragraph 1.9 of the Basic Lease
Provisions as security for Lessee's faithful performance of Lessee's obligations
hereunder. If Lessee fails to pay rent or other charges due hereunder, or
otherwise defaults with respect to any provision of this Lease, Lessor may use,
apply or retain all or any portion of said deposit for the payment of any rent
or other charge in default or for the payment of any other sum to which Lessor
may become obligated by reason of Lessee's default, or to compensate Lessor for
any loss or damage which Lessor may suffer thereby. If Lessor so uses or applies
all or any portion of said deposit, Lessee shall within tell (10) days after
written demand therefor deposit cash with Lessor in an amount sufficent to
restore said deposit to the full amount then required of Lessee. If the monthly
Base Rent shall, from time to time, increase during the term of thus Lease,
Lessee shall, at the time of such increase, deposit with Lessor additional money
as a security deposit so that the total amount of the Security Deposit held by
Lessor shall at all limes bear the same proportion to die then current Base Rent
as the initial Security Deposit bears to the initial Base Rent set forth in
paragraph 1.6 of the Basic Lease Provisions. Lessor shall not be required to
keep said security deposit separate from its general accounts. If Lessee
performs all of the Lessee's obligations hereunder, said deposit, or so much
thereof as has not heretofore been applied by Lessor, shall be returned, without
payment of interest or other increment for its use, to Lessee (or, at Lessor's
option, to the last assignee, if any, of Lessee's interest hereunder) at the
expiration of the term hereof, and after Lessee has vacated tile Premises. No
trust relationship is created herein between Lessor and Lessee with respect to
said Security Deposit, and under no circumstances shall Lessor be required to
keep the Security Deposit separate from its other funds or in an
interest-bearing account, nor shall Lessee be entitled to any interest on such
amounts regardless of whether or not the Security Deposit is deposited in an
interest-bearing account. Should Lessor sell or transfer, voluntarily or
othenvise, its interest in the Premises during the term hereof and if Lessor
deposits with the purchaser or transferee thereof the then unappropriated funds
deposited by Lessee as aforesaid, Lessor shall thereupon be discharged from any
further liability with respect to such Security Deposit.
6. Permitted Use.
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6.1 Permitted Use. The Premises shall be used and occupied only for the
purpose set forth in paragraph 1.4 of the Basic Lease Provisions and for no
other purpose.
6.2 Compliance With Law.
6.2.1 Lessor makes no representation or warranty to Lessee regarding the
condition of the Premises or with respect to whether or not die Premises, or the
use for which Lessee will occupy die Premises, will violate any covenants or
restrictions of record, or any applicable building code, regulation, law or
ordinance in effect oil the Lease Commencement Date or at any oilier time.
6.2.2 Lessee shall, at Lessee's expense, promptly comply with
all applicable statutes, ordinances, rules, regulations, orders, covenants,
conditions and restrictions of record, and requirements of any fire insurance
underwriters or rating bureaus, now in effect or which may hereafter come into
effect, whether or not they reflect a change in policy from that now existing,
during the Term or any part of tile Term hereof, relating in any manner to the
Premises and the occupation and use by Lessee of tile Premises. Lessee shall
conduct its business in a lawful manner and shall not use or permit the use of
the Premises or the Common Areas in any manner that will tend to create waste or
a nuisance or shall tend to disturb other occupants of the Office Building
Project.
6.3 Condition Of Premises.
6.3.1 Lessor shall deliver the Premises to Lessee on the Lease
Commencement Date (unless Lessee is already in possession), but snakes no
representation or warranty regarding the condition of the Premises.
6.3.2 Except as otherwise provided in this Lease, Lessee
hereby accepts the Premises and Office Building Project in their condition
existing as of the Lease Commencement Date or the date that Lessee takes
possession of the Premises, whichever is earlier, subject to all applicable
zoning, municipal, county and state laws, ordinances and regulations governing
and regulating the use of the Premises, and any easements, covenants or
restrictions of record, and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto. Lessee
acknowledges that it has satisfied itself by its own independent investigation
that the Premises are suitable for its intended use, and that neither Lessor nor
Lessor's agent or agents has made any representation or warranty as to the
present future suitability of the Premises, Common Areas, or Office Building
Project for the conduct of Lessee's business.
7. Maintenance, Repairs, Alterations And Common Area Services.
7.1 Lessor's Obligations.
Lessor shall keep the Office Building Project, including the Premises,
interior and exterior walls,
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roof, and common areas, in good condition and repair; provided, however, Lessor
shall not be obligated to paint, repair or replace wall coverings, or to repair
or replace any improvements that are not ordinarily a part of the Building or
are above then Building standards. Except as provided in paragraph 9.5, there
shall be no abatement of rent or liability to Lessor on account of any injury or
interference with Lessee's business with respect to any improvements,
alterations or repairs made by Lessor to the Office Building Project or arty
part thereof, or on account of any interruption of services or of access to the
Premises, Building or Office Building Project. Lessee expressly waives the
benefits of any statute now or hereafter in effect which would otherwise afford
Lessee the right to make repairs at Lessor's expense or to terminate this Lease
because of Lessor's failure to keep the Premises in good order, condition and
repair.
7.2 Lessee's Obligations.
7.2.1 Notwithstanding Lessor's obligation to keep the Premises in good
condition and repair, Lessee shall be responsible for payment of
(lie cost thereof to Lessor as additional rent for that portion of the cost
of any maintenance and repair of the Premises, or any equipment (wherever
located) that serves only Lessee or the Premises, to the extent such cost is
attributable to causes beyond normal wear and tear. Lessee shall be
responsible for the cost of painting, repairing or replacing wall coverings,
and to repair or replace any Premises improvements that are not ordinarily
a part of the Building or that are above then Building standards. Lessor tray,
al its option, upon reasonable notice, elect to have Lessee perform any
particular such maintenance or repairs the cost of which is
otherwise Lessee's responsibility hereunder.
7.2.2 On the last day of the Term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same
condition as received, ordinary wear and tear excepted, clean and free of
Lessee's personal property and of any debris. Any damage or deterioration
of the Premises shall riot be deemed ordinary wear and tear if the same could
have been prevented by good maintenance practices by Lessee. Lessee shall
repair any damage to tire Premises occasioned by the installation or removal
of Lessee's trade fixtures, alterations, furnishings and equipment.
Except as otherwise stated in this Lease, Lessee shall leave the air lines,
power panels, electrical distribution systems, lighting fixtures, air
conditioning, window coverings, wall coverings, carpets, wall paneling,
ceilings and plumbing on tire Premises and in good operating condition.
7.3 Alterations And Additions.
7.3.1 Lessee shall not, without Lessor's prior written consent,
make any alterations, improvements additions, Utility Installations or repairs
in, on or about the Premises, or the Office Building Project. As used in this
paragraph 7.3 the term "Utility Installation" shall mean carpeting, window and
wall coverings, power panels, electrical distribution systems, lighting
fixtures, air conditioning, plumbing, and telephone arid telecommunication
wiring and equipment. At the expiration of the term, Lessor may require tire
removal of any or all of said alterations, improvements, additions or Utility
Installations, and the restoration of the Premises and the Office Building
Project to their prior condition, at Lessee's expense. Should Lessor permit
Lessee to make its own alterations, improvements, additions or Utility
Installations, Lessee shall use only such contractor as has been expressly
approved by Lessor, and Lessor stay require Lessee to provide Lessor, at
Lessee's sole cost and expense, a lien and completion bond in an amount equal to
one and one-half limes the estimated cost of such improvements, to insure Lessor
against any liability for mechanic's and materialmen's liens and to insure
completion of the work. Should Lessee make any alterations, improvements,
additions or Utility Installations without the prior approval of Lessor, or use
a contractor not expressly approved by Lessor, Lessor may, at any time during
the Term of this Lease, require that Lessee remove any part or all of the same.
<PAGE>
7.3.2 Any alterations, improvements, additions or Utility
Installations in or about the Premises or tire Office Building Project that
Lessee shall desire to make shall be presented to Lessor in written form, with
proposed detailed plans. If Lessor shall give its consent to Lessee's making
such alteration, improvement, addition or Utility Installation, the consent
shall be deemed conditioned upon Lessee acquiring a permit to do so from the
applicable governmental agencies, furnishing a copy thereof to Lessor prior to
the commencement of the work, and compliance by Lessee with all conditions of
said permit in a prompt and expeditious manner.
7.3.3 Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use in the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, the Building or the Office Building
Project, or any interest therein.
7.3.4 Lessee shall give Lessor not less than ten (10) days'
notice prior to the commencement of any work in the Premises by Lessee, and
Lessor shall have the right to post notices of non-responsibility in or on the
Premises or the Building as provided by law. Lessee shall at all times keep the
Premises, the Building and the Office Building Project free and clear of liens
attributable in any way to a work of improvement commissioned by Lessee, or to
the acts or omissions of Lessee, any of Lessee's employees, agents, or
contractors, or any of their employees, agents or sub-contractors. If Lessee
shall, in good faith, contest the validity of any such lien, claim or demand,
then Lessee shall, at its sole expense defend itself and Lessor against the same
mid shall pay and satisfy any such adverse judgment that may be rendered thereon
before the enforcement thereof against Lessor or the Premises, the Building or
the Office Building Project, upon the condition that Lessee shall furnish to
Lessor a surely bond satisfactory to Lessor in an amount not less than one
hundred fifty percent (150"/0) of the amount of such contested lien, claim or
demand indemnifying Lessor against liability for the same and holding the
Premises, the Building and (lie Office Building Project free from the effect of
such lien or claim. In addition, Lessor may require Lessee to pay Lessor's
reasonable attorneys' fees and costs in participating in such action if Lessor
shall decide it is to Lessor's best interest so to do.
7.3.5 All alterations, improvements, additions and Utility
installations (whether or not such Utility Installations constitute trade
fixtures of Lessee), which may be made to the Premises by Lessee, including but
not limited to, floor coverings, panelings, doors, drapes, built-ins, moldings,
sound attenuation, and lighting and telephone or communication systems, conduit,
wiring and outlets, shall be made and done in a good and workmanlike manner and
of good and sufficient quality and materials and shall be the properly of Lessor
and remain upon and be surrendered with the Premises at the expiration of the
Lease Term, unless Lessor requires their removal pursuant to paragraph 7.3.1.
Provided Lessee is not in default, notwithstanding the provisions of this
paragraph 7.3.5, Lessee's personal property and equipment, other than that which
is affixed to the Premises so that it cannot be removed without material damage
to the Premises or the Building, and other than Utility Installations, shall
remain the properly of Lessee and may be removed by Lessee subject to the
provisions of paragraph 7.2.
7.3.6 Lessee shall provide Lessor with as-built plans and
specifications for any alterations, improvements, additions or Utility
Installations.
7.4 Utility Additions. Lessor reserves the right to install new or
additional utility facilities Throughout (lie Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building Project,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, security systems, communication systems, and fire protection and
detection systems, so long as such installations do not unreasonably interfere
with Lessee's use of the Premises.
8. Insurance; Indemnity.
<PAGE>
8.1 Liability Insurance-Lessee. Lessee shall, at Lessee's
expense, obtain and keep in force during the Term of this Lease a policy of
broad form Commercial Liability insurance on an occurrence basis, in an amount
of not less than $2;90A;0(#1 $1,1100,1100 per occurrence of bodily injury and
property damage combined or in a greater amount as reasonably determined by
Lessor and shall insure Lessee with Lessor as an additional insured against
liability arising out of the use, occupancy or maintenance of the Premises.
Compliance with the above requirement shall not, however, limit the liability of
Lessee hereunder.
8.2 Liability Insurance-Lessor. Although Lessor shall not be
required to maintain any liability insurance, any premiums for liability
insurance maintained by Lessor relating to the Premises, the Building or the
Office Building Project shall be Operating Expenses hereunder.
8.3 Property Insurance-Lessee. Lessee shall, al Lessee's
expense, obtain and keep in force during the Term of (his Lease for the benefit
of Lessee, replacement cost all-risks insurance, including without limitation
fire and extended coverage insurance, with vandalism and malicious mischief,
sprinkler leakage and earthquake sprinkler leakage endorsements, in an amount
sufficient to cover not less than 100"/0 of the full replacement costs, as the
same may exist from time to time, of all of Lessee's personal property,
fixtures, equipment and tenant improvements.
8.4 Property Insurance-Lessor. Lessor shall obtain and keep in
force during the Term of this Lease a policy or policies of insurance covering
loss or damage to the Office Building Project improvements, but not Lessee's
personal property, fixtures, equipment or tenant improvements, in the amount of
the full replacement cost thereof, as the same may exist from time to time,
utilizing Insurance Services Office standard form, or equivalent providing
protection against all perils included within the classification of tire,
extended coverage, vandalism. malicious mischief plate glass, and such other
perils as Lessor deems advisable or may be required by a lender having a lien on
the Office Building Project. In addition, Lessor shall obtain and keep in force,
during the term of this Lease, a policy of rental value insurance covering a
period of one year, with loss payable to Lessor, which insurance shall also
cover all Operating Expenses for said period. Lessee will not be named in any
such policies carried by Lessor shall have no right to any proceeds therefrom.
The policies set forth in paragraphs 8.2 and 8.4 shall contain such deductibles
as Lessor or the aforesaid lender may determine. Lessee shall not do or permit
to be done anything which shall invalidate the insurance policies carried by
Lessor. Lessee shall pay the entirety of any increase in the property insurance
premium for the Office Building Project over what it was immediately prior to
the commencement of the Term of this Lease if the increase is specified by
Lessor's insurance carrier as being caused by the nature of Lessee's occupancy
or any act or omission of Lessee.
8.5 Insurance Policies. Lessee shall deliver to Lessor
certificates evidencing the existence and amounts of the liability insurance
policies required under paragraphs 8.1 and 8.3 within seven (7) days after the
Commencement Date of this Lease.
Each policy required to be obtained by Lessee hereunder shall: (a) be
issued by insurers
<PAGE>
authorized to do business in the state of California and rated not less than
financial class X, and not less than policyholder rating A, in the most recent
version of Best's Key Rating Guide, or the equivalent rating in any other
comparable guide selected by Lessor (provided that, in Duty event, the same
insurance company shall provide the coverages described in paragraphs 8.1 and
8.3 above); (b) be in form reasonably satisfactory from time to time to Lessor;
(c) name Lessee as named insured thereunder and shall name Lessor and, at
Lessor's request, Lessor's mortgagees and ground lessors of which Lessee has
been informed in writing, as additional insureds; (d) not have a deductible
amount exceeding Five Thousand Dollars ($5,000.00); (e) specifically provide
that the insurance afforded by such policy for the benefit of Lessor and
Lessor's mortgagees and ground lessors shall be primary, and any insurance
carried by Lessor or Lessor's mortgagees and ground lessors shall be excess and
non-contributing; (f) except for worker's compensation insurance, contain an
endorsement that the insurer waives its right to subrogation as described in
paragraph 8.6 below; and (g) contain alt undertaking by the insurer to notify
Lessor (and the mortgagees and ground lessors of Lessor who are named as
additional insureds) in writing not less than thirty (30) days prior to any
material change, reduction in coverage, cancellation or other termination
thereof. Lessee agrees to deliver to Lessor, as soon as practicable after the
placing of tile required insurance, but in no event later than seven (7) days
alter late date Lessee takes possession of all or any part of the Premises,
certificates front the insurance company evidencing the existence of such
insurance and Lessee's compliance with the foregoing provisions of thus
paragraph 8. Lessee shall cause certificates of replacement policies to be
delivered to Lessor not less than thirty (30) days prior to the expiration of
any such policy or policies. If any such initial or replacement certificates are
not furnished within the time(s) specified herein, Lessee shall be deemed to be
in material default under this Lease without tile benefit of any additional
notice or cure period provided herein, and Lessor shall have the right, but not
the obligation, to procure such policies and certificates at Lessee's expense.
8.6 Waiver Of Subrogation. Lessee and Lessor each hereby
release and relieve the other, and waive their entire right of recovery against
the other, for direct or consequential loss or damage arising out of or incident
to the perils covered by property insurance carried by such party, whether due
to the negligence of Lessor or Lessee or their agents, employees, contractors
and/or invitees. All property insurance policies required of Lessee under this
Lease shall be endorsed to so provide.
8.7 Indemnity. Lessee shall indemnify and (told Harmless
Lessor and its agents, shareholders, directors, employees, partners and lenders,
from and against any and all claims for damage to the person or property of
anyone or any entity arising from Lessee's use of the Office Building Project,
or from the conduct of Lessee's business or from any activity, work or things
done, permitted or suffered by Lessee in or about the Premises or elsewhere and
shall further indemnify and hold harmless Lessor from and against any and all
claims, costs and expenses arising from any breach or default in the performance
of any obligation on Lessee's part to be performed under the terms of this
Lease, or arising from any act or omission of Lessee, or any of Lessee's agents,
contractors, employees or invitees and from and against all costs, attorneys'
fees, expenses and liabilities incurred by Lessor as the result of any such use,
conduct, activity, work, things done, permitted or suffered, breach, default or
negligence, and in dealing reasonably therewith, including but not limited to
the defense or pursuit of any claim or any action or proceeding involved
therein; and in case any action or proceeding be brought against Lessor by
reason of any such matter, Lessee upon notice front Lessor shall defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified. Lessee, as a material part of the
consideration to Lessor for the granting of thus Lease, hereby assumes all risk
of damage to property of Lessee or injury to persons, in, upon or about the
Office Building Project arising from any cause mid Lessee hereby waives all
claims in respect thereof against Lessor and agrees that any claims for such
damages or injuries shall be made against the policies of insurance required to
be carried by Lessee pursuant to paragraphs 8.1 and 8.3 hereinabove and any
deductible amounts therein shall be deemed to be Lessee's "self insurance".
<PAGE>
8.8 Exemption Of Lessor From Liability. Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any loss of income
therefrom or for loss of or damage to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers, or any other person
in or about the Premises or the Office Building Project, nor shall Lessor be
liable for injury to the person of Lessee, Lessee's employees, agents or
contractors, whether such damage or injury is caused by or results from theft,
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause, whether said
damage or injury results from conditions arising upon the Premises or upon other
portions of the Office Building Project, or from other sources or places, or
from new construction or the repair, alteration or improvement of any part of
the Office Building Project, or of the equipment, fixtures or appurtenances
applicable thereto, and regardless of whether the cause of such damage or injury
or means of repairing the same is inaccessible. Lessor shall not be liable for
any damages arising from any act or neglect of any other lessee, occupant or
user of the Office Building Project, nor from the failure of Lessor to enforce
the provisions of any other lease of any other lessee of the Office Building
Project.
8.9 No Representation Of Adequate Coverage. Lessor
makes no representation that the limits or forms of coverage of insurance
specified in this paragraph 8 are adequate to cover Lessee's properly or
obligations under this Lease.
9. Damage Or Destruction.
9.1 Definitions.
9.1.1 "Premises Damage" shall mean if the Premises are damaged or destroyed
to any extent.
9.1.2 "Premises Building Partial Damage" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the extent
that the cost to repair is less than fifty percent (50%) of the then Replacement
Cost of the Building.
9.1.3 "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the extent
that the cost to repair is fifty percent (50"/0) or more of the then Replacement
Cost of the Building.
9.1.4 "Office Building Project Buildings" shall mean
all of the buildings oft the office building project site.
9.1.5 "Office Building Project Buildings Total Destruction"
shall mean if the office building project buildings are damaged or destroyed to
the extent that the cost of repair is fifty percent (50%) or more of (lie then
replacement cost of the office building project buildings.
9.1.6 "Insured Loss" shall mean damage or destruction which was
Caused by an event required to be covered by the insurance described in
Paragraph 8. The fact that an insured loss has a deductible amount shall not
make the loss an uninsured loss.
9.1.7 "Replacement Cost" shall mean the amount of money necessary
to be spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring, excluding all improvements
made by lessees, other than those installed by lessor at lessee's expense.
<PAGE>
9.2 Premises Damage; Premises Building Partial Damage.
9.2.1 Insured Loss: subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this lease there is damage which is
an insured loss and which falls into the classification of either premises
damage or premises building partial damage, then lessor shall, as soon as
reasonably possible and to the extent insurance proceeds are available and the
required materials and labor are readily available through usual commercial
channels, at lessor's expense, repair such damage (but not lessee's fixtures,
equipment or tenant improvements originally paid for by lessee) to its condition
existing at the lime of the damage, and this lease shall continue in full force
and effect.
9.2.2 Uninsured Loss: subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of thus lease there is damage which is not
an insured loss and which falls within the classification of premises damage or
premises building partial damage, unless caused by a negligent or willful act of
lessee (in which event lessee shall make the repairs at lessee's expense), which
damage prevents lessee from snaking any substantial use of the premises, lessor
may at lessor's option either (i) repair such damage as soon as reasonably
possible at lessor's expense, in which event this lease shall continue in full
force and effect, or (ii) give written notice to lessee within thirty (30) days
after the date of the occurrence of such damage of lessor's intention to cancel
and terminate this lease as of the date of the occurrence of such damage, in
which event thus lease shall terminate as of the date of the occurrence of such
damage.
9.3 Premises Building Total Destruction; Office Building Project Total
Destruction.
Subject to the provisions of paragraphs 9.4 and 9.5, if at any time during the
Term of this Lease there is damage, whether or not it is an Insured Loss, which
falls into the classifications of either (i) Premises Building Total
Destruction, or (ii) Office Building Total Destruction, then Lessor may at
Lessor's option either (i) repair such damage or destruction as soon as
reasonably possible at Lessor's expense (to the extent the required materials
are readily available through usual commercial channels) to its condition
existing at the time of the damage, but not Lessee's fixtures, equipment or
tenant improvements and this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after the date of
occurrence of such damage of Lessor's intention to cancel and terminate this
Lease, in which case this Lease shall terminate as of the occurrence of such
damage.
9.4 Damage Near End Of Terms.
9.4.1 Subject to paragraph 9.4.2, if at any time during the last twelve
(12) months of the Term of this Lease there is substantial damage to die
Premises, Lessor may at Lessor's option cancel and terminate this Lease as of
the date of occurrence of such damage by giving written notice to Lessee of
Lessor's election to do so within 30 days after the date of occurrence of such
damage.
<PAGE>
9.4.2 Notwithstanding paragraph 9.4.1, in the event that Lessee has an
option to cxtcud or renew this Lease, and I-lie time within which said option
may be exercised has not yet expired, Lessee shall exercise such option, if it
is to be exercised at all, no later than twenty (20) days alter the occurrence
of an Insured Loss falling within the classification of Premises Damage during
the last twelve (12) months of the Term of this Lease. If Lessee duly exercises
such option during said twenty (20) day period, Lessor shall, at Lessor's
expense, repair such damage, but not Lessee's fixtures, equipment or tenant
improvements, as soon as reasonably possible and this Lease shall continue in
full force and effect. If Lessee fails to exercise such option during said
twenty (20) day period, then Lessor may at Lessor's option terminate and cancel
this Lease as of the expiration of said twenty (20) day period by giving written
notice to Lessee of Lessor's election to do so within ten (10) days after the
expiration of said twenty (20) day period, notwithstanding any term or provision
in the grant of option to the contrary.
9.5 Abatement Of Rent; Lessee's Remedies.
9.5.1 If, in the event of Premises Damages, Lessor repairs or restores
the Building or Premises pursuant to the provisions of this paragraph 9, and any
part of the Premises are not usable (including loss of use due to loss of access
or essential services), the rent payable hereunder (including Lessee's Share of
Operating Expenses) for the period during which such damage, repair or
restoration continues shall be abated, provided (1) the damage was not the
result of the negligence of Lessee, and (2) such abatement shall only be to the
extent the operation and profitability of Lessee's business as operated from the
Premises is adversely affected. Except for said abatement of rent, if any,
Lessee shall have no claim against Lessor for any damage suffered by reason of
any such damage, destruction, repair or restoration.
9.5.2 If Lessor shall be obligated to repair or restore the
Premises or the Building under the provisions of this paragraph 9 and shall not
commence such repair or restoration within ninety (90) days after such
occurrence, or if Lessor shall not complete die restoration and repair within
six (G) months alter such occurrence, Lessee may at Lessee's option cancel and
terminate this Lease by giving Lessor written notice of Lessee's election to do
so at any lime prior to the commencement or completion, respectively, of such
repair or restoration. In such event this Lease shall terminate as of the date
of such notice.
9.5.3 Lessee agrees to cooperate with Lessor in connection with any
such restoration and repair, including but not limited to the approval and/or
execution of plans and specifications required.
9.6 Termination-Advance Payments. Upon termination of this Lease
pursuant to this paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.
9.7 Waiver. Lessor and Lessee waive the provisions of any statute
which relates to termination of leases when leased property is destroyed,
including without limitation California Civil Code Section .1932, Subsection 2
and Section 1933, Subsection 4, and agree that such event shall be governed by
the terms of this Lease.
10. Real Property Taxes.
10.1 Payment Of Taxes. Lessor shall pay the real property tax, as
defined in paragraph 10.3, applicable to the Office Building Project, except as
otherwise provided in paragraph 10.2.
<PAGE>
10.2 Additional Improvements. Lessee shall not be responsible for
paying any increase in real property tax specified in the tax assessor's records
and work sheets as being caused by additional improvements placed upon the
Office Building Project by other lessees or by Lessor for the exclusive
enjoyment of any other lessee. Lessee shall, however, pay to Lessor, at the time
that the next scheduled rental payment comes due, the entirety of any increase
in real property tax if assessed solely by reason of additional improvements
placed upon the Premises by Lessee or at Lessee's request.
10.3 Definition Of "Real Property Tax." As used in this paragraph 10
only, the term "real property tax" shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license fee,
commercial rental tax, improvement bond or bonds, levy or tax (other than
inheritance, personal income or estate taxes) imposed on the Office Building
Project or any portion thereof by any authority having the direct or indirect
power to tax, including any city, county, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage or other improvement
district thereof, as against any legal or equitable interest of Lessor in the
Office Building Project or in any portion thereof, as against Lessor's right to
rent or other income therefrom, and as against Lessor's business of leasing the
Office Building Project. The term "real property tax" shall also include any
tax, fee, levy, assessment or charge (i) in substitution of, partially or
totally, any tax, fee, levy, assessment or charge hereinabove included within
the definition of "real property tax," or (ii) the nature of which was
hereinabove included within the definition of "real property tax," or (iii)
which is imposed for a service or right not charged prior to June 1, 1978, or,
if previously charged, has been increased since June 1, 1978, or (iv) which is
imposed as a result of a change in ownership, as defined by applicable local
statutes for property tax purposes, of the Office Building Project or which is
added to a tax or charge hereinbefore included within the definition of real
property tax by reason of such change of ownership, or (v) which is imposed by
reason of this transaction, any modifications or changes hereto, or any
transfers hereof.
10.4 Joint Assessment: If the improvements or property, the taxes for
which are to be paid separately by Lessee under paragraph 10.2 or 10.5 are not
separately assessed, Lessee's portion of that tax shall be equitably determined
by Lessor from. the respective valuations assigned in the assessor's work sheets
or such other information (which may include the cost of construction) as may be
reasonably available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.
10.5 Personal Property Taxes.
10.5.1 Lessee shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises or elsewhere.
10.5.2 If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.
11. Utilities.
11.1 Omitted.
<PAGE>
11.2 Services Exclusive To Lessee. Lessee shall pay for all gas, heat,
light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee,
together with any taxes thereon. If any such services are not separately metered
to the Premises, Lessee shall pay a reasonable proportion to be determined by
Lessor of all charges jointly metered with other premises in the Building.
11.3 Omitted.
11.4 Excess Usage By Lessee. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water, lighting
or power, or suffer or permit any act that causes extra burden upon the
utilities or services, including but not limited to security services, over
standard office usage for the Office Building Project. Lessor shall require
Lessee to reimburse Lessor for any excess expenses or costs that may arise out
of a breach of this subparagraph by Lessee.
11.5 Interruptions. There shall be no abatement of rent and
Lessor shall not be liable in any respect whatsoever for the inadequacy,
stoppage, interruption or discontinuance of any utility or service, regardless
of whether or not the cause thereof was within Lessor's control.
12. Assignment And Subletting.
12.1 Lessor's Consent Required. Lessee shall not voluntarily
or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer
or encumber all or any part of Lessee's interest in the Lease or in the
Premises, without Lessor's prior written consent, which Lessor shall not
unreasonably withhold. Lessor shall respond to Lessee's request for consent
hereunder in a timely manner and any attempted assignment, transfer, mortgage,
encumbrance or subletting without such consent shall be void, and shall
constitute a material, non-curable default and breach of this Lease without the
need for notice to Lessee under paragraph 13.1. "Transfer" within the meaning of
this paragraph 12 shall include the transfer or transfers aggregating: (a) if
Lessee is a corporation, more than twenty-five percent (25%) of the voting stock
of Lessee's parent or (b) if Lessee is a partnership, more than twenty-five
percent (25%) of the profit and loss participation in such partnership.
12..2.1 Terms And Conditions Applicable To Assignment And Subletting.
12.2.1 Regardless of Lessor's consent, no assignment or
subletting shall release Lessee of Lessee's obligations hereunder or after the
primary liability of Lessee to pay the rent and other sums due Lessor hereunder
including Lessee's Expense Share and Lessee's Tax Share, and to perform all
other obligations to be performed by Lessee hereunder.
12.2.2 Lessor may accept rent from any person other than
Lessee pending approval or disapproval of such assignment or subletting without
being deemed to have consented thereto.
12.2.3 Neither a delay in the approval or disapproval of
such assignment or subletting, nor the acceptance of rent, shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for the breach of
any of the terms or conditions of this paragraph 12 or this Lease.
<PAGE>
12.2.4 If Lessee's obligations under this Lease have been
guaranteed by third parties, then an assignment or sublease, and Lessor's
consent thereto, shall not be effective unless said guarantors give their
written consent to such assignment or sublease and the terms thereof.
12.2.5 The consent by Lessor- to any assignment or subletting shall
not constitute a consent to any subsequent assignment or subletting by
Lessee or to any subsequent or successive assignment or subletting by the
sublessee or assignee, as the case may be. However, Lessor may consent to
subsequent sublettings and assignments or any amendments or modifications
thereto without notifying Lessee or anyone else liable on the Lease or
sublease and without obtaining their consent and such action shall not relieve
such persons from liability under thus Lease or said sublease; provided,
however, such persons shall not be responsible to the extent any such
amendment or modification enlarges or increases, he obligations of the
Lessee or sublessee under this Lease or such sublease.
12.2.6 In the event of any default under this Lease, Lessor may
proceed directly against Lessee, any guarantors or anyone else responsible for
the performance of this Lease, including the sublessee or assignee, without
first exhausting Lessor's remedies against any other person or entity
responsible therefor to Lessor, or any security held by Lessor or Lessee.
12.2.7 Lessor's written consent to any assignment or subletting of
the Premises by Lessee shall not constitute an acknowledgment that no default
then exists under this Lease of the obligations to be performed by Lessee nor
shall such consent be deemed a waiver of any then existing default, except as
may be otherwise stated by Lessor at the time.
12.2.8 The discovery of the fact that any financial statement
relied upon by Lessor in giving its consent to an assignment or subletting was
materially false shall, at Lessor's election, render Lessor's said consent null
and void.
12.2.9 Any disapproval by Lessor of any proposed assignee or
sublessee based on the fact that such party is an existing tenant of the Ofce
Building Project ("Existing Tenant") shall be deemed to be reasonable. With
respect to any such proposed assignment or sublease to an Existing Tenant,
Lessor shall have the right, at its election, to recapture the Premises or a
portion thereof as applicable for the purpose of directly marketing the Premises
or a portion thereof to any third party, including the Existing Tenant, selected
by Lessor, for the length of time, in the case of a sublease, offered by Lessee.
Such recapture shall be effective as of the date specified by Lessee in its
request for consent of Lessor as the proposed commencement date for the
assignment or sublease or, if no date is so specified, on the date selected by
Lessor. In the event of such recapture by Lessor, the Lease shall be amended to
document the elimination of the applicable portion of the Premises. Any
necessary documents in connection with such recapture shall be prepared by
Lessor.
<PAGE>
12.3 Additional Terms And Conditions Applicable To Subletting.
Regardless of Lessor's consent, the following terms and conditions shall apply
to any subletting by Lessee of all or any part of the Premises and shall be
deemed included in all subleases under thus Lease whether or not expressly
incorporated therein:
12.3.1 Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any sublease heretofore
or hereafter made by Lessee, and Lessor may collect such rent and income and
apply same (or the balance thereof after application of the provisions of
paragraph 12.3.6 hereinbelow) toward Lessee's obligations under this Lease;
provided, however, that until a default shall occur in performance of Lessee's
obligations under this Lease, Lessee may, subject to the provisions of paragraph
12.3.6 hereinbelow, receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this sublease or any assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a default exists in
the performance of Lessee's obligations under this Lease, to pay to Lessor the
rents due and to become due under the sublease. Lessee agrees that such
sublessee shall have the right to rely upon any such statement and request from
Lessor, and that such sublessee shall pay such rents to Lessor without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against said sublessee or Lessor for any such rents
so paid by said sublessee to Lessor.
12.3.2 No sublease entered into by Lessee shall be effective
unless and until it has been approved in writing by Lessor. Any sublessee shall,
by reason of entering into a sublease under this Lease, be deemed, for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every obligation herein to be performed by Lessee other than such
obligations as are contrary to or inconsistent with provisions contained in a
sublease and to which provisions Lessor has expressly consented in writing.
12.3.3 In the event Lessee shall default in the performance of
its obligations under thus Lease, Lessor, at its option and without any
obligation to do so, may require any sublessee to attorn to Lessor, in which
event Lessor shall undertake the obligations of Lessee under such sublease from
the time of the exercise of said option to the termination of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to Lessee or for any other prior defaults of
Lessee under such sublease.
12.3.4 No sublessee shall further assign or sublet all or any
part of the Premises without Lessor's prior written consent.
<PAGE>
12.3.5 With respect to any subletting to which Lessor has
consented, Lessor agrees to deliver a copy of any notice of default by Lessee to
the sublessee. Such sublessee shall have the right to cure a default of Lessee
within the time period specified in said notice of default and.the sublessee
shall have a right of reimbursement and offset from and against Lessee for any
such defaults cured by the sublessee.
12.3.6 Notwithstanding anything to the contrary in the foregoing, one
hundred percent (100"/0) of any rent or other economic consideration received by
Lessee as a result of an assignment or subletting which exceeds, on a square
foot basis, in the aggregate, (i) the total rent which Lessee is obligated to
pay to Lessor under the Lease (prorated to reflect obligations allocable to any
portion of the Premises subleased), plus (ii) any reasonable and customary
brokerage commissions (not to exceed five percent (5%) of base rent payable
under the assignment or sublease) actually paid by Lessee in connection with
such assignment or subletting, shall be paid to Lessor within ten (10) days
alter receipt thereof as additional rent hereunder, without altering or reducing
any other obligations of Lessee hereunder.
12.4 Lessor's Expenses. In the event Lessee shall assign or sublet
the Premises or request the consent of Lessor to any assignment or subletting or
if Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable costs and expenses incurred in
connection therewith, including without limitation attorneys', architects',
engineers' and other consultants' fees.
12.5 Conditions To Consent. Lessor reserves the right to condition
any approval to assign or sublet upon Lessor's determination that (a) the
proposed assignee or sublessee shall conduct a business on the Premises of a
quality substantially equal to that of Lessee and consistent with the general
character of the other occupants of the Office Building Project and not in
violation of any exclusives or rights then held by other tenants, and (b) the
proposed assignee or sublessee be at least as financially responsible as Lessee
was expected to be at the time of the execution of this Lease or of such
assignment or subletting, whichever is greater.
13. Default; Remedies.
13.1 Default. The occurrence of any one or more of the following
events shall constitute a material default of this Lease by Lessee:
13.1.1 The vacation or abandonment of the Premises by Lessee.
Vacation or abandonment of the Premises shall include the failure to occupy the
Premises (i) for a continuous period of sixty (60) days or more if the rent is
paid, or (ii) for any period of time during which Lessee has failed to pay the
Base Rent or any additional rent as and when due.
13.1.2 The breach by Lessee of any of the covenants,
conditions or provisions of paragraphs 7.3 (alterations and additions), 12
(assignment or subletting), 13.1.5 (insolvency), 13.1.6 (false statement), 16.1
(estoppel certificate), 29.3 (subordination), 32 (auctions), or 39.1
(easements), all of which are hereby deemed to be material, non-curable defaults
without the necessity of any notice by Lessor to Lessee thereof. Nothing herein
shall preclude Lessor from waiving, in writing, any such default.
<PAGE>
13.1.3 The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
therefore from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes,
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
13.1.4 The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Lessee
other than those referenced in subparagraphs 13.1, 13.2 and 13.3 above, where
such failure shall continue for a period of thirty (30) days alter written
notice thereof from Lessor to Lessee; provided, however, that if the nature of
Lessee's noncompliance is such that more than thirty (30) day's are reasonably
required for its cure, then Lessee shall not be deemed to be in default if
lessee commences such cure within said thirty (30) day period and thereafter
diligently pursues such cure to con completion. To the extent permitted by law,
such thirty (3U) day notice shall constitute the sole and exclusive notice
required to be given to Lessee under applicable Unlawful Detainer statutes.
13.1.5 (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becoming a "debtor" as
defned in 11U.S.C. '101 or any successor statute thereto (unless, in the case of
a petition filed against Lessee, the same is dismissed within sixty (G0) days;
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in thus Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of thus paragraph 13.1.5 is contrary to
any applicable law, such provision shall be of no force or effect.
13.1.6 The discovery by Lessor that any financial statement
given to Lessor by Lessee, or its successor in interest or by any guarantor of
Lessee's obligation hereunder, was materially false. Lessor's Remedies.
13.2 Lessor's Remedies.
13.2 Termination. In the event of any default by Lessee, in
addition to any other remedies available to Lessor under thus Lease, at law or
in equity, Lessor shall have the immediate option to terminate this Lease and
all rights of Lessee hereunder. In the event that Lessor shall elect to so
terminate this Lease, then Lessor may recover from Lessee:
13.2.1.1 the worth at the time of award of any unpaid rent
which had been earned at the time of such termination; plus
13.2.1.2 the worth at the time of the award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Lessee proves could have been
reasonably avoided; plus
<PAGE>
13.2.13 the worth at the time of award of the amount by which the unpaid rent
for the balance of the Term after the time of award exceeds the amount of such
rental loss that Lessee proves could be reasonable avoided; plus
13.2.1.4 any other amount necessary to compensate Lessor for all
the detriment approximately caused by Lessee's failure to perform its
obligations under this Lease or which, in the ordinary course of things, would
be likely to result therefrom including, but not limited to: "unreimbursed
Leasehold Improvement Costs" (as defined below); attorneys' fees; brokers'
commissions; the costs of refurbishment, alterations, renovation and repair of
the Premises; and costs of removal (including the repair of damage caused by
such removal) and storage (or disposal) of Lessee's personal property,
equipment, fixtures, Lessee's alterations, additions, leasehold improvements and
any other items which Lessee is required under this Lease to remove but does not
remove. As used herein, the term "unreimbursed Leasehold Improvement Costs"
shall mean the product when multiplying (i) the sum of any leasehold improvement
allowance plus any other costs provided, paid or incurred by Lessor in
connection with the design and construction of the initial leasehold
improvements installed in the Premises on or prior to the Commencement Date
pursuant to the Work Letter, by (ii) the fraction, the numerator of which is the
number of months of the Term of this Lease not yet elapsed as of the date on
which thus Lease is terminated (excluding any unexercised renewal options), and
the denominator of which is the total number of months of the Term of this Lease
(excluding any unexercised renewal options). For example, if the total costs
paid or incurred by Lessor with respect to the initial leasehold improvements
was $100,000.00, the Lease term was sixty (60) months, and the Lease was
terminated by reason of Lessee's default at the end of twelve (12) months, the
Unreimbursed Leasehold Improvement Costs would be equal to $80,000.00 (i.e.,
$80,000.00 equals $100,000.00 x 48/60).
As used in subparagraphs 13.2.1.1 and 13.2.1.2 above, the "worth
at time of award" is computed by allowing interest at the maximum interest rate
which Lessor is permitted by law to charge Lessee (the "Lease Rate"). As used in
subparagraph 13.2.1.3. above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
13.2.2 Re-Entry Rights. In event of any default by Lessee,
in addition to any other remedies available to Lessor under this Lease, at law
or in equity, Lessor shall also have the right, with or without terminating this
Lease, to re-enter the Premises and remove all persons and property from the
Premises; such property may be removed, stored and /or disposed of pursuant to
this Lease or any other procedures permitted by applicable law, all at Lessee's
expense. No re-entry or taking possession of the Premises by Lessor pursuant to
this paragraph 13.2.2, and no acceptance of surrender of the Premises or other
action on Lessor's part, shall be construed as an election to terminate this
Lease unless a written notice of such intention be given to Lessee or unless the
termination thereof be decreed by a court of competent jurisdiction.
13.2.4 Continuation Of Lease. In the event of any default
by Lessee, in addition to any other remedies available to Lessor under this
Lease, at law or in equity, Lessor shall (lave the right to continue this Lease
in full force and effect, whether or not Lessee
<PAGE>
shall have abandoned the Premises. The foregoing remedy shall also be available
to Lessor pursuant to California Civil Code Section 1951.4 and any successor
statute thereof in the event Tenant has abandoned the Premises. In tile event
Lessor elects to continue this Lease in full force and effect pursuant to this
paragraph 13.2.3, then Lessor shall be entitled to enforce all of its rights and
remedies under this Lease, including the right to recover rent as it becomes
due. Lessor's election not to terminate this Lease pursuant to this paragraph
13.2.3 or pursuant to any other provision of this Lease, at law or in equity,
shall not preclude Lessor from subsequently electing to terminate this Lease or
pursuing any of its other remedies.
13.2.4 Rights And Remedies Cumulative. All rights, options and
remedies of Lessor contained in this paragraph13.2 and elsewhere in this Lease
shall be construed and held to be cumulative. and no one of them shall be
exclusive of the other, and Lessor shall have the right to pursue any one or all
of such remedies or any other remedy or relief which may be provided by law or
in equity, whether or not staled in this Lease. Nothing in this paragraph 13.2
shall be deemed to limit or otherwise affect Lessee's indemnification of Lessor
pursuant to any provision of this Lease.
13.3 Default By Lessor. .Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within thirty (30) days after
written notice by Lessee to Lessor and to the holder of any first Mortgage or
deed of trust covering the Premises whose name and address shall have
theretofore been furnished to Lessee in writing, specifying wherein Lessor has
failed to perform such obligation; provided, however, that if the nature of
Lessor's obligation is such that more than thirty (30) days are required for
performance then Lessor shall not be in default if Lessor commences performance
within such 30-day period and thereafter diligently pursues (lie same to
completion. In no event shall Tenant have the right to terminate this Lease as a
result of Landlord's default and Tenant's remedies shall be limited to damages
and/or an injunction.
13.4 Late Charges. Lessee hereby acknowledges that late payment by
Lessee to Lessor of Base Rent, Lessee's Expense Share , Lessee's Tax Share or
other sums due hereunder will cause Lessor to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting charges,
loss of use of such funds by Lessor and late charges which may be imposed on
Lessor by the terms of any mortgage or trust deed covering the Office Building
Project. Accordingly, if any installment of Base Rent, Operating Expenses, or
ally other suns due from Lessee shall not be received by Lessor or Lessor's
designee within ten (10) days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay to Lessor a late charge equal
to ten percent (10%) of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Lessor will
incur by reason of late payment by Lessee. Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Lessee's default with respect to
such overdue amount, nor prevent Lessor from exercising any of the other rights
and remedies granted hereunder.
14. Condemnation. If the Premises or any portion thereof or the Office
Building Project are taken under the power of eminent domain, or sold under the
threat of the exercise of said power (all of which are herein called
"condemnation"), this Lease shall terminate as to the part so taken as of tile
date tile condemning authority takes title or possession, whichever first
occurs; provided that if so much of the Premises or the Office Building Project
are taken by such condemnation as would substantially and adversely affect (lie
operation and profitability of Lessee's business conducted from the Premises,
Lessee shall have the option, to be exercised
<PAGE>
only in writing within thirty (30) days after Lessor shall have given Lessee
written notice of such taking (or in the absence of such notice, within thirty
(30) days alter the condemning authority shall have taken possession), to
terminate this Lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the rent and Lessee's Expense Share and
Lessee's Tax Share shall be reduced in the proportion that the rentable square
feet of the Premises taken bears to the total rentable square feet of the
Premises. Common Areas taken shall be excluded from Common Areas usable by
Lessee and no reduction of rent shall occur with respect thereto or by reason
thereof. Lessor shall have the option in its sole discretion to terminate this
Lease as of the taking of possession by the condemning authority, by giving
written notice to Lessee of such election within thirty (30) days after receipt
of notice of a taking by condemnation of any part of the Premises or the Office
Building Project. Any award for the taking of all or any part of the Premises or
the Office Building Project under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any separate award for loss of or
damage to Lessee's trade fixtures, removable personal property and unamortized
tenant improvements that have been paid for by Lessee. For that purpose the cost
of such improvements shall be amortized over the original term of this Lease
excluding any options. In the event that thus Lease is not terminated by reason
of such condemnation, Lessor shall to the extent of severance damages received
by Lessor in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall pay any amount in
excess of such severance damages required to complete such repair.
15. Broker's Fee.
15.1 The brokers involved in this transaction are Tooley & Company
as "listing broker" and as "cooperating broker," licensed real estate broker(s).
A "cooperating broker" is defined as any broker other than the listing broker
entitled to a share of any commission arising under this Lease. Lessor shall pay
to the brokers a fee as set forth in a separate agreement between Lessor and the
listing broker.
15.2 Lessor agrees to pay said fee not only on behalf of Lessor
but also on behalf of any person, corporation, association, or other entity
having an ownership interest in said Office Building Project or any part
thereof, when such fee is due pursuant to such separate agreement. Any
transferee of Lessor's interest in this Lease, whether such transfer is by
agreement or by operation of law, shall be deemed to have assumed Lessor's
obligation under this paragraph 15.
15.3 Lessee and Lessor each represents and warrants to the
other that neither has had any dealings with any person, firm, broker or finder
(other than the person(s), firm(s), broker(s) or finder(s), if any, whose names
are set forth in paragraph 15.1, above) in connection with the negotiation of
this Lease and/or tile consummation of tie transaction contemplated hereby, and
no other broker or other person, firm or entity is entitled to any commission or
finder's fee in connection with said transaction and Lessee and Lessor do each
hereby indemnify and hold the other harmless from and against any costs,
expenses, attorneys' fees or liability for compensation or charges which may be
claimed by any such unnamed person, firm, broker, finder or other similar party
by reason of any dealings or actions of the indemnifying party.
<PAGE>
16. Estoppel Certificate.
16.1 Lessee shall at any time upon not less than ten (10) days'
prior written notice from the Lessor execute, acknowledge and deliver to Lessor
a statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that thus Lease, as so modified, is in full force and effect) and the
date to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Lessee's knowledge, any uncured defaults on
the part of Lessor, or specifying such defaults if any are claimed, and (iii)
certifying as to such other matters as may be requested by Lessor or by a
prospective purchaser or encumbrancer of all or any part of the Office Building
Project. Any such statement may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Office Building Project.
16.2 At Lessor's option, tile failure to deliver such
statement within such time shall be a material, non-curable default of this
Lease by Lessee, without any further notice to such party, and it shall be
conclusive upon such patty that (i) this Lease is in full force and effect,
without modification except as may be represented by Lessor, (ii) there are no
uncured defaults in Lessor's performance, (iii) not more than one month's rent
has been paid in advance, and (iv) there are no remaining obligations of Lessor
under this Lease yet to be performcd.
17. Lessor's Liability. The term "Lessor" as used herein shall mean only
the owner or owners, at the time in question, of the fee title or a Lessee's
interest in a ground lease of the Office Building Project, and in the event of
any transfer of such title or interest, Lessor herein named (and in case of any
subsequent transfers the then grantor) shall be relieved from and after the date
of such transfer of all liability as respects Lessor's obligations thereafter to
be performed, provided that any funds in the hands of Lessor or the then grantor
al the time of such transfer in which Lessee has an interest, shall be delivered
to the grantee. The obligations contained in this Lease to be performed by
Lessor shall, subject as aforesaid, be binding on Lessor's successors and
assigns, only during their respective periods of ownership.
18. Severability. The invalidity of any provision of this Lease as
determined by a courrt of competent
jurisdiction shall in no way affect the validity of any other provision hereof
19. Interest On Past-Due Obligations. Excepts as expressly herein
provided, any amount due to Lessor
not paid when due shall bear interest at the maximum rate then allowable by law
or judgments from the date due. Payment of such interest shall not excuse or
cure any default by Lessee under this Lease; provided, however, that interest
shall not be payable on late charges incurred by Lessee nor on any amounts upon
which late charges are paid by Lessee.
20. Time Of Essence. Time is of the essence with respect to the obligations
to be performed under this
Lease.
21. Additional Rent. All monetary obligations of Lessee to Lessor under the
terms of thus Lease, including
expenses payable by Lessee hereunder, shall be deemed to be rent.
<PAGE>
22. Incorporation Of Prior Agreements; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein.
No prior or contemporaneous agreement or understanding pertaining to any
such matter shall be effective. This Lease may be modified in writing only,
signed by lite parties in interest at the lime of the modification. Except
as otherwise staled in this Lease, Lessee hereby acknowledges that neither
the real estate broker listed in paragraph 15 hereof nor any cooperating
broker on this transaction nor the Lessor or any employee or agents of any
of said persons has made any oral or written warranties or representations to
Lessee relative to the condition or use by Lessee of the Premises or the Office
Building Project and Lessee acknowledges that Lessee assumes all responsibility
regarding the Occupational Safety Health Act, the legal use and adaptability
of the Premises and the compliance thereof with all applicable laws and
regulations in effect during the Term of thus Lease.
23. Notices. Any notice required or permitted to be given
hereunder shall be in writing and may be given by personal delivery or by
certified or registered mail, and shall be deemed sufficiently given if
delivered or addressed to Lessee at the Premises or to Lessor at the address
noted in paragraph I .14 of the Basic Lease Provisions, as the case may be.
Mailed notices shall be deemed given upon actual receipt at the address
required, or forty-eight hours following deposit in the mail, postage prepaid,
whichever firs( occurs. Either party may by notice to the outer specify a
different address for notice purposes except that upon Lessee's taking
possession of the Premises, the Premises shall constitute Lessee's address for
notice purposes. A copy of all notices required or permitted to be given to
Lessor hereunder shall be concurrently transmitted to such party or parties at
such addresses as Lessor tray from time to time hereafter designate by notice to
Lessee.
24. Waivers. No waiver by Lessor of any provision hereof
shall be deemed a waiver of any other provision hereof or of any subsequent
breach by Lessee of the same or any outer provision. Lessor's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Lessor's consent to or approval of any subsequent act by Lessee. The acceptance
of rent hereunder by Lessor shall not be a waiver of any preceding breach by
Lessee of any provision hereof, other than the failure of Lessee to pay the
particular rent so accepted, regardless of Lessor's knowledge of such preceding
breach at the time of acceptance of such rent.
25. Recording. Lessor and Lessee shall, upon request of Lessor, execute,
acknowledge and deliver to the
other a "short form" memorandum of this Lease for recording purposes.
26. Holding Over. If Lessee, with Lessor's consent, remains in possession
of the Premises or ally part
thereof after die expiration of the term hereof, such occupancy shall be a
tenancy from month to month upon
all the provisions of this Lease pertaining to the obligations of Lessee, except
that the rent payable shall be two hundred percent (200%) of the rent payable
immediately preceding the expiration of the Term of this Lease, and all Options,
if any, granted under the terms of this Lease shall be deemed terminated and be
of no further effect during said month to month tenancy.
27. Covenants And Conditions. Each provision of this Lease performable by
Lessee shall be deemed both
a covenant and a condition.
28. Binding Effect; Choice Of Law. Subject to any provisions hereof
restricting assignment or subletting
by Lessee and subject to the provisions of paragraph 17, this Lease shall bind
the parties, their personal representatives, successors and assigns. This Lease
shall be governed by the laws of the Stale of California applicable to contracts
to be wholly performed within such State.
<PAGE>
29. Subordination.
29.1 Lessor shall have the right to subordinate this Lease, and
Lessee shall, at Lessor's request, subordinate its rights under this Lease, to
any existing or future ground lease, covenants, conditions and restrictions,
easements, rights of way or any construction, operation and reciprocal easement
agreements, deeds of trust or mortgages encumbering the Office Building Project,
any advances made on the security thereof any renewals, modifications,
consolidations, replacements or extensions thereof , whenever made or recorded.
However, Lessee's right to quiet possession of the Premises during the Term
shall not be disturbed if Lessee pays the rent and performs all Lessee's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
its ground lease, deed of trust or mortgage, and gives written notice thereof to
Lessee, then this Lease shall be deemed prior to such ground lease, deed of
trust or mortgage, whether this Lease is dated prior or subsequent to the date
of said ground lease, deed of trust or mortgage or the date of recording
thereof.
29.2 If Lessor's interest in the Premises is acquired by any
ground lessor, beneficiary under a deed of trust, mortgagee or purchaser at a
foreclosure sale, Lessee shall attorn to the transferee of or successor to
Lessor's interest in the Premises and recognize such transferee or successor as
Lessor under this Lease, provided that the purchaser or lessor shall acquire and
accept the Premises subject to this Lease. Lessee waives the protection of any
statute or rule of law which gives or purports to give Lessee any right to
terminate this Lease or surrender possession of the Premises upon the transfer
of Lessor's interest.
29.3 Lessee shall sign and deliver any instrument or documents
necessary or appropriate to evidence any such attornment or subordination or
agreement to do so provided that such interests or documents recognize that
Lessee's right to quiet possession of the Premises shall not be disturbed so
long as Lessee is not in default of its obligations pursuant to this Lease
beyond any applicable notice and cure period. If Lessee fails to do so within
ten (10) days after written request, such failure shall be a material,
non-curable default and Lessee hereby makes, constitutes and irrevocably
appoints Lessor, or any transferee or successor of Lessor, the attorney-in-fact
of Lessee to execute and deliver any such instrument or document.
30. Attorneys' Fees.
30.1 If either party or the broker(s) named herein brings an
action to enforce the terms hereof or declare rights hereunder, the prevailing
party in any such action, trial or appeal thereon, shall be entitled to its
reasonable attorneys' fees to be paid by the losing party as fixed by (lie court
in the same or a separate suit, and whether or not such action is pursued to
decision or judgment.
30.2 The attorneys' fee award shall not be computed in
accordance with any court fee schedule, but shall be such as to fully reimburse
all attorneys' fees reasonably incurred in good faith.
30.3 Lessor shall be entitled to reasonable attorneys' fees and
all other costs and expenses incurred in the preparation and service of notices
of default and consultations in connection therewith, whether or not a legal
action is subsequently commenced in connection with such default.
<PAGE>
31. Lessor's Access.
31.1 Lessor and Lessor's agents shall have the right to enter the
Premises at reasonable times for the purpose of inspecting the same, performing
any services required of Lessor, showing the same to prospective purchasers,
lenders, or lessees, taking such safety measures, erecting such scaffolding or
other necessary structures, making such alterations, repairs, improvements or
additions to the Premises or to tile Office Building Project as Lessor may
reasonably deem necessary or desirable and the erecting, using and maintaining
of utilities, services, pipes and conduits through the Premises and/or other
premises as long as there is no material adverse effect to Lessee's use of the
Premises. Lessor may at any time place on or about the Premises, the Building or
the Office Building Project any ordinary "For Sale" signs and Lessor may at any
time during the last 120 days of the Term hereof place on or about the Premises
any ordinary "For Lease" signs.
31.2 All activities of Lessor pursuant to this paragraph shall be
without abatement of rent, nor shall Lessor have any liability to Lessee for the
stone.
31.3 Lessor shall have the right to retain keys to the Premises and
to unlock all doors in or upon the Premises other than to files, vaults and
safes, and in the case of emergency to enter the Premises by any reasonably
appropriate means, and any such entry shall not be deemed a forcible or unlawful
entry or detainer of the Premises or an eviction. Lessee waives any charges for
damages or injuries or interference with Lessee's property or business in
connection therewith.
32. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any
auction upon the Premises or the Common Areas without first having obtained
Lessor's prior written consent. Notwithstanding anything to the contrary in this
Lease, Lessor shall not be obligated to exercise any standard of reasonableness
in determining whether to grant such consent. The holding of any auction on the
Premises or Common Areas in violation of this paragraph shall constitute a
material, non-curable default of this Lease.
33. Signs. Lessee shall not place any sign upon the Premises or the Office
Building Project without
Lessor's prior written consent. Notwithstanding anything to the contrary in this
Lease, Lessor shall not be obligated to exercise any standard of reasonableness
in determining whether in grant such consent. Lessee shall be entitled to one
(1) of Lessor's standard suite entry signs, as mutually agreed upon between
Lessor and Lessee, at Lessor's costs and expense, and in accordance with all
applicable laws, regulations, ordinances and recorded covenants, conditions and
restrictions.
34. Merger. The voluntary or other surrender of this Lease by Lessee, or
mutual cancellation thereof, or a
termination by Lessor, shall not work a merger, and shall, at the option of
Lessor, terminate all or any existing subtenancies or may, at the option of
Lessor, operate as an assignment to Lessor of any or all of such subtenancies.
35. Consents. Except for paragraphs 32 (auctions) and 33 (signs) hereof,
wherever in this Lease the
consent of one party is required to an act of the other party such consent shall
not be unreasonably withheld or delayed.
36. Guarantor. In the event that there is a guarantor of this Lease, said
guarantor shall lave the same
obligations as Lessee under this Lease.
<PAGE>
37. Quiet Possession. Upon Lessee paying the rent for the Premises and
observing and performing all of the
covenants, conditions and provisions on Lessee's part to be observed and
performed hereunder, Lessee shall have quiet possession of (lie Premises for the
entire Term hereof subject to all of the provisions of this Lease. The
individuals executing this Lease on behalf of Lessor represent and warrant to
Lessee that they are fully authorized and legally capable of executing this
Lease on behalf of Lessor and that such execution is binding upon all parties
holding an ownership interest in the Office Building Project.
38. Security Measures-Lessor's Reservations.
38.1 Lessee hereby acknowledges that Lessor shall have no obligation
whatsoever to provide guard
service or other security measures for the benefit of Lessee, the Premises or
the Office Building Project. Lessee assumes all responsibility for the
protection of Lessee, its agents, and invitees and (lie property of Lessee and
of Lessee's agents and invitees from acts of third parties. Nothing herein
contained shall prevent Lessor, at Lessor's sole option, from providing security
protection for the Office Building Project or any part thereof, in which event
the cost thereof shall be included within tie definition of Operating Expenses,
as set forth in paragraph 4.2.7.
38.2 Without limiting its rights at law or elsewhere under.
this Lease, Lessor shall have the following rights:
38.2.1 To change the name, address or title of the Office
Building Project or building in which the Premises are located upon not less
than thirty (30) days prior written notice;
38.2.2 To provide and install Building standard graphics on the
door of the Premises and such portions of the Common Areas as Lessor shall
reasonably deem appropriate;
38.2.3 To permit any lessee the exclusive right to conduct any business
as long as such exclusive does not conflict with any rights expressly given
herein;
38.2.4 To place such signs, notices or displays as Lessor reasonably
deems necessary or advisable upon the roof, exterior of the buildings or the
Office Building Project or on pole signs in the Common Areas.
38.3 Lessee Shall Not:
38.3.1 Use a representation (photographic or otherwise) of the
Building or the Office Building Project or their name(s) in connection with
Lessee's business;
38.3.2 Suffer or permit anyone, except in emergency, to go upon
the roof of the Building.
39. Easements.
39.1 Lessor reserves to itself the right, from time to time, to grant
such easements, rights and dedications that Lessor deems necessary or desirable,
and to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Parcel Maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
<PAGE>
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material, noncurable default of thus Lease by Lessee without the
need for further notice to Lessee.
39.2 The obstruction of Lessee's view, air, or light by any
structure erected in the vicinity of the Building, whether by Lessor or third
parties, shall in no way affect this Lease or impose any liability upon Lessor.
40. Building Planning. Lessor shall have the right to relocate the Premises
to another part of the Building in accordance with the following:
40.1 The new premises shall be substantially the same size,
dimensions, configuration, and decor as the Premises described in this Lease,
and if the relocation occurs after the Commencement Date, shall be placed in
that condition by Lessor at its cost.
40.2 Lessor shall give Lessee at least thirty (30) days written
notice of Lessor's intention to relocate the Premises.
40.3 As nearly as practicable, the physical relocation of the
Premises shall take place on a weekend and shall be completed before the
following Monday. If the physical relocation has not been completed in that
time, Base Rent shall abate in full from the time the physical relocation
commences to the time it is completed. Upon completion of such relocation, the
new premises shall become the "Premises" under this Lease.
40.4 All reasonable costs incurred by Lessee as a result of the
relocation shall be paid by Lessor.
40.5 If the new premises are smaller than the Premises as it
existed before the relocation, Base Rent, Lessee's Expense Share and Lessee's
Tax Share shall be reduced proportionately.
40.6 The parties hereto shall immediately execute an amendment to
this Lease setting forth the relocation of the Premises and the reduction of
Base Rent, Lessee's Expense Share and Lessee's Tax Share, if any.
41. Lessor's Right To Perform. Except as specifically provided
otherwise in this Lease, all covenants and agreements by Lessee under this Lease
shall be performed by Lessee at Lessee's sole cost and expense and without any
abatement or offset of rent. If Lessee shall fail to pay any sum of money (other
than Basic Rent) or perform any other act on its part to be paid or performed
hereunder and such failure shall continue for three (3) days with respect to
monetary obligations (or ten (10) days with respect to non-monetary obligations)
then, notwithstanding anything to the contrary provided elsewhere herein, after
Lessee's receipt of written notice thereof from Lessor, Lessor may, without
waiving or releasing Lessee from any of Lessee's obligations, make such payment
or perform such other act on behalf of Lessee. All sums so paid by Lessor and
all necessary incidental costs incurred by Lessor in performing such other acts,
together with interest at the Lease Rate (as defined in paragraph 13.2.1.4),
shall be payable by Lessee to Lessor within five (5) days after demand therefor
as additional rent. The foregoing rights are in addition to any and all remedies
available to Lessor upon Lessee's default as described in paragraph 13.2.
<PAGE>
42. Limitation On Lessor's Liability. Notwithstanding anything contained in
this Lease to the contrary, the obligations of Lessor under this Lease
(including any actual or alleged breach or default by Lessor) do not
constitute personal obligations of the individual partners, directors,
officers, employees or shareholders of Lessor or Lessor's partners, and
Lessee shall not seek recourse against the individual partners, directors,
officers, employees or shareholders of Lessor or Lessor's partners, or any
of their personal assets for satisfaction of any liability with respect to
this Lease. In addition, in consideration of the benefits accruing hereunder
to Lessee and notwithstanding anything contained in this Lease to the
contrary, Lessee hereby covenants and agrees for itself and all of its
successors and assigns that the liability of Lessor for its obligations
under this Lease (including any liability as a result of any actual or
alleged failure, breach or default hereunder by Lessor), shall be limited solely
to, and Lessee's and its successors' and assigns' sole and exclusive
remedy shall be against, Lessor's interest in the Office Building
Project and proceeds therefrom, and no other assets of Lessor.
43. Toxic Materials.
43.1 Definitions.
For purposes of this paragraph 44, "Hazardous Material" shall mean any
substance:
(i) the presence of which requires investigation or remediation under
any federal, state or local statute, regulation, ordinance, order, action or
policy; or
(ii) which is or becomes defined as a "hazardous waste" or
"hazardous substance" under any federal, state or local statute, regulation,
ordinance or amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. section 9601
et seq.) and or the Resource Conservation and Recovery Act (42 U.S.C. section
6901 et seq.); or
(iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department, commission, board,
agency or instrumentality of the United States, the State of California or any
political subdivision thereof; or
(iv) the presence of which on the Premises, Building or Office Building
Project causes or threatens to cause a nuisance upon the Premises, Building or
Office Building Project or to adjacent properties or poses or threatens to pose
a hazard to the Premises, Building or Office Building Project or to the health
or safety of persons on or about the Premises, Building or Office Building
Project; or
(v) without limitation which contains gasoline, diesel fuel or other
petroleum hydrocarbons; or
(vi) without limitation which contains polychlorinated bipheynols
(PCBs), asbestos or urea formaldehyde foam insulation; or
<PAGE>
(vii) which is or becomes defined as "medical waste" under the Medical
Waste Management Act (Health & Safety Code Sections 25015-25099.3).
For purposes of this paragraph 44, "Environmental Requirements" means all
applicable present and future statutes, regulations, rules, ordinances, codes,
licenses, permits, orders, approvals, plans, authorizations, concessions,
franchises and similar items, of all governmental agencies, departments,
commissions, boards, bureaus or instrumentalities of the United Slates, stales
and political subdivisions (hereof and all applicable judicial and
administrative and regulatory decrees, judgments and orders relating to (lie
protection of human health or the environment, including without limitation:
(i) all requirements, including but not limited to those pertaining to
reporting, licensing, permitting, investigation and remediation of emissions,
discharges, releases or threatened releases of Hazardous Materials, chemical
substances, pollutants, contaminants or hazardous or toxic substances, materials
or wastes whether solid, liquid or gaseous in nature, into the air, surface
water, groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
chemical substances, pollutants, contaminants or hazardous or toxic substances,
materials, or wastes, whether solid, liquid or gaseous in nature; and
(ii) all requirements pertaining to the protection of the health and
safety of employees or the public.
For purposes of this paragraph 44, "Environmental Damages" means all claims,
judgments, damages, losses, penalties, fines, liabilities (including strict
liability), encumbrances, liens, costs and expenses of investigation and defense
of any claim, whether or not such claim is ultimately defeated, and of any good
faith settlement of judgment, of whatever kind or nature, contingent or
otherwise, matured or unmatured, foreseeable or unforeseeable, including without
limitation reasonable attorneys' fees and disbursements and consultants' fees,
any of which are incurred at any time as a result of the existence on or after
the date upon which Lessee takes possession of the Premises (the "Possession
Date") of Hazardous Material upon, about, beneath the Premises, Building or
Office Building Project or migrating or threatening to migrate to or from the
Premises, Building or Office Building Project or the existence of a violation of
Enviromnental Requirements pertaining to the Premises, Building or Office
Building Project, regardless of whether the existence of such Hazardous Material
or the violation of Environmental Requirements arose prior to the present
ownership or operation of the Premises, Building or Office Building Project, and
including without limitation:
(i) damages for personal injury, or injury to property or natural
resources occurring upon or off of the Premises, Building or Office Building
Project, foreseeable or unforeseeable, including, without limitation, lost
profits, consequential damages, the cost of demolition and rebuilding of any
improvements on real property, interest and penalties including but not limited
to claims brought by or oil behalf of employees of Lessee, with respect to which
Lessee waives any immunity to which it may be entitled under any industrial or
worker's compensation laws;
<PAGE>
(ii) fees incurred for the service of attorneys, consultants, contractors,
experts, laboratories and all other costs incurred in connection with the
investigation or remediation of such Hazardous Materials or violation of
Environmental Requirements including, but not limited to, the preparation of any
feasibility studies or reports or the performance of any cleanup, remedial,
removal, response, abatement, containment, closure, restoration or monitoring
work required by any federal, state or local governmental agency or political
subdivision, or reasonably necessary to snake full economic use of the Premises,
Building or Office Building Project or any other property or otherwise expended
in connection with such conditions, and including without limitation any
attorneys' fees, costs and expenses incurred in enforcing thus Lease or
collection of any sums due hereunder;
(iii) liability to any third person or governmental agency to
indemnify such person or agency for costs expended in connection with the items
referenced in subparagraph (ii) herein; and
(iv) diminution in the value of the Premises, Building or Office Building
Project, and damages for the loss of business and restriction on the use of or
adverse impact on the marketing of rentable or usable space or of any amenity of
the Premises, Building or Office Building Project.
43.2 Lessee's Obligations.
Lessee, at its sole cost and expense, shall comply with all Environmental
Requirements relating to the
<PAGE>
storage, use and disposal of all Hazardous Materials, including those materials
identified in Sections 66680 through 66685 of Title 22 of the California
Administrative Code, Division 4, Chapter 30 ("Title22") as the same may be
amended from time to time. If Lessee does store, use or dispose of any Hazardous
Materials other than copy machine toners or similar commonly used office
supplies, Lessee shall notify Landlord in writing at least ten (10) days prior
to the first appearance of such materials on the Premises, Building or Office
Building Project, and Lessor shall have the right to disapprove of Lessee's use
thereof on the Premises (provided that the Lessor's failure to disapprove
thereof shall not constitute Lessor's approval thereof or excuse Lessee from
complying with the terms of this paragraph 44), and Lessee's failure to so
notify Lessor shall constitute a default under this Lease. Lessee shall be
solely responsible for and shall protect, defend, indemnify, and hold Lessor,
its agents and contractors harmless from and against all Environmental Damages
arising out of or in connection with the storage, use and disposal of Hazardous
Materials by Lessee, its officers, employees, agents, representatives, servants,
subtenants, concessionaires, licensees, contractors, invitees or permittees. If
the presence of Hazardous Materials on the Premises, Building or Office Building
Project caused or permitted by Lessee results in contamination or deterioration
of water or soil resulting in a level of contamination greater than the levels
established by any governmental agency (raving jurisdiction over such
contamination, then Lessee shall, at its sole cost and expense, promptly take
any arid all action necessary to clean up such contamination if required by law
or as a condition to the issuance or continuing effectiveness of any
governmental approval which relates to tire use orthe Premises, Building or
Offcc Building Project. If at any lime prior to the expiration of the Lease
Term, Lessor shall reach a reasonable good faith determination that Lessee or
its officers, employees, agents, representatives, servants, subtenants,
concessionaires, licensees, contractors, invitees or permitees have at any time
violated any Environmental Requirements, discharged any Hazardous Material onto
the Premises, Building or Office Building Project, or surrounding areas or
otherwise subjected Lessor or the Office Building Project to liability for
Environmental Damages, then Lessor shall have the right to require Lessee to
conduct appropriate tests of water arid soil and to deliver to Lessor the result
of such tests to demonstrate that no contamination in excess of legally
permitted levels has occurred as a result of Lessee's use of tire Premises,
Building or Office Building Project. If (lie presence of Hazardous Materials on
die Premises, Building or Office Building Project is caused or permitted by
Lessee or its officers, employees, agents, representatives, servants,
subtetiants, concessionaires, licensees, contractors, invitees or permittees
such that Lessor or Lessee becomes obligated to conduct the necessary clean-up
of such contamination as required above, then, Lessee shall further be solely
responsible for, and shall protect, defend, indemnify and hold Lessor, its
agents and contractors harmless from and against all claims, costs and
liabilities, including actual attorneys' fees, expert witness fees and costs,
arising out of or in connection with any removal, cleanup and restoration work
and materials required hereunder to return the Premises, Building or Office
Building Project and any other property of whatever nature to conditions which
existed prior to Lessee's use thereof and which are within acceptable levels
according to all Environmental Requirepients or any other Federal, State or
local governmental requirements. Lessee's obligations hereunder shall survive
tile expiration or earlier termination of this Lease.
44. Authority. If Lessee is a corporation, trust, or general or limited
partnership, Lessee, and each
individual executing this Lease on behalf of such entity, represent and warrant
drat such individual is duly authorized to execute and deliver this Lease on
behalf of said entity. If Lessee is a corporation, trust or partnership, Lessee
shall, within thirty (30) days after execution of this Lease, deliver to Lessor
evidence of such authority satisfactory to Lessor.
45. Conflict. Any conflict between the printed provisions, Exhibits or
Addenda of this Lease and (the
computer-generated, typewritten or handwritten provisions, if any, shall be
controlled by tire computergenerated, typewritten or handwritten provisions.
46. No Offer. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall
not be deemed all offer to Lessee to lease. This Lease shall become binding upon
Lessor and Lessee only when fully executed by and delivery to both parties.
47. Lender Modification. Lessee agrees to make such reasonable modifications
to this Lease as may be
reasonably required by all institutional lender in connection with the obtaining
of normal financing or refinancing of the Ofce Building Project.
48. Multiple Parties. If more than one person or entity is named as either
Lessor or Lessee herein, except
as otherwise expressly provided herein, the obligations of the Lessor or Lessee
herein shall be the joint and several responsibility of all persons or entities
named herein as such Lessor or Lessee, respectively.
49. Work Letter. This Lease is supplemented by that certain Work Letter of
even date executed by Lessor
and Lessee attached hereto as Exhibit D and incorporated herein by this
reference.
50. Waiver Or Jury Trial. Lessor and Lessee hereby waive their respective
rights to trial by jury of any
cause of action, claim, counter-claim or cross-complaint in any action,
proceeding and/or hearing brought by either Lessor against Lessee or Lessee
against Lessor on any matter whatsoever arising out of, or in any way connected
with, this Lease, the relationship of Lessor or Lessee, Lessee's use or
occupancy of the Premises, or any claim of injury or damage, or the enforcement
of any remedy under any law, statute, or regulation, emergency or otherwise, now
or hereafter in effect. Notwithstand the foregoing, Lessor and Lessee agree that
this waiver shall not be effective where the legal effect of such waiver would
be to invalidate, in whole or in part, or to limit or impair in any manner any
policy of insurance in force for the benefit of Lessor or Lessee or to limit or
impair any rights, remedies or coverage afforded by such policy or policies of
insurance. Lessee
<PAGE>
agrees that any lawsuit brought by Lessee against Lessor must be filed in a
court of competent jurisdiction in the County of Los Angeles.
51. AttachmentS. Attached hereto are the following documents
which constitute a part of this Lease:
Exhibit A - Premises Floor Plan
Exhibit B - Office Building Project
Exhibit C - Rules and Regulations
Exhibit D - Work Letter
Exhibit E - Omitted.
ADDENDUM - Option to Extend
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR
ATTORNEY FOR APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
LESSOR, ITS COUNSEL, ANY REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE
LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTION RELATING THERETO; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF
THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
LESSOR: LESSEE:
JOHN HANCOCK MUTUAL LIFE INSURANCE SANGUI BIOTECH, INC.,
COMPANY, INC., a Massachusetts corporation Delaware corporation
By: /s/ Timothy J. Malik By: /s/ John J. Kiang
------------------------- ----------------------
Name: Timothy J. Malik Name: John J. Kiang
Title: Investment Officer Title: President & CEO
Date: 09/10/96 Date: 09/09/96
<PAGE>
PAGE
----
3.3 Early Possession. If Lessee occupies the Premises prior to
said Target Commencement Date, such occupancy shall be subject to all provisions
of this Lease, such occupancy shall not change the expiration date, and Lessee
shall pay prorated rent for such occupancy based on the actual number of days in
the applicable month.
3.4 Uncertain CommencemenT. Upon the determination of the actual
Commencement Date, Lessee and Lessor shall, upon request by Lessor, execute an
Acceptance of Office Space in substantially the form of Exhibit "E" attached
hereto establishing the Commencement Date pursuant to paragraph 3.1 above.
4. Rent.
4.1 Base RenT. Except as may be otherwise expressly provided in this
Lease, Lessee shall pay to Lessor the Base Rent for the Premises set forth in
paragraph 1.6 of the Basic Lease Provisions, without offset or deduction. Lessee
shall pay Lessor upon execution hereof the advance Base Rent described in
paragraph 1.8 of the Basic Lease Provisions. Rent for any period during the term
hereof which is for less than one month shall be prorated based upon the actual
number of days of the calendar month involved. Rent shall be payable in lawful
money of the United States to the Payee specified in paragraph 1.14 of the Basic
Lease Provisions and at the address specified in paragraph 1.15 of the Basic
Lease Provisions or to such other persons or at such other places as Lessor may
designate in writing. The monthly Base Rent shall be as follows:
Months Rent Per Month Rent Per Year
12/2/99-03/1/00 $1,814.40 (I.G./ MO.FIXTURIZATION) $ 5,443.20
03/2/00-12/1/00 $3,628.80 (I.G./ MO.) $32,659.20
12/2/00-12/1/01 $3,864.00 (I.G./ MO.) $46,368.00
12/2/01-12/1/02 $4,032.00 (I.G./ MO.) $48,384.00
4.2 Definitions. The following definitions shall apply to this Article 4:
4.2.1. "Expense Base Year" shall be as specified in paragraph 1.11 of
the Basic LeaseProvisions.
4.2.2. "Tax Base Year" shall be as specified in paragraph 1.12 of the
Basic Lease Provisions.
4.2.3. "Expense Comparison Year" shall mean each successive calendar year
after the Expense Base Year during the Lease Term.
4.2.4. "Tax Comparison Year" shall mean each successive calendar year
after the Tax Base Year during the Lease Term.
<PAGE>
4.2.5. "Lessee's Expense Share" shall mean the percentage set forth in
paragraph 1.10 of the Basic Lease Provisions, which percentage has been
determined by dividing the approximate rentable square footage of the
Premises by the total approximate rentable square footage contained in the
"Brookhollow Office Park Project". It is understood and agreed that the square
footage figures set forth in the Basic Lease Provisions are approximations which
Lessor and Lessee agree are reasonable and shall not be subject to revision
except in connection with an actual change in the size of the Premises or a
change in the space available for lease in the "Brookhollow Office Park
Project". It is further agreed that Lessee shall in no event be entitled to a
credit to or adjustment of Lessee's Expense Share payable hereunder, even if
the ratio of Operating Expenses actually paid by Lessee compared to total
Operating Expenses actually paid by other lessees of the "Brookhollow Office
Park Project" exceeds Lessee's Expense Share (as it might, by way of example
only and not limitation, if some leases of the "Brookhollow Office Park Project"
are made on a "full gross" basis, in which case the lessees under such leases
would not directly pay any portion of the Operating Expenses or increase
therein).
4.2.6. "Lessee's Tax Share" shall mean the percentage specified in
paragraph 1.10 of the Basic Lease Provisions, which percentage has been
determined by dividing the approximate rentable square footage of the
Premises by total approximate rentable square footage contained in the
"Brookhollow Office Park Project". It is understood and agreed that the
square footage figures set forth in the Basic Lease Provisions are
approximations which Lessor and Lessee agree are reasonable and shall not
be subject to revision except in connection with an actual change in
size of the Premises or a change in the space available for lease in the
"Brookhollow Office Park Project." It is agreed that Lessee shall in no event be
entitled to a credit to or adjustment of Lessee's Tax Share payable hereunder,
even if the ratio of Applicable Taxes actually paid by Lessee compared to total
applicable Taxes actually paid by other lessees of the "Brookhollow Office Park
Project" exceeds Lessee's Tax Share.
4.2.7 "Operating Expenses" is defined, for purposes of this Lease, to
include all costs, if any, incurred by Lessor in the exercise of its
reasonable discretion, for:
