Entrust Inc. Contracts
Sample Business Contracts
California-Santa Clara-455 El Camino Real Lease - Sobrato Interests II and Entrust Technologies Inc.
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
Lease between
Sobrato Interests II and Entrust Technologies
Section................................................................Page #
Parties.....................................................................1
Premises....................................................................1
Use.........................................................................1
Permitted Uses...........................................................1
Uses Prohibited..........................................................1
Advertisements and Signs.................................................2
Covenants, Conditions and Restrictions...................................2
Term and Rental.............................................................2
Base Monthly Rent........................................................2
Late Charges.............................................................2
Security Deposit.........................................................3
Security Deposit Reduction...............................................4
Construction................................................................4
Building Shell Construction..............................................4
Tenant Improvement Construction..........................................4
Building Shell Costs.....................................................5
Tenant Improvement Costs.................................................5
Force Majeure............................................................5
Landlord Delay...........................................................6
Landlord's Failure to Complete...........................................6
Insurance................................................................6
Punch List & Warranty....................................................6
Other Work by Tenant.....................................................6
Acceptance of Possession and Covenants to Surrender.........................7
Delivery and Acceptance..................................................7
Condition Upon Surrender.................................................7
Failure to Surrender.....................................................8
Alterations and Additions...................................................8
Tenant's Alterations.....................................................8
Free From Liens..........................................................9
Compliance With Governmental Regulations.................................9
Back-Up Generator........................................................9
Maintenance of Premises.....................................................9
Landlord's Obligations...................................................9
Page i
<PAGE>
Tenant's Obligations........................................................9
Waiver of Liability........................................................10
Hazard Insurance..............................................................10
Tenant's Use...............................................................10
Landlord's Insurance.......................................................10
Tenant's Insurance.........................................................11
Waiver.....................................................................11
Taxes.........................................................................11
Utilities.....................................................................11
Toxic Waste and Environmental Damage..........................................12
Use of Hazardous Material..................................................12
Tenant's Indemnity Regarding Hazardous Material............................12
Notice of Release or Violation.............................................13
Remediation Obligations....................................................14
Environmental Monitoring...................................................14
Tenant's Default..............................................................14
Remedies...................................................................14
Right to Re-enter..........................................................15
Abandonment................................................................15
No Termination.............................................................15
Non-Waiver.................................................................16
Performance by Landlord....................................................16
Habitual Default...........................................................16
Landlord's Liability.........................................................16
Limitation on Landlord's Liability.........................................16
Limitation on Tenant's Recourse............................................17
Indemnification of Landlord................................................17
Destruction of Premises.......................................................17
Landlord's Obligation to Restore...........................................17
Limitations on Landlord's Restoration Obligation...........................17
Condemnation..................................................................18
Assignment or Sublease........................................................18
Consent by Landlord........................................................18
Assignment or Subletting Consideration.....................................19
No Release.................................................................19
Reorganization of Tenant...................................................20
Permitted Transfers........................................................20
Effect of Default..........................................................20
Effects of Conveyance......................................................20
Successors and Assigns.....................................................21
Option to Extend the Lease Term...............................................21
Grant and Exercise of Option...............................................21
Determination of Fair Market Rental........................................21
Resolution of a Disagreement over the Fair Market Rental...................22
Personal to Tenant.........................................................22
General Provisions............................................................22
Attorney's Fees............................................................22
Authority of Parties.......................................................22
Page ii
<PAGE>
Brokers....................................................................23
Choice of Law..............................................................23
Dispute Resolution.........................................................23
Entire Agreement...........................................................24
Entry by Landlord..........................................................24
Estoppel Certificates......................................................24
Exhibits...................................................................25
Interest...................................................................25
Modifications Required by Lender...........................................25
No Presumption Against Drafter.............................................25
Notices....................................................................25
Property Management........................................................25
Rent.......................................................................25
Representations............................................................25
Rights and Remedies........................................................26
Severability...............................................................26
Submission of Lease........................................................26
Subordination..............................................................26
Survival of Indemnities....................................................26
Time.......................................................................26
Transportation Demand Management Programs..................................26
Waiver of Right to Jury Trial..............................................27
EXHIBIT A - Premises & Building...............................................29
EXHIBIT B - Draft Letter of Credit............................................30
EXHIBIT C - Building Shell Definition.........................................31
EXHIBIT D - Shell Plans and Specifications....................................34
EXHIBIT E - Tenant Improvement Plans and Specifications.......................35
EXHIBIT F - Building Core Improvements........................................36
Page iii
<PAGE>
1. Parties: THIS LEASE, is entered into on this 14th day of November 2000,
("Effective Date") between Sobrato Interests II, a California Limited
Partnership, whose address is 10600 North De Anza Boulevard, Suite 200,
Cupertino, CA 95014 and Entrust Technologies, Inc., a Maryland Corporation,
whose address is One Preston Park South, 4975 Preston Park Boulevard, 4th Floor,
Suite 400, Plano, Texas, 75093, hereinafter called respectively Landlord and
Tenant.
2. Premises: Landlord hereby leases to Tenant, and Tenant hires from Landlord
those certain Premises with the appurtenances, situated in the City of Santa
Clara, County of Santa Clara, State of California, commonly known and designated
as 455 El Camino Real consisting of 75,000 rentable square feet ("Building")
including parking for approximately 260 cars as outlined in red on Exhibit "A"
-----------
and all improvements located therein including but not limited to buildings,
parking areas, landscaping, loading docks, sidewalks, service areas and other
facilities. Unless expressly provided otherwise, the term Premises as used
herein shall include the Tenant Improvements (defined in Section 5.B)
constructed by Tenant pursuant to Section 5.B.
3. USE:
A. Permitted Uses: Tenant shall use the Premises as permitted under
applicable zoning laws only for the following purposes and shall not change the
use of the Premises without the prior written consent of Landlord: Office,
research and development, marketing, light manufacturing, ancillary storage and
other incidental uses. Tenant shall use only the number of parking spaces
allocated to Tenant under this Lease. All commercial trucks and delivery
vehicles shall (i) be parked at the rear of the Building, (ii) loaded and
unloaded in a manner which does not interfere with the businesses of other
occupants of the Project, and (iii) permitted to remain within the Project only
so long as is reasonably necessary to complete the loading and unloading
(provided, however, that Tenant may have a small number of its own vans and
small trucks parked on the Premises so long as they are parked behind the
Building). Landlord makes no representation or warranty that any specific use of
the Premises desired by Tenant is permitted pursuant to any Laws.
B. Uses Prohibited: Tenant shall not commit or suffer to be committed on
the Premises any waste, nuisance, or other act or thing which may disturb the
quiet enjoyment of any other tenant in or around the Premises, nor allow any
sale by auction or any other use of the Premises for an unlawful purpose. Tenant
shall not (i) damage or overload the electrical, mechanical or plumbing systems
of the Premises, (ii) attach, hang or suspend anything from the ceiling, walls
or columns of the building in excess of the load limits for which such items are
designed or set any load on the floor in excess of the load limits for which the
floors are designed, or (iii) generate dust, fumes or waste products which
create a fire or health hazard or damage the Premises or any portion of the
Project, including without limitation the soils or ground water in or around the
Project. No materials, supplies, equipment, finished products or semi-finished
products, raw materials or articles of any nature, or any waste materials,
refuse, scrap or debris, shall be stored upon or permitted to remain on any
portion of the Premises outside of the Building without Landlord's prior
approval, which approval may be withheld in its sole discretion.
C. Advertisements and Signs: Tenant will not place or permit to be placed,
in, upon or
Page 1
<PAGE>
about the Premises any signs not approved by the city and other governing
authority having jurisdiction. Tenant will not place or permit to be placed upon
the Premises any signs, advertisements or notices without the written consent of
Landlord as to type, size, design, lettering, coloring and location, which
consent will not be unreasonably withheld, conditioned or delayed. Any sign
placed on the Premises shall be removed by Tenant, at its sole cost, prior to
the Expiration Date or promptly following the earlier termination of the Lease,
and Tenant shall repair, at its sole cost, any damage or injury to the Premises
caused thereby, and if not so removed, then Landlord may have same so removed at
Tenant's expense.
D. Covenants, Conditions and Restrictions: This Lease is subject to the
effect of (i) any covenants, conditions, restrictions, easements, mortgages or
deeds of trust, ground leases, rights of way of record and any other matters or
documents of record; and (ii) any zoning laws of the city, county and state
where the Building is situated (collectively referred to herein as
"Restrictions") and Tenant will conform to and will not violate the terms of any
such Restrictions.
4. TERM AND RENTAL:
A. Base Monthly Rent: The term ("Lease Term") shall be for one hundred
twenty (120) months, commencing on May 1, 2001 unless adjusted pursuant to
Section 5.F. below ("Commencement Date") and ending one hundred twenty (120)
months thereafter ("Expiration Date"). Notwithstanding the Parties agreement
that the Lease Term begins on the Commencement Date, this Lease and all of the
obligations of Landlord and Tenant shall be binding and in full force and effect
from and after the Effective Date. In addition to all other sums payable by
Tenant under this Lease, Tenant shall pay base monthly rent ("Base Monthly
Rent") for the Premises according to the following schedule:
Months 01 - 12: $412,500.00 ($5.50 p.s.f.)
Months 13 - 24: $429,000.00 ($5.72 p.s.f.)
Months 25 - 36: $446,250.00 ($5.95 p.s.f.)
Months 37 - 48: $464,250.00 ($6.19 p.s.f.)
Months 49 - 60: $482,250.00 ($6.43 p.s.f.)
Months 61 - 72: $501,750.00 ($6.69 p.s.f.)
Months 73 - 84: $522,000.00 ($6.96 p.s.f.)
Months 85 - 96: $543,000.00 ($7.24 p.s.f.)
Months 97 - 108: $564,750.00 ($7.53 p.s.f.)
Months 109 - 120: $587,250.00 ($7.83 p.s.f.)
Upon Substantial Completion of construction, the Building shall be measured by
Tenant's Architect (as defined in Section 5.B) from outside wall/glass to
outside wall/glass of each floor, without deductions, to arrive at the actual
rentable square footage ("Rentable Square Footage"). If the Rentable Square
Footage differs from 75,000 square feet, the Base Monthly Rent for each year of
the Lease Term shall be modified so as to equal the product of (i) the Rentable
Square Footage, and (ii) the price-per-square-foot rate for each month as shown
in the above schedule.
Base Monthly Rent shall be due in advance on or before the first day of each
calendar month during the Lease Term. All sums payable by Tenant under this
Lease shall be paid to Landlord in lawful money of the United States of America,
without offset or deduction and without prior notice or demand, at the address
specified in Section 1 of this Lease or at such place or places as may be
designated in writing by Landlord during the Lease Term. Base Monthly Rent for
any period less than a calendar month shall be a pro rata portion of the monthly
installment. Concurrently with Tenant's execution of this Lease, Tenant shall
pay to Landlord the sum of Four Hundred Twelve Thousand Five Hundred and No/100
Dollars ($412,500.00) as prepaid rent for the first month of the Lease.
B. Late Charges: Tenant hereby acknowledges that late payment by Tenant to
Landlord of Base Monthly Rent and other sums due hereunder will cause Landlord
to incur costs not contemplated by this Lease, the exact amount of which is
extremely difficult to ascertain. Such costs include but are not limited to:
administrative, processing, accounting, and late charges which may be imposed on
Landlord by the terms of any contract, revolving credit, mortgage, or trust deed
covering the Premises. Accordingly, if any installment of Base Monthly
Page 2
<PAGE>
Rent or other sum due from Tenant shall not be received by Landlord or its
designee within five (5) days after the rent is due, Tenant shall pay to
Landlord a late charge equal to five (5%) percent of such overdue amount, which
late charge shall be due and payable on the same date that the overdue amount
was due. The parties agree that such late charge represents a fair and
reasonable estimate of the costs Landlord will incur by reason of late payment
by Tenant, excluding interest and attorneys fees and costs. If any rent or other
sum due from Tenant remains delinquent for a period in excess of thirty (30)
days then, in addition to such late charge, Tenant shall pay to Landlord
interest on any rent that is not paid when due at the Agreed Interest Rate
specified in Section 19.J following the date such amount became due until paid.
Acceptance by Landlord of such late charge shall not constitute a waiver of
Tenant's default with respect to such overdue amount nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder. In the event
that a late charge is payable hereunder, whether or not collected, for three (3)
consecutive installments of Base Monthly Rent, then the Base Monthly Rent shall
automatically become due and payable quarterly in advance, rather than monthly,
notwithstanding any provision of this Lease to the contrary.
C. Security Deposit: Within ten (10) days of Tenant's execution of this
Lease, Tenant shall deposit with Landlord the sum of Four Million Five Hundred
Thousand and No/100 Dollars ($4,500,000.00) ("Security "Deposit"). Landlord
shall not be deemed a trustee of the Security Deposit, may use the Security
Deposit in business, and shall not be required to segregate it from its general
accounts. Tenant shall not be entitled to interest on the Security Deposit. If
Tenant defaults with respect to any provisions of the Lease, including but not
limited to the provisions relating to payment of Base Monthly Rent or other
charges, Landlord may, to the extent reasonably necessary to remedy Tenant's
default, use any or all of the Security Deposit towards payment of the
following: (i) Base Monthly Rent or other charges in default; (ii) any other
amount which Landlord may spend or become obligated to spend by reason of
Tenant's default including, but not limited to Tenant's failure to restore or
clean the Premises following vacation thereof. If any portion of the Security
Deposit is so used or applied, Tenant shall, within ten (10) days after written
demand from Landlord, deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to its full original amount, and shall pay to
Landlord such other sums as necessary to reimburse Landlord for any sums paid by
Landlord. If Tenant shall default more than three (3) times in any twelve (12)
month period, irrespective of whether or not such default is cured, then the
Security Deposit shall, within ten (10) days after demand by Landlord, be
increased by Tenant to an amount equal to three (3) times the Base Monthly Rent.
Tenant may not assign or encumber the Security Deposit without the consent of
Landlord. Any attempt to do so shall be void and shall not be binding on
Landlord. The Security Deposit shall be returned to Tenant within thirty (30)
days after the Expiration Date and surrender of the Premises to Landlord, less
any amount deducted in accordance with this Section, together with Landlord's
written notice itemizing the amounts and purposes for such deduction.
Landlord agrees that in lieu of a cash Security Deposit, Tenant may deposit a
letter of credit ("Letter of Credit") substantially in the form attached hereto
as Exhibit "B". Landlord shall be entitled to draw against the Letter of Credit
-----------
at any time provided only that Landlord certifies to the issuer of the Letter of
Credit that Tenant is in default under the Lease. Tenant shall keep the letter
of credit in effect during the entire Lease Term, as the same may be extended,
plus a period of four (4) weeks after expiration of the Lease Term. At least
thirty (30) days prior to expiration of any Letter of Credit, the term thereof
shall be renewed or extended for a period of at least one (1) year. Tenant's
failure to so renew or extend the Letter of Credit shall be a material default
of this Lease by Tenant. In the event Landlord draws against the Letter of
Credit, Tenant shall replenish the existing Letter of Credit or cause a new
Letter of Credit to be issued such that the aggregate amount of letters of
credit available to Landlord at all times during the Lease Term is the amount of
the Security Deposit originally required.
Page 3
<PAGE>
D. Security Deposit Reduction: Provided Tenant has not been in default
under the Lease, then at the commencement of the 13th month of the Lease Term
and every 12 months thereafter during the initial Lease Term, , Tenant shall be
allowed the reduce the amount of the Security Deposit by $450,000.00.
5. CONSTRUCTION:
A. Building Shell Construction: Landlord shall cause the Building Shell
(as defined on the Building Shell Definition attached as Exhibit "C") and
-----------
certain Building Core Improvements (as defined below) to be constructed by
Landlord's affiliated construction company, Sobrato Construction Corporation
("General Contractor") in accordance with the Building Shell plans and guideline
specifications prepared by The Hagman Group ("Landlord's Architect") and
attached by reference as Exhibit "D" ("Building Shell Plans and
-----------
Specifications"). The Building Shell Plans and Specifications include certain
elements of the Building core ("Building Core Improvements") which is defined as
those items typically associated in the industry with an office building core
including elevators, restrooms, fire sprinklers, HVAC and electrical systems
distributed to each floor, exiting stair finishes, and a finished building
lobby. Although certain Building Core Improvements have been designed by
Landlord's Architect and incorporated into the Building Shell Plans and
Specifications, it is understood and agreed that Building Core Improvements are
classified as part of Tenant Improvements and all costs associated with the
design and construction thereof shall be paid by Tenant pursuant to Section 5.D.
below. The Building Shell and Building Core Improvements shall be constructed in
a good and workmanlike fashion and in compliance with all codes, laws, rules and
regulations of applicable governmental authority. Landlord shall assign to
Tenant any warranties related to the Building Shell and Building Core
Improvements which would reduce Tenant's maintenance obligations hereunder and
shall cooperate with Tenant to enforce all such warranties.
Landlord agrees that, on the Commencement Date, the Building Shell and those
Building Core Improvements included the Building Shell Plans and Specifications
shall be substantially complete and that all elements of the Building to be
maintained by Landlord pursuant to this Lease shall be in good operating
condition and repair. The Building Shell shall be deemed substantially complete
("Substantially Complete" or "Substantial Completion") when the Building Shell
has been substantially completed in accordance with the Shell Plans and
Specifications, as evidenced by a final inspection or its equivalent by the
appropriate governmental authority.
B. Tenant Improvement Construction: Tenant, at Tenant's sole cost and
expense, shall retain an interior architect ("Tenant's Architect") to prepare
plans and outline specifications as soon as reasonably possible to be attached
as Exhibit "E" ("Tenant Improvement Plans and Specifications") with respect to
-----------
the construction of the balance of the improvements to the interior of the
Premises ("Tenant Improvements") necessary for Tenant's use and occupancy of the
Building. The Tenant Improvement Plans and Specifications shall be completed for
all aspects of the work no later than January 31, 2001 with all detail necessary
for submittal to the city for issuance of building permits and for construction.
The Tenant Improvement Plans and Specifications shall include any information
required by the relevant agencies regarding Tenant's use of Hazardous Materials
if applicable. The Tenant Improvements shall consist of all items not included
within the scope of the Building Shell Definition, including all Building Core
Improvements. All Tenant Improvements shall be subject to Landlord's approval,
which shall not be unreasonably withheld, conditioned or delayed. The Tenant
Improvement Plans and Specifications shall provide for a generally open
office layout with no more than 30% closed office and shall include a minimum
build-out in all areas of the Premises consisting of: (i) fire sprinklers, (ii)
floor coverings, (iii) t-bar suspended ceiling (iv) distribution of the HVAC
system, (v) 2' x 4' drop-in florescent lighting, and (vi) any other work
required by the City of Santa Clara necessary to obtain an unconditional
Page 4
<PAGE>
certificate of occupancy within ninety (90) days from the Commencement Date. The
Tenant Improvement Plans and Specifications shall be prepared in sufficient
detail to allow a general contractor selected by Tenant and reasonably approved
by Landlord ("Tenant's Contractor") to construct the Tenant Improvements.
Tenant's Contractor shall use union labor. Tenant shall contract directly with
and shall cause Tenant's Contractor to construct the Tenant Improvements in
accordance with all Tenant Improvement Plans and Specifications. Provided that
Tenant's Contractor does not interfere with General Contractor's construction of
the Building Shell, Landlord shall permit Tenant's Contractor access to the
Premises in order to commence construction of the Tenant Improvements by January
15, 2001.
Tenant shall use its best efforts to obtain a building permit from the City of
Santa Clara as soon as possible and thereafter diligently supervise the
construction of Tenant Improvements until they are substantially complete as
hereinafter defined. The Tenant Improvements shall be deemed substantially
complete ("Substantially Complete" or "Substantial Completion") when the Tenant
Improvements have been substantially completed in accordance with the Tenant
Improvement Plans and Specifications, as evidenced by the completion of a final
inspection or the issuance of a certificate of occupancy or its equivalent by
the appropriate governmental authority. The Tenant Improvements shall not be
removed or altered by Tenant without the prior written consent of Landlord as
provided in Section 7 below. Tenant shall have the right to depreciate and claim
and collect any investment tax credits related to the Tenant Improvements. Upon
expiration of the Lease Term or any earlier termination of the Lease, the Tenant
Improvements shall become the property of Landlord and shall remain upon and be
surrendered with the Premises, and title thereto shall automatically vest in
Landlord without any payment therefore.
C. Building Shell Costs: Landlord shall pay all costs associated with the
Building Shell. The Building Shell Definition shall be the governing document in
defining the costs associated with the Building Shell.
D. Tenant Improvement Costs: Concurrently with Tenant's execution of this
Lease, Tenant shall reimburse Landlord the sum of One Million One Hundred Thirty
Seven Thousand Eight Hundred Sixteen and 50/100 Dollars ($1,137,816.50), which
represents the first half of the cost of Building Core Improvements being
constructed by Landlord as part of the Building Shell, as detailed on Exhibit
-------
"F" attached hereto. The remaining $1,137,816.50, which is the second half of
---
the cost of the Building Core Improvements, shall be paid by Tenant to Landlord
no later than January 10, 2001. Tenant shall pay directly to Tenant's Contractor
all costs associated with construction of the remaining Tenant Improvements
pursuant to a separate construction contract between Tenant and Tenant's
Contractor, such costs to include but not be limited to the following to the
extent actually incurred by Tenant's Contractor in connection with the
construction of Tenant Improvements: construction costs, and all permit fees,
construction taxes or other costs imposed by governmental authorities related to
the Tenant Improvements.
Notwithstanding Tenant's reimbursement obligations pursuant to this Section
5.D., Landlord agrees to refund to Tenant at the completion of the Building
Core: (i) any unused contingency amount; and (ii) any unused Lobby Allowance
amount.
E. Force Majeure: Any prevention, delay or stoppage due to strikes,
lockouts, inclement weather, labor disputes, inability to obtain labor,
materials, fuel or reasonable substitutes therefor, governmental restrictions,
regulations, controls, civil commotion, fire or other act of God, and another
causes beyond the reasonable control of Landlord (except financial inability)
shall extend the dates contained in this Section 5 by a period equal to the
period of any said prevention, delay or stoppage. If Landlord cannot
substantially complete construction by the dates set forth herein, this Lease
shall not be void or voidable nor shall Landlord be liable for any loss or
damage resulting therefrom except as
Page 5
<PAGE>
specifically provided in Sections 5.F. and 5.G. below.
F. Landlord Delays: In the event that either: (i) Landlord fails to
substantially complete the Building Shell and Building Core Improvements
included in the Building Shell Plans and Specifications by the Commencement
Date; or (ii) Landlord fails to allow Tenant's Contractor access to the Premises
for the purpose of commencing construction of the Tenant Improvements by the
date specified in Section 5.B. above ("Landlord Delay"), the scheduled
Commencement Date shall by delayed by the total number of days of Landlord
Delay.
G. Landlord's Failure to Complete: If the Building Shell is not
Substantially Complete in accordance with the Building Shell Plans and
Specifications and Tenant Improvements Plans and Specifications by July 31, 2001
("Deadline Date"), then Tenant, upon written notice to Landlord, shall be
entitled to complete construction of the Building and offset the cost of
construction for which Landlord is responsible under this Lease, plus interest
at the Agreed Interest Rate, against Tenant's obligation for the Base Monthly
Rent due under this Lease. The completion by Tenant of Landlord's construction
obligations as provided in this Section 5.G. shall be the sole and exclusive
remedy of Tenant with respect to the failure by Landlord to achieve Substantial
Completion of the Building Shell by the Deadline Date. In the event that Tenant
shall be required to complete Landlord's Work, Landlord agrees to promptly
assign to Tenant upon demand all plans and specifications relating to
construction for which Landlord is responsible under this Lease in order to
effectuate the completion thereof, and to cooperate with Tenant in connection
with the completion of such work. Nothing herein shall diminish Landlord's
obligation to act in good faith to promptly commence and diligently prosecute
the Landlord's Work.
The foregoing notwithstanding, the Deadline Date shall be extended one day for
every day of Force Majeure Delay as defined above.
H. Insurance: Landlord shall cause the General Contractor to procure (as a
cost of the Building Shell) a "Broad Form" liability insurance policy in the
amount of Three Million Dollars ($3,000,000.00). Landlord shall also procure (as
a cost of the Building Shell) builder's risk insurance for the full replacement
cost of the Building Shell and Tenant Improvements while the Building and Tenant
Improvements are under construction, up until the date that the casualty
insurance policy described in Section 9 is in full force and effect.
I. Punch List & Warranty: After the Building Shell and Tenant Improvements
are Substantially Complete: (i) Landlord shall cause the General Contractor to
immediately correct any construction defect or other "punch list" item which
Tenant brings to Landlord's attention related to the Building Shell, such work
to be performed so as to reasonably minimize the interruption to Tenant and its
activities on the Premises; and (ii) Tenant shall cause Tenant's Contractor to
immediately correct any construction defects or other "punch list" items which
require attention. General Contractor shall provide a standard contractor's
warranty with respect to the Building Shell for one (1) year from the
Commencement Date. Such warranty shall exclude routine maintenance, damage
caused by Tenant's negligence or misuse, and acts of God.
J. Other Work by Tenant: All work not described in the Shell Plans and
Specifications or Tenant Improvement Plans and Specifications, such as
furniture, telephone equipment, telephone wiring and office equipment work,
shall be furnished and installed by Tenant at Tenant' cost. Prior to substantial
completion, Tenant shall be obligated to (i) provide active phone lines to any
elevators, and (ii) contract with a firm to monitor the fire system. When the
construction of the Tenant Improvements has proceeded to the point where
Tenant's work of installing its fixtures and equipment in the Premises can be
commenced, General Contractor shall notify Tenant and shall permit Tenant and
its authorized representatives and contractors access to the Premises before the
Commencement Date for the purpose of installing Tenant's trade fixtures and
equipment. Any such installation work by Tenant or its
Page 6
<PAGE>
authorized representatives and contractor shall be undertaken upon the following
conditions: (i) the entry into the Premises by Tenant or its representatives or
contractors shall not interfere with or delay General Contractor's work, and
(ii) any contractor used by Tenant in connection with such entry and
installation shall use union labor.
6. ACCEPTANCE OF POSSESSION AND COVENANTS TO SURRENDER:
A. Delivery and Acceptance: Except as otherwise specifically provided
herein, Tenant agrees to accept possession of the Premises on the Commencement
Date in its then existing condition, subject to all Restrictions and without
representation or warranty by Landlord except as provided in Section 5.I. above.
Tenant's taking possession of any part of the Premises shall be deemed to be an
acceptance of any work of improvement done by Landlord in such part as complete
and in accordance with the terms of this Lease except for "Punch List" type
items of which Tenant has given Landlord written notice prior to the time Tenant
takes possession. At the time Landlord delivers possession of the Premises to
Tenant, Landlord and Tenant shall together execute an acceptance agreement.
Landlord shall have no obligation to deliver possession, nor shall Tenant be
entitled to take occupancy, of the Premises until such acceptance agreement has
been executed, and Tenant's obligation to pay Base Monthly Rent and Additional
Rent shall not be excused or delayed because of Tenant's failure to execute such
acceptance agreement. Within thirty (30) days after the Commencement Date,
Tenant agrees to be in occupancy of at least fifty percent (50%) of the rentable
square footage of the Premises.
B. Condition Upon Surrender: Tenant further agrees on the Expiration Date
or on the sooner termination of this Lease, to surrender the Premises to
Landlord in good condition and repair, normal wear and tear excepted. In this
regard, "normal wear and tear" shall be construed to mean wear and tear caused
to the Premises by the natural aging process which occurs in spite of prudent
application of the best commercially reasonable standards for maintenance,
repair replacement, and janitorial practices, and does not include items of
neglected or deferred maintenance. In any event, Tenant shall cause the
following to be done prior to the Expiration Date or sooner termination of this
Lease: (i) all interior walls shall be patched and otherwise made paint-ready,
(ii) all tiled floors shall be cleaned and waxed, (iii) all carpets shall be
cleaned and shampooed, (iv) all broken, marred, stained or nonconforming
acoustical ceiling tiles shall be replaced, (v) all cabling placed above the
ceiling by Tenant or Tenant's contractors shall be removed unless such cabling
has been placed in trays especially designed for such purpose and is not
weighing on the ceiling, (vi) all windows shall be washed; (vii) the HVAC system
shall be serviced by a reputable and licensed service firm and left in "good
operating condition and repair" as so certified by such firm, (viii) the
plumbing and electrical systems and lighting shall be placed in good order and
repair (including replacement of any burned out, discolored or broken light
bulbs, ballasts, or lenses. On or before the Expiration Date or sooner
termination of this Lease, Tenant shall remove all its personal property and
trade fixtures from the Premises. All property and fixtures not so removed shall
be deemed as abandoned by Tenant. Tenant shall ascertain from Landlord within
ninety (90) days before the Expiration Date whether Landlord desires to have any
Alterations made by Tenant (as defined in Section 7) removed and the Premises or
any parts thereof restored to a standard open office plan with materials and
finishes consistent with the other open office areas with the Premises, or to
cause Tenant to surrender all Alterations in place to Landlord. If Landlord
shall so desire, Tenant shall, at Tenant's sole cost and expense, remove such
Alterations as Landlord requires and shall repair and restore said Premises or
such parts thereof before the Expiration Date. Such repair and restoration shall
include causing the Premises to be brought into compliance with all applicable
building codes and laws in effect at the time of the removal to the extent such
compliance is necessitated by the repair and restoration work.
C. Failure to Surrender: If the Premises are not surrendered at the
Expiration Date or
Page 7
<PAGE>
sooner termination of this Lease in the condition required by this Section 6,
Tenant shall be deemed in a holdover tenancy pursuant to this Section 6.C and
Tenant shall indemnify, defend, and hold Landlord harmless against loss or
liability resulting from delay by Tenant in so surrendering the Premises
including, without limitation, any claims made by any succeeding tenant founded
on such delay and costs incurred by Landlord in returning the Premises to the
required condition, plus interest at the Agreed Interest Rate. If Tenant remains
in possession of the Premises after the Expiration Date or sooner termination of
this Lease without Landlord's consent, Tenant's continued possession shall be on
the basis of a tenancy at sufferance and Tenant shall pay as rent during the
holdover period an amount equal to one hundred fifty percent (150%) of the Base
Monthly Rent due in the month preceding the termination or Expiration Date, plus
all other amounts payable by Tenant under this Lease. Any holding over shall
otherwise be on the terms and conditions herein specified, except those
provisions relating to the Lease Term and any options to extend or renew, which
provisions shall be of no further force and effect following the expiration of
the applicable exercise period. This provision shall survive the termination or
expiration of the Lease.
7. ALTERATIONS AND ADDITIONS:
A. Tenant's Alterations: Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises ("Alterations"), or any part thereof,
without obtaining Landlord's prior written consent and delivering to Landlord
the proposed architectural and structural plans for all such Alterations at
least fifteen (15) days prior to the start of construction. If such Alterations
affect the structure of the Building, Tenant additionally agrees to reimburse
Landlord its reasonable out-of-pocket costs incurred in reviewing Tenant's
plans. After obtaining Landlord's consent, which consent shall state whether or
not Landlord will require Tenant to remove such Alteration at the expiration or
earlier termination of this Lease, Tenant shall not proceed to make such
Alterations until Tenant has obtained all required governmental approvals and
permits, and provides Landlord reasonable security, in form reasonably approved
by Landlord, to protect Landlord against mechanics' lien claims. Tenant agrees
to provide Landlord (i) written notice of the anticipated and actual start-date
of the work, (ii) a complete set of half-size (15" X 21") vellum as-built
drawings, and (iii) a certificate of occupancy for the work upon completion of
the Alterations. All Alterations shall be constructed in compliance with all
applicable building codes and laws including, without limitation, the Americans
with Disabilities Act of 1990 as amended from time to time. Upon the Expiration
Date, all Alterations, except movable furniture and trade fixtures, shall become
a part of the realty and belong to Landlord but shall nevertheless be subject to
removal by Tenant as provided in Section 6 above. Alterations which are not
deemed as trade fixtures include heating, lighting, electrical systems, air
conditioning, walls, carpeting, or any other installation which has become an
integral part of the Premises. All Alterations shall be maintained, replaced or
repaired by Tenant at its sole cost and expense.
Notwithstanding the foregoing, Tenant shall be entitled, without obtaining
Landlord's consent, to make Alterations which do not affect the structure of the
Building and which do not cost more than Fifty Thousand Dollars ($50,000.00) per
Alteration ("Permitted Alterations"); provided, however, that: (i) Tenant shall
still be required to comply with all other provisions of this paragraph; and
(ii) such Permitted Alterations are subject to removal by Tenant at Landlord's
election pursuant to Section 6.B. above at the expiration or earlier termination
of the Lease.
B. Free From Liens: Tenant shall keep the Premises free from all liens
arising out of work performed, materials furnished, or obligations incurred by
Tenant or claimed to have been performed for Tenant. In the event Tenant fails
to discharge any such lien within ten (10) days after receiving notice of the
filing, Landlord shall immediately be entitled to discharge the lien at Tenant's
expense and all resulting costs incurred by Landlord, including attorney's fees
shall be due from Tenant as additional rent.
Page 8
<PAGE>
C. Compliance With Governmental Regulations: The term Laws or Governmental
Regulations shall include all federal, state, county, city or governmental
agency laws, statutes, ordinances, standards, rules, requirements, or orders now
in force or hereafter enacted, promulgated, or issued. The term also includes
government measures regulating or enforcing public access, traffic mitigation,
occupational, health, or safety standards for employers, employees, landlords,
or tenants. Tenant, at Tenant's sole expense will compy with all such
Governmental Regulatons and shall make all repairs, replacements, alterations,
or improvements necessary to comply with all Governmental Regulations. The
judgment of any court of competent jurisdiction or the admission of Tenant in
any action or proceeding against Tenant (whether Landlord be a party thereto or
not) that Tenant has violated any such law, regulation or other requirement in
its use of the Premises shall be conclusive of that fact as between Landlord and
Tenant.
D. Back-Up Generator: Tenant shall have the right, subject to Landlord's
prior written consent (which consent shall be subject to the terms in this
Section 7.C. but which shall not otherwise be unreasonably withheld, conditioned
or delayed) to install a generator in a location mutually agreeable to Landlord
and Tenant so as to minimize its visibility. Tenant shall install the generator
at its sole expense and with components reasonably acceptable to Landlord, and
shall be responsible for maintenance of the generator, for compliance with all
applicable Laws with respect to the generator, and for any damage caused by the
installation of the generator or related to the generator. The generator shall
at all times be the property of Tenant and at the end of the Term, Tenant shall
remove the generator from the Premises and restore those affected areas to their
condition prior to the installation of the generator; provided, however, that
alternately, Tenant may sell the generator to a subsequent tenant in the
Premises.
8. MAINTENANCE OF PREMISES:
A. Landlord's Obligations: Landlord at its sole cost and expense, shall
maintain in good condition, order, and repair, and replace as and when
necessary, the foundation, exterior load bearing walls and roof structure of the
Building Shell.
B. Tenant's Obligations: Tenant shall clean, maintain, repair and replace
when necessary the Premises and every part thereof through regular inspections
and servicing, including but not limited to: (i) all plumbing and sewage
facilities, (ii) all heating ventilating and air conditioning facilities and
equipment, (iii) all fixtures, interior walls floors, carpets and ceilings, (iv)
all windows, door entrances, plate glass and glazing systems including caulking,
and skylights, (v) all electrical facilities and equipment, (vi) all automatic
fire extinguisher equipment, (vii) the parking lot and all underground utility
facilities servicing the Premises, (viii) all elevator equipment, (ix) the roof
membrane system, and (x) all waterscape, landscaping and shrubbery. All wall
surfaces and floor tile are to be maintained in an as good a condition as when
Tenant took possession free of holes, gouges, or defacements. With respect to
items (ii), (viii) and (ix) above, Tenant shall provide Landlord a copy of a
service contract between Tenant and a licensed service contractor providing for
periodic maintenance of all such systems or equipment in conformance with the
manufacturer's recommendations. Tenant shall provide Landlord a copy of such
preventive maintenance contracts and paid invoices for the recommended work if
requested by Landlord.
C. Waiver of Liability: Failure by Landlord to perform any defined
services, or any cessation thereof, when such failure is caused by accident,
breakage, repairs, strikes, lockout or other labor disturbances or labor
disputes of any character or by any other cause, similar or dissimilar, shall
not render Landlord liable to Tenant in any respect, including damages to either
person or property, nor be construed as an eviction of Tenant, nor cause an
abatement of rent, nor relieve Tenant from fulfillment of any covenant or
agreement hereof. Should any equipment or machinery utilized in supplying the
services listed herein break down
Page 9
<PAGE>
or for any cause cease to function properly, upon receipt of written notice from
Tenant of any deficiency or failure of any services, Landlord shall use
reasonable diligence to repair the same promptly, but Tenant shall have no right
to terminate this Lease and shall have no claim for rebate of rent or damages on
account of any interruptions in service occasioned thereby or resulting
therefrom. Tenant waives the provisions of California Civil Code Sections 1941
and 1942 concerning the Landlord's obligation of tenantability and Tenant's
right to make repairs and deduct the cost of such repairs from the rent.
Landlord shall not be liable for a loss of or injury to person or property,
however occurring, through or in connection with or incidental to furnishing, or
its failure to furnish, any of the foregoing.
9. HAZARD INSURANCE:
A. Tenant's Use: Tenant shall not use or permit the Premises, or any part
thereof, to be used for any purpose other than that for which the Premises are
hereby leased; and no use of the Premises shall be made or permitted, nor acts
done, which will cause an increase in premiums or a cancellation of any
insurance policy covering the Premises or any part thereof, nor shall Tenant
sell or permit to be sold, kept, or used in or about the Premises, any article
prohibited by the standard form of fire insurance policies. Tenant shall, at its
sole cost, comply with all requirements of any insurance company or organization
necessary for the maintenance of reasonable fire and public liability insurance
covering the Premises and appurtenances.
B. Landlord's Insurance: Landlord agrees to purchase and keep in force All
Risk and fire insurance in an amount equal to the replacement cost of the
Building (not including any Tenant Improvements or Alterations paid for by
Tenant from sources other than the Work Allowance) as determined by Landlord's
insurance company's appraisers. At Landlord's election, such fire and property
damage insurance may be endorsed to cover loss caused by such additional perils
against which Landlord may elect to insure, including earthquake and/or flood,
and shall contain reasonable deductibles. Additionally Landlord may maintain a
policy of (i) commercial general liability insurance insuring Landlord (and such
others designated by Landlord) against liability for personal injury, bodily
injury, death and damage to property occurring or resulting from an occurrence
in, on or about the Premises or Project in an amount as Landlord determines is
reasonably necessary for its protection, and (ii) rental lost insurance covering
a twelve (12) month period. Tenant agrees to pay Landlord as additional rent, on
demand, the full cost of said insurance as evidenced by insurance billings to
Landlord, and in the event of damage covered by said insurance, the amount of
any deductible under such policy. Payment shall be due to Landlord within ten
(10) days after written invoice to Tenant. It is understood and agreed that
Tenant's obligation under this Section will be prorated to reflect the Lease
Commencement and Expiration Dates.
C. Tenant's Insurance: Tenant agrees, at its sole cost, to insure its
personal property, Tenant Improvements, and Alterations against damage for their
full replacement value (without depreciation). Said insurance shall provide All
Risk and fire coverage equal to the replacement cost of said property. The
property casualty insurance provided by Tenant as required by this paragraph
shall be carried in favor of Landlord and Tenant as their respective interests
may appear and shall provide that any loss to Tenant Improvements shall be
adjusted with and be payable to both Landlord and Tenant. Tenant shall deliver a
copy of the policy and renewal certificate to Landlord. Tenant agrees, at its
sole cost, and to obtain worker's compensation and Commercial General Liability
insurance for occurrences within the Premises with a combined single limit of
not less than Ten Million Dollars ($10,000,000.00). Tenant's liability insurance
shall be primary insurance containing a cross-liability endorsement, and shall
provide coverage on an "occurrence" rather than on a "claims made" basis. All
such insurance shall provide for severability of interests; shall provide that
an act or omission of one of the named (additional) insureds shall not reduce or
avoid coverage to the other named (additional insureds). Tenant shall name
Landlord and Landlord's lender as an additional
Page 10
<PAGE>
insured and shall deliver a copy of the policies and renewal certificates to
Landlord. All insurance policies required under this section shall provide for
thirty (30) days' prior written notice to Landlord of any cancellation,
termination, or reduction in coverage. Notwithstanding the above, Landlord
retains the right to have Tenant provide other forms of insurance which may be
reasonably required to cover future risks.
D. Waiver: Landlord and Tenant hereby waive all tort, contract or other
rights each may have against the other on account of any loss or damage
sustained by Landlord or Tenant, as the case may be, or to the Premises or its
contents, which may arise from any risk covered by their respective insurance
policies (or which would have been covered had such insurance policies been
maintained in accordance with this Lease) as set forth above. The Parties shall
each obtain from their respective insurance companies a waiver of any right of
subrogation which said insurance company may have against Landlord or Tenant, as
the case may be.
10. TAXES: Tenant shall be liable for and shall pay as additional rental, prior
to delinquency, the following: (i) all taxes and assessments levied against
Tenant's personal property and trade or business fixtures; (ii) all real estate
taxes and assessment installments or other impositions or charges which may be
levied on the Premises or upon the occupancy of the Premises, including any
substitute or additional charges which may be imposed applicable to the Lease
Term; and (iii) real estate tax increases due to an increase in assessed value
resulting from a sale, transfer or other change of ownership of the Premises as
it appears on the City and County tax bills during the Lease Term. All real
estate taxes shall be prorated to reflect the Lease Commencement and Expiration
Dates. If, at any time during the Lease Term a tax, excise on rents, business
license tax or any other tax, however described, is levied or assessed against
Landlord as a substitute or addition, in whole or in part, for taxes assessed or
imposed on land or Buildings, Tenant shall pay and discharge its pro rata share
of such tax or excise on rents or other tax before it becomes delinquent; except
that this provision is not intended to cover net income taxes, inheritance, gift
or estate tax imposed upon Landlord. In the event that a tax is placed, levied,
or assessed against Landlord and the taxing authority takes the position that
Tenant cannot pay and discharge its pro rata share of such tax on behalf of
Landlord, then at Landlord's sole election, Landlord may increase the Base
Monthly Rent by the exact amount of such tax and Tenant shall pay such increase.
If by virtue of any application or proceeding brought by Landlord, there results
a reduction in the assessed value of the Premises during the Lease Term, Tenant
agrees to pay Landlord a fee consistent with the fees charged by a third party
appeal firm for such services.
11. UTILITIES: Tenant shall pay directly to the providing utility all water,
gas, electric, telephone, and other utilities supplied to the Premises. Landlord
shall not be liable for loss of or injury to person or property, however
occurring, through or in connection with or incidental to furnishing or the
utility company's failure to furnish utilities to the Premises, and in such
event Tenant shall not be entitled to abatement or reduction of any portion of
Base Monthly Rent or any other amount payable under this Lease.
12. TOXIC WASTE AND ENVIRONMENTAL DAMAGE:
A. Use of Hazardous Material: Without the prior written consent of
Landlord, Tenant or Tenant's agents, employees, contractors, subtenants or
invitees ("Tenant's Agents") shall not cause or permit any Hazardous Material,
as defined below, to be generated, brought onto, used, stored, created, released
or disposed of in or about the Premises, except that Tenant may use and store
small quantities of common household cleaners and office supplies on the
Premises provided such use and storage is in strict compliance with all
Environmental Laws, as defined below. As used herein, the term "Hazardous
Material" shall mean any substance, material or waste (whether liquid, solid or
gaseous), which is a pollutant or contaminant, or which is hazardous, toxic,
ignitable, reactive, corrosive, dangerous, harmful or injurious, or which
presents a risk to public health or the environment, or which is or
Page 11
<PAGE>
may become regulated by or under the authority of any Environmental Laws, as
defined below, including, without limitation, asbestos or asbestos containing
materials, petroleum products, pesticides, polychlorinated biphenyls, flammable
explosives, radioactive materials and urea formaldehyde. As used herein, the
term "Environmental Laws" shall mean any present or future federal, state or
local law, whether common law, statute, rule, regulation or ordinance, judgment,
order, or other governmental restriction, guideline, listing or requirement,
relating to the environment or any Hazardous Material, including without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. ss.9601 et seq., the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. ss.6901 et seq., and applicable provisions of
the California Health and Safety Code and the California Water Code, all as
heretofore or hereafter may be amended from time to time. In order to obtain
consent, Tenant shall deliver to Landlord its written proposal describing the
Hazardous Material to be brought onto the Premises, measures to be taken for
storage and disposal thereof, and safety measures to be employed to prevent
pollution or contamination of the air, soil, surface and ground water.
Landlord's approval may be withheld in its reasonable judgment. In the event
Landlord consents to Tenant's use of Hazardous Materials on the Premises or such
consent is not required, Tenant represents and warrants that it shall comply
with all Governmental Regulations applicable to Hazardous Material including
doing the following: (i) adhere to all reporting and inspection requirements
imposed by Federal, State, County or Municipal laws, ordinances or regulations
and provide Landlord a copy of any such reports or agency inspections; (ii)
obtain and provide Landlord copies of all necessary permits required for the use
and handling of Hazardous Material on the Premises; (iii) enforce Hazardous
Material handling and disposal practices consistent with industry standards;
(iv) surrender the Premises free from any Hazardous Materials arising from
Tenant's generating, bringing, using, storing, creating, releasing, or disposing
of Hazardous Material; and (v) properly close the facility with regard to
Hazardous Material including the removal or decontamination of any process
piping, mechanical ducting, storage tanks, containers, or trenches which have
come into contact with Hazardous Material and obtaining a closure certificate
from the local administering agency prior to the Expiration Date.
B. Tenant's Indemnity Regarding Hazardous Material: Tenant shall, at its
sole cost and expense and with counsel reasonably acceptable to Landlord,
indemnify, defend and hold harmless Landlord and Landlord's trustees,
shareholders, directors, officers, employees, partners, affiliates, agents,
successors and assigns from, and against any and all claims, liabilities,
obligations, penalties, fines, actions, costs or expenses incurred or suffered
arising from generating, bringing, using, storing, creating, releasing or
disposing of Hazardous Material by Tenant or Tenant's Agents in or about the
Premises, or the violation of any Governmental Regulation or Environmental Laws
by Tenant or Tenant's Agents. This indemnification applies whether or not the
concentrations of any such Hazardous Material exceed applicable maximum
contaminant or action levels or any governmental agency has issued a cleanup
order. Tenant's indemnification, defense, and hold harmless obligations include,
without limitation, the following: (i) claims, liabilities, costs or expenses
resulting from or based upon administrative, judicial (civil or criminal) or
other action, legal or equitable, brought by any private or public person under
present or future laws, including Environmental Laws; (ii) claims, liabilities,
costs or expenses pertaining to the identification, monitoring, cleanup,
containment, or removal of Hazardous Material from soils, riverbeds or aquifers
including the provision of an alternative public drinking water source; (iii)
losses attributable to diminution in the value of the Premises or the Building
(iv) loss or restriction of use of rentable space in the Building; (v) adverse
effect on the marketing of any space in the Building; and (vi) all other
liabilities, obligations, penalties, fines, claims, actions (including remedial
or enforcement actions of any kind and administrative or judicial proceedings,
orders or judgments), damages (including consequential and punitive damages),
and costs (including
Page 12
<PAGE>
attorney, consultant, and expert fees and expenses) resulting from the release
or violation. This Section 12.B shall survive the expiration or termination o
this Lease.
C. Notice of Release or Violation: If, during the Lease Term (including
any extensions), Tenant becomes aware of (i) any actual or threatened release of
a Hazardous Material on, under or about the Premises or (ii) any inquiry,
investigation, proceeding, claim, notice or order by any private or public
person or entity regarding the presence of Hazardous Material on, under or about
the Premises, including alleged violations of Environmental Laws by Tenant or
Tenant's Agents., Tenant shall give Landlord written notice of the release or
investigation within five (5) days after learning of it and shall simultaneously
and thereafter furnish Landlord with copies of any claims, notices of violation,
reports, or other writings received by Tenant concerning the release or
investigation. In the event of an actual release of Hazardous Materials, Tenant
shall also give Landlord immediate verbal notice of such release.
In the event of any release on or into the Premises or into the soil
or ground water under the Premises, the Building or the Project of any Hazardous
Materials used, treated, stored or disposed of by Tenant or Tenant's Agents,
Tenant agrees to comply, at its sole cost, with all laws, regulations,
ordinances and orders of any federal, state or local agency relating to the
monitoring or remediation of such Hazardous Materials. In the event of any such
release of Hazardous Materials Tenant shall immediately give verbal and
follow-up written notice of the release to Landlord, and Tenant agrees to meet
and confer with Landlord and its Lender to attempt to eliminate and mitigate any
financial exposure to such Lender and resultant exposure to Landlord under
California Code of Civil Procedure Section 736(b) as a result of such release,
and promptly to take reasonable monitoring, cleanup and remedial steps given,
inter alia, the historical uses to which the Property has and continues to be
used, the risks to public health posed by the release, the then available
technology and the costs of remediation, cleanup and monitoring, consistent with
acceptable customary practices for the type and severity of such contamination
and all applicable laws. Nothing in the preceding sentence shall eliminate,
modify or reduce the obligation of Tenant under 12.B of this Lease to indemnify,
defend and hold Landlord harmless from any claims liabilities, costs or expenses
incurred or suffered by Landlord. Tenant shall provide Landlord prompt written
notice of Tenant's monitoring, cleanup and remedial steps.
In the absence of an order of any federal, state or local governmental or
quasi-governmental agency relating to the cleanup, remediation or other response
action required by applicable law, any dispute arising between Landlord and
Tenant concerning Tenant's obligation to Landlord under this Section 12.C
concerning the level, method, and manner of cleanup, remediation or response
action required in connection with such a release of Hazardous Materials shall
be resolved by mediation and/or arbitration pursuant to this Lease.
D. Remediation Obligations: In the event of any release on, under or about
the Premises of any Hazardous Material generated, brought onto, used, stored,
created or disposed of by Tenant or Tenant's Agents, Tenant shall, at its sole
cost, promptly take all necessary and appropriate actions, in compliance with
applicable Environmental Laws, to remove or remediate such Hazardous Material,
whether or not any governmental agency has issued a cleanup order, so as to
return the Premises to the condition that existed before the introduction of
such Hazardous Material. Tenant shall obtain Landlord's written consent prior to
implementing any proposed removal or remedial action, provided, however, that
Tenant shall be entitled to respond immediately to an emergency without first
obtaining Landlord's written consent. Nothing in the preceding sentence shall in
any way eliminate, modify or reduce the obligation of Tenant under 12.B of this
Lease to indemnify, defend and hold Landlord harmless from any claims,
liabilities, costs or reasonable expenses incurred or suffered by Landlord.
Page 13
<PAGE>
E. Environmental Monitoring: Landlord and its agents shall have the right
to inspect, investigate, sample and monitor the Premises, including any air,
soil, water, ground water, or to conduct any other sampling or testing, digging,
drilling or analysis, to determine whether Tenant is complying with the terms of
this Section 12. If Landlord discovers that Tenant is not in compliance with the
terms of this Section 12, any reasonable costs incurred by Landlord in
determining Tenant's non-compliance, including reasonable attorneys',
consultants' and experts' fees, shall be due and payable by Tenant to Landlord
within five (5) days following Landlord's written demand therefor.
13. TENANT'S DEFAULT: The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant: (i) Tenant's failure to pay
the Base Monthly Rent including additional rent or any other payment due under
this Lease by the date such amount is due, (ii) the abandonment or vacation of
the Premises by Tenant; (iii) Tenant's failure to observe and perform any other
required provision of this Lease, where such failure continues for thirty (30)
days after written notice from Landlord; (iv) Tenant's making of any general
assignment for the benefit of creditors; (v) the filing by or against Tenant of
a petition to have Tenant adjudged a bankrupt or of a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed after the
filing); (vi) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; (vii) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days; or (viii) the occurrence of any other event described as a default
elsewhere in this Lease or any amendment thereto regardless of whether such
event is defined as a material default and breach of this Lease in this
Paragraph 13.
A. Remedies: In the event of any such default by Tenant, then in addition
to other remedies available to Landlord at law or in equity, Landlord shall have
the immediate option to terminate this Lease and all rights of Tenant hereunder
by giving written notice of such intention to terminate. In the event Landlord
elects to so terminate this Lease, Landlord may recover from Tenant all the
following: (i) the worth at time of award of any unpaid rent which had been
earned at the time of such termination; (ii) the worth at time of award of the
amount by which the unpaid rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss for the same
period that Tenant proves could have been reasonably avoided; (iii) the worth at
time of award of the amount by which the unpaid rent for the balance of the
Lease Term after the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided; (iv) any other amount necessary to
compensate Landlord for all detriment proximately caused by Tenant's failure to
perform its obligations under this Lease, or which in the ordinary course of
things would be likely to result therefrom; including the following: (x)
expenses for repairing, altering or remodeling the Premises for purposes of
reletting, (y) broker's fees, advertising costs or other expenses of reletting
the Premises, and (z) costs of carrying the Premises such as taxes, insurance
premiums, utilities and security precautions; and (v) at Landlord's election,
such other amounts in addition to or in lieu of the foregoing as may be
permitted by applicable California law. The term "rent", as used herein, is
defined as the minimum monthly installments of Base Monthly Rent and all other
sums required to be paid by Tenant pursuant to this Lease, all such other sums
being deemed as additional rent due hereunder. As used in (i) and (ii) above,
"worth at the time of award" shall be computed by allowing interest at a rate
equal to the discount rate of the Federal Reserve Bank of San Francisco plus
five (5%) percent per annum. As used in (iii) above, "worth at the time of
award" shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one
Page 14
<PAGE>
(1%) percent.
B. Right to Re-enter: In the event of any such default by Tenant, Landlord
shall have the right, after terminating this Lease, to re-enter the Premises and
remove all persons and property. Such property may be removed and stored in a
public warehouse or elsewhere at the cost of and for the account of Tenant, and
disposed of by Landlord in any manner permitted by law.
C. Abandonment: If Landlord does not elect to terminate this Lease as
provided in Section 13.A or 13.B above, then the provisions of California Civil
Code Section 1951.4, (Landlord may continue the lease in effect after Tenant's
breach and abandonment and recover rent as it becomes due if Tenant has a right
to sublet and assign, subject only to reasonable limitations) as amended from
time to time, shall apply and Landlord may from time to time, without
terminating this Lease, either recover all rental as it becomes due or relet the
Premises or any part thereof for such term or terms and at such rental or
rentals and upon such other terms and conditions as Landlord in its sole
discretion may deem advisable, with the right to make alterations and repairs to
the Premises. In the event that Landlord elects to so relet, rentals received by
Landlord from such reletting shall be applied in the following order to: (i) the
payment of any indebtedness other than Base Monthly Rent due hereunder from
Tenant to Landlord; (ii) the payment of any cost of such reletting; (iii) the
payment of the cost of any alterations and repairs to the Premises; and (iv) the
payment of Base Monthly Rent and other sums due and unpaid hereunder. The
residual rentals, if any, shall be held by Landlord and applied in payment of
future Base Monthly Rent as the same may become due and payable hereunder.
Landlord shall the obligation to market the space but shall have no obligation
to relet the Premises following a default if Landlord has other comparable
available space within the Building or Project. In the event the portion of
rentals received from such reletting which is applied to the payment of rent
hereunder during any month be less than the rent payable during that month by
Tenant hereunder, then Tenant shall pay such deficiency to Landlord immediately
upon demand. Such deficiency shall be calculated and paid monthly. Tenant shall
also pay to Landlord, as soon as ascertained, any costs and expenses incurred by
Landlord in such reletting or in making such alterations and repairs not covered
by the rentals received from such reletting.
D. No Termination: Landlord's re-entry or taking possession of the
Premises pursuant to 13.B or 13.C shall not be construed as an election to
terminate this Lease unless written notice of such intention is given to Tenant
or unless the termination is decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Landlord because of any
default by Tenant, Landlord may at any time after such reletting elect to
terminate this Lease for any such default.
E. Non-Waiver: Landlord may accept Tenant's payments without waiving any
rights under this Lease, including rights under a previously served notice of
default. No payment by Tenant or receipt by Landlord of a lesser amount than any
installment of rent due shall be deemed as other than payment on account of the
amount due. If Landlord accepts payments after serving a notice of default,
Landlord may nevertheless commence and pursue an action to enforce rights and
remedies under the previously served notice of default without giving Tenant any
further notice or demand. Furthermore, the Landlord's acceptance of rent from
the Tenant when the Tenant is holding over without express written consent does
not convert Tenant's Tenancy from a tenancy at sufferance to a month to month
tenancy. No waiver of any provision of this Lease shall be implied by any
failure of Landlord to enforce any remedy for the violation of that provision,
even if that violation continues or is repeated. Any waiver by Landlord of any
provision of this Lease must be in writing. Such waiver shall affect only the
provision specified and only for the time and in the manner stated in the
writing. No delay or omission in the exercise of any right or remedy by Landlord
shall impair such right or remedy or be construed as a waiver thereof by
Landlord. No act or conduct of Landlord, including, without limitation, the
acceptance of keys to the Premises, shall constitute acceptance
Page 15
<PAGE>
of the surrender of the Premises by Tenant before the Expiration Date. Only
written notice from Landlord to Tenant of acceptance shall constitute such
acceptance of surrender of the Premises. Landlord's consent to or approval of
any act by Tenant which requires Landlord's consent or approvals shall not be
deemed to waive or render unnecessary Landlord's consent to or approval of any
subsequent act by Tenant.
F. Performance by Landlord: If Tenant fails to perform any obligation
required under this Lease or by law or governmental regulation, Landlord in its
sole discretion may, without notice, without waiving any rights or remedies and
without releasing Tenant from its obligations hereunder, perform such
obligation, in which event Tenant shall pay Landlord as additional rent all sums
paid by Landlord in connection with such substitute performance, including
interest at the Agreed Interest Rate (as defined in Section 19.J) within ten
(10) days of Landlord's written notice for such payment.
G. Habitual Default: The provisions of Section 13 notwithstanding, the
Parties agree that if Tenant shall have defaulted in the performance of any (but
not necessarily the same) term or condition of this Lease for three or more
times during any twelve (12) month period during the Lease Term, then such
conduct shall, at the election of the Landlord, represent a separate event of
default which cannot be cured by Tenant. Tenant acknowledges that the purpose of
this provision is to prevent repetitive defaults by Tenant, which work a
hardship upon Landlord and deprive Landlord of Tenant's timely performance under
this Lease.
14. LANDLORD'S LIABILITY:
A. Limitation on Landlord's Liability: In the event of Landlord's failure
to perform any of its covenants or agreements under this Lease, Tenant shall
give Landlord written notice of such failure and shall give Landlord thirty (30)
days to cure or commence to cure such failure prior to any claim for breach or
resultant damages, provided, however, that if the nature of the default is such
that it cannot reasonably be cured within the 30-day period, Landlord shall not
be deemed in default if it commences within such period to cure, and thereafter
diligently prosecutes the same to completion. In addition, upon any such failure
by Landlord, Tenant shall give notice by registered or certified mail to any
person or entity with a security interest in the Premises ("Mortgagee") that has
provided Tenant with notice of its interest in the Premises, and shall provide
Mortgagee a reasonable opportunity to cure such failure, including such time to
obtain possession of the Premises by power of sale or judicial foreclosure, if
such should prove necessary to effectuate a cure. Tenant agrees that each of the
Mortgagees to whom this Lease has been assigned is an expressed third-party
beneficiary hereof. Tenant waives any right under California Civil Code Section
1950.7 or any other present or future law to the collection of any payment or
deposit from Mortgagee or any purchaser at a foreclosure sale of Mortgagee's
interest unless Mortgagee or such purchaser shall have actually received and not
refunded the applicable payment or deposit. Tenant Further waives any right to
terminate this Lease and to vacate the Premises on Landlord's default under this
Lease. Tenant's sole remedy on Landlord's default is an action for damages or
injunctive or declaratory relief.
B. Limitation on Tenant's Recourse: If Landlord is a corporation, trust,
partnership, joint venture, unincorporated association or other form of business
entity, then (i) the obligations of Landlord shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals or representatives except to
the extent of their interest in the Premises. Tenant shall have recourse only to
the interest of Landlord in the Premises or for the satisfaction of the
obligations of Landlord and shall not have recourse to any other assets of
Landlord for the satisfaction of such obligations.
C. Indemnification of Landlord: Except to the extent due to the negligence
or willful misconduct of Landlord, as a material part of the consideration
rendered to Landlord, Tenant hereby waives all claims against Landlord for
damages to goods, wares and merchandise, and
Page 16
<PAGE>
all other personal property in, upon or about said Premises and for injuries to
persons in or about said Premises, from any cause arising at any time to the
fullest extent permitted by law, and Tenant shall indemnify, defend with counsel
reasonably acceptable to Landlord and hold Landlord, and their shareholders,
directors, officers, trustees, employees, partners, affiliates and agents from
any claims, liabilities, costs or expenses incurred or suffered arising from the
use of occupancy of the Premises or any part of the Project by Tenant or
Tenant's Agents, the acts or omissions of Tenant or Tenant's Agents, Tenant's
breach of this Lease, or any damage or injury to person or property from any
cause, or from the failure of Tenant to keep the Premises in good condition and
repair as herein provided,. Further, in the event Landlord is made party to any
litigation due to the acts or omission of Tenant or Tenant's Agents, Tenant will
indemnify, defend (with counsel reasonably acceptable to Landlord) and hold
Landlord harmless from any such claim or liability including Landlord's costs
and expenses and reasonable attorney's fees incurred in defending such claims.
15. DESTRUCTION OF PREMISES:
A. Landlord's Obligation to Restore: In the event of a destruction of the
Premises during the Lease Term Landlord shall repair the same to a similar
condition to that which existed prior to such destruction. Such destruction
shall not annul or void this Lease; however, Tenant shall be entitled to a
proportionate reduction of Base Monthly Rent while repairs are being made, such
proportionate reduction to be based upon the extent to which the repairs
interfere with Tenant's business in the Premises, as reasonably determined by
Landlord. In no event shall Landlord be required to replace or restore
Alterations, Tenant Improvements paid for by Tenant from sources other than the
Work Allowance or Tenant's fixtures or personal property.
B. Limitations on Landlord's Restoration Obligation: Notwithstanding the
provisions of Section 15.A, Landlord shall have no obligation to repair, or
restore the Premises if any of the following occur: (i) if the repairs cannot be
made in one hundred eighty (180) days from the date of receipt of all
governmental approvals necessary under the laws and regulations of State,
Federal, County or Municipal authorities, as reasonably determined by Landlord,
(ii) if the holder of the first deed of trust or mortgage encumbering the
Building elects not to permit the insurance proceeds payable upon damage or
destruction to be used for such repair or restoration, (iii) the damage or
destruction is not fully covered by the insurance maintained by Landlord, (iv)
the damage or destruction occurs in the last twenty four (24) months of the
Lease Term, (v) Tenant is in default pursuant to the provisions of Section 13,
or (vi) Tenant has vacated the Premises for more than ninety (90) days. In any
such event Landlord may elect either to (i) complete the repair or restoration,
or (ii) terminate this Lease by providing Tenant written notice of its election
within sixty (60) days following the damage or destruction. If Landlord elects
to repair or restore, this Lease shall continue in full force and effect.
16. CONDEMNATION: If any part of the Premises shall be taken for any public or
quasi-public use, under any statute or by right of eminent domain or private
purchase in lieu thereof, and only a part thereof remains which is susceptible
of occupation hereunder, this Lease shall, as to the part so taken, terminate as
of the day before title vests in the condemnor or purchaser ("Vesting Date") and
Base Monthly Rent payable hereunder shall be adjusted so that Tenant is required
to pay for the remainder of the Lease Term only such portion of Base Monthly
Rent as the value of the part remaining after such taking bears to the value of
the entire Premises prior to such taking. Further, in the event of such partial
taking, Landlord shall have the option to terminate this Lease as of the Vesting
Date. If all of the Premises or such part thereof be taken so that there does
not remain a portion susceptible for occupation hereunder, this Lease shall
terminate on the Vesting Date. If part or all of the Premises be taken, all
compensation awarded upon such taking shall go to Landlord, and Tenant shall
have no claim thereto; except Landlord shall cooperate with Tenant, without cost
to Landlord, to recover compensation for damage to or taking of any Alterations,
Tenant Improvements paid for by
Page 17
<PAGE>
Tenant from sources other than the Work Allowance, or for Tenant's moving costs.
Tenant hereby waives the provisions of California Code of Civil Procedures
Section 1265.130 and any other similarly enacted statue, and the provisions of
this Section 16 shall govern in the case of a taking.
17. ASSIGNMENT OR SUBLEASE:
A. Consent by Landlord: Except as specifically provided in this Section
17.E, Tenant may not assign, sublet, hypothecate, or allow a third party to use
the Premises without the express written consent of Landlord, which consent
shall not be unreasonably withheld, conditioned or delayed. In the event Tenant
desires to assign this Lease or any interest herein or sublet the Premises or
any part thereof, Tenant shall deliver to Landlord (i) executed counterparts of
any agreement and of all ancillary agreements with the proposed
assignee/subtenant, (ii) current financial statements of the transferee covering
the preceding three years, (iii) the nature of the proposed transferee's
business to be carried on in the Premises, (iv) a statement outlining all
consideration to be given on account of the Transfer, and (v) a current
financial statement of Tenant. Landlord may condition its approval of any
Transfer on receipt of a certification from both Tenant and the proposed
transferee of all consideration to be paid to Tenant in connection with such
Transfer. At Landlord's request, Tenant shall also provide additional
information reasonably required by Landlord to determine whether it will consent
to the proposed assignment or sublease. Landlord shall have a thirty (30) day
period following receipt of all the foregoing within which to notify Tenant in
writing that Landlord elects to: (i) terminate this Lease in the event the
proposed sublease or assignment is for substantially all of space in the
Premises provided, however, that Landlord shall not have the right to terminate
on any sublease or assignment expiring within three (3) years of the
Commencement Date; (ii) permit Tenant to assign or sublet such space to the
named assignee/subtenant on the terms and conditions set forth in the notice; or
(iii) refuse consent. If Landlord should fail to notify Tenant in writing of
such election within the 30-day period, Landlord shall be deemed to have elected
option (iii) above. In the event Landlord elects option (i) above, this Lease
shall expire with respect to such part of the Premises on the date upon which
the proposed sublease or transfer was to commence, and from such date forward,
Base Monthly Rent and Tenant's Allocable Share of all other costs and charges
shall be adjusted based upon the proportion that the rentable area of the
Premises remaining bears to the total rentable area of the Building. In the
event Landlord elects option (ii) above, Landlord's written consent to the
proposed assignment or sublease shall not be unreasonably withheld, provided and
upon the condition that: (i) the proposed assignee or subtenant is engaged in a
business that is limited to the use expressly permitted under this Lease; (ii)
the proposed assignee or subtenant is a company with sufficient financial worth
and management ability to undertake the financial obligation of this Lease and
Landlord has been furnished with reasonable proof thereof; (iii) the proposed
assignment or sublease is in form reasonably satisfactory to Landlord; (iv) the
proposed sublease will not result in there being greater than two (2) subtenants
within the Premises at any time during the Lease Term; (v) Tenant reimburses
Landlord on demand for any costs that may be incurred by Landlord in connection
with said assignment or sublease, including the costs of making investigations
as to the acceptability of the proposed assignee or subtenant and legal costs
incurred in connection with the granting of any requested consent; and (vi)
Tenant shall not have advertised or publicized in any way the availability of
the Premises without prior notice to Landlord. In the event all or any one of
the foregoing conditions are not satisfied, Landlord shall be considered to have
acted reasonably if it withholds its consent.
B. Assignment or Subletting Consideration: Landlord and Tenant hereby
agree that fifty percent (50%) of any rent or other economic consideration (i)
realized by Tenant under any sublease or assignment, or (ii) realized by any
subtenant under any sub-sublease of the Premises, in excess of the Base Monthly
Rent payable hereunder and reasonable subletting and assignment costs,
Page 18
<PAGE>
shall be paid to Landlord. Tenant's obligation to pay over Landlord's portion of
the consideration constitutes an obligation for additional rent hereunder. The
above provisions relating to Landlord's right to terminate the Lease and
relating to the allocation of excess rent are independently negotiated terms of
the Lease which constitute a material inducement for the Landlord to enter into
the Lease, and are agreed by the Parties to be commercially reasonable. No
assignment or subletting by Tenant shall relieve it of any obligation under this
Lease. Any assignment or subletting which conflicts with the provisions hereof
shall be void.
C. No Release: Any assignment or sublease shall be made only if and shall
not be effective until the assignee or subtenant shall execute, acknowledge, and
deliver to Landlord an agreement, in form and substance satisfactory to
Landlord, whereby the assignee or subtenant shall assume all the obligations of
this Lease on the part of Tenant to be performed or observed and shall be
subject to all the covenants, agreements, terms, provisions and conditions in
this Lease. Notwithstanding any such sublease or assignment and the acceptance
of rent by Landlord from any subtenant or assignee, Tenant and any guarantor
shall remain fully liable for the payment of Base Monthly Rent and additional
rent due, and to become due hereunder, for the performance of all the covenants,
agreements, terms, provisions and conditions contained in this Lease on the part
of Tenant to be performed and for all acts and omissions of any licensee,
subtenant, assignee or any other person claiming under or through any subtenant
or assignee that shall be in violation of any of the terms and conditions of
this Lease, and any such violation shall be deemed a violation by Tenant. Tenant
shall indemnify, defend and hold Landlord harmless from and against all losses,
liabilities, damages, costs and expenses (including reasonable attorney fees)
resulting from any claims that may be made against Landlord by the proposed
assignee or subtenant or by any real estate brokers or other persons claiming
compensation in connection with the proposed assignment or sublease.
D. Reorganization of Tenant: The provisions of this Section 17.D shall
apply if Tenant is a corporation and: (i) there is a dissolution, merger,
consolidation, or other reorganization of or affecting Tenant, where Tenant is
not the surviving corporation, or (ii) there is a sale or transfer to one person
or entity (or to any group of related persons or entities) of stock possessing
more than 50% of the total combined voting power of all classes of Tenant's
capital stock issued, outstanding and entitled to vote for the election of
directors, and after such sale or transfer of stock Tenant's stock is no longer
publicly traded. In a transaction under clause (i) the surviving corporation
shall promptly execute and deliver to Landlord an agreement in form reasonably
satisfactory to Landlord under which such surviving corporation assumes the
obligations of Tenant hereunder, and in a transaction under clause (ii) the
transferee or buyer shall promptly execute and deliver to Landlord an agreement
in form reasonably satisfactory to Landlord under which such transferee or buyer
assumes the obligations of Tenant under the Lease.
E. Permitted Transfers: Notwithstanding anything contained in this Section
17, so long as Tenant otherwise complies with the provisions of this Article,
Tenant may enter into any of the following transfers (a "Permitted Transfer")
without Landlord's prior consent, and Landlord shall not be entitled to
terminate the Lease or to receive any part of any subrent resulting therefrom
that would otherwise be due pursuant to Sections 17.A and 17.B. Tenant may
sublease all or part of the Premises or assign its interest in this Lease to (i)
any corporation which controls, is controlled by, or is under common control
with the original Tenant to this Lease by means of an ownership interest of more
than 50%; (ii) a corporation which results from a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation, so long as the
surviving corporation has a net worth at the time of such assignment that is
equal to or greater than the net worth of Tenant immediately prior to such
transaction; and (iii) a corporation which purchases or otherwise acquires all
or substantially all of the assets of Tenant so long as such acquiring
corporation has a net worth at the time of such assignment that is equal to or
Page 19
<PAGE>
greater than the net worth of Tenant immediately prior to such transaction.
F. Effect of Default: In the event of Tenant's default, Tenant hereby
assigns all rents due from any assignment or subletting to Landlord as security
for performance of its obligations under this Lease, and Landlord may collect
such rents as Tenant's Attorney-in-Fact, except that Tenant may collect such
rents unless a default occurs as described in Section 13 above. A termination of
the Lease due to Tenant's default shall not automatically terminate an
assignment or sublease then in existence; rather at Landlord's election, such
assignment or sublease shall survive the Lease termination, the assignee or
subtenant shall attorn to Landlord, and Landlord shall undertake the obligations
of Tenant under the sublease or assignment; except that Landlord shall not be
liable for prepaid rent, security deposits or other defaults of Tenant to the
subtenant or assignee, or for any acts or omissions of Tenant and Tenant's
Agents.
G. Conveyance by Landlord: As used in this Lease, the term "Landlord" is
defined only as the owner for the time being of the Premises, so that in the
event of any sale or other conveyance of the Premises or in the event of a
master lease of the Premises, Landlord shall be entirely freed and relieved of
all its covenants and obligations hereunder, and it shall be deemed and
construed, without further agreement between the Parties and the purchaser at
any such sale or the master tenant of the Premises, that the purchaser or master
tenant of the Premises has assumed and agreed to carry out any and all covenants
and obligations of Landlord hereunder. Such transferor shall transfer and
deliver Tenant's security deposit to the purchaser at any such sale or the
master tenant of the Premises, and thereupon the transferor shall be discharged
from any further liability in reference thereto.
H. Successors and Assigns: Subject to the provisions this Section 17, the
covenants and conditions of this Lease shall apply to and bind the heirs,
successors, executors, administrators and assigns of all Parties hereto; and all
Parties hereto comprising Tenant shall be jointly and severally liable
hereunder.
18. OPTION TO EXTEND THE LEASE TERM:
A. Grant and Exercise of Option: Landlord grants to Tenant, subject to the
terms and conditions set forth in this Section 18.A, an option ("Option") to
extend the Lease Term for an additional term of sixty (60) months ("Option
Term"). The Option Term shall be exercised, if at all, by written notice to
Landlord no earlier than fifteen (15) months prior to the date the Lease Term
would expire but for such exercise but no later than nine (9) months prior to
the date the Lease Term would expire but for such exercise, time being of the
essence for the giving of such notice. If Tenant exercises the Option, all of
the terms, covenants and conditions of this Lease shall apply except for the
grant of additional Options pursuant to this Section, provided that Base Monthly
Rent for the Premises payable by Tenant during the Option Term shall be the
greater of (i) the Base Monthly Rent applicable to the period immediately prior
to the commencement of the Option Term, and (ii) the then Fair Market Rental as
hereinafter defined. Notwithstanding anything herein to the contrary, (i) if
Tenant is in monetary or material non-monetary default under any of the terms,
covenants or conditions of this Lease either at the time Tenant exercises the
Option or at any time thereafter prior to the commencement date of the Option
Term, or (ii) if the net worth of Tenant as reported in Tenant's most recent
financial statements is less than the net worth of Tenant as of the date of
execution of this Lease, then Landlord shall have, in addition to all of
Landlord's other rights and remedies provided in this Lease, the right to
terminate the Option upon notice to Tenant, in which event the Lease Term shall
not be extended pursuant to this Section 18.A. As used herein, the term "Fair
Market Rental" is defined as the rental and all other monetary payments,
including any escalations and adjustments thereto (including without limitation
Consumer Price Indexing) that Landlord could obtain during the Option Term from
a third party desiring to lease the Premises, based upon the current use and
other potential uses of the Premises, as determined by the rents then obtainable
for new leases of space comparable in
Page 20
<PAGE>
age and quality to the Premises in the same real estate submarket as the
Building.
B. Determination of Fair Market Rental: If Tenant exercises the Option,
Landlord shall send Tenant a notice setting forth the Fair Market Rental for the
Option Term within thirty (30) days following the Exercise Date. If Tenant
disputes Landlord's determination of Fair Market Rental for the Option Term,
Tenant shall, within thirty (30) days after the date of Landlord's notice
setting forth Fair Market Rental for the Option Term, send to Landlord a notice
stating that Tenant either elects to terminate its exercise of the Option, in
which event the Option shall lapse and this Lease shall terminate on the
Expiration Date, or that Tenant disagrees with Landlord's determination of Fair
Market Rental for the Option Term and elects to resolve the disagreement as
provided in Section 18.C below. If Tenant does not send Landlord a notice as
provided in the previous sentence, Landlord's determination of Fair Market
Rental shall be the Base Monthly Rent payable by Tenant during the Option Term.
If Tenant elects to resolve the disagreement as provided in Section 18.C and
such procedures are not concluded prior to the commencement date of the Option
Term, Tenant shall pay to Landlord as Base Monthly Rent the Fair Market Rental
as determined by Landlord in the manner provided above. If the Fair Market
Rental as finally determined pursuant to Section 18.C is greater than Landlord's
determination, Tenant shall pay Landlord the difference between the amount paid
by Tenant and the Fair Market Rental as so determined in Section 18.C within
thirty (30) days after such determination. If the Fair Market Rental as finally
determined in Section 18.C is less than Landlord's determination, the difference
between the amount paid by Tenant and the Fair Market Rental as so determined in
Section 18.C shall be credited against the next installments of Base Monthly
Rent due from Tenant to Landlord hereunder.
C. Resolution of a Disagreement over the Fair Market Rental: Any
disagreement regarding Fair Market Rental shall be resolved as follows:
1. Within thirty (30) days after Tenant's response to Landlord's
notice setting forth the Fair Market Rental, Landlord and Tenant shall meet at a
mutually agreeable time and place, in an attempt to resolve the disagreement.
2. If within the 30-day period referred to above, Landlord and
Tenant cannot reach agreement as to Fair Market Rental, each party shall select
one appraiser to determine Fair Market Rental. Each such appraiser shall arrive
at a determination of Fair Market Rental and submit their conclusions to
Landlord and Tenant within thirty (30) days after the expiration of the 30-day
consultation period described above.
3. If only one appraisal is submitted within the requisite time
period, it shall be deemed as Fair Market Rental. If both appraisals are
submitted within such time period and the two appraisals so submitted differ by
less than ten percent (10%), the average of the two shall be deemed as Fair
Market Rental. If the two appraisals differ by more than 10%, the appraisers
shall immediately select a third appraiser who shall, within thirty (30) days
after his selection, make and submit to Landlord and Tenant a determination of
Fair Market Rental. This third appraisal will then be averaged with the closer
of the two previous appraisals and the result shall be Fair Market Rental.
4. All appraisers specified pursuant to this Section shall be
members of the American Institute of Real Estate Appraisers with not less than
ten (10) years experience appraising office and industrial properties in the
Santa Clara Valley. Each party shall pay the cost of the appraiser selected by
such party and one-half of the cost of the third appraiser.
D. Personal to Tenant: All Options provided to Tenant in this Lease are
personal and granted to Entrust Technologies and are not exercisable by any
third party should Tenant assign or sublet all or a portion of its rights under
this Lease, unless Landlord consents to permit exercise of any option by any
assignee or subtenant, in Landlord's sole and absolute
Page 21
<PAGE>
discretion.
19. GENERAL PROVISIONS:
A. Attorney's Fees: In the event a suit or alternative form of dispute
resolution is brought for the possession of the Premises, for the recovery of
any sum due hereunder, to interpret the Lease, or because of the breach of any
other covenant herein; then the losing party shall pay to the prevailing party
reasonable attorney's fees including the expense of expert witnesses,
depositions and court testimony as part of its costs which shall be deemed to
have accrued on the commencement of such action. The prevailing party shall also
be entitled to recover all costs and expenses including reasonable attorney's
fees incurred in enforcing any judgment or award against the other party. The
foregoing provision relating to post-judgment costs is severable from all other
provisions of this Lease.
B. Authority of Parties: Each party represents and warrants that it is
duly formed and in good standing, and is duly authorized to execute and deliver
this Lease on behalf of said partnership or corporation and that this Lease is
binding upon said corporation or partnership in accordance with its terms. At
the request of either party, the other party shall provide the requesting party
with corporate or partnership resolutions or other proof in a form acceptable to
the requesting party, authorizing the execution of the Lease.
C. Brokers: Tenant represents it has not utilized or contacted a real
estate broker or finder with respect to this Lease other than CPS and Torode
Realty Limited and Tenant agrees to indemnify, defend and hold Landlord harmless
against any claim, cost, liability or cause of action asserted by any other
broker or finder claiming through Tenant.
D. Choice of Law: This Lease shall be governed by and construed in
accordance with California law. Except as provided in Section 19.E, venue shall
be Santa Clara County.
E. Dispute Resolution: Landlord and Tenant and any other party that may
become a party to this Lease or be deemed a party to this Lease including any
subtenants agree that, except for any claim by Landlord for unlawful detainer or
any claim within the jurisdiction of the small claims court (which small claims
court shall be the sole court of competent jurisdiction), any controversy,
dispute, or claim of whatever nature arising out of, in connection with or in
relation to the interpretation, performance or breach of this Lease, including
any claim based on contract, tort, or statute, shall be resolved at the request
of any party to this agreement through a two-step dispute resolution process
administered by J.A.M.S. or another judicial mediation service mutually
acceptable to the parties located in Santa Clara County, California. The dispute
resolution process shall involve first, mediation, followed, if necessary, by
final and binding arbitration administered by and in accordance with the then
existing rules and practices of J.A.M.S. or other judicial mediation service
selected. In the event of any dispute subject to this provision, either party
may initiate a request for mediation and the parties shall use reasonable
efforts to promptly select a J.A.M.S. mediator and commence the mediation. In
the event the parties are not able to agree on a mediator within thirty (30)
days, J. A. M. S. or another judicial mediation service mutually acceptable to
the parties shall appoint a mediator. The mediation shall be confidential and in
accordance with California Evidence Code ss. 1119 et. seq. The mediation shall
be held in Santa Clara County, California and in accordance with the existing
rules and practice of J. A. M. S. (or other judicial and mediation service
selected). The parties shall use reasonable efforts to conclude the mediation
within sixty (60) days of the date of either party's request for mediation. The
mediation shall be held prior to any arbitration or court action (other than a
claim by Landlord for unlawful detainer or any claim within the jurisdiction of
the small claims court which are not subject to this mediation/arbitration
provision and may be filed directly with a court of competent jurisdiction).
Should the prevailing party in any dispute subject to this Section 19.E attempt
an arbitration or a court action before attempting to mediate, the prevailing
party shall not be entitled to attorney's fees that might otherwise be available
to them in a court action
Page 22
<PAGE>
or arbitration and in addition thereto, the party who is determined by the
arbitrator to have resisted mediation, shall be sanctioned by the arbitrator or
judge.
IF A MEDIATION IS CONDUCTED BUT IS UNSUCCESSFUL, IT SHALL BE FOLLOWED BY FINAL
AND BINDING ARBITRATION ADMINISTERED BY AND IN ACCORDANCE WITH THE THEN EXISTING
RULES AND PRACTICES OF J.A.M.S. OR THE OTHER JUDICIAL AND MEDIATION SERVICE
SELECTED, AND JUDGMENT UPON ANY AWARD RENDERED BY THE ARBITRATOR(S) MAY BE
ENTERED BY ANY STATE OR FEDERAL COURT HAVING JURISDICTION THEREOF AS PROVIDED BY
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280 ET. SEQ, AS SAID STATUTES THEN
APPEAR, INCLUDING ANY AMENDMENTS TO SAID STATUTES OR SUCCESSORS TO SAID STATUTES
OR AMENDED STATUTES, EXCEPT THAT IN NO EVENT SHALL THE PARTIES BE ENTITLED TO
PROPOUND INTERROGATORIES OR REQUEST FOR ADMISSIONS DURING THE ARBITRATION
PROCESS. THE ARBITRATOR SHALL BE A RETIRED JUDGE OR A LICENSED CALIFORNIA
ATTORNEY. THE VENUE FOR ANY SUCH ARBITRATION OR MEDIATION SHALL BE IN SANTA
CLARA COUNTY, CALIFORNIA.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE "MEDIATION AND ARBITRATION OF
DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW
AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED
IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP
YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE
SPECIFICALLY INCLUDED IN THE "MEDIATION AND ARBITRATION OF DISPUTES" PROVISION.
IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY
BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THE MATTERS INCLUDED IN THE "MEDIATION AND ARBITRATION OF DISPUTES"
PROVISION TO NEUTRAL ARBITRATION.
LANDLORD: ______ TENANT: _______
F. Entire Agreement: This Lease and the exhibits attached hereto contain
all of the agreements and conditions made between the Parties hereto and may not
be modified orally or in any other manner other than by written agreement signed
by all parties hereto or their respective successors in interest. This Lease
supersedes and revokes all previous negotiations, letters of intent, lease
proposals, brochures, agreements, representations, promises, warranties, and
understandings, whether oral or in writing, between the parties or their
respective representatives or any other person purporting to represent Landlord
or Tenant.
G. Entry by Landlord: Upon prior notice to Tenant and subject to Tenant's
reasonable security regulations, Tenant shall permit Landlord and his agents to
enter into and upon the Premises at all reasonable times, and without any rent
abatement or reduction or any liability to Tenant for any loss of occupation or
quiet enjoyment of the Premises thereby occasioned, for the following purposes:
(i) inspecting and maintaining the Premises; (ii) making repairs, alterations or
additions to the Premises; (iii) erecting additional building(s) and
improvements on the land where the Premises are situated or on adjacent land
owned by Landlord; (iv) performing any obligations of Landlord under the Lease
including remediation of Hazardous Materials if determined to be the
responsibility of Landlord, (v) posting and keeping posted thereon notices of
non-responsibility for any construction, alteration or repair thereof, as
required or permitted by any law, and (vi) showing the
Page 23
<PAGE>
Premises to Landlord's or the Master Landlord's existing or potential
successors, purchaser, tenants and lenders. Tenant shall permit Landlord and his
agents, at any time within eighteen (18) months prior to the Expiration Date (or
at any time during the Lease if Tenant is in default hereunder), to place upon
the Premises "For Lease" signs and exhibit the Premises to real estate brokers
and prospective tenants at reasonable hours.
H. Estoppel Certificates: At any time during the Lease Term, Tenant shall,
within ten (10) days following written notice from Landlord, execute and deliver
to Landlord a written statement certifying, if true, the following: (i) that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification); (ii) the date to which rent and other charges
are paid in advance, if any; (iii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on Landlord's part hereunder (or specifying such
defaults if they are claimed); and (iv) such other information as Landlord may
reasonably request. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of Landlord's interest in the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon the Tenant that this Lease is in full force and effect without
modification, except as may be represented by Landlord, and that there are no
uncured defaults in Landlord's performance. Tenant agrees to provide, within
five (5) days of Landlord's request, Tenant's most recent three (3) years of
audited financial statements for Landlord's use in financing or sale of the
Premises or Landlord's interest therein.
I. Exhibits: All exhibits referred to are attached to this Lease and
incorporated by reference.
J. Interest: All rent due hereunder, if not paid when due, shall bear
interest at the rate of the Reference Rate published by Bank of America, San
Francisco Branch, plus two percent (2%) per annum from that date until paid in
full ("Agreed Interest Rate"). This provision shall survive the expiration or
sooner termination of the Lease. Despite any other provision of this Lease, the
total liability for interest payments shall not exceed the limits, if any,
imposed by the usury laws of the State of California. Any interest paid in
excess of those limits shall be refunded to Tenant by application of the amount
of excess interest paid against any sums outstanding in any order that Landlord
requires. If the amount of excess interest paid exceeds the sums outstanding,
the portion exceeding those sums shall be refunded in cash to Tenant by
Landlord. To ascertain whether any interest payable exceeds the limits imposed,
any non-principal payment (including late charges) shall be considered to the
extent permitted by law to be an expense or a fee, premium, or penalty rather
than interest.
K. Modifications Required by Lender: If any lender of Landlord or ground
lessor of the Premises requires a modification of this Lease that will not
increase Tenant's cost or expense or materially or adversely change Tenant's
rights and obligations, this Lease shall be so modified and Tenant shall execute
whatever documents are required and deliver them to Landlord within fifteen (15)
days after the request.
L. No Presumption Against Drafter: Landlord and Tenant understand, agree
and acknowledge that this Lease has been freely negotiated by both Parties; and
that in any controversy, dispute, or contest over the meaning, interpretation,
validity, or enforceability of this Lease or any of its terms or conditions,
there shall be no inference, presumption, or conclusion drawn whatsoever against
either party by virtue of that party having drafted this Lease or any portion
thereof.
M. Notices: All notices, demands, requests, or consents required to be
given under this Lease shall be sent in writing by certified mail (both U.S. and
Canadian, when applicable, return receipt requested, or by personal delivery
addressed to the party to be notified at the address for such party specified in
Section 1 of this Lease, or to such other place as the party to be notified may
from time to time designate by at least fifteen (15) days prior notice to the
notifying party. When this Lease requires service of a notice, that notice shall
replace
Page 24
<PAGE>
rather than supplement any equivalent or similar statutory notice, including any
notices required by Code of Civil Procedure Section 1161 or any similar or
successor statute.
N. Property Management: In addition, Tenant agrees to pay Landlord along
with the expenses to be reimbursed by Tenant a monthly fee for management
services rendered by either Landlord or a third party manager engaged by
Landlord (which may be a party affiliated with Landlord), in the amount of three
percent (3%) of the Base Monthly Rent.
O. Rent: All monetary sums due from Tenant to Landlord under this Lease,
including, without limitation those referred to as "additional rent", shall be
deemed as rent.
P. Representations: Tenant acknowledges that neither Landlord nor any of
its employees or agents have made any agreements, representations, warranties or
promises with respect to the Premises or with respect to present or future
rents, expenses, operations, tenancies or any other matter. Except as herein
expressly set forth herein, Tenant relied on no statement of Landlord or its
employees or agents for that purpose.
Q. Rights and Remedies: Subject to Section 14 above, All rights and
remedies hereunder are cumulative and not alternative to the extent permitted by
law, and are in addition to all other rights and remedies in law and in equity.
R. Severability: If any term or provision of this Lease is held
unenforceable or invalid by a court of competent jurisdiction, the remainder of
the Lease shall not be invalidated thereby but shall be enforceable in
accordance with its terms, omitting the invalid or unenforceable term.
S. Submission of Lease: Submission of this document for examination or
signature by the parties does not constitute an option or offer to lease the
Premises on the terms in this document or a reservation of the Premises in favor
of Tenant. This document is not effective as a lease or otherwise until executed
and delivered by both Landlord and Tenant.
T. Subordination: This Lease is subject and subordinate to ground and
underlying leases, mortgages and deeds of trust (collectively "Encumbrances")
which may now affect the Premises, to any covenants, conditions or restrictions
of record, and to all renewals, modifications, consolidations, replacements and
extensions thereof; provided, however, if the holder or holders of any such
Encumbrance ("Holder") require that this Lease be prior and superior thereto,
within seven (7) days after written request of Landlord to Tenant, Tenant shall
execute, have acknowledged and deliver all documents or instruments, in the form
presented to Tenant, which Landlord or Holder deems necessary or desirable for
such purposes. Landlord shall have the right to cause this Lease to be and
become and remain subject and subordinate to any and all Encumbrances which are
now or may hereafter be executed covering the Premises or any renewals,
modifications, consolidations, replacements or extensions thereof, for the full
amount of all advances made or to be made thereunder and without regard to the
time or character of such advances, together with interest thereon and subject
to all the terms and provisions thereof; provided only, that in the event of
termination of any such lease or upon the foreclosure of any such mortgage or
deed of trust, Holder agrees to recognize Tenant's rights under this Lease as
long as Tenant is not then in default and continues to pay Base Monthly Rent and
additional rent and observes and performs all required provisions of this Lease.
Within ten (10) days after Landlord's written request, Tenant shall execute any
documents required by Landlord or the Holder to make this Lease subordinate to
any lien of the Encumbrance. If Tenant fails to do so, then in addition to such
failure constituting a default by Tenant, it shall be deemed that this Lease is
so subordinated to such Encumbrance. Notwithstanding anything to the contrary in
this Section, Tenant hereby attorns and agrees to attorn to any entity
purchasing or otherwise acquiring the Premises at any sale or other proceeding
or pursuant to the exercise of any other rights, powers or remedies under such
encumbrance.
U. Survival of Indemnities: All
Page 25
<PAGE>
indemnification, defense, and hold harmless obligations of Landlord and Tenant
under this Lease shall survive the expiration or sooner termination of the
Lease.
V. Time: Time is of the essence hereunder.
W. Transportation Demand Management Programs: Should a government agency
or municipality require Landlord to institute TDM (Transportation Demand
Management) facilities and/or programs, Tenant agrees that the cost of TDM
imposed facilities and programs required on the Premises, including but not
limited to employee showers, lockers, cafeteria, or lunchroom facilities, shall
be paid by Tenant. Further, any ongoing costs or expenses associated with a TDM
program which are required for the Premises and not provided by Tenant, such as
an on-site TDM coordinator, shall be provided by Landlord with such costs being
included as additional rent and reimbursed to Landlord by Tenant within thirty
(30) days after demand. If TDM facilities and programs are instituted on a
Project wide basis, Tenant shall pay its proportionate share of such costs in
accordance with Section 8 above.
X. Waiver of Right to Jury Trial: Landlord and Tenant waive their
respective rights to trial by jury of any contract or tort claim, counterclaim,
cross-complaint, or cause of action in any action, proceeding, or hearing
brought by either party against the other on any matter arising out of or in any
way connected with this Lease, the relationship of Landlord and Tenant, or
Tenant's use or occupancy of the Premises, including any claim of injury or
damage or the enforcement of any remedy under any current or future law,
statute, regulation, code, or ordinance.
Page 26
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the day and
year first above written.
Landlord: Sobrato Interests II, Tenant: Entrust Technologies,
a California Limited Partnership a Maryland Corporation
By: /s/ John Michael Sobrato * By: /s/ Dave Wagner
-------------------------------- -------------------------------
Its: General Partner Its: VP & Controller
* By: /s/ Jay D. Kendry
---------------------
Its: VP, Legal Affairs
* NOTE: This lease must be signed by two (2) officers of such corporation: one
being the chairman of the board, the president, or a vice president, and the
other being the secretary, an assistant secretary, the chief financial officer
or an assistant treasurer. If one (1) individual is signing in two (2) of the
foregoing capacities, that individual must sign twice; once as one officer and
again as the other officer and in such event, Tenant must deliver to Landlord a
certified copy of a corporate resolution authorizing the signatory to execute
this Lease.
Page 27
<PAGE>
EXHIBIT "A" - Premises & Building
Page 28
<PAGE>
EXHIBIT "B" - Draft Letter of Credit
Page 29
<PAGE>
EXHIBIT "C" - Building Shell Definition
1. Building Structure
(a) Foundations including footings, grade beams, or other building foundation
components required to support the Building structure.
(b) Five inch (5") thick concrete slab on grade with welded wire mesh and any
other reinforcing or structural connections that may be necessary or required as
specified by structural engineer.
(c) Complete structural framing system comprised of rolled steel beams, columns,
and braced-frame steel construction with corrugated metal deck and concrete
fill, all members required by code to be fireproofed. Upper floor systems
provide a minimum of 3" concrete over metal deck and are designed for an 80 lb.
live load plus 20 lb. partition load. Structural framing will include
intermediate beams for HVAC units at the roof, and for major shafts on each
floor.
(d) Exterior Building skin consisting of performance glass with aluminum
framing, GFRC panels, and metal panels. All exterior doors, door closer and
locking devices as necessary.
(e) Four (4) ply built up roofing by Owens-Corning, John Manville, or equal and
all flashings over a perlite board and corrugated metal deck roof assembly.
Title 24 code required roof insulation is included.
(f) Exterior painting of all non-finished metals and caulking of all exterior
joints.
(g) Two (2) concrete pan-filled stair sets at each end of the Building
perimeter.
(h) Riser for Building sprinkler system (no sprinkler grid or drops).
2. Sitework
(a) All work outside the Building perimeter walls shall be considered site work
for the Building Shell and shall include asphalt concrete paving, surface
parking for approximately 260 cars, landscaping,
Page 30
<PAGE>
landscape irrigation, storm drainage, utility service laterals, curbs, gutters,
sidewalks, retaining walls, planters, trash enclosures, parking lot and
landscape lighting and other exterior lighting per code.
(b) Paving sections for automobile and truck access shall be according to the
Geologic Soils Report.
(c) All parking lot striping to include handicap spaces and signage.
(d) Underground site storm drainage system shall be connected to the city storm
system main.
3. Plumbing
(a) Underground sanitary sewer laterals connected to the city sewer main in the
street and stubbed to the core of the Building.
(b) Domestic water mains connected to the city water main in the street and
stubbed to the Building.
(c) Roof drain leaders and downspouts piped and connected to the site storm
drainage system.
(d) Gas lines connected to the city or public utility mains and run to gas
meters adjacent to, and in close proximity to the Building. Meter supplied by
utility company.
4. Electrical
(a) A primary and secondary electrical service from the street to the Building
electrical room limited to underground conduit, pull-string, and transformer
pad. Transformer supplied by utility company.
(b) Two 4" underground conduit from the street to the Building for telephone
trunk lines by Pacific Bell.
(c) An electrically operated landscape irrigation system, with controller, that
is a complete and functioning system.
(d) Underground conduit with pull-string from the Building to the main fire
protection system post
Page 31
<PAGE>
indicated valve (PIV) for installation of supervisory alarm wiring.
6. General
(a) All construction shall conform to State and Local Building Codes, Title 24
Regulations, and shall be ADA Compliant.
All other costs shall be deemed Tenant Improvements.
Page 32
<PAGE>
EXHIBIT "D" - Shell Plans and Specifications
(sheet references attached)
Page 33
<PAGE>
EXHIBIT "E" - Tenant Improvement Plans and Specifications
(sheet references to be attached)
Page 34
<PAGE>
EXHIBIT "F" - Building Core Improvements
Page 35