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EXHIBIT 10.13
STANDARD OFFICE LEASE
THIS LEASE is made and entered into as of this nineteenth day of
September, 1996 by and between PACIFIC CORPORATE TOWERS LLC, a Delaware limited
liability company ("Landlord"), and HEALTH MANAGEMENT SYSTEMS INC., a New York
corporation, and HEALTH CARE MICROSYSTEMS, INC., a California corporation
(collectively, "Tenant").
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the Premises described as Suite No. 600 on the sixth (6th) floor and Suite No.
700 on the seventh (7th) floor in the building ("Building") whose address is 000
X. Xxxxxxxxx Xxxx., Xx Xxxxxxx, Xxxxxxxxxx, as designated on the plan attached
hereto and incorporated herein as Exhibit "A" (the "Premises") of the project
consisting of the building(s), parking structure(s), land and any other land or
improvements surrounding the buildings which are designated from time to time by
Landlord as appurtenant to or servicing the building(s) (the "Project"), now
known as Pacific Corporate Towers, for the term and upon the terms and
conditions hereinafter set forth, and Landlord and Tenant hereby agree as
follows:
ARTICLE 1
BASIC LEASE PROVISIONS
1.1 Term.
(a) Scheduled Occupancy Date. December 15, 1996, subject to
Article 2.1 hereof and Paragraph 7.0 of the Work Letter Agreement attached as
Exhibit "C".
(b) Scheduled Commencement Date. June 15, 1997, subject to
Article 2.2.
(c) Scheduled Expiration Date. June 14, 2007, subject to
Article 2.2.
1.2 Rentable Square Footage. Thirty-three Thousand Four Hundred
Forty-five (33,445) consisting of Twenty-three Thousand Eight Hundred Sixty
(23,860) rentable square feet in Suite No. 700, and Nine Thousand Five Hundred
Eighty-five (9,585) in Suite No. 600, subject to Article 3.1.
1.3 Basic Rental.
Lease Month Base Annual Rent Monthly Installment
----------- ---------------- -------------------
1 - 60 $541,809.00 $45,150.75
61 - 120 $622,077.00 $51,839.75
1.4 Base Year. 1997
1.5 Tenant's Proportionate Share. Three percent (3%)
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1.6 Security Deposit. None.
1.7 Permitted Use. General Office.
1.8 Broker. CB Commercial Real Estate Group, Inc. for Landlord and
Tenant.
1.9 Parking Spaces. Ninety-five (95) unreserved and thirty-two (32)
reserved parking spaces subject to the terms and conditions of Article 23. If
Tenant expands the Premises in accordance with Article 33, Tenant shall be
entitled to use four (4) additional parking spaces per each additional one
thousand (1,000) rentable square feet added to the Premises.
1.10 Parking Charge. None during the initial ten (10) year term,
subject to Article 23.
1.11 Tenant Address Prior to Lease Commencement Date. 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000
ARTICLE 2
TERM
2.1 Early Occupancy. Tenant shall have the right to occupy the Premises
for a six (6) month period prior to the Commencement Date ("Early Occupancy
Period") commencing upon the expiration of Tenant's Fixturization Period (as
defined in the Work Letter Agreement). Tenant's occupancy of the Premises during
the Early Occupancy Period shall be without payment of Basic Rental and Tenant's
Proportionate Share of Direct Costs as determined below, but shall otherwise be
subject to all the terms and conditions of this Lease.
2.2 Lease Commencement. The term of this Lease ("Lease Term") shall
commence ("Commencement Date") on the date that is six (6) months after the
first day of the Early Occupancy Period. The term of this Lease shall expire,
unless earlier terminated, on the date that is one (1) day prior to the tenth
(10th) anniversary of the Commencement Date.
2.3 Possession. Subject to and upon approval of the Final Working
Drawings and Specifications and Work Cost Estimate by the parties pursuant to
the Work Letter Agreement, Landlord shall diligently construct the Tenant
Building Standard Work in the Premises. If Landlord is unable to deliver
possession of the Premises to Tenant on or before the Scheduled Occupancy Date,
Landlord shall not be subject to any liability for its failure to do so, and
such failure shall not affect the validity of this Lease nor the obligations of
Tenant hereunder, but the Early Occupancy Period shall commence in accordance
with Article 2.1 and the Lease Term shall commence in accordance with Article
2.2. At any time during the Lease Term, Landlord may deliver to Tenant a notice
executed by Landlord in the form as set forth in Exhibit "D", attached hereto,
which Tenant shall execute and return to Landlord within five (5) business days
of receipt thereof.
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2.4 Right to Terminate. Subject to compliance with the terms and
conditions contained in this Article 2.4, Tenant shall have the right to
terminate this Lease as of the end of the eighty-fourth (84th) month of the
Lease Term ("Termination Right"). Tenant may exercise the Termination Right by
giving Landlord written notice of such termination not later than the last day
of the seventy-eighth (78th) month of the Lease Term. As consideration for the
early termination of this Lease, Tenant shall pay to Landlord, concurrently with
delivery of its notice of exercise of the Termination Right, an amount equal to
("Termination Payment"): (i) the unamortized tenant improvement costs and
leasing commissions incurred by Landlord in connection with this Lease; plus
(ii) plus the amount of One Hundred Fifty-five Thousand Five Hundred Nineteen
Dollars and Twenty-five Cents ($155,519.25). For purposes of determining the
Termination Payment, the Work Cost (as defined in the Work Letter Agreement)
incurred by Landlord in connection with the Tenant Building Standard Work
constructed by Landlord for Tenant in accordance with the Work Letter Agreement
and the leasing commissions paid to the brokers identified in Article 1.8 of the
Basic Lease Provisions shall be amortized over the ten (10) year Lease Term.
Landlord shall give Tenant written notice of the Termination Payment within ten
(10) days after Tenant's written request therefor. Tenant's failure to exercise
the Termination Right and to concurrently pay the Termination Payment prior to
the end of the seventy-eighth (78th) month of the Lease Term shall be deemed
Tenant's waiver of the Termination Right and Tenant shall have no further right
to terminate the Lease pursuant to this Article 2.4. If Tenant timely exercises
the Termination Right and concurrently pays the Termination Payment, this Lease
shall terminate at the end of the eighty-fourth (84th) month of the Lease Term
and Tenant shall surrender and vacate the Premises in accordance with Article 29
hereof prior to such date. If a default by Tenant exists under this Lease on the
date of the delivery of Tenant's notice of exercise of the Termination Right to
Landlord, then such notice shall be of no force and effect, and Tenant shall
have no right to exercise the Termination Right; provided, however, that if
Tenant cures such default and again gives notice of exercise of the Termination
Right not later than the last day of the seventy-eighth (78th) month of the
Lease Term, such subsequent notice shall be effective. If a default by Tenant
beyond any applicable cure period exists under this Lease at any time after
Tenant exercises the Termination Right, then Landlord may at its sole discretion
elect to have Tenant's exercise of the Termination Right to be of no force and
effect, in which case, Landlord may apply the Termination Payment to the Basic
Rental and Additional Rent next accruing and this Lease shall continue and
expire at the end of the Lease Term.
ARTICLE 3
RENTAL
3.1 Basic Rental. Tenant agrees to pay to Landlord during the term
hereof, at Landlord's office or to such other person or at such other place as
directed from time to time by written notice to Tenant from Landlord, the
initial monthly and annual sums as set forth in Article 1.3 of the Basic Lease
Provisions, payable in advance on the first day of each calendar month, without
demand, setoff or deduction, and in the event this Lease commences or the date
of expiration of this Lease occurs other than on the first day or last day of a
calendar month, the rent for such month shall be prorated. Notwithstanding the
foregoing, Tenant shall pay to Landlord concurrently with the execution of this
Lease the monthly installment of Basic Rental
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due for the first month of the Lease. Basic Rental shall be subject to increase
from time to time pursuant to the subsequent provisions of this Article 3.
Landlord shall cause the rentable square footage of the sixth (6th)
floor of the Premises to be measured by Pace Compumetrics using the modified
BOMA standard. Landlord shall cause Pace Compumetrics to certify to both
Landlord and Tenant the rentable square footage of the sixth (6th) floor of the
Premises using such method. The rentable square footage of the sixth (6th) floor
of the Premises as measured by Pace Compumetrics shall be conclusive on the
parties. Upon receipt of such certification, the monthly Basic Rental set forth
in Article 1.C of the Basic Lease Provisions shall be adjusted to be equal to
the product obtained by multiplying One Dollar and Thirty-five Cents ($1.35) for
each rentable square foot in the Premises for the first sixty (60) months of the
Lease Term and One Dollar and Fifty-five Cents ($1.55) for each rentable square
foot in the Premises during the last sixty (60) months of the Lease Term.
3.2 Increase in Costs. The term "Base Year" means the calendar year set
forth in Article 1.4 of the Basic Lease Provisions. If, in any calendar year
during the term of this Lease commencing with the calendar year immediately
after the Base Year (each such year a "Comparison Year"), (i) the "Tax Costs"
(as hereinafter defined) paid or incurred by Landlord shall be higher than the
Tax Costs for the Base Year, (ii) the "Operating Costs" (as hereinafter defined)
paid or incurred by Landlord shall be higher than the Operating Costs for the
Base Year, or (iii) the "Insurance Costs" (as hereinafter defined) paid or
incurred by Landlord shall be higher than the Insurance Costs for the Base Year,
Tenant shall pay Landlord as Additional Rent Tenant's Proportionate Share (as
provided in Article 1.5 of the Basic Lease Provisions) of such increase in the
amount by which the respective Tax Costs, Operating Costs and Insurance Costs,
paid or incurred by Landlord in such Comparison Year exceed the respective Tax
Costs, Operating Costs and Insurance Costs paid or incurred by Landlord for the
Base Year. Notwithstanding the foregoing, Tenant's Proportionate Share of the
increase in Controllable Costs (as defined below) due and owing Landlord in any
year during the Lease Term shall not increase by more than five percent (5%)
from the previous Comparison Year or Base Year, as applicable. In the event
either the Premises and/or the Project is expanded or reduced, then Tenant's
Proportionate Share shall be appropriately adjusted, and as to the calendar year
in which such change occurs, Tenant's Proportionate Share for such year shall be
determined on the basis of the number of days during that particular calendar
year that each such Tenant's Proportionate Share was in effect. In the event
this Lease shall terminate on any date other than the last day of a calendar
year, Tenant's Proportionate Share of Tax Costs, Operating Costs and Insurance
Costs for such calendar year in which this Lease terminates shall be prorated on
the basis of the relationship which the number of days which have elapsed from
the commencement of said calendar year to and including said date on which this
Lease terminates bears to three hundred sixty (360). Any and all amounts due and
payable by Tenant pursuant to Articles 3.2, 3.3 and 3.4 hereof shall be deemed
"Additional Rent" and Landlord shall be entitled to exercise the same rights and
remedies upon default in these payments.
3.3 Definitions. As used herein, the following terms shall have the
following meanings:
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(a) "Tax Costs" shall mean any and all real estate taxes and
other similar charges on real property or improvements, assessments, water and
sewer charges, and all other charges assessed or levied upon the Project and
appurtenances thereto and the parking or other facilities thereof, or the real
property (the "Property") thereunder (collectively the "Real Property") or
attributable thereto or on the rents, issues or income received or derived
therefrom which are assessed or levied by the United States, the State of
California or any local government authority or agency or any political
subdivision thereof, and shall include Landlord's reasonable legal fees, costs
and disbursements incurred in connection with proceedings for reduction of Tax
Costs or any part thereof, provided, however, if at any time after the date of
this Lease the methods of taxation now prevailing shall be altered so that in
lieu of or as a supplement to or a substitute for the whole or any part of any
Tax Costs, there shall be assessed or levied (a) a tax, assessment, levy,
imposition or charge wholly or partially as a net income, capital or franchise
levy or otherwise on the rents, issues, profits or income derived therefrom, or
(b) a tax, assessment, levy (including but not limited to any municipal, state
or federal levy), imposition or charge measured by or based in whole or in part
upon the real property and imposed upon Landlord, or (c) a license fee measured
by the rent payable under this Lease, then all such taxes, assessments or levies
or the part thereof so measured or based, shall be deemed to be included in the
term "Tax Costs". Notwithstanding the foregoing, Tax Costs shall not include any
federal or state income tax levied upon Landlord or the rents derived from the
Project except to the extent such income taxes are imposed in lieu of or as a
substitute for any of the Tax Costs described in the foregoing sentence.
Notwithstanding anything to the contrary herein, Tenant shall not be required to
pay its Proportionate Share of any increase in Tax Costs resulting from a sale
of the Project at any time during the first sixty (60) months of the Lease Term.
(b) "Operating Costs" shall mean all costs, expenses and amounts of
every kind and nature incurred by Landlord in connection with the maintenance,
operation, replacement, ownership and repair of the Project, the equipment,
adjacent walks, malls and landscaped and common areas and the parking structure,
areas and facilities of the Project, including, but not limited to, salaries,
wages, medical, surgical and general welfare benefits and pension payments,
payroll taxes, fringe benefits, employment taxes, workers' compensation,
uniforms and dry cleaning thereof for all persons who perform duties connected
with the operation, maintenance and repair of the Project, its equipment and the
adjacent walks and landscaped areas, including janitorial, gardening, security,
parking, operating engineer, elevator, painting, plumbing, electrical,
carpentry, heating, ventilation, air conditioning, window washing, hired
services (but excluding persons performing services not uniformly available to
or performed for the benefit of substantially all building tenants), a
reasonable allowance for depreciation of the cost of acquiring or the rental
expense of personal property used in the maintenance, operation and repair of
the Project, accountant's fees incurred in the preparation of rent adjustment
statements, reasonable legal fees incurred for the benefit of the Project, real
estate tax consulting fees, personal property taxes on property used in the
maintenance and operation of the Project, capital expenditures incurred to
effect economies of operation and capital expenditures required by government
regulations, laws, or ordinances determined in accordance with generally
accepted accounting principles as applied to real estate industry standards; the
cost of all charges for electricity, gas, water and other utilities furnished to
the Project, including any taxes thereon; the cost of all building and cleaning
supplies and materials; the cost of all charges for cleaning, maintenance and
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service contracts and other services with independent contractors (including
property management fees); and license, permit and inspection fees relating to
the Project. In the event, during any calendar year, the Project is less than
one hundred percent (100%) occupied at all times, the Operating Costs shall be
adjusted in accordance with real estate industry standards to reflect the
Operating Costs of the Project as though one hundred percent (100%) occupied at
all times, and the increase or decrease in rent shall be based upon such
Operating Costs as so adjusted. Operating Costs shall also include all
management fees. Landlord shall not, in any subsequent year, add any categories
of Operating Costs that were not included within the Base Year; provided,
however, that Landlord may change the name of the categories under which it
allocates Operating Costs from time to time. Landlord shall have the right, from
time to time, to equitably allocate some or all of the Operating Costs among
different tenants of the Project (i.e. office space and retail space tenants of
the Project).
"Operating Costs" shall not include any of the following: (i) any
ground lease rental, (ii) costs incurred by Landlord with respect to goods and
services (including utilities) furnished to tenants to the extent that Landlord
is reimbursed directly for the cost of such service by such tenants, (iii) costs
incurred by Landlord for the repair of damage to the Building or Project to the
extent of insurance proceeds received by Landlord for such costs; (iv) costs,
including permit, license and inspection costs, incurred with respect to the
design, planning, construction and installation of tenant improvements for new
tenants in the Project, (v) leasing commissions, attorneys' fees and other costs
in connection with leasing space in the Building or Project or in connection
with disputes with individual tenants, (vi) costs for services provided directly
to specific tenants for which Landlord is reimbursed by such tenants, (vii)
interest, points, fees, and other costs of debt service on any financing
encumbering the Building, Project or land on which is the Project is situated,
(viii) advertising expenses; (ix) any compensation paid to clerks, attendants or
other persons in commercial (for profit) concessions operated by Landlord in the
Project, and (x) tax penalties or interest incurred as a result of Landlord's
failure to pay any Tax Cost(s) prior to the delinquency date therefor.
(c) "Insurance Costs" shall mean the cost of all charges for
fire and extended coverage, commercial liability and all other insurance for the
Project required to be carried by Landlord under the Lease or now or hereafter
maintained by Landlord with respect to the Project.
(d) "Direct Costs" as used herein shall mean the Tax Costs,
Operating Costs, and Insurance Costs.
(e) "Controllable Costs" shall mean costs incurred by Landlord
for landscape, maintenance, janitorial, security and other services provided to
the Building or Project by third party service providers.
3.4 Determination of Payment.
(a) Landlord shall, prior to the commencement of each
Comparison Year, furnish to Tenant a written estimate showing in reasonable
detail Landlord's estimated Direct Costs for the next following Comparison Year
and the amount of Tenant's Proportionate Share of
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the increase in Tax Costs, Operating Costs and Insurance Costs appropriately
prorated on a monthly basis for such Comparison Year. Thereafter, on each
monthly rental payment date, Tenant shall pay to Landlord the monthly amount of
Tenant's Proportionate Share of the estimated increase in Direct Costs as shown
in said written estimate. Landlord reserves the right to revise any estimate of
Direct Costs if actual or projected Tax Costs, Operating Costs or Insurance
Costs show an increase or decrease from any earlier estimate for the same
Comparison Year. Landlord shall deliver such revised estimate to Tenant together
with a written explanation of the actual or projected increase in Tax Costs,
Operating Costs or Insurance Costs at any time during the Comparison Year, and
Tenant shall commence payment of such estimated amount on the next monthly
rental payment as shown in the revised estimate. Neither Landlord's failure to
deliver nor the late delivery of such estimate shall constitute a default by
Landlord hereunder or a waiver of Landlord's right to receive Tenant's
Proportionate Share of the estimated increase in Direct Costs and Tenant shall
continue to pay on the basis of the most recent estimate until Landlord delivers
a new estimate of Direct Costs to Tenant. Within one hundred eighty (180)
calendar days following the close of each Comparison Year during the term
hereof, Landlord shall endeavor to furnish to Tenant a written statement (the
"Reconciliation") showing in reasonable detail Landlord's actual Tax Costs,
Operating Costs and Insurance Costs for the relevant Comparison Year, together
with a full statement of any adjustments necessary to reconcile any sums paid
(or credited) hereunder as Tenant's Proportionate Share of Tax Costs, Operating
Costs and Insurance Costs during such Comparison Year with those sums actually
payable and due hereunder for such Comparison Year as set forth in the
Reconciliation. If the Reconciliation shows that additional sums are due from
Tenant hereunder, Tenant shall pay such sums to Landlord within thirty (30) days
of receipt of the Reconciliation; provided, however, that if the amount owed by
Tenant is in excess of one (1) monthly installment of Basic Rental, then Tenant
shall pay such additional amount owed to Landlord on the first day of each month
in monthly installments equal to the then current monthly installment of Basic
Rental until such time as said additional sum is paid in full. If the
Reconciliation shows that a credit is due Tenant, such credit shall be credited
against the next sums becoming due from Tenant hereunder, unless Landlord's
estimate of Tenant's Proportionate Share of Tax Costs, Operating Costs and
Insurance Costs for the next calendar year is zero (0), in which case, Landlord
shall pay the amount of the credit due to Tenant within thirty (30) days after
the date of such Reconciliation. Notwithstanding that the term of this Lease has
expired and Tenant has vacated the Premises, Tenant shall pay to Landlord any
additional sums due Landlord and Landlord shall rebate to Tenant the amount of
any credit due Tenant, as set forth in the Reconciliation for the Comparison
Year in which the Lease Term expired.
(b) In the event of any dispute as to any Additional Rental
due hereunder, Tenant shall have the right after reasonable notice and at
reasonable times to inspect Landlord's accounting records at Landlord's
accounting office and if, after such inspection, Tenant still disputes such
Additional Rental, a certification as to the proper amount shall be made by an
independent certified public accountant. Tenant agrees to pay the cost of such
certification unless it is subsequently determined that Landlord's original
statement was in error to Tenant's disadvantage by more than five percent (5%)
of the Direct Costs. As a condition precedent to its exercise of its rights of
dispute aforesaid, Tenant shall timely pay to Landlord all amounts set forth in
the statement which Tenant wishes to dispute.
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ARTICLE 4
INTENTIONALLY OMITTED
ARTICLE 5
HOLDING OVER
Should Tenant, with Landlord's written consent, hold over after
termination of this Lease, Tenant shall become a tenant from month to month only
upon each and all of the terms herein provided as may be applicable to a month
to month tenancy and any such holding over shall not constitute an extension of
this Lease. During such holding over, Tenant shall pay in advance, monthly, a
rental rate equal to one hundred twenty-five percent (125%) of the Basic Rental
in effect for the last month of the Lease Term, plus all other payments required
to be made by Tenant hereunder including but not limited to Tenant's
Proportionate Share of Direct Costs. If Tenant holds over after termination of
this Lease without the express written consent of Landlord, Tenant shall become
a tenant at sufferance only, at a rental rate equal to one hundred twenty-five
percent (125%) of the Basic Rental in effect upon the date of such termination
(prorated on a daily basis) for the first two (2) months of such holding over,
and thereafter at a rental rate equal to one hundred fifty percent (150%) of the
Basic Rental in effect upon the date of such termination (prorated on a daily
basis), and otherwise subject to the terms, covenants and conditions herein
specified so far as applicable. Acceptance by Landlord of rent after such
termination shall not constitute a hold over hereunder or result in a renewal.
If Tenant holds over and fails to surrender the Premises upon the expiration or
termination of this Lease, Tenant shall indemnify, defend and hold Landlord
harmless from all costs, losses, expenses or liabilities, including without
limitation, costs and attorney fees proximately caused by such holding over and
failure to surrender.
ARTICLE 6
PERSONAL PROPERTY TAXES
Tenant shall pay, prior to delinquency, all taxes assessed against or
levied upon fixtures, furnishings, equipment and all other personal property of
Tenant located in the Premises. In the event any or all of Tenant's fixtures,
furnishings, equipment and other personal property shall be assessed and taxed
with property of Landlord, Tenant shall pay to Landlord its share of such taxes
within ten (10) days after delivery to Tenant by Landlord of a statement in
writing setting forth the amount of such taxes applicable to Tenant's property.
Tenant shall assume and pay to Landlord at the time of paying Basic Rental any
excise, sales, use, rent, occupancy, garage, parking, gross receipts or other
taxes (other than net income taxes) which may be imposed on or on account of
letting of the Premises or the payment of Basic Rental or any other sums due or
payable hereunder, and which Landlord may be required to pay or collect under
any law now in effect or hereafter enacted. Tenant shall pay directly to the
party or entity entitled thereto all business license fees, gross receipts taxes
and similar taxes and impositions which may from time to time be assessed
against or levied upon Tenant, as and when the same become due and before
delinquency. Notwithstanding anything to the contrary contained herein, any sums
payable by Tenant under this Article 6 shall not be included in the computation
of "Tax Costs."
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ARTICLE 7
USE
Tenant shall use and occupy the Premises only for the use set forth in
Article 1.7. of the Basic Lease Provisions and shall not use or occupy the
Premises or permit the same to be used or occupied for any other purpose without
the prior written consent of Landlord, and Tenant agrees that it will use the
Premises in such a manner so as not to interfere with or infringe the rights of
other tenants in the Project. Tenant shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances and governmental regulations
or requirements now in force or which may hereafter be in force relating to or
affecting the condition, use or occupancy of the Premises or the Project,
including all requirements for alterations, improvements or structural changes
required by Tenant's specific use and occupancy of the Premises. Tenant shall
not do or permit to be done anything which will invalidate or increase the cost
of any fire and extended coverage insurance policy covering the Project and/or
the property located therein and Tenant shall comply with all rules, orders,
regulations and requirements of any organization which sets out standards,
requirements or recommendations commonly referred to by major fire insurance
underwriters. Tenant shall promptly upon demand reimburse Landlord for any
additional premium charges for such policy by reason of Tenant's failure to
comply with the provisions of this Article.
ARTICLE 8
CONDITION OF PREMISES
Except for the work to be performed by Landlord pursuant to the Work
Letter Agreement attached hereto as Exhibit "C," Tenant hereby agrees that the
Premises shall be taken "as is", "with all faults", "without any representations
or warranties", and Tenant hereby agrees and warrants that it has inspected the
condition of the Premises and the suitability of same for Tenant's purposes, and
Tenant does hereby waive and disclaim any objection to, cause of action based
upon, or claim that its obligations hereunder should be reduced or limited
because of the condition of the Premises or the Project or the suitability of
same for Tenant's purposes. Tenant acknowledges that neither Landlord nor any
agent nor any employee of Landlord has made any representations or warranty with
respect to the Premises or the Project or with respect to the suitability of
either for the conduct of Tenant's business. The taking of possession of the
Premises by Tenant shall conclusively establish that the Premises and the
Project were at such time in satisfactory condition. Tenant hereby waives and
releases its right to make repairs at Landlord's expense pursuant to Sections
1941 and 1942 of the Civil Code of California or under any similar law, statute
or ordinance now or hereafter in effect. If during the term any asbestos is
discovered in the Premises (other than in the Tenant Building Standard Work or
in personal property, fixtures or other items brought into the Premises by
Tenant), and removal of such asbestos is required by a governmental agency to
comply with all applicable Environmental Laws (as defined in Section 28.4), then
Landlord shall remove such asbestos at its sole cost and expense; provided,
however, Landlord shall have no obligation to remove any asbestos in the
Premises to the extent Tenant's acts or omissions gave rise to the requirement
to remove such asbestos to comply with Environmental Laws, nor shall Landlord
have any obligation to remove any asbestos which is present in the Tenant
Building Standard Work or in any personal property,
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fixtures or other items brought into the Premises by Tenant. The cost of any
asbestos removal undertaken by Landlord in accordance with the foregoing
sentence shall not be deducted from the Allowance (as defined in the Work Letter
Agreement).
ARTICLE 9
REPAIRS AND ALTERATIONS
Tenant shall keep the Premises in good condition and repair. All damage
or injury to the Premises or the Project caused by the act or negligence of
Tenant, its employees, agents or visitors, guests, invitees or licensees shall
be promptly repaired by Tenant, at its sole cost and expense, to the
satisfaction of Landlord. Landlord may make any repairs which are not promptly
made by Tenant and charge Tenant for the cost thereof, which cost shall be paid
by Tenant within ten (10) days from invoice from Landlord. Landlord shall
maintain the common areas of the Project and the cost thereof shall be an
Operating Cost. Tenant shall be responsible for the design and function of all
non-standard improvements of the Premises, whether or not installed by Landlord
at Tenant's request. Tenant waives all rights to make repairs to the Premises at
the expense of Landlord, or to deduct the cost thereof from the rent. Tenant
shall make no alterations, changes or additions in or to the Premises without
Landlord's prior written consent, which shall not be unreasonably withheld, and
then only by contractors or mechanics who shall be subject to the prior written
approval of Landlord, which shall not be unreasonably withheld, and further
subject to the approval by Landlord of fully detailed and dimensioned plans and
specifications pertaining to the work in question, to be prepared and submitted
by Tenant at its sole cost and expense. Notwithstanding the foregoing, Tenant
may make non-structural or decorative alterations which do not affect the
Building systems or the Building shell in an amount not more than $20,000 during
the term of the Lease without obtaining Landlord's prior written consent but
otherwise subject to all of the terms and conditions of this Article 9,
including the requirement that Tenant deliver plans and specifications for such
work to Landlord prior to the commencement thereof. Tenant shall at its sole
cost and expense obtain all necessary approvals and permits pertaining to any
work. If Landlord, in approving any work, specifies a commencement date
therefor, Tenant shall not commence any work prior to such date. Tenant hereby
indemnifies and agrees to defend and hold Landlord free and harmless from all
liens and claims of lien, and all other liability, claims and demands arising
out of any work done or material supplied to the Premises by or at the request
of Tenant. If permitted alterations, changes, or additions are made, they shall
be made at Tenant's expense and shall be and become the property of Landlord,
except that Landlord may, by written notice to Tenant given at least thirty (30)
days prior to the end of the Lease Term, require Tenant at Tenant's expense to
promptly both remove any such alteration, change or addition and to repair any
damage to the Premises caused by such removal and restore the Premises to the
condition that existed prior to such alteration in accordance with all
applicable laws, statutes, building codes and regulations in effect as of the
date of such restoration. Notwithstanding the foregoing, Tenant shall have no
obligation to remove the Tenant Building Standard Work. With regard to repairs,
alterations or any other work arising from or related to this Article 9,
Landlord shall be entitled to receive an administrative/supervision fee based on
the total cost of all (i) work performed; (ii) materials, plans and drawings
furnished; and (iii) all other costs and expenses related to such repairs,
alterations or other work ("Total Alteration Cost"). If the total Alteration
Cost is Ten Thousand
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Dollars ($10,000) or less, the administrative/supervision fee shall be fifteen
percent (15%) of such amount. If the Total Alteration Cost exceeds Ten Thousand
Dollars ($10,000), the administrative/supervision fee shall be five percent (5%)
of such amount. The foregoing administrative/supervision fee shall not be
applicable to any tenant improvements constructed by Landlord in the Premises
either pursuant to the Work Letter Agreement or pursuant to Article 33 hereof.
ARTICLE 10
LIENS
Tenant shall keep the Premises, Building and Project free from any
mechanics' liens, vendors liens or any other liens arising out of any work
performed, materials furnished or obligations incurred by Tenant (but the
foregoing obligation shall not extend to work performed, materials furnished or
obligations incurred by Landlord), and agrees to defend, indemnify and hold
harmless Landlord from and against any such lien or claim or action thereon,
together with costs of suit and reasonable attorneys' fees incurred by Landlord
in connection with any such claim or action. Before commencing any work of
alteration, addition or improvement to the Premises, Tenant shall give Landlord
at least ten (10) business days' written notice of the proposed commencement of
such work (to afford Landlord an opportunity to post appropriate notices of
non-responsibility) and, if required by Landlord in writing, shall secure, at
Tenant's own cost and expense, a completion and lien indemnity bond,
satisfactory to Landlord, for said work. In the event that there shall be
recorded against the Premises or the Building or the property of which the
Premises is a part any claim or lien arising out of any such work performed,
materials furnished or obligations incurred by Tenant and such claim or lien
shall not be removed or discharged or bonded and removed within ten (10)
business days of filing, Landlord shall have the right but not the obligation to
pay and discharge said lien without regard to whether such lien shall be lawful
or correct or to require that Tenant deposit with Landlord in cash, lawful money
of the United States, one hundred fifty percent (150%) of the amount of such
claim, which sum may be retained by Landlord until such claim shall have been
removed of record or until judgment shall have been rendered on such claim and
such judgment shall have become final, at which time Landlord shall have the
right to apply such deposit in discharge of the judgment on said claim and any
costs, including attorneys' fees incurred by Landlord, and shall remit the
balance thereof to Tenant. If Landlord pays and discharges said lien, then
Tenant shall reimburse Landlord for all costs and expenses incurred by Landlord
in discharging such lien, including attorneys' fees, within ten (10) business
days after the date of receipt of Landlord's invoice therefor.
ARTICLE 11
PROJECT SERVICES
11.1 Building Hours. Landlord agrees to furnish to the Premises, from
8:00 a.m. to 6:00 p.m. Mondays through Fridays and 9:00 a.m. to 1:00 p.m. on
Saturdays, local and national holidays excepted, air conditioning and heat,
elevator service, electric current for normal lighting and fractional horsepower
office machines and, on the same floor as the Premises, water for lavatory and
drinking purposes, all in such reasonable quantities as in the reasonable
judgment of Landlord is necessary for the comfortable occupancy of the Premises.
Janitorial and maintenance
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services will be furnished five (5) days per week. Such janitorial service shall
be provided in accordance with standards for comparable class "A" office
buildings in the City of El Segundo. The cost of all such services furnished to
the Premises by Landlord shall be an Operating Cost. The current holidays for
the Project are: New Year's Day, Presidents' Day, Memorial Day, the Fourth of
July, Labor Day, Thanksgiving Day and Christmas Day; provided, however, that
Landlord may observe such other holidays from time to time as may be observed by
comparable office building projects in the City of El Segundo. Tenant shall
comply with all rules and regulations which Landlord may reasonably establish
for the proper functioning and protection of the air conditioning, heating,
elevator, electrical and plumbing systems. Landlord shall not be liable for, and
there shall be no rent abatement as a result of, any stoppage, reduction or
interruption of any such services caused by governmental rules, regulations or
ordinances, riot, strike, labor dispute, breakdowns, accidents or necessary
repairs. Except as specifically provided in this Article 11, Tenant agrees to
pay for all utilities and other services utilized by Tenant for all overtime or
additional building services furnished to Tenant not uniformly furnished to all
tenants of the Project at Landlord's expense. Landlord's obligation to render to
the Premises the services set forth in this Article 11 is conditional upon the
payment by Tenant of all sums due under this Lease.
11.2 Utility Use. Tenant shall not without the written consent of
Landlord use any apparatus or device in the Premises, including without
limitation, machines using current in excess of 110 volts, except for
photocopiers and computers that are consistent with general office use, which
will in any way increase the amount of electricity or water usually furnished or
supplied for use of the Premises as general office space; nor connect any
apparatus, machine or device with water pipes or electric current (except
through existing electrical outlets in the Premises), for the purpose of using
electric current or water.
11.3 Excess Electricity Use. If Tenant shall require electric current
in excess of that which Landlord is obligated to furnish under Section 11.1
above, Tenant shall first obtain the consent of Landlord, which Landlord shall
not unreasonably withhold; provided, however, it shall be deemed reasonable for
Landlord to withhold such consent if alterations are required to be made to the
Project's electrical system to provide such additional service or if Landlord
would be unable to offer the same level of electric service to other tenants in
the Building. If Tenant requests such additional electrical current, Landlord
may cause an electric current meter to be installed in the Premises to measure
the amount of electric current consumed in the Premises. The cost of any such
meter and of installation, maintenance and repair thereof shall be paid for by
Tenant and Tenant agrees to pay to Landlord, promptly upon demand therefor by
Landlord, for all such electric current consumed in the Premises or by any such
use as shown by said meter at the rates charged for such service by the local
public utility furnishing the same, plus the actual administrative costs
incurred by Landlord in keeping account of the electric current so consumed.
11.4 Heat Generating Machines. If any lights, machines or equipment
(including but not limited to computers) are used by Tenant in the Premises
which materially affect the temperature otherwise maintained by the air
conditioning system, or generate substantially more heat in the Premises than
would be generated by the building standard lights and usual fractional
horsepower office equipment, Landlord shall have the right to install any
machinery and
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equipment which Landlord reasonably deems necessary to restore temperature
balance, including but not limited to modifications to the standard air
conditioning equipment, and the cost thereof, including the cost of installation
and any additional cost of operation and maintenance occasioned thereby, shall
be paid by Tenant to Landlord upon demand by Landlord. Landlord shall not be
liable under any circumstances for loss of or injury to property, however
occurring, through or in connection with or incidental to failure to furnish any
of the foregoing.
11.5 After-Hours HVAC. If Tenant requires heating, ventilation and/or
air conditioning during hours other than those hours set forth in Section 11.1
above, Tenant shall give Landlord such advance notice as Landlord shall
reasonably require and shall pay Landlord for the use of such equipment such
charges as Landlord may impose from time to time for such after hours usage. As
of the date of this Lease, the current charge for after-hours heating,
ventilating and air conditioning is Thirty-five Dollars ($35.00) per hour, which
charge is inclusive of Landlord's administrative charges for providing such
service. Landlord agrees that the portion of any after-hours HVAC charge that is
attributable to labor and administrative costs shall not increase during any
calendar year by more than the percentage increase in the Consumer Price Index,
All Urban Consumers-Los Angeles, Long Beach, Anaheim, during such calendar year.
11.6 Recurrent Utility Use. Landlord may impose a reasonable charge for
any utilities or services, including without limitation electric current,
required to be provided by Landlord by reason of any substantial recurrent use
of the Premises other than during the times provided in Section 11.1 above.
ARTICLE 12
RIGHTS OF LANDLORD
Landlord and its agents shall have the right to enter the Premises at
all reasonable times for the purpose of cleaning the Premises, examining or
inspecting the same, serving or posting and keeping posted thereon notices as
provided by law, or which Landlord deems necessary for the protection of
Landlord or the Property, showing the same to prospective tenants or purchasers
of the Project, and for making such alterations, repairs, improvements or
additions to the Premises or to the Project as Landlord may deem necessary or
desirable. Except in an emergency and any entry for cleaning the Premises,
Landlord shall provide Tenant with twenty-four (24) hours notice of its intended
entry. If necessary, Landlord and Tenant shall schedule Landlord's entry for
maintenance, repairs, alterations, or improvements to the Premises at a time
during regular business hours to avoid any unreasonable interference with
Tenant's use of the Premises. If Tenant shall not be personally present to open
and permit an entry into the Premises at any time when such an entry by Landlord
is necessary or permitted hereunder, Landlord may enter by means of a master key
or may enter forcibly, without liability to Tenant except for any failure to
exercise reasonable care for Tenant's property.
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ARTICLE 13
INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY
13.1 Indemnity. Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all claims arising from Tenant's use of the
Premises or from the conduct of its business in the Premises, or from any work
or thing which may be permitted or suffered by Tenant in the Premises or arising
out of the use thereof and shall further indemnify, defend and hold Landlord
harmless from and against any and all claims arising from any breach or default
in the performance of any obligation on Tenant's part to be performed under this
Lease or arising from any negligence of Tenant or any of its agents,
contractors, employees or invitees, patrons, customers or members and from any
and all costs, attorneys' fees, expenses and liabilities incurred in the defense
of any claim or any action or proceeding brought thereon, including negotiations
in connection therewith. Tenant hereby assumes all risk of damage to property or
injury to persons in or about the Premises from any cause, and Tenant hereby
waives all claims in respect thereof against Landlord.
13.2 Exemption of Landlord from Liability. Landlord shall not be liable
for injury to Tenant's business, or loss of income therefrom, or for damage that
may be sustained by the person, goods, wares, merchandise or property of Tenant,
its employees, invitees, customers, agents, or contractors, or any other person
in, on or about the Premises directly or indirectly caused by or resulting from
fire, steam, electricity, gas, water, or rain which may leak or flow from or
into any part of the Premises, or from the breakage, leakage, obstruction or
other defects of the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, light fixtures, or mechanical or electrical systems, whether such
damage or injury results from conditions arising upon the Premises or upon other
portions of the Building or from other sources or places and regardless of
whether the cause of such damage or injury or the means or repairing the same is
inaccessible to Tenant. Landlord shall not be liable to Tenant for any damages
arising from any act or neglect of any other tenant of the building.
Tenant acknowledges that Landlord's election to provide mechanical
surveillance or to post security personnel in the Building is solely within
Landlord's discretion; Landlord shall have no liability in connection with the
decision whether or not to provide such services and Tenant hereby waives all
claims based thereon. Landlord shall not be liable for losses due to theft,
vandalism, or like causes. Tenant shall defend, indemnify, and hold Landlord
harmless from any such claims made by any employee, licensee, invitee,
contractor, agent, or other person whose presence in, on or about the Premises
or the Building is attendant to the business of Tenant.
13.3 Exceptions to Indemnity. The indemnity obligations of Tenant set
forth in this Article 13 shall not extend to any claim, demand, loss, cost or
liability to the extent caused by the gross negligence or willful misconduct of
Landlord.
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ARTICLE 14
INSURANCE
14.1 Tenant's Insurance. Tenant, shall at all times during the Lease
Term and Early Occupancy Period, and at its own cost and expense, procure and
continue in force the following insurance coverage: (i) Commercial General
Liability Insurance with a combined single limit for bodily injury and property
damage of not less than Three Million Dollars ($3,000,000) per occurrence and
Five Million Dollars ($5,000,000) in the annual aggregate, including products
liability coverage if applicable, covering the use of the Premises and the
performance of Tenant of the indemnity agreements set forth in Article 13
hereof; (ii) a policy of standard fire, extended coverage and special extended
coverage insurance (all risks), including a vandalism and malicious mischief
endorsement, sprinkler leakage coverage and earthquake sprinkler leakage where
sprinklers are provided in an amount equal to the full replacement value new
without deduction for depreciation of all fixtures, furniture, and leasehold
improvements installed by or at the expense of Tenant; and (iii) insurance on
all plate or tempered glass in the Premises for the replacement cost of such
glass.
14.2 Form of Policies. The aforementioned minimum limits of policies
shall in no event limit the liability of Tenant hereunder. Such insurance shall
name Landlord and such other persons or firms with insurable interests, as
Landlord specifies from time to time, as additional insureds with an appropriate
endorsement to the policy(s) and shall be with companies having a rating of not
less than A-VIII in Best's Insurance Guide. Tenant shall furnish to Landlord,
from the insurance companies, or cause the insurance companies to furnish,
certificates of coverage. No such policy shall be cancelable or subject to
reduction of coverage or other modification or cancellation except after thirty
(30) days prior written notice to Landlord by the insurer. All such policies
shall be endorsed to agree that Tenant's policy is primary and that any
insurance covered by Landlord is excess and not contributing with any insurance
requirement hereunder. Tenant shall, at least fifteen (15) days prior to the
expiration of such policies, furnish Landlord with renewals or binders. Tenant
agrees that if Tenant does not take out and maintain such insurance or furnish
Landlord with renewals or binders, Landlord may (but shall not be required to)
procure said insurance on Tenant's behalf and charge Tenant the cost thereof,
which amount shall be payable by Tenant upon demand with interest from the date
such sums are expended. Additionally, Tenant shall maintain Worker's
Compensation required by law and shall provide Landlord with evidence of
coverage. Said evidence shall be in the form of a certificate of insurance and
shall provide for Landlord to receive thirty (30) days notice of cancellation
from the insurer.
14.3 Landlord's Insurance. Landlord shall, at Landlord's expense,
procure and maintain at all times during the Lease Term and Early Occupancy
Period, a policy or policies of insurance covering loss or damage to the
Building in the amount of the full replacement cost new without deduction for
depreciation thereof (exclusive of Tenant's trade fixtures, inventory, personal
property and equipment), providing protection against all perils included within
the classification of fire and extended coverage, vandalism coverage and
malicious mischief, sprinkler leakage, water damage, and special extended
coverage on building. Additionally, Landlord may
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(but shall not be required to) carry: (i) Bodily Injury and Property Damage
Liability Insurance and/or Excess Liability Coverage Insurance; (ii) Earthquake
and/or Flood Damage Insurance; or (iii) Rental Income Insurance at its election
or if required by its lender from time to time during the term hereof, in such
amounts and with such limits as Landlord or its lender may deem appropriate. The
costs of all such insurance shall be included in Insurance Costs.
14.4 Waiver of Subrogation. Both parties release each other and their
respective authorized representatives from any claims for damage to any person
or the Premises, and to the fixtures, personal property, improvements, and
alterations of either Landlord or Tenant, in or on the Premises, Building or
Project, that are caused by or result from risks insured against under any
insurance policies carried by the parties and in force at the time of any such
damage. Any policy or policies of fire, extended or similar casualty insurance
which either party obtains in connection with the Premises shall include a
clause or endorsement denying the insurer any rights of subrogation against the
other party to the extent any rights have been waived by the insured prior to
the occurrence of injury of loss.
14.5 Compliance With Law. Tenant agrees that it will not, at any time,
during the Lease Term, carry any stock of goods or do anything in or about the
Premises that will in any way tend to increase the insurance rates upon the
Building. Tenant agrees to pay Landlord forthwith upon demand the amount of any
increase in premiums for insurance against loss by fire that may be charged
during the Lease Term on the amount of insurance to be carried by Landlord on
the Building resulting from the foregoing, or from Tenant doing any act in or
about said Premises that does so increase the insurance rates, whether or not
Landlord shall have consented to such act on the part of Tenant. If Tenant
installs upon the Premises any electrical equipment which constitutes an
overload of electrical lines of the Premises, Tenant shall at its own expense
make whatever changes are necessary to comply with requirements of the insurance
underwriters and any governmental authority having jurisdiction thereover, but
nothing herein contained shall be deemed to constitute Landlord's consent to
such overloading. Tenant shall, at its own expense, comply with all requirements
of the insurance authority having jurisdiction over the Project necessary for
the maintenance of reasonable fire and extended coverage insurance for the
Premises, including without limitation thereto, the installation of fire
extinguishers or an automatic dry chemical extinguishing system.
ARTICLE 15
ASSIGNMENT AND SUBLETTING
15.1 Prohibition on Assignment. Except as expressly provided in this
Article 15, Tenant shall not and have no power to, either voluntarily or by
operation of law, sell, assign, transfer or hypothecate this Lease, or sublet
the Premises or any part thereof, or permit the Premises or any part thereof to
be occupied by anyone other than Tenant or Tenant's employees without the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
subject to compliance with this Article 15. If Tenant is a corporation, limited
liability company, unincorporated association or partnership, then except as
expressly provided in Section 15.1(h) below, the sale, assignment, transfer or
hypothecation of any stock, membership or other ownership interest in such
corporation, limited liability company, association or partnership in the
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aggregate in excess of twenty-five percent (25%) shall be deemed a prohibited
assignment within the meaning and provisions of this Article 15. Tenant may
transfer its interest pursuant to this Lease upon the following express
conditions:
(a) That the proposed transferee shall be subject to the prior
written consent of Landlord, which consent shall not be unreasonably withheld;
provided, however, without limiting the generality of the foregoing, it shall be
reasonable for Landlord to deny such consent if any of the following are
applicable:
(i) The use to be made of Premises by the proposed
transferee is (A) not generally consistent with the character and nature of all
other tenancies in the Building or Project, (B) a use which conflicts with any
so-called "exclusive" then in favor of, or for any use which is the same as that
stated in any percentage lease to, another tenant of the Building or Project, or
(C) a use which would be prohibited by any other portion of this Lease
(including but not limited to any Rules and Regulations then in effect);
(ii) The character, moral stability, reputation and
financial responsibility of the proposed transferee are not reasonably
satisfactory to Landlord or in any event not at least equal to those which were
possessed by Tenant as of the date of execution of this Lease;
(iii) The transferee is either a governmental agency
or instrumentality thereof;
(iv) The proposed transfer would cause Landlord to be
in violation of another lease or agreement to which Landlord is a party, or
would give an occupant of the Project a right to cancel its lease;
(v) The terms of the proposed transfer will allow the
transferee to exercise a right of renewal, right of expansion, right of first
offer, or other similar right held by Tenant (or will allow the transferee to
occupy space leased by Tenant pursuant to any such right); or
(vi) Either the proposed transferee, or any person or
entity which directly or indirectly, controls, is controlled by, or is under
common control with, the proposed transferee, (i) occupies space in the Project
at the time of the request for consent, (ii) is negotiating with Landlord to
lease space in the Project at such time, or (iii) has negotiated with Landlord
to lease space in the Project during the twelve (12) month period immediately
preceding the request for consent notice from Tenant;
(b) That Tenant shall pay Landlord's standard processing fee
of Five Hundred Dollars ($500) and reasonable attorneys' fees incurred in
connection with the review of the request for consent to the transfer,
regardless of whether Landlord consents thereto;
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(c) That the proposed transferee shall execute an agreement
pursuant to which it shall agree to perform faithfully and be bound by all of
the terms, covenants, conditions, provisions and agreements of this Lease;
(d) That an executed duplicate original of said assignment and
assumption agreement or other transfer on Landlord's then standard form, shall
be delivered to Landlord within five days after the execution thereof. Such
transfer shall not be binding upon Landlord until the delivery thereof to
Landlord and the execution and delivery of Landlord's consent thereto. It shall
be a condition to Landlord's consent to any subleasing, assignment or other
transfer of part or all of Tenant's interest in the Premises (hereinafter
referred to as a "Transfer") that (i) Tenant shall be required to pay Landlord's
standard processing fee referenced in subsection (b) above and reasonable
attorneys' fees and other costs incurred in connection with the review and
execution thereof; (ii) upon Landlord's consent to any Transfer, Tenant shall
pay and continue to pay as Additional Rent over the term of the sublease or
assignment to Landlord fifty percent (50%) of the amount by which (A) the rent
or other sums paid to Tenant as a result of such assignment or subletting less
the amortized cost of any leasehold improvements constructed for such transferee
and brokerage fees incurred by Tenant in connection with the Transfer amortized
over the term of the sublease or assignment exceed (B) the total sums which
Tenant is obligated to pay Landlord under this Lease (prorated to reflect
obligations allocable to that portion of the Premises subject to such Transfer);
(iii) any sublessee of part or all of Tenant's interest in the Premises shall
agree that in the event Landlord gives such sublessee notice that Tenant is in
default under this Lease and that so long as such default continues, such
sublessee shall thereafter make all sublease or other payments directly to
Landlord, which will be received by Landlord without any liability whether to
honor the sublease or otherwise (except to credit such payments against sums due
under this Lease), and any sublessee shall agree to attorn to Landlord or its
successors and assigns at their request should this Lease be terminated for any
reason, except that in no event shall Landlord or its successors or assigns be
obligated to accept such attornment; (iv) any such Transfer and consent shall be
effected on forms, supplied or approved by Landlord and/or its legal counsel;
(v) Landlord may require that Tenant not then be in default hereunder in any
respect; and (vi) Tenant or the proposed subtenant or assignee shall agree to
pay Landlord, upon demand, as additional rent, a sum equal to the additional
costs, if any, incurred by Landlord for maintenance and repair as a result of
any change in the nature of occupancy caused by such subletting or assignment.
If Landlord consents to a requested assignment or sublease, Tenant hereby agrees
that (i) it shall thereupon be deemed, automatically and irrevocably to have
assigned to Landlord as additional security for the performance and observance
of Tenant's obligations and covenants under this Lease, all rent or other sums
received or to be received by Tenant in connection therewith and (ii) Landlord
as assignee may collect such rent or other sums and apply the same toward
Tenant's obligations under this Lease. Notwithstanding the foregoing, Tenant
shall have the right to collect such rent and other sums unless and until Tenant
commits any act of default hereunder. Tenant hereby agrees and acknowledges that
the above conditions imposed upon the granting of Landlord's consent to any
proposed Transfer by Tenant are reasonable. In lieu of giving such consent,
Landlord may, at Landlord's option, elect to terminate this Lease and release
Tenant from any prospective liability under the Lease as to the portion of the
Premises to be sublet or assigned as of the proposed effective date of any
proposed assignment or subletting. Any sale assignment, hypothecation,
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transfer or subletting of this Lease which is not in compliance with the
provisions of this Article 15 shall be void and shall, at the option of
Landlord, terminate this Lease. In no event shall the consent by Landlord to an
assignment or subletting be construed as relieving Tenant, any assignee, or
sublessee from obtaining the express written consent of Landlord to any further
assignment or subletting or as releasing Tenant from any liability or obligation
hereunder whether or not then accrued and Tenant shall continue to be fully
liable therefor. No collection or acceptance of rent by Landlord from any person
other than Tenant shall be deemed a waiver of any provision of this Article 15
or the acceptance of any assignee or subtenant hereunder, or a release of Tenant
(or of any successor of Tenant or any subtenant holding theretofore or
thereafter accruing);
(e) Tenant shall not enter into any sublease or assignment in
which any of the following is applicable:
(i) The determination of the amount of rent is
expressed in whole or in part as a percentage of the income or profits derived
by the tenant or subtenant or assignee from the space leased (other than an
amount based on a fixed percentage or percentages of gross receipts or gross
sales);
(ii) More than ten percent (10%) of rent is expressly
attributable to personal property, determined at the time the personal property
is placed in service and by reference to relative fair market values of the
personal and other property of the tenant, subtenant or assignee (and not by
reference to any allocation contained in the sublease or assignment documents);
or
(iii) Services are expressly required to be rendered
to a tenant or occupant unrelated to subTenant's or assignee's use of the space
and primarily for its convenience and which are other than those usually or
customarily rendered in connection with the rental of space for occupancy only;
(f) In any sublease or assignment in which the amount of rent
is determined in whole or in part by reference to the gross sales or receipts of
the subtenant or assignee such sublease or assignment shall contain a provision
which prohibits subleasing or assigning or if subleasing or assigning is
permitted it shall prohibit the tenant or any successor in interest from
subleasing all or any portion of its leasehold interest for an amount of rent
determined in whole or in part from the income or profits derived by any person
from such interest (other than an amount based in a fixed percentage or
percentages of receipts or sales).
(g) Notwithstanding anything contained in this Article 15, so
long as no default by Tenant then exists under this Lease, and Health Management
Systems, Inc. or a Permitted Transferee is the Tenant under the Lease, Tenant
shall have the right to sublet or assign a portion of the Premises to a
wholly-owned subsidiary or affiliate of Health Care Microsystems, Inc. without
the prior written consent of Landlord but otherwise subject to all of the terms
of this Article 15 except as set forth below; provided, however, that such
sublease or assignment shall not be effective until Tenant has given Landlord at
least thirty (30) days written notice of such
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sublease or assignment, identified the subtenant or assignee, and delivered to
Landlord an executed copy of such sublease or assignment (which shall include an
undertaking by the affiliate to assume, perform and be bound by all of the
obligations of Tenant under the Lease) and such financial information with
respect to the subtenant or assignee as Landlord may reasonably request. In no
event shall such assignment or subletting release Tenant from any liability
under this Lease. Landlord shall not have any right to recapture with respect to
the portion of the Premises subject to such sublease or assignment or to any
"bonus rent" payable to Landlord pursuant to Section 15.1(d)(ii). As used
herein, an "affiliate" shall mean any entity controlling, controlled by or under
common control with Health Care Microsystems, Inc. The rights granted hereunder
may only be transferred or assigned to a Permitted Transferee of Health
Management Systems, Inc. (as defined in Section 15.1(h) below). Any additional
subletting or assignment by the affiliate permitted hereunder shall be subject
to all of the terms and conditions of this Article 15.
(h) Notwithstanding anything contained in this Article 15, so
long as no default by Tenant then exists under this Lease, a transfer by Health
Management Systems, Inc. of all of the stock of Health Care Microsystems, Inc.
either by sale or through merger to or with a person or entity having a net
worth of not less than the net worth of Health Management Systems, Inc. at the
end of 1995, or a transfer of all or substantially all of the stock, membership
interest or assets or a merger of Health Management Systems, Inc. to or with a
person or entity having a net worth of not less than the net worth of Health
Management Systems, Inc. at the end of 1995 shall not be deemed an assignment
requiring the prior written consent of Landlord hereunder, but shall otherwise
be subject to compliance with the following conditions: Tenant shall give
Landlord at least thirty (30) days written notice of such transfer identifying
the person or entity acquiring the stock of Health Care Microsystems, Inc. by
sale or through merger or the transferee of the stock, membership interest, or
assets of Health Management Systems, Inc. or the surviving corporation from a
merger with Health Management Systems, Inc., provide Landlord with such
financial information as Landlord may reasonably require to verify that the
transferee or surviving corporation satisfies the net worth requirements set
forth above, and in the case of the transfer of the stock of Health Care
Microsystems, Inc. by sale or through merger or a transfer of all or
substantially all of the assets or a merger of Health Management Systems, Inc.,
the transferee or surviving corporation shall execute and deliver to Landlord an
assumption of all of the Tenant's obligations under the Lease. A transferee
meeting all of the requirements of this Section 15.1(h) shall hereafter be
referred to as a "Permitted Transferee." Notwithstanding the transfer of all of
the stock of Health Care Microsystems, Inc. by sale or through merger or the
transfer or all or substantially all of the stock, membership interest or assets
or the merger of Health Management Systems, Inc. to or with a Permitted
Transferee, all of the terms and conditions of this Lease shall remain in full
force and effect. If the transfer to a Permitted Transferee occurs during the
first five (5) years of the Lease term, Health Management Systems, Inc. shall
remain fully liable for all of the obligations of the Tenant under the Lease
until the expiration of the fifth year of the term of the Lease, whereupon
Health Management Systems, Inc. shall be released from any prospective liability
under this Lease from and after the expiration of the fifth year of the Lease
term, so long as no default by Tenant exists at the expiration of the fifth year
of the Lease term.. If a transfer to a Permitted Transferee occurs after the
fifth year of the term of the Lease, Health Management Systems, Inc. shall be
released upon the Permitted Transferee's assumption of the Tenant's
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obligations under the Lease and so long as no default by Tenant exists at the
time of the transfer. If the stock of Health Care Microsystems, Inc. is
transferred to a Permitted Transferee by sale of through merger, or the stock,
membership interest, or assets of Health Management Systems, Inc. is transferred
to a Permitted Transferee or Health Management Systems, Inc. is merged with a
Permitted Transferee, the Permitted Transferee shall become a tenant under the
lease with Health Care Microsystems, Inc..
ARTICLE 16
DAMAGE OR DESTRUCTION
If the Project is damaged by fire or other insured casualty and the
insurance proceeds have been made available therefor by the holder or holders of
any mortgages or deeds of trust covering the Premises or the Project, the damage
shall be repaired by and at the expense of the Landlord to the condition that
existed prior to said casualty to the extent such insurance proceeds are
available therefor and provided such repairs can, in Landlord's opinion, be made
within ninety (90) days after the occurrence of the damage without the payment
of overtime or other premiums. Until such repairs are completed, rent shall be
abated in proportion to the part of the Premises which is unusable by Tenant in
the conduct of its business (but there shall be no abatement of rent by reason
of any portion of the Premises being unusable for a period equal to one (1) day
or less). If the damage is due to the fault or neglect of Tenant or its
employees, agents or visitors, there shall be no abatement of rent. If repairs
cannot, in Landlord's opinion, be made within ninety (90) days after the
occurrence of the damage, Landlord may, at its option, make them within a
reasonable time and in such event this Lease shall continue in effect and the
rent shall be abated in the manner provided in this Article 16. Landlord's
election to make such repairs must be evidenced by written notice to Tenant
within thirty (30) days after the learning of the occurrence of the damage. If
Landlord does not so elect within such thirty (30) day period to make such
repairs which cannot be made within said ninety (90) days, then either party
may, by written notice to the other, cancel this Lease as the date of the
occurrence of such damage. A total destruction of the Project shall
automatically terminate this Lease. Except as provided in this Article, there
shall be no abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant's business or property arising from such
damage or destruction or the making of any repairs, alterations or improvements
in or to any portion of the Project or the Premises or in or to fixtures,
appurtenances and equipment therein. Tenant understands that Landlord will not
carry insurance of any kind to Tenant's furniture, furnishings, fixtures or
equipment, and that Landlord shall not be obligated to repair any damage thereto
or replace the same. With respect to any damage which Landlord is obligated to
repair or elects to repair, Tenant, as a material inducement to Landlord
entering into this Lease, irrevocably waives and releases its rights under the
provisions of Sections 1932(2) and 1933(4) of the California Civil Code.
ARTICLE 17
SUBORDINATION
The Property and the Project are currently not subject to any ground or
underlying lease, mortgage or deed of trust. Landlord shall have the right to
cause this Lease to be and become and remain subject and subordinate to any and
all ground or underlying leases, mortgages or
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deeds of trust which may hereafter be executed covering the Premises, the
Project or the Property 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, however, that Landlord obtains from the lender or
other party in question a written undertaking in favor of Tenant to the effect
that such lender or other party will not disturb Tenant's right of possession
under this Lease if Tenant is not then or thereafter in breach of any covenant
or provision of this Lease; and Tenant agrees, within ten (10) business days
after Landlord's written request therefor, to execute, acknowledge and deliver
upon request any and all documents or instruments requested by Landlord or
necessary or proper to assure the subordination of this Lease to any such
mortgages, deed of trust, or leasehold estates. In the event of any foreclosure
sale, transfer in lieu of foreclosure or termination of the lease in which
Landlord is lessee, Tenant shall attorn to the purchaser, transferee or lessor
as the case may be, and recognize that party as Landlord under this Lease,
provided such party acquires and accepts the Premises subject to the terms and
conditions of this Lease. Tenant waives the protection of any statute or rule of
law which gives or purports to give Tenant any right to terminate this Lease or
surrender possession of the Premises upon the transfer of Landlord's interest.
ARTICLE 18
EMINENT DOMAIN
If the whole of the Premises or so much thereof as to render the
balance commercially unusable by Tenant shall be taken under power of eminent
domain, or is sold, transferred or conveyed in lieu thereof, this Lease shall
automatically terminate as of the date of such condemnation, or as of the date
possession is taken by the condemning authority, at Landlord's option. No award
for any partial or entire taking shall be apportioned, and Tenant hereby assigns
to Landlord any award which may be made in such taking or condemnation, together
with any and all rights of Tenant now or hereafter arising in or to the same or
any part thereof; provided, however, that nothing contained herein shall be
deemed to give Landlord any interest in or to require Tenant to assign to
Landlord any award made to Tenant for the taking of personal property and
fixtures belonging to Tenant and removable by Tenant at the expiration of the
term hereof as provided hereunder or for the interruption of, or damage to,
Tenant's business. In the event of a partial taking, or a sale, transfer or
conveyance in lieu thereof, which does not result in a termination of this
Lease, the rent shall be apportioned according to the ratio that the part of the
Premises remaining useable by Tenant bears to the total area of the Premises.
ARTICLE 19
DEFAULT
19.1 Events of Default. Each of the following acts or omissions of
Tenant or of any guarantor of Tenant's performance hereunder, or occurrences,
shall constitute an "Event of Default";
(a) Failure or refusal to pay Basic Rental, Additional Rent
[Article 3] or any other amount provided hereunder within five (5) calendar days
after the same becomes due or
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payable hereunder; said five (5) day period shall be in lieu of, and not in
addition to, the notice requirements pertaining to the unlawful detainer
statutes (i.e. C.C.P. sections 1161, 1161.1(a)-(e));
(b) Failure to perform or observe any other covenant or
condition of this Lease to be performed or observed within thirty (30) days
following written notice to Tenant of such failure. Such thirty (30) day notice
shall also constitute any notice required under Section 1161 of the California
Code of Civil Procedure;
(c) Abandonment or vacating or failure to accept tender of
possession of the Premises or any significant portion thereof;
(d) The taking in execution or by similar process or law
(other than by eminent domain) of the estate hereby created;
(e) To the extent permitted by law, the filing by Tenant or
any guarantor hereunder in any court pursuant to any statute of a petition in
bankruptcy or insolvency or for reorganization or arrangement of for the
appointment of a receiver of all or a portion of Tenant's property; the filing
against Tenant or any guarantor hereunder of any such petition, or the
commencement of a proceeding for the appointment of a trustee, receiver or
liquidator for Tenant, or for any guarantor hereunder, or of any of the property
of either, or a proceeding by any governmental authority for the dissolution or
liquidation of Tenant or any guarantor hereunder, if such proceeding shall not
be dismissed or trusteeship discontinued within sixty (60) days after
commencement of such proceeding or the appointment of such trustee or receiver;
or the making by Tenant or any guarantor hereunder of an assignment for the
benefit of creditors. Tenant hereby stipulates to the lifting of the automatic
stay in effect and relief from such stay for Landlord in the event Tenant files
a petition under the United States Bankruptcy laws, for the purpose of Landlord
pursuing its rights and remedies against Tenant and/or a guarantor of this
Lease; and
(f) Tenant's failure to cause to be released or bonded and
removed any mechanics liens filed against the Premises or the Project within
twenty (20) days after the date the same shall have been filed or recorded.
ARTICLE 20
REMEDIES
20.1 Remedies for Default. In the event of a breach of or default under
this Lease as provided in Article 19 hereof, Landlord may exercise all of its
remedies as may be permitted by law, including but not limited to the remedy
provided by Section 1951.4 of the California Civil Code, and including,
terminating this Lease, reentering the Premises and removing all persons and
property therefrom, which property may be stored by Landlord at a warehouse or
elsewhere at the risk, expense and for the account of Tenant. If Landlord elects
to terminate this Lease, Landlord shall be entitled to recover from Tenant the
aggregate of all amounts permitted by law, including but not limited to, the
cost of recovering the Premises and including (i) the worth at the time of award
of the unpaid rent which had been earned at the time of termination; (ii) the
worth at the
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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 that Tenant proves could have been reasonably avoided; (iii) the
worth at the time of the award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that Tenant proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which in the
ordinary course of events would be likely to result therefrom. The "worth at the
time of award" of the amounts referred to in (i) and (ii) above is computed by
allowing interest at the rate of ten percent (10%) per annum. The "worth at the
time of award" of the amount referred to in (iii) above 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 percent (1%). Further, Tenant shall be
liable for the unamortized portion of the leasing commissions paid by or owing
by Landlord arising from this Lease and any extensions thereof.
20.2 Effect on Indemnity Obligation. Nothing in this Article 20 shall
be deemed to affect Landlord's right to indemnification for liability or
liabilities arising prior to the termination of this Lease for personal injuries
or property damage under the indemnification clause or clauses contained in this
Lease.
20.3 Maintenance of Lease in Effect. Notwithstanding anything to the
contrary set forth herein, Landlord's re-entry to perform acts of maintenance or
preservation of or in connection with efforts to relet the Premises or any
portion thereof, or the appointment of a receiver upon Landlord's initiative to
protect Landlord's interest under this Lease shall not terminate Tenant's right
to possession of the Premises or any portion thereof and, until Landlord does
elect to terminate this Lease, this Lease shall continue in full force and
effect and Landlord shall enforce all of Landlord's rights and remedies
hereunder including, without limitation, the right to recover from Tenant as it
becomes due hereunder all Basic Rental, Additional Rent and other charges
required to be paid by Tenant under the terms hereof.
20.4 Cumulative Remedies. All rights, powers and remedies of Landlord
hereunder and under any other agreement now or hereafter in force between
Landlord and Tenant shall be cumulative and not alternative and shall be in
addition to all rights, powers and remedies given to Landlord by law, and the
exercise of one or more rights or remedies shall not impair Landlord's right to
exercise any other right or remedy.
20.5 Interest; Late Charge. Any amount due from Tenant to Landlord
hereunder which is not paid within thirty (30) days of when due shall bear
interest at the lower of 18% per annum or the maximum lawful rate of interest
from the due date until paid, unless otherwise specifically provided herein, but
the payment of such interest shall not excuse or cure any default by Tenant
under this Lease. In addition to such interest: (a) if Basic Rental is not paid
within ten (10) days after the same is due, a late charge equal to 1 1/2% of the
amount overdue or $100, whichever is greater, shall be assessed and shall accrue
for each calendar month or part thereof until such rental, including the late
charge, is paid in full, which late charge Tenant hereby agrees is a reasonable
estimate of the damages Landlord shall suffer as a result of Tenant's late
payment and
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(b) an additional charge of $25 shall be assessed for any check given to
Landlord by or on behalf of Tenant which is not honored by the drawee thereof;
which damages include Landlord's additional administrative and other costs
associated with such late payment and unsatisfied checks and the parties agree
that it would be impracticable or extremely difficult to fix Landlord's actual
damage in such event. Such charges for interest and late payments and
unsatisfied checks are separate and cumulative and are in addition to and shall
not diminish or represent a substitute for any or all of Landlord's rights or
remedies under any other provision of this Lease.
20.6 Additional Damages. Tenant shall be liable for any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease, or which in the
ordinary cause of things would be likely to result therefrom.
ARTICLE 21
TRANSFER OF LANDLORD'S INTEREST
Landlord shall have the right to transfer and assign, in whole or in
part, all of its rights and obligations hereunder and in the Project and other
property referred to herein, and in such event and upon such transfer (any such
transferee to have the benefit of, and be subject to, the rights and obligations
of Landlord hereunder), Landlord shall be released from any further obligations
hereunder and Tenant agrees to look solely to such successor-in-interest of
Landlord for the performance of such obligations.
ARTICLE 22
BROKER
Each party represents and warrants to the other party that it has not
had dealings in any manner with any real estate broker, finder or other person
with respect to the Premises and the negotiation and execution of this Lease
except CB Commercial Real Estate Group, Inc. Except as to commissions and fees
to be paid as provided in this Article 22, Tenant shall indemnify, defend, and
hold harmless Landlord from all damage, loss, liability and expense (including
reasonable attorneys' fees and related costs) arising out of or resulting from
any claims for commissions or fees that may or have been asserted against
Landlord by any broker, finder or other person with whom Tenant has or
purportedly has dealt with in connection with the Premises and the negotiation
and execution of this Lease. Landlord shall pay broker leasing commissions to CB
Commercial Real Estate Group, Inc. in connection with the negotiation and
execution of this Lease pursuant to a separate agreement. Landlord and Tenant
agree that Landlord shall not be obligated to pay any broker leasing
commissions, consulting fees, finder fees or any other fees or commissions
arising out of or relating to any extended term of this Lease or to any
expansion or relocation of the Premises at any time.
ARTICLE 23
PARKING
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Tenant shall be entitled to use the number of parking spaces set forth
in Article 1.9 of the Basic Lease Provisions ("Permitted Parking Spaces").
Tenant's use of the Permitted Parking Spaces shall be free of charge during the
initial ten (10) year Lease Term ("Initial Term"). If Tenant exercises the
Option pursuant to Article 31.1, Landlord's prevailing monthly charge for
parking during the Option Term shall be added to the Prevailing Market Rental
determined in accordance with Article 31.1. Tenant has informed Landlord that
all of Tenant's employees will not be working in the Premises on a daily basis
and that therefore some of the Permitted Parking Spaces would not be used if
Landlord issued only one parking pass per parking space. Tenant has requested
that Landlord issue an unlimited number of parking passes so that Tenant's
employees may use parking spaces on days when the regular user of such space is
absent. Landlord agrees to issue an unlimited number of parking passes to
accommodate Tenant's needs; provided, however, that Tenant's use of parking
spaces without charge during the Initial Term shall be limited to the Permitted
Parking Spaces. If Tenant uses more than the number of Permitted Parking Spaces,
Tenant shall pay Landlord's standard monthly charge for use of such additional
parking spaces on a monthly basis within ten (10) days after the date of
Landlord's invoice therefore. Notwithstanding the foregoing, Landlord reserves
the right to monitor Tenant's use of the parking passes and to reduce the number
of parking passes made available to Tenant to the number of Permitted Parking
Spaces if Tenant fails to pay the monthly parking charges for any parking spaces
used in excess of the Permitted Parking Spaces or if Landlord requires such
additional spaces for the use by other tenants. Parking shall be available upon
the terms and conditions (other than charges for parking passes) established
from time to time by Landlord or Landlord's operator of such parking facilities.
Tenant shall be entitled to receive one hundred fifty (150) hours of parking
validations free of charge each month during the initial Lease Term for Tenant's
visitor parking and a discount of fifty percent (50%) off the then current
charges for parking validations for visitor parking in excess of said one
hundred fifty (150) hours. All visitor parking shall be in parking areas
designated by Landlord upon terms and conditions to be established from time to
time by Landlord or Landlord's operator of such parking facilities.
ARTICLE 24
WAIVER
No waiver by Landlord of any provision of this Lease shall be deemed to
be a waiver of any other provision hereof or of any subsequent breach by Tenant
of the same or any other provision. No provision of this Lease may be waived,
except by an instrument in writing executed by the waiving party. Landlord's
consent to or approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act of Tenant, whether or not similar
to the act so consented to or approved. No act or thing done by Landlord or
Landlord's agents during the term of this Lease shall be deemed an acceptance of
a surrender of the Premises, and no agreement to accept such surrender shall be
valid unless in writing and signed by Landlord. Any payment by Tenant or receipt
by Landlord of an amount less than the total amount then due hereunder shall be
deemed to be in partial payment only thereof and not a waiver of the balance due
or an accord and satisfaction, notwithstanding any statement or endorsement to
the contrary on any check or any other instrument delivered concurrently
therewith or in reference thereto. Accordingly Landlord may accept any such
amount and negotiate any such check without
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prejudice to Landlord's right to recover all balances due and owing and to
pursue its other rights against Tenant under this Lease, regardless of whether
Landlord makes any notation on such instrument of payment or otherwise notifies
Tenant that such acceptance or negotiation is without prejudice to Landlord's
rights.
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ARTICLE 25
ESTOPPEL CERTIFICATE
Tenant shall, at any time and from time to time, upon not less than ten
(10) business days' from the date of receipt from Landlord, execute, acknowledge
and deliver to Landlord a statement in writing certifying the following
information (but not limited to the following information in the event further
information is requested by Landlord): (i) that this Lease is unmodified and in
full force and effect (or, if modified, stating the nature of such modification
and certifying that this Lease, as modified, is in full force and effect); (ii)
the dates to which the rental and other charges are paid in advance, if any;
(iii) the amount of Tenant's security deposit, if any; (iv) acknowledging that
there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder, and no events or conditions then in existence which, with
the passage of time or notice or both, would constitute a default on the part of
Landlord hereunder, or specifying such defaults, events or conditions, if any
are claimed; and (v) such other statements regarding the Lease as may be
reasonably requested by Landlord. It is expressly understood and agreed that any
such statement may be relied upon by any prospective purchaser or encumbrancer
of all or any portion of the real property. Tenant's failure upon Landlord's
reasonable request to deliver such statement within such time shall, at the
option of Landlord, constitute a default under this Lease. Furthermore, Tenant's
failure to deliver such statement within such time shall constitute an admission
by Tenant that all statements contained therein are true and correct. Tenant
agrees to execute all documents required in accordance with this Article 25
within ten (10) business days after the date of receipt of said documents and
the failure to execute such documents within ten (10) business days shall
entitle Landlord to execute such documents on behalf of Tenant as Tenant's
attorney-in-fact. Tenant does hereby make, constitute and irrevocably appoint
Landlord as Tenant's attorney-in-fact and in Tenant's name, place and stead to
execute such documents pursuant to this Article.
ARTICLE 26
LIABILITY OF LANDLORD
The liability of Landlord, any agent of Landlord, or any of their
respective officers, directors, shareholders or employees to Tenant for or in
respect of any default by Landlord under the terms of this Lease or in respect
of any other claim or cause of action shall be limited to the interest of
Landlord in the Project, and Tenant agrees to look solely to Landlord's interest
in the Project for the recovery and satisfaction of any judgment against
Landlord, any agent of Landlord, or any of their respective officers, directors,
shareholders and employees.
ARTICLE 27
INABILITY TO PERFORM
This Lease and the obligations of Tenant hereunder shall not be
affected or impaired because Landlord is unable to fulfill any of its
obligations hereunder or is delayed in doing so, if such inability or delay is
caused by reason of unavailability of materials, strike or other labor
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troubles or any other cause previously or at such time beyond the reasonable
control of anticipation of Landlord.
ARTICLE 28
HAZARDOUS MATERIALS
28.1 Environmental Law Compliance. During the term of this Lease,
Tenant shall comply with all Environmental Laws and Environmental Permits (each
as defined in Article 28.4 hereof) applicable to the operation or use of the
Premises, will cause all other persons occupying or using the Premises to comply
with all such Environmental Laws and Environmental Permits, and will immediately
pay or cause to be paid all costs and expenses incurred by reason of such
compliance.
28.2 Prohibition. Tenant shall not generate, use, treat, store, handle,
release or dispose of, or permit the generation, use, treatment, storage,
handling, release or disposal of Hazardous Materials (as defined in Article 28.4
hereof) on the Premises, or the Project, or transport or permit the
transportation of Hazardous Materials to or from the Premises or the Project
except for limited quantities used or stored at the Premises and required in
connection with the routine operation and maintenance of the Premises, and then
only upon the written consent of Landlord and in compliance with all applicable
Environmental Laws and Environmental Permits.
28.3 Indemnity. Tenant agrees to defend, indemnify and hold harmless
Landlord from and against all obligations (including removal and remedial
actions), losses, claims, suits, judgments, liabilities, penalties, damages
(including consequential and punitive damages), costs and expenses (including
attorneys' and consultants' fees and expenses) of any kind or nature whatsoever
that may at any time be incurred by, imposed on or asserted against Landlord
directly or indirectly based on, or arising or resulting from (a) the actual or
alleged presence of Hazardous Materials on the Project which is caused or
permitted by Tenant and (b) any Environmental Claim relating in any way to
Tenant's operation or use of the Premises (the "Hazardous Materials Indemnified
Matters"). The provisions of this Article 28.3 shall survive the expiration or
sooner termination of this lease.
28.4 Definitions. As used herein, the following terms shall have the
following meanings: "Hazardous Materials" means (i) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, and radon gas; (ii) any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (iii) any other substance exposure to which is regulated by any
governmental authority. "Environmental Law" means any federal, state or local
statute, law, rule, regulation, ordinance, code, policy or rule of common law
now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980,
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42 U.S.C. sections 9601 et seq.; the Resource Conservation and Recovery Act, 42
U.S.C. sections 6901 et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. sections 1801 et seq.; the Clean Water Act, 33 U.S.C. sections 1251 et
seq.; the Toxic Substances Control Act, 15 U.S.C. sections 2601 et seq.; the
Clean Air Act, 42 U.S.C. sections 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. sections 300f et seq.; the Atomic Energy Act, 42 U.S.C. sections 2011 et
seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. sections
136 et seq.; the Occupational Safety and Health Act, 29 U.S.C. sections 651 et
seq. "Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations, proceedings, consent orders or
consent agreements relating in any way to any Environmental Law or any
Environmental Permit, including without limitation (i) any and all Environmental
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental law and (ii) any and all Environmental Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Permits" means all permits, approvals, identification numbers,
licenses and other authorizations required under any applicable Environmental
Law.
ARTICLE 29
SURRENDER OF PREMISES; REMOVAL OF PROPERTY
29.1 No Merger. The voluntary or other surrender of this Lease by
Tenant to Landlord, or a mutual termination hereof, shall not work a merger, and
shall at the option of Landlord, operate as an assignment to it of any or all
subleases or subtenancies affecting the Premises.
29.2 Surrender. Upon the expiration of the Lease Term, or upon any
earlier termination of this Lease, Tenant shall quit and surrender possession of
the Premises to Landlord in as good order and condition as the same are now and
hereafter may be improved by Landlord or Tenant, reasonable wear and tear and
repairs which are Landlord's obligation excepted, and shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, all furniture, equipment, business and trade fixtures, free-standing
cabinet work, moveable partitioning and other articles of personal property
owned by Tenant or installed or placed by Tenant at its own expense in the
Premises, and all similar articles of any other persons claiming under Tenant
unless Landlord exercises its option to have any subleases or subtenancies
assigned to it, and Tenant shall repair all damage to the Premises resulting
from the installation and removal of such items to be removed and restore such
areas to the condition that existed prior to the installation thereof in
accordance with all applicable laws, statutes, building codes and regulations in
effect as of the date of such repair and restoration.
29.3 Disposition of Personal Property. Whenever Landlord shall reenter
the Premises as provided in Article 12 hereof, or as otherwise provided in this
Lease, any property of Tenant not removed by Tenant upon the expiration of the
Lease Term (or within forty-eight (48) hours after a termination by reason of
Tenant's default), as provided in this Lease, shall be considered abandoned and
Landlord may remove any or all of such items and dispose of the same in any
manner or store the same in a public warehouse or elsewhere for the account and
at the expense
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and risk of Tenant, and if Tenant shall fail to pay the cost of storing any such
property after it has been stored for a period of ninety (90) days or more,
Landlord may sell any or all of such property at public or private sale, in such
manner and at such times and places as Landlord, in its sole discretion, may
deem proper, without notice or to demand upon Tenant, for the payment of all or
any part of such charges or the removal of any such property, and shall apply
the proceeds of such sale: first, to the cost and expense of such sale,
including reasonable attorneys' fees for services rendered; second, to the
payment of the cost of or charges for storing any such property; third, to the
payment of any other sums of money which may then or thereafter be due to
Landlord from Tenant under any of the terms hereof; and fourth, the balance, if
any, to Tenant.
29.4 Removal of Alterations. All fixtures, equipment, alterations,
additions, improvements and/or appurtenances attached to or built into the
Premises prior to or during the Early Occupancy Period and Lease Term, whether
by Landlord or Tenant and whether at the expense of Landlord or Tenant, or of
both, shall be and remain part of the Premises and shall not be removed by
Tenant at the end of the Lease Term except to the extent otherwise expressly
provided for in Article 29.2 hereof or unless such removal is required by
Landlord pursuant to the provisions of Article 9 above. Such fixtures,
equipment, alterations, additions, improvements and/or appurtenances shall
include but not be limited to: all floor coverings, drapes, paneling, built-in
cabinetry, molding, doors, vaults (including vault doors), plumbing systems,
electrical systems, lighting systems, silencing equipment, built-in portions of
communication systems, all fixtures and outlets for the systems mentioned above
and for all telephone, radio, telegraph and television purposes, and any special
flooring or ceiling installations.
29.5 Notice of Surrender. Tenant shall, at least ninety (90) days
before the last day of the Lease Term, give to Landlord a written notice of
intention to surrender the Premises on that date, but Tenant's failure to give
such notice shall not be construed as an extension of the Lease Term or as
consent of Landlord to any holding over by Tenant.
ARTICLE 30
MISCELLANEOUS
30.1 Severability; Entire Agreement. Any provision of this Lease which
shall prove to be invalid, void, or illegal shall in no way affect, impair or
invalidate any other provision hereof and any such other provisions shall remain
in full force and effect. Except for that certain Confidentiality Agreement
dated September 19, 1996, executed by Landlord and Tenant, this Lease and the
Exhibits constitute the entire agreement between the parties hereto with respect
to the subject matter hereof, and no prior agreement or understanding pertaining
to any such matter shall be effective for any purpose. No provision of this
Lease may be amended or supplemented except by an agreement in writing signed by
the parties hereto or their successor in interest. This Lease shall be governed
by and construed in accordance with the laws of the State of California.
30.2 Attorneys' Fees.
(a) If Tenant or Landlord shall bring any action for any
relief against the other, declaratory or otherwise, arising out of or under this
Lease, including any suit by Landlord for the
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recovery of rent or possession of the Premises, the losing party shall pay the
successful party a reasonable sum for attorneys' fees in such suit and such
attorneys' fees shall be deemed to have accrued on the commencement of such
action and shall be paid whether or not such action is prosecuted to judgment.
(b) Reasonable attorneys' fees shall include fees for services
rendered prior to the commencement of any such action or litigation and, when
legal services are rendered by an attorney at law who is an employee of a party,
shall be determined as to amount, including overhead, by consideration of the
same factors, including but not limited by, the importance of the matter, time
applied, difficulty and results, as are considered when an attorney not in the
employ of a party is engaged to render such service.
30.3 Time of Essence. Time is of the essence with respect to the
performance of every provision of this Lease and the strict performance of each
shall be a condition precedent to Tenant's right to remain in possession of the
Premises or to have this Lease continue in effect.
30.4 Headings. The article headings contained in this Lease are for
convenience only and do not in any way limit or amplify any term or provision
hereof. The terms "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular, the neuter shall include the masculine and
feminine genders and the obligations herein imposed upon Tenant shall be joint
and several as to each of the persons, firms or corporations of which Tenant may
be composed.
30.5 Reserved Area. Tenant hereby acknowledges and agrees that the
exterior walls of the Premises and the area between the finished ceiling of the
Premises and the slab of the floor of the Building thereabove have not been
demised hereby and the use thereof together with the right to install, maintain,
use, repair and replace pipes, ducts, conduits and wires leading through, under
or above the Premises in locations which will not materially interfere with
Tenant's use of the Premises and serving other parts of the Project are hereby
excepted and reserved unto Landlord.
30.6 No Option. The submission of this Lease by Landlord, its agent or
representative for examination or execution by Tenant does not constitute an
option or offer to lease the Premises upon the terms and conditions contained
herein or a reservation of the Premises in favor of Tenant, it being intended
hereby that this Lease shall only become effective upon the execution hereof by
Landlord and delivery of a fully executed counterpart hereof to Tenant.
30.7 Use of Project Name; Improvements. Tenant shall not be allowed to
use the name, picture or representation of the Project, or words to that effect,
in connection with any business carried on in the Premises or otherwise (except
as Tenant's address) without the prior written consent of Landlord. In the event
that Landlord undertakes any additional improvements on the real property
including but not limited to new construction or renovation or additions to the
existing improvements, Landlord shall not be liable to Tenant for any noise,
dust, vibration or interference with access to the Premises or disruption in
Tenant's business caused thereby and rental hereunder shall under no
circumstances be abated; provided, however, Landlord shall use reasonable
efforts to minimize any such disruption during regular business hours, except in
an
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emergency. Landlord shall use diligent efforts to give Tenant at least five
(5) days notice of any major construction that will take place near the Premises
or interfere with access to the Premises.
30.8 Rules and Regulations. Tenant shall observe faithfully and comply
strictly with the Rules and Regulations attached to this Lease and made a part
hereof, and such other Rules and Regulations as Landlord may from time to time
reasonably adopt for the safety, care and cleanliness of the Project, the
facilities thereof, or the preservation of good order therein. Landlord shall
not be liable to Tenant for violation of any such Rules and Regulations, or for
the breach of any covenant or condition in any lease by any other tenant in the
Project. A waiver by Landlord of any Rule or Regulation for any other tenant
shall not constitute nor be deemed a waiver of the Rule or Regulation for this
Tenant. Landlord shall equally enforce the Rules and Regulations in accordance
with each Tenant's lease.
30.9 Quiet Possession. Upon Tenant's paying the Basic Rental,
Additional Rent and other sums provided hereunder and observing and performing
all of the covenants, conditions and provisions on Tenant's part to be observed
and performed hereunder, Tenant shall have quiet possession of the Premises for
the entire Lease Term, subject to all of the provisions of this Lease.
30.10 Rent. All payments required to be made hereunder shall be deemed
to be rent, whether or not described as such.
30.11 [Intentionally Omitted].
30.12 Successors and Assigns. Subject to the provisions of Article 15
hereof, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
30.13 Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal service evidenced by a signed
receipt or sent by registered or certified mail, return receipt requested,
addressed to Tenant at the addresses set forth below or to Landlord at the
address of the place from time to time established for the payment of rent and
which shall be effective upon proof of delivery. Copies of all notices to
Landlord should be sent to the following address: GE Capital Investment
Advisors, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel. Notices to Tenant should be sent to the following
address:
Health Care Microsystems, Inc.
000 Xxxxx Xxxxxxxxx Xxxx., Xxxxx 000
Xx Xxxxxxx, XX 000000
Attn: Xx. Xxxxxxxx X. Xxxxxxxxx
-------------------------------
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and to: Health Management Systems, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxxxx
With a copy to: Xxxxxxx & Rhine
1120 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxxx
Either party may by notice to the other specify a different address for notice
purposes except that, upon Tenant's taking possession of the Premises, the
Premises shall constitute Tenant's address for notice purposes. A copy of all
notices to be given to Landlord hereunder shall be concurrently transmitted by
Tenant to such party hereafter designated by notice from Landlord to Tenant.
30.14 Persistent Delinquencies. In the event that Tenant shall be
delinquent by more than fifteen (15) days in the payment of rent on three (3)
separate occasions in any twelve (12) month period, Landlord shall have the
right to terminate this Lease by thirty (30) days written notice given by
Landlord to Tenant within thirteen (13) months of the first of the last three
(3) such delinquencies and then ten (10) days of the last such delinquency.
30.15 Right of Landlord to Perform. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of rent. If
Tenant shall fail to pay any sum of money, other than rent, required to be paid
by it hereunder or shall fail to perform any other act on its part to be
performed hereunder, and such failure shall continue beyond any applicable
period of notice set forth in this Lease, Landlord may, but shall not be
obligated so to do, and without waiving or releasing Tenant from any obligations
of Tenant, make any such payment or perform any such other act on Tenant's part
to be made or performed as is in this Lease provided. All sums so paid by
Landlord and all reasonable incidental costs, together with interest thereon at
the rate of ten percent (10%) per annum from the date of such payment by
Landlord, shall be payable to Landlord on demand and Tenant covenants to pay any
such sums, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of the nonpayment thereof by
Tenant as in the case of default by Tenant in the payment of the rent.
30.16 Access, Changes in Project, Facilities, Name.
(a) Every part of the Project except the inside surfaces of
all walls, windows and doors bounding the Premises (including exterior building
walls, core corridor walls and doors and any core corridor entrance), and any
space in or adjacent to the Premises used for shafts, stacks, pipes, conduits,
fan rooms, ducts, electric or other utilities, sinks or other building
facilities, and the use thereof, as well as access thereto through the Premises
for the purposes of operation, maintenance, decoration and repair, are reserved
to Landlord.
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(b) Tenant shall permit Landlord to install, use and maintain
pipes, ducts and conduits within the walls, bearing columns and ceilings of the
Premises.
(c) Landlord reserves the right, without incurring any
liability to Tenant therefor, to make such changes in or to the Building and the
fixtures and equipment thereof, as well as in or to the street entrances, halls,
passages, elevators, stairways and other improvements thereof, as it may deemed
necessary or desirable. In making any such changes, Landlord shall use diligent
efforts not to unreasonably interfere with Tenant's use of the Premises.
(d) Landlord may adopt any name for the Project and Landlord
reserves the right to change the name or address of the Building at any time. If
Landlord changes the address of the Building, Landlord shall reimburse Tenant
for the cost of new stationery and business cards in an amount not to exceed
Seven Thousand Dollars ($7,000) within thirty (30) days after receipt of
Tenant's invoice together with reasonable supporting documentation for such
cost.
30.17 Corporate Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the By-laws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. If Tenant is a corporation, said corporation and each individual
executing this Lease on behalf of said corporation covenants that Tenant shall
provide to Landlord a copy of such resolution of the Board of Directors
authorizing the execution of this Lease on behalf of such corporation, which
copy of resolution shall be duly certified by the secretary or an assistant
secretary of the corporation to be a true copy of a resolution duly adopted by
the Board of Directors of said corporation. In the event Tenant fails to comply
with the requirements set forth in this Article 30.17, then each individual
executing this Lease shall be personally liable for all of Tenant's obligations
in this Lease.
30.18 Identification of Tenant.
(a) If more than one person or entity executes this Lease as
Tenant, (i) each of them shall be jointly and severally liable for the keeping,
observing and performing of all of the terms, covenants, conditions and
provisions of this Lease to be kept, observed and performed by Tenant, (ii) the
term "Tenant" as used in this Lease shall mean and include each of them jointly
and severally, and (iii) the act of or notice from, or notice or refund to, or
the signature of, any one or more of them, with respect to the tenancy of this
Lease, including, but not limited to, any renewal, extension, expiration,
termination or modification of this Lease, shall be binding upon each and all of
the persons executing this Lease as Tenant with the same force and effect as if
each and all of them had so acted or so given or received such notice or refund
or so signed.
(b) If Tenant's interest in this Lease shall be assigned to a
partnership (or to two or more persons, individually and as co-partners of a
partnership) pursuant to Article 15 hereof (any such partnership and such
persons hereinafter referred to in this Article 30.18(b) as
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"Partnership Tenant"), the following provisions of this Lease shall apply to
such Partnership Tenant:
(i) The liability of each of the parties comprising
Partnership Tenant shall be joint and several.
(ii) Each of the parties comprising the Partnership
Tenant hereby consents in advance to, and agrees to be bound by, any written
instrument which may hereafter be executed, changing, modifying or discharging
this Lease, in whole or in part, or surrendering all or any part of the Premises
to the Landlord, and by notices, demands, requests or other communication which
may hereafter be given, by Partnership Tenant or any of the parties comprising
Partnership Tenant.
(iii) Any bills, statements, notices, demands,
requests or other communications given or rendered to Partnership Tenant or to
any of the parties comprising Partnership Tenant shall be deemed given or
rendered to Partnership Tenant and to all such parties and shall be binding upon
Partnership Tenant and all such parties.
(iv) If Partnership Tenant admits new partners, all
of such new partners shall, by their admission to Partnership Tenant, be deemed
to have assumed performance of all of the terms, covenants and conditions of
this Lease on Tenant's part to be observed and performed.
(v) Partnership Tenant shall give prompt notice to
Landlord of the admission of any such new partners, and, upon demand of
Landlord, shall cause each such new partner to execute and deliver to Landlord
an agreement in form satisfactory to Landlord, wherein each such new partner
shall assume performance of all of the terms, covenants and conditions of this
Lease on Partnership Tenant's part to be observed and performed (but neither
Landlord's failure to request any such agreement nor the failure of any such new
partner to execute or deliver any such agreement to Landlord shall violate the
provisions of clause (iv) of this Article 30.18(b) or relieve any such new
partner of his obligations thereunder).
30.19 Building Codes. After completion of the Tenant Building Standard
Work, any and all costs attributable to or related to the applicable building
codes of the City of El Segundo (or any other authority having jurisdiction over
the Project) arising from Tenant's plans, specifications, improvements, or
alterations shall be paid by Tenant at its sole cost and expense. The costs of
any alterations or improvements to the common areas of the Project incurred by
Landlord to comply with applicable statutes, codes, rules or regulations enacted
after the date of this Lease shall be an Operating Cost determined in accordance
with generally accepted accounting principles as applied to real estate industry
standards.
30.20 Transportation and Energy Management. Tenant shall fully comply
with all present and future programs intended to manage parking, transportation,
traffic, energy or any other programs affecting the Project.
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30.21 Exhibits. The Exhibits attached hereto are incorporated herein by
this reference as if fully set forth herein.
30.22 Waiver of Jury Trial. LANDLORD AND TENANT HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT TO
ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
LEASE OR ANY DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER WITH THE
PREMISES (INCLUDING WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS
LEASE OR ANY CLAIMS OR DEFENSES ASSERTING THAT THIS LEASE WAS FRAUDULENTLY
INDUCED OR AS OTHERWISE VOID OR VOIDABLE). THIS WAVIER IS A MATERIAL INDUCEMENT
FOR LANDLORD TO ENTER INTO AND ACCEPT THIS LEASE.
/s/ /s/
----------------------- ----------------
LANDLORD TENANT
ARTICLE 31
OPTION TO EXTEND
31.1 Grant of Option. Landlord hereby grants to Tenant one (1) option
(the "Option") to extend the Initial Term for an additional five (5) years (the
"Option Term") upon and subject to the terms and conditions set forth in this
Lease. Tenant shall have no right to extend the Initial Term except as provided
herein. The Option shall be personal to Health Management Systems, Inc. and
Health Care Microsystems, Inc., and shall not be transferable or assignable to
any assignee of the Lease other than a Permitted Transferee. The Option shall be
exercised, if at all, by Tenant's delivery of written notice of exercise to
Landlord no later than six (6) months nor earlier than twelve (12) months prior
to the expiration date of the Initial Term. The Basic Rental to be paid during
the Option Term shall be ninety-five percent (95%) of the Prevailing Market
Rental, as hereinafter defined. As used herein, the term "Prevailing Market
Rental" shall mean the rental and all other monetary payments and escalations
that Landlord could obtain from a third party tenant comparable to Tenant
desiring to lease the Premises for the Option Term, taking into account the age
of the Project, the size of the Premises, the type and quality of tenant
improvements, the location and floor levels of the Premises, the quality of
construction of the Project and the Premises, the services provided under the
terms of the Lease, the rental and brokers commissions then being paid and any
refurbishment allowance then being obtained by tenants comparable to Tenant for
the renewal of leases of space comparable to the Premises in the City of El
Segundo and all other factors that would be relevant to a third party in
determining the rental such party would be willing to pay to lease the Premises
for the Option Term. There shall be added to the Prevailing Market Rental,
Landlord's then effective monthly parking charge for use of the parking spaces
allocated to Tenant pursuant to Article 1.9 hereof for the Option Term, which
parking charges may be increased from time to time during the Option Term.
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Notwithstanding anything contained herein to the contrary, if a default by
Tenant exists under any of the terms, covenants or conditions of this Lease at
the time Tenant exercises such Option, then Tenant's exercise of the Option
shall be of no force and effect, provided, however, if Tenant cures such default
and gives notice of exercise of the Option prior to the expiration of the time
period for giving such notice, then such subsequent notice shall be effective.
If (i) a default by Tenant beyond any applicable cure period exists under this
Lease at any time after Tenant exercises the Option or (ii) Tenant and/or its
permitted affiliates (as defined in Article 15.1(g) hereof) do not occupy at
least a full floor of the Premises either at the time Tenant exercises the
Option or at any time thereafter prior to the commencement date of the Option
Term (the "Option Commencement Date"), then in each case Tenant shall have no
rights hereunder to extend the Initial Term.
31.2 Determination of Prevailing Market Rental. On or before five (5)
days after Tenant provides Landlord with notice of Tenant's exercise of the
Option, Landlord and Tenant shall commence negotiations to agree upon the
Prevailing Market Rental applicable thereto. If Landlord and Tenant are unable
to reach agreement on the Prevailing Market Rental within twenty (20) days after
the date negotiations commence, then the Prevailing Market Rental shall be
determined as follows:
(a) If Landlord and Tenant are unable to agree on the
Prevailing Market Rental within said twenty (20) day period, then, within ten
(10) days thereafter, Landlord and Tenant shall each simultaneously submit to
the other in a sealed envelope its good faith estimate of the Prevailing Market
Rental. If the higher of such estimates is not more than one hundred five
percent (105%) of the lower of such estimates, then the Prevailing Market Rental
shall be the average of the two estimates.
(b) If the matter is not resolved by the exchange of estimates
as provided in subparagraph (a) above, then either Landlord or Tenant may, by
written notice to the other on or before ten (10) days after the exchange of
such estimates, require that the disagreement be resolved by arbitration. Within
ten (10) days after such notice, the parties shall select as an arbitrator a
mutually acceptable MAI appraiser with experience in real estate activities,
including at least ten (10) years' experience in appraising office space in the
County of Los Angeles, California. If the parties cannot agree on an appraiser,
then, within a second period of ten (10) days, each party shall select an
independent MAI appraiser meeting the aforementioned criteria and, within a
third period of ten (10) days, the two appointed appraisers shall select a third
appraiser meeting the aforementioned criteria and the third appraiser shall
determine the Prevailing Market Rental pursuant to subparagraph (c) below. If
one party shall fail to make such appointment within said second ten (10) day
period, then the appraiser chosen by the other party shall be the sole
arbitrator.
(c) Once the arbitrator has been selected as provided for in
subparagraph (b) above, then, as soon as practicable but in any case within
fourteen (14) days thereafter, the arbitrator shall select one of the two
estimates of the Prevailing Market Rental submitted by Landlord and Tenant,
which estimate shall be the one that is closer to the Prevailing Market Rental
as determined by the arbitrator. The arbitrator's selection shall be rendered in
writing to both Landlord and Tenant and shall be final and binding upon them and
shall not be subject to
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appeal. If the arbitrator believes that expert advice would materially assist
such arbitrator, then the arbitrator may retain one or more qualified persons,
including, but not limited to, legal counsel, brokers, architects or engineers,
to provide such expert advice. The party whose estimate is not chosen by the
arbitrator shall pay the costs of the arbitrator and of any experts retained by
the arbitrator; provided, however, that any fees of any counsel or expert
engaged directly by Landlord or Tenant shall be borne by the party retaining
such counsel or expert.
ARTICLE 32
SIGNAGE
Except as provided in this Article 32, Tenant shall not place any sign
upon the Premises or the Project without Landlord's prior written consent, which
consent may be withheld by Landlord in its sole and absolute discretion. All
signs shall be installed by Landlord at Tenant's sole cost and expense.
Notwithstanding the foregoing and subject to Landlord's approval of the sign in
accordance with this Article 32, Tenant shall have the right to place a sign on
the "eyebrow" of the northwest side of Building with the initials "HCm" in size
and type acceptable to Landlord and in compliance with all applicable codes of
the City of El Segundo, in the location designated by Landlord. Tenant shall
provide Landlord with plans and specifications showing the size, design, and
other requirements for Tenant's eyebrow sign. Within fifteen (15) days after
receipt of such plans, Landlord shall give Tenant written notice of any
disapproval thereof, specifying Landlord's reasons for disapproval in writing.
Thereafter, Tenant shall revise its plans and specifications to satisfy
Landlord's objections. After Landlord has approved the plans and specifications
for Tenant's sign, Landlord shall cause the sign to be installed on the eyebrow
of the Building and all costs and expenses of installation thereof, together
with any reasonable costs incurred by Landlord to thereafter maintain the
eyebrow sign, shall be paid by Tenant to Landlord within fifteen (15) days after
the date of Landlord's invoice therefor. Notwithstanding the foregoing, upon
ninety (90) days written notice provided to Tenant at any time from October 1,
1997 through January 1, 1999, Landlord shall have the right to remove Tenant's
sign on the "eyebrow" of the Building and install the sign of another tenant in
the Building who has been granted eyebrow signage rights pursuant to a lease
executed prior to January 1, 1999, and elected to place its eyebrow sign on the
Building so long as such other tenant leases space from Landlord in the
Building, the square footage of which is one hundred percent (100%) larger than
the Premises. If Landlord removes Tenant's sign from the "eyebrow" of the
Building in accordance with the previous sentence, Landlord shall replace
Tenant's eyebrow sign with a panel identifying Tenant on the multi-tenant
monument sign dedicated to the Building facing Xxxxxxxxx Boulevard. Tenant shall
be entitled to the top line of such multi-tenant monument sign during such time
that the Premises leased by Tenant are twenty percent (20%) greater than any
space in the Building rented by Landlord to another tenant who has been granted
monument sign rights. Landlord shall be responsible for all costs of removal of
Tenant's eyebrow sign and replacement thereof with a panel in the multi-tenant
monument sign. Notwithstanding the foregoing, in no event shall Tenant's eyebrow
sign be removed from the Building during the first twelve (12) months of the
Early Occupancy Period and Term. If Landlord has not given Tenant written notice
of Landlord's intent to remove the eyebrow sign prior to January 1, 1999, then
Tenant's eyebrow sign may not be removed during the balance of the Initial Term.
If Tenant's eyebrow sign is removed for a larger tenant in accordance with this
Article 32, and such larger tenant later vacates the Building
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prior to the expiration of the Initial Term, and any tenant who has been granted
eyebrow signage rights who is at least one hundred percent (100%) larger than
Tenant does not elect to use the eyebrow sign, then Tenant may replace its
eyebrow sign on the Building for the remainder of the Initial Term, at Tenant's
sole cost and expense.
ARTICLE 33
EXPANSION RIGHTS; RIGHT OF FIRST REFUSAL
33.1 First Expansion Option. Landlord hereby grants Tenant an option to
lease ("First Expansion Option") additional space located on the sixth floor
(6th) floor of the Building contiguous to the Premises consisting of
approximately Two Thousand (2,000) square feet, as designated on the plan
attached hereto and incorporated herein as Exhibit "E" ("First Expansion
Space"). Tenant may exercise the First Expansion Option at any time commencing
with the Commencement Date and terminating upon the expiration of the
twenty-fourth (24th) month of the Lease Term by delivering to Landlord
irrevocable written notice of such exercise. Time is of the essence with respect
to the time period during which Tenant must deliver to Landlord its written
notice of exercise of the First Expansion Option. If Tenant fails to deliver
written notice of its exercise of the First Expansion Option to Landlord prior
to the expiration of the twenty-fourth (24th) lease month, then the First
Expansion Option shall expire and shall be of no further force or effect.
If Tenant timely exercises the First Expansion Option, then Landlord
shall prepare and execute an amendment to this Lease that incorporates the First
Expansion Space into the Premises and subjects the First Expansion Space to all
of the terms and conditions of the Lease, except that Tenant shall have no
rights of early occupancy with respect to the First Expansion Space. The
amendment shall provide for the term of the Lease to commence as to the First
Expansion Space on the earlier of (i) the date of substantial completion of any
tenant improvements constructed by Landlord in the First Expansion Space for
Tenant's benefit, or if Landlord is prevented from or delayed in completing such
tenant improvements due to Tenant Delays (as defined in the Work Letter
Agreement) then upon the date which such work would have been substantially
completed but for such Tenant Delays or (ii) the date Tenant first takes
possession of or commences the operation of its business in the First Expansion
Space and to expire concurrently with the Lease Term. The amendment shall also
provide for Tenant to pay Basic Rental for the First Expansion Space at the same
rent as set forth in Article 1.3 of the Basic Lease Provisions and for an
allowance for the construction of tenant improvements in an amount equal to
Thirty-seven Dollar ($37.00) per rentable square foot in the First Expansion
Space. The amendment shall attach a Work Letter Agreement similar to that
attached hereto as Exhibit "C" for the construction of tenant improvements in
the First Expansion Space. If Landlord and Tenant, after good faith
negotiations, do not execute the Amendment within thirty (30) days after the
date Landlord delivers a draft of the amendment to Tenant, Tenant's exercise of
the First Expansion Option shall be deemed null and void and Landlord shall be
free to lease the First Expansion Space to third parties.
33.2 Second Expansion Option. Landlord hereby grants Tenant an option
to lease ("Second Expansion Option") additional space on the sixth (6th) floor
of the Building consisting of
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approximately five thousand (5,000) square feet, as designated on the plan
attached hereto as Exhibit "E" ("Second Expansion Space") with Tenant's
occupancy of the Second Expansion Space occurring between the sixtieth (60th)
and sixty-sixth (66th) month of the Lease Term. Tenant may exercise the Second
Expansion Option at any time commencing with the fifty-fourth (54th) month of
the Lease Term and terminating at the expiration of the sixtieth (60th) month of
the Lease Term by delivering to Landlord its irrevocable written notice of such
exercise. Time is of the essence with respect to the time period during which
Tenant must deliver to Landlord its written notice of exercise of the Second
Expansion Option. If Tenant fails to deliver written notice of its exercise of
the Second Expansion Option to Landlord during the Second Expansion Option
exercise period, then the Second Expansion Option shall expire and be of no
further force and effect.
If Tenant exercises the Second Expansion Option, then Landlord shall
prepare and execute an amendment to this Lease that incorporates the Second
Expansion Space into the Premises and subjects the Second Expansion Space to all
of the terms and conditions of the Lease, except (i) Tenant shall not have any
rights of early occupancy of the Second Expansion Space; (ii) the term of the
Lease with respect to the Second Expansion Space shall commence upon the earlier
of (A) the date of substantial completion of any tenant improvements constructed
in the Second Expansion Space by Landlord for Tenant's benefit or the date upon
which such tenant improvements would have been substantially completed but for
any Tenant Delays, or (B) the date Tenant first takes possession of or commences
the operation of its business in the Second Expansion Space and shall terminate
concurrently with the Lease Term, and (iii) and Landlord shall grant Tenant an
allowance for the construction of tenant improvements in the Second Expansion
Space in an amount equal to Twenty-five Dollars ($25.00) per square foot of the
Second Expansion Space less the "Salvage Costs" as defined herein. For the
purposes of this Lease, "Salvage Costs" shall mean the fair market value of any
existing improvements that are consistent with the design of the tenant
improvements contemplated by Tenant which Tenant desires to retain therein upon
taking possession of the Second Expansion Space as reasonably determined by
Landlord and Tenant. The amendment shall attach a Work Letter Agreement similar
to that attached hereto as Exhibit "C" for the construction of tenant
improvements in the Second Expansion Space. If Landlord and Tenant, after good
faith negotiations, do not execute the amendment within thirty (30) days after
the date Landlord delivers a draft of the amendment to Tenant, Tenant's exercise
of the Second Expansion Option shall be deemed null and void, and Landlord shall
be free to lease the Second Expansion Space to third parties.
33.3 Right of First Refusal. If at any time during the Initial Term,
Landlord reaches an agreement with a third party who desires to lease the
portion of the sixth (6th) floor of the Building consisting of approximately
fourteen thousand (14,000) rentable square feet, as designated on the plan
attached hereto and incorporated herein as Exhibit "E" (the AFirst Refusal
Space), Landlord shall give Tenant written notice of the terms and conditions on
which such third party is willing to lease the First Refusal Space ("Offer"). If
Landlord receives the Offer during the first seventy-two (72) months of the
Lease Term, Tenant shall have the right to lease the First Refusal Space on the
same terms and conditions set forth in the Lease except, (i) Tenant shall not
have any right of early occupancy of the First Refusal Space, (ii) the term of
the Lease with respect to the First Refusal Space shall commence upon the
earlier of (A) the date of substantial
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completion of any tenant improvements constructed in the First Refusal Space by
Landlord for Tenant's benefit or the date on which the tenant improvements would
have been substantially completed but for Tenant Delays or (B) the date that
Tenant first takes possession of or commences the operation of its business in
the Premises and shall terminate concurrently with the Lease Term, and (iii)
Landlord shall grant Tenant an allowance for the construction of tenant
improvements in the Right of First Refusal Space equal to Twenty-five Dollars
($25.00) per square foot of the First Refusal Space less any Salvage Cost with
respect to the First Refusal Space. If Landlord receives the Offer at any time
after the end of the seventy-second (72nd) month of the Lease Term, Tenant shall
have a right of first refusal to lease the First Refusal Space on the same terms
and conditions as set forth in the Offer. Tenant may exercise the right of first
refusal by giving Landlord written notice of such exercise with five (5)
business days after the date of Tenant's receipt of the Offer. Tenant's failure
to give written notice of its exercise of the right of first refusal within said
five (5) business day period shall be deemed Tenant's waiver of its right of
first refusal to lease the First Refusal Space as provided herein. If Tenant
gives written notice of its exercise of the right of first refusal, then
Landlord shall prepare an amendment to this Lease that incorporates the First
Refusal Space into the Premises on the applicable terms and conditions as
contemplated in this Article 33.3. If Landlord and Tenant, after good faith
negotiations, do not execute an amendment to this Lease that incorporates the
First Refusal Space into the Premises as contemplated herein within thirty (30)
days after Landlord delivers a draft of the amendment to Tenant, then Tenant's
right of first refusal with respect to the First Refusal Space shall be deemed
terminated and Landlord shall have the right to lease the First Refusal Space
free and clear of such right of first refusal.
33.4 Limitation on Rights. If a default by Tenant exists under this
Lease on the date of Tenant's notice of exercise of any of the rights granted in
this Article 33, then such notice shall be of no force and effect; provided,
however, if Tenant cures such default and again gives notice of exercise of such
rights prior to the expiration of the time period provided herein for giving
such notice, such subsequent notice shall be effective. If a default by Tenant
beyond any applicable cure period exists under this Lease at any time after
Tenant has exercised a right granted under this Article 33, then Landlord may at
its sole discretion elect to have Tenant's exercise of such right to be of no
force and effect. From and after the date that any of the First Expansion Space,
Second Expansion Space or First Refusal Space is made subject to this Lease,
then the term "Premises" as used herein shall be deemed to refer to the original
Premises demised under this Lease as well as such First Expansion Space, Second
Expansion Space or First Refusal Space, as applicable, made subject to the
Lease.
ARTICLE 34
CONFERENCE ROOM
Tenant shall have the nonexclusive right, in common with other tenants
of the Project, to use any project conference room including the 17th floor of
the building in the Project known as 000 Xxxxx Xxxxxxxxx Xxxx. Tenant may use
such conference rooms for up to a total of thirty-two (32) hours per month free
of charge during the Initial Term. Such conference rooms shall be available upon
terms and conditions to be established from time to time by Landlord, but
Landlord
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makes no representations or warranties to Tenant regarding the availability of
the Project conference rooms.
ARTICLE 35
HEALTH FITNESS CENTER
If Landlord constructs or installs a health fitness center in the
Project, Landlord shall waive the initial initiation fee for the first two
hundred (200) employees of Tenant that register to use the health fitness center
prior to the expiration of the second (2nd) year from the date such health
fitness center opens. Notwithstanding the foregoing, Tenant acknowledges that
Landlord has made no representations or warranties regarding the installation or
construction of a health fitness center, and Landlord is under no obligation to
install, construct, or operate the same in the Project at any time during the
Lease Term.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date set forth above.
TENANT:
HEALTH MANAGEMENT SYSTEMS, INC.,
a New York corporation
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
Its: Director of Administration
----------------------------------
HEALTH CARE MICROSYSTEMS, INC.,
a California corporation
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Its: Chief Operating Officer
-----------------------------------
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LANDLORD:
PACIFIC CORPORATE TOWERS LLC, a
Delaware limited liability company
By: GE Capital Investment Advisors, Inc.,
Its authorized investment advisor
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Its: Vice President
--------------------------------
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[GRAPHIC OF PACIFIC CORPORATE TOWERS PREMISES]
46
[GRAPHIC OF PACIFIC CORPORATE TOWERS PREMISES]
47
EXHIBIT "B"
RULES AND REGULATIONS
1. No sign, advertisement or notice shall be displayed, printed or
affixed on or to the Premises or to the outside or inside of the Building or so
as to be visible from outside the Premises or Building without Landlord's prior
written consent. Landlord shall have the right to remove any non-approved sign,
advertisement or notice, without notice to and at the expense of Tenant, and
Landlord shall not be liable in damages for such removal. All approved signs or
lettering on doors and walls shall be printed, painted, affixed or inscribed at
the expense of Tenant by Landlord or by a person selected by Landlord and in a
manner and style acceptable to Landlord.
2. Tenant shall not obtain for use on the Premises ice, drinking water,
waxing, cleaning, interior glass polishing, rubbish removal, towel or other
similar services, or accept barbering or bootblackening, or coffee cart
services, milk, soft drinks or other like services on the Premises, except from
persons authorized by Landlord and at the hours and under regulations fixed by
Landlord. No vending machines or machines of any description shall be installed,
maintained or operated upon the Premises without Landlord's prior written
consent.
3. The sidewalks, hall, passages, exits, entrances, elevators and
stairways shall not be obstructed by Tenant or used for any purpose other than
for ingress and egress from Tenant's Premises.
4. Toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein.
5. Tenant shall not overload the floor of the Premises or xxxx, drive
nails, screw or drill into the partitions, ceilings or floor or in any way
deface the Premises.
6. In no event shall Tenant place a load upon any floor of the Premises
or portion of any such flooring exceeding the floor load per square foot of area
for which such floor is designed to carry and which is allowed by law, or any
machinery or equipment which shall cause excessive vibration to the Premises or
noticeable vibration to any other part of the Building. Prior to bringing any
heavy safes, vaults, large computers or similarly heavy equipment into the
Building, Tenant shall inform Landlord in writing of the dimensions and weights
thereof and shall obtain Landlord's consent thereto, which consent Landlord
shall have the right to deny. Such consent shall not constitute a representation
or warranty by Landlord that the safe, vault or other equipment complies, with
regard to distribution of weight and/or vibration, with the provisions of this
Rule 6 nor relieve Tenant from responsibility for the consequences of such
noncompliance, and any such safe, vault or other equipment which Landlord
determines to constitute a danger of damage to the Building or a nuisance to
other Tenants, either alone or in combination with other heavy and/or vibrating
objects and equipment, shall be promptly removed by Tenant upon Landlord's
written notice of such determination and demand for removal thereof.
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7. Tenant shall not use or keep in the Premises or Project any
kerosene, gasoline or inflammable, explosive or combustible fluid or material,
or use any method of heating or air-conditioning other than that supplied by
Landlord.
8. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by Landlord.
9. Tenant shall not install or use any blinds, shades, awnings or
screens in connection with any window or door of the Premises and shall not use
any drape or window covering facing any exterior glass surface other than the
standard drapes, blinds or other window covering established by Landlord.
10. Tenant shall cooperate with Landlord in obtaining maximum
effectiveness of the cooling system by closing drapes when the sun's rays fall
directly on windows of the Premises. Tenant shall not obstruct, alter, or in any
way impair the efficient operation of Landlord's heating, ventilating and
air-conditioning system. Tenant shall not tamper with or change the setting of
any thermostats or control valves.
11. The Premises shall not be used for manufacturing or for the storage
of merchandise except as such storage may be incidental to the permitted use of
the Premises. Tenant shall not, without Landlord's prior written consent, occupy
or permit any portion of the Premises to be occupied or used for the manufacture
or sale of liquor or tobacco in any form, or a xxxxxx or manicure shop, or as an
employment bureau. The Premises shall not be used for lodging or sleeping or for
any improper, objectionable or immoral purpose. No auction shall be conducted on
the Premises.
12. Tenant shall not make, or permit to be made, any unseemly or
disturbing noises, or disturb or interfere with occupants of Building or
neighboring buildings or premises or those having business with it by the use of
any musical instrument, radio, phonographs or unusual noise, or in any other
way.
13. No bicycles, vehicles or animals of any kind shall be brought into
or kept in or about the Premises, and no cooking shall be done or permitted,
except by microwave and toaster oven, by any tenant in the Premises, except that
the preparation of coffee, tea, hot chocolate and similar items for tenants,
their employees and visitors shall be permitted. No tenant shall cause or permit
any unusual or objectionable odors to be produced in or permeate from or
throughout the Premises.
14. The sashes, sash doors, skylights, windows and doors that reflect
or admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by any tenant, nor shall any
bottles, parcels or other articles be placed on the window xxxxx.
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15. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by any tenant, nor shall any changes be made in existing
locks or the mechanisms thereof unless Landlord is first notified thereof, gives
written approval, and is furnished a key therefor. Each tenant must, upon the
termination of his tenancy, give to Landlord all keys of stores, offices, or
toilets or toilet rooms, either furnished to, or otherwise procured by, such
tenant, and in the event of the loss of any keys so furnished, such tenant shall
pay Landlord the cost of replacing the same or of changing the lock or locks
opened by such lost key if Landlord shall deem it necessary to make such change.
16. Landlord shall have the right to prohibit any advertising by any
tenant in the Premises, Building or Project which, in Landlord's opinion, tends
to impair the reputation of the Building or its desirability as an office
building and upon written notice from Landlord any tenant shall refrain from and
discontinue such advertising.
17. Landlord reserves the right to control access to the Building by
all persons after reasonable hours of generally recognized business days and at
all hours on Sundays and legal holidays. Each tenant shall be responsible for
all persons for whom he requests after hours access and shall be liable to
Landlord for all acts of such persons. Landlord shall have the right from time
to time to establish reasonable rules pertaining to freight elevator usage,
including the allocation and reservation of such usage for tenants' initial
move-in to their premises, and final departure therefrom. Landlord
shall notify Tenant of any change in the holiday schedule for the Project.
18. Any person employed by any tenant to do janitorial work shall,
while in the Building and outside of the Premises, be subject to and under the
control and direction of the Office of the Building (but not as an agent or
servant of Landlord, and the tenant shall be responsible for all acts of such
persons).
19. All doors opening on to public corridors shall be kept closed,
except when being used for ingress and egress.
20. The requirements of tenants will be attended to only upon
application to the Office of the Building.
21. Canvassing, soliciting and peddling in the Building are prohibited
and each tenant shall cooperate to prevent the same.
22. All office equipment of any electrical or mechanical nature shall
be placed by tenants in the Premises in settings approved by landlord, to absorb
or prevent any vibration, noise or annoyance.
23. No air conditioning unit or other similar apparatus shall be
installed or used by any tenant without the prior written consent of Landlord.
Tenant shall pay the cost of all electricity used for air conditioning in the
Premises if such electrical consumption exceeds normal office
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requirements, regardless of whether additional apparatus is installed pursuant
to the preceding sentence.
24. There shall not be used in any space, or in the public halls of the
Building, either by any tenant or others, any hand trucks except those equipped
with rubber tires and side guards.
25. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Building must be florescent and/or of a quality, type, design
and bulb color approved by Landlord. Tenant shall not permit the consumption in
the Premises of more than 2 1/2 xxxxx per net usable square foot in the Premises
in respect of office lighting nor shall Tenant permit the consumption in the
Premises of more than 1 1/2 xxxxx per net usable square foot of space in the
Premises in respect of the power outlets therein, at any one time. In the event
that such limits are exceeded, Landlord shall have the right to remove any
lighting fixture of any florescent tube or bulb therein as it deems necessary
and/or to charge Tenant for the cost of the additional electricity consumed.
26. Parking
(a) Garage hours shall be 5:00 a.m. to 8:00 p.m., Monday
through Friday, and 5:00 a.m. to 5:00 p.m. Saturday, state and federal holidays
excepted, as revised from time to time by Landlord.
(b) Automobiles must be parked entirely with the stall lines
on the floor.
(c) All directional signs and arrows must be observed.
(d) The speed limit shall be 5 miles per hour.
(e) Parking is prohibited in areas not striped for parking.
(f) Parking cards or any other device or form of
identification supplied by Landlord (or its operator) shall remain the property
of Landlord (or its operator). Such parking identification device must be
displayed as requested and may not be mutilated in any manner. The serial number
of the parking identification device may not be obliterated. Devices are not
transferable or assignable and any device in the possession of an unauthorized
holder will be void. There will be a replacement charge to the Tenant or person
designated by Tenant of $25.00 for loss of any parking card.
(g) Unless otherwise provided in the Lease, the monthly rate
for parking is payable one (1) month in advance and must be paid by the third
business day of each month. Failure to do so will automatically cancel parking
privileges and a charge at the prevailing daily rate will be due. No deductions
or allowances from the monthly rate will be made for days xxxxxx does not use
Parking Facilities.
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(h) Tenant may validate visitor parking by such method or
methods as the Landlord may approve, at the validation rate from time to time
generally applicable to visitor parking, except as otherwise provided in the
Lease.
(i) Landlord (and its operator) may refuse to permit any
person who violates the within published rules to park in the garage, and any
violation of the rules shall subject the automobile to removal from the garage
at the xxxxxx'x expense. In either of said events, Landlord (or its operator)
shall refund a pro rata portion of the current monthly parking rate and the
sticker or any other form of identification supplied by Landlord (or its
operator) will be returned to Landlord (or its operator).
(j) Garage managers or attendants are not authorized to make
or allow any exceptions to these Rules and Regulations.
(k) Every xxxxxx is required to park and lock his own
automobile. All responsibility for any loss or damage to automobiles or any
personal property therein is assumed by the xxxxxx.
(l) Loss or theft of parking identification devices from
automobiles must be reported to the garage manager immediately, and a lost or
stolen report must be filed by the xxxxxx at that time.
(m) The Parking Facilities are for the sole purpose of parking
one automobile per space. Washing, waxing, cleaning or servicing of any vehicles
by the xxxxxx or his agents is prohibited.
(n) Landlord (and its operator) reserves the right to refuse
the issuance of monthly stickers or other parking identification devices to any
Tenant and/or its employees who refuse to comply with the above Rules and
Regulations and all posted and unposted City, State or Federal ordinances, laws
or agreements.
(o) Tenant agrees to acquaint all employees with these Rules
and Regulations.
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EXHIBIT "C"
WORK LETTER AGREEMENT
This Work Letter Agreement ("Letter") supplements the Standard Office
Lease (the "Amendment") dated as of September 19, 1996, executed concurrently
herewith by and between Landlord and Tenant ("Lease"), covering certain premises
described in the Lease (the "Premises"). All terms not defined herein shall have
the same meaning as set forth in the Lease.
1.0 Plans and Drawings for Premises.
1.1 Sign Approval Schedule.
Promptly after execution of this Lease Landlord shall furnish Tenant
with a schedule setting forth the projected time periods for submission and
approval of plans and specifications and cost estimates and showing the
deadlines for any actions required to be taken by the parties during the plan
approval process. Landlord may from time to time during the plan approval
process modify or amend such schedule due to any delays that are encountered.
1.2 Space Plans.
Promptly after the execution of the Lease, Tenant shall cause Tenant's
architect to furnish to Landlord and Landlord's architect, for review and
approval, a preliminary space plan sufficient to convey the architectural design
of the Premises for Tenant's leasehold improvements ("Space Plans").
The Space Plans shall include any improvements Tenant intends to make to the
common areas of the seventh (7th) floor (i.e. elevator lobby and corridors). If
Landlord or Landlord's architect shall disapprove of any part of the Space
Plans, Landlord shall, within five (5) days after receipt thereof, advise Tenant
in writing of such revisions and reasons therefor, as are reasonably required by
Landlord or Landlord's architect to approve the Space Plans. Landlord and Tenant
shall thereafter negotiate in good faith to reach agreement upon revisions to
the Space Plans. After Landlord and Tenant have reached such agreement, Tenant
shall then submit to Landlord and Landlord's architect for review and approval,
a revision of the Space Plans incorporating the revisions requested by Landlord
or Landlord's architect. The cost for the initial Space Plan and one revision
thereto shall be deducted from the Allowance (as defined in Paragraph 4.0
below). Any further Space Plan revisions shall be at Tenant's sole cost and
expense.
1.3 Working Drawings.
Tenant shall cause Tenant's architect to prepare from the approved
Space Plans and to furnish to Landlord and Landlord's architect for review and
approval complete architectural plans, drawings and specifications and complete
engineered mechanical, structural and electrical Working Drawings for (i) all of
the Premises showing the demising plan, finish schedule (i.e. carpeting and
other floor coverings), including the finish schedule for any improvements to
the common areas of the seventh (7th) floor of the Premises, and Tenant's design
work desired by Tenant therefor, and (ii) any internal or external
communications or special utility facilities which
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will require conduits or other improvements within common areas (collectively
"Final Working Drawings and Specifications"; the work shown thereon being called
the "Tenant Building Standard Work"), all in such form and in such detail as may
be reasonably required by Landlord. The Final Working Drawings and
Specifications shall be prepared by Tenant's architect and Tenant shall use an
engineer approved by Landlord to perform the engineering work on the mechanical
and electrical plans. Tenant's architect and the engineer retained by Tenant
shall furnish all services necessary for the preparation of the Final Working
Drawings and Specifications and for securing approvals and permits as, by reason
of the nature of the Tenant Building Standard Work, shall be required from any
governmental authority having jurisdiction or compliance deemed necessary by
Landlord including without limitation ACM (asbestos containing material),
hazardous wastes or materials, OSHA, CAL-OSHA, life-safety, sprinklers and the
like. If Landlord or Landlord's architect shall disapprove of any part of the
Final Working Drawings and Specifications, Landlord shall, within ten (10) days
after receipt thereof, advise Tenant in writing of such revisions and reasons
therefor as are reasonably required by Landlord or Landlord's architect to
approve the Final Working Drawings and Specifications. Landlord and Tenant shall
thereafter negotiate in good faith to reach agreement upon revisions to the
Final Working Drawings and Specifications. After Landlord and Tenant have
reached such agreement, Tenant shall then submit to Landlord and Landlord's
architect for review and approval, a revision of the Final Working Drawings and
Specifications incorporating the revisions requested by Landlord or Landlord's
architect. Notwithstanding the foregoing, if Landlord disapproves the portion of
the Final Working Drawings and Specifications relating to the finish schedule
for Tenant's proposed improvements to the common area of the seventh (7th)
floor, Landlord shall provide written notice of such disapproval separate and
apart from any other disapproval of the Final Working Drawings and
Specifications. Tenant shall not be required to revise the finish schedule for
the proposed improvements to the common area of the seventh (7th) floor to
overcome Landlord's objections; provided, however, that Landlord shall have no
obligation to perform any improvements to the restrooms on the seventh (7th)
floor of the Premises (other than code compliance alterations) unless Landlord
approves the finish schedule and the portion of the Final Working Drawings and
Specifications pertaining to Tenant's proposed improvements to the common areas
of the seventh (7th) floor of the Premises. Final Working Drawings and
Specifications shall comply with all conditions set forth in paragraph 1.4
below. Unless otherwise specified in the Final Working Drawings and
Specifications, Landlord shall use building standard materials for the Tenant
Building Standard Work. All architectural and engineering fees and consultant
fees incurred by Landlord in connection with the review and approval of the
Space Plans and Final Working Drawings and Specifications shall be deducted from
the Allowance but shall be included within the limitation on the fee to be paid
to Landlord's construction manager pursuant to Paragraph 4.2(ix) hereof. The
cost of the initial Final Working Drawings and Specifications and one revision
thereto shall be deducted from the Allowance. Any further Final Working Drawings
and Specifications revisions shall be at Tenant's sole cost and expense.
1.4 Requirements of Final Working Drawings and Specifications.
The Final Working Drawings and Specifications shall: (i) be in
conformance with the Base Building shell and with the design, construction and
equipment of the Building and with Landlord's Building standards and
specifications in effect for the Project; (ii) comply with all
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applicable laws and ordinances, and the rules and regulations of all
governmental authorities having jurisdiction; (iii) comply as Landlord deems
reasonably necessary with all ACM, hazardous waste, American with Disabilities
Act, OSHA, CAL-OSHA, life-safety, and sprinkler rules, regulations, ordinances
or laws; (iv) comply with all applicable insurance regulations for a fire
resistive Class A Building; and (v) include locations and complete and exact
dimensions.
1.5 Changes at Tenant's Expense.
If Tenant makes any changes to the Final Working Drawings and
Specifications after Landlord's approval thereof or if the Final Working
Drawings and Specifications or any amendment thereof or supplement thereto shall
require changes in the Building shell, the increased cost of the Building shell
work caused by such changes shall (to the extent such increase is in excess of
the Allowance) be charged against Tenant, including without limitation permits,
consultants, mitigation fees, surcharges, additional supervisory fees or
administrative fees. The cost thereof shall include all direct architectural
and/or engineering fees and expenses in connection therewith, including the fees
of Landlord's architect incurred in reviewing any such changes, amendments or
supplements to the Final Working Drawings and Specifications (which shall be
limited in accordance with Paragraph 4.2(ix) hereof), as well as compensation
from Tenant for the costs of any delays which arise from such changes, such
costs including but not limited to lost rent, Final Working Drawings and
Specifications triggering code work, title work and the like. If any such
change, deletion or addition increases the cost of construction and installation
of the Tenant Building Standard Work (to the extent such increase is in excess
of the Allowance), Tenant shall immediately pay to Landlord the full amount of
the increase in the cost of such construction and installation prior to
Landlord's commencement of such addition or change. Tenant's failure to make any
payment with respect to change orders shall be deemed a default under the Lease
and the amount so delinquent shall be deemed Additional Rent and Landlord may
exercise all rights and remedies set forth in Article 20 of the Lease; and in
addition, Landlord may delay construction until such payment is made and such
delay shall be deemed a Tenant-caused delay subject to the provisions of
Paragraph 7.0 of this Exhibit C.
2.0 Costs of Work.
2.1 Landlord shall provide those building standard tenant
improvements pursuant to mutually approved Final Working Drawings and
Specifications prepared by the Tenant's architect. All items of Tenant Building
Standard Work (whether or not the cost thereof is covered by the Allowance)
shall become the property of Landlord upon expiration or earlier termination of
the Lease and shall remain on the Premises at all times during the Lease Term.
2.2 At such time as Landlord has approved the Final Working
Drawings and Specifications, Landlord shall request bids for the installation of
the Tenant Building Standard Work from the following contractors: Xxxxxxx
Xxxxxxx, Turelk, Interscape, Innerspace and Xxxx. Landlord and Tenant shall
jointly determine which contractor's bid to accept. The bid from the contractor
selected by Landlord and Tenant shall be used for purposes of preparing the Work
Cost Statement pursuant to Subparagraph 2.3 hereof.
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2.3 Prior to the commencement of any Tenant Building Standard Work,
Landlord shall submit to Tenant a written estimate of Work Cost (as defined in
Paragraph 4.2 below) on all Tenant Building Standard Work, which written
estimate shall be based on the Final Working Drawings and Specifications.
Thereupon, the contractor selected pursuant to Section 2.2 above ("Contractor")
and Tenant shall either approve the estimate or disapprove specific items and
submit to Landlord a revision of the Final Working Drawings and Specifications
to reflect the deletion and/or substitution for such disapproved items.
Submission and approval of the Work Cost estimate shall proceed in accordance
with the schedule provided in Paragraph 5 below. Upon Landlord's approval of
such estimate, the approved estimate is to be hereinafter known as "Work Cost
Statement." Landlord shall have the right to purchase special installations
requiring extended material delivery lead items as set forth in the Final
Working Drawings and Specifications and to commence the construction of the
items included in said Work Cost Statement pursuant to Subparagraph 3.1 hereof.
2.4 Until Landlord approves the estimate and the Working Drawings and
the Final Working Drawings and Specifications are signed by Landlord and Tenant,
Landlord shall be under no obligation to perform the installation of the Tenant
Building Standard Work.
3.0 Construction.
3.1 Following Landlord's approval of the Work Cost Statement, Landlord
shall direct the Contractor (as determined in Paragraph 2.2) to commence and
diligently proceed with the construction of all of the Tenant Building Standard
Work, subject to delays beyond the reasonable control of Landlord or the
Contractor. Promptly upon the commencement of the Tenant Building Standard Work,
Landlord shall furnish Tenant with a schedule setting forth the projected
completion dates therefor and showing the deadlines for any actions required to
be taken by Tenant during such construction, and Landlord may from time to time
during the prosecution of the Tenant Building Standard Work modify or amend such
schedule due to delays encountered by Landlord. Landlord shall make a reasonable
effort to meet such schedule as the same may be modified or amended.
3.2 Concurrently with Landlord's construction of the Tenant Building
Standard Work, Landlord shall, at Landlord's sole cost and expense, improve and
upgrade the common areas (i.e., the restrooms, elevator lobby and corridors) of
the sixth (6th) floor of the Building consistent with Landlord's building
standard for the common areas of the Building. If Landlord has approved the
finish schedule and the Final Working Drawings and Specifications for Tenant's
proposed improvement of the common areas of the seventh (7th) floor of the
Premises, then Landlord shall also, at Landlord's sole cost and expense, improve
and upgrade the restrooms on the seventh (7th) floor of the Building to
Landlord's building standard for restrooms in the Building. In addition,
Landlord shall, at Landlord's sole cost and expense and without deduction from
the Allowance, clean the heating, ventilating and air conditioning ducts serving
the Premises in conjunction with the installation of the Tenant Building
Standard Work.
3.3 Tenant shall have a thirty (30) day period ("Fixturization Period")
prior to the Scheduled Occupancy Date for the purpose of installing Tenant's
personal property and
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equipment. The Fixturization Period shall commence upon the date of substantial
completion of Tenant's Building Standard Work, or if Landlord is prevented from
or delayed in completing the Tenant Building Standard Work due to Tenant Delays
(as defined in Section 7.0 below), then the date upon which the Tenant Building
Standard Work would have been substantially completed but for such acts or
omissions of Tenant. Tenant's Building Standard Work shall be substantially
complete on the date when all of Tenant's Building Standard Work has been
substantially completed in accordance with this Work Letter Agreement, except
for punchlist items. In addition, Tenant may enter the Premises not earlier than
fourteen (14) days prior to substantial completion of the Tenant Building
Standard Work for the sole purpose of installing Tenant's personal property and
equipment so long as such entry does not interfere with the orderly construction
and completion of the Tenant Building Standard Work. Tenant shall notify
Landlord of its desired times of entry during the Fixturization Period or during
the last fourteen (14) days prior to substantial completion of the Tenant
Building Standard Work and shall submit the scope of work to be performed and
the names of the contractors who will perform such work. Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all suits, claims,
actions, losses, costs or expenses including claims for worker's compensation of
any nature whatsoever together with reasonable attorneys' fees arising out of or
in connection with the installation of Tenant's personal property, fixtures or
equipment during the Fixturization Period. Landlord and Tenant shall cause their
respective contractors to cooperate so that each party may complete its work in
the Premises without interfering with the other. Tenant shall not be required to
pay any Basic Rental or Tenant's Proportionate Share of Direct Costs during the
Fixturization Period, but all other terms and conditions of the Lease shall
apply.
3.4 Upon substantial completion of the Tenant Building Standard
Work, representatives of Landlord and Tenant shall jointly conduct a
walk-through inspection of the Premises and shall prepare a schedule of
punchlist items for the Tenant Building Standard Work requiring correction or
completion by Landlord. Landlord shall correct or complete the items on the
punchlist within a reasonable period of time following the substantial
completion of the Tenant Building Standard Work.
4.0 Allowance and Work Cost.
4.1 Allowance.
Landlord shall grant to Tenant an allowance ("Allowance") of
Thirty-seven Dollars ($37.00) per rentable square foot in the Premises, to be
applied toward the Work Cost.
4.2 Work Cost.
"Work Cost" means: (i) the cost of preparation of the initial Space
Plans and Final Working Drawings and Specifications, and one revision thereof;
(ii) governmental agency plan check, permit and other fees; (iii) sales and
other taxes; (iv) Title 24 fees; (v) inspection costs; (vi) the actual costs and
charges for material and labor, contractor's profit and general overhead
incurred by Landlord for the Tenant Building Standard Work; (vii) all other
reasonable costs to be expended by Landlord in the construction of the Tenant
Building Standard Work, (viii) cost of furniture, fixtures and equipment
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installed in the Premises as part of the Tenant Building Standard Work, (ix) all
design, architectural and engineering fees and consultant fees incurred by
Landlord in connection with the review and approval of the Space Plans, Working
Drawings and Final Working Drawings and Specifications and the costs of
Landlord's construction manager (provided that all such fees and costs shall not
exceed $1.00 per rentable square foot in Premises). If more than one revision to
any of the Space Plans, Working Drawings and Final Working Drawings and
Specifications is required, the cost thereof shall be paid by Tenant at its sole
cost and expense.
4.3 Costs in Excess of Allowance.
If the amount provided in the Work Cost Statement exceeds the Allowance
(the amount by which the Work Cost exceeds the Allowance shall be referred to
herein as the "Excess Cost"), Tenant shall pay the Excess Cost to Landlord by
paying a portion of each progress payment requested by the Contractor under the
contract equal to the proportion that the total Excess Cost bears to the total
amount set forth in the Work Cost Statement multiplied by the amount requested
by the Contractor in its request for payment. All such payments of Excess Cost
shall be due and payable on the same date that Landlord is required to pay the
request for payment under the Contractor's contract. Tenant's failure to make
any payment of the Excess Cost when due, or to make any payment with respect to
change orders that cause the Work Cost to exceed the Allowance, shall be deemed
an Event of Default under the Lease and the amount so delinquent shall be deemed
Additional Rent and Landlord may exercise all rights and remedies set forth in
Article 20 of the Lease with respect to such Event of Default; and in addition,
Landlord may delay construction until such payment is made and such delay shall
be deemed a Tenant-caused delay subject to the provisions of Paragraph 7.0 of
this Exhibit C.
4.4 Unapplied Allowance.
If upon completion of the Tenant Building Standard Work, any portion of
the Allowance has not been applied to the Work Cost (such portion shall
hereafter be referred to as the "Unapplied Allowance"), Landlord shall give
written notice to Tenant of the amount of the Unapplied Allowance within fifteen
(15) days after completion of the Tenant Building Standard Work. Tenant may use
the Unapplied Allowance to pay the cost of furnishings, fixtures or equipment to
be used by Tenant solely in the Premises or to defray moving expenses incurred
by Tenant in relocating to the Premises. Landlord shall reimburse Tenant from
the Unapplied Allowance for the cost of installing furnishings, fixtures or
equipment to be used solely in the Premises by Tenant and/or moving expenses
incurred by Tenant in relocating to the Premises. Landlord shall use diligent
efforts to reimburse Tenant for such amounts within fifteen (15) days after
Landlord's receipt of detailed invoices for such costs or expenses but in no
event shall such reimbursement be made later than thirty (30) days from the date
of Landlord's receipt of such invoices; provided, however, Landlord shall have
no obligation to use any portion of the Unapplied Allowance to reimburse Tenant
for furnishings, fixtures or equipment and/or moving expenses unless and until
Tenant takes possession of the Premises and accepts the same in accordance with
Article 8 of the Lease. Landlord shall have no obligation to use any portion of
the Unapplied Allowance to pay the cost of furnishings, fixtures or equipment to
be used solely in the Premises and/or to pay moving expenses from and after the
date that is ninety (90) days after the date that Tenant takes possession of the
Premises. In the alternative, Tenant may elect to
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apply a portion of the Unapplied Allowance not to exceed Three Dollars ($3.00)
per rentable square foot in the Premises to the Basic Rental becoming due under
the Lease. Tenant may exercise such right by giving written notice to Landlord
within fifteen (15) days after the date Landlord notifies Tenant of the amount
of any Unapplied Allowance. If Tenant exercises such right, a portion of the
Unapplied Allowance not to exceed Three Dollars ($3.00) per rentable square foot
shall be applied to the first installments of monthly Basic Rental becoming due
under the Lease until such amount is used in full.
5.0 Intentionally Omitted
6.0 Intentionally Omitted.
7.0 Delays.
It is agreed that the Fixturization Period shall not commence until
Landlord has substantially completed all Tenant Building Standard Work to be
performed by Landlord by this Work Letter Agreement; provided, however, that if
Landlord shall be delayed in substantially completing said work as a result of
any of the following (collectively, "Tenant Delays"):
(i) Tenant's failure to complete any action item on or before the
due date which is the responsibility of Tenant, or
(ii) Any change orders, or
(iii) Tenant's request for materials, finishes, or installations
other than Building Standard Work, or
(iv) Any delay of Tenant in making payment to Landlord as provided
herein, or
(v) Any other delay attributable to Tenant or by a party employed
by Tenant or under Tenant's control or due to failure of
Tenant to perform or act in order to facilitate Tenant's
tenancy,
then as soon as possible following the commencement of the Fixturization Period,
Landlord shall provide to Tenant a reasonable particularized statement of the
number of days of Tenant Delays, and the Early Occupancy Period shall be reduced
and the Commencement Date of the Lease shall be advanced by the number of days
of such Tenant Delays.
8.0 Indemnity and Insurance.
8.1 Indemnity. To the extent Tenant constructs or installs any
tenant improvements in the Premises, Tenant, Tenant's contractor and
subcontractors, agents, employees and representatives agree to save, indemnify
and hold harmless Landlord against any and all liability, claims, mechanics
liens, judgments, or demands, including demands arising from injuries to or
death of persons (Tenant's employees, employees of Tenant's contractor(s) and
employees of all
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subcontractors and sub-subcontractors of Tenant's contractor included) and
damage to property, or any other loss, loss of rent, damage, or expense, arising
directly or indirectly out of the obligations herein undertaken or out of the
operations conducted by Tenant and/or its contractor(s), subcontractors or
sub-subcontractors save and except liability, claims, judgments or demands
arising through the gross negligence or sole willful misconduct of Landlord and
will make good to and reimburse Landlord for any expenditures, including actual
attorneys' fees, which Landlord may incur by reason of such matters and, if
requested by Landlord will defend any such suits at the sole cost and expense of
contractor.
8.2 Insurance.
If Tenant constructs or installs any tenant improvements in the
Premises, the Tenant shall, at its sole expense, be responsible for the securing
of insurance by the Tenant's contractor(s) and for the maintenance of same by
the Tenant's contractor(s) until completion and final acceptance of the work.
Certificates of Insurance affording evidence of same shall be obtained from the
Tenant's contractor(s) by the Tenant and delivered to the Landlord prior to the
commencement of any work by the Tenant's contractor. The required insurance
coverage is as follows:
1. Worker's Compensation and Employers' Liability Insurance including
coverage under the U.S. Longshoremen's and Harborworkers' Act and
affording 30 days written notice of cancellation to Contractor. The
Employers' Liability minimum limits required are as follows:
Bodily Injury by accident $100,000. each accident
Bodily Injury by disease $500,000. policy limit
Bodily Injury by disease $100,000. each employee
2. General Liability Insurance on an Occurrence basis for an amount of
$5,000,000 each occurrence and including the following coverage:
a) Premises and Operations coverage with X, C and U exclusions
deleted, if applicable.
b) Owners and Contractors Protective coverage.
c) Products and Completed Operations coverage.
d) Blanket Contractual coverage, including both oral and written
contracts.
e) Personal Injury coverage.
f) Broad Form Property Damage coverage, including completed
operations.
g) An endorsement naming Landlord as additional insured.
h) An endorsement affording 30 days written notice to Contractor
in event of cancellation or material reduction in coverage.
i) An endorsement providing that such insurance as is afforded
under policy of Tenant's contractor(s) is primary insurance as
respects the Owner and that any other insurance maintained by
Owner is excess and noncontributing with the insurance
required hereunder.
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j) Insurance covering ACM, hazardous materials, life-safety
systems, sprinklers, OSHA, CAL-OSHA and the like.
No endorsement limiting or excluding a required coverage is permitted.
CLAIMS-MADE COVERAGE IS NOT ACCEPTABLE.
3. Business Auto Liability Insurance for an amount of $5,000,000 combined single
limit for bodily injury and/or property damage liability including:
a) Owned Autos,
b) Hired or Borrowed Autos,
c) Nonowned Autos, and
d) An endorsement affording 30 days written notice of
cancellation to Landlord in event of cancellation or material
reduction in coverage.
A certificate and endorsements affording evidence of the above requirements must
be delivered to Landlord before Tenant's contractor performs any work at or
prepares or delivers materials to the site of construction.
Tenant shall require its contractor(s) to require its subcontractors to provide
insurance where Tenant's contractor(s) would be required to carry insurance
under this insurance section and to be responsible for obtaining the appropriate
certificates or other evidence of insurance.
Tenant's contractor(s) shall maintain all of the foregoing insurance coverage in
force until the work under this agreement is fully completed and accepted except
as to 2c, (Products and Completed Operation Coverage), which is to be maintained
for ten (10) years following completion of the work and acceptance by Landlord
and Tenant. All insurance, except Workers' Compensation, maintained by Tenant's
contractor and its subcontractors shall preclude subrogation claims by the
insurer against anyone insured thereunder.
The requirements for the foregoing insurance shall not derogate from the
provisions for indemnification of Landlord by Tenant under the "indemnity"
paragraph of this agreement.
If the Tenant fails to secure and maintain the required insurance from Tenant's
contractors, the Landlord shall have the right (without any obligation to do so,
however) to secure same in the name and for the account of the Tenant's
contractor(s) in which event the Tenant shall pay the cost thereof and shall
furnish upon demand, all information that may be required in connection
therewith. Further, such failure to secure and maintain the required insurance
shall constitute a default under the Lease and Landlord shall be entitled to
immediately have all tenant improvement work cease.
9.0 Miscellaneous.
(a) If Tenant constructs or installs any tenant improvements in the
Premises, Tenant and Tenant's contractors shall abide by all safety and
construction rules and regulations of
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Landlord, and all work and deliveries shall be scheduled through Landlord. Entry
by Tenant's contractors shall be deemed to be under all the terms, covenants,
provisions and conditions of said Lease except the covenant to pay rent and
additional rent. All Tenant's materials, work, installations and decorations of
any nature brought upon or installed in the Premises before the commencement of
the Early Occupancy Period shall be at Tenant's risk, and neither Landlord nor
any party acting on Landlord's behalf shall be responsible for any damage
thereto or loss or destruction thereof. Tenant shall award its contracts and
conduct its activities hereunder in a manner consistent with Landlord's
contractor's labor agreement affecting the Building.
(b) Tenant shall reimburse Landlord for any extra expenses incurred by
Landlord in the construction of the Tenant Building Standard Work by reason of
faulty work done by Tenant or its contractors, or by reason of delays caused by
such work, or by reason of cleanup which fails to comply with Landlord's rules
and regulations.
(c) Tenant's contractors shall not post any signs other than those
required by law in connection with the construction on any part of the Project
or Premises.
10.0 Incorporation.
This Work Letter Agreement is hereby incorporated into the Lease executed
between Landlord and Tenant concurrently herewith.
TENANT:
HEALTH MANAGEMENT SYSTEMS, INC.,
a New York corporation
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
Its: Director of Administration
----------------------------------
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HEALTH CARE MICROSYSTEMS, INC.,
a California corporation
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------
Its: Chief Operating Officer
---------------------------------------
LANDLORD:
PACIFIC CORPORATE TOWERS LLC, a
Delaware limited liability company
By: GE Capital Investment Advisors, Inc.,
Its authorized investment advisor
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------
Its: Vice President
---------------------------------------
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EXHIBIT "D"
NOTICE OF LEASE TERM DATES
TO: ___________________________________
___________________________________
___________________________________
___________________________________
RE: Standard Office Lease dated _________________ between PACIFIC CORPORATE
TOWERS LLC, a Delaware limited liability company ("Landlord") and
HEALTH MANAGEMENT SYSTEMS, INC., a New York corporation, and HEALTH
CARE MICROSYSTEMS, INC., a California corporation (collectively,
"Tenant") concerning Suite No. 600 on the sixth (6th) floor and Suite
No. 700 on the seventh (7th) floor of the office building located at
000 X. Xxxxxxxxx Xxxx., Xx Xxxxxxx, Xxxxxxxxxx.
Dear Tenant:
In accordance with the Standard Office Lease (the "Lease"), we wish to
advise you and/or confirm as follows:
1. The Premises are Ready for Occupancy, and the Early Occupancy Period
has commenced or shall commence on _________________.
2. The Lease Term shall commence on ________________ for a term of
___________ ending on _______________________.
3. Rent will commence to accrue on _____________________, in the amount
of ________________.
4. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.
5. Your rent checks should be made payable to ____________________ at
_______________________.
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6. The exact number of rentable square feet within the Premises is
_______ square feet.
LANDLORD:
PACIFIC CORPORATE TOWERS LLC, a
Delaware limited liability company
By: GE CAPITAL INVESTMENT
ADVISORS, INC., its authorized
investment advisor
By: Xxxxxx Xxxxxxx
----------------
Its: Vice President
----------------
Agreed to and accepted this _____ day of _____ 1996.
TENANT:
HEALTH MANAGEMENT SYSTEMS, INC.,
a New York Corporation
By: Xxxxxxx Xxxxxxx
-------------------
Its: Director of Administration
---------------------------
HEALTH CARE MICROSYSTEMS, INC.,
a California corporation
By: Xxxxxx Xxxxxxx
----------------
Its: Chief Operating Officer
-----------------------
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EXHIBIT E
EXPANSION SPACE
Notwithstanding anything contained in Article 33 of the Lease, the
following terms shall have the following meanings:
"First Refusal Space" shall mean the remainder of the space on the
sixth (6th) floor of the Building that does not constitute the original
Premises, First Expansion Space or Second Expansion Space.
"First Expansion Space" shall mean approximately two thousand rentable
square feet located contiguous to the Premises on the sixth (6th) floor of the
Building in a location designated, as shown on Exhibit A, approximate to
corresponding gridlines R through P and quadrants 17 through 19.
"Second Expansion Space" shall be contiguous to either the First
Expansion Space beginning at gridlines R through P of Exhibit A and expanding
forward, or if the First Expansion Space is not taken, then the Second
Expansion Space shall mean contiguous to the current premises beginning at
gridline R and moving forward through gridline P, and coinciding with quadrants
17 through 19.
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66
CONFIDENTIALITY AGREEMENT
This Agreement is made and entered into as of September 19, 1996 by and
between Health Management Systems, Inc., a New York corporation, and Health
Care Microsystems, Inc., a California corporation (collectively, "Tenant"), and
Pacific Corporate Towers LLC, a Delaware limited company ("Landlord").
Landlord and Tenant are entering into a lease of certain premises in
the building located at 000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx
(the "Premises"). In connection with the lease ("Proposed Transaction"),
Landlord has granted certain terms and conditions as an inducement to Tenant to
enter into the Proposed Transaction. Landlord would not have proposed these
terms and conditions to Tenant without Tenant's agreement to keep such terms
and conditions confidential. Tenant, and its agents, officers, shareholders,
employees, advisors, contractors, affiliates and representatives (including,
without limitation, brokers, accountants and attorneys)(collectively
"Representatives"), will acquire various information relating to the terms and
conditions of the Proposed Transaction. The parties desire to maintain the
confidentiality of such information pursuant to the provisions of this
Agreement.
For purposes of this Agreement, the term "Information" means any and
all information, materials and documents, in written or oral form, relating to
the terms and conditions of the Proposed Transaction, including, without
limitation, the economic terms and conditions of the Proposed Transaction.
Tenant agrees to keep confidential, and not to publish, disclose or
otherwise divulge to anyone, the Information, and to cause its Representatives
to keep confidential, and to not publish, disclose or otherwise divulge to
anyone, the Information, except that Tenant shall be permitted to disclose the
Information: (i) to any Representative of Tenant who needs to know the
Information, provided that such Representative is advised of this Agreement;
(ii) to the extent required to comply with federal and state income tax laws;
(iii) to the extent required by applicable laws and governmental regulations
or by any subpoena or similar legal process, provided that the Tenant provides
prompt written notice to Landlord prior to such disclosure so that Landlord may
seek a protective order or other remedy to prevent or limit such disclosure;
(iv) to the extent such disclosure is contemplated under the lease for the
Proposed Transaction; (v) to the extent Landlord shall have consented to such
disclosure in writing; or (vi) in any arbitration or litigation proceeding
between Landlord and Tenant arising out of this Lease. Notwithstanding the
foregoing, nothing herein shall prohibit the disclosure by Tenant or Landlord,
after the consummation of the Proposed Transaction, of the fact that Tenant has
leased the Premises in the Building.
Without prejudice to any rights and remedies otherwise available,
Landlord shall be entitled to equitable relief by way of injunction or
otherwise without proof of actual damages if Tenant or its Representatives
breach or threaten to breech any of the provisions of this Agreement. In the
event of any litigation concerning this Agreement, the prevailing party shall
be entitled to recover its reasonable attorneys' fees and costs of suit. Tenant
shall be responsible for the breach of this Agreement by any of its
Representatives. No failure or delay of Landlord in
67
exercising any right, power or privilege hereunder will operate as a waiver
thereof. This Agreement shall be governed by the laws of the State of
California.
This Agreement shall terminate on the second (2nd) anniversary of the
date first set forth above.
This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
In Witness Whereof, the parties have executed this Agreement as of the
date first set forth above.
LANDLORD:
PACIFIC CORPORATE TOWERS LLC,
a Delaware limited liability company
By: GE Capital Investment Advisors, Inc.,
its authorized investment advisor
By: /s/ Xxxxxx Xxxxxxx
-------------------------
Its: Vice President
-------------------------
TENANT;
HEALTH MANAGEMENT SYSTEMS, INC.
a New York corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Its: Director of Administration
-----------------------------
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HEALTH CARE MICROSYSTEMS, INC.
a California corporation
By: /s/ Xxxxxx Xxxxxxx
--------------------------
Its: Chief Operating Officer
