Exhibit 10.5
SECOND AMENDMENT TO LEASE
This SECOND AMENDMENT TO LEASE ("Amendment") is made to be effective as of the
18th day of November, 1998, by and between XXXXXX REALTY, L.P., a Delaware
limited partnership ("Landlord") and COMSTREAM CORPORATION, a Delaware
corporation ("Tenant"), with reference to the following facts:
R E C I T A L S :
A. ADI Communication Partners, L.P., a California limited partnership,
Landlord's predecessor-in-interest, and Tenant entered into that certain Lease
(Bondable Triple Net) dated April 23, 1997 ("Original Lease") with respect to
certain premises located in San Diego, California and more particularly
described in the Lease ("Demised Premises"), upon which two (2) 2-story concrete
tilt-up commercial and industrial buildings ("Buildings") and certain other
related improvements were previously constructed by Landlord pursuant to the
Original Lease. The Original Lease was amended by that certain First Amendment
dated July 16, 1997 ("Amendment"). The Original Lease and the Amendment are
hereinafter collectively referred to as the "Lease."
B. Capitalized terms used in this Amendment and not otherwise defined
herein shall have the meaning ascribed to them in the Lease.
C. Tenant desires to vacate, in its entirety, the approximately 132,600
rentable square foot Building known as "Building A" ("Building A") and certain
portions of the Land and consolidate its business operations into the
approximately 66,400 rentable square foot Building known as "Building B"
("Building B").
D. Landlord is willing to allow Tenant to so consolidate its operations
and reduce the Demised Premises on certain conditions, including the condition
that Landlord enter into a replacement lease for Building A on terms acceptable
to Landlord.
E. Concurrently with Landlord's execution of this Amendment, Landlord
is entering into a lease ("Pac Xxxx Lease") with Pacific Xxxx ("Pac Xxxx")
regarding Pac Xxxx'x lease of Building A in its entirety and certain portions of
the Land and Improvements, as more particularly provided below.
F. Landlord and Tenant now desire to amend the Lease, subject to the
terms and conditions set forth herein, to (i) reflect Tenant's agreement to
deliver to Landlord (for its concurrent delivery to Pac Xxxx) possession of the
"Initial Surrender Space" described below on or before November 26, 1998; (ii)
redefine the Demised Premises by eliminating Building A and certain portions of
the Land on the "Surrender Date" described below, (iii) reduce the Monthly Base
Rent payable under the Lease as of March 1, 1999 ("Rent Adjustment Date"), (iv)
reduce the amount of
1
the LC currently required under Section 20.25 of the Lease to $462,000, (v)
provide Tenant with a $300,000 tenant improvement allowance ("New Allowance")
and concurrently therewith, provide for the repayment by Tenant to Landlord of
such New Allowance over the remaining Initial Term; (vi) provide for Tenant's
delivery to Landlord of a $2,000,000 payment as partial consideration for
Landlord's agreement to reduce the Demised Premises and enter into this
Amendment which consideration shall be payable in two installments, the first of
which shall be due and payable upon the Rent Adjustment Date and the second of
which shall be due on or before September 1, 1999 and shall be secured by a
$1,000,000 irrevocable standby letter of credit ("New LC"), and (vii) make
certain other modifications to the Lease, as more particularly set forth below.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Landlord and Tenant hereby agree to amend the
Lease, as follows:
1. DEMISED PREMISES. Tenant hereby agrees to vacate and surrender to
Landlord, on or prior to November 26, 1998, possession of the approximately
33,000 square feet of Building A ("Initial Surrender Space") depicted on the
site plan attached hereto AS EXHIBIT "A" ("Site Plan"). In addition, on or
before December 15, 1998 ("Surrender Date"), Tenant hereby covenants and agrees
to vacate, in its entirety, the balance of Building A and surrender the balance
of Building A to Landlord. Effective as of the Surrender Date, the "Demised
Premises," as described in the Lease, are hereby redefined to consist solely of
Building B and the portion of the Land (and related Improvements constructed
thereon) more particularly depicted on the Site Plan, subject, however, to
Tenant's continuing obligation to pay Monthly Base Rent, until the Rent
Adjustment Date, as more particularly set forth in Paragraph 3 below. As a
result thereof, effective as of the Surrender Date, all references in the Lease
to the Demised Premises shall mean the Demised Premises depicted on the Site
Plan and, any references in the Lease to (1) Buildings shall instead mean
Building B and (ii) the Land shall mean the Land depicted as the Demised
Premises on the Site Plan. In connection with the reduction of the Demised
Premises to Building B and the portion of the Land depicted on the Site Plan,
Tenant shall be required to perform, at Tenant's sole cost and expense, the work
described in EXHIBIT "B" attached hereto ("Sur-render Work"). All of the
Surrender Work shall be completed in its entirety by Tenant on or before January
31, 1999. All of such Surrender Work shall be performed in compliance with
Article XIX of the Lease (to the extent Article XIX is applicable to such
Surrender Work). Pacific Cornerstone Architects ("PCA") shall have the
opportunity to review, on behalf of Landlord, any required plans and
specifications for any such Surrender Work and the Building B Improvements
described below. The costs incurred by PCA in connection with such review shall
be applied against the New Allowance. Following such reconfiguration of the
parking areas, Tenant shall (notwithstanding anything to the contrary contained
in the definition of Improvements contained in the Lease), during the balance of
the Term, be entitled solely to the use of the 144 parking spaces identified on
the Site Plan (with the balance thereof to be for the sole use of the tenant(s)
of Building A and any Expansion Building(s) constructed within the Project by
Landlord); provided, however, in the event Tenant elects, at its option and at
Its sole cost and expense, to modify the parking areas around the Building B
truck doors, the parking spaces allocated for Tenant's exclusive use may be
increased to up to a maximum of 178 spaces. Such election may be made at any
time during the Term by
2
Tenant, subject to the requirements, to the extent applicable, of Article XIX of
the Lease. Tenant shall not permit any of its employees, contractors, agents,
visitors or invitees to use any parking spaces in the Project other than such
parking spaces allocated to Tenant as set forth above and as identified on the
Site Plan.
2. COMMENCEMENT DATE. Landlord and Tenant hereby acknowledge that the
Commencement Date of the Lease occurred on March 2, 1998. As a result thereof,
the Initial Term of this Lease shall end on February 28, 2005.
3. RENT. Effective as of the Rent Adjustment Date (but subject to
adjustment pursuant to Paragraph 4 below and the "Credit" described in Paragraph
I I below), the Base Rent schedule set forth in Section 3.1 of the Lease is
hereby deleted in its entirety and the following Base Rent schedule is inserted
in lieu thereof-
Period Monthly Base Rent Annual Base Rent
-------------------------------------------------------------------------
Rent Adjustment Date- $72,447 $ 869,364
02/29/00
03/01/00-02/28/02 $76,794 $ 921,528
03/01/02-02/29/04 $81,402 $ 976,824
03/01/04-02/28/05 $86,286 $1,035,432
From and after the Rent Adjustment Date, Tenant shall no longer be obligated to
pay any rent or other charges with respect to Building A nor any portion of the
Land no longer part of the Demised Premises; provided, however, Tenant shall, as
partial consideration for Landlord's agreement to enter into this Amendment and
reduce the Demised Premises, until the Rent Adjustment Date, continue to be
solely responsible for all Monthly Base Rent payable with respect to the
original Demised Premises (including Building A); subject, however, to the
Credit described in Paragraph 11 below. Following the Surrender Date, Tenant
shall no longer have any obligations with respect to the portions of the Demised
Premises no longer leased by Tenant (i.e., Building A and portions of the Land
no longer included in the Demised Premises) with the exception of (i) Tenant's
obligation to complete the Surrender Work; (ii) Tenant's obligation to pay all
Monthly Base Rent due with respect thereto until the Rent Adjustment Date, and
(iii) any other obligations which expressly survive the expiration or earlier
termination of the Term of the Lease to the extent such obligations arise on or
before the Surrender Date. Tenant acknowledges that the Impositions payable with
respect to the original Demised Premises through the Surrender Date will include
supplemental taxes reflecting the increased value of the Demised Premises as a
result of the prior construction of the Buildings and other improvements thereon
whether or not such supplemental tax xxxx is delivered by the taxing authority
prior to or after the Surrender Date.
3
4. NEW ALLOWANCE. Landlord shall provide Tenant with the New Allowance
in the amount of $300,000, which New Allowance shall be utilized by Tenant
solely for the costs of improving Building B for Tenant's consolidated business
operations ("Building B Improvements"). Notwithstanding the foregoing, Landlord
hereby agrees that up to $75,000 of the New Allowance may be used by Tenant for
the cost of performing the portion of the Surrender Work relating to the
necessary modifications to the parking lots as more particularly described IN
EXHIBIT "B." The Building B Improvements shall be constructed in compliance with
the requirements of Article XIX of the Lease. Notwithstanding anything to the
contrary contained in the Lease, Tenant shall not be required to remove the
Building B Improvements at the expiration or earlier termination of the Lease.
Further, Tenant shall only be required to remove any subsequent alterations or
other improvements constructed to Building B to the extent required under the
Lease; provided, however, in the event of any Transfer by Tenant pursuant to
Article XV of the Lease, Landlord shall have the right to reasonably require
that any subsequent alterations made to the Premises by or on behalf of such
transferee be removed at the expiration or earlier termination of the Lease
("Landlord's Removal Election"). Landlord's Removal Election shall be set forth
in a written notice delivered concurrently with Landlord's approval of the plans
for any such alterations Tenant shall be solely responsible for obtaining, at
Tenant's sole cost and expense, from any Authority all necessary governmental
approvals and permits subject to the New Allowance. Landlord shall reasonably
cooperate with Tenant in connection with obtaining such approvals. In the event
the New Allowance is insufficient to pay for the entire cost of the Building )3
Improvements, Tenant shall be solely responsible for such excess. As a result of
the New Allowance, the Monthly Base Rent payable under this Lease shall be
increased, as of the Rent Adjustment Date, by an amount equal to (i) the New
Allowance disbursed to Tenant, (ii) multiplied by a percentage factor sufficient
to amortize the New Allowance over the remaining Initial Tenn (approximately 72
months) at an annual interest rate of 10%, (iii) divided by 12. Any undisbursed
New Allowance remaining following the construction of the Building B
Improvements shall belong to Landlord. With the exception of the New Allowance,
Landlord shall have no obligation to contribute any allowance or make any
improvements with respect to the Demised Premises and the consolidation of
Tenant into the reduced Demised Premises described herein.
5. REDUCTION OF LETTER OF Credit. Within five (5) days after full
execution of this Amendment by Landlord and Tenant, the LC required as
additional security against an Event or Default under this Lease by Tenant shall
be replaced with the New LC in the amount of $462,000. The form of the New LC
shall be identical to the forrn of the existing LC, as more particularly
provided in Section 20.25(a) of the Lease. In addition, Section 20.25(b) of the
Lease is hereby deleted in its entirety and the following is hereby inserted in
lieu thereof-
"(b) RETURN OF NEW LC. The New LC shall be returned to Tenant at such
time as Tenant meets the following financial requirements for a period
of four (4) consecutive quarters:
(i) Tenant shall have annual revenues of not less than $40,000,000;
4
(ii) Tenant shall have annual operating income (before interest
payments and taxes) of not less than $2,000,000; and
(iii) Tenant's debt to equity ratio shall not be greater than 1:2.
Notwithstanding the foregoing, in the event that the New LC has been
returned to Tenant as a result of Tenant meeting all of tile foregoing
financial requirements and Tenant's financial coridition subsequently
falls to meet all of such requirements, Landlord shall be entitled to
require that a New LC in the amount of $462,000 be reestablished on the
terms and provisions set forth in this Section 20.25 in which event
Tenant shall, within five (5) days of written notice from Landlord,
deliver the New LC to Landlord in the form required hereunder."
6. CONSIDERATION FOR REDUCTION OF TENANT'S OBLIGATIONS. As partial
consideration for Landlord agreeing to enter into this Amendment and reduce the
size of the Demised Premises by removing Building A and other certain portions
of the Land from the Lease as of the Surrender Date, Tenant hereby covenants and
agrees to pay to Landlord the sum of $2,000,000 ("Amendment Consideration"). The
first $1,000,000 of the Amendment Consideration shall be payable by Tenant to
Landlord, in cash or by cashier's check or wire transfer of funds ("Cash") on or
before the Rent Adjustment Date. Concurrently with Tenant's execution hereof,
Tenant shall deliver evidence to Landlord that Tenant has the ftinds available
to pay the Amendment Consideration and shall reasonably demonstrate to Landlord
that such funds shall remain available to pay the Amendment Consideration as and
when required hereunder. The second $ 1,000,000 installment of the Amendment
Consideration shall be payable by Tenant to Landlord in Cash on or before
September 1, 1999. As additional security to ensure Tenant's payment of the
Amendment Consideration, Tenant shall deliver to Landlord, within five (5) days
after full execution of this Amendment by Landlord and Tenant, a $ 1,000,000
irrevocable standby letter of credit ("Amendment Consideration LC") naming
Landlord as the payee thereunder. The Amendment Consideration LC shall be held
by Landlord until such time as Tenant has paid to Landlord, in full, the
$2,000,000 Amendment Consideration. The Amendment Consideration LC shall be an
irrevocable standby letter of credit, issued by Citibank or another federally
insured bank reasonably acceptable to Landlord, and shall be in a form and
content reasonably acceptable to Landlord. Tenant shall pay all expenses, points
and/or fees incurred by Tenant in obtaining the Amendment Consideration LC. The
Amendment Consideration LC shall have an expiration date of September 30, 1999.
Landlord may present a site draft or demand with respect to the Amendment
Consideration LC if Tenant fails to deliver to Landlord the first S 1,000,000
installment of the Amendment Consideration on or before the Rent Adjustment Date
or falls to deliver to Landlord the second installment of the Amendment
Consideration on or before September 1, 1999. Landlord shall be entitled to
grant a security interest in, or make a collateral assignment of, Landlord's
rIghts under the Amendment Consideration LC in connection with mortgage
indebtedness incur-red by Landlord to a bona fide third party institutional
lender at an arm's length transaction. Landlord and Tenant shall execute such
documents as may be reasonably
5
necessary to document and perfect the security arrangements described
hereinabove. The Amendment Consideration LC shall be returned to Tenant upon
receipt by Landlord of the entire $2,000,000 Amendment Consideration.
7. NON-APPLICABILITY OF CERTAIN TERMS OF THE Lease. Notwithstanding
anything to the contrary contained in this Amendment or the Lease, Landlord and
Tenant hereby acknowledge and agree that:
(i) Tenant shall relinquish its signage rights witli respect to
Building A and any existing monument or other freestanding signs for Building A
on or before the Surrender Date. Tenant sliall, at Tenant's sole cost and
expense, promptly repair any and all damage caused to Building A in connection
with such removal.
(ii) Section 20.23 of the Lease (Expansion Option) is liereby deleted
in its entirety as Tenant shall no longer have any riglits with respect to
"Parcel C" identified on the Site Plan with the exception of Tenant's exclusive
night to use the 24 parking spaces, which spaces are part of Tenant's 144 total
spaces (subject to Tenant's right to increase such total up to 178 spaces
pursuant to Paragraph I above) located on Parcel C (as depicted on the Site
Plan) for the balance of the Term.
(iii) Section 20.24 of the Lease (Right of First Offer on Expansion
Building) is hereby deleted in its entirety as Tenant no longer has any right of
first offer with respect to any building hereinafter constructed on said Parcel
C.
(iv) Section 20.26 of the Lease (Reconfiguration of Land) is hereby
deleted in its entirety.
kI8. IMPOSITIONS. The following new Section 5.7 is inserted at the
end of Article V:
"5.7 SEPARATE ASSESSMENT. In the event the Improvements on the
Demised Premises or the Land are not separately assessed, but a part of a
larger parcel ("Larger Parcel") for assessment purposes, Tenant shall pay, as
its share of Impositions, all Impositions with respect to all Improvements on
the Demised Premises plus Tenant's Share of Impositions on the realty
underlying the Large Parcel. For purposes of this Lease Landlord and Tenant
agree that Tenant's Share of Impositions on the realty underlying the Larger
Parcel shall equal the square footage of the realty comprising Land depicted
on Site Plan divided by the total square footage of the realty comprising the
Larger Parcel. Landlord shall deliver to Tenant, contemporaneously with
delivery of the xxxx therefore, the calculations and assumptions made by
Landlord in determining Tenant's share of such impositions."
9. NOTICES. Landlord hereby amends its notices infori-nation contained in the
Lease as follows:
To Landlord: Xxxxxx Realty, L.P.
6
0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxx
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Realty, L.P.
0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxx
Facsimile: (000) 000-0000
with an additional copy to:
Xxxxxx Realty, L.P.San Diego, California 92121
Attn: Xxxxx Xxxxx
Facsimile: (000) 000-0000
To Tenant:
ComStream Corporation
0000 Xxxxxxxx XxxxxXxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
10. AMENDED AND RESTATED MEMORANDUM OF LEASE. Landlord and Tenant previously
recorded a Memorandum of Lease against the Land originally leased by Tenant.
Promptly after the Surrender Date, Landlord and Tenant shall execute an Amended
and Restated Memorandum of Lease in a form similar to Exhibit "C" to the Lease
modifying the legal description of the Land to be consistent with the reduced
Land leased by Tenant as of the Surrender Date.
11. CREDIT. Notwithstanding anything to the contrary contained herein, on
February 1, 1999, Landlord shall provide Tenant with a credit against Monthly
Base Rent, Impositions and other charges due under this Lease in an amount equal
to $120,000 ("Credit").
12. COMMON AREA PAYMENTS. As more particularly depicted on the Site Plan, when
Pac Xxxx solely occupies Building A, there will exist certain common area
between Building A and Building B consisting of a plaza, walkways and certain
other improvements (collectively, "Common Area"). Pursuant to the Pac Xxxx
Lease, Pac Xxxx (or Landlord) will be required to maintain and repair the Common
Area in good condition. Tenant hereby agrees to reimburse Landlord, within 15
days of Tenant's receipt of an invoice therefor (accompanied by reasonable
supporting documentation), for 33.3% of the reasonable costs actually incurred
in connection with such maintenance and repair of the Common Area. Such
reimbursement obligations shall constitute Additional Obligations under the
Lease. Tenant hereby grants Pac Xxxx and Landlord an irrevocable license to
enter upon the
7
portion of the Common Area located on the Land and further agrees that Pac
Xxxx'x or Landlord's entering upon the Land to perform such maintenance and
repair obligations shall not constitute a breach of Landlord's quiet enjoyment
covenant under the Lease; provided, Landlord agrees to use (and cause Pac Xxxx
to use) its commercially reasonable efforts not to interfere with Tenant's
business operations in connection therewith.
13. RETROFIT ALLOWANCE. Landlord and Tenant agree that the Retrofit Allowance
described in Section 2.11 of the Lease is hereby reduced to equal $335,000. As
more particularly set forth in said Section 2.11, such reduced Retrofit
Allowance shall be provided to Tenant upon the commencement of each Extension
Term. Such Retrofit Allowance shall be repaid as part of Base Rent as more
particularly set forth in Section 3.2 of the Lease.
14. LEGAL DESCRIPTION. Exhibit 'W' of the Lease is hereby deleted in its
entirety. The Land leased to Tenant shall, as of the Surrender Date, consist of
Land depicted as part of the Demised Premises upon the Site Plan attached hereto
as EXHIBIT "A".
15. HAZARDOUS MATERIALS. Landlord and Tenant acknowledge and agree that,
notwithstanding Tenant's complete vacation of Building A as of the Surrender
Date, the covenants, representations and indemnities a f Landlord and Tenant
with respect to Hazardous Materials shall survive the expiration of the Lease
with respect to Building A; provided, however, Tenant shall not be responsible
for the introduction of Hazardous Materials to Building A from and after the
Surrender Date unless such Hazardous Materials are so introduced to Building A
by Tenant or Tenants employees, agents, contractors or invitees.
16. COUNTERPARTS- This Amendment may be executed in multiple counterparts, all
of which together shall constitute one and the same Amendment.
17. EFFECT OF AMENDMENT This Amendment and all. terms herein are effective as
of the date hereof subject to the terms and conditions set forth herein. Except
as expressly amended hereby, all terms and conditions of the Lease shall
CONTINUE IN FULL FORCE AND EFFECT throughout the Lease Term, The Lease, as
amended hereby, constitutes the entire agreement of the parties and no further
modification of the Lease shall be binding and effective unless evidenced by an
AGREEMENT, IN WRITING, signed by both Landlord and Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the
date fast above written,
8
"Landlord" XXXXXX REALTY, L.P.,
a Delaware limited partnershipBy
By: Xxxxxx Realty Corporation Xxxxxx Realty Corporation,
a Maryland corporation a Maryland corporation
Its General Partner Its General Partner
By:__/s/_Jeffrey L. Hawken______ By:___/s/ Xxxxxx X. Xxxxx
Name:__Jeffrey L. Hawken_______ Name: Xxxxxx X. Xxxxx
Its:_____EVP & COO___________ Its: Executive Vice President
"Tenant" COMSTREAM CORPORATION
a Delaware corporation
By:__/s/Xxxxx Crichton______ By:_/s/ Xxxxx Crichton__________________
Name: Xxxxx Xxxxxxxx Name: Xxxxx Xxxxxxxx
Title: Vice President/Secretary Title: Chief Financial Officer
9
EXHIBIT "B"
SURRENDER WORK
Tenant shall cause all of the following Surrender Work to be completed
in its entirety on or before the applicable dates described in the Amendment to
which this Exhibit "B" is attached:
I . Tenant shall vacate, in its entirety, Building A and deliver
Building A to Landlord in the same condition as they were upon delivery of
possession thereof at the Commencement Date, reasonable wear and tear, casualty
and condemnation excepted, and shall surrender all keys to the Demised Premises
to Landlord at the address set forth in the Lease and shall inform Landlord of
all combinations on locks, safes and vaults, if any. Tenant shall move all of
its property therefrom and all alterations and improvements placed therein by
Tenant. Tenant shall repair any material damage to the Demised Premises caused
as a result of Tenant's vacation, including but not limited to, in connection
with the removal of its lab area cable trays, all materially damaged ceiling
tiles, floor tiles, walls and other Building A interior improvements damaged
during Tenant's occupancy of Building A and during the course of Tenant's
vacation of Building A.
2. Tenant shall remove the existing volleyball court and Tenant's
satellite farm and shall relocate Tenant's satellite equipment to the roof of
Building B. In connection with such removal, Tenant shall cause the areas
previously occupied by such volleyball court and such satellite farm to be paved
and improved to match the balance of the parking areas to create an additional
approximately 34 parking spaces. Tenant's satellite equipment shall be
installed, replaced, repaired, removed, operated and maintained in compliance
with all governmental laws, rules and regulations. Landlord shall reasonably
approve the location of such satellite equipment on the roof of Building B. Such
satellite equipment shall be reasonably screened and located on roof pads such
that there shall be no penetrations of the roof of Building B except for
installation of a roof Xxxx in connection therewith. All costs of installation,
operation and maintenance of the satellite equipment and any necessary related
equipment shall be borne by Tenant. Landlord shall not have any obligations with
respect to the satellite equipment. Landlord makes no representation that the
satellite equipment will be able to receive or transmit communication signals
without interference or disturbance and Tenant agrees that Landlord shall not be
liable to Tenant therefor. Tenant shall be solely responsible for any damage
caused as a result of the installation, operation, maintenance or removal of the
satellite equipment. Such satellite equipment shall remain the sole property of
Tenant and Tenant shall remove the satellite equipment and related equipment at
Tenant's sole expense upon the expiration or earlier termination of the Lease or
upon the imposition of any governmental law or regulation which may require
removal, and shall repair Building B upon such removal to the extent required by
such work or removal. If Tenant falls to remove such satellite equipment and
repair Building B within ten (10) days after the expiration or earlier
tennination of the Lease, Landlord may do so at Tenant's expense.
10
3. Tenant shall reconfigure the parking area and related Improvements
utilized by Building A and Building B in accordance with the Site Nan attached
to the Amendment as EXHIBIT "A."
4. All of the Surrender Work shall be performed in a good and
workmanlike manner and free of defects. Tenant shall be solely responsible at
its cost and expense to repair any defects arising with respect to the Surrender
Work during the Term. The obligation to repair any such defects shall survive
the expiration or earlier termination of the Lease. The materials and
specifications for any Surrender Work relating to the parking areas and other
areas outside of Building B (e.g., paving of the areas occupied by the
volleyball court) shall be consistent with the existing surrounding
improvements.
11
