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EXHIBIT 10.7
INDUSTRIAL LEASE
(SINGLE TENANT; NET; STAND-ALONE)
BETWEEN
THE IRVINE COMPANY
AND
XXXXX INSTRUMENTS CORP.
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INDEX TO INDUSTRIAL LEASE
(Single Tenant; Net; Stand-Alone)
ARTICLE I. BASIC LEASE PROVISIONS.................................... 1
ARTICLE II. PREMISES.................................................. 2
SECTION 2.1. LEASED PREMISES.................................. 2
SECTION 2.2. ACCEPTANCE OF PREMISES........................... 2
SECTION 2.3. BUILDING NAME AND ADDRESS........................ 3
ARTICLE III. TERM...................................................... 3
SECTION 3.1. GENERAL.......................................... 3
SECTION 3.2. DELAY IN POSSESSION.............................. 4
ARTICLE IV. RENT AND OPERATING EXPENSES............................... 4
SECTION 4.1. BASIC RENT....................................... 4
SECTION 4.2. OPERATING EXPENSES............................... 5
SECTION 4.3. SECURITY DEPOSIT................................. 6
ARTICLE V. USES...................................................... 7
SECTION 5.1. USE.............................................. 7
SECTION 5.2. SIGNS............................................ 7
SECTION 5.3. HAZARDOUS MATERIALS.............................. 7
ARTICLE VI. SERVICES.................................................. 10
SECTION 6.1. UTILITIES AND SERVICES........................... 10
SECTION 6.2. PARKING.......................................... 10
ARTICLE VII. MAINTAINING THE PREMISES.................................. 10
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR.................. 10
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR................ 11
SECTION 7.3. ALTERATIONS...................................... 11
SECTION 7.4. MECHANIC'S LIENS................................. 12
SECTION 7.5. ENTRY AND INSPECTION............................. 12
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY................ 12
ARTICLE IX. ASSIGNMENT AND SUBLETTING................................. 13
SECTION 9.1. RIGHTS OF PARTIES................................ 13
SECTION 9.2. EFFECT OF TRANSFER............................... 14
SECTION 9.3. SUBLEASE REQUIREMENTS............................ 14
SECTION 9.4. CERTAIN TRANSFERS................................ 15
ARTICLE X. INSURANCE AND INDEMNITY................................... 15
SECTION 10.1. TENANT'S INSURANCE............................... 15
SECTION 10.2. LANDLORD'S INSURANCE............................. 15
SECTION 10.3. TENANT'S INDEMNITY............................... 16
SECTION 10.4. LANDLORD'S NONLIABILITY.......................... 16
SECTION 10.5. WAIVER OF SUBROGATION............................ 16
ARTICLE XI. DAMAGE OR DESTRUCTION..................................... 17
SECTION 11.1. RESTORATION...................................... 17
SECTION 11.2. LEASE GOVERNS.................................... 18
ARTICLE XII. EMINENT DOMAIN............................................ 18
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SECTION 12.1. TOTAL OR PARTIAL TAKING.......................... 18
SECTION 12.2. TEMPORARY TAKING................................. 18
SECTION 12.3. TAKING OF PARKING AREA........................... 18
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS........... 18
SECTION 13.1. SUBORDINATION.................................... 18
SECTION 13.2. ESTOPPEL CERTIFICATE............................. 19
SECTION 13.3 FINANCIALS........................................... 19
ARTICLE XIV. DEFAULTS AND REMEDIES..................................... 19
SECTION 14.1. TENANT'S DEFAULTS................................ 19
SECTION 14.2. LANDLORD'S REMEDIES.............................. 20
SECTION 14.3. LATE PAYMENTS.................................... 21
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM..................... 22
SECTION 14.5. DEFAULT BY LANDLORD.............................. 22
SECTION 14.6. EXPENSES AND LEGAL FEES.......................... 22
SECTION 14.7. WAIVER OF JURY TRIAL............................. 23
SECTION 14.8. SATISFACTION OF JUDGMENT......................... 23
SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD........... 23
ARTICLE XV. END OF TERM............................................... 23
SECTION 15.1. HOLDING OVER..................................... 23
SECTION 15.2. MERGER ON TERMINATION............................ 23
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY....... 23
ARTICLE XVI. PAYMENTS AND NOTICES...................................... 24
ARTICLE XVII. RULES AND REGULATIONS..................................... 24
ARTICLE XVIII. BROKER'S COMMISSION....................................... 24
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST........................... 25
ARTICLE XX. INTERPRETATION............................................ .25
SECTION 20.1. GENDER AND NUMBER................................ 25
SECTION 20.2. HEADINGS......................................... 25
SECTION 20.3. JOINT AND SEVERAL LIABILITY...................... 25
SECTION 20.4. SUCCESSORS....................................... 25
SECTION 20.5. TIME OF ESSENCE.................................. 25
SECTION 20.6. CONTROLLING LAW.................................. 25
SECTION 20.7. SEVERABILITY..................................... 25
SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES................... 26
SECTION 20.9. INABILITY TO PERFORM............................. 26
SECTION 20.10. ENTIRE AGREEMENT................................. 26
SECTION 20.11. QUIET ENJOYMENT.................................. 26
SECTION 20.12. SURVIVAL......................................... 26
ARTICLE XXI. EXECUTION AND RECORDING................................... 26
SECTION 21.1. COUNTERPARTS..................................... 26
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY.............. 26
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER........... 26
SECTION 21.4. RECORDING........................................ 27
SECTION 21.5. AMENDMENTS....................................... 27
SECTION 21.6. EXECUTED COPY.................................... 27
SECTION 21.7. ATTACHMENTS...................................... 27
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ARTICLE XXII. MISCELLANEOUS............................................. 27
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS..................... 27
SECTION 22.2. GUARANTY......................................... 27
SECTION 22.3. CHANGES REQUESTED BY LENDER...................... 27
SECTION 22.4. MORTGAGEE PROTECTION............................. 27
SECTION 22.5. COVENANTS AND CONDITIONS......................... 27
SECTION 22.6. SECURITY MEASURES................................ 28
SECTION 22.7. OFF-SITE OBLIGATIONS............................. 28
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INDUSTRIAL LEASE
(SINGLE TENANT; NET; STAND-ALONE)
THIS LEASE is made as of the 20th day of December, 1996, by and between
The Irvine Company, a Michigan corporation, hereafter called "Landlord," and
Xxxxx Instruments Corp., a California corporation hereinafter called "Tenant."
ARTICLE I. BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean
and refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.
1. Premises: The Premises are more particularly described in Section 2.1.
2. Address of Building: To be determined.
3. Use of Premises: General office and manufacturing, warehouse and
distribution of telescopes, microscopes, binoculars and related optical
products.
4. Estimated Commencement Date: October 1, 1997
5. Lease Term: One Hundred Twenty (120) months, plus such additional days
as may be required to cause this Lease to terminate on the final day of
the calendar month.
6. Basic Rent: Seventy-Five Thousand One Hundred Thirty-Two Dollars
($75,132.00) per month, based on $.465 per rentable square foot.
Basic Rent is subject to adjustment as follows:
Commencing on the first day of the thirty-first (31st) month of the
Lease Term, the Basic Rent shall be Eighty-One Thousand Nine Hundred
Nineteen Dollars ($81,919.00) per month, based on $.507 per rentable
square foot.
Commencing on the first day of the sixty-first (61st) month of the
Lease Term, the Basic Rent shall be Eighty-Nine Thousand One Hundred
Eighty-Nine Dollars ($89,189.00) per month, based on $.552 per rentable
square foot.
Commencing on the first day of the ninety-first (91st) month of the
Lease Term, the Basic Rent shall be Ninety-Seven Thousand Two Hundred
Sixty-Eight Dollars ($97,268.00) per month, based on $.602 per rentable
square foot.
7. Guarantor(s): N/A
8. Floor Area of Premises: approximately 161,575 rentable square feet
9. Security Deposit: $107,000.00
10. Broker(s): CB Commercial
11. Additional Insureds: Insignia Commercial Group, Inc.
12. Address for Payments and Notices:
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LANDLORD TENANT
Prior to Commencement Date:
INSIGNIA COMMERCIAL GROUP, INC. XXXXX INSTRUMENTS CORP.
Xxx Xxxxxxxxxx Xxxxx, Xxxxx X-000 00000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
After the Commencement Date:
At the Premises
with a copy of notices to:
IRVINE INDUSTRIAL COMPANY
X.X. Xxx 0000
Xxxxxxx Xxxxx, XX 00000-0000
Attn: Vice President, Industrial Operations
13. Tenant's Liability Insurance Requirement: $1,000,000.00
14. Vehicle Parking Spaces: Three Hundred Fifteen (315)
Exhibits:
A Description of Premises E Rules and Regulations
A-1 Description of the Site X Work Letter
B Environmental Questionnaire X-1 Outline Specification
C Landlord's Disclosures X-2 Oak Canyon Streetscape Plan
D Insurance Requirements 5.3 Chemical Inventory List
ARTICLE II. PREMISES
SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant
leases from Landlord the premises shown in Exhibit A (the "Premises"), including
the building identified in Item 2 of the Basic Lease Provisions (which together
with the underlying real property, is called the "Building"), and containing
approximately the floor area set forth in Item 8 of the Basic Lease Provisions.
The Building is located on the site (the "Site") shown on EXHIBIT A-1 attached
hereto.
SECTION 2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that neither
Landlord nor any representative of Landlord has made any representation or
warranty with respect to the Premises or the Building or the suitability or
fitness of either for any purpose, including without limitation any
representations or warranties regarding zoning or other land use matters. Tenant
further acknowledges that neither Landlord nor any representative of Landlord
has agreed to undertake any alterations or additions or construct any
improvements to the Premises except as expressly provided in this Lease. The
taking of possession or use of the Premises by Tenant for any purpose other than
construction shall conclusively establish that the Premises and the Building
were in satisfactory condition and in conformity with the provisions of this
Lease in all respects, except for those matters which Tenant shall have brought
to Landlord's attention on a written punch list. The list shall be limited to
any items required to be accomplished by Landlord under the Work Letter attached
as Exhibit X, and shall be delivered to Landlord within thirty (30) days after
the term ("Term") of this Lease commences as provided in Article III below. If
no items are required of Landlord under the Work Letter, by taking possession of
the Premises Tenant
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accepts the improvements in their existing condition, and waives any right or
claim against Landlord arising out of the condition of the Premises. Nothing
contained in this Section shall affect the commencement of the Term or the
obligation of Tenant to pay rent. Landlord shall diligently complete all punch
list items of which it is notified as provided above.
SECTION 2.3. BUILDING NAME AND ADDRESS. Tenant shall not utilize any
name selected by Landlord from time to time for the Building as any part of
Tenant's corporate or trade name. Landlord shall have the right to change the
name or designation of the Building without liability to Tenant.
ARTICLE III. TERM
SECTION 3.1. GENERAL.
(a) The Term shall be for the period shown in Item 5 of the
Basic Lease Provisions. Subject to the provisions of Section 3.2 below, the Term
shall commence ("Commencement Date") on the earlier of (a) the date upon which
all relevant governmental authorities have approved the Tenant Improvements in
accordance with applicable building codes, as evidenced by written approval
thereof in accordance with the building permits issued for the Tenant
Improvements or issuance of a temporary or final certificate of occupancy for
the Premises, provided that Landlord shall give Tenant not less than fifteen
(15) days written notice prior to such approval or issuance or (b) the date
Tenant acquires possession or commences use of the Premises for any purpose
other than construction of Tenant Improvements by Tenant under the Work Letter.
Within ten (10) days after possession of the Premises is tendered to Tenant, the
parties shall memorialize on a form provided by Landlord the actual Commencement
Date and the expiration date ("Expiration Date") of this Lease. Tenant's failure
to execute that form shall not affect the validity of Landlord's determination
of those dates. If the Commencement Date has not occurred on or before a date
eight (8) months after the Estimated Commencement Date specified in Item 4 of
the Basic Lease Provisions for reasons other than Tenant's delays, then Tenant
may terminate this Lease by written notice given to Landlord within thirty (30)
days after such date.
(b) Provided that Tenant is not in default under any provision
of this Lease, either at the time of exercise of the extension right granted
herein or at the time of the commencement of such extension, and provided
further that Tenant has not assigned its interest in this Lease or sublet in the
aggregate more than one-half of the rentable square footage of the Premises,
Tenant may extend the Term of this Lease for two (2) consecutive periods of
sixty (60) months each. Tenant shall exercise its right to extend the Term by
and only by delivering to Landlord, not less than nine (9) months or more than
twelve (12) months prior to the expiration date of the initial Term in the case
of the first extension period, and not less than nine (9) months or more than
twelve(12) months after the expiration of the Term as extended by the first
extension period in the case of the second extension period, Tenant's
irrevocable written notice of its commitment to extend (the "Commitment
Notice"). The Basic Rent payable under the Lease during each extension of the
Term shall be determined prior to the commencement of each extension period at
the fair market rental, including subsequent adjustments, for comparable
industrial space being leased by Landlord in the Irvine Spectrum; provided that
such rate shall in no event be less than the rate payable by Tenant during the
final month of the initial Term in the case of the first extension period, or
the final month of the first extension period, in the case of the second
extension period. In the event that the parties are not able to agree on the
fair market rental within one hundred twenty (120) days prior to the
commencement of the applicable extension period, then either party may elect, by
written notice to the other party, to cause said rental, including subsequent
adjustments, to be determined by appraisal as follows.
Within ten (10) days following receipt of such
appraisal election, the parties shall attempt to agree on an appraiser to
determine the fair market rental. If the parties are unable to agree in that
time, then each party shall designate an appraiser within ten (10) days
thereafter. Should either party fail to so designate an appraiser within that
time, then the appraiser designated by the other party shall determine the fair
rental value. Should each of the parties timely designate an appraiser, then the
two appraisers so designated shall appoint a third appraiser who shall, acting
alone, determine the fair rental value of the Premises. Any appraiser designated
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hereunder shall have an M.A.I. certification with not less than five (5) years
experience in the valuation of commercial industrial buildings in Orange County,
California.
Within thirty (30) days following the selection of
the appraiser, such appraiser shall determine the fair market rental value,
including subsequent adjustments of the Premises. In determining such value, the
appraiser shall consider rental comparables for similarly improved space in the
Irvine Spectrum area with appropriate adjustments for differences in location
and quality of project. In no event shall the appraiser attribute factors for
brokerage commissions to reduce said fair market rental. The fees of the
appraiser(s) shall be shared equally by both parties.
Within twenty (20) days after the determination of
the fair market rental, Landlord shall prepare a reasonably appropriate
amendment to this Lease for the applicable extension period and Tenant shall
execute and return same to Landlord within ten (10) days. Should the fair market
rental not be established by the commencement of the applicable extension
period, then Tenant shall continue paying rent at the rate in effect during the
last month of the initial Term or the last month of the first extension period,
as applicable, and a lump sum adjustment shall be made promptly upon the
determination of such new rental.
If Tenant fails to timely comply with any of the
provisions of this paragraph, Tenant's right to extend the Term shall be
extinguished and the Lease shall automatically terminate as of the expiration
date of the Term, without any extension and without any liability to Landlord.
If Tenant fails to exercise its right to extend the term for the first sixty
(60) month extension period, Tenant's right to extend the Term for a second
sixty (60) month period shall be extinguished. Any attempt to assign or transfer
any right or interest created by this paragraph shall be void from its
inception. Tenant shall have no other right to extend the Term beyond the two
sixty (60) month extensions created by this paragraph. Unless agreed to in a
writing signed by Landlord and Tenant, any extension of the Term, whether
created by an amendment to this Lease or by a holdover of the Premises by
Tenant, or otherwise, shall be deemed a part of, and not in addition to, any
duly exercised extension period permitted by this paragraph.
SECTION 3.2. DELAY IN POSSESSION. If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant on or before the
Estimated Commencement Date, this Lease shall not be void or voidable nor shall
Landlord be liable to Tenant for any resulting loss or damage. However, Tenant
shall not be liable for any rent and the Commencement Date shall not occur until
Landlord delivers possession of the Premises and the Premises are in fact
available for Tenant's occupancy with any Tenant Improvements that have been
approved as per Section 3.1(a) above, except that if Landlord's failure to so
deliver possession on the Estimated Commencement Date is attributable to any
action or inaction by Tenant (including without limitation any Tenant Delay
described in the Work Letter, if any, attached to this Lease), then the
Commencement Date shall not be delayed to the date on which possession of the
Premises is tendered to Tenant, and Landlord shall be entitled to full
performance by Tenant (including the payment of rent) from the date Landlord
would have been able to deliver the Premises to Tenant but for Tenant's
delay(s).
ARTICLE IV. RENT AND OPERATING EXPENSES
SECTION 4.1. BASIC RENT. From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset, Basic Rent for the Premises
in the total amount shown (including subsequent adjustments, if any) in Item 6
of the Basic Lease Provisions. Any rental adjustment shown in Item 6 shall be
deemed to occur on the specified monthly anniversary of the Commencement Date,
whether or not that date occurs at the end of a calendar month. The rent shall
be due and payable in advance commencing on the Commencement Date (as prorated
for any partial month) and continuing thereafter on the first day of each
successive calendar month of the Term. No demand, notice or invoice shall be
required for the payment of Basic Rent. An installment of rent in the amount of
one (1) full month's Basic Rent at the initial rate specified in Item 6 of the
Basic Lease Provisions shall be delivered to Landlord concurrently with Tenant's
execution of this Lease and shall be applied against the Basic Rent first due
hereunder.
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SECTION 4.2. OPERATING EXPENSES.
(a) Tenant shall pay to Landlord, as additional rent,
"Building Costs" and "Property Taxes," as those terms are defined below,
incurred by Landlord in the operation of the Building. For convenience of
reference, Property Taxes and Building Costs shall be referred to collectively
as "Operating Expenses".
(b) Commencing prior to the start of the first full "Expense
Recovery Period" (as defined below) of the Lease, and prior to the start of each
full or partial Expense Recovery Period thereafter, Landlord shall give Tenant a
written estimate of the amount of Operating Expenses for the Expense Recovery
Period. Tenant shall pay the estimated amounts to Landlord in equal monthly
installments, in advance, with Basic Rent. If Landlord has not furnished its
written estimate for any Expense Recovery Period by the time set forth above,
Tenant shall continue to pay cost reimbursements at the rates established for
the prior Expense Recovery Period, if any; provided that when the new estimate
is delivered to Tenant, Tenant shall, at the next monthly payment date, pay any
accrued cost reimbursements based upon the new estimate. For purposes hereof,
"Expense Recovery Period" shall mean every twelve month period during the Term
(or portion thereof for the first and last lease years) commencing July 1 and
ending June 30.
(c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual or prorated Operating Expenses incurred by Landlord
during the period, and the parties shall within thirty (30) days thereafter make
any payment or allowance necessary to adjust Tenant's estimated payments, if
any, to Tenant's actual owed amounts as shown by the annual statement. Any delay
by Landlord in delivering any statement hereunder for a period of less than
eighteen (18) months shall not constitute a waiver of Landlord's right to
require Tenant to pay Operating Expenses pursuant hereto. Any amount due Tenant
shall be credited against installments next coming due under this Section 4.2,
and any deficiency shall be paid by Tenant together with the next installment.
If Tenant has not made estimated payments during the Expense Recovery Period,
any amount owing by Tenant pursuant to subsection (a) above shall be paid to
Landlord in accordance with Article XVI. Should Tenant fail to object in writing
to Landlord's determination of actual Operating Expenses within sixty (60) days
following delivery of Landlord's expense statement, Landlord's determination of
actual Operating Expenses for the applicable Expense Recovery Period shall be
conclusive and binding on the parties and any future claims to the contrary
shall be barred.
(d) Even though the Lease has terminated and the Tenant has
vacated the Premises, when the final determination is made of Operating Expenses
for the Expense Recovery Period in which the Lease terminates, Tenant shall upon
notice pay the entire increase due over the estimated expenses paid. Conversely,
any overpayment made in the event expenses decrease shall be rebated by Landlord
to Tenant.
(e) If, at any time during any Expense Recovery Period, any
one or more of the Operating Expenses are increased to a rate(s) or amount(s) in
excess of the rate(s) or amount(s) used in calculating the estimated expenses
for the year, then the estimate of Operating Expenses shall be increased for the
month in which such rate(s) or amount(s) becomes effective and for all
succeeding months by an amount equal to the increase. Landlord shall give Tenant
written notice of the amount or estimated amount of the increase, the month in
which the increase will become effective, and the month for which the payments
are due. Tenant shall pay the increase to Landlord as a part of Tenant's monthly
payments of estimated expenses as provided in paragraph (b) above, commencing
with the month in which effective.
(f) The term "Building Costs" shall include all expenses of
operation and maintenance of the Building and all landscaping, walkways, parking
areas and lighting of the Site, to the extent such expenses are not billed to
and paid directly by Tenant, and shall include the following charges by way of
illustration but not limitation: water and sewer charges; insurance premiums or
reasonable premium equivalents should Landlord elect to self-insure any risk
that Landlord is authorized to insure hereunder (provided that a pro-rata share
of earthquake insurance premiums or premium equivalents shall only be Building
Costs if earthquake insurance coverage is obtained or a formal self-insurance
program for earthquake risks is established for all or a substantial portion of
Landlord's industrial property portfolio); license, permit, and inspection fees;
heat; light; power; air conditioning; supplies; materials; equipment; tools; the
cost of any environmental, insurance or other consultant utilized by
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Landlord in connection with the Building arising as a result of Tenant's
particular use of the Premises or subject to Tenant's approval of the same such
approval not to be unreasonably withheld; costs incurred in connection with
compliance of any laws or changes in laws applicable to the Building, provided
that the costs for any improvements to the Premises required for such compliance
shall be included to the extent of the amortized amount over the useful life of
the improvements calculated at a market cost of funds, all as determined by
Landlord, with Tenant paying only the portion of such amortized costs allocable
to the Term of the Lease; the cost of any capital investments (other than tenant
improvements for specific tenants) to the extent of the amortized amount thereof
over the useful life of such capital investments calculated at a market cost of
funds, all as determined by Landlord, with Tenant paying only the portion of
such amortized costs allocable to the Term of the Lease; labor; reasonably
allocated wages and salaries, fringe benefits, and payroll taxes for
administrative and other personnel directly applicable to the Building,
including both Landlord's personnel and outside personnel; any expense incurred
pursuant to Sections 6.1, 6.2, 7.2, and 10.2; and a reasonable
overhead/management fee (not to exceed 2.5% of Basic Rent) for the professional
operation of the Building. Notwithstanding anything to the contrary contained
herein, the amount of such overhead/management fee to be charged to Tenant shall
be determined by multiplying the actual fee charged (which from time to time may
be with respect to the Building only or the Building together with other
properties owned by Landlord and/or its affiliates) by a fraction, the numerator
of which is the floor area of the Premises (as set forth in Item No. 8 of the
Basic Lease Provisions) and the denominator of which is the total square footage
of space charged with such fee actually leased to tenants (including Tenant). It
is understood that Building Costs shall include competitive charges for direct
services provided by any subsidiary or division of Landlord, and may include the
Building's or the Site's proportionate share of the cost of maintenance or
repair contracts which cover the Building and/or the Site and other buildings
and/or projects in Landlord's portfolio, as reasonably allocated by Landlord.
(g) The term "Property Taxes" as used herein shall include the
following: (i) all real estate taxes or personal property taxes assessed against
the Building and/or the Site, as such property taxes may be reassessed from time
to time; and (ii) other taxes, charges and assessments which are levied with
respect to this Lease or to the Building, and any improvements, fixtures and
equipment and other property of Landlord located in the Building, except that
general net income and franchise taxes imposed against Landlord shall be
excluded; and (iii) all assessments and fees for public improvements, services,
and facilities and impacts thereon, including without limitation arising out of
any Community Facilities Districts, "Xxxxx Xxxx" districts, similar assessment
districts, and any traffic impact mitigation assessments or fees; and (iv) any
tax, surcharge or assessment which shall be levied in addition to or in lieu of
real estate or personal property taxes, other than taxes covered by Article
VIII; and (v) costs and expenses incurred in contesting the amount or validity
of any Property Tax by appropriate proceedings.
SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant's delivery of
this Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9
of the Basic Lease Provisions, to be held by Landlord as security for the full
and faithful performance of Tenant's obligations under this Lease (the "Security
Deposit"). Subject to the last sentence of this Section, the Security Deposit
shall be understood and agreed to be the property of Landlord upon Landlord's
receipt thereof, and may be utilized by Landlord in its discretion towards the
payment of all prepaid expenses by Landlord for which Tenant would be required
to reimburse Landlord under this Lease, including without limitation brokerage
commissions and Tenant Improvement costs. Upon any default by Tenant, including
specifically Tenant's failure to pay rent or to abide by its obligations under
Sections 7.1 and 15.3 below, whether or not Landlord is informed of or has
knowledge of the default, the Security Deposit shall be deemed to be
automatically and immediately applied, without waiver of any rights Landlord may
have under this Lease or at law or in equity as a result of the default, as a
setoff for full or partial compensation for that default. If any portion of the
Security Deposit is applied after a default by Tenant, Tenant shall within five
(5) days after written demand by Landlord deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount.
Landlord shall not be required to keep this Security Deposit separate from its
general funds, and Tenant shall not be entitled to interest on the Security
Deposit. If Tenant fully performs its obligations under this Lease, the Security
Deposit or any balance thereof shall be returned to Tenant (or, at Landlord's
option, to the last assignee of Tenant's interest in this Lease) after the
expiration of the Term, provided that Landlord may retain the Security Deposit
to the extent and until such time as all amounts due from Tenant in accordance
with this Lease have been determined and paid in full.
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ARTICLE V. USES
SECTION 5.1. USE. Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions, all in accordance with
applicable laws and restrictions and pursuant to approvals to be obtained by
Tenant from all relevant and required governmental agencies and authorities. The
parties agree that any contrary use shall be deemed to cause material and
irreparable harm to Landlord and shall entitle Landlord to injunctive relief in
addition to any other available remedy. Tenant, at its expense, shall procure,
maintain and make available for Landlord's inspection throughout the Term, all
governmental approvals, licenses and permits required for the proper and lawful
conduct of Tenant's permitted use of the Premises. Tenant shall not use or allow
the Premises to be used for any unlawful purpose, nor shall Tenant permit any
nuisance or commit any waste in the Premises. Tenant shall not do or permit to
be done anything which will invalidate or increase the cost of any insurance
policy(ies) covering the Building or its contents, and shall comply with all
applicable insurance underwriters rules and the requirements of the Pacific Fire
Rating Bureau or any other organization performing a similar function. Tenant
shall comply at its expense with all present and future laws, ordinances,
restrictions, regulations, orders, rules and requirements of all governmental
authorities that pertain to Tenant or its use of the Premises, including without
limitation all federal and state occupational health and safety requirements,
whether or not Tenant's compliance will necessitate expenditures or interfere
with its use and enjoyment of the Premises, provided that if such compliance
would apply to all similar buildings and requires improvements with a useful
life extending beyond the Term then Landlord shall construct such improvements
and include the costs thereof amortized over the useful life of such
improvements calculated at a market cost of funds as Building Costs. Tenant
shall comply at its expense with all present covenants, conditions, easements or
restrictions now or hereafter affecting or encumbering the Building, and any
amendments or modifications thereto, including without limitation the payment by
Tenant of any periodic or special dues or assessments charged against the
Premises or Tenant which may be allocated to the Premises or Tenant in
accordance with the provisions thereof. Tenant shall promptly upon demand
reimburse Landlord for any additional insurance premium charged by reason of
Tenant's failure to comply with the provisions of this Section, and shall
indemnify Landlord from any liability and/or expense resulting from Tenant's
noncompliance.
SECTION 5.2. SIGNS. Except as approved in writing by Landlord, in its
sole discretion, Tenant shall have no right to maintain identification signs in
any location in, on or about the Premises or the Building and shall not place or
erect any signs, displays or other advertising materials that are visible from
the exterior of the Building. The size, design, graphics, material, style, color
and other physical aspects of any permitted sign shall be subject to Landlord's
written approval prior to installation (which approval may be withheld in
Landlord's discretion), any covenants, conditions or restrictions encumbering
the Premises, Landlord's signage program, if any, as in effect from time to time
and approved by the City of Irvine ("Signage Criteria"), and any applicable
municipal or other governmental permits and approvals. Tenant acknowledges
having received and reviewed a copy of the current Signage Criteria, if
applicable. Tenant shall be responsible for the cost of any permitted sign,
including the fabrication, installation, maintenance and removal thereof. If
Tenant fails to maintain its sign, or if Tenant fails to remove same upon
termination of this Lease and repair any damage caused by such removal, Landlord
may do so at Tenant's expense.
SECTION 5.3. HAZARDOUS MATERIALS.
(a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in Section 25501(n) of the
California Health and Safety Code, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such substance or
matter under any statutory or common law theory, and (iii) any substance or
matter which is in excess of permitted levels set forth in any federal,
California or local law or regulation pertaining to any hazardous or toxic
substance, material or waste.
(b) Tenant shall not cause or permit any Hazardous Materials
to be brought upon, stored, used, generated, released or disposed of on, under,
from or about the Premises or the Site (including without limitation the soil
and groundwater thereunder) without the prior written consent of Landlord,
except that Tenant
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may use and store on the Premises and shall properly dispose of reasonable
quantities of those Hazardous Materials identified on Schedule 5.3 attached
hereto. Notwithstanding the foregoing, Tenant shall have the right, without
obtaining prior written consent of Landlord, to utilize within the Premises
standard office products that may contain Hazardous Materials (such as photocopy
toner, "White Out", and the like), provided however, that (i) Tenant shall
maintain such products in their original retail packaging, shall follow all
instructions on such packaging with respect to the storage, use and disposal of
such products, and shall otherwise comply with all applicable laws with respect
to such products, and (ii) all of the other terms and provisions of this Section
5.3 shall apply with respect to Tenant's storage, use and disposal of all such
products. Landlord may, in its sole discretion, place such conditions as
Landlord deems appropriate with respect to any such Hazardous Materials, and may
further require that Tenant demonstrate that any such Hazardous Materials are
necessary or useful to Tenant's business and will be generated, stored, used and
disposed of in a manner that complies with all applicable laws and regulations
pertaining thereto and with good business practices. Tenant understands that
Landlord may utilize an environmental consultant to assist in determining
conditions of approval in connection with the storage, generation, release,
disposal or use of Hazardous Materials by Tenant on or about the Premises,
and/or to conduct periodic inspections of the storage, generation, use, release
and/or disposal of such Hazardous Materials by Tenant on and from the Premises,
and Tenant agrees that any costs incurred by Landlord to assure Tenant's
compliance with the requirements of this Lease or on account of Tenant's failure
to comply with the requirements of this Lease shall be reimbursed by Tenant to
Landlord as additional rent hereunder upon demand.
(c) Prior to the execution of this Lease, Tenant shall
complete, execute and deliver to Landlord an Environmental Questionnaire and
Disclosure Statement (the "Environmental Questionnaire") in the form of Exhibit
B attached hereto. The completed Environmental Questionnaire shall be deemed
incorporated into this Lease for all purposes, and Landlord shall be entitled to
rely fully on the information contained therein. On each anniversary of the
Commencement Date until the expiration or sooner termination of this Lease,
Tenant shall disclose to Landlord in writing the names and amounts of all
Hazardous Materials which were stored, generated, used, released and/or disposed
of on, under or about the Premises and/or the Site for the twelve-month period
prior thereto, and which Tenant desires to store, generate, use, release and/or
dispose of on, under or about the Premises for the succeeding twelve-month
period. In addition, to the extent Tenant is permitted to utilize Hazardous
Materials upon the Premises, Tenant shall promptly provide Landlord with
complete and legible copies of all the following environmental documents
relating thereto: reports filed pursuant to any self-reporting requirements;
permit applications, permits, monitoring reports, workplace exposure and
community exposure warnings or notices and all other reports, disclosures, plans
or documents (even those which may be characterized as confidential) relating to
water discharges, air pollution, waste generation or disposal, and underground
storage tanks for Hazardous Materials; orders, reports, notices, listings and
correspondence (even those which may be considered confidential) of or
concerning the release, investigation of, compliance, cleanup, remedial and
corrective actions, and abatement of Hazardous Materials; and all complaints,
pleadings and other legal documents filed by or against Tenant related to
Tenant's use, handling, storage, release and/or disposal of Hazardous Materials.
(d) Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises, the Site and/or the
soil or groundwater thereunder at any time to determine whether Tenant is
complying with the terms of this Section 5.3, and in connection therewith Tenant
shall provide Landlord with full access to all relevant facilities, records and
personnel. If Tenant is not in compliance with any of the provisions of this
Section 5.3, or in the event of a release of any Hazardous Material on, under or
about the Premises and/or the Site caused or permitted by Tenant, its agents,
employees, contractors, licensees or invitees, Landlord and its agents shall
have the right, but not the obligation, without limitation upon any of
Landlord's other rights and remedies under this Lease, to immediately enter upon
the Premises and/or the Site without notice and to discharge Tenant's
obligations under this Section 5.3 at Tenant's expense, including without
limitation the taking of emergency or long-term remedial action. Landlord and
its agents shall endeavor to minimize interference with Tenant's business in
connection therewith, but shall not be liable for any such interference. In
addition, Landlord, at Tenant's expense, shall have the right, but not the
obligation, to join and participate in any legal proceedings or actions
initiated in connection with any claims arising out of the storage, generation,
use, release and/or disposal by Tenant or its agents, employees, contractors,
licensees or invitees of Hazardous Materials on, under, from or about the
Premises and/or the Site.
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(e) If the presence of any Hazardous Materials on, under, from
or about the Premises and/or the Site caused or permitted by Tenant or its
agents, employees, contractors, licensees or invitees results in (i) injury to
any person, (ii) injury to or any contamination of the Premises and/or the Site,
or (iii) injury to or contamination of any real or personal property wherever
situated, Tenant, at its expense, shall promptly take all actions necessary to
return the Premises, the Site and any other affected real or personal property
owned by Landlord to the condition existing prior to the introduction of such
Hazardous Materials and to remedy or repair any such injury or contamination,
including without limitation, any cleanup, remediation, removal, disposal,
neutralization or other treatment of any such Hazardous Materials.
Notwithstanding the foregoing, Tenant shall not, without Landlord's prior
written consent, take any remedial action in response to the presence of any
Hazardous Materials on, under or about the Premises, the Site or any other
affected real or personal property owned by Landlord or enter into any similar
agreement, consent, decree or other compromise with any governmental agency with
respect to any Hazardous Materials claims; provided however, Landlord's prior
written consent shall not be necessary in the event that the presence of
Hazardous Materials on, under or about the Premises, the Site or any other
affected real or personal property owned by Landlord (i) imposes an immediate
threat to the health, safety or welfare of any individual or (ii) is of such a
nature that an immediate remedial response is necessary and it is not possible
to obtain Landlord's consent before taking such action. To the fullest extent
permitted by law, Tenant shall indemnify, hold harmless, protect and defend
(with attorneys acceptable to Landlord) Landlord and any successors to all or
any portion of Landlord's interest in the Premises, the Site and any other real
or personal property owned by Landlord from and against any and all liabilities,
losses, damages, diminution in value, judgments, fines, demands, claims,
recoveries, deficiencies, costs and expenses (including without limitation
attorneys' fees, court costs and other professional expenses), whether
foreseeable or unforeseeable, arising directly or indirectly out of the use,
generation, storage, treatment, release, on- or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Site and any other real or personal property owned by Landlord
caused or permitted by Tenant, its agents, employees, contractors, licensees or
invitees, specifically including without limitation the cost of any required or
necessary repair, restoration, cleanup or detoxification of the Premises, the
Site and any other real or personal property owned by Landlord, and the
preparation of any closure or other required plans, whether or not such action
is required or necessary during the Term or after the expiration of this Lease.
If Landlord at any time discovers that Tenant or its agents, employees,
contractors, licensees or invitees may have caused or permitted the release of a
Hazardous Material on, under, from or about the Premises, the Site or any other
real or personal property owned by Landlord, Tenant shall, at Landlord's
request, immediately prepare and submit to Landlord a comprehensive plan,
subject to Landlord's approval, specifying the actions to be taken by Tenant to
return the Premises, the Site or any other real or personal property owned by
Landlord to the condition existing prior to the introduction of such Hazardous
Materials. Upon Landlord's approval of such cleanup plan, Tenant shall, at its
expense, and without limitation of any rights and remedies of Landlord under
this Lease or at law or in equity, immediately implement such plan and proceed
to cleanup such Hazardous Materials in accordance with all applicable laws and
as required by such plan and this Lease. The provisions of this subsection (e)
shall expressly survive the expiration or sooner termination of this Lease.
(f) Landlord hereby discloses to Tenant, and Tenant hereby
acknowledges, certain facts relating to Hazardous Materials at the Premises
and/or the Site known by Landlord to exist as of the date of this Lease, as more
particularly described in Exhibit C attached hereto. Tenant shall have no
liability or responsibility with respect to any Hazardous Materials affecting
the Premises and/or the Site prior to the Commencement Date, including, without
limitation the facts described in Exhibit C, nor with respect to any Hazardous
Materials which Tenant proves were not caused or permitted by Tenant, its
agents, employees, contractors, licensees or invitees and Landlord hereby
releases Tenant from any and all liability with regard to the same.
Notwithstanding the preceding two sentences, Tenant agrees to notify its agents,
employees, contractors, licensees, and invitees of any exposure or potential
exposure to Hazardous Materials at the Premises and/or the Site that Landlord
brings to Tenant's attention.
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ARTICLE VI. SERVICES
SECTION 6.1. UTILITIES AND SERVICES. Tenant shall be responsible for
and shall pay promptly, directly to the appropriate supplier, all charges for
water, gas, electricity, sewer, heat, light, power, telephone, refuse pickup,
janitorial service, interior landscape maintenance and all other utilities,
materials and services furnished directly to Tenant or the Premises or used by
Tenant in, on or about the Premises during the Term, together with any taxes
thereon. Landlord shall not be liable for damages or otherwise for any failure
or interruption of any utility or other service furnished to the Premises, and
no such failure or interruption shall be deemed an eviction or entitle Tenant to
terminate this Lease or withhold or xxxxx any rent due hereunder. Landlord shall
at all reasonable times have free access to all electrical and mechanical
installations of Landlord.
SECTION 6.2. PARKING. Tenant shall be entitled to the number of vehicle
parking spaces on the Site set forth in Item 14 of the Basic Lease Provisions.
Tenant shall not use more parking spaces than such number. Tenant shall not
permit or allow any vehicles that belong to or are controlled by Tenant or
Tenant's employees, suppliers, shippers, customers or invitees to be loaded,
unloaded or parked in areas other than those designated by Landlord for such
activities. If Tenant permits or allows any of the prohibited activities
described above, then Landlord shall have the right, without notice, in addition
to such other rights and remedies that Landlord may have, to remove or tow away
the vehicle involved and charge the costs to Tenant. Parking shall be limited to
striped parking stalls, and no parking shall be permitted in any driveways,
access ways or in any similar area. Nothing contained in this Lease shall be
deemed to create liability upon Landlord for any damage to motor vehicles of
visitors or employees, for any loss of property from within those motor
vehicles, or for any injury to Tenant, its visitors or employees, unless
ultimately determined to be caused by the sole active negligence or willful
misconduct of Landlord, its agents, servants and employees. Landlord shall have
the right to establish, and from time to time amend, and to enforce against all
users all reasonable rules and regulations (including the designation of areas
for employee parking) that Landlord may deem necessary and advisable for the
proper and efficient operation and maintenance of parking. Landlord shall have
the right to construct, maintain and operate lighting facilities within the
parking areas; to change the area, level, location and arrangement of the
parking areas and improvements therein; and to do and perform such other acts in
and to the parking areas and improvements therein as, in the use of good
business judgment, Landlord shall determine to be advisable. Parking areas shall
be used only for parking vehicles. Washing, waxing, cleaning or servicing of
vehicles, or the storage of vehicles for 24-hour periods, is prohibited unless
otherwise authorized by Landlord. Tenant shall be liable for any damage to the
parking areas caused by Tenant or Tenant's employees, suppliers, shippers,
customers or invitees, including without limitation damage from excess oil
leakage. Tenant shall have no right to install any fixtures, equipment or
personal property in the parking areas.
ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole
expense shall comply with all applicable laws and governmental regulations
governing the Premises and make all repairs necessary to keep the Premises in
the condition as existed on the Commencement Date (or on any later date that the
improvements may have been installed), excepting ordinary wear and tear,
including without limitation the electrical and mechanical systems, any air
conditioning, ventilating or heating equipment which serves the Premises, all
walls, glass, windows, doors, door closures, hardware, fixtures, electrical,
plumbing, fire extinguisher equipment and other equipment. Any damage or
deterioration of the Premises shall not be deemed ordinary wear and tear if the
same could have been prevented by good maintenance practices by Tenant. As part
of its maintenance obligations hereunder, Tenant shall, at Landlord's request,
provide Landlord with copies of all maintenance schedules, reports and notices
prepared by, for or on behalf of Tenant. Tenant shall obtain preventive
maintenance contracts from a licensed heating and air conditioning contractor to
provide for regular inspection and maintenance of the heating, ventilating and
air conditioning systems servicing the Premises, all subject to Landlord's
reasonable approval. All repairs shall be at least equal in quality to the
original work, shall be made only by a licensed contractor approved in writing
in advance by Landlord. Any contractor utilized by Tenant shall be subject to
Landlord's standard
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requirements for contractors, as modified from time to time. Landlord shall have
the right at all times to inspect Tenant's maintenance of all equipment
(including without limitation air conditioning, ventilating and heating
equipment), and may impose reasonable restrictions and requirements with respect
to repairs, as provided in Section 7.3, and the provisions of Section 7.4 shall
apply to all repairs. Alternatively, Landlord may elect after reasonable notice
to Tenant to make any repair or maintenance required hereunder on behalf of
Tenant and at Tenant's expense, and Tenant shall promptly reimburse Landlord for
all costs incurred upon submission of an invoice.
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR. Subject to Section 7.1
and Article XI, Landlord shall provide service, maintenance and repair with
respect to the roof, foundations, and footings of the Building, all landscaping,
walkways, parking areas, exterior lighting of the Site, and the exterior
surfaces of the exterior walls of the Building, except that Tenant at its
expense shall make all repairs which Landlord deems reasonably necessary as a
result of the act or negligence of Tenant, its agents, employees, invitees,
subtenants or contractors. In the event any maintenance or repair would be
covered by construction warranties obtained by Landlord in connection with the
construction of the Premises, Landlord shall use reasonable efforts to enforce
any such warranties, within a reasonable period of time after Landlord's receipt
of notice in writing from Tenant of the need for maintenance or repair. Landlord
shall have the right to employ or designate any reputable person or firm,
including any employee or agent of Landlord or any of Landlord's affiliates or
divisions, to perform any service, repair or maintenance function. Landlord need
not make any other improvements or repairs except as specifically required under
this Lease, and nothing contained in this Section shall limit Landlord's right
to reimbursement from Tenant for maintenance, repair costs and replacement costs
as provided elsewhere in this Lease. Tenant understands that it shall not make
repairs at Landlord's expense or by rental offset. Tenant further understands
that Landlord shall not be required to make any repairs to the roof, foundations
or footings unless and until Tenant has notified Landlord in writing of the need
for such repair and Landlord shall have a reasonable period of time thereafter
to commence and complete said repair, if warranted. All costs of any maintenance
and repairs on the part of Landlord provided hereunder shall be considered part
of Building Costs, except maintenance or repair costs incurred with regard to
the foundation, footings and structural elements of the Building (other than the
roof).
SECTION 7.3. ALTERATIONS. (a) Tenant shall make no alterations,
additions or improvements to the Premises without the prior written consent of
Landlord, which consent may be given or withheld in Landlord's sole discretion.
Notwithstanding the foregoing, Landlord shall not unreasonably withhold its
consent to any alterations, additions or improvements to the Premises which do
not (i) affect the exterior of the Building or outside areas (or be visible from
adjoining sites), or (ii) affect or penetrate any of the structural portions of
the Building, including but not limited to the roof, or (iii) require any change
to the basic floor plan of the Premises, any change to any structural or
mechanical systems of the Premises, or any governmental permit as a prerequisite
to the construction thereof, or (iv) interfere in any manner with the proper
functioning of or Landlord's access to any mechanical, electrical, plumbing or
HVAC systems, facilities or equipment located in or serving the Building, or (v)
diminish the value of the Premises. Landlord may impose, as a condition to its
consent, any requirements that Landlord in its discretion may deem reasonable or
desirable, including but not limited to a requirement that all work be covered
by a lien and completion bond satisfactory to Landlord and requirements as to
the manner, time, and contractor for performance of the work. Tenant shall
obtain all required permits for the work and shall perform the work in
compliance with all applicable laws, regulations and ordinances, all covenants,
conditions and restrictions affecting the Premises, and the Rules and
Regulations (hereafter defined). If any governmental entity requires, as a
condition to any proposed alterations, additions or improvements to the Premises
by Tenant, that improvements be made to the outside areas, and if Landlord
consents to such improvements to the outside areas, then Tenant shall, at
Tenant's sole expense, make such required improvements to the outside areas in
such manner, utilizing such materials, and with such contractors (including, if
required by Landlord, Landlord's contractors) as Landlord may require in its
sole discretion. Under no circumstances shall Tenant make any improvement which
incorporates any Hazardous Materials, including without limitation
asbestos-containing construction materials into the Premises. Any request for
Landlord's consent shall be made in writing and shall contain architectural
plans describing the work in detail reasonably satisfactory to Landlord. Unless
Landlord otherwise agrees in writing, all alterations, additions or improvements
affixed to the Premises (excluding moveable trade fixtures and furniture) shall
become the property of Landlord and shall be surrendered with the Premises at
the end of the Term, except that Landlord may, by notice to Tenant, require
Tenant to remove by the Expiration Date, or sooner termination date
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of this Lease, all or any alterations, decorations, fixtures, additions,
improvements and the like installed either by Tenant or by Landlord at Tenant's
request and to repair any damage to the Premises arising from that removal.
Except as otherwise provided in this Lease or in any Exhibit to this Lease,
should Landlord make any alteration or improvement to the Premises for Tenant at
Tenant's request, Landlord shall be entitled to prompt reimbursement from Tenant
for all costs incurred.
(b) Landlord agrees that it will consent to Tenant installing
and adding to the Building, a roof-top observatory structure of approximately
sixteen (16) feet in diameter. Landlord shall include, at Tenant's expense, as
part of the construction of the Building's Shell Improvements, an approximately
four (4) foot square support column to support the observatory structure, at a
mutually agreed upon location. Landlord hereby notifies Tenant that Landlord
will require the removal of the roof-top observatory structure at the Expiration
Date, or sooner termination date of the Lease and the repair of any damage to
the Premises arising from that removal, but Landlord will not require the
removal of the support column. Tenant's installation of the roof-top observatory
structure shall, in all other respects, be made in compliance with the
requirements of this Lease for alterations, additions or improvements to the
Premises, including without limitation, submittal of architectural plans for the
same to Landlord.
SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free from
any liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly cause
any such lien to be released by posting a bond in accordance with California
Civil Code Section 3143 or any successor statute. In the event that Tenant shall
not, within thirty (30) days following the imposition of any lien, cause the
lien to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other available remedies, the right to cause the
lien to be released by any means it deems proper, including payment of or
defense against the claim giving rise to the lien. All expenses so incurred by
Landlord, including Landlord's attorneys' fees, and any consequential or other
damages incurred by Landlord arising out of such lien, shall be reimbursed by
Tenant promptly following Landlord's demand, together with interest from the
date of payment by Landlord at the maximum rate permitted by law until paid.
Tenant shall give Landlord no less than twenty (20) days' prior notice in
writing before commencing construction of any kind on the Premises so that
Landlord may post and maintain notices of nonresponsibility on the Premises.
SECTION 7.5. ENTRY AND INSPECTION. Landlord shall at all reasonable
times, upon reasonable written or oral notice (except in emergencies, when no
notice shall be required) have the right to enter the Premises to inspect them,
to supply services in accordance with this Lease, to protect the interests of
Landlord in the Premises, and to submit the Premises to prospective or actual
purchasers or encumbrance holders (or, during the last one hundred and eighty
(180) days of the Term or when an uncured Tenant default exists, to prospective
tenants), all without being deemed to have caused an eviction of Tenant and
without abatement of rent except as provided elsewhere in this Lease, provided
that Tenant may restrict access of prospective purchasers or tenants who are
competitors of Tenant as to portions of the Premises as reasonably necessary to
protect Tenant from disclosure of its proprietary processes or operations.
Landlord shall have the right, if desired, to retain a key which unlocks all of
the doors in the Premises, excluding Tenant's vaults and safes, and Landlord
shall have the right to use any and all means which Landlord may deem proper to
open the doors in an emergency in order to obtain entry to the Premises, and any
entry to the Premises obtained by Landlord shall not under any circumstances be
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises,
or any eviction of Tenant from the Premises.
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes and assessments levied against all personal property of
Tenant located in the Premises, and against any alterations, additions or like
improvements made to the Premises by or on behalf of Tenant. When possible
Tenant shall cause its personal property and alterations to be assessed and
billed separately from the real property of which the Premises form a part. If
any taxes on Tenant's personal property and/or alterations are levied against
Landlord or Landlord's property and if Landlord pays the same, or if the
assessed value of Landlord's property is increased by the inclusion
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of a value placed upon the personal property and/or alterations of Tenant and if
Landlord pays the taxes based upon the increased assessment, Tenant shall pay to
Landlord the taxes so levied against Landlord or the proportion of the taxes
resulting from the increase in the assessment.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
SECTION 9.1. RIGHTS OF PARTIES.
(a) Notwithstanding any provision of this Lease to the
contrary, Tenant will not, either voluntarily or by operation of law, assign,
sublet, encumber, or otherwise transfer all or any part of Tenant's interest in
this lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent shall not unreasonably
be withheld in accordance with the provisions of Section 9.1.(b). No assignment
(whether voluntary, involuntary or by operation of law) and no subletting shall
be valid or effective without Landlord's prior written consent and, at
Landlord's election, any such assignment or subletting or attempted assignment
or subletting shall constitute a material default of this Lease. Landlord shall
not be deemed to have given its consent to any assignment or subletting by any
other course of action, including its acceptance of any name for listing in the
Building directory. To the extent not prohibited by provisions of the Bankruptcy
Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"), including Section
365(f)(1), Tenant on behalf of itself and its creditors, administrators and
assigns waives the applicability of Section 365(e) of the Bankruptcy Code unless
the proposed assignee of the Trustee for the estate of the bankrupt meets
Landlord's standard for consent as set forth in Section 9.1(b) of this Lease. If
this Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, any and all monies or other considerations to be delivered in
connection with the assignment shall be delivered to Landlord, shall be and
remain the exclusive property of Landlord and shall not constitute property of
Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code. Any
person or entity to which this Lease is assigned pursuant to the provisions of
the Bankruptcy Code shall be deemed to have assumed all of the obligations
arising under this Lease on and after the date of the assignment, and shall upon
demand execute and deliver to Landlord an instrument confirming that assumption.
(b) If Tenant desires to transfer an interest in this Lease,
it shall first notify Landlord of its desire and shall submit in writing to
Landlord: (i) the name and address of the proposed transferee; (ii) the nature
of any proposed subtenant's or assignee's business to be carried on in the
Premises; (iii) the terms and provisions of any proposed sublease or assignment,
including a copy of the proposed assignment or sublease form; (iv) evidence of
insurance of the proposed assignee or subtenant complying with the requirements
of Exhibit D hereto; (v) a completed Environmental Questionnaire from the
proposed assignee or subtenant; and (vi) any other information requested by
Landlord and reasonably related to the transfer. Except as provided in
Subsection (e) of this Section, Landlord shall not unreasonably withhold its
consent, provided: (1) the use of the Premises will be consistent with the
provisions of this Lease or Landlord shall approve an alternate general office,
manufacturing, warehouse and/or distribution use by the proposed transferee,
which approval shall not be unreasonably withheld; (2) the proposed assignee or
subtenant has not failed to take or delayed taking remedial action in connection
with Hazardous Materials contaminating a property arising out of the proposed
assignee's or subtenant's actions or use of the property in question in
accordance with any enforcement order issued by any governmental authority in
connection with the use, disposal or storage of a Hazardous Material; (3) at
Landlord's election, insurance requirements shall be brought into conformity
with Landlord's then current leasing practice; (4) any proposed subtenant or
assignee demonstrates that it is financially responsible by submission to
Landlord of all reasonable information as Landlord may request concerning the
proposed subtenant or assignee, including, but not limited to, a balance sheet
of the proposed subtenant or assignee as of a date within ninety (90) days of
the request for Landlord's consent and statements of income or profit and loss
of the proposed subtenant or assignee for the most recent period preceding the
request for Landlord's consent; (5) any proposed subtenant of more than 20,000
rentable square feet of the Premises or any proposed assignee demonstrates to
Landlord's reasonable satisfaction a record of successful experience in
business; and (6) the proposed transfer will not impose additional burdens or
adverse tax effects on Landlord. If Tenant has any exterior sign rights under
this Lease, such rights are personal to Tenant and may not be assigned or
transferred to any assignee of this Lease or subtenant of the Premises without
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Landlord's prior written consent, which may be withheld in Landlord's reasonable
discretion. Reasonable grounds for Landlord to withhold its consent to the
transfer of exterior sign rights shall include, but not be limited to,
circumstances where the proposed assignee's or subtenant's signage would (A) not
comply with the Landlord's sign criteria; (B) could be considered offensive due
to the proposed assignee's or subtenant's name or logo, or the design,
materials, wording or color of the proposed signage; or (C) would violate rights
claimed by other tenants in the area in which the Building is located to
restrict signage in such area.
If Landlord consents to the proposed transfer, Tenant may within ninety (90)
days after the date of the consent effect the transfer upon the terms described
in the information furnished to Landlord; provided that any material change in
the terms shall be subject to Landlord's consent as set forth in this Section.
Landlord shall approve or disapprove any requested transfer within thirty (30)
days following receipt of Tenant's written request, the information set forth
above, and the fee set forth below.
(c) Notwithstanding the provisions of Subsection (b) above, in
lieu of consenting to a proposed assignment or subletting, Landlord may elect to
(i) sublease the Premises (or the portion proposed to be subleased), or take an
assignment of Tenant's interest in this Lease, upon the same terms as offered to
the proposed subtenant or assignee (excluding terms relating to the purchase of
personal property, the use of Tenant's name or the continuation of Tenant's
business), or (ii) terminate this Lease as to the portion of the Premises
proposed to be subleased (if such portion to be subleased is more than 25% of
the rentable square footage of the Premises) or assigned with a proportionate
abatement in the rent payable under this Lease, effective on the date that the
proposed sublease or assignment would have become effective. Landlord may
thereafter, at its option, assign or re-let any space so recaptured to any third
party, including without limitation the proposed transferee of Tenant.
(d) Tenant agrees that fifty percent (50%) of any amounts paid
by the assignee or subtenant, however described, in excess of (i) the Basic Rent
payable by Tenant hereunder, or in the case of a sublease of a portion of the
Premises, in excess of the Basic Rent reasonably allocable to such portion, plus
(ii) Tenant's direct out-of-pocket costs which Tenant certifies to Landlord have
been paid to provide occupancy related services to such assignee or subtenant of
a nature commonly provided by landlords of similar space, shall be the property
of Landlord and such amounts shall be payable directly to Landlord by the
assignee or subtenant or, at Landlord's option, by Tenant. At Landlord's
request, a written agreement shall be entered into by and among Tenant, Landlord
and the proposed assignee or subtenant confirming the requirements of this
subsection.
(e) Tenant shall pay to Landlord a fee of Five Hundred Dollars
($500.00) if and when any transfer hereunder is requested by Tenant. Such fee is
hereby acknowledged as a reasonable amount to reimburse Landlord for its costs
of review and evaluation of a proposed assignee/sublessee, and Landlord shall
not be obligated to commence such review and evaluation unless and until such
fee is paid.
SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with
the consent of Landlord, shall relieve Tenant of its obligation to pay rent and
to perform all its other obligations under this Lease. Moreover, Tenant shall
indemnify and hold Landlord harmless, as provided in Section 10.3, for any act
or omission by an assignee or subtenant. Each assignee, other than Landlord,
shall be deemed to assume all obligations of Tenant under this Lease and shall
be liable jointly and severally with Tenant for the payment of all rent, and for
the due performance of all of Tenant's obligations, under this Lease. No
transfer shall be binding on Landlord unless any document memorializing the
transfer is delivered to Landlord and both the assignee/subtenant and Tenant
deliver to Landlord an executed consent to transfer instrument prepared by
Landlord and consistent with the requirements of this Article. The acceptance by
Landlord of any payment due under this Lease from any other person shall not be
deemed to be a waiver by Landlord of any provision of this Lease or to be a
consent to any transfer. Consent by Landlord to one or more transfers shall not
operate as a waiver or estoppel to the future enforcement by Landlord of its
rights under this Lease.
SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises and
shall be deemed included in each sublease:
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(a) Each and every provision contained in this Lease (other
than with respect to the payment of rent hereunder) is incorporated by reference
into and made a part of such sublease, with "Landlord" hereunder meaning the
sublandlord therein and "Tenant" hereunder meaning the subtenant therein.
(b) Tenant hereby irrevocably assigns to Landlord all of
Tenant's interest in all rentals and income arising from any sublease of the
Premises, and Landlord may collect such rent and income and apply same toward
Tenant's obligations under this Lease; provided, however, that until a default
occurs in the performance of Tenant's obligations under this Lease, Tenant shall
have the right to receive and collect the sublease rentals. Landlord shall not,
by reason of this assignment or the collection of sublease rentals, be deemed
liable to the subtenant for the performance of any of Tenant's obligations under
the sublease. Tenant hereby irrevocably authorizes and directs any subtenant,
upon receipt of a written notice from Landlord stating that an uncured default
exists in the performance of Tenant's obligations under this Lease, to pay to
Landlord all sums then and thereafter due under the sublease. Tenant agrees that
the subtenant may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall have
no right or claim against the subtenant or Landlord for any rentals so paid to
Landlord.
(c) In the event of the termination of this Lease, Landlord
may, at its sole option, take over Tenant's entire interest in any sublease and,
upon notice from Landlord, the subtenant shall attorn to Landlord. In no event,
however, shall Landlord be liable for any previous act or omission by Tenant
under the sublease or for the return of any advance rental payments or deposits
under the sublease that have not been actually delivered to Landlord, nor shall
Landlord be bound by any sublease modification executed without Landlord's
consent or for any advance rental payment by the subtenant in excess of one
month's rent. The general provisions of this Lease, including without limitation
those pertaining to insurance and indemnification, shall be deemed incorporated
by reference into the sublease despite the termination of this Lease.
SECTION 9.4. CERTAIN TRANSFERS. The sale of all or substantially all of
Tenant's assets (other than bulk sales in the ordinary course of business) or,
if Tenant is a corporation, a limited liability company, an unincorporated
association, or a partnership, the transfer, assignment or hypothecation of any
stock or interest in such corporation, limited liability company, association,
or partnership in the aggregate of fifty percent (50%) (except for publicly
traded shares of stock constituting a transfer of fifty percent (50%) or more in
the aggregate, so long as no change in the controlling interest of Tenant occurs
as a result thereof) shall be deemed an assignment within the meaning and
provisions of this Article. Notwithstanding the foregoing, Landlord's consent
shall not be required for the assignment of this Lease as a result of a merger
by Tenant with or into another entity, so long as (i) the net worth of the
successor entity after such merger or sale is at least equal to the greater of
the net worth of Tenant as of the execution of this Lease by Landlord or the net
worth of Tenant immediately prior to the date of such merger or sale, evidence
of which, satisfactory to Landlord, shall be presented to Landlord prior to such
merger or sale, (ii) Tenant shall provide to Landlord, prior to such merger or
sale, written notice of such merger or sale and such assignment documentation
and other information as Landlord may request in connection therewith, and (iii)
all of the other terms and requirements of this Article shall apply with respect
to such assignment. Landlord's consent shall also not be required for the
transfer or assignment of any stock or interest in Tenant made as a result of
the death or incapacity of the holder of such stock or interest, or made for
estate planning purposes where the initial holder of such stock or interest
continues to indirectly hold or control such stock or interest.
ARTICLE X. INSURANCE AND INDEMNITY
SECTION 10.1. TENANT'S INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in Exhibit D.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.
SECTION 10.2. LANDLORD'S INSURANCE. Landlord shall provide the
following types of insurance, with or without deductible and in amounts and
coverages as may be determined by Landlord in its discretion: "all risk"
property insurance, subject to standard exclusions, covering the Building for
its full replacement cost, and
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may, at its election, provide insurance for such other risks as Landlord or its
mortgagees may from time to time deem appropriate, including leasehold
improvements made by Landlord, and commercial general liability coverage.
Landlord shall not be required to carry insurance of any kind on Tenant's
property, including leasehold improvements, trade fixtures, furnishings,
equipment, plate glass, signs and all other items of personal property, and
shall not be obligated to repair or replace that property should damage occur.
All proceeds of insurance maintained by Landlord upon the Building shall be the
property of Landlord, whether or not Landlord is obligated to or elects to make
any repairs. At Landlord's option, Landlord may self-insure all or any portion
of the risks for which Landlord is required or elects to provide insurance
hereunder or may provide the same through blanket policies.
SECTION 10.3. TENANT'S INDEMNITY. Except to the extent caused by
Landlord's sole active negligence or willful misconduct, to the fullest extent
permitted by law, Tenant shall defend, indemnify, protect, save and hold
harmless Landlord, its agents, and any and all affiliates of Landlord,
including, without limitation, any corporations or other entities controlling,
controlled by or under common control with Landlord, from and against any and
all claims, liabilities, costs or expenses arising either before or after the
Commencement Date from Tenant's use or occupancy of the Premises or the
Building, or from the conduct of its business, or from any activity, work, or
thing done, permitted or suffered by Tenant or its agents, employees, invitees
or licensees in or about the Premises or the Building, or from any default in
the performance of any obligation on Tenant's part to be performed under this
Lease, or from any act or negligence of Tenant or its agents, employees,
visitors, patrons, guests, invitees or licensees. Landlord may, at its option,
require Tenant to assume Landlord's defense in any action covered by this
Section through counsel satisfactory to Landlord. The provisions of this Section
shall expressly survive the expiration or sooner termination of this Lease.
SECTION 10.4. LANDLORD'S NONLIABILITY. Landlord shall not be liable to
Tenant, its employees, agents and invitees, and Tenant hereby waives all claims
against Landlord for loss of or damage to any property, or any injury to any
person, or loss or interruption of business or income, or any other loss, cost,
damage, injury or liability whatsoever (including without limitation any
consequential damages and lost profit or opportunity costs) resulting from, but
not limited to, Acts of God, acts of civil disobedience or insurrection, fire,
explosion, falling plaster, steam, gas, electricity, water or rain which may
leak or flow from or into any part of the Building or from the breakage,
leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, electrical works or other fixtures in
the Building. It is understood that any such condition may require the temporary
evacuation or closure of all or a portion of the Building. Except as provided in
Sections 11.1 and 12.1 below, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant's
business (including without limitation consequential damages and lost profit or
opportunity costs) arising from the making of any repairs, alterations or
improvements to any portion of the Building, including repairs to the Premises,
nor shall any related activity by Landlord constitute an actual or constructive
eviction; provided, however, that in making repairs, alterations or
improvements, Landlord shall interfere as little as reasonably practicable with
the conduct of Tenant's business in the Premises. Neither Landlord nor its
agents shall be liable for interference with light or other similar intangible
interests. Tenant shall immediately notify Landlord in case of fire or accident
in the Premises or the Building and of defects in any improvements or equipment.
SECTION 10.5. WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waives all rights of recovery against the other and the other's agents on
account of loss and damage occasioned to the property of such waiving party to
the extent only that such loss or damage is required to be insured against under
any "all risk" property insurance policies required by this Article X; provided
however, that (i) the foregoing waiver shall not apply to the extent of Tenant's
obligations to pay deductibles under any such policies and this Lease, and (ii)
if any loss is due to the act, omission or negligence or willful misconduct of
Tenant or its agents, employees, contractors, guests or invitees, Tenant's
liability insurance shall be primary and shall cover all losses and damages
prior to any other insurance hereunder. By this waiver it is the intent of the
parties that neither Landlord nor Tenant shall be liable to any insurance
company (by way of subrogation or otherwise) insuring the other party for any
loss or damage insured against under any "all-risk" property insurance policies
required by this Article, even though such loss or damage might be occasioned by
the negligence of such party, its agents, employees, contractors, guests or
invitees. The provisions of this Section shall not limit the indemnification
provisions elsewhere contained in this Lease.
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ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1. RESTORATION.
(a) If the Building is damaged, Landlord shall repair that
damage as soon as reasonably possible, at its expense, unless: (i) Landlord
reasonably determines that the cost of repair is not covered by Landlord's
"all-risk" fire and extended coverage insurance plus such additional amounts
Tenant elects, at its option, to contribute, excluding however the deductible
(for which Tenant shall be responsible for Tenant's proportionate share); (ii)
Landlord reasonably determines that the Premises cannot, with reasonable
diligence, be fully repaired by Landlord (or cannot be safely repaired because
of the presence of hazardous factors, including without limitation Hazardous
Materials, earthquake faults, and other similar dangers) within two hundred
seventy (270) days after the date of the damage; (iii) an event of default by
Tenant has occurred and is continuing at the time of such damage; or (iv) the
damage occurs during the final twelve (12) months of the Term and repair of the
same would cost in excess of thirty percent (30%) of the full replacement cost
of the Building. Should Landlord elect not to repair the damage for one of the
preceding reasons, Landlord shall so notify Tenant in writing within sixty (60)
days after the damage occurs and this Lease shall terminate as of the date of
that notice.
(b) Unless Landlord elects to terminate this Lease in
accordance with subsection (a) above, this Lease shall continue in effect for
the remainder of the Term; provided that so long as Tenant is not in default
under this Lease, if the damage is so extensive that Landlord reasonably
determines that the Premises cannot, with reasonable diligence, be repaired by
Landlord (or cannot be safely repaired because of the presence of hazardous
factors, earthquake faults, and other similar dangers) so as to allow Tenant's
substantial use and enjoyment of the Premises within two hundred seventy (270)
days after the date of damage, then Tenant may elect to terminate this Lease by
written notice to Landlord within the sixty (60) day period stated in subsection
(a).
(c) Commencing on the date of any damage to the Building, and
ending on the sooner of the date the damage is repaired or the date this Lease
is terminated, the rental to be paid under this Lease shall be abated in the
same proportion that the floor area of the Building that is rendered unusable by
the damage from time to time bears to the total floor area of the Building, but
only to the extent that any business interruption insurance coverage required to
be maintained by Tenant in accordance with Exhibit D has been properly
maintained in effect.
(d) Notwithstanding the provisions of subsections (a), (b) and
(c) of this Section, and subject to the provisions of Section 10.5 above, the
cost of any repairs shall be borne by Tenant, and Tenant shall not be entitled
to rental abatement or termination rights, if the damage is due to the fault or
neglect of Tenant or its employees, subtenants, invitees or representatives. In
addition, the provisions of this Section shall not be deemed to require Landlord
to repair any improvements or fixtures that Tenant is obligated to repair or
insure pursuant to any other provision of this Lease.
(e) Tenant shall fully cooperate with Landlord in removing
Tenant's personal property and any debris from the Premises to facilitate all
inspections of the Premises and the making of any repairs. Notwithstanding
anything to the contrary contained in this Lease, if Landlord in good faith
believes there is a risk of injury to persons or damage to property from entry
into the Building or Premises following any damage or destruction thereto,
Landlord may restrict entry into the Building or the Premises by Tenant, its
employees, agents and contractors in a non-discriminatory manner, without being
deemed to have violated Tenant's rights of quiet enjoyment to, or made an
unlawful detainer of, or evicted Tenant from, the Premises. Upon request,
Landlord shall consult with Tenant to determine if there are safe methods of
entry into the Building or the Premises solely in order to allow Tenant to
retrieve files, data in computers, and necessary inventory, subject however to
all indemnities and waivers of liability from Tenant to Landlord contained in
this Lease and any additional indemnities and waivers of liability which
Landlord may require.
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SECTION 11.2. LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.
ARTICLE XII. EMINENT DOMAIN
SECTION 12.1. TOTAL OR PARTIAL TAKING. If all or a material portion of
the Premises is taken by any lawful authority by exercise of the right of
eminent domain, or sold to prevent a taking, either Tenant or Landlord may
terminate this Lease effective as of the date possession is required to be
surrendered to the authority. In the event title to a portion of the Premises is
taken or sold in lieu of taking, and if Landlord elects to restore the Premises
in such a way as to alter the Premises materially, either party may terminate
this Lease, by written notice to the other party, effective on the date of
vesting of title. In the event neither party has elected to terminate this Lease
as provided above, then Landlord shall promptly, after receipt of a sufficient
condemnation award, proceed to restore the Premises to substantially their
condition prior to the taking, and a proportionate allowance shall be made to
Tenant for the rent corresponding to the time during which, and to the part of
the Premises of which, Tenant is deprived on account of the taking and
restoration. In the event of a taking, Landlord shall be entitled to the entire
amount of the condemnation award without deduction for any estate or interest of
Tenant; provided that nothing in this Section shall be deemed to give Landlord
any interest in, or prevent Tenant from seeking any award against the taking
authority for, the taking of personal property and fixtures belonging to Tenant,
for Tenant's goodwill or for relocation or business interruption expenses
recoverable from the taking authority.
SECTION 12.2. TEMPORARY TAKING. No temporary taking of the Premises
shall terminate this Lease or give Tenant any right to abatement of rent, and
any award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant. A temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period of not to exceed one hundred
eighty (180) days.
SECTION 12.3. TAKING OF PARKING AREA. In the event there shall be a
taking of the parking area such that Landlord can no longer provide sufficient
parking to comply with this Lease, Landlord may substitute reasonably equivalent
parking in a location reasonably close to the Building; provided that if
Landlord fails to make that substitution within one hundred eighty (180) days
following the taking and if the taking materially impairs Tenant's use and
enjoyment of the Premises, Tenant may, at its option, terminate this Lease by
written notice to Landlord. If this Lease is not so terminated by Tenant, there
shall be no abatement of rent and this Lease shall continue in effect.
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
SECTION 13.1. SUBORDINATION. At the option of Landlord, this Lease
shall be either superior or subordinate to all ground or underlying leases,
mortgages and deeds of trust, if any, which may hereafter affect the Premises,
and to all renewals, modifications, consolidations, replacements and extensions
thereof; provided, that so long as Tenant is not in default under this Lease,
this Lease shall not be terminated or Tenant's quiet enjoyment of the Premises
disturbed in the event of termination of any such ground or underlying lease, or
the foreclosure of any such mortgage or deed of trust, to which Tenant has
subordinated this Lease pursuant to this Section. In the event of a termination
or foreclosure, Tenant shall become a tenant of and attorn to the
successor-in-interest to Landlord upon the same terms and conditions as are
contained in this Lease, and shall execute any instrument reasonably required by
Landlord's successor for that purpose. Tenant shall also, within fifteen (15)
days after its receipt of written request from Landlord, execute and deliver all
instruments as may be reasonably required from time to time to subordinate the
rights of Tenant under this Lease to any ground or underlying lease or to the
lien of any mortgage or deed of trust (provided that such instruments include
the nondisturbance and attornment provisions set forth above), or, if requested
by Landlord, to subordinate, in whole or in part, any ground or underlying lease
or the lien of any mortgage or deed of trust to this Lease. Tenant further
agrees to subordinate
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its right under this Lease to covenants, conditions or restrictions which
Landlord expects to record after the date of this Lease and which would be
uniformly applicable to the area commonly referred to by Landlord as Spectrum 7.
SECTION 13.2. ESTOPPEL CERTIFICATE.
(a) Each party shall, at any time upon not less than ten (10)
days prior written notice from the other party, execute, acknowledge and deliver
to the requesting party, in any form that the requesting party may reasonably
require, a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of the
modification and certifying that this Lease, as modified, is in full force and
effect) and the dates to which the rental, additional rent and other charges
have been paid in advance, if any, and (ii) acknowledging that, to such party's
knowledge, there are no uncured defaults on the part of the requesting party, or
specifying each default if any are claimed, and (iii) setting forth all further
information that the requesting party may reasonably require. Such statement may
be relied upon by any prospective purchaser or encumbrancer of the Premises or
any assignee of or sublessee under this Lease.
(b) Notwithstanding any other rights and remedies of the
parties hereunder, any party's failure to deliver any estoppel statement within
the provided time shall be conclusive upon such party that (i) this Lease is in
full force and effect, without modification, (ii) there are no uncured defaults
in such party's performance, and (iii) not more than one month's rental has been
paid in advance.
SECTION 13.3 FINANCIALS.
(a) Tenant shall deliver to Landlord, prior to the execution
of this Lease and thereafter at any time upon Landlord's request (which request
shall not be made more frequently than once in any twelve month period),
Tenant's current tax returns and financial statements, certified true, accurate
and complete by the chief financial officer of Tenant, including a balance sheet
and profit and loss statement for the most recent prior year (collectively, the
"Statements"), which Statements shall accurately and completely reflect the
financial condition of Tenant. Landlord agrees that it will keep the Statements
confidential, except that Landlord shall have the right to deliver the same to
any proposed purchaser or encumbrancer of the Premises that, in Tenant's
reasonable judgment, is not a competitor of Tenant.
(b) Tenant acknowledges that Landlord is relying on the
Statements in its determination to enter into this Lease, and Tenant represents
to Landlord, which representation shall be deemed made on the date of this Lease
and again on the Commencement Date, that no material change in the financial
condition of Tenant, as reflected in the Statements, has occurred since the date
Tenant delivered the Statements to Landlord. The Statements are represented and
warranted by Tenant to be correct and to accurately and fully reflect Tenant's
true financial condition as of the date of submission by any Statements to
Landlord.
ARTICLE XIV. DEFAULTS AND REMEDIES
SECTION 14.1. TENANT'S DEFAULTS. In addition to any other event of
default set forth in this Lease, the occurrence of any one or more of the
following events shall constitute a default by Tenant:
(a) The failure by Tenant to make any payment of rent or
additional rent required to be made by Tenant, as and when due, where the
failure continues for a period of ten (10) days after written notice from
Landlord to Tenant; provided, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure Section 1161 and 1161(a) as amended. For purposes of these default and
remedies provisions, the term "additional rent" shall be deemed to include all
amounts of any type whatsoever other than Basic Rent to be paid by Tenant
pursuant to the terms of this Lease.
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(b) Assignment, sublease, encumbrance or other transfer of the
Lease by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means, without the prior
written consent of Landlord.
(c) The discovery by Landlord that any financial statement
provided by Tenant, or by any affiliate, successor or guarantor of Tenant, was
intentionally and materially false.
(d) The failure of Tenant to timely and fully provide any
subordination agreement, estoppel certificate or financial statements in
accordance with the requirements of Article XIII.
(e) The failure or inability by Tenant to observe or perform
any of the express or implied covenants or provisions of this Lease to be
observed or performed by Tenant, other than as specified in any other subsection
of this Section, where the failure continues for a period of thirty (30) days
after written notice from Landlord to Tenant or such shorter period as is
specified in any other provision of this Lease; provided, however, that any such
notice shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161 and 1161(a) as amended. However,
if the nature of the failure is such that more than thirty (30) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commences the cure within thirty (30) days, and thereafter
diligently pursues the cure to completion.
(f) (i) The making by Tenant of any general assignment for the
benefit of creditors; (ii) the filing by or against Tenant of a petition to have
Tenant adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within thirty (30) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; (iv) the attachment, execution
or other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where the seizure is not
discharged within thirty (30) days; or (v) Tenant's convening of a meeting of
its creditors for the purpose of effecting a moratorium upon or composition of
its debts. Landlord shall not be deemed to have knowledge of any event described
in this subsection unless notification in writing is received by Landlord, nor
shall there be any presumption attributable to Landlord of Tenant's insolvency.
In the event that any provision of this subsection is contrary to applicable
law, the provision shall be of no force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant which remains
uncured after any applicable cure periods set forth in this Lease, if any, or in
the event of the abandonment of the Premises by Tenant following notice to
Tenant of Landlord's belief that such abandonment has occurred, then in addition
to any other remedies available to Landlord, Landlord may exercise the following
remedies:
(i) Landlord may terminate Tenant's right to
possession of the Premises by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. Such termination shall not affect any accrued obligations of Tenant
under this Lease. Upon termination, Landlord shall have the right to reenter the
Premises and remove all persons and property. Landlord shall also be entitled to
recover from Tenant:
(1) The worth at the time of award of the
unpaid rent and additional rent which had been earned at the time of
termination;
(2) The worth at the time of award of the
amount by which the unpaid rent and additional rent which would have been earned
after termination until the time of award exceeds the amount of such loss that
Tenant proves could have been reasonably avoided;
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(3) The worth at the time of award of the
amount by which the unpaid rent and additional rent for the balance of the Term
after the time of award exceeds the amount of such loss that Tenant proves could
be reasonably avoided;
(4) 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 things would
be likely to result from Tenant's default, including, but not limited to, the
cost of recovering possession of the Premises, refurbishment of the Premises,
marketing costs, commissions and other expenses of reletting, including
necessary repair, the unamortized portion of any tenant improvements and
brokerage commissions funded by Landlord in connection with this Lease,
reasonable attorneys' fees, and any other reasonable costs; and
(5) At Landlord's election, all other
amounts in addition to or in lieu of the foregoing as may be permitted by law.
The term "rent" as used in this Lease shall be deemed to mean the Basic Rent and
all other sums required to be paid by Tenant to Landlord pursuant to the terms
of this Lease. Any sum, other than Basic Rent, shall be computed on the basis of
the average monthly amount accruing during the twenty-four (24) month period
immediately prior to default, except that if it becomes necessary to compute
such rental before the twenty-four (24) month period has occurred, then the
computation shall be on the basis of the average monthly amount during the
shorter period. As used in subparagraphs (1) and (2) above, the "worth at the
time of award" shall be computed by allowing interest at the rate of ten percent
(10%) per annum. As used in subparagraph (3) above, the "worth at the time of
award" shall be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
(ii) Landlord may elect not to terminate Tenant's
right to possession of the Premises, in which event Landlord may continue to
enforce all of its rights and remedies under this Lease, including the right to
collect all rent as it becomes due. Efforts by the Landlord to maintain,
preserve or relet the Premises, or the appointment of a receiver to protect the
Landlord's interests under this Lease, shall not constitute a termination of the
Tenant's right to possession of the Premises. In the event that Landlord elects
to avail itself of the remedy provided by this subsection (ii), Landlord shall
not unreasonably withhold its consent to an assignment or subletting of the
Premises subject to the reasonable standards for Landlord's consent as are
contained in this Lease.
(b) The various rights and remedies reserved to Landlord in
this Lease or otherwise shall be cumulative and, except as otherwise provided by
California law, Landlord may pursue any or all of its rights and remedies at the
same time.
(c) No delay or omission of Landlord to exercise any right or
remedy shall be construed as a waiver of the right or remedy or of any default
by Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord's knowledge of the preceding breach or default at the time of
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord's right to recover the balance of the rent or pursue any other remedy
available to it. No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises prior to the termination of this Lease, and
the delivery of the keys to any employee shall not operate as a termination of
the Lease or a surrender of the Premises.
SECTION 14.3. LATE PAYMENTS.
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(a) Any rent due under this Lease that is not received by
Landlord within five (5) days of the date when due shall bear interest at the
maximum rate permitted by law from the date due until fully paid. The payment of
interest shall not cure any default by Tenant under this Lease. In addition,
Tenant acknowledges that the late payment by Tenant to Landlord of rent will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult and impracticable to ascertain. Those costs
may include, but are not limited to, administrative, processing and accounting
charges, and late charges which may be imposed on Landlord by the terms of any
ground lease, mortgage or trust deed covering the Premises. Accordingly, if any
rent due from Tenant shall not be received by Landlord or Landlord's designee
within five (5) days after the date due, then Tenant shall pay to Landlord, in
addition to the interest provided above, a late charge in a sum equal to the
greater of five percent (5%) of the amount overdue or Two Hundred Fifty Dollars
($250.00) for each delinquent payment. Notwithstanding the foregoing sentence,
Landlord shall not charge Tenant a late charge until five (5) days after notice
from Landlord to Tenant that rent remains unpaid for the first two (2) times
that rent is more than five days late during any five (5) year period during the
Term. Acceptance of a late charge by Landlord shall not constitute a waiver of
Tenant's default with respect to the overdue amount, nor shall it prevent
Landlord from exercising any of its other rights and remedies.
(b) Following each second consecutive installment of rent that
is not paid within five (5) days following notice of nonpayment from Landlord,
Landlord shall have the option (i) to require that beginning with the first
payment of rent next due, rent shall no longer be paid in monthly installments
but shall be payable quarterly three (3) months in advance and/or (ii) to
require that Tenant increase the amount, if any, of the Security Deposit by one
hundred percent (100%). Should Tenant deliver to Landlord, at any time during
the Term, two (2) or more insufficient checks, the Landlord may require that all
monies then and thereafter due from Tenant be paid to Landlord by cashier's
check.
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and
agreements to be performed by Tenant under this Lease shall be performed at
Tenant's sole cost and expense and without any abatement of rent or right of
set-off. If Tenant fails to pay any sum of money, other than rent, or fails to
perform any other act on its part to be performed under this Lease, and the
failure continues beyond any applicable grace period set forth in Section 14.1,
then in addition to any other available remedies, Landlord may, at its election
make the payment or perform the other act on Tenant's part. Landlord's election
to make the payment or perform the act on Tenant's part shall not give rise to
any responsibility of Landlord to continue making the same or similar payments
or performing the same or similar acts. Tenant shall, promptly upon demand by
Landlord, reimburse Landlord for all sums paid by Landlord and all necessary
incidental costs, together with interest at the maximum rate permitted by law
from the date of the payment by Landlord. Landlord shall have the same rights
and remedies if Tenant fails to pay those amounts as Landlord would have in the
event of a default by Tenant in the payment of rent.
SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be
in default in the performance of any obligation under this Lease unless and
until it has failed to perform the obligation within thirty (30) days after
written notice by Tenant to Landlord specifying in reasonable detail the nature
and extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion.
SECTION 14.6. EXPENSES AND LEGAL FEES. All sums reasonably incurred by
Landlord in connection with any event of default by Tenant under this Lease or
holding over of possession by Tenant after the expiration or earlier termination
of this Lease, including without limitation all costs, expenses and actual
accountants, appraisers, attorneys and other professional fees, and any
collection agency or other collection charges, shall be due and payable by
Tenant to Landlord on demand, and shall bear interest at the rate of ten percent
(10%) per annum. Should either Landlord or Tenant bring any action in connection
with this Lease, the prevailing party shall be entitled to recover as a part of
the action its reasonable attorneys' fees, and all other costs. The prevailing
party for the purpose of this paragraph shall be determined by the trier of the
facts.
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SECTION 14.7. WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH
ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE
WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY
EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR
SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
AND/OR ANY CLAIM OF INJURY OR DAMAGE.
SECTION 14.8. SATISFACTION OF JUDGMENT. The obligations of Landlord do
not constitute the personal obligations of the individual partners, trustees,
directors, officers or shareholders of Landlord or its constituent partners. The
obligations of Tenant do not constitute the personal obligations of the
individual partners, trustees, directors, officers or shareholders of Tenant or
its constituent partners. Should Tenant recover a money judgment against
Landlord, such judgment shall be satisfied only to the extent of the fair market
value of the Building and/or the Site or out of the rent or other income from
such property receivable by Landlord or out of consideration received by
Landlord from the sale or other disposition of all or any part of the Building
and/or the Site, and no action may be sought or obtained by Tenant beyond such
value.
SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim, demand
or right of any kind by Tenant which is based upon or arises in connection with
this Lease shall be barred unless Tenant commences an action thereon within six
(6) months after the date that the act, omission, event or default upon which
the claim, demand or right arises, has occurred.
ARTICLE XV. END OF TERM
SECTION 15.1. HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after the
expiration shall not constitute a renewal or extension of this Lease, or give
Tenant any rights under this Lease, except when in writing signed by both
parties. If Tenant holds over for any period after the expiration (or earlier
termination) of the Term without the prior written consent of Landlord, such
possession shall constitute a tenancy at sufferance only; such holding over with
the prior written consent of Landlord shall constitute a month-to-month tenancy
commencing on the first (1st) day following the termination of this Lease. In
either of such events, possession shall be subject to all of the terms of this
Lease, except that the monthly Basic Rent shall be the greater of (a) one
hundred fifty percent (150%) for the first two months of any holdover period,
and thereafter one hundred seventy-five percent (175%), of the Basic Rent for
the month immediately preceding the date of termination or (b) the then
currently scheduled Basic Rent for comparable space in the Building. If Tenant
fails to surrender the Premises upon the expiration of this Lease despite demand
to do so by Landlord, Tenant shall indemnify and hold Landlord harmless from all
loss or liability, including without limitation, any claims made by any
succeeding tenant relating to such failure to surrender. Acceptance by Landlord
of rent after the termination shall not constitute a consent to a holdover or
result in a renewal of this Lease. The foregoing provisions of this Section are
in addition to and do not affect Landlord's right of re-entry or any other
rights of Landlord under this Lease or at law.
SECTION 15.2. MERGER ON TERMINATION. The voluntary or other surrender
of this Lease by Tenant, or a mutual termination of this Lease, shall terminate
any or all existing subleases unless Landlord, at its option, elects in writing
to treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord's obligation
excepted, and shall, without
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expense to Landlord, remove or cause to be removed from the Premises all
personal property and debris, except for any items that Landlord may by written
authorization allow to remain. Tenant shall repair all damage to the Premises
resulting from the removal, which repair shall include the patching and filling
of holes and repair of structural damage, provided that Landlord may instead
elect to repair any structural damage at Tenant's expense. If Tenant shall fail
to comply with the provisions of this Section, Landlord may effect the removal
and/or make any repairs, and the cost to Landlord shall be additional rent
payable by Tenant upon demand. If Tenant fails to remove Tenant's personal
property from the Premises upon the expiration of the Term, Landlord may remove,
store, dispose of and/or retain such personal property, at Landlord's option, in
accordance with then applicable laws, all at the expense of Tenant. If requested
by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an
instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in the Premises.
ARTICLE XVI. PAYMENTS AND NOTICES
All sums payable by Tenant to Landlord shall be paid, without deduction
or offset, in lawful money of the United States to Landlord at its address set
forth in Item 12 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within five (5) days after demand. All
payments requiring proration shall be prorated on the basis of a thirty (30) day
month and a three hundred sixty (360) day year. Any notice, election, demand,
consent, approval or other communication to be given or other document to be
delivered by either party to the other may be delivered in person or by courier
or overnight delivery service to the other party, or may be deposited in the
United States mail, duly registered or certified, postage prepaid, return
receipt requested, and addressed to the other party at the address set forth in
Item 12 of the Basic Lease Provisions, or if to Tenant, at that address or, from
and after the Commencement Date, at the Premises (whether or not Tenant has
departed from, abandoned or vacated the Premises), or may be delivered by
telegram, telex or telecopy, provided that receipt thereof is telephonically
confirmed. Either party may, by written notice to the other, served in the
manner provided in this Article, designate a different address. If any notice or
other document is sent by mail, it shall be deemed served or delivered three (3)
days after mailing. If more than one person or entity is named as Tenant under
this Lease, service of any notice upon any one of them shall be deemed as
service upon all of them.
ARTICLE XVII. RULES AND REGULATIONS
Tenant agrees to observe faithfully and comply strictly with the Rules
and Regulations, attached as Exhibit E, and any reasonable and nondiscriminatory
amendments, modifications and/or additions as may be adopted and published by
written notice to tenants by Landlord for the safety, care, security, good
order, or cleanliness of the Premises. Landlord shall not be liable to Tenant
for any violation of the Rules and Regulations or the breach of any covenant or
condition in any lease by any other tenant or such tenant's agents, employees,
contractors, quests or invitees. One or more waivers by Landlord of any breach
of the Rules and Regulations by Tenant or by any other tenant(s) shall not be a
waiver of any subsequent breach of that rule or any other. Tenant's failure to
keep and observe the Rules and Regulations shall constitute a default under this
Lease. In the case of any conflict between the Rules and Regulations and this
Lease, this Lease shall be controlling.
ARTICLE XVIII. BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) unless otherwise provided in this
Lease. Each party warrants that it has had no dealings with any other real
estate broker or agent in connection with the negotiation of this Lease, and
each
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party agrees to indemnify and hold the other harmless from any cost, expense or
liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by the indemnifying party in
connection with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease. If Tenant fails to take possession of the
Premises or if this Lease otherwise terminates prior to the Expiration Date as
the result of failure of performance by Tenant, Landlord shall be entitled to
recover from Tenant the unamortized portion of any brokerage commission funded
by Landlord in addition to any other damages to which Landlord may be entitled.
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer of Landlord's interest in the Premises,
the transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that any funds held by the transferor in which Tenant has an interest
shall be turned over, subject to that interest, to the transferee and Tenant is
notified of the transfer as required by law. No holder of a mortgage and/or deed
of trust to which this Lease is or may be subordinate, and no landlord under a
so-called sale-leaseback, shall be responsible in connection with the Security
Deposit, unless the mortgagee or holder of the deed of trust or the landlord
actually receives the Security Deposit. It is intended that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject to
the foregoing, be binding on Landlord, its successors and assigns, only during
and in respect to their respective successive periods of ownership.
ARTICLE XX. INTERPRETATION
SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.
SECTION 20.2. HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.
SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.
SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights
and liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.
SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to
the performance of every provision of this Lease.
SECTION 20.6. CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.
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SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES. One or more waivers by
Landlord or Tenant of any breach of any term, covenant or condition contained in
this Lease shall not be a waiver of any subsequent breach of the same or any
other term, covenant or condition. Consent to any act by one of the parties
shall not be deemed to render unnecessary the obtaining of that party's consent
to any subsequent act. No breach by Tenant of this Lease shall be deemed to have
been waived by Landlord unless the waiver is in a writing signed by Landlord.
The rights and remedies of Landlord under this Lease shall be cumulative and in
addition to any and all other rights and remedies which Landlord may have.
SECTION 20.9. INABILITY TO PERFORM. In the event that either party
shall be delayed or hindered in or prevented from the performance of any work or
in performing any act required under this Lease by reason of any cause beyond
the reasonable control of that party, then the performance of the work or the
doing of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent or from the timely performance of any other
obligation under this Lease within Tenant's reasonable control.
SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises and the Building, and all preliminary
negotiations, oral agreements, understandings and/or practices, except those
contained in this Lease, are superseded and of no further effect. Tenant waives
its rights to rely on any representations or promises made by Landlord or others
which are not contained in this Lease. No verbal agreement or implied covenant
shall be held to modify the provisions of this Lease, any statute, law, or
custom to the contrary notwithstanding.
SECTION 20.11. QUIET ENJOYMENT. Upon the observance and performance of
all the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person claiming by or through Landlord.
SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
ARTICLE XXI. EXECUTION AND RECORDING
SECTION 21.1. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation or partnership, each individual executing this Lease on behalf of
the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
partnership, and that this Lease is binding upon the corporation or partnership
in accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises. Execution of
this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.
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SECTION 21.4. RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord, shall
execute and acknowledge a "short form" memorandum of this Lease for recording
purposes.
SECTION 21.5. AMENDMENTS. No amendment or termination of this Lease
shall be effective unless in writing signed by authorized signatories of Tenant
and Landlord, or by their respective successors in interest. No actions,
policies, oral or informal arrangements, business dealings or other course of
conduct by or between the parties shall be deemed to modify this Lease in any
respect.
SECTION 21.6. EXECUTED COPY. Any fully executed photocopy or similar
reproduction of this Lease shall be deemed an original for all purposes.
SECTION 21.7. ATTACHMENTS. All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease.
ARTICLE XXII. MISCELLANEOUS
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Landlord, either directly or indirectly,
without the prior written consent of Landlord, provided, however, that Tenant
may disclose the terms to prospective subtenants or assignees under this Lease
or to any entity contemplating a merger with Tenant or the acquisition of all or
substantially all of Tenant's assets, stock or membership interests.
SECTION 22.2. GUARANTY. As a condition to the execution of this Lease
by Landlord, the obligations, covenants and performance of the Tenant as herein
provided shall be guaranteed in writing by the Guarantor(s) listed in Item 7 of
the Basic Lease Provisions, if any, on a form of guaranty provided by Landlord.
SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with
obtaining financing for the Building, the lender shall request reasonable
modifications in this Lease as a condition to the financing, Tenant will not
unreasonably withhold or delay its consent, provided that the modifications do
not materially increase the obligations of Tenant or materially and adversely
affect the leasehold interest created by this Lease.
SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the
part of Landlord which would otherwise entitle Tenant to be relieved of its
obligations hereunder or to terminate this Lease shall result in such a release
or termination unless (a) Tenant has given notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Premises
whose address has been furnished to Tenant and (b) such beneficiary is afforded
a reasonable opportunity to cure the default by Landlord (which in no event
shall be less than sixty (60) days), including, if necessary to effect the cure,
time to obtain possession of the Premises by power of sale or judicial
foreclosure provided that such foreclosure remedy is diligently pursued. Tenant
agrees that each beneficiary of a deed of trust or mortgage covering the
Premises is an express third party beneficiary hereof, Tenant shall have no
right or claim for the collection of any deposit from such beneficiary or from
any purchaser at a foreclosure sale unless such beneficiary or purchaser shall
have actually received and not refunded the deposit, and Tenant shall comply
with any written directions by any beneficiary to pay rent due hereunder
directly to such beneficiary without determining whether an event of default
exists under such beneficiary's deed of trust.
SECTION 22.5. COVENANTS AND CONDITIONS. All of the provisions of this
Lease shall be construed to be conditions as well as covenants as though the
words specifically expressing or imparting covenants and conditions were used in
each separate provision.
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SECTION 22.6. SECURITY MEASURES. Tenant hereby acknowledges that
Landlord shall have no obligation whatsoever to provide guard service or other
security measures for the benefit of the Premises. Tenant assumes all
responsibility for the protection of Tenant, its agents, invitees and property
from acts of third parties. Nothing herein contained shall prevent Landlord, at
its sole option, after written notice to Tenant from providing security
protection for the Premises or any part thereof, in which event the cost thereof
shall be included within the definition of Building Costs.
SECTION 22.7. OFF-SITE OBLIGATIONS. Tenant understands and acknowledges
that the parcel located easterly of the Premises is utilized in a manner which
may create dust and noise from time to time and that the current occupant of
such parcel is obligated by law and under contract with Landlord to not operate
its business upon such parcel so as to create a public or private nuisance.
During the Term, Landlord shall use its good faith efforts to enforce its rights
to prohibit operation of the parcel located easterly of the Site in a manner
which would constitute a public or private nuisance. Such efforts shall include,
if necessary, legal action(s) against the subject parcel owner, if and to the
extent such action(s) are warranted and have a reasonable likelihood of success
as determined in the sole and absolute discretion of Landlord. The foregoing
obligation is personal to Landlord, and shall not be binding on or enforceable
against any successor-in-interest to Landlord in the event of a transfer of the
Premises, including without limitation, the holder of the beneficial interest
under any mortgage or deed of trust taking title by way of foreclosure or
deed-in-lieu of foreclosure.
LANDLORD: TENANT:
THE IRVINE COMPANY, XXXXX INSTRUMENTS CORP.,
a Michigan corporation a California corporation
By: /s/ XXXXXXXX X. XXXXXX By: /s/ XXXXXX XXXXXXX
------------------------------------- ----------------------------
Xxxxxxxx X. Xxxxxx, Xxxxxx Xxxxxxx,
President, Irvine Industrial Company, President and Chief
a division of The Irvine Company Operating Officer
By: /s/ XXXXXXX X. SIM By: /s/ XXXXX XXXXXXXXXXX
------------------------------------- ----------------------------
Xxxxxxx X. Sim, Xxxxx Xxxxxxxxxxx,
Executive Vice President Chief Financial Officer
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EXHIBIT A
[GRAPHIC]
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EXHIBIT B
IRVINE INDUSTRIAL COMPANY
HAZARDOUS MATERIALS SURVEY FORM
The purpose of this form is to obtain information regarding the use of
hazardous substances on Irvine Industrial Company property. Prospective tenants
and contractors should answer the questions in light of their proposed
operations on the premises. Existing tenants and contractors should answer the
questions as they relate to ongoing operations on the premises and should update
any information previously submitted.
If additional space is needed to answer the questions, you may attach
separate sheets of paper to this form. When completed, the form should be sent
to the following address:
___________________________________
___________________________________
___________________________________
___________________________________
(insert address of Property
Management Company)
Your cooperation in this matter is appreciated. If you have any questions,
please do not hesitate to call [insert name of Property Manager] at [insert
phone number] for assistance.
1. GENERAL INFORMATION
Name of Responding Company:____________________________________________
________________
Check all that apply: Tenant ( ) Contractor ( ) Prospective ( )
Existing ( )
Mailing Address:_______________________________________________________
________________
Contact Person & Title:________________________________________________
________________
Telephone Number: ( )_______ - _______________________
Address of Leased Premises:____________________________________________
________________
Length of Lease or Contract Term:______________________________________
________________
Describe the proposed operations to take place on the property,
including principal products manufactured or services to be conducted.
Existing tenants and contractors should describe any proposed changes
to ongoing operations.
________________________________________________________________________________
________________
________________________________________________________________________________
________________
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2. STORAGE OF HAZARDOUS MATERIALS
2.1 Will any hazardous materials be used or stored on-site?
Wastes Yes ( ) No ( )
Chemical Products Yes ( ) No ( )
Biological Hazards/ Yes ( ) No ( )
Infectious Wastes Yes ( ) No ( )
Radioactive Materials Yes ( ) No ( )
2.2 List any hazardous materials to be used or stored, the
quantities that will be on-site at any given time, and the
location and method of storage (e.g., bottles in storage
closet on the premises).
Location and Method
Waste/Products of Storage Quantity
__________________ _________________ _____________
__________________ _________________ _____________
__________________ _________________ _____________
__________________ _________________ _____________
2.3 Is any underground storage of hazardous substances proposed or
currently conducted on the premises? Yes ( ) No ( )
If yes, describe the materials to be stored, and the size and
construction of the tank. Attach copies of any permits
obtained for the underground storage of such substances.______
______________________________________________________________
__________________
3. SPILLS
3.1 During the past year, have any spills occurred on the
premises? Yes ( ) No ( )
If so, please describe the spill and attach the results of any
testing conducted to determine the extent of such spills.
3.2 Were any agencies notified in connection with such spills?
Yes ( ) No ( )
If so, attach copies of any spill reports or other
correspondence with regulatory agencies.
3.3 Were any clean-up actions undertaken in connection with the
spills? Yes ( ) No ( )
If so, briefly describe the actions taken. Attach copies of
any clearance letters obtained from any regulatory agencies
involved and the results of any final soil or groundwater
sampling done upon completion of the clean-up work.
4. WASTE MANAGEMENT
4.1 List the waste, if any, generated or to be generated at the
premises, whether it is as hazardous waste, biological or
radioactive hazard, its hazard class and the quantity
generated on a monthly basis.
Waste Hazard Class Quantity/Month
__________________ ___________________ _________________
__________________ ___________________ _________________
__________________ ___________________ _________________
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__________________ ___________________ _________________
4.2 Describe the method(s) of disposal for each waste. Indicate
where and how often disposal will take place._________________
______________________________________________________________
__________________
4.3 Is any treatment or processing of hazardous, infectious or
radioactive wastes currently conducted or proposed to be
conducted at the premises? Yes ( ) No ( )
If yes, please describe any existing or proposed treatment
methods.______________________________________________________
______________________________________________________________
__________________
4.4 Attach copies of any hazardous waste permits or licenses
issued to your company with respect to its operations on the
premises.
5. WASTEWATER TREATMENT/DISCHARGE
5.1 Do you discharge industrial wastewater to:
___ storm drain? ___ sewer?
___ surface water? ___ no industrial discharge
5.2 Is your industrial wastewater treated before discharge?
Yes ( ) No ( )
If yes, describe the type of treatment conducted.
5.3 Attach copies of any wastewater discharge permits issued to
your company with respect to its operations on the premises.
6. AIR DISCHARGES
6.1 Do you have any air filtration systems or stacks that
discharge into the air? Yes ( ) No ( )
6.2 Do you operate any equipment that require air emissions
permits? Yes ( ) No ( )
6.3 Attach copies of any air discharge permits pertaining to these
operations.
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Does your company handle an aggregate of at least 500 pounds,
55 gallons or 200 cubic feet of hazardous material at any
given time? If so, state law requires that you prepare a
hazardous materials management plan. Yes ( ) No ( )
7.2 Has your company prepared a hazardous materials management
plan ('business plan') pursuant to state and Orange County
Fire Department requirements? Yes ( ) No ( )
If so, attach a copy of the business plan.
7.3 Are any of the chemicals used in your operations regulated
under Proposition 65? Yes ( ) No ( )
If so, describe the actions taken, or proposed actions to be
taken, to comply with Proposition 65 requirements.
7.4 Is your company subject to OSHA Hazard Communication Standard
Requirements? Yes ( ) No ( )
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If so, describe the procedures followed to comply with these
requirements.
8. ENFORCEMENT ACTIONS, COMPLAINTS
8.1 Has your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees? Yes ( )
No ( )
If so, describe the actions and any continuing compliance
obligations imposed as a result of these actions.
8.2 Has your company ever received requests for information,
notice or demand letters, or any other inquiries regarding its
operations? Yes ( ) No ( )
8.3 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health and
safety concerns? Yes ( ) No ( )
8.4 Has an environmental audit ever been conducted at your
company's current facility? Yes ( ) No ( )
If so, discuss the results of the audit.
8.5 Have there been any problems or complaints from neighbors at
your company's current facility? Yes ( ) No ( )
________________________________________
________________________________________
By:_____________________________________
Name: _____________________________
Title:_____________________________
Date: _____________________________
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EXHIBIT C
LANDLORD'S DISCLOSURES
The capitalized terms used and not otherwise defined in this Exhibit
shall have the same definitions as set forth in the Lease. The provisions of
this Exhibit shall supersede any inconsistent or conflicting provisions of the
Lease.
1. Landlord has been informed that the El Toro Marine Corps Air Station
(MCAS) has been listed as a Federal Superfund site as a result of chemical
releases occurring over many years of occupancy. Various chemicals including jet
fuel, motor oil and solvents have been discharged in several areas throughout
the MCAS site. A regional study conducted by the Orange County Water District
has estimated that groundwaters beneath more than 2,900 acres have been impacted
by Trichloroethlene (TCE), an industrial solvent. There is a potential that this
substance may have migrated into the ground water underlying the Premises. The
U.S. Environmental Protection Agency, the Santa Xxx Region Quality Control
Board, and the Orange County Health Care Agency are overseeing the
investigation/cleanup of this contamination. To the Landlord's current actual
knowledge, the ground water in this area is used for irrigation purposes only,
and there is no practical impediment to the use or occupancy of the Premises due
to the El Toro discharges.
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EXHIBIT D
TENANT'S INSURANCE
The following standards for Tenant's insurance shall be in effect at
the Premises. Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions to those standards. Tenant agrees to obtain and
present evidence to Landlord that it has fully complied with the insurance
requirements.
1. Tenant shall, at its sole cost and expense, commencing on the date
Tenant is given access to the Premises for any purpose and during the entire
Term, procure, pay for and keep in full force and effect: (i) commercial general
liability insurance with respect to the Premises and the operations of or on
behalf of Tenant in, on or about the Premises, including but not limited to
personal injury, owned and nonowned automobile, blanket contractual, independent
contractors, broad form property damage (with an exception to any pollution
exclusion with respect to damage arising out of heat, smoke or fumes from a
hostile fire), fire and water legal liability, products liability (if a product
is sold from the Premises), liquor law liability (if alcoholic beverages are
sold, served or consumed within the Premises), and severability of interest,
which policy(ies) shall be written on an "occurrence" basis and for not less
than the amount set forth in Item 13 of the Basic Lease Provisions, with a
combined single limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily injury, death, and property damage liability, or the
current limit of liability carried by Tenant, whichever is greater, and subject
to such increases in amounts as Landlord may determine from time to time; (ii)
workers' compensation insurance coverage as required by law, together with
employers' liability insurance; (iii) with respect to improvements, alterations,
and the like required or permitted to be made by Tenant under this Lease,
builder's all-risk insurance, in an amount equal to the replacement cost of the
work; (iv) insurance against fire, vandalism, malicious mischief and such other
additional perils as may be included in a standard "all risk" form in general
use in Orange County, California, insuring Tenant's leasehold improvements,
trade fixtures, furnishings, equipment and items of personal property of Tenant
located in the Premises, in an amount equal to not less than ninety percent
(90%) of their actual replacement cost (with replacement cost endorsement); and
(v) business interruption insurance in amounts satisfactory to cover one (1)
year of loss. In no event shall the limits of any policy be considered as
limiting the liability of Tenant under this Lease.
2. In the event Landlord consents to Tenant's use, generation or
storage of Hazardous Materials on, under or about the Premises pursuant to
Section 5.3 of this Lease, Landlord shall have the continuing right to require
Tenant, at Tenant's sole cost and expense (provided the same is available for
purchase upon commercially reasonable terms), to purchase insurance specified
and approved by Landlord, with coverage not less than Five Million Dollars
($5,000,000.00), insuring (i) any Hazardous Materials shall be removed from the
Premises, (ii) the Premises shall be restored to a clean, healthy, safe and
sanitary condition, and (iii) any liability of Tenant, Landlord and Landlord's
officers, directors, shareholders, agents, employees and representatives,
arising from such Hazardous Materials.
3. All policies of insurance required to be carried by Tenant pursuant
to this Exhibit D containing a deductible exceeding Ten Thousand Dollars
($10,000.00) per occurrence must be approved in writing by Landlord prior to the
issuance of such policy. Tenant shall be solely responsible for the payment of
all deductibles.
4. All policies of insurance required to be carried by Tenant pursuant
to this Exhibit D shall be written by responsible insurance companies authorized
to do business in the State of California and with a Best's rating of not less
than "A" subject to final acceptance and approval by Landlord. Any insurance
required of Tenant may be furnished by Tenant under any blanket policy carried
by it or under a separate policy, so long as (i) the Premises are specifically
covered (by rider, endorsement or otherwise), (ii) the limits of the policy are
applicable on a "per location" basis to the Premises and provide for restoration
of the aggregate limits, and (iii) the policy otherwise complies with the
provisions of this Exhibit D. A true and exact copy of each paid up policy
evidencing the insurance (appropriately authenticated by the insurer) or a
certificate of insurance, certifying that the policy has been issued, provides
the coverage required by this Exhibit D and contains the required provisions,
shall be delivered to Landlord prior to the date Tenant is given the right of
possession of the Premises. Proper evidence of the renewal of any insurance
coverage shall also be delivered to Landlord not less than thirty (30) days
prior to
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the expiration of the coverage. Landlord may at any time, and from time to time,
inspect and/or copy any and all insurance policies required by this Lease.
5. Each policy evidencing insurance required to be carried by Tenant
pursuant to this Exhibit D shall contain the following provisions and/or clauses
satisfactory to Landlord: (i) a provision that the policy and the coverage
provided shall be primary and that any coverage carried by Landlord shall be
noncontributory with respect to any policies carried by Tenant except as to
workers' compensation insurance; (ii) a provision including Landlord, the
Additional Insureds identified in Item 11 of the Basic Lease Provisions, and any
other parties in interest designated by Landlord as an additional insured,
except as to workers' compensation insurance; (iii) a waiver by the insurer of
any right to subrogation against Landlord, its agents, employees, contractors
and representatives which arises or might arise by reason of any payment under
the policy or by reason of any act or omission of Landlord, its agents,
employees, contractors or representatives; and (iv) a provision that the insurer
will not cancel or change the coverage provided by the policy without first
giving Landlord thirty (30) days prior written notice.
6. In the event that Tenant fails to procure, maintain and/or pay for,
at the times and for the durations specified in this Exhibit D, any insurance
required by this Exhibit D, or fails to carry insurance required by any
governmental authority, Landlord may at its election procure that insurance and
pay the premiums, in which event Tenant shall repay Landlord all sums paid by
Landlord, together with interest at the maximum rate permitted by law and any
related costs or expenses incurred by Landlord, within ten (10) days following
Landlord's written demand to Tenant.
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EXHIBIT E
RULES AND REGULATIONS
This Exhibit sets forth the rules and regulations governing
Tenant's use of the Premises leased to Tenant pursuant to the terms, covenants
and conditions of the Lease to which this Exhibit is attached and therein made
part thereof. In the event of any conflict or inconsistency between this Exhibit
and the Lease, the Lease shall control.
1. Tenant shall not place anything or allow anything to be
placed near the glass of any window, door, partition or wall which may appear
unsightly from outside the Premises.
2. The walls, walkways, sidewalks, entrance passages, courts
and vestibules shall not be obstructed or used for any purpose other than
ingress and egress of pedestrian travel to and from the Premises, and shall not
be used for loitering or gathering, or to display, store or place any
merchandise, equipment or devices, or for any other purpose. The walkways,
entrance passageways, courts, vestibules and roof are not for the use of the
general public and Landlord shall in all cases retain the right to control and
prevent access thereto by all persons whose presence in the judgment of the
Landlord shall be prejudicial to the safety, character, reputation and interests
of the Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom Tenant normally deals in
the ordinary course of Tenant's business unless such persons are engaged in
illegal activities. No tenant or employee or invitee of any tenant shall be
permitted upon the roof of the Building except as may be reasonably necessary to
maintain an observatory which Tenant contemplates constructing at the Premises.
3. No awnings or other projection shall be attached to the
outside walls of the Building. No security bars or gates, curtains, blinds,
shades or screens shall be attached to or hung in, or used in connection with,
any window or door of the Premises without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Neither the interior
nor exterior of any windows shall be coated or otherwise sunscreened without the
express written consent of Landlord.
4. Tenant shall not xxxx, nail, paint, drill into, or in any
way deface any exterior part of the Premises or the Building. 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 in writing. The expense of repairing any damage resulting from a
violation of this rule or removal of any floor covering shall be borne by
Tenant.
5. The toilet rooms, urinals, wash bowls and other plumbing
apparatus shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or
invitees, caused it.
6. Landlord shall direct electricians as to the manner and
location of any future telephone wiring. No boring or cutting for wires will be
allowed without the prior consent of Landlord. The locations of the telephones,
call boxes and other office equipment affixed to the Premises shall be subject
to the prior written approval of Landlord.
7. 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. No exterior storage shall be allowed at any time without
the prior written approval of Landlord except as permitted in the fenced
exterior trucking area. Tenant shall be permitted to stage pallets, shipping
containers, and similar items in such area for a period not to exceed seven (7)
days. The Premises shall not be used for cooking or washing clothes without the
prior written consent of Landlord, or for lodging or sleeping or for any immoral
or illegal purposes.
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0. Tenant shall not make, or permit to be made, any unseemly
or disturbing noises or disturb or interfere with occupants of this or
neighboring buildings or premises or those having business with them, whether by
the use of any musical instrument, radio, phonograph, noise, or otherwise.
Tenant shall not use, keep or permit to be used, or kept, any foul or obnoxious
gas or substance in the Premises or permit or suffer the Premises to be used or
occupied in any manner offensive or objectionable to Landlord or other occupants
of this or neighboring buildings or premises by reason of any odors, fumes or
gases.
9. No animals shall be permitted at any time within the
Premises.
10. Tenant shall not use the name of the Building or the
Project in connection with or in promoting or advertising the business of
Tenant, except as Tenant's address, without the written consent of Landlord.
Landlord shall have the right to prohibit any advertising by any Tenant which,
in Landlord's reasonable opinion, tends to impair the reputation of the Project
or its desirability for its intended uses, and upon written notice from Landlord
any Tenant shall refrain from or discontinue such advertising.
11. Canvassing, soliciting, peddling, parading, picketing,
demonstrating or otherwise engaging in any conduct that unreasonably impairs the
value or use of the Premises or the Project are prohibited and each Tenant shall
cooperate to prevent the same.
12. No equipment of any type shall be placed on the Premises
which in Landlord's opinion exceeds the load limits of the floor or otherwise
threatens the soundness of the structure or improvements of the Building.
13. No air conditioning unit or other similar apparatus shall
be installed or used by any Tenant without the prior written consent of
Landlord.
14. No aerial antenna shall be erected on the roof or exterior
walls of the Premises, or on the grounds, without in each instance, the prior
written consent of Landlord. Any aerial or antenna so installed without such
written consent shall be subject to removal by Landlord at any time without
prior notice at the expense of the Tenant, and Tenant shall upon Landlord's
demand pay a removal fee to Landlord of not less than $200.00.
15. The entire Premises, including vestibules, entrances,
doors, fixtures, windows and plate glass, shall at all times be maintained in a
safe, neat and clean condition by Tenant. All trash, refuse and waste materials
shall be regularly removed from the Premises by Tenant and placed in the
containers at the locations designated by Landlord for refuse collection. All
cardboard boxes must be "broken down" prior to being placed in the trash
container. All styrofoam chips must be bagged or otherwise contained prior to
placement in the trash container, so as not to constitute a nuisance. Pallets
may not be disposed of in the trash container or enclosures. The burning of
trash, refuse or waste materials is prohibited.
16. Tenant shall use at Tenant's cost such pest extermination
contractor as Landlord may direct and at such intervals as Landlord may require.
17. All keys for the Premises shall be provided to Tenant by
Landlord and Tenant shall return to Landlord any of such keys so provided upon
the termination of the Lease. Tenant shall not change locks or install other
locks on doors of the Premises, without the prior written consent of Landlord.
In the event of loss of any keys furnished by Landlord for Tenant, Tenant shall
pay to Landlord the costs thereof.
18. No person shall enter or remain within the Project while
intoxicated or under the influence of liquor or drugs. Landlord shall have the
right to exclude or expel from the Project any person who, in the absolute
discretion of Landlord, is under the influence of liquor or drugs.
Landlord reserves the right to amend or supplement the
foregoing Rules and Regulations and to adopt and promulgate additional rules and
regulations applicable to the Premises. Notice of such rules and regulations and
amendments and supplements thereto, if any, shall be given to the Tenant.
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EXHIBIT X
INDUSTRIAL WORK LETTER
DOLLAR ALLOWANCE
(SHELL BUILDING AND TI)
As used herein, the terms "Tenant Improvements" shall mean and consist
of any and all work required to complete the construction of the improvements in
accordance with the approved "TI Working Drawings" (as hereinafter defined), and
"Shell Improvements" shall mean and consist of any and all work required in
accordance with the approved "Shell Working Drawings" (as hereinafter defined).
All of the Tenant Improvement and Shell Improvement work shall be performed by a
general contractor or contractors selected by Landlord in accordance with the
procedures and requirements set forth below.
I. ARCHITECTURAL AND CONSTRUCTION PROCEDURES.
A. Landlord and Tenant have approved the following plans and
elevations dated November 15, 1996 prepared by Xxxx & Xxxxxxx Architects, Inc.,
which together shall constitute the approved "Site Plan and Elevations": Site
Plan (Sheet A-1.1), Partial Floor Plan (Sheet A-2.1), Partial Floor Plan (Sheet
A-2.2), Mezzanine Plan, Stair Plans/Section & Canopy Plan (Sheet A-2.3), Partial
Roof Plan (Sheet A-3.1), Partial Roof Plan (Sheet 3.2), Exterior Elevations
(Sheet A-4), Wall Sections (Sheet A-5.1) and Wall Section and Enlarged Stair
Plans (Sheet A-5.2). Landlord and Tenant have also approved that certain Outline
Specification and Project Description Warehouse/Midtech Buildings dated 10/1/96
attached hereto as EXHIBIT X-1 (the "Outline Specification"), and certain
Proposed Oak Canyon Streetscape Plan attached hereto as EXHIBIT X-2 for the
off-site improvement of Oak Canyon Road (the "Oak Canyon Streetscape Plan"). The
Outline Specification is hereby modified to replace the requirement for an
Elevator in the "Tenant Office and Building Lobby/Core Improvements" section
with a requirement for an area within the lobby of the Building for future
installation of an elevator, shaft and related equipment and devices.
B. On or before ninety (90) days from and after the execution
of this Lease, Landlord shall submit to Tenant for Tenant's approval each of the
following: (i) preliminary plans (the "Preliminary Shell Plans") for the
construction of the shell Building and the landscaping, walkways, parking areas
and lighting of the Site, prepared by Landlord's architect and based on the Site
Plan and Elevations, which plans shall incorporate the specifications for the
Building shell and site work set forth in the Sections entitled "Site Work" and
"Building Shell" of the Outline Specification and fencing to enclose the truck
loading area on the east side of the Site (the "Loading Fence"), (ii) space
plans for the interior improvements of the Premises prepared by Landlord's
architect, which space plans shall include interior partitions, ceilings,
interior finishes, interior doors, suite entrance, floor coverings, window
coverings, lighting, electrical and telephone outlets and plumbing connections,
and which space plans shall incorporate the specifications set forth in the
Section entitled "Tenant Office and Building Lobby/Core Improvements" of the
Outline Specification together with plans (the "Lunch Area Plans") for an
outdoor employee lunch area (the "Lunch Area") on the Site consisting of a
concrete slab of sufficient size to permit two picnic tables (collectively, the
"Preliminary TI Plans"), and (iii) an estimate, prepared by Landlord's
contractor, of the cost for completion of the work shown on the Preliminary TI
Plans, including separate cost estimates for the completion of the office space
portion, the manufacturing space portion, the warehouse space portion of the
Premises and the Lunch Area (the "Preliminary TI Cost Estimate"). The
Preliminary Shell Plans, Preliminary TI Plans and the Preliminary TI Cost
Estimate may be submitted at different times within said ninety (90) day period.
Tenant shall approve or disapprove each of the Preliminary Shell Plans, the
Preliminary TI Plans and the Preliminary TI Cost Estimate by signing copies of
the appropriate instrument and delivering same to Landlord within fifteen (15)
business days of its receipt by Tenant. The expiration of said fifteen (15)
business day period (or the expiration of the last of said fifteen (15) day
periods if the Preliminary Shell Plans, the Preliminary TI Plans or the
Preliminary TI Cost Estimate are submitted to Tenant for Tenant's approval at
different times within the said ninety (90) day period) is herein referred to as
the "Plan Approval Date". To the extent of any inconsistency, Tenant's approval
of the
X-1
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Preliminary Shell Plans and the Preliminary TI Plans shall supersede the
specifications contained in the Site Plan and Elevations and/or the Outline
Specification. If Tenant disapproves any matter, Tenant shall specify in detail
the reasons for disapproval. Landlord shall attempt to modify the Preliminary
Shell Plans, the Preliminary TI Plans and the Preliminary TI Cost Estimate to
incorporate Tenant's suggested revisions in a mutually satisfactory manner,
provided that Landlord may reject any suggested revision(s) by Tenant to either
the Preliminary Shell Plans or to the Preliminary TI Plans for the reasons set
forth in the last sentence of Section I(D) of this Work Letter, and, in
addition, may reject any suggested revisions to the Preliminary Shell Plans if
the suggested revisions would increase the cost of the Shell Improvements.
Tenant shall approve in all respects the Preliminary Shell Plans, the
Preliminary TI Plans and Preliminary TI Cost Estimate not later than the Plan
Approval Date, it being understood that Tenant's failure to do so shall
constitute a "Tenant Delay" for purposes of this Lease. The size, location,
configuration and materials for the Lunch Area shall be determined by Landlord
based upon governmental requirements, cost, design and the aesthetic impact of
the same on the Site and adjacent properties. The Lunch Area shall be considered
part of the Tenant Improvements, but shall be constructed solely at Tenant's
cost.
C. On or before the Plan Approval Date, Tenant shall also
provide in writing to Landlord or Landlord's architect all specifications and
information requested by Landlord for the preparation of final construction
documents and costing for the Tenant Improvement work, including without
limitation Tenant's final selection of wall and floor finishes, complete
specifications and locations (including load and HVAC requirements) of Tenant's
equipment, and details of all "Non-Standard Improvements" (as defined below) to
be installed in the Premises (collectively, "Programming Information"). Tenant's
failure to provide the Programming Information by the Plan Approval Date shall
constitute a Tenant Delay for purposes of this Lease. Tenant understands that
final construction documents for the Tenant Improvements shall be predicated on
the Programming Information, and accordingly that such information must be
accurate and complete.
D. Except as otherwise specified by Tenant and authorized
herein, the Tenant Improvements shall incorporate the specifications set forth
in the Section entitled "Tenant Office and Building Lobby/Core Improvements" of
the Outline Specification, and shall also incorporate Landlord's standard finish
specifications for tiles, colors and doors (collectively, the "Building
Standards"). The cost of the Building Standards portion of the Tenant
Improvement work shall be eligible for inclusion as part of the "Landlord's
Contribution" (as defined below). Any deviations from the Building Standards
("Non-Standard Improvements") proposed by Tenant shall be subject to the prior
approval of Landlord, and shall be part of the "Tenant's Contribution" (as
defined below). If Landlord approves any Non-Standard Improvements, such
approval shall be accompanied by Landlord's election as to whether such
Non-Standard Improvements, or any portion thereof, should be removed or remain
as Landlord's property at the expiration or earlier termination of the Lease. If
Landlord so elects that such Non-Standard Improvements be removed, Tenant shall
be solely responsible for the cost of removing same upon the expiration or
earlier termination of this Lease. Landlord shall in no event be required to
approve any Non-Standard Improvement if Landlord determines that such
improvement (i) is of a lesser quality than the corresponding Building Standard,
(ii) fails to conform to applicable governmental requirements, (iii) requires
building services beyond the level normally provided to other tenants, (iv)
would delay construction of the Shell Improvements and/or the Tenant
Improvements beyond the Estimated Commencement Date and Tenant declines to
accept such delay in writing as a Tenant Delay, or (v) would have an adverse
aesthetic impact from the exterior of the Premises.
E. Upon Tenant's approval of the Preliminary TI Plan, the
Preliminary TI Cost Estimate and the Preliminary Shell Plans, Landlord's
architect and engineers shall prepare and deliver to Tenant: (i) working
drawings and specifications ("TI Working Drawings") based on the approved
Preliminary TI Plans for the construction of Tenant Improvements, (ii) a final
construction cost estimate (the "Final TI Cost Estimate") for the construction
of the Tenant Improvements, and (iii) working drawings and specifications (the
"Shell Working Drawings") based on the approved Preliminary Shell Plans for the
construction of the Shell Improvements. Subject to Tenant Delays, the Shell
Working Drawings shall be delivered to Tenant on or before sixty (60) days from
and after the execution of this Lease, and the TI Working Drawings and Final TI
Cost Estimate shall be delivered to Tenant on or before one hundred thirty-five
(135) days from and after the execution of this Lease. Tenant shall have ten
(10) business days from the receipt thereof to approve or disapprove the TI
Working Drawings, the Final TI Cost Estimate and the Shell Working Drawings.
Tenant shall not unreasonably withhold or delay its approval, and any
disapproval or requested modification shall be limited to items not contained in
the approved Preliminary TI Plan, approved Preliminary Shell Plan, or
Preliminary TI Cost Estimate. In no event shall Tenant disapprove
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45
the Final TI Cost Estimate if it does not exceed the approved Preliminary TI
Cost Estimate. Should Tenant disapprove the TI Working Drawings, the Shell
Working Drawings and/or the Final TI Cost Estimate, such disapproval shall be
accompanied by a detailed list of revisions. Landlord may reject any suggested
revision(s) to either the TI Working Drawings or to the Shell Working Drawings
for the reasons set forth in the last sentence of Section I(D) of this Work
Letter, and, in addition, may reject any suggested revision(s) to the Shell
Working Drawings if the suggested revision(s) would increase the cost of the
Shell Improvements. Any revision requested by Tenant and accepted by Landlord
shall be incorporated into a revised set of TI Working Drawings, Shell Working
Drawings and Final TI Cost Estimate, and Tenant shall approve same in writing
within five (5) business days of receipt without further revision. Tenant's
failure to comply in a timely manner with any of the requirements of this
paragraph shall constitute a Tenant Delay. Without limiting the rights of
Landlord for Tenant Delays as set forth herein, in the event Tenant has not
approved the TI Working Drawings, the Shell Working Drawings and the Final TI
Cost Estimate on or before May 1, 1997, and such failure to so approve is due to
Tenant Delays and/or Tenant's default(s) of its obligation under this Lease,
then Landlord may, at its option, elect to terminate this Lease by written
notice to Tenant. In the event Landlord elects to effect such a termination,
Tenant shall, within ten (10) business days following demand by Landlord, pay to
Landlord any costs incurred by Landlord in connection with the preparation or
review of all plans, construction estimates, price quotations, drawings or
specifications under this Work Letter, the cost of on-site work, if any,
constructed in reliance on the provisions of this Work Letter, and for all costs
incurred in the preparation and execution of this Lease, including any leasing
commissions.
F. Set forth below is a schedule which summarizes the
provisions for submittal by Landlord and approval of submittals by Tenant, for
the convenience of the parties, The provisions for submittal and approval are
more particularly provided in Sections I(A) through I(E) of this Work Letter:
Reference Date Due
--------- --------
Approval of Site Plan and Elevations Upon Lease execution
and Outline Specifications
Landlord's submittal of Preliminary Shell Plans, Within 90 days following
Preliminary TI Plans and Preliminary TI Cost Lease execution
Estimate
Tenant's approval of Preliminary Shell Plans, Within 15 business days
TI Plans and Preliminary TI Cost Estimate following submittal
Landlord's submittal of Shell Working Drawings Within 60 days following
Lease execution
Tenant's approval of Shell Working Drawings Within 10 business days
following submittal
Landlord's submittal of TI Working Drawings Within 135 days following
and Final TI Cost Estimate Lease execution
Tenant's approval of TI Working Drawings Within 10 business days
and Final Cost Estimate following submittal
Tenant's approval of revisions to Shell Working Within 5 business days
Drawings, TI Working Drawings and Final TI following submittal
Cost Estimates
G. Upon Tenant's approval of the TI Working Drawings and the
TI Final Cost Estimate, Landlord shall competitively bid the Tenant Improvement
work with at least three (3) qualified bidders. Landlord, however, may elect to
competitively bid the entire general contract for such work, or select a general
contractor and competitively bid the major subcontract trades. Landlord shall
select the lowest of such qualified bidders to
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construct the Tenant Improvements on a guaranteed maximum price basis. In the
event that the competitive bid(s) for the Tenant Improvement work is/are greater
than the Final TI Cost Estimate, then Landlord, Landlord's general contractor
and Tenant shall work in good faith, within ten (10) business days thereafter,
to attempt to reduce such costs to bring them in line with the Final TI Cost
Estimate.
H. In the event that Tenant requests in writing a revision in
the approved TI Working Drawings ("Change"), Landlord shall advise Tenant by
written change order as soon as is practical of any increase in the TI
Completion Cost and/or any Tenant Delay such Change would cause. Tenant shall
approve or disapprove such change order in writing within two (2) days following
its receipt from Landlord. Landlord shall have the right to decline Tenant's
request for a Change for any of the reasons set forth in Article I(D) above for
Landlord's disapproval of a Non-Standard Improvement. It is understood that
Landlord shall have no obligation to interrupt or modify the Tenant Improvement
work pending Tenant's approval of a Change.
I. Each of the following shall be referred to as a "Tenant
Delay" under this Lease: Tenant fails to comply with any of the time periods
specified in this Work Letter, fails otherwise to approve or reasonably
disapprove any submittal within five (5) days, fails to approve in writing the
TI Preliminary Plans, Preliminary TI Cost Estimate and the Preliminary Shell
Plans by the Plan Approval Date, fails to provide all of the Programming
Information requested by Landlord by the Plan Approval Date, fails to approve in
writing the TI Working Drawings, the Shell Working Drawings and the Final TI
Cost Estimate within the time provided herein, requests any Changes, furnishes
inaccurate or erroneous specifications or other information, or otherwise delays
in any manner the completion of the Tenant Improvements (including without
limitation by specifying materials that are not readily available) or the
issuance of an occupancy certificate. Tenant shall bear any resulting additional
construction cost or other expenses, and the Commencement Date of this Lease
shall be deemed to have occurred for all purposes, including Tenant's obligation
to pay rent, as of the date Landlord would have been able to deliver the
Premises to Tenant but for the collective Tenant Delays. In no event, however,
shall such date be earlier than the Estimated Commencement Date set forth in the
Basic Lease Provisions. Should Landlord determine that the Commencement Date
should be advanced in accordance with the foregoing, it shall so notify Tenant
in writing. Landlord's determination shall be conclusive unless Tenant notifies
Landlord in writing, within ten (10) business days thereafter, of Tenant's
election to contest same by arbitration with JAMS/ENDISPUTE, or its successor,
in Orange County, California. Pending the outcome of such arbitration
proceedings, Tenant shall make timely payment of all rent due under this Lease
based upon the Commencement Date set forth in the aforesaid notice from
Landlord.
J. Landlord shall permit Tenant and its agents to enter the
Premises not less than thirty (30) days prior to the Commencement Date of the
Lease in order that Tenant may perform any work to be performed by Tenant
hereunder through its own contractors, subject to Landlord's prior written
approval, and in a manner and upon terms and conditions and at times
satisfactory to Landlord's representative. The foregoing license to enter the
Premises is, however, conditioned upon Tenant's contractors and their
subcontractors and employees working in harmony and not interfering with the
work being performed by Landlord. If at any time that entry shall cause
disharmony or interfere with the work being performed by Landlord, this license
may be withdrawn by Landlord upon twenty-four (24) hours written notice to
Tenant. That license is further conditioned upon the compliance by Tenant's
contractors with all requirements imposed by Landlord on third party
contractors, including without limitation the maintenance by Tenant and its
contractors and subcontractors of workers' compensation and public liability and
property damage insurance in amounts and with companies and on forms
satisfactory to Landlord, with certificates of such insurance being furnished to
Landlord prior to proceeding with any such entry. The entry shall be deemed to
be under all of the provisions of the Lease except as to the covenants to pay
rent. Landlord shall not be liable in any way for any injury, loss or damage
which may occur to any such work being performed by Tenant, the same being
solely at Tenant's risk. In no event shall the failure of Tenant's contractors
to complete any work in the Premises extend the Commencement Date of this Lease
beyond the date that Landlord has completed its Tenant Improvement work and
tendered the Premises to Tenant.
K. Tenant hereby designates Xxxx X. Xxxxxx, Telephone No.
(000) 000-0000, as its representative, agent and attorney-in-fact for the
purpose of receiving notices, approving submittals and issuing requests for
Changes, and Landlord shall be entitled to rely upon authorizations and
directives of such person(s) as if given directly by Tenant. Tenant may amend
the designation of its construction representative(s) at any time upon delivery
of written notice to Landlord.
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II. COST/COMPLETION OF TENANT IMPROVEMENTS
A. Landlord shall complete, or cause to be completed, the
Tenant Improvements substantially in accord with the approved TI Working
Drawings approved by both Landlord and Tenant, in accordance with all applicable
laws and building codes in effect on or before the Commencement Date. Landlord,
however, shall have the right to make any changes to the TI Working Drawings in
the course of construction in its sole discretion, but Tenant shall have the
right to reasonably approve any material changes which materially affect the
functioning of Tenant's business on the Premises within five (5) business days
following receipt of notice from Landlord. Notwithstanding the foregoing,
Landlord shall have the right to make those changes required by code or
otherwise required by any governmental agency having jurisdiction without
Tenant's approval. Landlord shall pay towards the "TI Completion Cost" (defined
below) as incurred a maximum of Twenty-Five Dollars ($25.00) per usable square
foot of the office space portion of the Premises (which portion shall not exceed
Twenty-Five Thousand (25,000) usable square feet in the aggregate), (ii) Fifteen
Dollars ($15.00) per usable square foot of the manufacturing space portion of
the Premises (which portion shall not exceed Fifteen Thousand (15,000) usable
square feet in the aggregate), and (iii) One Dollar ($1.00) per usable square
foot of the warehouse space portion of the Premises (collectively, the
"Landlord's Contribution"). To the extent not used, up to but not exceeding One
Dollar ($1.00) of the Landlord's Contribution applicable to the office space
portion of the Premises may be applied instead towards the manufacturing space
portion of the Premises, and, to the extent not used, up to but not exceeding
One Dollar ($1.00) of the Landlord's Contribution applicable to the
manufacturing space portion of the Premises may be applied instead towards the
office space portion of the Premises. Except as provided in the immediately
preceding sentence, the Landlord's Contribution shall be applied solely towards
the cost of completing the office space portion, the manufacturing space portion
and the warehousing space portion of the Premises, in the amounts indicated.
Tenant shall be fully responsible for the remainder of the TI Completion Cost
("Tenant's Contribution"), including, without limitation, TI Completion Costs
for the Lunch Area.
B. The "TI Completion Cost" shall mean all direct costs of
Landlord in completing the Tenant Improvements, including but not limited to the
following: (i) payments made to architects, engineers, contractors,
subcontractors and other third party consultants in the performance of the
Tenant Improvement work, (ii) permit fees and other sums paid to governmental
agencies for the Tenant Improvement work, (iii) costs of all materials
incorporated into the work or used in connection with the Tenant Improvement
work, and (iv) keying and signage costs. The TI Completion Cost shall also
include Landlord's administrative/supervision fee in the amount of three percent
(3%) of the TI Completion Cost.
C. Prior to start of construction of the Tenant Improvements,
Tenant shall pay to Landlord in full the amount of the Tenant's Contribution set
forth in the approved Final TI Cost Estimate. If the actual TI Completion Cost
of the Tenant Improvements following completion is greater than the Final TI
Cost Estimate, then Tenant shall be responsible for all such additional costs,
including any additional architectural fee. The balance of any sums not
otherwise paid by Tenant shall be due and payable on or before the Commencement
Date of this Lease. If Tenant defaults in the payment of any sums due under this
Work Letter, Landlord shall (in addition to all other remedies) have the same
rights as in the case of Tenant's failure to pay rent under the Lease.
D. Notwithstanding any contrary provision of the Lease or this
Work Letter, in addition to Landlord's Contribution, Landlord shall pay up to
$150,000 of Tenant's Contribution ("Landlord's Excess Allowance") to the extent
utilized for TI Completion Costs attributable to: (i) the Building Standards
portion of the Tenant Improvements in the office space portion of the Premises
and in the manufacturing space portion of the Premises, and (ii) up to three (3)
dock load levelers in the warehouse portion of the Premises. Any Landlord's
Excess Allowance utilized by Tenant shall be repaid by the addition to Basic
Rent under the Lease of an amount equal to the monthly payment necessary to
fully amortize the portion of Landlord's Excess Allowance utilized for such TI
Completion Costs together with interest at the rate of twelve percent (12%) per
annum in equal payments over the initial Term of the Lease. Any such additional
Basic Rent shall be memorialized on a form provided by Landlord within ten (10)
days after possession of the Premises is tendered to Tenant. Tenant's failure to
execute such form shall not affect Landlord's right to increase the Basic Rent
pursuant to this Section II(D).
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III. COST OF SHELL IMPROVEMENTS.
A. Except as set forth in Section II(D) of this Work Letter,
Landlord shall complete, or cause to be completed, the Shell Improvements
substantially in accord with the final Shell Working Drawings approved by both
Landlord and Tenant and in compliance with all applicable laws and building
codes in effect on or before the Commencement Date. Landlord shall have the
right to make any changes to the Shell Working Drawings in the course of
construction in its sole discretion, but Tenant shall have the right to
reasonably approve any material changes which materially affect the functioning
of Tenant's business on the Premises within five (5) business days following
receipt from Landlord. Notwithstanding the foregoing, Landlord shall have the
right to make those changes required by code or otherwise required by any
governmental agency having jurisdiction without Tenant's approval. The
completion of the Shell Improvements shall be at Landlord's sole cost and
expense, provided that Landlord shall have the right to reduce the number of
truck doors by no more than three (3) doors to offset any additional cost for
the Loading Fence.
IV. COST/COMPLETION OF OAK CANYON ROAD IMPROVEMENTS.
A. Landlord shall complete, or cause to be completed, the
streetscape improvements to Oak Canyon Road substantially in accord with the Oak
Canyon Streetscape Plan, and in compliance with all applicable laws and building
codes in effect on or before the Commencement Date (the "Oak Canyon Road
Improvements"). Landlord shall have the right to make any changes to the Oak
Canyon Streetscape Plan required by the City of Irvine in connection with the
City's approval thereof, or as otherwise required by code, without Tenant's
approval. Landlord shall use its reasonable diligence to cause the Oak Canyon
Road Improvements to be substantially completed concurrently with the completion
of the on-site Shell Improvements, subject, however, to matters beyond
Landlord's reasonable control (including, without limitation, governmental
restrictions and delays and/or delays caused by the other owners of affected
parcels on Oak Canyon Road) and shall use its reasonable diligence to complete
the Oak Canyon Road Improvements without unreasonably interfering with
reasonable continuous access to the Premises. In no event, however, shall the
completion of the Oak Canyon Road Improvements delay or otherwise affect the
Commencement Date of the Lease. The completion of the Oak Canyon Road
Improvements shall be at Landlord's sole cost and expense.
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EXHIBIT X-1
OUTLINE SPECIFICATION AND PROJECT DESCRIPTION
WAREHOUSE / MID TECH BUILDINGS
THE IRVINE COMPANY
October 1, 1996
In addition to the Project Data and information provided on the attached
drawings sheets, the following should be considered:
Site Work
Utilities
a) Underground storm drain system including catch basins, man
holes, and connections.
b) Interior roof drains at front of building, sheet metal
downspouts at rear of building.
c) Connect sewer from building to street. Include clean outs.
d) Install transformer on pad and connect underground conduits to
building.
e) Provide for telephone connection to the street with
underground conduits between buildings.
f) Provide for underground natural gas to face of building.
g) Provide metered domestic building water connection to the
street. Include separate metered water connection for on-site
landscape irrigation.
h) Provide underground fire line/fire sprinkler water system
including detector check assembly, fire hose connections, post
indicator valves, fire hydrants, and main service into the
site per local fire authority requirements.
Site Concrete
a) Provide standard concrete curbs, gutters and xxxxxx.
b) Provide handicapped access curb ramps with 12" wide grooved
warning strips, non slip surface and side slopes per code.
c) Construct new driveway entrances per city standards including
off site work to patch as required.
d) Construct 6" reinforced concrete trucking pad as shown with
sealed expansion joints at approximately 24' on center and
intermediate sawcut control joints. Broom finish.
Reinforcement as recommended by Geotechnical report.
e) Construct 6" reinforced truck ramps and ramp walls. Ramp walls
may be tilt-up construction. Provide expansion joints, control
joints, broom finish. Paint walls to match building.
f) Construct exit stairs as shown of tilt-up construction and
reinforced concrete steps. Paint walls.
Site Lighting
a) Provide HPS wall pack cut-off light fixtures mounted on the
building per Irvine Spectrum Lighting Design Guidelines.
b) Provide additional pole mounted HPS cut-off light fixtures
around the site to achieve minimum lighting levels per city
security ordinance throughout site. Mount on 2' height
concrete footing base.
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Hardscape
a) Construct building entry plaza and lunch patio with textured
concrete finish on 4" concrete slab. Provide 1/2" sealed
expansion joints spaced apart as recommended by Geotechnical
report.
b) Construct 4" concrete walks over sand base with score line and
expansion joints spaced apart as recommended by Geotechnical
report, slab to be finished with medium salt or accent finish.
AC Paving
a) Provide standard paving over base at parking stalls and drive
aisles to be used only by cars as recommended by Geotechnical
report.
b) Provide heavier duty paving over base at drive aisles which
will be used by trucks as recommended by Geotechnical report.
c) Paving to be finished smooth with no sealer.
Striping & Signage
a) Provide city standard parking lot striping double striped with
compact and carpool stall identification.
b) Stripe handicapped stalls with loading zone stripes and
handicapped symbol per code.
c) Provide other site signage for handicapped and accessibility
directions as required, as well as other required surface
markings and curb painting.
Building Shell
Concrete Slab
a) Warehouse slab shall be 6" thick reinforced with wire mesh or
re-bars over gravel base for 4,000 psi strength. Reinforcement
and base as recommended by Geotechnical report. Provide
control joints throughout.
b) Office area slab shall be 6" thick reinforced over base with
visqueen vapor barrier. Reinforcement and base as recommended
by Geotechnical report.
Columns/Structural Frames
a) Standard section tube, pipe, or H steel roof and mezzanine
columns full height with welded plates and connectors to
accept floor and/or roof framing structure.
b) Standard section tube or H steel braced "K" frames as needed
for lateral resistance.
Roof Structure
a) Steel carrying girders with continuous connectors and shear
straps as needed. 26' clear height at Warehouse Buildings (30'
clear height at Oak Canyon), 24' clear height at Mid Tech.
Buildings.
b) Steel trusses at 8' o.c. with steel connectors, straps and
bracing.
c) Panelized roof with 2 x 4 sub purlins at 24" o.c. and 1/2"
structural grade OSB sheathing over Warehouse areas and 2 x 6
purlins over office areas.
d) Provide double 2x or 4x supports and blackouts for roof
mounted equipment, skylights, roof access hatch and roof
drains.
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Roof Finish
a) 4-ply built up fiberglass roof system (10 year warranty)
complete with fiber cants, cap sheet, walking pads, and base
flashing.
Smokehatch Skylights
a) Provide 4' x 8' vented skylight smoke hatches with integral
curb by Bristolite or equal, 2% coverage of warehouse area.
Walls
a) 7 1/2" thick concrete tilt-up full height and extended 18"
below finish floor. Walls to be 5' below finished floor at
trucking pad and elsewhere as indicated on grading and
structural plans. Walls may be thicker at panels with openings
and at shear wall panels.
b) Add reinforcing steel for future expansion knock-outs as
indicated.
c) Include 3/4" deep reveals, feature recessed areas at exterior
side.
d) Sack finish and paint at exterior side.
e) Interior shell walls to be 3 5/8" wide light gauge steel studs
at 24" o.c. or 2 x wood studs at 16" o.c. where indicated.
Fire Sprinkler
a) Provide separate zoned system as best suited for this size and
type of building.
b) Provide .45 density system throughout entire warehouse area.
(ESFR ready at Warehouse Buildings).
Footings
a) Perimeter walls and interior shear walls to be continuous type
footings. Step as necessary to conform with exterior finish
grades.
b) Interior columns to be spread footings.
c) Dry pack under all walls and base plates.
Misc. Steel
a) Provide channel or double angle truck door jambs to 4' height
and angle sill edge at all truck doors.
Windows
a) Provide 2" x 4 1/2" store front window system. Front glazed.
b) Glazing to be 1/4" High Performance Reflective Glass by
Spectrum, Guardian, PPG or equal.
c) All first floor glass to be tempered. Tempered elsewhere per
code. Provide Spandrel glazing at shear wall and between floor
space, where occurs.
Man Doors
a) Provide 3' x 7' 18g. Hollow Metal doors and frames at all
warehouse perimeter doors. Provide drip at top exterior. Paint
finish.
b) Hardware to include 3 ball bearing hinges, lever action exit
from interior, key only from exterior, door stop, self closure
threshold and seals.
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52
Truck doors
a) Truck doors to be vertical lift type with painted finish.
Designed for 20 lb. wind load. Manually operated. Provide
minimum air infiltration seals and locks.
Entry doors
a) Pair 3' x 9' thin-style aluminum store front door with 1/4"
clear tempered glass.
b) Provide recessed floor closer, panic hardware, key entry,
threshold, and pulls
Glass Exit
a) 3' x 9' thin style aluminum store front door with 1/4"
tempered reflective glass.
b) Provide overhead closer, panic hardware, threshold, seals, and
key entry.
Mezzanine Floor
a) Steel wide flange support beams with 3x wood plates.
b) Wood TJI solid web trusses maximum 20" deep with end hangers
and cross bracing.
c) 3/4" structural plywood subfloor.
d) 1" thick gypsum concrete floor fill.
e) Provide all anchors, ties, straps, and block outs for ducts as
needed.
f) Design load of floor to be 80 lb. reduced live load plus
20 lb. partition load.
Soffits
a) 2 x 4 wood at 24" o.c. Use metal connectors on wood ledgers.
b) All soffits to be 7/8" plaster on metal lath, smooth finish to
match concrete and painted to match walls.
Dock Equipment
a) Provide a pair of rubber dock bumpers 10" x 11" x 6" thick at
each dock high door.
Stairs
a) Wood frame stair construction with 2 x 16 cut stringers at 12"
o.c. and 3/4" plywood over treads and risers. Platform framed
landings.
b) Enclosure walls to be either wood or metal studs of 1-hour
rated construction to roof with Type "X" gyp. board finish
each side.
Electrical
a) Service to building will be 277/480 volt, three phase, four
wire.
b) 1200 amp 480 volt 3 phase 4 wire future service provided for
at Warehouse building, 800 amp, 480 volt 3 Phase 4 wire future
service provided for at Mid Tech building with additional
conduit stubs for future upgrades. [Switchgear and tenant
panels installed as part of the tenant improvement scope of
work).
c) Transformer on grade with bus duct per electric utility
purveyor.
d) House meter installed to separately meter common interior and
exterior electrical usage.
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53
TENANT OFFICE AND BUILDING LOBBY/CORE IMPROVEMENTS
(Covered by Tenant or Tenant Allowance)
Wall Framing
a) Light gauge steel studs at 24" o.c. with top and bottom tracks
and screw connections. 3-5/8" throughout except 6" at some
plumbing walls. Provide wood studs at stairwell walls.
b) Use 2 1/2" furring at all office area concrete exterior walls
and all office area columns to 6" above finish ceiling height.
c) Provide R-11 Fiberglass Batt insulation at exterior concrete
walls within furring space; full height in office areas where
required.
Ceiling
a) Use light gauge steel studs or steel channels at solid
ceilings in lobby/core and restrooms, etc., 6" deep at 24"
o.c. or as needed per span. Provide bracing. Gypsum board
ceilings at lobby/core and restrooms to be painted per finish
schedule.
b) 2' x 4' suspended ceiling grid system in standard white finish
by Xxxx or equal. Include all seismic anchors, compression
struts and diagonal wires per code.
c) 2' x 4' "Second Look" mineral fiber lay-in tile in 15/16"
T-bar grid.
Drywall
a) 5/8" drywall throughout all interior walls and over furring at
office area exterior walls.
b) Type "X" drywall all corridor walls, lobby walls, columns at
lobby and corridors, lunch room walls, and conference room
walls.
c) Type "X" drywall at 1-hour rated roof/ceiling at lobby, stair
xxxxx and conference room, and 1-hour rated floor/ceiling at
conference room and lobby balconies.
d) Use 5/8" greenboard at restrooms, kitchen and janitor rooms.
Carpet
a) Provide Design Weave - 32 oz., New Tempest glu-down carpet at
standard office areas, and corridors as indicated on the
finish schedule
Tile
a) Provide thin set quarry or similar tile paver at main entry
lobby floor and at upper lobby/landing floor areas.
b) Provide 2" x 2" ceramic tile on thin set at all office area
rest room floors; slope to floor drain.
c) Provide 4" x 4" full height glazed ceramic tile at all wet
walls in restroom at Mid Tech. Buildings, 4' high wainscot at
Warehouse Buildings.
Vinyl Flooring & Base
a) Provide 12 x 12 Xxxxxxxxx VCT flooring, or Xxxxxxxxx Xxxxxxxx
Sheet Vinyl where indicated in the finish schedule. Include
carpet edge trim.
b) Provide rubber stair treads at stair well stairs.
c) Provide 4" rubber base in standard color at all walls. Provide
rubber stair base at all stairs.
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54
Doors/Sidelites
a) Provide solid core 1-3/4", 3' x 9' plain sliced oak with
Western Integrated clear anodized aluminum frame.
b) Provide 20 minute rating for all corridor doors.
c) Provide 16" wide x 9' high tempered glass divided sidelite
adjacent to each individual office door with anodized aluminum
framed to match door frame.
Finish Hardware
a) Schlage "D" series "Sparta", dull chrome finish hardware
throughout. Provide 3 ball bearing hinges, hardware stops,
silencers.
b) Provide panic hardware at all rated doors to corridors, etc.
c) Provide kick plates and push pulls at restrooms
Toilet Partition
a) Standard height floor mounted overhead braced metal toilet
partitions throughout all restrooms. Baked enamel color to be
standard selection.
Toilet
a) Standard accessories for toilet paper, trash, seat covers,
feminine napkins, soap, mirrors, etc. by Bobrick or equal
accessories for all restrooms.
b) Warehouse toilet to have sheet vinyl flooring and Marlite or
equal wainscot, 4' high.
Cabinets
a) All office area cabinets to be laminated plastic finish, all
surfaces and doors. Provide bull nose top at leading edge.
b) All restrooms to have lavatory counters/splashes with angle
supports and laminated plastic finish.
Miniblinds
a) All exterior windows to have standard Meriak Industries PVC
vertical miniblinds throughout, and all interior glass
sidelites to have standard Bali Classic 1" horizontal
miniblinds.
Paint
a) All surfaces shall be painted unless noted to be finished
otherwise.
b) A standard spec. for paint such as by Xxxx Xxxxxxx shall be
followed for all types of surfaces and conditions.
c) Flat wall paint at standard offices.
d) Semi-gloss at lunch room, restrooms, storage rooms or as
otherwise noted.
Fire Sprinkler
a) Provide standard office type system at Mid Tech and Warehouse
office areas (both floors).
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55
Warehouse Curtains
a) 6' deep measured from underside of roof sheathing. Smoke
curtains made of 1/2" gyp. board on drywall frame or
corrugated sheet metal with top and bottom angle stiffener.
Seal all penetrations.
HVAC
a) Rooftop package units as required for improved tenant areas
and building lobby/core areas.
b) Thermostats set points 55(degree)F, control heating no more
than 70(degree)F and cooling not less than 78(degree)F.
c) Ceiling supply and return diffusers, perforated face in 2x4
ceiling grid.
d) Exhaust fans provided at all toilet rooms and mechanical
rooms.
Tenant Office and Building Lobby/Core Lighting
a) Double switch per Title 24, paired in double gang box, white
plastic cover, 42" AFF. to switch centerline. 2x4 fluorescent
fixture. Provide parabolic lens at lobby/core fixtures.
b) Exit signs and internally illuminated, brushed stainless steel
face.
Warehouse Lights
a) 400 w. high pressure sodium aluminum high bay fixtures for 20
fc general warehouse lighting.
Outlets
a) Power: 15 amps 125 volt specification grade duplex receptacle
mounted vertically, 15" AFF. to centerline, white plastic
coverplate.
b) Telephone: Single gang box with mud ring and pull string,
mounted vertically, 15" AFF. to centerline, coverplate by
telephone company.
Elevator
a) Two stop 2,500 lb. Capacity hydraulic passenger elevator with
standard finished cab, finished elevator shaft, elevator
equipment and necessary mechanical/electrical devices
associated with the installation
Insulation
a) Provide R-19 fiberglass batt insulation at the underside of
roof structure directly over improved tenant office areas, and
as required per acoustical analysis recommendations.
X-1-7
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EXHIBIT X-2
[GRAPHIC]
X-1-8
