EXHIBIT 10.1
LEASE
(SINGLE TENANT; NET)
BETWEEN
THE IRVINE COMPANY
AND
INTERCHANGE CORPORATION
INDEX TO LEASE
ARTICLE I. BASIC LEASE PROVISIONS................................................................................1
ARTICLE II. PREMISES.............................................................................................3
SECTION 2.1. LEASED PREMISES.......................................................................3
SECTION 2.2. ACCEPTANCE OF PREMISES................................................................3
SECTION 2.3. BUILDING NAME AND ADDRESS.............................................................3
ARTICLE III. TERM................................................................................................3
SECTION 3.1. GENERAL...............................................................................3
SECTION 3.2. DELAY IN POSSESSION...................................................................3
SECTION 3.3. RIGHT TO EXTEND THIS LEASE............................................................4
ARTICLE IV. RENT AND OPERATING EXPENSES..........................................................................5
SECTION 4.1. BASIC RENT............................................................................5
SECTION 4.2. OPERATING EXPENSES....................................................................5
SECTION 4.3. SECURITY DEPOSIT......................................................................7
ARTICLE V. USES..................................................................................................7
SECTION 5.1. USE...................................................................................7
SECTION 5.2. SIGNS.................................................................................8
SECTION 5.3. HAZARDOUS MATERIALS...................................................................8
ARTICLE VI. COMMON AREAS; SERVICES...............................................................................9
SECTION 6.1. UTILITIES AND SERVICES................................................................9
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS............................................10
SECTION 6.3. USE OF COMMON AREAS..................................................................10
SECTION 6.4. PARKING..............................................................................10
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD....................................................11
ARTICLE VII. MAINTAINING THE PREMISES...........................................................................11
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR......................................................11
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........................................................13
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.................................................................15
SECTION 10.4. LANDLORD'S NONLIABILITY............................................................16
SECTION 10.5. WAIVER OF SUBROGATION..............................................................16
ARTICLE XI. DAMAGE OR DESTRUCTION...............................................................................16
SECTION 11.1. RESTORATION........................................................................16
SECTION 11.2. LEASE GOVERNS......................................................................17
ARTICLE XII. EMINENT DOMAIN.....................................................................................17
SECTION 12.1. TOTAL OR PARTIAL TAKING............................................................17
SECTION 12.2. TEMPORARY TAKING...................................................................17
SECTION 12.3. TAKING OF PARKING AREA.............................................................17
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS...................................................18
SECTION 13.1. SUBORDINATION......................................................................18
SECTION 13.2. ESTOPPEL CERTIFICATE...............................................................18
SECTION 13.3. FINANCIALS.........................................................................18
ARTICLE XIV. EVENTS OF DEFAULT AND REMEDIES.....................................................................18
SECTION 14.1. TENANT'S DEFAULTS..................................................................18
SECTION 14.2. LANDLORD'S REMEDIES................................................................19
SECTION 14.3. LATE PAYMENTS......................................................................20
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM.......................................................21
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SECTION 14.5. DEFAULT BY LANDLORD................................................................21
SECTION 14.6. EXPENSES AND LEGAL FEES............................................................21
SECTION 14.7. WAIVER OF JURY TRIAL...............................................................21
SECTION 14.8. SATISFACTION OF JUDGMENT...........................................................21
SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD.............................................21
ARTICLE XV. END OF TERM.........................................................................................22
SECTION 15.1. HOLDING OVER.......................................................................22
SECTION 15.2. MERGER ON TERMINATION..............................................................22
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY.........................................22
ARTICLE XVI. PAYMENTS AND NOTICES...............................................................................22
ARTICLE XVII. RULES AND REGULATIONS.............................................................................22
ARTICLE XVIII. BROKER'S COMMISSION..............................................................................23
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST....................................................................23
ARTICLE XX. INTERPRETATION......................................................................................23
SECTION 20.1. GENDER AND NUMBER..................................................................23
SECTION 20.2. HEADINGS...........................................................................23
SECTION 20.3. JOINT AND SEVERAL LIABILITY........................................................23
SECTION 20.4. SUCCESSORS.........................................................................23
SECTION 20.5. TIME OF ESSENCE....................................................................23
SECTION 20.6. CONTROLLING LAW/VENUE..............................................................23
SECTION 20.7. SEVERABILITY.......................................................................23
SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES.....................................................23
SECTION 20.9. INABILITY TO PERFORM...............................................................23
SECTION 20.10. ENTIRE AGREEMENT..................................................................24
SECTION 20.11. QUIET ENJOYMENT...................................................................24
SECTION 20.12. SURVIVAL..........................................................................24
SECTION 20.13. INTERPRETATION....................................................................24
ARTICLE XXI. EXECUTION AND RECORDING............................................................................24
SECTION 21.1. COUNTERPARTS.......................................................................24
SECTION 21.2. CORPORATE, LIMITED LIABILITY COMPANY AND PARTNERSHIP AUTHORITY.....................24
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER.............................................24
SECTION 21.4. RECORDING..........................................................................24
SECTION 21.5. AMENDMENTS.........................................................................24
SECTION 21.6. EXECUTED COPY......................................................................24
SECTION 21.7. ATTACHMENTS........................................................................24
ARTICLE XXII. MISCELLANEOUS.....................................................................................24
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS.......................................................24
SECTION 22.2. GUARANTY...........................................................................25
SECTION 22.3. CHANGES REQUESTED BY LENDER........................................................25
SECTION 22.4. MORTGAGEE PROTECTION...............................................................25
SECTION 22.5. COVENANTS AND CONDITIONS...........................................................25
SECTION 22.6. SECURITY MEASURES..................................................................25
EXHIBITS
EXHIBIT A DESCRIPTION OF PREMISES
EXHIBIT B ENVIRONMENTAL QUESTIONNAIRE
EXHIBIT C LANDLORD'S DISCLOSURES
EXHIBIT D INSURANCE REQUIREMENTS
EXHIBIT E RULES AND REGULATIONS
EXHIBIT X WORK LETTER
EXHIBIT Y PROJECT SITE PLAN
ii
LEASE
(SINGLE TENANT; NET)
THIS LEASE is made as of the 18th day of March, 2005, by and between THE
IRVINE COMPANY, a Delaware corporation hereafter called "LANDLORD," and
INTERCHANGE CORPORATION, a Delaware 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.
Xxxxxxx xx Xxxxxxxx: 0X Xxxxxxxxxx Xxxxx, Xxxxxx, XX
0. Project Description (if applicable): One Technology Park I
3. Use of Premises: General office
4. Estimated Commencement Date: Thirteen (13) weeks from and after the date
of this Lease.
5. Term: Sixty (60) 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: Commencing on the Commencement Date, the Basic Rent shall be
Twenty Seven Thousand Five Hundred Fifty-Five Dollars ($27,555.00) per
month, based on $1.18 per rentable square foot.
Basic Rent is subject to adjustment as follows:
Commencing twelve (12) months following the Commencement Date, the Basic
Rent shall be Twenty Eight Thousand Seven Hundred Twenty-Three Dollars
($28,723.00) per month, based on $1.23 per rentable square foot.
Commencing twenty-four (24) months following the Commencement Date, the
Basic Rent shall be Twenty Nine Thousand Eight Hundred Ninety-One Dollars
($29,891.00) per month, based on $1.28 per rentable square foot.
Commencing thirty-six (36) months following the Commencement Date, the
Basic Rent shall be Thirty One Thousand Fifty-Eight Dollars ($31,058.00)
per month, based on $1.33 per rentable square foot.
Commencing forty-eight (48) months following the Commencement Date, the
Basic Rent shall be Thirty Two Thousand Two Hundred Twenty-Six Dollars
($32,226.00) per month, based on $1.38 per rentable square foot.
7. Guarantor(s): None
8. Floor Area: Approximately 23,352 rentable square feet
9. Security Deposit: $ 0 (but see Section 4.3 for Letter of Credit
Requirements).
10. Broker(s): Colliers Xxxxxx
11. Additional Insureds: None
12. Address for Payments and Notices:
LANDLORD TENANT
THE IRVINE COMPANY
000 Xxxxxxx Xxxxxx Xxxxx INTERCHANGE CORPORATION
Xxxxxxx Xxxxx, XX 00000 1G Technology Drive
Attn: Senior Vice President, Operations Xxxxxx, XX 00000
Irvine Office Properties
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with a copy of notices to:
THE IRVINE COMPANY
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Vice President, Operations
Irvine Office Properties, Technology Portfolio
13. Tenant's Liability Insurance Requirement: $2,000,000.00
14. Vehicle Parking Spaces: Ninety-three (93)
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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"), containing
approximately the rentable square footage set forth as the "FLOOR AREA" in Item
8 of the Basic Lease Provisions. The Premises consist of all of the Floor Area
within the building identified in Item 1 of the Basic Lease Provisions (the
Premises together with such building and the underlying real property, are
called the "BUILDING"), and is a portion of the project identified in Item 2 of
the Basic Lease Provisions and shown in Exhibit Y, if any (the "PROJECT"). If
the Project is not already completed, Landlord makes no representation that the
Project, if any, as shown on Exhibit Y, (a) will be completed or that it will be
constructed as shown on Exhibit Y without change, or (b) to the extent the
Project is constructed, it will not be changed from the Project as shown on
Exhibit Y. All references to "Floor Area" in this Lease shall mean the rentable
square footage set forth in Item 8 of the Basic Lease Provisions. The rentable
square footage set forth in Item 8 may include or have been adjusted by various
factors, including, without limitation, a load factor for any vertical
penetrations, stairwells or similar features or areas of the Building. Tenant
agrees that the Floor Area set forth in Item 8 shall be binding on Landlord and
Tenant for purposes of this Lease regardless of whether any future or differing
measurements of the Premises or the Building are consistent or inconsistent with
the Floor Area set forth in Item 8.
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, the Building or the Project or their
respective suitability or fitness for any purpose, including without limitation
any representations or warranties regarding the compliance of Tenant's use of
the Premises with the applicable zoning or regarding any other land use matters,
and Tenant shall be solely responsible as to such matters. Further, neither
Landlord nor any representative of Landlord has made any representations or
warranties regarding (i) what other tenants or uses may be permitted or intended
in the Building or the Project, (ii) any exclusivity of use by Tenant with
respect to its permitted use of the Premises as set forth in Item 3 of the Basic
Lease Provisions, or (iii) any construction of portions of the Project not yet
completed. 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. As of the Commencement Date, Tenant shall be conclusively deemed to
have accepted the Premises and those portions of the Building and Project in
which Tenant has any rights under this Lease, which acceptance shall mean that
it is conclusively established that the Premises and those portions of the
Building and Project in which Tenant has any rights under this Lease were in
satisfactory condition and in conformity with the provisions of this Lease,
subject only to those defective or incomplete portions of the Tenant
Improvements constructed by Landlord pursuant to the Work Letter, if any,
attached hereto as Exhibit X ("WORK LETTER"), which Tenant shall have itemized
on a written punch list and delivered to Landlord within thirty (30) days after
the Commencement Date (as defined in Section 3.1). If no items are required of
Landlord under the Work Letter, Tenant shall be conclusively deemed to have
accepted the Premises, and those portions of the Building and Project in which
Tenant has any rights under this Lease, in their existing condition as of the
Commencement Date, and to have waived any and all right or claim regardless of
the nature thereof against Landlord arising out of the condition of the
Premises, the Building or the Project. 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 and/or the Project as
any part of Tenant's corporate or trade name. Landlord shall have the right to
change the name, address, number or designation of the Building or Project
without liability to Tenant.
ARTICLE III. TERM
SECTION 3.1. GENERAL. The term of this Lease ("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 Tenant acquires possession of or commences use of the
Premises for any purpose other than any construction permitted to be performed
by Tenant pursuant to the Work Letter, or (b) the date the Premises are tendered
to Tenant, provided that the Premises shall not be tendered to Tenant until any
approvals by relevant governmental authorities of the tenant improvements
constructed by Landlord pursuant to the Work Letter ("TENANT IMPROVEMENTS")
which are required for occupancy of the Premises have been obtained (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). The date on which this Lease is
scheduled to terminate is referred to as the "EXPIRATION DATE." Prior to
Tenant's taking of possession of the Premises, the parties shall memorialize on
a form provided by Landlord the actual Commencement Date and the Expiration Date
of this Lease. Tenant's failure to execute that form shall not affect the
validity of Landlord's determination of those dates or Tenant's obligation to
pay rent hereunder. Landlord may at its election, provide Tenant with access to
the Premises not less than ten (10) days prior to the Commencement Date of this
Lease to enable Tenant to install fixtures, furniture, computers, telephone and
cabling equipment in the Premises. Such access shall be subject to all of the
terms and conditions of this Lease, except that Tenant's rental obligation shall
not commence to accrue until the Commencement Date hereof.
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 as set forth in Item 4 of the Basic Lease Provisions
("ESTIMATED COMMENCEMENT DATE"), this Lease shall not be void or voidable nor
shall
3
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 tenders possession of the Premises in accordance with Section 3.1(b)
above, except that if Landlord cannot so tender possession of the Premises on or
before the Estimated Commencement Date due to any action or inaction of Tenant
(including without limitation any Tenant Delay described in the Work Letter, if
any, attached to this Lease), then the Commencement Date shall be deemed to have
occurred 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 action or inaction, including without
limitation any Tenant Delay described in the attached Work Letter, if any.
SECTION 3.3. RIGHT TO EXTEND THIS LEASE. Provided that no Event of Default
has occurred under any provision of this Lease and is continuing, 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 is occupying
the entire Premises and has not assigned or sublet any of its interest in this
Lease, then Tenant may extend the Term of this Lease for one (1) period of sixty
(60) months. 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 Term, Tenant's irrevocable written
notice of its commitment to extend (the "COMMITMENT NOTICE"). The Basic Rent
payable under the Lease during any extension of the Term shall be determined as
provided in the following provisions.
If Landlord and Tenant have not by then been able to agree upon the Basic
Rent for the extension of the Term, then within one hundred twenty (120) and
ninety (90) days prior to the expiration date of the Term, Landlord shall notify
Tenant in writing of the Basic Rent that would reflect the prevailing market
rental rate for a 60-month renewal of comparable space in the Project (together
with any increases thereof during the extension period) as of the commencement
of the extension period ("LANDLORD'S DETERMINATION"). Should Tenant disagree
with the Landlord's Determination, then Tenant shall, not later than twenty (20)
days thereafter, notify Landlord in writing of Tenant's determination of those
rental terms ("TENANT'S DETERMINATION"). In no event, however, shall Landlord's
Determination or Tenant's Determination be less than the Basic Rent payable by
Tenant during the then-scheduled final month of the initial Term. Within ten
(10) days following delivery of the Tenant's Determination, 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 market rental. 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 market
rental for the Premises. Any appraiser designated hereunder shall have an MAI
certification with not less than five (5) years experience in the valuation of
commercial industrial buildings in the vicinity of the Project.
Within thirty (30) days following the selection of the appraiser and such
appraiser's receipt of the Landlord's Determination and the Tenant's
Determination, the appraiser shall determine whether the rental rate determined
by Landlord or by Tenant more accurately reflects the fair market rental rate
for the 60-month renewal of the Lease for the Premises, as reasonably
extrapolated to the commencement of the extension period. Accordingly, either
the Landlord's Determination or the Tenant's Determination shall be selected by
the appraiser as the fair market rental rate for the extension period. In making
such determination, the appraiser shall consider rental comparables for the
Project (provided that if there are an insufficient number of comparables within
the project, the appraiser shall consider rental comparables for similarly
improved space within the vicinity of the Project with appropriate adjustment
for location and quality of project), but the appraiser shall not attribute any
factor for market tenant improvement allowances or brokerage commissions in
making its determination of the fair market rental rate. At any time before the
decision of the appraiser is rendered, either party may, by written notice to
the other party, accept the rental terms submitted by the other party, in which
event such terms shall be deemed adopted as the agreed fair market rental. The
fees of the appraiser(s) shall be borne entirely by the party whose
determination of the fair market rental rate was not accepted by the appraiser.
Within twenty (20) days after the determination of the fair market rental,
Landlord shall prepare an appropriate amendment to this Lease for the extension
period, and Tenant shall execute and return same to Landlord within ten (10)
days after Tenant's receipt of same. Should the fair market rental not be
established by the commencement of the extension period, then Tenant shall
continue paying rent at the rate in effect during the last month of the initial
Term, and a lump sum adjustment shall be made promptly upon the determination of
such new rental.
If Tenant fails to timely exercise the extension right granted herein
within the time period expressly set forth for exercise by Tenant in the initial
paragraph of this Section, 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.
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 single sixty (60) month extension period 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.
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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, the rental amount for the
Premises shown in Item 6 of the Basic Lease Provisions (the "BASIC RENT"),
including subsequent adjustments, if any. Any rental adjustment to Basic Rent
shown in Item 6 shall be deemed to occur on the specified monthly anniversary of
the Commencement Date, whether or not the Commencement 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 and one (1)
month's estimated Tenant's Share of Operating Expenses (as defined in Section
4.2) shall be delivered to Landlord concurrently with Tenant's execution of this
Lease and shall be applied against the Basic Rent and Operating Expenses first
due hereunder.
SECTION 4.2. OPERATING EXPENSES.
(a) From and after the Commencement Date, Tenant shall pay to Landlord, as
additional rent, Tenant's Share of all Operating Expenses, as defined in Section
4.2(f), incurred by Landlord in the operation of the Building and the Project.
The term "TENANT'S SHARE" means one hundred percent (100%) of Operating Expenses
determined by Landlord to benefit or relate substantially to the Building rather
than the entire Project, plus that portion of any Operating Expenses determined
by multiplying the cost of such item by a fraction, the numerator of which is
the Floor Area and the denominator of which is the total rentable square
footage, as determined from time to time by Landlord, of (i) all of the
buildings in the Project, as determined by Landlord, for expenses determined by
Landlord to benefit or relate substantially to the entire Project rather than
any specific building or (ii) all or some of the buildings within the Project as
well as all or a portion of other property owned by Landlord and/or its
affiliates, for expenses which benefit or relate to such buildings within the
Project and such other real property. In the event that Landlord determines in
its sole and absolute discretion that any premises within any building within
the Project or any portion of a building or project within a larger area incurs
a non-proportional benefit from any expense, or is the non-proportional cause of
any such expense, Landlord may, allocate a greater percentage of such Operating
Expense to such premises, building or project, as applicable. The full amount of
any management fee payable by Landlord for the management of Tenant's Premises
that is calculated as a percentage of the rent payable by Tenant shall be paid
in full by Tenant as additional rent.
(b) Prior to the start of each full Expense Recovery Period (as defined in
this Section 4.2), Landlord shall give Tenant a written estimate of the amount
of Tenant's Share of Operating Expenses for the applicable Expense Recovery
Period. Failure to provide such estimate shall not relieve Tenant from its
obligation to pay Tenant's Share of Operating Expenses or estimated amounts
thereof, if and when Landlord provides such estimate or final payment amount.
Tenant shall pay the estimated amounts to Landlord in equal monthly
installments, in advance concurrently with payments of 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 monthly the estimated
Tenant's Share of Operating Expenses in effect during the prior Expense Recovery
Period; provided that when the new estimate is delivered to Tenant, Tenant
shall, at the next monthly payment date, pay any accrued estimated Tenant's
Share of Operating Expenses 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, provided that Landlord shall have the right to change the date
on which an Expense Recovery Period commences in which event appropriate
reasonable adjustments shall be made to Tenant's Share of Operating Expenses so
that the amount payable by Tenant shall not materially vary as a result of such
change.
(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 Tenant's Share of 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 of Tenant's Share of Operating Expenses, if any, to the
actual Tenant's Share of Operating Expenses as shown by the annual statement.
Any delay or failure by Landlord in delivering any statement hereunder shall not
constitute a waiver of Landlord's right to require Tenant to pay Tenant's Share
of 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. Should Tenant fail
to object in writing to Landlord's determination of Tenant's Share of Operating
Expenses within sixty (60) days following delivery of Landlord's expense
statement, Landlord's determination of Tenant's Share of Operating Expenses for
the applicable Expense Recovery Period shall be conclusive and binding on the
parties for all purposes and any future claims to the contrary shall be barred.
(d) Even though this Lease has terminated and the Tenant has vacated the
Premises, when the final determination is made of Tenant's Share of Operating
Expenses for the Expense Recovery Period in which this Lease terminates, Tenant
shall within thirty (30) days of written notice pay the entire increase over the
estimated Tenant's Share of Operating Expenses already paid. Conversely, any
overpayment by Tenant shall be rebated by Landlord to Tenant not later than
thirty (30) days after such final determination.
(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 Tenant's Share of
Operating Expenses for the year, then the estimate of Tenant's Share of
Operating Expenses may be increased by written notice from Landlord for the
month in which such rate(s) or amount(s) becomes effective and for all
succeeding months by an amount equal to Tenant's Share of the increase. If
Landlord gives Tenant written
5
notice of the amount or estimated amount of the increase, the month in which the
increase will or has become effective, then Tenant shall pay the increase to
Landlord as a part of Tenant's monthly payments of the estimated Tenant's Share
of Operating Expenses as provided in Section 4.2(b), commencing with the month
following Tenant's receipt of Landlord's notice. In addition, Tenant shall pay
upon written request any such increases which were incurred prior to the Tenant
commencing to pay such monthly increase.
(f) The term "OPERATING EXPENSES" shall mean and include all Project
Costs, as defined in subsection (g), and Property Taxes, as defined in
subsection (h).
(g) The term "PROJECT COSTS" shall include all expenses of operation,
repair and maintenance of the Building and the Project, including without
limitation all appurtenant Common Areas (as defined in Section 6.2), and shall
include the following charges by way of illustration but not limitation: water
and sewer charges; insurance premiums and deductibles and/or reasonable premium
and deductible equivalents should Landlord elect to self-insure all or any
portion of any risk that Landlord is authorized to insure hereunder; license,
permit, and inspection fees; light; power; window washing; trash pickup;
heating, ventilating and air conditioning; supplies; materials; equipment;
tools; the cost of any environmental, insurance, tax or other consultant
utilized by Landlord in connection with the Building and/or Project;
establishment of reasonable reserves for replacements and/or repairs; costs
incurred in connection with compliance with any laws or changes in laws
applicable to the Building or the Project; the cost of any capital investments
or replacements (other than tenant improvements for specific tenants) to the
extent of the amortized amount thereof over the useful life of such capital
investments or replacements calculated at a market cost of funds, all as
determined by Landlord, for each such year of useful life during the Term; costs
associated with the maintenance of an air conditioning, heating and ventilation
service agreement, and maintenance of an intrabuilding network cable service
agreement for any intrabuilding network cable telecommunications lines within
the Project, and any other installation, maintenance, repair and replacement
costs associated with such lines; capital costs associated with a requirement
related to demands on utilities by Project tenants, including without limitation
the cost to obtain additional phone connections; labor; reasonably allocated
wages and salaries, fringe benefits, and payroll taxes for administrative and
other personnel directly applicable to the Building and/or Project, including
both Landlord's personnel and outside personnel; any expense incurred pursuant
to Sections 6.1, 6.2, 6.4, 7.2, and 10.2; and a reasonable overhead/management
fee for the professional operation of the Project. It is understood and agreed
that Project Costs may include competitive charges for direct services
(including, without limitation, management and/or operations services) provided
by any subsidiary, division or affiliate of Landlord.
(h) The term "PROPERTY TAXES" as used herein shall include any form of
federal, state, county or local government or municipal taxes, fees, charges or
other impositions of every kind (whether general, special, ordinary or
extraordinary) related to the ownership, leasing or operation of the Premises,
Building or Project, including without limitation, the following: (i) all real
estate taxes or personal property taxes, 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/or the
Project, and any improvements, fixtures and equipment and other property of
Landlord located in the Building and/or the Project, (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; (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) taxes based on the
receipt of rent (including gross receipts or sales taxes applicable to the
receipt of rent), and (vi) costs and expenses incurred in contesting the amount
or validity of any Property Tax by appropriate proceedings. Notwithstanding the
foregoing, general net income or franchise taxes imposed against Landlord shall
be excluded.
SECTION 4.3. LETTER OF CREDIT. Tenant shall deliver to Landlord,
concurrently with Tenant's execution of this Lease, an irrevocable stand-by
letter of credit in the amount One Hundred Twenty Two Thousand Two Hundred
Forty-Seven Dollars ($122,247.00). Said letter of credit shall be in form and
with the substance of Exhibit F attached hereto, and issued by a financial
institution which is acceptable to Landlord. Upon any "Event of Default" by
Tenant (as hereinafter defined), Landlord shall be entitled to draw upon said
letter of credit by the issuance of Landlord's sole written demand to the
issuing financial institution, which draw shall be in an amount necessary to
cure the default in question and to compensate Landlord for all damages incurred
thereby, as determined by Landlord in its sole and absolute discretion, and if
such amount cannot be readily determined by Landlord, then the full amount of
the letter of credit can be drawn by Landlord pending determination of said
amount. Notwithstanding the foregoing, while the amount of any such draw shall
be determined in Landlord's sole and absolute discretion as provided in the
foregoing, if the amount of any such draw(s) shall ultimately exceed the amount
of damages actually incurred by Landlord as the result of Tenant's default (as
determined pursuant to the applicable provisions of Article XIV of this Lease),
then Landlord shall promptly refund any such excess to Tenant. Any such draw
shall be without waiver or 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 the default. If any portion of the letter of credit is drawn
after a default by Tenant, Tenant shall within five (5) days after written
demand by Landlord restore the letter of credit. Failure to so restore said
letter of credit within said five (5) days shall be a default by Tenant under
this Lease. Partial drawings upon said letter of credit shall be permitted. The
letter of credit shall provide for automatic annual renewals through that date
which is sixty (60) days after the Expiration Date of the Term of this Lease
(including any extensions of the Term as provided in this Lease). In the event
the letter of credit is not renewed by the issuing financial institution on or
before twenty (20) days prior to the then-scheduled expiration date of the
letter of credit, then Landlord shall have the right to draw the full amount of
such letter of credit and to hold such amount as cash security for Tenant's full
and faithful performance of its obligations under the Lease. In the event of a
draw down of the letter of credit to cash security as provided in the foregoing,
the following shall apply: (i) upon any
6
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, Landlord may retain,
use or apply the whole or any part of such cash security to pay any sum which
Tenant is obligated to pay under this Lease, sums that Landlord may spend or be
required to expend by reason of the default by Tenant or any loss or damage that
Landlord may suffer by reason of such default or costs incurred by Landlord in
connection with the repair or restoration of the Premises pursuant to Section
15.3 upon expiration or earlier termination of this Lease, (ii) Landlord shall
not be required to keep the cash security separate from its general funds and
Tenant shall not be entitled to interest on such cash security, and (iii) if
Tenant fully performs its obligations under this Lease, the cash security shall
be returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interest under the Lease) within thirty (30) days after the expiration
of the Term, provided that Tenant agrees that Landlord may retain the cash
security 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 and Tenant
agrees that Tenant shall have no claim against Landlord for Landlord's retaining
the cash security to the extent provided in the foregoing.
Upon any Event of 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 and Tenant's failure to cure the same within any applicable cure period,
Landlord shall be entitled to draw upon said letter of credit by the issuance of
Landlord's sole written demand to the issuing financial institution, which draw
shall be in an amount necessary to cure the default in question and to
compensate Landlord for all damages incurred thereby, as determined by Landlord
in its sole and absolute discretion, and if such amount cannot be readily
determined by Landlord, then the full amount of the letter of credit can be
drawn by Landlord pending determination of said amount. Any such draw shall be
without waiver or 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 the default. If any portion of the letter of credit is drawn after a default
by Tenant, Tenant shall within ten (10) days after written demand by Landlord
restore the letter of credit. Failure to so restore said letter of credit within
said ten (10) days shall be a default by Tenant under this Lease. Partial
drawings upon said letter of credit shall be permitted.
In the event that no Event of Default has occurred at any time during the
Term hereof, and provided further that Tenant has not at any time been more than
five (5) days late with respect to any payments of Basic Rent and Operating
Expenses due under the Lease, then upon the written request of Tenant, Landlord
shall the written request of Tenant, shall authorize in writing consecutive
reductions to the principal amount of the letter of credit in accordance with
the following schedule:
(i) Upon the expiration of the twenty-fourth (24th) month of the Term,
the principal amount of the Letter of Credit shall be reduced by
Twenty Nine Thousand Eight Hundred Ninety One Dollars ($29,891.00);
(ii) Upon the expiration of the thirty-sixth (36th) month of the Term,
the principal amount of the Letter of Credit shall be reduced by One
Thousand Fifty-Eight Dollars ($31,058.00); and
(iii) Upon the expiration of the forty-eighth (48th) month of the Term,
the principal amount of the Letter of Credit shall be reduced by
Thirty Two Thousand Two Hundred Twenty-Six Dollars ($32,226.00).
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 do or permit
anything to be done in or about the Premises which will in any way interfere
with the rights of other occupants of the Building or the Project, or 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 or the Project. Tenant shall
not perform any work or conduct any business whatsoever in the Project other
than inside 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, the Project and/or their contents, and shall comply with all
applicable insurance underwriters rules. 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. Tenant shall comply at its expense with all present and future
covenants, conditions, easements or restrictions now or hereafter affecting or
encumbering the Building and/or Project, 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.
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SECTION 5.2. SIGNS. Provided Tenant continues to occupy the entire
Premises, Tenant shall have the non-exclusive right to one (1) exterior
building-top sign and one (1) exterior eyebrow sign on the Building for Tenant's
name and graphics in locations designated by Landlord, subject to Landlord's
right of prior approval that such exterior signage is in compliance with the
Signage Criteria (defined below). Except as provided in the foregoing, Tenant
shall have no right to maintain signs in on or about the Premises, the Building
or the Project and shall not place or erect any signs 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 determination, as determined solely by Landlord, prior to installation,
that signage is in compliance with any covenants, conditions or restrictions
encumbering the Premises and Landlord's signage program for the Project, as in
effect from time to time and approved by the City in which the Premises are
located ("SIGNAGE CRITERIA"). Prior to placing or erecting any such signs,
Tenant shall obtain and deliver to Landlord a copy of any applicable municipal
or other governmental permits and approvals and comply with any applicable
insurance requirements for such signage. Tenant shall be responsible for the
cost of any permitted sign, including the fabrication, installation, maintenance
and removal thereof and the cost of any permits therefor. If Tenant fails to
maintain its sign in good condition, or if Tenant fails to remove same upon
termination of this Lease and repair and restore any damage caused by the sign
or its removal, Landlord may do so at Tenant's expense. Landlord shall have the
right to temporarily remove any signs in connection with any repairs or
maintenance in or upon the Building. The term "sign" as used in this Section
shall include all signs, designs, monuments, displays, advertising materials,
logos, banners, projected images, pennants, decals, pictures, notices,
lettering, numerals or graphics.
SECTION 5.3. HAZARDOUS MATERIALS.
(a) For purposes of this Lease, the term "HAZARDOUS MATERIALS" includes
(i) any "hazardous material" as defined in Section 25501(o) of the California
Health and Safety Code, (ii) hydrocarbons, polychlorinated biphenyls or
asbestos, (iii) any toxic or hazardous materials, substances, wastes or
materials as defined pursuant to any other applicable state, federal or local
law or regulation, and (iv) any other substance or matter which may result in
liability to any person or entity as a result of such person's possession, use,
release or distribution of such substance or matter under any statutory or
common law theory.
(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 (including without limitation the soil and groundwater thereunder)
without the prior written consent of Landlord, which consent may be given or
withheld in Landlord's sole and absolute discretion. Notwithstanding the
foregoing, Tenant shall have the right, without obtaining prior written consent
of Landlord, to utilize within the Premises a reasonable quantity of 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 and absolute discretion, place such
conditions as Landlord deems appropriate with respect to Tenant's use of 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 in connection therewith 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 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,
emergency response or action plans, 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 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
8
access to all facilities, records and personnel related thereto. 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
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 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.
(e) If the presence of any Hazardous Materials on, under, from or about
the Premises or the Project 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 or the Project, 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 and the Project 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, which consent may be given or withheld in Landlord's sole and
absolute discretion, take any remedial action in response to the presence of any
Hazardous Materials on, from, under or about the Premises or the Project 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 or the Project
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 and (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 and the Project 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 (A) on, into, from, under or about the
Premises during the Term regardless of the source of such Hazardous Materials
unless caused solely by Landlord or (B) on, into, from, under or about the
Premises, the Building or the Project and any other real or personal property
owned by Landlord caused or permitted by Tenant, its agents, employees,
contractors, licensees or invitees. Such indemnity obligation shall specifically
include, without limitation, the cost of any required or necessary repair,
restoration, cleanup or detoxification of the Premises, the Building and the
Project and any other real or personal property owned by Landlord, 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
and any loss of rental due to the inability to lease the Premises or any portion
of the Building or Project as a result of such Hazardous Material or remediation
thereof. If it is at any time discovered that Hazardous Materials have been
released on, into, from, under or about the Premises during the Term, or 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 Building or the Project 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
Building or the Project 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 Section 5.3(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 Project 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 the Hazardous Materials facts described in Exhibit C, nor with respect to any
Hazardous Materials which Tenant proves were neither released on the Premises
during the Term nor caused or permitted by Tenant, its agents, employees,
contractors, licensees or invitees. 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 that Landlord brings to Tenant's attention. Tenant hereby acknowledges
that this disclosure satisfies any obligation of Landlord to Tenant pursuant to
California Health & Safety Code Section 25359.7, or any amendment or substitute
thereto or any other disclosure obligations of Landlord.
ARTICLE VI. COMMON AREAS; 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, telecommunications
service, refuse pickup, janitorial service, interior landscape maintenance and
all other utilities,
9
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. If any utilities or services are not separately metered or assessed to
Tenant, Landlord shall make a reasonable determination of Tenant's proportionate
share of the cost of such utilities and services, and Tenant shall pay such
amount to Landlord, as an item of additional rent, within ten (10) days after
receipt of Landlord's statement or invoice therefor. Alternatively, Landlord may
elect to include such cost in the definition of Project Costs in which event
Tenant shall pay Tenant's proportionate share of such costs in the manner set
forth in Section 4.2. Tenant shall also pay to Landlord as an item of additional
rent, within ten (10) days after receipt of Landlord's statement or invoice
therefor, a reasonable charge (which shall be in addition to the electricity
charge paid to the utility provider) for Tenant's "after hours" usage of each
HVAC unit servicing the Premises. "After hours" shall mean more than two hundred
eighty-three (283) hours of usage of each HVAC unit servicing the Premises
during any month during the Term, and shall be determined based upon the
operation of the applicable HVAC unit during each month on a "non-cumulative"
basis (without regard to Tenant's usage or nonusage of said unit during other
months during the Term). 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 the
Building and Premises to install, maintain, repair, replace or remove all
electrical and mechanical installations of Landlord. Tenant acknowledges that
the costs incurred by Landlord related to providing above-standard utilities to
Tenant, including, without limitation, telephone lines, may be charged to
Tenant.
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate all Common Areas within the Project. The term "COMMON
AREAS" shall mean all areas which are not held for exclusive use by persons
entitled to occupy space, and all other appurtenant areas and improvements
within the Project provided by Landlord for the common use of Landlord and
tenants and their respective employees and invitees, including without
limitation parking areas and structures, driveways, sidewalks, landscaped and
planted areas, hallways and interior stairwells not located within the premises
of any tenant, common electrical rooms and roof access entries, common entrances
and lobbies, elevators, and restrooms not located within the premises of any
tenant.
SECTION 6.3. USE OF COMMON AREAS. The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord. Landlord shall operate and maintain
the Common Areas as a "first class" business park in the manner Landlord may
determine to be appropriate. All costs incurred by Landlord for the maintenance
and operation of the Common Areas shall be included in Project Costs except to
the extent any particular cost incurred is related to or associated with a
specific tenant and can be charged to such tenant of the Project. Landlord shall
at all times during the Term have exclusive control of the Common Areas, and may
restrain or permit any use or occupancy, except as authorized by Landlord's
rules and regulations. Tenant shall keep the Common Areas clear of any
obstruction or unauthorized use related to Tenant's operations or use of
Premises, including without limitation, planters and furniture. Nothing in this
Lease shall be deemed to impose liability upon Landlord for any damage to or
loss of the property of, or for any injury to, Tenant, its invitees or
employees. Landlord may temporarily close any portion of the Common Areas for
repairs, remodeling and/or alterations, to prevent a public dedication or the
accrual of prescriptive rights, or for any other reason deemed sufficient by
Landlord, without liability to Landlord.
SECTION 6.4. PARKING. Tenant shall be entitled to the number of vehicle
parking spaces set forth in Item 14 of the Basic Lease Provisions, which spaces
shall be unreserved and unassigned, on those portions of the Common Areas
designated by Landlord for parking. Tenant shall not use more parking spaces
than such number. All parking spaces shall be used only for parking of vehicles
no larger than full size passenger automobiles, sports utility vehicles or
pickup trucks. 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 within the Common Areas shall be limited to striped parking stalls, and
no parking shall be permitted in any driveways, access ways or in any area which
would prohibit or impede the free flow of traffic within the Common Areas. There
shall be no parking of any vehicles for longer than a forty-eight (48) hour
period unless otherwise authorized by Landlord, and vehicles which have been
abandoned or parked in violation of the terms hereof may be towed away at the
owner's expense. 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. 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
within the Common Areas. 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;
to restrict parking by tenants, their officers, agents and employees to employee
parking areas; after the expiration of the initial 60-month term of this Lease,
to enforce parking charges (by operation of meters or otherwise); 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.
Any person using the parking area shall observe all directional signs and arrows
and any posted speed limits. In no event shall Tenant interfere with the use and
enjoyment of the parking area by other tenants of the Project or their
10
employees or invitees. Parking areas shall be used only for parking vehicles.
Washing, waxing, cleaning or servicing of vehicles, or the storage of vehicles
for longer than 48-hours, 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.
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the
right to make alterations or additions to the Building or the Project, or to the
attendant fixtures, equipment and Common Areas. Landlord may at any time
relocate or remove any of the various buildings, parking areas, and other Common
Areas, and may add buildings and areas to the Project from time to time. No
change shall entitle Tenant to any abatement of rent or other claim against
Landlord, provided that the change does not deprive Tenant of reasonable access
to or use of the Premises, nor lessen the number of vehicle spaces allotted to
Tenant pursuant to Section 6.4 above.
ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole expense
shall maintain and make all repairs and replacements necessary to keep the
Premises and the Building 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 all interior glass, doors,
door closures, hardware, fixtures, electrical, plumbing, fire extinguisher
equipment and other equipment installed in the Premises and all Alterations
constructed by Tenant pursuant to Section 7.3 below. 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. All repairs and replacements 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 and shall be made only at
the time or times approved by Landlord. Any contractor utilized by Tenant shall
be subject to Landlord's standard requirements for contractors, as modified from
time to time. Landlord 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 to perform any
repair and maintenance of the electrical and mechanical systems and any air
conditioning, ventilating or heating equipment serving the Premises and include
the cost thereof as part of Tenant's Share of Operating Expenses. If Tenant
fails to properly maintain and/or repair the Premises as herein provided
following Landlord's notice and the expiration of the applicable cure period (or
earlier if Landlord determines that such work must be performed prior to such
time in order to avoid damage to the Premises or Building or other detriment),
then Landlord may elect, but shall have no obligation, to perform any repair or
maintenance required hereunder on behalf of Tenant and at Tenant's expense, and
Tenant shall reimburse Landlord upon demand 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 any air conditioning, ventilating or heating equipment which serves the
Premises (exclusive, however, of supplemental HVAC equipment serving only the
Premises), and shall maintain in good repair the roof, foundations, footings,
the exterior surfaces of the exterior walls of the Building (including exterior
glass), and the structural, electrical and mechanical systems, 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. 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, footings, the exterior
surfaces of the exterior walls of the Building (excluding exterior glass), or
structural, electrical or mechanical systems 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, repairs and replacement on the part of
Landlord provided hereunder shall be considered part of Project Costs. Tenant
further agrees that if Tenant fails to report any such need for repair in
writing within sixty (60) days of its discovery by Tenant, Tenant shall be
responsible for any costs and expenses and other damages related to such repair
which are in excess of those which would have resulted had such need for repair
been reported to Landlord within such sixty (60) day period.
SECTION 7.3. ALTERATIONS. Except as otherwise provided in this Section,
Tenant shall make no alterations, additions, fixtures or improvements
("ALTERATIONS") to the Premises or the Building without the prior written
consent of Landlord, which consent may be granted or withheld in Landlord's sole
and absolute discretion. In the event that any requested Alteration would result
in a change from Landlord's building standard materials and specifications for
the Project ("STANDARD IMPROVEMENTS"), Landlord may withhold consent to such
Alteration in its sole and absolute discretion. In the event Landlord so
consents to a change from the Standard Improvements (such change being referred
to as a "NON-STANDARD IMPROVEMENT"), Tenant shall be responsible for the cost of
replacing such Non-Standard Improvement with the applicable Standard Improvement
("REPLACEMENTS") which Replacements shall be completed prior to the Expiration
Date or earlier termination of this Lease. Landlord shall not unreasonably
withhold its consent to any Alterations which cost less than One Dollar ($1.00)
per square foot of the improved portions of the Premises (excluding warehouse
square footage) and 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
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Premises (including, without limitation, the adding of any additional "office"
square footage) or any change to any structural or mechanical systems of the
Premises, or (iv) fail to comply with any applicable governmental requirements
or require any governmental permit as a prerequisite to the construction
thereof, or (v) result in the Premises requiring building services beyond the
level normally provided to other tenants, or (vi) 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 (vii) diminish the value of the Premises including, without
limitation, using lesser quality materials than those existing in the Premises,
or (viii) alter or replace Standard Improvements. Landlord may impose any
condition to its consent, including but not limited to a requirement that the
installation and/or removal of all Alterations and Replacements be covered by a
lien and completion bond satisfactory to Landlord in its sole and absolute
discretion and requirements as to the manner and time of performance of such
work. Landlord shall in all events, whether or not Landlord's consent is
required, have the right to approve the contractor performing the installation
and removal of Alterations and Replacements and Tenant shall not permit any
contractor not approved by Landlord to perform any work on the Premises or on
the Building. Tenant shall obtain all required permits for the installation and
removal of Alterations and Replacements and shall perform the installation and
removal of Alterations and Replacements in compliance with all applicable laws,
regulations and ordinances, including without limitation the Americans with
Disabilities Act, all covenants, conditions and restrictions affecting the
Project, and the Rules and Regulations as described in Article XVII. Tenant
understands and agrees that Landlord shall be entitled to a supervision fee in
the amount of five percent (5%) of the cost of the Alterations. Under no
circumstances shall Tenant make any Alterations or Replacements which
incorporate any Hazardous Materials, including without limitation
asbestos-containing construction materials into the Premises, the Building or
the Common Area. If any governmental entity requires, as a condition to any
proposed Alterations by Tenant, that improvements be made to the Common Areas,
and if Landlord consents to such improvements to the Common Areas (which consent
may be withheld in the sole and absolute discretion of Landlord), then Tenant
shall, at Tenant's sole expense, make such required improvements to the Common
Areas in such manner, utilizing such materials, and with such contractors,
architects and engineers as Landlord may require in its sole and absolute
discretion. Any request for Landlord's consent to any proposed Alterations shall
be made in writing and shall contain architectural plans describing the work in
detail reasonably satisfactory to Landlord. Landlord may elect to cause its
architect to review Tenant's architectural plans, and the reasonable cost of
that review shall be reimbursed by Tenant. Should the work proposed by Tenant
and consented to by Landlord modify the basic floor plan of the Premises, then
Tenant shall, at its expense, furnish Landlord with as-built drawings and CAD
disks compatible with Landlord's systems and standards. Unless Landlord
otherwise agrees in writing, all Alterations made or affixed to the Premises,
the Building or to the Common Area (excluding moveable trade fixtures and
furniture), including without limitation all Tenant Improvements constructed
pursuant to the Work Letter (except as otherwise provided in the Work Letter),
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 given
either prior to or following the expiration or termination of this Lease,
require Tenant to remove by the Expiration Date, or sooner termination date of
this Lease, or within ten (10) days following notice to Tenant that such removal
is required if notice is given following the Expiration Date or sooner
termination, all or any of the Alterations installed either by Tenant or by
Landlord at Tenant's request, including without limitation all Tenant
Improvements constructed pursuant to the Work Letter (except as otherwise
provided in the Work Letter), and to repair any damage to the Premises, the
Building or the Common Area arising from that removal and restore the Premises
to their condition prior to making such Alterations.
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 (but
in no event later than five (5) business days following such request) 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
upon 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 or Common Area and shall again notify Landlord that
construction has commenced, such notice to be given on the actual date on which
construction commences, so that Landlord may post and maintain notices of
nonresponsibility on the Premises or Common Area, as applicable, which notices
Landlord shall have the right to post and which Tenant agrees it shall not
disturb. Tenant shall also provide Landlord notice in writing within ten (10)
days following the date on which such work is substantially completed. The
provisions of this Section shall expressly survive the expiration or sooner
termination of this Lease.
SECTION 7.5. ENTRY AND INSPECTION. Landlord shall at all reasonable times,
upon 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 have access to install, repair,
maintain, replace or remove all electrical and mechanical installations of
Landlord and 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 Event of 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. 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
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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, if required by Landlord, against all Non
Standard Improvements to the Premises (as defined in Section 7.3) made by
Landlord or Tenant, and against any Alterations (as defined in Section 7.3) made
to the Premises or the Building by or on behalf of Tenant. If requested by
Landlord, Tenant shall cause its personal property, Non-Standard Improvements
and Alterations to be assessed and billed separately from the real property of
which the Premises form a part. If any taxes required to be paid by Tenant on
Tenant's personal property, Non-Standard Improvements 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 of a
value placed upon the personal property, Non-Standard Improvements and/or
Alterations and if Landlord pays the taxes based upon the increased assessment,
Landlord shall have the right to require that Tenant pay to Landlord the taxes
so levied against Landlord or the proportion of the taxes resulting from the
increase in the assessment. In calculating what portion of any tax xxxx which is
assessed against Landlord separately, or Landlord and Tenant jointly, is
attributable to Tenant's Non-Standard Improvements, Alterations and personal
property, Landlord's reasonable determination shall be conclusive.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
SECTION 9.1. RIGHTS OF PARTIES.
(a) Notwithstanding any provision of this Lease to the contrary, and
except as to transfers expressly permitted without Landlord's consent pursuant
to Section 9.4, 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 the Premises, 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
shall be void and of no force and effect and any such attempted assignment or
subletting shall constitute an Event of Default of this Lease. Landlord shall
not be deemed to have given its consent to any assignment or subletting by any
course of action other than written consent. 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 or the
Premises, 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 transferee's business to be carried on in the
Premises; (iii) the terms and provisions of any proposed sublease, assignment or
other transfer, including a copy of the proposed assignment, sublease or
transfer form; (iv) evidence that the proposed assignee, subtenant or transferee
will comply with the requirements of Exhibit D hereto; (v) a completed
Environmental Questionnaire from the proposed assignee, subtenant or transferee;
(vi) any other information requested by Landlord and reasonably related to the
transfer and (vii) the fee described in Section 9.1(e). Except as provided in
Section 9.1 (c), Landlord shall not unreasonably withhold its consent, provided
that the parties agree that it shall be reasonable for Landlord to withhold its
consent if: (1) the use of the Premises will not be consistent with the
provisions of this Lease or with Landlord's commitment to other tenants of the
Building and Project; (2) the proposed assignee or subtenant has been required
by any prior landlord, lender or governmental authority to take 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 or is subject to any enforcement order issued by any governmental
authority in connection with the use, disposal or storage of a Hazardous
Material; (3) insurance requirements of the proposed assignee or subtenant may
not be brought into conformity with Landlord's then current leasing practice;
(4) a proposed subtenant or assignee has not demonstrated to the reasonable
satisfaction of Landlord that it is financially responsible or has failed to
submit to Landlord all reasonable information as requested by Landlord
concerning the proposed subtenant or assignee, including, but not limited to, a
certified balance sheet of the proposed subtenant or assignee as of a date
within ninety (90) days of the request for Landlord's consent, statements of
income or profit and loss of the proposed subtenant or assignee for the two-year
period preceding the request for Landlord's consent, and/or a certification
signed by the proposed subtenant or assignee that it has not been evicted or
been in arrears in rent at any other leased premises for the 3-year period
preceding the request for Landlord's consent; (5) any proposed subtenant or
assignee has not demonstrated to Landlord's reasonable satisfaction a record of
successful experience in business; (6) the proposed assignee or subtenant is an
existing tenant of the Building or Project or a prospect with whom Landlord is
negotiating to become a tenant at the Building or Project; or (7) the proposed
transfer will 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
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be assigned or transferred to any assignee of this Lease or subtenant of the
Premises without Landlord's prior written consent, which may be withheld in
Landlord's sole and absolute discretion.
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 9.1. 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 Section 9.1(b) above, in lieu of
consenting to a proposed assignment or subletting, Landlord may elect, within
the thirty (30) day period permitted for Landlord to approve or disapprove a
requested transfer, to (i) sublease the Premises (or the portion proposed to be
subleased), or take an assignment of Tenant's interest in this Lease, upon
substantially 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 or assigned
with a proportionate abatement in the rent payable under this Lease, effective
thirty (30) days' following written notice by Landlord of its election to so
sublease or terminate. Landlord may thereafter, at its option, assign, sublet or
re-let any space so sublet, obtained by assignment or obtained by termination to
any third party, including without limitation the proposed transferee of Tenant.
(d) In the event that Landlord approves the requested assignment or
subletting, 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 as
determined by Landlord, 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 within ten (10) days of Tenant's receipt thereof.
Landlord shall have the right to review or audit the books and records of
Tenant, or have such books and records reviewed or audited by an outside
accountant, to confirm any such direct out-of-pocket costs. In the event that
such direct out-of-pocket costs claimed by Tenant are overstated by more than
five percent (5%), Tenant shall reimburse Landlord for any of Landlord's costs
related to such review or audit. 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 Section 9.1(d).
(e) Tenant shall pay to Landlord a fee equal to the greater of (i)
Landlord's actual costs related to such assignment, subletting or other transfer
or (ii) Five Hundred Dollars ($500.00), to process any request by Tenant for an
assignment, subletting or other transfer under this Lease. Tenant shall pay
Landlord the sum of Five Hundred Dollars ($500.00) concurrently with Tenant's
request for consent to any assignment, subletting or other transfer, and
Landlord shall have no obligation to consider such request unless accompanied by
such payment. Tenant shall pay Landlord upon demand any costs in excess of such
payment to the extent Landlord's actual costs related to such request exceeds
$500.00. Such fee is hereby acknowledged as a reasonable amount to reimburse
Landlord for its costs of review and evaluation of a proposed transfer.
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 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 assignment or
subletting shall be effective or binding on Landlord unless documentation in
form and substance satisfactory to Landlord in its reasonable discretion
evidencing the transfer, and in the case of an assignment, the assignee's
assumption of the obligations of Tenant under this Lease, 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 or
as a consent to any subsequent transfer.
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:
(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 there is an Event of
Default by Tenant, 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 Event of Default exists in the
performance of Tenant's
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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 for any reason,
including without limitation as the result of an Event of Default by Tenant or
by the mutual agreement of Landlord and Tenant, 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. In the event Landlord does
not elect to take over Tenant's interest in a sublease in the event of any such
termination of this Lease, such sublease shall terminate concurrently with the
termination of this Lease and such subtenant shall have no further rights under
such sublease and Landlord shall have no obligations to such subtenant.
SECTION 9.4. CERTAIN TRANSFERS. The following shall be deemed to
constitute an assignment of this Lease; (a) the sale of all or substantially all
of Tenant's assets (other than bulk sales in the ordinary course of business),
(b) if Tenant is a corporation, an unincorporated association, a limited
liability company or a partnership, the transfer, assignment or hypothecation of
any stock or interest in such corporation, association, limited liability
company or partnership in the aggregate of twenty-five percent (25%) (except for
publicly traded shares of stock constituting a transfer of twenty-five percent
(25%) or more in the aggregate, so long as no change in the controlling interest
of Tenant occurs as a result thereof), or (c) any other direct or indirect
change of control of Tenant, including, without limitation, change of control of
Tenant's parent company or a merger by Tenant or its parent company.
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 or a reorganization of Tenant, so long as (i) the net worth of the
successor or reorganized entity after such merger 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
reorganization, evidence of which, satisfactory to Landlord, shall be presented
to Landlord prior to such merger or reorganization, (ii) Tenant shall provide to
Landlord, prior to such merger or reorganization, written notice of such merger
or reorganization and such assignment documentation and other information as
Landlord may require in connection therewith, and (iii) all of the other terms
and requirements Section 9.2 and 9.3 shall apply with respect to such
assignment.
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 may, at its election, provide
any or all of the following types of insurance, with or without deductible and
in amounts and coverages as may be determined by Landlord in its sole and
absolute discretion: property insurance, subject to standard exclusions,
covering the Building and/or Project, and such other risks as Landlord or its
mortgagees may from time to time deem appropriate, including coverage for the
Tenant Improvements constructed by Landlord pursuant to the Work Letter (if any)
attached hereto, and commercial general liability coverage. Landlord shall not
be required to carry insurance of any kind on Tenant's Alterations or on
Tenant's other property, including, without limitation, Tenant's trade fixtures,
furnishings, equipment, signs and all other items of personal property, and
Landlord shall not be obligated to repair or replace that property should damage
occur. All proceeds of insurance maintained by Landlord upon the Building and/or
Project 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 elects to provide insurance
hereunder.
SECTION 10.3. TENANT'S INDEMNITY. 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, the Building or the Common Areas, including,
without limitation, the use by Tenant, its agents, employees, invitees or
licensees of any recreational facilities within the Common Areas, 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, the Building or the Common Areas, or from any Event of 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.
Tenant's obligations under this Section shall not apply in the event that the
claim, liability, cost or expense is caused solely by the active negligence or
willful misconduct of Landlord.
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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 and knowingly assumes the risk of for loss of or damage to any
property, 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, acts or
omissions of third parties and/or of other tenants within the Project or their
agents, employees, contractors, guests or invitees, fire, explosion, falling
plaster, steam, gas, electricity, water or rain which may leak or flow from or
into any part of the Premises or from the breakage, leakage, obstruction or
other defects of the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, electrical works, roof, windows or other fixtures in the Building,
whether the damage or injury results from conditions arising in the Premises or
in other portions of the Building. It is understood that any such condition may
require the temporary evacuation or closure of all or a portion of the Building.
Landlord shall have no liability (including without limitation consequential
damages and lost profit or opportunity costs) and, except as provided in
Sections 11.1 and 12.1 below, there shall be no abatement of rent, by reason of
any injury to or interference with Tenant's business 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.
Should Tenant elect to receive any service or products from a concessionaire,
licensee or third party tenant of Landlord, Landlord shall have no liability for
any services or products so provided or for any breach of contract by such third
party provider. 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, the Building or the
Project 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 that the waiving party is entitled to proceeds for such loss or
damage under any property insurance policies carried or required to be carried
by the provisions of this Lease; provided however, that the foregoing waiver
shall not apply to the extent of Tenant's obligations to pay deductibles under
any such policies and this Lease. 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 property insurance policies contemplated by this
Lease, even though such loss or damage might be occasioned by the negligence of
such party, its agents, employees, contractors, guests or invitees.
ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1. RESTORATION.
(a) If the Premises or the Building or a part thereof are materially
damaged by any fire, flood, earthquake or other casualty, Landlord shall have
the right to terminate this Lease upon written notice to Tenant if: (i) Landlord
reasonably determines that proceeds necessary to pay the full cost of repair is
not available from Landlord's insurance, including without limitation earthquake
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 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 uncured Event of Default by Tenant has occurred; or (iv) the
material damage occurs during the final twelve (12) months of the Term. Landlord
shall notify Tenant in writing ("LANDLORD'S NOTICE") within sixty (60) days
after the damage occurs as to (A) whether Landlord is terminating this Lease as
a result of such material damage and (B) if Landlord is not terminating this
Lease, the number of days within which Landlord has estimated that the Premises,
with reasonable diligence, are likely to be fully repaired. In the event
Landlord elects to terminate this Lease, this Lease shall terminate as of the
date specified for termination by Landlord's Notice (which termination date
shall in no event be later than sixty (60) days following the date of the
damage, or, if no such date is specified, such termination shall be the date of
Landlord's Notice).
(b) If Landlord has the right to terminate this Lease pursuant to Section
11.1(a) and does not elect to so terminate this Lease, and provided that at the
time of Landlord's Notice neither an Event of Default exists nor has Landlord
delivered Tenant a notice of any failure by Tenant to fulfill an obligation
under this Lease which, unless cured by Tenant within the applicable grace
period, would constitute an Event of Default, then within ten (10) days
following delivery of Landlord's Notice pursuant to Section 11.1(a), Tenant may
elect to terminate this Lease by written notice to Landlord, but only if (i)
Landlord's Notice specifies that Landlord has determined that the Premises
cannot be repaired, with reasonable diligence, within two hundred seventy (270)
days after the date of damage or (ii) the casualty has occurred within the final
twelve (12) months of the Term and such material damage has a materially adverse
impact on Tenant's continued use of the Premises. If Tenant fails to provide
such termination notice within such ten (10) day period, Tenant shall be deemed
to have waived any termination right under this Section 1l.1(b) or any other
applicable law.
(c) In the event that neither Landlord nor Tenant terminates this Lease
pursuant to this Section 11.1 as a result of material damage to the Building or
Premises resulting from a casualty, Landlord shall repair all material damage to
the Premises or the Building as soon as reasonably possible and this Lease shall
continue in effect for the remainder of the Term. Subject to any provision to
the contrary in the Work Letter, such repair by Landlord shall include repair of
material damage to the Tenant Improvements constructed pursuant to the Work
Letter, so long as insurance proceeds from insurance required to be carried by
Tenant are made available to Landlord. Landlord shall
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have the right, but not the obligation, to repair or replace any other leasehold
improvements made by Tenant or any Alterations (as defined in Section 7.3)
constructed by Tenant. If Landlord elects to repair or replace such leasehold
improvements and/or Alterations, all insurance proceeds available for such
repair or replacement shall be made available to Landlord. Landlord shall have
no liability to Tenant in the event that the Premises or the Building has not
been fully repaired within the time period specified by Landlord in Landlord's
Notice to Tenant as described in Section 11.1(a). Notwithstanding the foregoing,
the repair of damage to the Premises to the extent such damage is not material
shall be governed by Sections 7.1 and 7.2.
(d) Commencing on the date of such material 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 Premises that is rendered unusable by
the damage from time to time bears to the total Floor Area of the Premises, as
determined by Landlord, but only to the extent that Landlord is entitled to
reimbursement from the proceeds of the business interruption insurance required
of Tenant pursuant to Exhibit D.
(e) Landlord shall not be required to repair or replace any improvements
or fixtures that Tenant is obligated to repair or replace pursuant to Section
7.1 or any other provision of this Lease and Tenant shall continue to be
obligated to so repair or replace any such improvements or fixtures,
notwithstanding any provisions to the contrary in this Article XI. In addition,
but subject to the provisions of Section 10.5, in the event the damage or
destruction to the Premises or Building are due in substantial part to the fault
or neglect of Tenant or its employees, subtenants, invitees or representatives,
the costs of such repairs or replacement to the Premises or Building shall be
borne by Tenant, and in addition, Tenant shall not be entitled to terminate this
Lease as a result, notwithstanding the provisions of Section 11.1(b).
(f) 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.
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 Building or Project,
whether or not including a portion of the Premises, is taken or sold in lieu of
taking, and if Landlord elects to restore the Building 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 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 ninety (90)
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 ninety (90) 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.
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ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
SECTION 13.1. SUBORDINATION. At the option of Landlord or any lender of
Landlord's that obtains a security interest in the Building, 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 Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof;
provided, that so long as no Event of Default exists under this Lease, Tenant's
possession and quiet enjoyment of the Premises shall not be disturbed and this
Lease shall not terminate 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 this Lease has been subordinated pursuant to this Section. Tenant shall
execute and deliver any documents or agreements requested by Landlord or such
lessor or lender which provide Tenant with the non-disturbance protections set
forth in 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, upon written request of Landlord, execute and
deliver all instruments as may be 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 agrees that
any purchaser at a foreclosure sale or lender taking title under a deed-in-lieu
of foreclosure shall not be responsible for any act or omission of a prior
landlord, shall not be subject to any offsets or defenses Tenant may have
against a prior landlord, and shall not be liable for the return of the security
deposit to the extent it is not actually received by such purchaser or bound by
any rent paid for more than the current month in which the foreclosure occurred.
SECTION 13.2. ESTOPPEL CERTIFICATE.
(a) Tenant shall, at any time upon not less than ten (10) days prior
written notice from Landlord, execute, acknowledge and deliver to Landlord, in
any form that Landlord 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 Tenant's knowledge, there are no uncured defaults on the
part of Landlord, or specifying each default if any are claimed, and (iii)
setting forth all further information that Landlord or any purchaser or
encumbrancer may reasonably require. Tenant's statement may be relied upon by
any prospective purchaser or encumbrancer of all or any portion of the Building
or Project.
(b) Notwithstanding any other rights and remedies of Landlord, Tenant's
failure to deliver any estoppel statement within the provided time shall be
conclusive upon Tenant that (i) this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) there are no uncured
Events of Default in Landlord'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, 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, or, in the event Tenant is a publicly
traded corporation on a nationally recognized stock exchange, Tenant's current
financial reports filed with the Securities and Exchange Commission
(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 of the Building or Project, and to
any encumbrancer of all or any portion of the Building or Project.
(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. EVENTS OF DEFAULT AND REMEDIES
SECTION 14.1. TENANT'S DEFAULTS. In addition to any other breaches of this
Lease which are defined as Events of Default in this Lease, the occurrence of
any one or more of the following events shall constitute an Event of Default by
Tenant:
(a) The failure by Tenant to make any payment of Basic Rent or additional
rent required to be made by Tenant, as and when due, where the failure continues
for a period of three (3) 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 Events of 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) The assignment, sublease, encumbrance or other transfer of this 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 when consent is required by this Lease.
(c) The discovery by Landlord that any financial statement provided by
Tenant, or by any affiliate, successor or guarantor of Tenant, was 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 abandonment of the Premises by Tenant.
(f) 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 this Section 14.1, 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 have committed an Event of Default if Tenant
commences the cure within thirty (30) days, and thereafter diligently pursues
the cure to completion.
(g) (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; (v) Tenant's convening of a meeting of its
creditors for the purpose of effecting a moratorium upon or composition of its
debts or (vi) the failure of Tenant to pay its material obligations to creditors
as and when they become due and payable, other than as a result of a good faith
dispute by Tenant as to the amount due to such creditors. Landlord shall not be
deemed to have knowledge of any event described in this Section 14.1(g) 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 Section 14.1(g) is contrary to applicable law, the
provision shall be of no force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) If an Event of Default by Tenant occurs, 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 Basic 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 Basic 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;
(3) The worth at the time of award of the amount by which the
unpaid Basic 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 Event of 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 the
Lease shall be deemed to mean the Basic Rent, Tenant's Share of Operating
Expenses and any other sums required to be paid by Tenant to Landlord pursuant
to the terms of this Lease, including, without limitation, any sums that may be
owing from Tenant pursuant to Section 4.3 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 the Event
of Default, except that if
19
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 Sections 14.2(a)(i) (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 Section
14.2(a)(i)(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 Section 14.2(a)(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) Landlord shall be under no obligation to observe or perform any
covenant of this Lease on its part to be observed or performed which accrues
after the date of any Event of Default by Tenant unless and until the Event of
Default is cured by Tenant, it being understood and agreed that the performance
by Landlord of its obligations under this Lease are expressly conditioned upon
Tenant's full and timely performance of its obligations under this Lease. 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 breach or Event of
Default by Tenant. The acceptance by Landlord of rent shall not be a (i) waiver
of any preceding breach or Event of 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 Event of 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 Event of
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 breach or Event of 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 this Lease or a
surrender of the Premises.
(d) Any agreement for free or abated rent or other charges, or for the
giving or paying by Landlord to or for Tenant of any cash or other bonus,
inducement or consideration for Tenant's entering into this Lease ("INDUCEMENT
PROVISIONS") shall be deemed conditioned upon Tenant's full and faithful
performance of the terms, covenants and conditions of this Lease. Upon an Event
of Default under this Lease by Tenant, any such Inducement Provisions shall
automatically be deemed deleted from this Lease and of no further force or
effect and the amount of any rent reduction or abatement or other bonus or
consideration already given by Landlord or received by Tenant as an Inducement
shall be immediately due and payable by Tenant to Landlord, notwithstanding any
subsequent cure of said Event of Default by Tenant. The acceptance by Landlord
of rent or the cure of the Event of Default which initiated the operation of
this Section 14.1 shall not be deemed a waiver by Landlord of the provisions of
this Section 14.2(d).
SECTION 14.3. LATE PAYMENTS.
(a) Any payment due to Landlord under this Lease, including without
limitation Basic Rent, Tenant's Share of Operating Expenses or any other payment
due to Landlord under this Lease, that is not received by Landlord within five
(5) days following the date 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 breach or Event of Default by Tenant under this Lease. In
addition, Tenant acknowledges that the late payment by Tenant to Landlord of
Basic Rent and Tenant's Share of Operating Expenses 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 Basic Rent or
Tenant's Share of Operating Expenses due from Tenant shall not be received by
Landlord or Landlord's designee within five (5) days following the date due,
then Tenant shall pay to Landlord, in addition to the interest provided above, a
late charge, which the Tenant agrees is reasonable, 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. Acceptance of a late charge by Landlord
shall not constitute a waiver of Tenant's breach or Event of 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 installment of Basic Rent and/or the payment of
Tenant's Share of Operating Expenses within any twelve (12) month period that is
not paid within five (5) days following the date due, Landlord shall have the
option (i) to require that beginning with the first payment of Basic Rent next
due, Basic Rent
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and the Tenant's Share of Operating Expenses 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. If any check for any payment to Landlord hereunder is returned
by the bank for any reason, such payment shall not be deemed to have been
received by Landlord and Tenant shall be responsible for any applicable late
charge, interest payment and the charge to Landlord by its bank for such
returned check. Nothing in this Section shall be construed to compel Landlord to
accept Basic Rent, Tenant's Share of Operating Expenses or any other payment
from Tenant if there exists an Event of Default unless such payment fully cures
any and all such Event of Default. Any acceptance of any such payment shall not
be deemed to waive any other right of Landlord under this Lease. Any payment by
Tenant to Landlord may be applied by Landlord, in its sole and absolute
discretion, in any order determined by Landlord to any amounts then due to
Landlord.
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 payable to Landlord, 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 and Tenant
hereby grants Landlord the right to enter onto the Premises in order to carry
out such performance. 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 nor shall Landlord be responsible to Tenant for any damage caused to Tenant
as the result of such performance by Landlord. 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.
SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease, and Tenant shall
have no rights to take any action against Landlord, unless and until Landlord
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. In the event of Landlord's default under this Lease,
Tenant's sole remedies shall be to seek damages or specific performance from
Landlord, provided that any damages shall be limited to Tenant's actual
out-of-pocket expenses and shall in no event include any consequential damages,
lost profits or opportunity costs.
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, or any action related to a filing for bankruptcy or
reorganization by Tenant, 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 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 Section shall be determined by the trier of the facts.
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. FURTHERMORE, THIS WAIVER AND RELEASE OF ALL RIGHTS TO
A JURY TRIAL IS DEEMED TO BE INDEPENDENT OF EACH AND EVERY OTHER PROVISION,
COVENANT, AND/OR CONDITION SET FORTH IN THIS LEASE.
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.
Should Tenant recover a money judgment against Landlord, such judgment shall be
satisfied only from the interest of Landlord in the Project and 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 Landlord's right, title or interest in the Project and no action for
any deficiency may be sought or obtained by Tenant.
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, including without limitation any arising under a tort or contract
cause of action, shall be barred unless Tenant commences an action thereon
within six (6) months after the date that Tenant has actual knowledge, or should
have reasonably discovered, that the act, omission, event or default upon which
the claim, demand or right arises, has occurred.
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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. Any period of time following the Expiration Date or earlier termination
of this Lease required for Tenant to remove its property or to place the
Premises in the condition required pursuant to Section 15.3 (or for Landlord to
do so if Tenant fails to do so) shall be deemed a holding over by Tenant. If
Tenant holds over for any period after the Expiration Date (or earlier
termination) of the Term without the prior written consent of Landlord, such
possession shall constitute a tenancy at sufferance only and an Event of Default
under this Lease; 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 and terminating thirty (30) days
following delivery of written notice of termination by either Landlord or Tenant
to the other. 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 two hundred
percent (200%) of the greater of (a) 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 Project. The acceptance by Landlord of monthly
holdover rental in a lesser amount shall not constitute a waiver of Landlord's
right to recover the full amount due for any holdover by Tenant, unless
otherwise agreed in writing by Landlord. 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. 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. Subject to the
provisions of 7.3 of this Lease, 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 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 deemed to be rent under
this Lease and 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
Basic Rent and the Tenant's Share of Operating Costs pursuant to Sections 4.1
and 4.2, 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). 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 seventy-two (72) hours 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, Building, Project and Common Areas.
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, guests 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
22
rule or any other. Tenant's failure to keep and observe the Rules and
Regulations shall constitute a breach of 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. Tenant warrants that it has had no dealings with any other real estate
broker or agent in connection with the negotiation of this Lease, and Tenant
agrees to indemnify and hold Landlord 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 Tenant 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 further obligations on the
part of Landlord, and the transferor shall be relieved of any obligation to pay
any funds in which Tenant has an interest to the extent that such funds have
been turned over, subject to that interest, to the transferee and Tenant is
notified of the transfer as required by law. No beneficiary of a 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 beneficiary under 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/VENUE. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California. Any
litigation commenced concerning any matters whatsoever arising out of or in any
way connected to this Lease shall be initiated in the Superior Court of the
county in which the Project is located.
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.
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
23
any cause beyond the reasonable control of that party, other than financial
inability, 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, the Building, and the Project, 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 have
the right of quiet enjoyment and use of 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.
SECTION 20.13. INTERPRETATION. This Lease shall not be construed in favor
of or against either party, but shall be construed as if both parties prepared
this Lease.
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, LIMITED LIABILITY COMPANY AND PARTNERSHIP
AUTHORITY. If Tenant is a corporation, limited liability company or partnership,
each individual executing this Lease on behalf of the corporation, limited
liability company or partnership represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of the corporation,
limited liability company or partnership, and that this Lease is binding upon
the corporation, limited liability company or partnership in accordance with its
terms. Tenant shall, at Landlord's request, deliver a certified copy of its
board of directors' resolution, operating agreement 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.
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, by public filings or otherwise, the terms and conditions
of this Lease ("Confidential Information") to any third party, either directly
or indirectly, without the prior written consent of Landlord, which consent may
be given or withheld in Landlord's sole and absolute discretion. The foregoing
24
restriction shall not apply if either: (i) Tenant is required to disclose the
Confidential Information in response to a subpoena or other regulatory,
administrative or court order, or (ii) Tenant is required by law to disclose the
Confidential Information to, or file a copy of this Lease with, any governmental
agency or any stock exchange; provided however, that in such event, Tenant
shall, before making any such disclosure (A) provide Landlord with prompt
written notice of such required disclosure, and (B) if disclosure of the
Confidential Information is required by subpoena or other regulatory,
administrative or court order, Tenant shall provide Landlord with as much
advance notice of the possibility of such disclosure as practical so that
Landlord may attempt to stop such disclosure or obtain an order concerning such
disclosure. The form and content of a request by Tenant for confidential
treatment of the Confidential Information shall be provided to Landlord at least
five (5) business days before its submission to the applicable governmental
agency or stock exchange and is subject to the prior written approval of
Landlord. In addition, Tenant may disclose the terms of this Lease to
prospective assignees of this Lease and prospective subtenants under this Lease
with whom Tenant is actively negotiating such an assignment or sublease.
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 ("GUARANTOR"), if any, on a form of guaranty provided
by Landlord ("GUARANTY"). Any default by a Guarantor under the Guaranty shall be
deemed to be an Event of Default under the terms of this Lease. In addition, any
filing by or against a Guarantor of a petition to have such Guarantor 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 such Guarantor, the same is
dismissed within thirty (30) days), a Guarantor's convening of a meeting of its
creditors for the purpose of effecting a moratorium upon or composition of its
debts or the failure of a Guarantor to pay its material obligations to creditors
as and when they become due and payable, other than as a result of a good faith
dispute by such Guarantor, shall be deemed to be an Event of Default by Tenant.
SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with
obtaining financing for the Project, 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 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 Building 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
Building 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 Building 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 a 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.
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 or the Project. Tenant assumes all
responsibility for the protection of Tenant, its employees, agents, invitees and
property from acts of third parties. Nothing herein contained shall prevent
Landlord, at its sole option, from providing security protection for the Project
or any part thereof, in which event the cost thereof shall be included within
the definition of Project Costs.
LANDLORD: TENANT:
THE IRVINE COMPANY INTERCHANGE CORPORATION
a Delaware corporation
By: /s/ Xxxxxx X. Case By: /s/ Xxxxx X. Xxxxxx
------------------------------------- -------------------------------
Xxxxxx X. Case, Senior Vice President Name (Print): Xxxxx X. Xxxxxx
Office Properties Title (Print): Chief Executive
Officer
By: /s/ Xxxxxxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------- -------------------------------
Xxxxxxxxxxx X. Xxxxx, Vice President Name: Xxxxxxx X. Xxxxxx
Operations, Office Properties Title: Chief Financial Officer
& Secretary
25
EXHIBIT B
THE IRVINE COMPANY - INVESTMENT PROPERTIES GROUP
HAZARDOUS MATERIAL SURVEY FORM
The purpose of this form is to obtain information regarding the use of
hazardous substances on Investment Properties Group ("IPG") property.
Prospective tenants and contractors should answer the questions in light of
their proposed activities on the premises. Existing tenants and contractors
should answer the questions as they relate to ongoing activities 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:
THE IRVINE COMPANY MANAGEMENT OFFICE
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Your cooperation in this matter is appreciated. If you have any questions,
please call your property manager at (000) 000-0000 for assistance.
1. GENERAL INFORMATION.
Name of Responding Company: _____________________________________________
Check all that apply: Tenant ( ) Contractor ( )
Prospective ( ) Existing ( )
Mailing Address: _________________________________________________________
Contact person & Title: __________________________________________________
Telephone Number: ( ) _____________
Current TIC Tenant(s):
Address of Lease Premises: _______________________________________________
Length of Lease or Contract Term: ________________________________________
Prospective TIC Tenant(s):
Address of Leased Premises: ______________________________________________
Address of Current Operations: ___________________________________________
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. HAZARDOUS MATERIALS. For the purposes of this Survey Form, the term
"hazardous material" means any raw material, product or agent considered
hazardous under any state or federal law. The term does not include wastes
which are intended to be discarded.
2.1 Will any hazardous materials be used or stored on site?
Chemical Products Yes ( ) No ( )
Biological Hazards/
Infectious Wastes Yes ( ) No ( )
Radioactive Materials Yes ( ) No ( )
Petroleum Products Yes ( ) No ( )
1
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
Hazardous Materials of Storage Quantity
------------------- -------------------- ------------------
------------------- -------------------- ------------------
------------------- -------------------- ------------------
------------------- -------------------- ------------------
2.3 Is any underground storage of hazardous materials 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.
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3. HAZARDOUS WASTE. For the purposes of this Survey Form, the term "hazardous
waste" means any waste (including biological, infectious or radioactive
waste) considered hazardous under any state or federal law, and which is
intended to be discarded.
3.1 List any hazardous waste generated or to be generated on the
premises, and indicate the quantity generated on a monthly basis.
Location and Method
Hazardous Materials of Storage Quantity
------------------- -------------------- ------------------
------------------- -------------------- ------------------
------------------- -------------------- ------------------
------------------- -------------------- ------------------
3.2 Describe the method(s) of disposal (including recycling) for each
waste. Indicate where and how often disposal will take place.
Location and Method
Hazardous Materials of Storage Quantity
------------------- -------------------- ------------------
------------------- -------------------- ------------------
------------------- -------------------- ------------------
------------------- -------------------- ------------------
3.3 Is any treatment or processing of hazardous, infectious or
radioactive wastes currently conducted or proposed to be conducted
on the premise? Yes ( ) No ( )
If yes, please describe any existing or proposed treatment methods.
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3.4 Attach copies of any hazardous waste permits or licenses issued to
your company with respect to its operations on the premises.
2
4. SPILLS
4.1 During the past year, have any spills or releases of hazardous
materials 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.
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4.2 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.
4.3 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.
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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.
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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?
Yes ( ) No ( )
7.2 Has your company prepared a Hazardous Materials Disclosure -
Chemical Inventory and Business Emergency Plan or similar disclosure
document pursuant to state or county requirements? Yes ( ) No ( )
If so, attach a copy.
3
7.3 Are any of the chemicals used in your operations regulated under
Proposition 65?
If so, describe the procedures followed to comply with these
requirements.
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7.4 Is your company subject to OSHA Hazard Communication Standard
Requirements? Yes ( ) No ( )
If so, describe the procedures followed to comply with these
requirements.
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8. ANIMAL TESTING.
8.1 Does your company bring or intend to bring live animals onto the
premises for research or development purposes? Yes ( ) No ( )
If so, describe the activity.
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8.2 Does your company bring or intend to bring animal body parts or
bodily fluids onto the premises for research or development
purposes? Yes ( ) No ( )
If so, describe the activity.
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9. ENFORCEMENT ACTIONS, COMPLAINTS.
9.1 Has your company ever been subject to any agency enforcement
actions, administrative orders, lawsuits, or consent orders/decrees
regarding environmental compliance or health and safety?
Yes ( ) No ( )
If so, describe the actions and any continuing obligations imposed
as a result of these actions.
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9.2 Has your company ever received any request for information, notice
of violation or demand letter, complaint, or inquiry regarding
environmental compliance or health and safety? Yes ( ) No ( )
9.3 Has an environmental audit ever been conducted which concerned
operations or activities on premises occupied by you? Yes ( ) No ( )
4
9.4 If you answered "yes" to any questions in this section, describe the
environmental action or complaint and any continuing compliance
obligation imposed as a result of the same.
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By: ________________________________
Name: _________________________
Title: ________________________
Date: __________________________
5
EXHIBIT C
LANDLORD'S DISCLOSURES
SPECTRUM
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.
EXHIBIT D
TENANT'S INSURANCE
The following requirements for Tenant's insurance shall be in effect at
the Building, and Tenant shall also cause any subtenant to comply with these
requirements. Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions to these insurance requirements. 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
coverage for personal injury, independent contractors, broad form property
damage, fire and water legal liability, products liability (if a product is sold
from the Premises), and liquor law liability (if alcoholic beverages are sold,
served or consumed within the Premises), 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 of at least One
Million Dollars ($1,000,000.00); (iii) with respect to Alterations and the like
required or permitted to be made by Tenant under this Lease, builder's 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 "special form" policy, insuring Tenant's
Alterations, 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 Fifty Thousand Dollars
($50,000.00) 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 general policyholder rating of
not less than "A-" and financial rating of not less than "VIII" in the most
current Best's Insurance Report. Any insurance required of Tenant may be
furnished by Tenant under any blanket policy carried by it or under a separate
policy. 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, together with endorsements
acceptable to Landlord evidencing the waiver of subrogation and additional
insured provisions required below, 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 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) with respect to Tenant's commercial general
liability insurance, 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, together with 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
additional insureds; (ii) except with respect to Tenant's commercial general
liability insurance, 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
(iii) 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
1
and any related costs or expenses incurred by Landlord, within ten (10) days
following Landlord's written demand to Tenant.
NOTICE TO TENANT: IN ACCORDANCE WITH THE TERMS OF THIS LEASE, TENANT MUST
PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD'S MANAGEMENT AGENT PRIOR
TO BEING AFFORDED ACCESS TO THE PREMISES.
2
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, elevators,
stairwells, 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 smoking, loitering or gathering, or to
display, store or place any merchandise, equipment or devices, or for any other
purpose. The walkways, sidewalks, 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. Smoking is
permitted outside the building and within the project only in areas designated
by Landlord. No tenant or employee or invitee or agent of any tenant shall be
permitted upon the roof of the Building without prior written approval from
Landlord.
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. 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 part of the Premises or the Building except to affix standard pictures or
other wall hangings on the interior walls of the premises so long as they are
not visible from the exterior of 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. Any pipes or tubing used by Tenant to transmit water to an appliance or
device in the Premises must be made of copper or stainless steel, and in no
event shall plastic tubing be used for that purpose. 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. 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.
8. 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, except for seeing eye dogs, 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. Landlord shall have full and absolute authority to regulate or
prohibit the entrance to the Premises of any vendor, supplier, purveyor,
petitioner, proselytizer or other similar person if, in the good faith judgment
of Landlord, such person will be involved in general solicitation activities, or
the proselytizing,
1
petitioning, or disturbance of other tenants or their customers or invitees, or
engaged or likely to engage in conduct which may in Landlord's opinion distract
from the use of the Premises for its intended purpose. Notwithstanding the
foregoing, Landlord reserves the absolute right and discretion to limit or
prevent access to the Buildings by any food or beverage vendor, whether or not
invited by Tenant, and Landlord may condition such access upon the vendor's
execution of an entry permit agreement which may contain provisions for
insurance coverage and/or the payment of a fee to Landlord.
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. Regular building hours of operation are from 6:00 AM to 6:00 PM Monday
through Friday and 9:00 AM to 1:00 PM on Saturday. No air conditioning unit or
other similar apparatus shall be installed or used by any Tenant without the
prior written consent of Landlord.
14. The entire Premises, including vestibules, entrances, parking areas,
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
must be immediately disposed of by tenant and may not be disposed of in the
Landlord provided trash container or enclosures. Pallets may be neatly stacked
in an exterior location on a temporary basis (no longer than 5 days) so long as
Landlord has provided prior written approval. The burning of trash, refuse or
waste materials is prohibited.
15. Tenant shall use at Tenant's cost such pest extermination contractor
as Landlord may reasonably direct and at such intervals as Landlord may
reasonably require.
16. 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. Upon the termination of its tenancy, Tenant shall
deliver to Landlord all the keys to lobby(s), suite(s) and telephone &
electrical room(s) which have been furnished to Tenant or which Tenant shall
have had made.
17. 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.
18. The moving of large or heavy objects shall occur only between those
hours as may be designated by, and only upon previous written notice to,
Landlord, and the persons employed to move those objects in or out of the
Building must be reasonably acceptable to Landlord. Without limiting the
generality of the foregoing, no freight, furniture or bulky matter of any
description shall be received into or moved out of the lobby of the Building or
carried in the elevator.
19. Tenant shall not install equipment, such as but not limited to
electronic tabulating or computer equipment, requiring electrical or air
conditioning service in excess of that to be provided by Landlord under the
Lease without prior written consent of Landlord.
20. Landlord may from time to time grant other tenants of the project
individual and temporary variances from these Rules, provided that any variance
does not have a material adverse effect on the use and enjoyment of the Premises
by Tenant.
21. Landlord reserves the right to amend or supplement the foregoing Rules
and Regulations and to adopt and promulgate additional commercially reasonable
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.
2
EXHIBIT X
WORK LETTER
BUILD TO SUIT
(Landlord's Contribution)
The tenant improvement work (the "TENANT IMPROVEMENT " and the "TENANT
IMPROVEMENTS WORK") shall consist of the work, including work in place as of the
date hereof, required to complete the improvements to the Premises as shown in
the space plan (the "PLAN") prepared by LPA, Inc., dated February 4, 2005, and
the cost estimate (the "COST ESTIMATE") prepared by DBAC, Inc., dated February
10, 2005. The Tenant Improvement Work shall be performed by a contractor
selected by Landlord and in accordance with the requirements and procedures set
forth below.
I. ARCHITECTURAL AND CONSTRUCTION PROCEDURES.
A. Landlord shall pay up to the amount of the "Landlord's Contribution"
towards the "Completion Cost" (as defined below) of the Tenant Improvements
Work. Additional costs resulting from Changes (as hereinafter defined) requested
by Tenant shall be borne solely by Tenant and paid to Landlord as hereinafter
provided. Unless otherwise specified in the Plan or Cost Estimate, all
materials, specifications and finishes utilized in constructing the Tenant
Improvements shall be Landlord's building standard tenant improvements,
materials and specifications for the Project ("STANDARD IMPROVEMENTS"). Should
Landlord submit any additional plans, equipment specification sheets, or other
matters to Tenant for approval or completion in connection with the Tenant
Improvement Work, Tenant shall respond in writing, as appropriate, within five
(5) days unless a shorter period is provided herein. Tenant shall not
unreasonably withhold its approval of any matter, and any disapproval shall be
limited to items not previously approved by Tenant in the Plan or otherwise.
B. In the event that Tenant requests in writing a revision to the Plan
("CHANGE"), and Landlord so approves such Change as provided in Section I.C
below, Landlord shall advise Tenant by written change order as soon as is
practical of any increase in the cost to complete the Tenant Improvement Work
that such Change would cause. Tenant shall approve or disapprove such change
order in writing within two (2) days following Tenant's receipt of such change
order. If Tenant approves any such change order, Landlord, at its election, may
either (i) require as a condition to the effectiveness of such change order that
Tenant pay the increase in the cost to complete attributable to such change
order concurrently with delivery of Tenant's approval of the change order, or
(ii) defer Tenant's payment of such increase until the date ten (10) days after
delivery of invoices for same. If Tenant disapproves any such change order,
Tenant shall nonetheless be responsible for the reasonable architectural and/or
planning fees incurred in preparing such change order. Landlord shall have no
obligation to interrupt or modify the Tenant Improvement Work pending Tenant's
approval of a change order, but if Tenant fails to timely approve a change
order, Landlord may (but shall not be required to) suspend the applicable Tenant
Improvement Work.
C. Landlord may consent in writing, in its sole and absolute discretion,
to Tenant's request for a Change, including any modification of a Standard
Improvement in the Plan to a non-standard improvement ("NON-STANDARD
IMPROVEMENT"), if requested in writing by Tenant. In addition, Landlord agrees
that it shall not unreasonably withhold its consent to Tenant's requested
Changes to previously approved Non-Standard Improvements, unless Landlord
determines, in its sole and absolute discretion, that such requested Change to
the Non-Standard Improvements (i) is of a lesser quality than the Non-Standard
Improvements previously approved by Landlord, (ii) fails to conform to
applicable governmental requirements, (iii) would result in the Premises
requiring building services beyond the level normally provided to other tenants,
(iv) interferes in any manner with the proper functioning of, or Landlord's
access to, any mechanical, electrical, plumbing or HVAC systems, facilities or
equipment in or serving the Building, or (v) would have an adverse aesthetic
impact to the Premises or cause additional expenses to Landlord in reletting the
Premises. Unless Landlord otherwise agrees in writing, in its sole and absolute
discretion: (a) the cost to complete any Non-Standard Improvements shall be
borne by Tenant, and (b) all Standard Improvements and Non-Standard Improvements
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 given
either prior to or following the expiration or termination of the Lease, require
Tenant either to remove all or any of the Non-Standard Improvements, to repair
any damage to the Premises or the Common Area arising from such removal, and to
replace such Non-Standard Improvements with the applicable Standard Improvement,
or to reimburse Landlord for the reasonable cost of such removal, repair and
replacement upon demand. Any such removals, repairs and replacements by Tenant
shall be completed by the Expiration Date, or sooner termination of this Lease,
or within ten (10) days following notice to Tenant if such notice is given
following the Expiration Date or sooner termination.
1
D. Notwithstanding any provision in the Lease to the contrary, and not by
way of limitation of any other rights or remedies of Landlord, if 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 the time
period specified herein for such response (or if no time period is so specified,
within five (5) days following Tenant's receipt thereof), 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 (any of the foregoing
being referred to in this Lease as a "TENANT DELAY"), then 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
without limitation Tenant's obligation to pay rent, as of the date Landlord
reasonably determines that it would have been able to deliver the Premises to
Tenant but for the collective Tenant Delays. 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 five (5) days thereafter, of
Tenant's election to contest same by arbitration pursuant to the provisions of
Section II below. 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.
E. Landlord shall permit Tenant and its agents to enter the Premises prior
to the Commencement Date of the Lease in order that Tenant may install fixtures,
furniture and cabling through Tenant's own contractors prior to the Commencement
Date. Any such work shall be subject to Landlord's prior written approval, and
shall be performed in a manner and upon terms and conditions and at times
satisfactory to Landlord's representative. The foregoing license to enter the
Premises prior to the Commencement Date 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 as determined by Landlord
in Landlord's sole and absolute discretion. If at any time that entry shall
cause disharmony or interfere with the work being performed by Landlord as
defined by Landlord in Landlord's sole and absolute discretion, 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.
F. Tenant hereby designates Xxxxx Xxxxxxx (TENANT'S CONSTRUCTION
REPRESENTATIVE"), Telephone No. (000) 000-0000, as its representative, agent and
attorney-in-fact for all matters related to the Tenant Improvement Work,
including but not by way of limitation, for purposes 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. The foregoing authorization is intended to provide
assurance to Landlord that it may rely upon the directives and decision making
of the Tenant's Construction Representative with respect to the Tenant
Improvement Work and is not intended to limit or reduce Landlord's right to
reasonably rely upon any decisions or directives given by other officers or
representatives of Tenant. Tenant may amend the designation of its Tenant's
Construction Representative(s) at any time upon delivery of written notice to
Landlord.
II. COST OF THE TENANT IMPROVEMENTS WORK
A. Landlord shall provide an allowance towards the "Completion Cost" (as
defined below) of constructing the Tenant Improvement Work in the amount of Five
Hundred Forty Seven Thousand Three Hundred Seventy-One Dollars ($547,371.00)
(the "LANDLORD'S CONTRIBUTION"), based on $23.44 per useable square foot of the
Premises, with any excess cost of the Tenant Improvements Work in accordance
with the approved Working Drawings and Specifications to be borne solely by
Tenant. If the actual cost of completion of the Tenant Improvements is less than
the maximum amount provided for the Landlord's Contribution, such savings shall
inure to the benefit of Landlord and Tenant shall not be entitled to any credit
or payment.
B. Tenant shall pay all Completion Costs attributable to any Changes
requested by the Tenant, any costs attributable to Tenant Delays and the amount,
if any, by which aggregate Completion Cost of the Tenant Improvements Work
exceeds the Landlord's Contribution. The amounts to be paid by Tenant for the
Tenant Improvements pursuant to this Section II.C. are sometimes cumulatively
referred to herein as the "TENANT'S CONTRIBUTION".
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C. The "COMPLETION COST" shall mean all costs of Landlord in completing
the Tenant Improvements Work, 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 Work, (ii) permit fees and
other sums paid to governmental agencies, and (iii) costs of all materials
incorporated into the Work or used in connection with the Work. The Completion
Cost shall also include an administrative/supervision fee to be paid to Landlord
or to Landlord's management agent in the amount of five percent (5%) of the
Completion Cost. Unless expressly authorized in writing by Landlord, the
Completion Cost shall not include (and no portion of the Landlord Contribution
shall be paid for) any costs incurred by Tenant, including without limitation,
any costs for space planners, managers, advisors or consultants retained by
Tenant in connection with the Tenant Improvements.
D. 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 Cost Estimate. Following completion of the Tenant Improvements Work,
Tenant shall pay (or be refunded) any difference between the estimated and the
actual amount of the Tenant's Contribution towards the Completion Cost, which
difference shall be calculated by first applying Landlord's Contribution, in
full, to the actual amount of the final Completion Cost. The balance of all sums
due and owing and 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, including, without limitation, the right to terminate this
Lease and recover damages from Tenant and/or to charge a late payment fee and to
collect interest on delinquent payments, and Landlord may (but shall not be
required to) suspend the Tenant Improvement Work following such default, in
which event any delays because of such suspension shall constitute Tenant Delays
hereunder.
III. DISPUTE RESOLUTION
A. All claims or disputes between Landlord and Tenant arising out of, or
relating to, this Work Letter shall be decided by the JAMS/ENDISPUTE ("JAMS"),
or its successor, with such arbitration to be held in Orange County, California,
unless the parties mutually agree otherwise. Within ten (10) business days
following submission to JAMS, JAMS shall designate three arbitrators and each
party may, within five (5) business days thereafter, veto one of the three
persons so designated. If two different designated arbitrators have been vetoed,
the third arbitrator shall hear and decide the matter. If less than two (2)
arbitrators are timely vetoed, JAMS shall select a single arbitrator from the
non-vetoed arbitrators originally designated by JAMS, who shall hear and decide
the matter. Any arbitration pursuant to this section shall be decided within
thirty (30) days of submission to JAMS. The decision of the arbitrator shall be
final and binding on the parties. All costs associated with the arbitration
shall be awarded to the prevailing party as determined by the arbitrator.
B. Notice of the demand for arbitration by either party to the Work Letter
shall be filed in writing with the other party to the Work Letter and with JAMS
and shall be made within a reasonable time after the dispute has arisen. The
award rendered by the arbitrator shall be final, and judgment may be entered
upon it in accordance with applicable law in any court having jurisdiction
thereof. Except by written consent of the person or entity sought to be joined,
no arbitration arising out of or relating to this Work Letter shall include, by
consolidation, joinder or in any other manner, any person or entity not a party
to the Work Letter unless (1) such person or entity is substantially involved in
a common question of fact or law, (2) the presence of such person or entity is
required if complete relief is to be accorded in the arbitration, or (3) the
interest or responsibility of such person or entity in the matter is not
insubstantial.
C. The agreement herein among the parties to arbitrate shall be
specifically enforceable under prevailing law. The agreement to arbitrate
hereunder shall apply only to disputes arising out of, or relating to, this Work
Letter, and shall not apply to other matters of dispute under the Lease except
as may be expressly provided in the Lease.
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