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EXHIBIT 10.16
INDUSTRIAL LEASE
(SINGLE TENANT; NET)
BETWEEN
THE IRVINE COMPANY
AND
OPTICAL MICRO MACHINES, INC.
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INDEX TO INDUSTRIAL LEASE
(Single Tenant; Net)
ARTICLE I. BASIC LEASE PROVISIONS
ARTICLE II. PREMISES
Section 2.1 Leased Premises
Section 2.2 Acceptance of Premises
Section 2.3 Building Name and Address
Section 2.4 Landlord's Responsibilities
ARTICLE III. TERM
Section 3.1 General
Section 3.2 Delay in Possession
Section 3.3 Right to Extend this Lease
ARTICLE IV. RENT AND OPERATING EXPENSES
Section 4.1 Basic Rent
Section 4.2 Operating Expenses
Section 4.3 Security Deposit
Section 4.4 Letter of Credit
ARTICLE V. USES
Section 5.1 Use
Section 5.2 Signs
Section 5.3 Hazardous Materials
ARTICLE VI. COMMON AREAS; SERVICES
Section 6.1 Utilities and Services
Section 6.2 Operation and Maintenance of Common Areas
Section 6.3 Use of Common Areas
Section 6.4 Parking
Section 6.5 Changes and Additions by Landlord
ARTICLE VII. MAINTAINING THE PREMISES
Section 7.1 Tenant's Maintenance and Repair
Section 7.2 Landlord's Maintenance and Repair/Tenant's "Self-Help"
Section 7.3 Alterations
Section 7.4 Mechanic's Liens
Section 7.5 Entry and Inspection
Section 7.6 Communications Equipment
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANTS PROPERTY
ARTICLE IX. ASSIGNMENT AND SUBLETTING
Section 9.1 Rights of Parties
Section 9.2 Effect of Transfer
Section 9.3 Sublease Requirements
Section 9.4 Certain Transfers
ARTICLE X. INSURANCE AND INDEMNITY
Section 10.1 Tenant's Insurance
Section 10.2 Landlord's Insurance
Section 10.3 Joint Indemnity
Section 10.4 Landlord's Nonliability
Section 10.5 Waiver of Subrogation
ARTICLE XI. DAMAGE OR DESTRUCTION
Section 11.1 Restoration
Section 11.2 Lease Governs
ARTICLE XII. EMINENT DOMAIN
Section 12.1 Total or Partial Taking
Section 12.2 Temporary Taking
Section 12.3 Taking of Parking Area
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIAL
Section 13.1 Subordination
Section 13.2 Estoppel Certificate
Section 13.3 Financials
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ARTICLE XIV. DEFAULTS AND REMEDIES
Section 14.1 Tenant's Defaults
Section 14.2 Landlord's Remedies
Section 14.3 Late Payments
Section 14.4 Right of Landlord to Perform
Section 14.5 Default by Landlord
Section 14.6 Expenses and Legal Fees
Section 14.7 Waiver of Jury Trial
Section 14.8 Satisfaction of Judgment
Section 14.9 Limitation of Actions Against Landlord
ARTICLE XV. END OF TERM
Section 15.1 Holding Over
Section 15.2 Merger on Termination
Section 15.3 Surrender of Premises; Removal of Property
ARTICLE XVI. PAYMENTS AND NOTICES
ARTICLE XVII. RULES AND REGULATIONS
ARTICLE XVIII. BROKER'S COMMISSION
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
ARTICLE XX. INTERPRETATION
Section 20.1 Gender and Number
Section 20.2 Headings
Section 20.3 Joint and Several Liability
Section 20.4 Successors
Section 20.5 Time of Essence
Section 20.6 Controlling Law
Section 20.7 Severability
Section 20.8 Waiver and Cumulative Remedies
Section 20.9 Inability to Perform
Section 20.10 Entire Agreement
Section 20.11 Quiet Enjoyment
Section 20.12 Survival
ARTICLE XXI. EXECUTION AND RECORDING
Section 21.1 Counterparts
Section 21.2 Corporate and Partnership Authority
Section 21.3 Execution of Lease; No Option or Offer
Section 21.4 Recording
Section 21.5 Amendments
Section 21.6 Executed Copy
Section 21.7 Attachments
ARTICLE XXII. MISCELLANEOUS
Section 22.1 Nondisclosure of Lease Terms
Section 22.2 Guaranty
Section 22.3 Changes Requested by Lender
Section 22.4 Mortgagee Protection
Section 22.5 Covenants and Conditions
Section 22.6 Security Measures
Section 22.7 JAMS
Section 22.8 Tenant's Lien
Section 22.9 Contingency
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EXHIBITS
Exhibit A Description of the Premises
Exhibit B Environmental Questionnaire
Exhibit C Landlord's Disclosures
Exhibit D Insurance Requirements
Exhibit E Rules and Regulations
Exhibit F Irrevocable Standby Letter of Credit
Exhibit G Non-disturbance Agreement
Exhibit H Consent of Landlord
Exhibit X Work Letter
Exhibit Y Project Site Plan
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INDUSTRIAL LEASE
(SINGLE TENANT; NET)
THIS LEASE is made as of the _____ day of May, 2000, by and between THE
IRVINE COMPANY, hereafter called "Landlord," and OPTICAL MICRO MACHINES, INC., a
California Corporation, hereinafter called "Tenant."
ARTICLE I. BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean
and refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.
1. Premises: The Premises are more particularly described in Section 2.1,
and include all of the floor area within the building located at 0000
Xxxxxxx Xxxx Xxxxx, Xxx Xxxxx, XX 00000
2. Project Description: Canyon Ridge Business Park
3. Use of Premises: General office, light assembly, research & development
and testing for Tenant's products, marketing, storage and distribution
of Tenant's products and related uses in compliance with applicable laws
and restrictions of record, other than retail sales direct to consumers
from the Premises.
4. Commencement Date: August 1, 2000 (subject to the provisions of Section
3.2)
5. Lease Term: The Term of this Lease shall expire at midnight on July 31,
2009.
6. Basic Rent: Eighty Four Thousand One Hundred Forty-Seven Dollars
($84,147.00) per month, based on $.85 per rentable square foot.
Basic Rent is subject to adjustment as follows:
Commencing February 1, 2001, the Basic Rent shall be One Hundred Six
Thousand Nine Hundred Seventeen Dollars ($106,917.00) per month, based
on $1.08 per rentable square foot.
Commencing August 1, 2001, the Basic Rent shall be One Hundred Ten
Thousand Eight Hundred Seventy-Seven Dollars ($110,877.00) per month,
based on $1.12 per rentable square foot.
Commencing August 1, 2002, the Basic Rent shall be One Hundred Fourteen
Thousand Eight Hundred Thirty-Seven Dollars ($114,837.00) per month,
based on $1.16 per rentable square foot.
Commencing August 1, 2003, the Basic Rent shall be One Hundred Eighteen
Thousand Seven Hundred Ninety-Six Dollars ($118,796.00) per month, based
on $1.20 per rentable square foot.
Commencing August 1, 2004, the Basic Rent shall be One Hundred Twenty
Two Thousand Seven Hundred Fifty-Six Dollars ($122,756.00) per month,
based on $1.24 per rentable square foot.
Commencing August 1, 2005, the Basic Rent shall be One Hundred Twenty
Six Thousand Seven Hundred Sixteen Dollars ($126,716.00) per month,
based on $1.28 per rentable square foot.
Commencing August 1, 2006, the Basic Rent shall be One Hundred Thirty
Thousand Six Hundred Seventy-Six Dollars ($130,676.00) per month, based
on $1.32 per rentable square foot.
Commencing August 1, 2007, the Basic Rent shall be One Hundred Thirty
Four Thousand Six Hundred Thirty-Six Dollars ($134,636.00) per month,
based on $1.36 per rentable square foot.
Commencing August 1, 2008, the Basic Rent shall be One Hundred Thirty
Eight Thousand Five Hundred Ninety-Six Dollars ($138,596.00) per month,
based on $1.40 per rentable square foot.
7. Guarantor(s): None
8. Floor Area of Premises: approximately 98,997 rentable square feet
9. Security Deposit: $152,425.00 (See Section 4.3; see also Section 4.4 for
letter of credit requirements)
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10. Broker(s): CB Xxxxxxx Xxxxx
11. Additional Insureds: Insignia\ESG of California, Inc.
12. Address for Payments and Notices:
LANDLORD TENANT
INSIGNIA\ESG OF CALIFORNIA, INC. OPTICAL MICRO MACHINES, INC.
00 Xxxxxxxxx, Xxxxx 000 0000 Xxxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000 Xxx Xxxxx, XX 00000
with a copy of notices to: With a copy of notices to:
IRVINE INDUSTRIAL COMPANY
X.X. Xxx 0000 XXXXXXX, XXXXXXX & XXXXXXXX
Xxxxxxx Xxxxx, XX 00000-0000 00000 Xx Xxxxxx Xxxx
Attn: Vice President, Xxx Xxxxx, XX 00000
Industrial Operations Attn: W. Xxxxx Xxxx, Esq.
13. Tenant's Liability Insurance Requirement: $2,000,000.00
14. Vehicle Parking Spaces: Two Hundred Eighty (280) within the Common Area
of the Project.
15. Delivery Date: May 24, 2000
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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"), including
the building identified in Item 1 of the Basic Lease Provisions (which together
with the underlying real property, is called the "Building"), and containing the
floor area set forth in Item 8 of the Basic Lease Provisions, which floor area
the parties agree shall be the floor area for all purposes under this Lease and
shall not be subject to re-measurement by either party. The Premises is a
portion of the project shown in Exhibit Y (the "Project"). Landlord shall have
no right to relocate Tenant from the Premises at any time during the Term of
this Lease or any extension.
SECTION 2.2. ACCEPTANCE OF PREMISES. Landlord shall deliver the Premises
to Tenant on or before May 24, 2000 (the "Delivery Date") clean and free of all
debris and all prior occupants and their personal property, in order for Tenant
to begin its work of construction of the Tenant Improvements in accordance with
the terms of EXHIBIT X. Tenant acknowledges that, except as expressly provided
in this Lease, neither Landlord nor any representative of Landlord has made any
representation or warranty with respect to the Premises or the Building or the
suitability or fitness of either for any purpose, including without limitation
any representations or warranties regarding zoning or other land use matters,
and that neither Landlord nor any representations of Landlord has made any
representations or warranties regarding (i) what other tenants or uses may be
permitted or intended in the Building and the Project, or (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. Tenant further acknowledges that
neither Landlord nor any representative of Landlord has agreed to undertake any
alterations or additions or construct any improvements to the Premises except as
expressly provided in this Lease. The taking of possession or use of the
Premises by Tenant for any purpose other than construction shall conclusively
establish that the Premises and the Building were in satisfactory condition and
in conformity with the provisions of this Lease in all respects, except for
Landlord's obligations specifically provided in this Lease, including without
limitation, the responsibilities contained in Section 2.4 hereof. After the
Tenant Improvements to the Premises are substantially completed Tenant shall
cause the General Contractor to inspect the Premises with the Landlord's
representative and complete a punch list of unfinished or incorrect items of the
Tenant Improvements. Authorized representatives for the Landlord and Tenant
shall execute said punch list to indicate their approval thereof not later than
thirty (30) days from and after the Commencement Date. The items listed on such
punch list shall be completed by the Tenant within thirty (30) days after the
approval of such punch list or as soon thereafter as reasonably practicable.
Nothing contained in this Section shall affect the commencement of the Term or
the obligation of Tenant to pay rent. Tenant 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; provided, however, if the address of the Building
and/or the Project is changed by Landlord, Landlord agrees to provide Tenant
with no less than sixty (60) days prior written notice and to reimburse Tenant
for all expenses reasonably incurred by Tenant in conjunction with such address
change (including, without limitation, the cost of changing Tenant's stationery
and of notifying Tenant's clients and customers of Tenant's new address of the
Building and/or the Project), not to exceed Five Thousand Dollars ($5,000.00) in
the aggregate.
SECTION 2.4. LANDLORD'S RESPONSIBILITIES.
(a) Landlord shall correct, repair or replace, at Landlord's sole cost
and expense and not as a Building Cost, any failure of the structural components
of the roof, foundations, footings and load-bearing walls of the Building. The
foregoing obligation, however, shall not apply to the extent any such failure is
caused by the negligence or improper use of such structural components by
Tenant, its employees, agents, contractors, licensees or invitees, in which case
Tenant shall be responsible for the reasonable costs of such corrections,
repairs and/or replacements. The corrections, repairs or replacements required
of Landlord or of Tenant in the preceding sentences of this Section 2.4(a) shall
be made promptly following notice from the other party. Landlord agrees to
replace the roof membrane of the Building no later than November 30, 2000.
(b) Tenant and Landlord hereby acknowledge that a moisture condition
exists beneath the concrete subflooring of the Building which has disturbed the
Building flooring. Tenant has undertaken such investigations and evaluations of
such moisture condition as Tenant deems necessary or appropriate and has
determined the repairs necessary for the same and the cost of such repairs. At
Tenant's sole cost and expense, as part of the Tenant Improvements and subject
to Landlord's approval of Tenant's proposed method of repair, Tenant shall apply
a specialized treatment to the concrete subflooring to correct such moisture
condition causing such flooring disruption. Tenant shall be solely responsible
for the repair of any reoccurrence of such moisture condition throughout the
Term of this Lease to the extent Tenant determines such repairs to be necessary,
or for any costs of repair to any flooring within the Premises resulting from
the moisture condition or the repair of the same, or any reoccurrence of the
same, provided, that Tenant shall determine the appropriate and necessary scope
of such further repairs during the Term. Notwithstanding any contrary provision
of Section 15.3, Tenant shall not be obligated to undertake any further repairs
to the concrete subflooring of the Building or any flooring within the Premises
at the time of surrender of the Premises at the expiration or sooner termination
of the Term to the extent such further repairs relate to the moisture condition
or any reoccurrence thereof. Tenant estimates the cost of such repairs to be
approximately $467,000.00.
(c) Landlord shall correct, repair or replace, at Landlord's sole cost
and expense and not as a Building Cost, any non-compliance of the Building
exterior and the Common Areas with all applicable building permits and codes
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in effect as of the Commencement Date, including without limitation, the
provisions of Title III of the Americans With Disabilities Act ("ADA") in effect
as of the Commencement Date. Said costs of compliance shall be Landlord's sole
cost and shall not be part of Building Costs. Landlord shall correct, repair or
replace any non-compliance of the Building exterior and the Common Areas with
any revisions or amendments to the ADA in effect after the Commencement Date,
provided that the amortized cost of such repairs or replacements (amortized over
the useful life thereof using a market cost of funds reasonably determined by
Landlord) shall be included as Building Costs payable by Tenant. All other ADA
compliance issues which pertain to the Premises, including without limitation,
in connection with Tenant's construction of the Tenant Improvements and any
other alternations or improvements in the Premises (and any resulting ADA
compliance requirements in the Common Areas) and the operation of Tenant's
business and employment practices in the Premises, shall be the responsibility
of Tenant at its sole cost and expense. The repairs, corrections or replacements
required of Landlord or of Tenant under the foregoing provisions of this Section
2.4(b) shall be made promptly following notice of non-compliance from any
applicable governmental agency.
(d) Landlord hereby warrants to Tenant that the roof, plumbing, fire
sprinkler system, lighting, heating, ventilation and air conditioning systems
and electrical systems in the Premises, shall be in good operating condition on
the Commencement Date. In the event of a non-compliance with such warranty,
Landlord shall, except as otherwise provided in this Lease, promptly and
diligently after receipt of written notice from Tenant setting forth the nature
and extent of such non-compliance, rectify same at Landlord's cost and expense.
Any such notice of non-compliance from Tenant shall be delivered, if at all,
within thirty (30) days from and after the Commencement Date, Tenant's
acceptance of the Premises shall be subject to the foregoing and to the
provisions of this Lease regarding delivery of possession.
ARTICLE III. TERM
SECTION 3.1. GENERAL. The term of this Lease (the "Term") shall be for
the period shown in Item 5 of the Basic Lease Provisions. Subject to the
provisions of Section 3.2 below, the Term shall commence ("Commencement Date")
on the date set forth in Item 4 of the Basic Lease Provisions and shall expire
on the date set forth in Item 5 of the Basic Lease Provisions (the "Expiration
Date"). Tenant acknowledges and agrees that the completion of the Tenant
Improvements pursuant to the Work Letter attached hereto shall not be a
condition to the Commencement Date of this Lease. Tenant shall have the right to
occupy the Premises prior to the Commencement Date provided that such occupancy
shall be subject to all of the terms and provisions of this Lease, including
without limitation the obligation of Tenant to maintain insurance as required
hereunder from and after the initial date of such early occupancy. Tenant shall
not be obligated to pay Basic Rent or Tenant's Share of Operating Expenses
hereunder during the period of such early occupancy. Such payment obligation
shall commence as of the Commencement Date.
SECTION 3.2 DELAY IN POSSESSION. If Landlord, for any reason whatsoever,
cannot deliver possession of the Premises to Tenant free and clear of the
possessory interests of any third party on or before the Delivery Date, this
Lease shall not be void or voidable nor shall Landlord be liable to Tenant for
any resulting loss or damage. However, Tenant shall not be liable for any rent
and the Commencement Date shall not occur until Landlord so delivers possession
of the Premises to Tenant. If the Commencement Date has not occurred due to
Landlord's inability to so deliver possession of the Premises to Tenant by
August 1, 2000 (the "Outside Date"), then Tenant shall have the right to
terminate this Lease upon ten (10) days prior written notice to Landlord
delivered at any time following the Outside Date and prior to such delivery of
possession by Landlord, and this Lease shall terminate ten (10) days after such
notice unless Landlord shall so deliver possession of the Premises to Tenant
within said ten (10) days.
SECTION 3.3 RIGHT TO EXTENT THIS LEASE. Provided that Tenant is not in
default of any monetary covenant of this Lease (including, without limitation,
the obligation to pay Basic Rent and/or Tenant's Share of Operating Expenses) or
any material non-monetary covenant, following written notice and the expiration
of the applicable cure period, 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 (and/or a "Tenant Affiliate") is occupying not less
than fifty percent (50%) of the floor area of the Premises and that Tenant has
not assigned its interest in this Lease except to a "Tenant Affiliate", 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 eight (8) months or more than twelve (12)
months prior to the expiration date of the Term, Tenant's irrevocable written
notice of its commitment to extent (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"). 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
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designated hereunder shall have an MAI certification with not less than five (5)
years experience in the valuation of commercial industrial buildings in San
Diego County, California.
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. 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
twenty (20) days. 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 comply with any of the provisions of this
paragraph, Tenant's right to extend the Term shall be extinguished and the Lease
shall automatically terminate as of the expiration date of the Term, without any
extension and without any liability to Landlord. 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 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.
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 (except as otherwise expressly
provided in this Lease), Basic Rent for the Premises in the total amount shown
(including subsequent adjustments, if any) in Item 6 of the Basic Lease
Provisions. Any rental adjustment shown in Item 6 shall be deemed to occur on
the specified monthly anniversary of the Commencement Date, whether or not that
date occurs at the end of a calendar month. The rent shall be due and payable in
advance commencing on the Commencement Date (as prorated for any partial month)
and continuing thereafter on the first day of each successive calendar month of
the Term. No demand, notice or invoice shall be required for the payment of
Basic Rent. An installment of rent in the amount of one (1) full month's Basic
Rent at the initial rate specified in Item 6 of the Basic Lease Provisions shall
be delivered to Landlord concurrently with Tenant's execution of this Lease and
shall be applied against the Basic Rent first due hereunder.
SECTION 4.2. OPERATING EXPENSES.
(a) Tenant shall pay to Landlord, as additional rent, Tenant's
Share of "Building Costs" and "Property Taxes," as those terms are defined
below, incurred by Landlord in the operation of the Building and Project. For
convenience of reference, Property Taxes and Building Costs shall be referred to
collectively as "Operating Expenses". The term "Tenant's Share" means that
portion of an Operating Expense determined by multiplying the cost of such item
by a fraction, the numerator of which is the floor area of the Premises and the
denominator of which is the total square footage of the floor area within all
buildings in the Project to which such Operating Expenses relate, as of the date
on which the computation is made. The rentable square footage of the Project may
be adjusted from time to time in the event new buildings are constructed within
or incorporated within the Project. For the initial Expense Recovery Period of
this Lease, "Tenant's Share" of Operating Expenses for the Project shall be
17.66%.
(b) Commencing prior to the start of the first full "Expense
Recovery Period" (as defined below) of the Lease, and prior to the start of each
full or partial Expense Recovery Period thereafter, Landlord shall give Tenant a
written estimate of Tenant's Share of the amount of Operating Expenses for the
Expense Recovery Period. Tenant shall pay the estimated amounts to Landlord in
equal monthly installments, in advance, with Basic Rent. If Landlord has not
furnished its written estimate for any Expense Recovery Period by the time set
forth above, Tenant shall continue to pay cost reimbursements at the rates
established for the prior Expense Recovery Period, if any; provided that when
the new estimate is delivered to Tenant, Tenant shall, at the next monthly
payment date, pay any accrued cost reimbursements based upon the new estimate.
For purposes hereof, "Expense Recovery Period" shall mean every twelve month
period during the Term (or portion thereof for the first and last lease years)
commencing July 1 and ending June 30.
(c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual or prorated Operating Expenses incurred by Landlord
during the period, and the parties shall within thirty (30) days thereafter make
any payment or allowance necessary to adjust Tenant's estimated payments, if
any, to Tenant's actual owed amounts as shown by the annual statement. Any delay
or failure by Landlord in delivering any statement hereunder shall not
constitute a waiver of Landlord's right to require Tenant to pay Operating
Expenses pursuant hereto. Any amount due Tenant shall be
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credited against installments next coming due under this Section 4.2, and any
deficiency shall be paid by Tenant together with the next installment. If Tenant
has not made estimated payments during the Expense Recovery Period, any amount
owing by Tenant pursuant to subsection (a) above shall be paid to Landlord in
accordance with Article XVI. Should Tenant fail to object in writing to
Landlord's determination of actual Operating Expenses, or fail to give notice of
its intent to audit such Operating Expenses pursuant to the provisions of the
next succeeding paragraph, within one hundred twenty (120) days following
delivery of Landlord's expense statement, Landlord's determination of actual
Operating Expenses for the applicable Expense Recovery Period shall be
conclusive and binding on the parties and any future claims to the contrary
shall be barred.
Landlord agrees that it will maintain complete and accurate
records of all costs, expenses and disbursements paid or incurred by Landlord,
its employees, agents and/or contractors, with respect to the Operating Expenses
in accordance with generally accepted accounting principles, consistently
applied. Such records shall be kept until one (1) year after the termination of
this Lease. Landlord shall provide in reasonable detail the calculation of
Tenant's Share of the Operating Expenses. Provided Tenant is not then in default
of any monetary covenant of this Lease (including, without limitation, the
obligation to pay Basic Rent and/or Tenant's Share of Operating Expenses), or
any material non-monetary covenant, following written notice and the expiration
of the applicable cure period, then Tenant shall have the right to have Tenant's
financial officer or a certified public accountant audit Landlord's Operating
Expenses, subject to the terms and conditions hereof. In no event, however,
shall such auditor be compensated by Tenant on a "contingency" basis, or on any
other basis tied to the results of said audit. Tenant shall give notice to
Landlord of Tenant's intent to audit within one hundred twenty (120) days
following delivery of Landlord's expense statement for each of the Expense
Recovery Periods. Following at least ten (10) business days notice to Landlord,
such audit shall be conducted at a mutually agreeable time during normal
business hours at the office of Landlord or its management agent where the
records are maintained in San Diego County, California. Landlord agrees to make
such personnel available to Tenant as is reasonably necessary for Tenant's
employees and agents, to conduct such audit. Landlord shall make such records
available to Tenant's employees and agents, for inspection during normal
business hours. Tenant's employees and agents shall be entitled to make
photostatic copies of such records, provided Tenant bears the expense of such
copying, and further provided that Tenant keeps such copies in a confidential
manner and does not discuss, display or distribute such copies to any other
third party. If Tenant's audit determines that actual Operating Expenses have
been overstated by more than four percent (4%), then subject to Landlord's right
to review and/or contest the audit results, Landlord shall reimburse Tenant for
the reasonable out-of-pocket costs of such audit. Tenant's Basic Rent shall be
appropriately adjusted to reflect any overstatement in Operating Expenses. In
the event of a dispute between Landlord and Tenant regarding the results of such
audit, such dispute shall be submitted to and resolved by JAMS as provided in
Section 22.7 of this Lease.
All of the information obtained by Tenant and/or its auditor
in connection with such audit, as well as any compromise, settlement, or
adjustment reached between Landlord and Tenant as a result thereof, shall be
held in strict confidence and, except as may be required pursuant to litigation
and except for inadvertent disclosures despite Tenant's reasonable efforts to
keep the disclosed information confidential, shall not be disclosed to any third
party, directly or indirectly, by Tenant or its auditor or any of their
officers, agents or employees. Landlord may require Tenant's auditor to execute
a separate confidentiality agreement affirming the foregoing as a condition
precedent to any audit.
(d) Even though the Lease has terminated and the Tenant has
vacated the Premises, when the final determination is made of Operating Expenses
for the Expense Recovery Period in which the Lease terminates, Tenant shall upon
notice pay the entire increase of Tenant's Share of said Operating Expenses due
over the estimated expenses paid. Conversely, any overpayment made in the event
expenses decrease shall be rebated promptly by Landlord to Tenant.
(e) If, at any time during any Expense Recovery Period, any one
or more of the Operating Expenses are increased to a rate(s) or amount(s) in
excess of the rate(s) or amount(s) used in calculating the estimated expenses
for the year, then the estimate of Operating Expenses shall be increased for the
month in which such rate(s) or amount(s) becomes effective and for all
succeeding months by an amount equal to Tenant's Share of the increase. Landlord
shall give Tenant written notice of the amount or estimated amount of the
increase, the month in which the increase will become effective, and the month
for which the payments are due. Tenant shall pay the increase to Landlord as a
part of Tenant's monthly payments of estimated expenses as provided in paragraph
(b) above, commencing with the month in which effective.
(f) The term "Building Costs" shall include all expenses of
operation and maintenance of the Building and of the Building's proportionate
share of the Project, if applicable (determined as the rentable square footage
of the Building divided by the rentable square footage of all space in the
Project), to the extent such expenses are not billed to and paid directly by
Tenant, and shall include the following charges by way of illustration but not
limitation: water and sewer charges; insurance premiums or reasonable premium
equivalents should Landlord elect to self-insure any risk that Landlord is
authorized to insure hereunder (provided that: (i) in no event shall Tenant be
responsible for deductibles associated with earthquake or flood insurance
premiums in excess of Ten Thousand Dollars ($10,000.00) per year on an amortized
basis over the useful life of the "capitalized" repairs or replacements
resulting from the casualty giving rise to the payment of said deductibles
[calculated at a market cost of funds, all as determined by Landlord using
generally accepted accounting principles consistently applied] for each
remaining year of useful life during the Term, and (ii) in the event that
Landlord shall spread the cost of premiums or premium equivalents for earthquake
and/or flood insurance other than on a straight per square foot basis over its
leased portfolio throughout the State of California, then Landlord shall
reasonably determine the geographic risks of its leased portfolio for insurance
and flood insurance purposes and shall spread the costs of such coverage
accordingly); license, permit, and inspection fees; heat; light; power;
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air conditioning; supplies; materials; equipment; tools; the reasonable 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 repair of Common Area improvements (if
applicable), equipment and supplies; costs incurred in connection with
compliance of any laws or changes in laws applicable to the Building or the
Project (provided that to the extent such costs are capital investments, such
costs shall be included in Building Costs as capital investments and amortized
in accordance with the following clause); the cost of any capital investments
(other than tenant improvements for specific tenants) to the extent of the
amortized amount thereof over the useful life of such capital investments
calculated at a market cost of funds, all as determined by Landlord using
generally accepted accounting principles consistently applied, for each such
year of useful life during the Term; 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 Building and Project not in excess of
competitive market rates for similar properties in the geographical area of the
Premises. Notwithstanding anything to the contrary contained herein, the amount
of such overhead/management fee to be charged to Tenant shall be determined by
multiplying the actual fee charged (which from time to time may be with respect
to the entire Project, a portion of the Project only, the Building only, or the
Project together with other properties owned by Landlord and/or its affiliates)
by a fraction, the numerator of which is the floor area of the Premises (as set
forth in Item No. 8 of the Basic Lease Provisions) and the denominator of which
is the total square footage of space charged with such fee actually leased to
tenants (including Tenant). It is understood that Building Costs shall include
competitive charges for direct services provided by any subsidiary or division
of Landlord.
Notwithstanding the provisions of this Section 4.2 to the
contrary, Operating Expenses shall not include any cost or expense identified as
the responsibility of Landlord and not an Operating Expense by the express terms
of this Lease, and shall not include any of the following:
(1) Leasing commissions, attorneys' fees, costs,
disbursements and other expenses incurred by Landlord or its agents in
connection with negotiations for leases with tenants, other occupants or
prospective tenants or other occupants of the Project, and similar costs
incurred in connection with disputes with and/or enforcement of any lease with
tenants, other occupants, or prospective tenants or other occupants of the
Project;
(2) "Tenant allowances", "tenant concessions", work
letter payments, and other costs or expenses (including permit, license and
inspection fees) incurred in completing, fixturing, furnishing, renovating or
otherwise improving, decorating or redecorating space for other tenants or
occupants of the Project, or vacant, leasable space in the Project, including
space planning/interior design fees for same;
(3) Depreciation;
(4) Services, items and benefits for which Tenant or
any other tenant or occupant of the Project specifically reimburses Landlord or
for which Tenant or any other tenant or occupant of the Project pays third
persons or services, items or benefits which are not generally made available to
Tenant as an occupant of the Building or the Project;
(5) Costs or expenses (including fines, penalties and
legal fees) incurred due to the violation by Landlord of any terms and
conditions (other than by Tenant) of this Lease or of the leases of other
tenants in the Project, that would not have incurred but for such violation by
Landlord;
(6) Penalties for late payment of any Operating
Expenses by Landlord, including, without limitation, with respect to taxes,
equipment leases, etc.;
(7) Payments in respect of overhead and/or profit to
any subsidiary or Affiliate (hereinafter defined) of Landlord, as a result of a
non-competitive selection process for services (other than the management fee)
on or to the Project, or for goods, supplies or other materials, to the extent
that the costs of such services, goods, supplies or materials exceed the costs
that would have been paid if the services, goods, supplies or materials had been
provided by parties unaffiliated with Landlord, of similar skill, competence and
experience, on a competitive basis;
(8) Payments of principal, finance charges or interest
on debt or amortization on any deed of trust or other debt encumbering the
Project, and rental payments (or increases in same) under any ground or
underlying lease or leases encumbering the Project (except to the extent the
same may be made to pay or reimburse, or may be measured by Property Taxes);
(9) Except for a management fee which is reasonable and
commercially competitive for similar projects in the area of the Project, costs
of Landlord's general overhead and general administrative expenses (individual,
partnership or corporate, as the case may be) and wages, salaries and other
compensation and benefits (as well as adjustments thereto) for all employees and
personnel of Landlord above the level of manager for the Project, which costs
would not be chargeable to Operating Expenses in accordance with generally
accepted accounting principles, consistently applied;
(10) Rentals and other related expenses, if any,
incurred in leasing air conditioning systems or other equipment ordinarily
considered to be of a capital nature, except equipment which is used
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in providing janitorial services and which is not affixed to the Project and
equipment which is leased on a temporary basis in emergency situations;
(11) Advertising and promotional expenses;
(12) Costs or expenses for the acquisition of
sculpture, paintings or other works of art, but not the reasonable expenses of
maintaining, repairing and insuring same;
(13) Costs for which Landlord is compensated through or
reimbursed by insurance;
(14) Contributions to operating expense reserves
(including tax reserves), except for reasonable reserves for the roof of the
Building and as specifically set forth in Section 4.4 hereof;
(15) Contributions to political or charitable
organizations;
(16) Costs incurred in removing the property of former
tenants and/or other occupants of the Project;
(17) The costs of any "tap fees" or one-time lump sum
sewer, water or other utility connection fees for the Project;
(18) Costs or fees relating to the defense of
Landlord's title to or interest in the Building and/or the Project, or any part
thereof;
(19) Any other expense which, under generally accepted
accounting principles, consistently applied, would not be considered to be a
normal maintenance or operating expense of the Building and/or the Project;
(20) Costs for which Landlord is actually reimbursed by
any recovery of insurance proceeds; and
(21) All costs of the "shell" Building work (as defined
in the Work Letter attached hereto), including without limitation, initial
construction costs of parking lots and landscaping within the Common Areas.
As used herein, the term "Affiliate" shall mean and
refer to any person or entity controlling, controlled by, or under common
control with another such person or entity. "Control", as used herein, shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such controlled person or entity;
the ownership, directly or indirectly, of at least fifty-one percent (51%) of
the voting securities of, or possession of the right to vote, in the ordinary
direction of its affairs, at least fifty-one percent (51%) of the voting
interest in, any person or entity shall be presumed to constitute such control.
In the case of Landlord, the term "Affiliate" shall include any person or entity
controlling or controlled by or under common control with any general partner of
Landlord or any general partner of Landlord's general partner.
(g) The term "Property Taxes" as used herein shall include
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 and fixtures located in the
Building and/or the Project, except that general net income and franchise taxes
imposed against Landlord shall be excluded; and (iii) all assessments and fees
for public improvements, services, and facilities and impacts thereon, including
without limitation arising out of any Community Facilities Districts, "Xxxxx
Room" districts, similar assessment districts, and any traffic impact mitigation
assessments or fees to the extent of installments due and payable thereon during
the Term based on the maximum number of permitted installments; (iv) any tax,
surcharge or assessment which shall be levied in addition to or in lieu of real
estate or personal property taxes, other than taxes covered by Article VIII; and
(v) costs and expenses incurred in contesting the amount or validity of any
Property Tax by appropriate proceedings. The term Property Taxes shall not
include personal property taxes of any kind, which shall instead be governed by
the provisions of Article VIII of this Lease.
SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant's delivery of
this Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9
of the Basic Lease Provisions, to be held by Landlord as security for the full
and faithful performance of Tenant's obligations under this Lease (the "Security
Deposit"). Subject to the last sentence of this Section, the Security Deposit
shall be understood and agreed to be the property of Landlord upon Landlord's
receipt thereof, and may be utilized by Landlord in its discretion towards the
payment of all prepaid expenses by Landlord for which Tenant would be required
to reimburse Landlord under this Lease, including without limitation brokerage
commissions and Tenant Improvement costs. Upon any default by Tenant, including
specifically Tenant's failure to pay rent or to abide by its obligations under
Sections 7.1 and 15.3 below, whether or not Landlord is informed of or has
knowledge of the default, the Security Deposit shall be deemed to be
automatically and immediately applied, without waiver of any rights Landlord may
have under this Lease or at law or in equity as a result of the default, as a
setoff for full or partial compensation for that default. If any portion of the
Security Deposit is applied after a default by Tenant, Tenant shall within five
(5) days after written demand by Landlord deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount.
Landlord shall not be required to keep this Security Deposit separate from its
general funds, and Tenant shall not be entitled to interest on the Security
Deposit. If Tenant
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fully performs its obligations under this Lease, the Security Deposit or any
balance thereof shall be returned to Tenant (or, at Landlord's option, to the
last assignee of Tenant's interest in this Lease) after the expiration of the
Term, provided that Landlord may retain the Security Deposit to the extent and
until such time as all amounts due from Tenant in accordance with this Lease
have been determined and paid in full.
SECTION 4.4. LETTER OF CREDIT. In addition to the Security Deposit and
as security hereunder, Tenant shall deliver to Landlord, concurrently with
Tenant's execution of this Lease, an irrevocable letter of credit in the amount
of Two Million Two Hundred Thousand Dollars ($2,200,000.00). Said letter of
credit shall be in form and with the substance of Exhibit F attached hereto, and
issued by Silicon Valley Bank (or such other financial institution acceptable to
Landlord in its sole and absolute discretion). The letter of credit shall
provide for automatic yearly renewals throughout the Term of this Lease, as the
same may be extended. In the event (i) the issuer of the letter of credit elects
not to renew the letter of credit beyond the then-current expiration date
thereof, or (ii) the letter of credit includes a final expiration date that
precedes the date which is thirty (30) days beyond the then-scheduled Expiration
Date of this Lease, then, in either instance, unless Tenant provides Landlord
with a replacement letter of credit satisfying the requirements of this Section
4.4 at least fifteen (15) days prior to such then-current expiration date or
final expiration date, as applicable, of the letter of credit, Landlord shall be
entitled to draw upon the letter of credit in full and thereafter hold such
funds as security for full and faithful performance of Tenant's obligations
under this Lease (and, upon such draw, such funds shall be automatically added
to the Security Deposit described in Section 4.3 above and shall thereupon be
held by Landlord in accordance with and subject to the terms and conditions of
said Section 4.3 as if such funds were part of the original Security Deposit
provided to Landlord under this Lease); provided however, that upon Tenant's
replacement of the expired letter of credit with a letter of credit satisfying
the obligations set forth herein, such funds shall be returned to Tenant by
Landlord promptly following Landlord's receipt of such replacement letter of
credit. Upon any default by Tenant which has not been cured within the
applicable time period, including specifically Tenant's failure to pay rent or
to abide by its obligations under Sections 7.1 and 15.3 below, Landlord shall be
entitled to draw upon said letter of credit in the amount of the default(s) by
the issuance of Landlord's sole written demand to the issuing financial
institution. Any such draw shall be without waiver of any rights Landlord may
have under this Lease or at law or in equity as a result of 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. In the event that (i) Tenant has not been in default under the Lease
(beyond the expiration of any applicable cure period) at any time during the
Term hereof, and (ii) Tenant has not at any time been more than five (5) days
late with respect to any payments of rent due under the Lease during the
applicable twelve (12)-month period which precedes each of the following dates
for reductions to the letter of credit, then upon the written request of Tenant,
Landlord shall authorize in writing consecutive reductions to the principal
amount of the letter of credit, each of such reductions in the amount of Four
Hundred Forty Thousand Dollars ($440,000.00), upon the expiration of the twelfth
(12th), twenty-fourth (24th), thirty-sixth (36th), forty-eighth (48th), and the
sixtieth (60th) months during the Term. In addition, in the event that: (A)
Tenant has not been in default under the Lease (beyond the expiration of any
applicable cure period) at any time during the Term hereof, (B) Tenant has not
at any time been more than five (5) days late with respect to any payments of
rent due under the Lease during the prior twelve (12) month period, and (C)
Tenant shall demonstrate by the delivery to Landlord of its audited financial
Statements that Tenant has then achieved four consecutive quarters of positive
net income and a tangible net worth in excess of Twenty Million Dollars
($20,000,000.00) (as determined by generally accepted accounting principles,
consistently applied, and issued by a nationally recognized accounting firm),
then, upon written request of Tenant, given at any time after the date which is
thirty-six (36) months following the Commencement Date, Landlord shall authorize
a full exoneration and release of the letter of credit.
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 unreasonably
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 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 and the requirements of the Pacific Fire Rating Bureau or any other
organization performing a similar function (to the extent such rules and
regulations are provided to Tenant). 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 covenants,
conditions, easements or restrictions now affecting or encumbering the Building
and/or Project, 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, and any amendments or modifications thereto which do not
materially derogate the rights of Tenant or materially increase the obligations
of Tenant hereunder. Tenant shall promptly upon demand reimburse Landlord for
any additional insurance premium charged by reason of Tenant's failure
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to comply with the provisions of this Section, and shall indemnify Landlord from
any liability and/or expense resulting from Tenant's noncompliance.
SECTION 5.2 SIGNS. Provided Tenant continues to occupy the entire
Premises, Tenant shall have the exclusive right to two (2) exterior "Building
top" signs on the Building and to place its sign upon the existing signage
monument for the Building, 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 or as otherwise approved in writing
by Landlord, in its sole discretion, Tenant shall have no right to maintain
identification signs in any location in, on or about the Premises, the Building
or the Project and shall not place or erect any signs, displays or other
advertising materials that are visible from the exterior of the Building. The
size, design, graphics, material, style, color and other physical aspects of any
permitted sign shall be subject to Landlord's written approval prior to
installation (which approval may not be unreasonably withheld), any covenants,
conditions or restrictions encumbering the Premises, 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"), and any applicable
municipal or other governmental permits and approvals. Tenant acknowledges
having received and reviewed a copy of the current Signage Criteria for the
Project. Tenant shall be responsible for the cost of any permitted sign,
including the fabrication, installation, maintenance and removal thereof. If
Tenant fails to maintain its sign, or if Tenant fails to remove same upon
termination of this Lease and repair any damage caused by such removal, Landlord
may do so at Tenant's expense.
SECTION 5.3 HAZARDOUS MATERIALS.
(a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in Section 25501(n) of the
California Health and Safety Code, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such substance or
matter under any statutory or common law theory, and (iii) any substance or
matter which is in excess of permitted levels set forth in any federal,
California or local law or regulation pertaining to any hazardous or toxic
substance, material or waste.
(b) Except for those Hazardous Materials identified on the
Environmental Questionnaire approved by Landlord prior to the execution of this
Lease, Tenant shall not cause or knowingly 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. Notwithstanding the
foregoing, Tenant shall have the right, without obtaining prior written consent
of Landlord, to utilize within the Premises standard office products that may
contain Hazardous Materials (such as photocopy toner, "White Out", and the
like), provided however, that (i) Tenant shall maintain such products in their
original retail packaging, shall follow all instructions on such packaging with
respect to the storage, use and disposal of such products, and shall otherwise
comply with all applicable laws with respect to such products, and (ii) all of
the other terms and provisions of this Section 5.3 shall apply with respect to
Tenant's storage, use and disposal of all such products. Landlord may, in its
sole discretion, place such conditions as Landlord deems appropriate with
respect to any such Hazardous Materials, and may further require that Tenant
demonstrate that any such Hazardous Materials are necessary or useful to
Tenant's business and will be generated, stored, used and disposed of in a
manner that complies with all applicable laws and regulations pertaining thereto
and with good business practices. Tenant understands that Landlord may utilize
an environmental consultant to assist in determining conditions of approval in
connection with the storage, generation, release, disposal or use of Hazardous
Materials by Tenant on or about the Premises, and/or to conduct periodic
inspections of the storage, generation, use, release and/or disposal of such
Hazardous Materials by Tenant on and from the Premises, and Tenant agrees that
any costs reasonably incurred by Landlord in connection therewith shall be
reimbursed by Tenant to Landlord as additional rent hereunder upon demand;
however, Tenant shall have no obligation to reimburse Landlord for any costs
incurred in connection with any environmental consultant retained by Landlord
pursuant to this Section unless Tenant shall be in default under this Section
5.3 and such costs are covered by Tenant's indemnity contained in this Section
5.3.
(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, if any, 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, 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 access to all relevant facilities, records and personnel. If
Tenant is not in compliance with any of the provisions of this Section 5.3,
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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 (not to be unreasonably withheld), take any remedial action in
response to the presence of any Hazardous Materials on, 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 or (ii) is of such a nature that an immediate
remedial response is necessary and it is not possible to obtain Landlord's
consent before taking such action. To the fullest extent permitted by law,
Tenant shall indemnify, hold harmless, protect and defend (with attorneys
acceptable to Landlord) Landlord and any successors to all or any portion of
Landlord's interest in the Premises 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 on, into, from, under or about the
Premises, the Building and the Project and any other real or personal property
owned by Landlord caused or permitted by Tenant, its agents, employees,
contractors, licensees or invitees, specifically including without limitation
the cost of any required or necessary repair, restoration, cleanup or
detoxification of the Premises, the Building and the Project and any other real
or personal property owned by Landlord, and the preparation of any closure or
other required plans, whether or not such action is required or necessary during
the Term or after the expiration of this Lease. If Landlord at any time
discovers that Tenant or its agents, employees, contractors, licensees or
invitees may have caused or permitted the release of a Hazardous Material on,
under, from or about the Premises 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 or
the Project or any other real or personal property owned by Landlord to the
"Condition Substantially Existing" (as hereinafter defined) 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 to return the Premises, Project and/or
other real or personal property owned by Landlord, as applicable, to the
Condition Substantially Existing prior to the introduction of such Hazardous
Materials, as required by such plan and this Lease. As used herein, the term
"Condition Substantially Existing" shall mean that condition of the Project,
Premises and/or other real or personal property owned by Landlord, as
applicable, which is both: (i) in compliance with all applicable laws, rules,
regulations and/or the agreement, consent, decree or other compromise of, or
with, a governmental agency having jurisdiction with respect to such Hazardous
Materials, and (ii) allows Landlord to market, re-lease, sell and/or finance and
refinance the Project, Premises and/or such real or personal property owned by
Landlord, as applicable, without a material devaluation thereof as, and assuming
no substantial change in use thereof from, a first-class business project. The
provisions of this subsection (e) shall expressly survive the expiration or
sooner termination of this Lease.
(f) If the release of any Hazardous Materials on, under, from or
about the Premises or the Project caused by Landlord, its authorized agents or
employees, and not introduced by Tenant, its agents, employees, contractors,
licensees, or invitees results in (i) injury to any person, or (ii) injury to or
any contamination of the Premises or the Project at levels which require
clean-up or remediation under applicable laws, Landlord, at its expense (which
shall not be included in Operating Expenses), shall promptly take all actions
necessary to return the Premises and the Project to the condition existing prior
to the introduction of such Hazardous Materials, or to such condition as is
satisfactory to all governmental agencies asserting jurisdiction, and to remedy
or repair any such injury or contamination, including, without limitation, any
clean-up, remediation, removal, disposal, neutralization or other treatment of
any such Hazardous Materials. The foregoing obligation on the part of Landlord
shall include the reasonable costs (including, without limitation, reasonable
attorney's fees) of defending Tenant (with attorneys reasonably acceptable to
Tenant) from and against any legal action or proceeding instituted by any
governmental agency in connection with such clean-up, remediation, removal,
disposal, neutralization or other treatment of such conditions, provided that
Tenant promptly tenders such defense to Landlord. 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.
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(g) 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
not 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. Except as disclosed in this Section
5.3(g) (and/or as may otherwise be disclosed to Tenant in writing), Landlord
represents that, to the best of its actual knowledge without duty of inquiry or
investigation whatsoever, there are no Hazardous Materials in or about the
Premises which are in violation of any applicable federal, state or local law,
ordinance or regulation.
(h) The obligations on the part of Landlord contained in Section
5.3(g) above are personal to Landlord and shall not be binding on, nor inure
against any successor in interest to Landlord as of the owner of the Premises,
including without limitation, any lender acquiring the Premises by foreclosure
of its mortgage or deed of trust or deed in lieu of foreclosure. The obligations
on the part of Landlord contained in Section 5.3(f) above shall be binding on
Landlord and each successor-in-interest to Landlord as of owner of the Premises
(including, without limitation, any lender acquiring the Premises by foreclosure
of its mortgage or deed of trust or deed in lieu of foreclosure) only to the
extent of releases of Hazardous Materials caused by Landlord and any
successor-in-interest to Landlord during their respective periods of ownership
of the Premises.
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, refuse
pickup, janitorial service, interior landscape maintenance and all other
utilities, materials and services furnished directly to Tenant or the Premises
or used by Tenant in, on or about the Premises during the Term, together with
any taxes thereon; provided, however, Tenant shall not be obligated to pay
directly for any utilities, water, gas, electricity, sewer, heat, light, power,
janitorial service, landscape maintenance, etc. to the extent such costs are
billed to Tenant as Operating Expenses for the Project. 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 except as expressly provided in
the next succeeding paragraph of this Section 6.1, no such failure or
interruption shall be deemed an eviction or entitle Tenant to terminate this
Lease or withhold or xxxxx any rent due hereunder. Landlord shall at all
reasonable times have free access to all electrical and mechanical installations
of Landlord. In exercising Landlord's right of free access to all mechanical and
electrical installations, Landlord shall not unreasonably interfere with
Tenant's use and enjoyment of the Premises.
Notwithstanding the foregoing, if as a result of the actions of
Landlord, its authorized agents or employees, for more than three (3)
consecutive business days following written notice to Landlord there is no HVAC
or electricity services to all or a portion of the Premises, or such an
interruption of other essential utilities and building services, such as fire
protection or water, so that all or a portion of the Premises cannot be used by
Tenant, then Tenant's Basic Rent (or an equitable portion of such Basic Rent to
the extent that less than all of the Premises are affected) shall thereafter be
abated until the Premises are again usable by Tenant; provided, however, that if
Landlord is diligently pursuing the repair of such utilities or services and
Landlord provides substitute services reasonably suitable for Tenant's purposes,
as for example, bringing in portable air-conditioning equipment, then there
shall not be an abatement of Basic Rent. Any disputes concerning the foregoing
shall be submitted to and resolved by JAMS arbitration pursuant to Section 22.7
of this Lease. The foregoing provisions shall not apply in case of damage to, or
destruction of, the Premises, which shall be governed by the provisions of
Article XI of the Lease.
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
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. Subject
to the express provisions of this Lease, Tenant shall have access to the
Premises twenty-four (24) hours per day, three hundred sixty-five (365) days per
year and HVAC service in the Building shall be available to Tenant twenty-four
(24) hours per day, three hundred sixty-five (365) days per year. Any disputes
concerning the foregoing shall be submitted to and resolved by JAMS arbitration
pursuant to Section 22.7 of this Lease. Landlord's operation, maintenance and
repair of the Common Areas shall not unreasonably interfere with Tenant's use
and enjoyment of the Premises.
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 in a reasonable and
non-discriminatory manner. Landlord shall operate and maintain the Common Areas
consistent with other first-class business projects in the area of the Project,
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 Building Costs, unless excluded under Section 4.2 or unless any particular
cost incurred should be charged to a specific tenant of the Project in
Landlord's reasonable, good faith judgment, in which case such cost shall be so
charged. Landlord shall at all times during the Term have exclusive control of
the Common Areas, and may
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restrain 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. 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. Tenant shall not be required to comply with any
rules and regulations for the Project other than those attached to this Lease
unless such rules and regulations are commercially reasonable and
nondiscriminatory in content and application. Landlord's exclusive control,
operation, maintenance and repair of the Common Area shall be subject to
Tenant's parking rights contained in Section 6.4 below and to all other
limitations contained in this Lease. Landlord agrees that any temporary closure
of any portion of the Common Areas shall not unreasonably interfere with
Tenant's intended use of the Premises, nor its reasonable access to or parking
for the Premises.
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. Landlord will designate and Tenant may xxxx
five (5) of such spaces near the main entrance of the Building as "Optical Micro
Machines Reserved Parking." Tenant shall not use more parking spaces than the
number set forth in Item 14 of the Basic Lease Provisions. All parking spaces
shall be used only for parking by vehicles no larger than full size passenger
automobiles, vans, mini-vans or pickup trucks. Tenant shall not knowingly 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, knowingly or otherwise, 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 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, its agents, servants and
employees. Landlord shall have the right to establish, and from time to time
amend, and to enforce against all users all reasonable rules and regulations
(including the designation of areas for employee parking) that Landlord may deem
necessary and advisable for the proper and efficient operation and maintenance
of parking 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 one hundred eight
(108)-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 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 24-hour periods, is prohibited
unless otherwise authorized by Landlord. Tenant shall be liable for any damage
to the parking areas caused by Tenant or Tenant's employees, suppliers,
shippers, customers or invitees, including without limitation damage from excess
oil leakage. Tenant shall have no right to install any fixtures, equipment or
personal property in the parking areas. Landlord agrees to enforce all parking
rights and restrictions and rules and regulations for the Project on an equal
and non-discriminatory basis. Tenant shall have no liability for non-compliance
with the provisions of the Lease regarding parking other than with respect to
Tenant's officers, directors and employees or persons under the control of
Tenant, except for Landlord's towing rights herein provided.
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the
right to make alterations or additions to the Project, or to the attendant
fixtures, equipment and Common Areas. Landlord may at any time relocate or
remove any of the various buildings (other than the Building), 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 or the Common Areas, including parking
facilities.
ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole expense
shall comply with all applicable laws and governmental regulations governing the
Premises and make all repairs necessary to keep the Premises in the condition as
existed on the Commencement Date (or on any later date that the improvements may
have been installed), excepting ordinary wear and tear, including without
limitation the electrical and mechanical systems, any air conditioning,
ventilating or heating equipment which serves the Premises, all walls, glass,
windows, doors, door closures, hardware, fixtures, electrical, plumbing, fire
extinguisher equipment and other equipment; provided, however, Tenant shall have
no obligation to repair, maintain or replace the roof, foundations, footings,
structural systems, exterior glass, sky lights, sky light seals, window seals
and vents, electrical, plumbing, sewer and other utility lines outside the
Premises, landscaping, walkways, fencing, parking areas, exterior lighting or
exterior surfaces of exterior walls of the Building, and washing of exterior
windows, all of which obligations shall be the sole responsibility of Landlord
as
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provided in Section 7.2 below, subject to the terms of said Section 7.2
(including, without limitation, the provisions for "pass through" of such
expenses as Building Costs as therein provided). Any damage or deterioration of
the Premises shall not be deemed ordinary wear and tear if the same could have
been prevented by good maintenance practices by Tenant. As part of its
maintenance obligations hereunder, Tenant shall, at Landlord's request, provide
Landlord with copies of all maintenance schedules, reports and notices prepared
by, for or on behalf of Tenant. Tenant shall obtain preventive maintenance
contracts from a licensed heating and air conditioning contractor to provide for
regular inspection and maintenance of the heating, ventilating and air
conditioning systems servicing the Premises, all subject to Landlord's approval.
All repairs shall be at least equal in quality to the original work, shall be
made only by a licensed contractor approved in writing in advance by Landlord
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 shall have the right at all
times to inspect Tenant's maintenance of all equipment (including without
limitation air conditioning, ventilating and heating equipment), and may impose
reasonable restrictions and requirements with respect to repairs, as provided in
Section 7.3, and the provisions of Section 7.4 shall apply to all repairs.
Alternatively, Landlord may elect to make any repair or maintenance required
hereunder on behalf of Tenant and at Tenant's expense, and Tenant shall promptly
reimburse Landlord for all reasonable costs incurred upon submission of an
invoice. Landlord agrees not to unreasonably withhold its approval of any
preventive maintenance contracts or licensed contractors selected by Tenant with
respect to Tenant's maintenance and repair obligations.
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR/TENANT'S "SELF-HELP".
Subject to Section 7.1 and Article XI, Landlord shall provide service,
maintenance and repair with respect to the roof, foundations, and footings of
the Building, all landscaping, walkways, parking areas, Common Areas, exterior
lighting, and the exterior surfaces of the exterior walls and windows of the
Building, except that Tenant at its expense shall make all repairs which
Landlord-deems reasonably necessary as a result of the act or negligence of
Tenant, its agents, employees, invitees, subtenants or contractors. Landlord
shall have the right to employ or designate any reputable person or firm,
including any employee or agent of Landlord or any of Landlord's affiliates or
divisions, to perform any service, repair or maintenance function. Landlord need
not make any other improvements or repairs except as specifically required under
this Lease, and nothing contained in this Section shall limit Landlord's right
to reimbursement from Tenant for maintenance, repair costs and replacement costs
as provided elsewhere in this Lease. Tenant understands that it shall not make
repairs at Landlord's expense or by rental offset. Tenant further understands
that Landlord shall not be required to make any repairs to the roof, foundations
or footings unless and until Tenant has notified Landlord in writing of the need
for such repair and Landlord shall have a reasonable period of time thereafter
to commence and complete said repair, if warranted. Except as expressly provided
in Sections 2.4 and 4.2(f) above, all reasonable costs of any maintenance and
repairs on the part of Landlord provided hereunder shall be considered part of
Building Costs. Landlord shall provide Tenant reasonable notice, oral or
written, before commencing any repairs which are likely to materially interfere
with Tenant's use of the Premises, the Building or the Common Area.
If Landlord shall fail to perform any repair obligations required
under this Lease within thirty (30) days following Tenant's written request for
such repairs, or if Landlord shall fail to perform any repairs required under
this Lease of an emergency condition within forty-eight (48) hours' written
notice from Tenant, then Tenant may elect to make such repairs at Landlord's
expense by complying with the following provisions. Before making any such
repair, Tenant shall deliver to Landlord a notice for the need for such repair
("Self-Help Notice"), which notice shall specifically advise Landlord that
Tenant intends to exercise its self-help right hereunder. Should Landlord fail,
within ten (10) days following receipt of the Self-Help Notice (or within
twenty-four (24) hours following notice in the event of necessary emergency
repairs), to commence the necessary repair or to make other arrangements
reasonably satisfactory to Tenant, then Tenant shall have the right to make such
repair on behalf of Landlord. Landlord shall reimburse Tenant for the reasonable
costs of such repairs within thirty (30) days following receipt of Tenant's
invoice for such costs, provided that in no event shall Tenant have the right to
offset Basic Rent or any other charges payable by Tenant hereunder against such
costs. It is understood that such reimbursement obligation shall be personal to
Landlord, and in no event shall any lender or other deed of trust holder
succeeding to Landlord be liable for payment of any such amount. In the event
that the work could affect the Building's structural, mechanical, electrical,
heating, ventilating, air conditioning, life safety or plumbing components or
systems, then Tenant shall use only those contractors whose names are furnished
by Landlord for such work. If those contractors are unwilling or unable to
perform the work, or if Landlord fails to furnish the names of its contractors
to Tenant prior to the commencement of the work by Tenant, Tenant shall retain
the services of qualified, reputable and licensed, bonded contractors with like
experience in similar building systems. Tenant shall be responsible for
obtaining any necessary governmental permits before commencing the repair work.
Tenant shall be liable for any damage, loss or injury resulting from said work
to the extent of Tenant's or its agent's, employee's or contractor's negligence.
Any disputes regarding these self-help provisions shall be submitted to and
resolved by JAMS arbitration pursuant to Section 22.7 of this Lease.
SECTION 7.3. ALTERATIONS. Except for the Tenant Improvements, which
shall be governed by the terms and conditions of the Work Letter, Tenant shall
make no alterations, additions or improvements to the Premises without the prior
written consent of Landlord, which consent may be given or withheld in
Landlord's sole discretion. Notwithstanding the foregoing, but subject to the
following provisions of this Section, Landlord's consent shall not be required
for any alterations, additions or improvements to the Premises which cost less
than Two Dollars ($2.00) per square foot of the improved portions of the
Premises per year on a cumulative basis (the "Alteration Cap") and do not (i)
affect the exterior of the Building or outside areas (which are not visible from
adjoining sites), or (ii) affect or penetrate any of the structural portions of
the Building, including but not limited to the roof, or (iii) require any change
to the basic floor plan of the Premises, any change to any structural or
mechanical systems of the Premises, or any governmental permit as a prerequisite
to the construction thereof, or (iv) interfere in any manner with the proper
functioning of or Landlord's access to any mechanical, electrical, plumbing or
HVAC systems, facilities or equipment located in or serving the Building, or (v)
diminish the value of the Premises. Landlord may impose, as a condition to its
consent, any requirements that Landlord in its reasonable discretion may deem
reasonable or desirable, including but
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not limited to a requirement that all work be covered by a lien and completion
bond satisfactory to Landlord (not to exceed one hundred fifty percent (150%) of
the cost of the work), and requirements as to the manner, time, and contractor
for performance of the work. Tenant shall obtain all required permits for the
work and shall perform the work in compliance with all applicable laws,
regulations and ordinances, all covenants, conditions and restrictions affecting
the Project, and the Rules and Regulations (hereafter defined). Tenant
understands and agrees that Landlord shall be entitled to a supervision fee in
the amount of three percent (3%) of the cost of such work requiring a permit
from the City of San Diego. If any governmental entity requires, as a condition
to any proposed alterations, additions or improvements to the Premises by
Tenant, that improvements be made to the Common Areas, and if Landlord consents
to such improvements to the Common Areas, 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 (including, if required by
Landlord, Landlord's contractors) as Landlord may require in its sole
discretion. Under no circumstances shall Tenant make any improvement which
incorporates any Hazardous Materials, including without limitation
asbestos-containing construction materials into the Premises. Any request for
Landlord's consent shall be made in writing and shall contain architectural
plans describing the work in detail reasonably satisfactory to Landlord. Unless
Landlord otherwise agrees in writing, all alterations, additions or improvements
affixed to the Premises (excluding moveable trade fixtures and furniture) shall
become the property of Landlord and shall be surrendered with the Premises at
the end of the Term, except that Landlord may, by notice to Tenant, require
Tenant to remove by the Expiration Date, or sooner termination date of this
Lease, all or any alterations, decorations, fixtures, additions, improvements
and the like installed either by Tenant or by Landlord at Tenant's request and
to repair any damage to the Premises arising from that removal. Except as
otherwise provided in this Lease or in any Exhibit to this Lease, should
Landlord make any alteration or improvement to the Premises for Tenant, Landlord
shall be entitled to prompt reimbursement from Tenant for all costs incurred.
As of the expiration or earlier termination of the Term, Landlord
shall have the right to require Tenant to remove (i) any of the components of
the initial Tenant Improvements to the Premises but only if Landlord notifies
Tenant that such removal will be required at the time of Landlord's approval of
the Preliminary Plan following a written request by Tenant as to whether or not
Landlord will require such removal, and (ii) any subsequent alterations,
additions or improvements, whether or not Landlord's consent was required, but
only if Landlord's written consent was obtained and if, at the time of providing
its consent following a written request by Tenant as to whether or not Landlord
would require such removal, Landlord notified Tenant in writing that Tenant
would have to remove such items upon the expiration of the Lease Term. Landlord
and Tenant agree that Tenant shall have the right, upon expiration or
termination of this Lease, to remove any and all phone systems, furniture,
fixtures and other personal property which are not permanently affixed to the
Premises or which may be removed without significant change to the Premises
(including floor coverings, draperies, and/or removable shelves) that are
installed in the Premises at Tenant's sole expense; provided, however, that
Tenant shall, at its sole cost, repair any damage caused by such removal,
reasonable wear and tear excepted.
SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free from
any liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly cause
any such lien to be released by posting a bond in accordance with California
Civil Code Section 3143 or any successor statute. In the event that Tenant shall
not, within thirty (30) days following the imposition of any lien, cause the
lien to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other available remedies, the right to cause the
lien to be released by any means it deems proper, including payment of or
defense against the claim giving rise to the lien. All reasonable and actual
expenses so incurred by Landlord, including Landlord's reasonable attorney's
fees, and any foreseeable consequential or other damages incurred by Landlord
proximately caused by such lien, shall be reimbursed by Tenant promptly
following Landlord's demand, together with interest from the date of payment by
Landlord at the maximum rate permitted by law until paid. Tenant shall give
Landlord no less than twenty (20) days' prior notice in writing before
commencing construction of any kind on the Premises so that Landlord may post
and maintain notices of nonresponsibility on the Premises.
SECTION 7.5. ENTRY AND INSPECTION. Landlord shall at all reasonable
times, upon at least twenty-four (24) hours' prior written or oral notice
(except in emergencies, when no notice shall be required) have the right to
enter the Premises to inspect them, to supply services in accordance with this
Lease, to protect the interests of Landlord in the Premises, and to submit the
Premises to prospective or actual purchasers or encumbrance holders (or, during
the last one hundred and eighty (180) days of the Term or when an uncured Tenant
default exists, to prospective tenants), all without being deemed to have caused
an eviction of Tenant and without abatement of rent except as provided elsewhere
in this Lease. Landlord shall have the right, if desired, to retain a key which
unlocks all of the doors in the Premises, excluding Tenant's vaults and safes,
and Landlord shall have the right to use any and all means which Landlord may
deem proper to open the doors in an emergency in order to obtain entry to the
Premises, and any entry to the Premises obtained by Landlord shall not under any
circumstances be deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or any eviction of Tenant from the Premises.
SECTION 7.6. COMMUNICATIONS EQUIPMENT. Landlord hereby grants to Tenant
a non-exclusive license (the "License") to install, maintain and operate on the
roof of the Building three (3) antenna/satellite dishes each not exceeding
thirty-six (36) inches in height or twenty-four (24) inches in diameter
(collectively, the "Antenna"), in accordance with and subject to the terms and
conditions set forth below. The Antenna shall be installed at a location
designated by Landlord and reasonably acceptable to Tenant ("Licensed Area").
The Licensed Area shall be considered to be a part of the Premises for all
purposes under the Lease, and except as otherwise expressly provided in this
Section 7.6 all provisions applicable to the use of the Premises under the Lease
shall apply to the Licensed Area and its use by Tenant.
(1) The Term of the License shall be coterminous with this Lease;
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(2) Tenant shall not be obligated to pay any license fee for the
use of the Licensed Area pursuant to this Section 7.6 during the Term of this
Lease.
(3) Tenant shall use the Licensed Area only for the installation,
operation, repair, replacement and maintenance of the Antenna and the necessary
mechanical and electrical equipment to service said Antenna and for no other use
or purpose. The installation of the Antenna and all equipment and facilities
related thereto, including any required conduit from the Premises to the
Antenna, shall be deemed to constitute an alteration subject to the provisions
of Section 7.3 of the Lease, provided that Landlord shall not unreasonably
withhold its approval of the same. Landlord may require appropriate screening
for the Antenna as a condition of Landlord's approval of the installation of the
Antenna. So long as Tenant leases the entire Building, Tenant may have access to
the Licensed Area for such uses at all times. If Tenant no longer leases the
entirety of the Building, Tenant may have access to the Licensed Area for such
uses during normal business hours and at times upon reasonably prior notice to
Landlord and shall reimburse Landlord for any reasonably out-of-pocket expenses
incurred by Landlord in connection therewith;
(4) The Antenna shall be used only for transmitting and/or
receiving data, audio and/or video signals to and from Tenant's facilities
within the Premises for Tenant's use, and shall not be used or permitted to be
used by Tenant for purposes of broadcasting signals to the public or to provide
telecommunications or other communications transmitting or receiving services to
any third parties, provided, however, that the provisions of this paragraph (4)
shall not be construed to prohibit Tenant from transmitting and/or receiving
data, audio and/or video signals directly to and from its customers;
(5) Landlord reserves the right upon reasonable prior written
notice to Tenant to require either (a) the relocation of all equipment installed
by Tenant to another location on the roof of the Building reasonably designated
by Landlord, or (b) the removal of any and all of such equipment should Landlord
reasonably determine that its presence results in material damage to the
Building unless Tenant makes satisfactory arrangements to protect Landlord
therefrom;
(6) Tenant shall require its employees, when using the Licensed
Area, to stay within the immediate vicinity thereof. In addition, in the event
any communications system or broadcast or receiving facilities are operating in
the area (other than on the roof of the Building), Tenant shall at all times
during the term of the License conduct its operations so as to ensure that such
system or facilities shall not be subjected to harmful interference as a result
of such operations by Tenant. Upon notification from Landlord of any such
interference, Tenant agrees to immediately take the necessary steps to correct
such situation, and Tenant's failure to do so shall be deemed a default under
the terms of this Lease.
(7) During the term of the License, Tenant shall comply with any
standards promulgated by applicable governmental authorities or otherwise
reasonably established by Landlord regarding the generation of electromagnetic
fields. Should Landlord determine in good faith at any time that the Antenna
poses a health or safety hazard to occupants of the Building, Landlord may
require Tenant to make arrangements satisfactory to Landlord to mitigate such
hazard or, if Tenant either fails or is unable to make such satisfactory
arrangements, to remove the Antenna. Any claim or liability resulting from the
use of the Antenna or the Licensed Area shall be subject to the indemnification
provisions of this Lease applicable to Tenant's use of the Premises;
(8) During the term of the License, Tenant shall pay all taxes
attributable to the Antenna and other equipment owned and installed by Tenant,
and Tenant shall assure and provide Landlord with evidence that the Licensed
Area and Tenant's use thereof are subject to the insurance coverages otherwise
required to be maintained by Tenant as to the Premises pursuant to Exhibit D;
(9) Upon the expiration or sooner termination of the Lease,
Tenant shall remove the Antenna and all related equipment and facilities,
including any conduit from the Premises to the Antenna, from the Licensed Area
and any other portions of the Building within or upon which the same may be
installed, and shall restore the Licensed Area and all other areas affected by
such removal to their original condition, reasonable wear and tear excepted, all
at its sole cost and expense; and
(10) The License is personal to Tenant and shall not be
assignable in whole or in part, and any attempted assignment thereof without he
consent of Landlord, which consent may be withheld by Landlord in its sole and
absolute discretion, shall immediately terminate the License. Notwithstanding
the foregoing, Landlord's consent shall not be required with respect to an
assignment of the License made in connection with an assignment of this Lease
permitted to be made without Landlord's consent pursuant to Section 9.4 below,
and Tenant may permit the use of this License by any subtenant subject to all of
the terms and provisions of this Section 7.6, which terms and provisions shall
be expressly incorporated by reference in any sublease for any subtenant which
Tenant will permit to use the License.
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay all taxes and assessments
levied against all personal property of Tenant located in the Premises, against
all improvements to the Premises made by Landlord or Tenant which are above
Landlord's Project standard in quality and/or quantity for comparable space
within the Project ("Above Standard Improvements"), and against any alterations,
additions or like improvements made to the Premises by or on behalf of Tenant.
When possible Tenant shall cause its personal property, Above Standard
Improvements and alterations to be assessed and billed separately from the real
property of which the Premises form a part. If any taxes on Tenant's personal
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property, Above 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, Above Standard Improvements and/or
alterations of Tenant and if Landlord pays the taxes based upon the increased
assessment, Tenant shall pay to Landlord the taxes so levied against Landlord or
the proportion of the taxes resulting from the increase in the assessment. In
calculating what portion of any tax xxxx which is assessed against Landlord
separately, or Landlord and Tenant jointly, is attributable to Tenant's Above
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,
Tenant will not, either voluntarily or by operation of law, assign, sublet,
encumber, or otherwise transfer all or any part of Tenant's interest in this
lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent shall not unreasonably
be withheld or delayed, all in accordance with the provisions of Section
9.1.(b). No assignment (whether voluntary, involuntary or by operation of law)
and no subletting shall be valid or effective without Landlord's prior written
consent and, at Landlord's election, any such assignment or subletting or
attempted assignment or subletting shall constitute a material default of this
Lease. Without limiting the foregoing, Landlord agrees that the use and
occupancy of any portion of the Premises by any person performing office support
services (such as mail room, copy center, shipping or travel service) or other
services incidental to Tenant's permitted use on an outsource basis shall not
constitute a sublease or other prohibited transfer of the Premises provided
Tenant continues to occupy the remainder of the Premises. Landlord shall not be
deemed to have given its consent to any assignment or subletting by any other
course of action, including its acceptance of any name for listing in the
Building directory. To the extent not prohibited by provisions of the Bankruptcy
Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"), including Section
365(f)(1), Tenant on behalf of itself and its creditors, administrators and
assigns waives the applicability of Section 365(e) of the Bankruptcy Code unless
the proposed assignee of the Trustee for the estate of the bankrupt meets
Landlord's standard for consent as set forth in Section 9.1(b) of this Lease. If
this Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, any and all monies or other considerations to be delivered in
connection with the assignment shall be delivered to Landlord, shall be and
remain the exclusive property of Landlord and shall not constitute property of
Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code. Any
person or entity to which this Lease is assigned pursuant to the provisions of
the Bankruptcy Code shall be deemed to have assumed all of the obligations
arising under this Lease on and after the date of the assignment, and shall upon
demand execute and deliver to Landlord an instrument confirming that assumption.
(b) If Tenant desires to transfer an interest in this Lease, it
shall first notify Landlord of its desire and shall submit in writing to
Landlord: (i) the name and address of the proposed transferee; (ii) the nature
of any proposed subtenant's or assignee's business to be carried on in the
Premises; (iii) the terms and provisions of any proposed sublease or assignment,
including a copy of the proposed assignment or sublease form; (iv) evidence of
insurance of the proposed assignee or subtenant complying with the requirements
of Exhibit D hereto; (v) a completed Environmental Questionnaire from the
proposed assignee or subtenant; and (vi) any other information reasonably
requested by Landlord and reasonably related to the transfer. Except as provided
in Subsection (e) of this Section, Landlord shall not unreasonably withhold its
consent, provided: (1) the use of the Premises will be consistent with the
provisions of this Lease; (2) the proposed assignee or subtenant has not 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 and is not subject to any enforcement order issued by any
governmental authority in connection with the use, disposal or storage of a
Hazardous Material; (3) at Landlord's election, insurance requirements shall be
brought into conformity with Landlord's then current leasing practice; (4) any
proposed subtenant or assignee demonstrates that it is financially responsible
by submission to Landlord of all information as Landlord may reasonably request
concerning the proposed subtenant or assignee, including, but not limited to, a
balance sheet of the proposed subtenant or assignee as of a date within ninety
(90) days of the request for Landlord's consent and statements of income or
profit and loss of the proposed subtenant or assignee for the 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
demonstrates to Landlord's reasonable satisfaction a record of successful
experience in business; (6) the proposed assignee or subtenant is not an
existing tenant of the Project or a prospect with whom Landlord is negotiating
to become a tenant at the Project; and (7) the proposed transfer will not impose
additional burdens or adverse tax effects on Landlord. Tenant's exterior signage
rights described in Section 5.2 of this Lease may be assigned in connection with
an assignment of the Lease, but only if the name proposed for such Exterior
Signage will not materially devalue the Project 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. Landlord shall approve or disapprove any requested transfer
within fifteen (15) business days following receipt of Tenant's written request,
the information set forth above, and the fee set forth below.
(c) Notwithstanding the provisions of Subsection (b) above, in
lieu of consenting to a proposed assignment of this Lease or to any proposed
subletting of an entire floor (or more than an entire floor) of the Premises,
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Landlord may elect to (i) sublease the Premises (or the portion proposed to be
subleased), or take an assignment of Tenant's interest in this Lease, upon the
same terms as offered to the proposed subtenant or assignee (excluding terms
relating to the purchase of personal property, the use of Tenant's name or the
continuation of Tenant's business), or (ii) terminate this Lease as to the
portion of the Premises proposed to be subleased or assigned with a
proportionate abatement in the rent payable under this Lease, effective on the
date that the proposed sublease or assignment would have become effective.
Notwithstanding the foregoing, if Tenant provides notice to Landlord of its
desire to sublease the Premises or a portion thereof or to assign this Lease,
which notice shall state the terms on which Tenant proposes to sublet or assign,
Landlord agrees that it will within fifteen (15) business days after its receipt
of such notice either elect to utilize its rights under this subsection 9.1(c)
on the basis of such notice, or waive its right to utilize its rights under this
Section 9.1(c) upon a sublet or assignment made within one hundred eighty (180)
days after such notice on terms no less favorable to Tenant than those set forth
in such notice. Landlord may thereafter, at its option, assign or re-let any
space so recaptured to any third party, including without limitation the
proposed transferee of Tenant.
(d) Tenant agrees that fifty percent (50%) of any amounts paid by
the assignee or subtenant, however described, in excess of (i) the Basic Rent
payable by Tenant hereunder, or in the case of a sublease of a portion of the
Premises, in excess of the Basic Rent reasonably allocable to such portion, plus
(ii) Tenant's direct out-of-pocket costs such as tenant improvement or moving
costs and brokerage commissions which Tenant certifies to Landlord have been
paid to provide occupancy related services to such assignee or subtenant of a
nature commonly provided by landlords of similar space, shall be the property of
Landlord and such amounts shall be payable directly to Landlord by the assignee
or subtenant or, at Landlord's option, by Tenant. At Landlord's request, a
written agreement shall be entered into by and among Tenant, Landlord and the
proposed assignee or subtenant confirming the requirements of this subsection.
(e) Tenant shall pay to Landlord a fee of Five Hundred Dollars
($500.00) if and when any transfer hereunder is requested by Tenant. Such fee is
hereby acknowledged as a reasonable amount to reimburse Landlord for its costs
of review and evaluation of a proposed assignee/sublessee, and Landlord shall
not be obligated to commence such review and evaluation unless and until such
fee is paid.
SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with
the consent of Landlord, shall relieve Tenant of its obligation to pay rent and
to perform all its other obligations under this Lease. Moreover, Tenant shall
indemnify and hold Landlord harmless, as provided in Section 10.3, for any act
or omission by an assignee or subtenant. Each assignee, other than Landlord,
shall be deemed to assume all obligations of Tenant under this Lease and shall
be liable jointly and severally with Tenant for the payment of all rent, and for
the due performance of all of Tenant's obligations, under this Lease. No
transfer shall be binding on Landlord unless any document memorializing the
transfer is delivered to Landlord and both the assignee/subtenant and Tenant
deliver to Landlord an executed consent to transfer instrument prepared by
Landlord and consistent with the requirements of this Article. The acceptance by
Landlord of any payment due under this Lease from any other person shall not be
deemed to be a waiver by Landlord of any provision of this Lease or to be a
consent to any transfer. Consent by Landlord to one or more transfers shall not
operate as a waiver or estoppel to the future enforcement by Landlord of its
rights under this Lease.
SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises and
shall be deemed included in each sublease:
(a) Each and every provision contained in this Lease (other than
with respect to the payment of rent hereunder) is incorporated by reference into
and made a part of such sublease, with "Landlord" hereunder meaning the
sublandlord therein and "Tenant" hereunder meaning the subtenant therein.
(b) Tenant hereby irrevocably assigns to Landlord all of Tenant's
interest in all rentals and income arising from any sublease of the Premises,
and Landlord may collect such rent and income and apply same toward Tenant's
obligations under this Lease; provided, however, that until a default occurs in
the performance of Tenant's obligations under this Lease, Tenant shall have the
right to receive and collect the sublease rentals. Landlord shall not, by reason
of this assignment or the collection of sublease rentals, be deemed liable to
the subtenant for the performance of any of Tenant's obligations under the
sublease. Tenant hereby irrevocably authorizes and directs any subtenant, upon
receipt of a written notice from Landlord stating that an uncured default exists
in the performance of Tenant's obligations under this Lease, to pay to Landlord
all sums then and thereafter due under the sublease. Tenant agrees that the
subtenant may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall have
no right or claim against the subtenant or Landlord for any rentals so paid to
Landlord.
(c) In the event of the termination of this Lease, Landlord may,
at its sole option, take over Tenant's entire interest in any sublease and, upon
notice from Landlord, the subtenant shall attorn to Landlord. In no event,
however, shall Landlord be liable for any previous act or omission by Tenant
under the sublease or for the return of any advance rental payments or deposits
under the sublease that have not been actually delivered to Landlord, nor shall
Landlord be bound by any sublease modification executed without Landlord's
consent or for any advance rental payment by the subtenant in excess of one
month's rent. The general provisions of this Lease, including without limitation
those pertaining to insurance and indemnification, shall be deemed incorporated
by reference into the sublease despite the termination of this Lease.
SECTION 9.4. CERTAIN TRANSFERS. The sale of all or substantially all of
Tenant's assets (other than bulk sales in the ordinary course of business) or,
if Tenant is a corporation, an unincorporated association, or a partnership, the
transfer, assignment or hypothecation of any stock or interest in such
corporation, association, or partnership in the aggregate of fifty percent (50%)
(except for publicly traded shares of stock constituting a transfer of fifty
percent (50%) or more in the aggregate, so long as no change in the controlling
interest of Tenant occurs as a result
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thereof) shall be deemed an assignment within the meaning and provisions of this
Article. Notwithstanding the foregoing, Landlord's consent shall not be required
for the assignment of this Lease to any entity controlling or under common
control with Tenant, or as a result of a merger, acquisition, consolidation or
reorganization by or of Tenant with or into another entity or a sublease to any
entity controlled by or under common control with Tenant (any of the foregoing
successor entities and subtenants being herein referred to as a "Tenant
Affiliate"), so long as (i) the net worth of the successor entity after such
assignment (or in the case of an assignment to a Tenant Affiliate, the combined
net worth of Tenant and such Tenant Affiliate) 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 assignment, evidence
of which, satisfactory to Landlord, shall be presented to Landlord prior to such
assignment, (ii) Tenant shall provide to Landlord, prior to such assignment,
written notice of such assignment documentation and other information as
Landlord may request in connection therewith, and (iii) all of the other terms
and requirements of this Article shall apply with respect to such assignment,
except for the terms and requirements of Section 9.1 which shall not apply 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 shall provide the following
types of insurance, in amounts and coverages as may be determined by Landlord in
its reasonable discretion provided such amounts, coverages and deductibles are
reasonable and comparable to coverages maintained on comparable properties in
the area: "all risk" property insurance, subject to standard exclusions covering
the Building and the Project, and commercial general liability coverage in
amounts of not less than Two Million Dollars ($2,000,000.00) on an "occurrence"
basis. Further, Landlord may, in its sole and absolute discretion, obtain
coverage for such other risks as Landlord or its mortgagees may from time to
time deem appropriate, including without limitation, coverage for leasehold
improvements and/or earthquake and flood (provided, however, that the cost of
earthquake and flood insurance shall not be included as an Operating Expense
unless Landlord elects or is required to carry such coverage on the entire
Project). Landlord shall not be required to carry insurance of any kind on
Tenant's property, including leasehold improvements, trade fixtures,
furnishings, equipment, plate glass, signs and all other items of personal
property, and shall not be obligated to repair or replace that property should
damage occur. All proceeds of insurance maintained by Landlord upon the Building
and 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, provided, however, that in the event that Landlord
transfers its fee interest in the Project including the Premises (other than to
an entity affiliated with, controlled, controlling or under common control with
Landlord, or in which Landlord retains an interest), such transferee shall
demonstrate a financial net worth of at least Fifty Million Dollars
($50,000,000.00), and in the absence of such financial net worth, such
transferee shall instead maintain insurance coverage as required by this Section
10.2 from third-party insurance carrier(s).
SECTION 10.3. JOINT INDEMNITY.
(a) To the fullest extent permitted by law, but subject to the
express limitations on liability contained in Section 10.5 of this Lease, Tenant
shall defend, indemnify, protect, save and hold harmless Landlord, its agents,
and any and all affiliates of Landlord, including, without limitation, any
corporations or other entities controlling, controlled by or under common
control with Landlord, from and against any and all claims, liabilities, costs
or expenses arising either before or after the Commencement Date from Tenant's
use or occupancy of the Premises, or from the conduct of its business, or from
any activity, work, or thing done, permitted or suffered by Tenant or its
agents, employees, invitees or licensees in or about the Premises, or from any
negligence or willful misconduct of Tenant or its agents, employees, visitors,
patrons, guests, invitees or licensees. In cases of alleged negligence asserted
by third parties against Landlord which arise out of, are occasioned by, or in
any way attributable to Tenant's, its agents, employees, contractors, licensees
or invitees use and occupancy of the Premises, 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 on Tenant's part to be
performed under this Lease, or from any negligence or willful misconduct of
Tenant, its agents, employees, licensees or invitees, Tenant shall accept any
tender of defense for Landlord and shall, notwithstanding any allegation of
negligence or willful misconduct on the part of the Landlord (but subject to the
reimbursement provisions hereinafter provided), defend Landlord and protect and
hold Landlord harmless and pay all costs, expenses and attorneys' fees incurred
in connection with such litigation, provided that Tenant shall not be liable for
any such injury or damage, and Landlord shall reimburse Tenant for the
reasonable attorney's fees and costs for the attorney representing both parties,
all to the extent and in the proportion that such injury or damage is ultimately
determined by a court of competent jurisdiction (or in connection with any
negotiated settlement agreed to by Landlord) to be attributable to the
negligence or willful misconduct of Landlord. Upon Landlord's request, Tenant
shall at Tenant's sole cost and expense, retain a separate attorney selected by
Landlord and reasonably acceptable to Tenant to represent Landlord in any such
suit if Landlord reasonably determines that the representation of both Tenant
and Landlord by the same attorney would cause a conflict of interest; provided,
however, that to the extent and in the proportion that the injury or damage
which is the subject of the suit is ultimately determined by a court of
competent jurisdiction (or in connection with any negotiated settlement agreed
to by Landlord) to be attributable to the negligence or willful misconduct of
Landlord, Landlord shall reimburse Tenant for the reasonable legal fees and
costs of the separate attorney retained by Tenant. The provisions of this
Subsection 10.3(a) shall expressly survive the expiration or sooner termination
of this Lease.
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(b) To the fullest extent permitted by law, but subject to the
express limitations on liability contained in this Lease (including, without
limitation, the provisions of Sections 10.4, 10.5 and 14.8 of this Lease),
Landlord shall defend, indemnify, protect, save and hold harmless Tenant, its
agents and any and all affiliates of Tenant, including, without limitation, any
corporations, or other entities controlling, controlled by or under common
control with Tenant, from and against any and all claims, liabilities, costs or
expenses arising either before or after the Commencement Date from the
operation, maintenance or repair of the Common Areas, the Project and/or the
Building by Landlord or its employees or authorized agents. In cases of alleged
negligence asserted by third parties against Tenant which arise out of, are
occasioned by, or in any way attributable to the maintenance or repair of the
Common Areas, the Project or the Building by Landlord or its authorized agents
or employees, Landlord shall accept any tender of defense for Tenant and shall,
notwithstanding any allegation of negligence or willful misconduct on the part
of Tenant (but subject to the reimbursement provisions hereinafter provided),
defend Tenant and protect and hold Tenant harmless and pay all cost, expense and
attorneys' fees incurred in connection with such litigation, provided that
Landlord shall not be liable for any such injury or damage, and Tenant shall
reimburse Landlord for the reasonable attorney's fees and costs for the attorney
representing both parties, all to the extent and in the proportion that such
injury or damage is ultimately determined by a court of competent jurisdiction
(or in connection with any negotiated settlement agreed to by Tenant) to be
attributable to the negligence or willful misconduct of Tenant. Upon Tenant's
request, Landlord shall at Landlord's sole cost and expense, retain a separate
attorney selected by Tenant and reasonably acceptable to Landlord to represent
Tenant in any such suit if Tenant reasonably determines that the representation
of both Tenant and Landlord by the same attorney would cause conflict of
interest; provided, however, that to the extent and the proportion that the
injury or damage which is the subject of the suit is ultimately determined by a
court of competent jurisdiction (or in connection with any negotiated settlement
agreed to by Tenant) to be attributable to the negligence or willful misconduct
or Tenant, Tenant shall reimburse Landlord for the reasonable legal fees and
costs of the separate attorney retained by Landlord. The provisions of this
Subsection 10.3(b) shall expressly survive the expiration or sooner termination
of this Lease.
SECTION 10.4. LANDLORD'S NONLIABILITY. Subject to the express indemnity
obligations contained in Section 10.3(b) of this Lease, Landlord shall not be
liable to Tenant, its employees, agents and invitees, and Tenant hereby waives
all claims against Landlord for loss of or damage to any property or personal
injury, or any other loss, cost, damage, injury or liability whatsoever
resulting from 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 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. Notwithstanding any provision
of this Lease to the contrary, including, without limitation, the provisions of
Section 10.3(b) of this Lease, Landlord shall in no event be liable to Tenant,
its employees, agents, and invitees, and Tenant hereby waives all claims against
Landlord, for loss or interruption of Tenant's business or income (including,
without limitation, any consequential damages and lost profit or opportunity
costs), or any other loss, cost, damage, injury or liability resulting from, but
not limited to, Acts of God (except with respect to restoration obligations
pursuant to Article XI below), acts of civil disobedience or insurrection, acts
or omissions (criminal or otherwise) of any third parties (other than Landlord's
employees or authorized agents), including without limitation, any other tenants
within the Project or their agents, employees, contractors, guests or invitees.
It is understood that any such condition may require the temporary evacuation or
closure of all or a portion of the Building. Except as provided in Sections 11.1
and 12.1 below, there shall be no abatement of rent and no liability of Landlord
by reason of any injury to or interference with Tenant's business (including
without limitation consequential damages and lost profit or opportunity costs)
arising from the making of any repairs, alterations or improvements to any
portion of the Building, including repairs to the Premises, nor shall any
related activity by Landlord constitute an actual or constructive eviction;
provided, however, that in making repairs, alterations or improvements, Landlord
shall interfere as little as reasonably practicable with the conduct of Tenant's
business in the Premises. Neither Landlord nor its agents shall be liable for
interference with light or other similar intangible interests. Tenant shall
immediately notify Landlord in case of fire or accident in the Premises, 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 only that such loss or damage is required to be insured against under
any "all risk" property insurance policies required by this Article X; provided
however, that (i) the foregoing waiver shall not apply to the extent of Tenant's
obligations to pay deductibles under any such policies and this Lease, and (ii)
if any loss is due to the act, omission or negligence or willful misconduct of
Tenant or its agents, employees, contractors, guests or invitees, Tenant's
liability insurance shall be primary and shall cover all losses and damages
prior to any other insurance hereunder. By this waiver it is the intent of the
parties that neither Landlord nor Tenant shall be liable to any insurance
company (by way of subrogation or otherwise) insuring the other party for any
loss or damage insured against under any "all-risk" property insurance policies
required by this Article, even though such loss or damage might be occasioned by
the negligence of such party, its agents, employees, contractors, guests or
invitees. The provisions of this Section shall not limit the indemnification
provisions elsewhere contained in this Lease.
ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1. RESTORATION.
(a) If the Building is damaged, Landlord shall diligently repair
that damage as soon as reasonably possible, at its expense, unless: (i) Landlord
reasonably determines that the cost of repair is not covered by Landlord's fire
and extended coverage insurance (or, if Landlord is self-insuring, would not be
covered by a standard all-risk policy, subject to standard exclusions), plus
such additional amounts Tenant elects, at its option, to contribute, excluding
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however the deductible (for which Tenant shall be responsible for Tenant's
proportionate share); (ii) Landlord reasonably determines that the Premises
cannot, with reasonable diligence, be fully repaired by Landlord (or cannot be
safely repaired because of the presence of hazardous factors, including without
limitation Hazardous Materials, earthquake faults, and other similar dangers)
within two hundred seventy (270) days after the date of the damage; (iii) an
event of default by Tenant has occurred and is continuing beyond any applicable
cure period at the time of such damage; or (iv) the damage occurs during the
final twelve (12) months of the Term. Should Landlord elect not to repair the
damage for one of the preceding reasons, Landlord shall so notify Tenant in
writing within sixty (60) days after the damage occurs and this Lease shall
terminate as of the date of that notice.
(b) Unless Landlord elects to terminate this Lease in accordance
with subsection (a) above, this Lease shall continue in effect for the remainder
of the Term; provided that so long as Tenant is not in default under this Lease
beyond any applicable cure period, if, the damage is so extensive that Landlord
reasonably determines that the Premises cannot, with reasonable diligence, be
repaired by Landlord (or cannot be safely repaired because of the presence of
hazardous factors, earthquake faults, and other similar dangers) so as to allow
Tenant's substantial use and enjoyment of the Premises within two hundred
seventy (270) days after the date of damage, then Tenant may elect to terminate
this Lease by written notice to Landlord within the sixty (60) day period stated
in subsection (a).
(c) Commencing on the date of any damage to the Building, and
ending on the sooner of the date the damage is repaired or the date this Lease
is terminated, the rental to be paid under this Lease shall be abated in the
same proportion that the floor area of the Building that is rendered unusable by
the damage from time to time bears to the total floor area of the Building, but
only to the extent that any rental abatement Insurance proceeds are received by
Landlord therefor from Tenant's insurance described in Exhibit D.
(d) Notwithstanding the provisions of subsections (a), (b) and
(c) of this Section, and subject to the provisions of Section 10.5 above, the
cost of any repairs shall be borne by Tenant, and Tenant shall not be entitled
to rental abatement or termination rights, if the damage is due to the fault or
neglect of Tenant or its employees, subtenants, invitees or representatives. In
addition, the provisions of this Section shall not be deemed to require Landlord
to repair any improvements or fixtures that Tenant is obligated to repair or
insure pursuant to any other provision of this Lease.
(e) Tenant shall fully cooperate with Landlord in removing
Tenant's personal property and any non-structural 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. If damage or destruction rendering the Premises
unusable occurs during the final twelve (12) months of the Lease Term or the
final twelve (12) months of any extension period which cannot be repaired within
sixty (60) days following such damage or destruction, Tenant shall have the
option to terminate the Lease by providing Landlord written notification of
Tenant's election to terminate within thirty (30) days after the damage occurs.
For all purposes of this Section 11.1, damage to Tenant's parking areas and
access to the Premises shall be deemed damage to the Building.
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.
Any disputes regarding the obligations of the parties under this Article XI
shall be submitted to and resolved by JAMS arbitration pursuant to Section 22.7
of this Lease.
ARTICLE XII. EMINENT DOMAIN
SECTION 12.1. TOTAL OR PARTIAL TAKING. If all or a material portion of
the Premises which materially impairs Tenant's ability to conduct business from
the Premises is taken by any lawful authority by exercise of the right of
eminent domain, or sold to prevent a taking, either Tenant or Landlord may
terminate this Lease effective as of the date possession is required to be
surrendered to the authority. In the event title to a portion of the Premises is
taken or sold in lieu of taking, and if Landlord elects to restore the Premises
in such a way as to alter the Premises materially, either party may terminate
this Lease, by written notice to the other party, effective on the date of
vesting of title. In the event neither party has elected to terminate this Lease
as provided above, then Landlord shall promptly, after receipt of a sufficient
condemnation award, proceed to restore the Premises to substantially their
condition prior to the taking, and a proportionate allowance shall be made to
Tenant for the rent corresponding to the time during which, and to the part of
the Premises of which, Tenant is deprived on account of the taking and
restoration. In the event of a taking, Landlord shall be entitled to the entire
amount of the condemnation award without deduction for any estate or interest of
Tenant; provided that nothing in this Section shall be deemed to give Landlord
any interest in, or prevent Tenant from seeking any award against the taking
authority for, the taking of personal property and fixtures belonging to Tenant
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
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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. Any dispute regarding
the substitution of parking spaces under this Section 12.3 shall be submitted to
and resolved by JAMS arbitration pursuant to Section 22.7 of this Lease.
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
SECTION 13.1. SUBORDINATION. At the option of Landlord, this Lease shall
be either superior or subordinate to all ground or underlying leases, mortgages
and deeds of trust, if any, which may hereafter affect the Premises, and to all
renewals, modifications, consolidations, replacements and extensions thereof;
provided, that so long as Tenant is not in default under this Lease beyond any
applicable cure period, this Lease shall not be terminated or Tenant's quiet
enjoyment of the Premises disturbed in the event of termination of any such
ground or underlying lease, or the foreclosure of any such mortgage or deed of
trust, to which Tenant has subordinated this Lease pursuant to this Section. Any
such subordination instrument presented for Tenant's signature shall be in form
reasonably acceptable to Tenant and shall contain nondisturbance provisions for
Tenant's benefit substantially in accordance with the provisions for Tenant's
benefit 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 in form reasonably
acceptable to Tenant), 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. The Building is currently subject to a deed of trust in
favor of The Prudential Insurance Company of America, as beneficiary, and
Landlord agrees that it will provide to Tenant a nondisturbance agreement in
substantially the form attached hereto as EXHIBIT G within thirty (30) days
after the date of this Lease.
SECTION 13.2. ESTOPPEL CERTIFICATE.
(a) Tenant shall, at any time upon not less than ten (10)
business 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 may
reasonably require. Tenant's statement may be relied upon by any prospective
purchaser or encumbrancer of the Premises.
(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 defaults 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 (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 (provided that any such purchaser shall agree to keep
said Statements confidential), and to any encumbrancer of all or any portion
of the Building or Project (provided that Landlord shall request that any such
encumbrancer keep said Statements confidential).
(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.
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ARTICLE XIV. DEFAULTS AND REMEDIES
SECTION 14.1. TENANT'S DEFAULTS. In addition to any other event of
default set forth in this Lease, the occurrence of any one or more of the
following events shall constitute a default by Tenant:
(a) The failure by Tenant to make any payment of rent or
additional rent required to be made by Tenant, as and when due, where the
failure continues for a period of 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 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.
(b) Assignment, sublease, encumbrance or other transfer of the
Lease by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means, without the prior
written consent of Landlord (except as provided under the express provisions of
Article IX above).
(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, where the failure continues
for a period of three (3) days after written notice from Landlord to Tenant.
(e) The failure or inability by Tenant to observe or perform any
of the express or implied covenants or provisions of this Lease to be observed
or performed by Tenant, other than as specified in any other subsection of this
Section, where the failure continues for a period of thirty (30) days after
written notice from Landlord to Tenant or such shorter period as is specified in
any other provision of this Lease; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under California Code
of Civil Procedure Section 1161 and 1161(a) as amended. However, if the nature
of the failure is such that more than thirty (30) days are reasonably required
for its cure, then Tenant shall not be deemed to be in default if Tenant
commences the cure within thirty (30) days, and thereafter diligently pursues
the cure to completion.
(f) (i) The making by Tenant of any general assignment for the
benefit of creditors; (ii) the filing by or against Tenant of a petition to have
Tenant adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within thirty (30) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; (iv) the attachment, execution
or other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where the seizure is not
discharged within thirty (30) days; or (v) Tenant's convening of a meeting of
its creditors for the purpose of effecting a moratorium upon or composition of
its debts. Landlord shall not be deemed to have knowledge of any event described
in this subsection unless notification in writing is received by Landlord, nor
shall there be any presumption attributable to Landlord of Tenant's insolvency.
In the event that any provision of this subsection is contrary to applicable
law, the provision shall be of no force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, or in the event of the
abandonment of the Premises by Tenant, then in addition to any other remedies
available to Landlord, Landlord may exercise the following remedies:
(i) Landlord may terminate Tenant's right to possession of
the Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. Such
termination shall not affect any accrued obligations of Tenant under this Lease.
Upon termination, Landlord shall have the right to reenter the Premises and
remove all persons and property. Landlord shall also be entitled to recover from
Tenant:
(1) The worth at the time of award of the unpaid rent
and additional rent which had been earned at the time of termination;
(2) The worth at the time of award of the amount by
which the unpaid rent and additional rent which would have been earned after
termination until the time of award exceeds the amount of such loss that Tenant
proves could have been reasonably avoided;
(3) The worth at the time of award of the amount by
which the unpaid rent and additional rent for the balance of the Term after the
time of award exceeds the amount of such loss that Tenant proves could be
reasonably avoided;
(4) Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result from Tenant's default, including, but not limited to, the cost
of recovering possession of
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the Premises, refurbishment of the Premises, marketing costs, commissions and
other expenses of reletting, including necessary repair, the unamortized portion
of any tenant improvements and brokerage commissions funded by Landlord in
connection with this Lease, reasonable attorneys' fees, and any other reasonable
costs; and
(5) At Landlord's election, all other amounts in
addition to or in lieu of the foregoing as may be permitted by law. The term
"rent" as used in this Lease shall be deemed to mean the Basic Rent and all
other sums required to be paid by Tenant to Landlord pursuant to the terms of
this Lease. Any sum, other than Basic Rent, shall be computed on the basis of
the average monthly amount accruing during the twenty-four (24) month period
immediately prior to default, except that if it becomes necessary to compute
such rental before the twenty-four (24) month period has occurred, then the
computation shall be on the basis of the average monthly amount during the
shorter period. As used in subparagraphs (1) and (2) above, the "worth at the
time of award" shall be computed by allowing interest at the rate of ten percent
(10%) per annum. As used in subparagraph (3) above, the "worth at the time of
award" shall be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
(ii) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may continue to enforce all
of its rights and remedies under this Lease, including the right to collect all
rent as it becomes due. Efforts by the Landlord to maintain, preserve or relet
the Premises, or the appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a termination of the Tenant's
right to possession of the Premises. In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the Premises
subject to the reasonable standards for Landlord's consent as are contained in
this Lease.
(b) 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 default by Tenant unless and until the 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 default
by Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord's knowledge of the preceding breach or default at the time of
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord's right to recover the balance of the rent or pursue any other remedy
available to it. No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises prior to the termination of this Lease, and
the delivery of the keys to any employee shall not operate as a termination of
the Lease or a surrender of the Premises.
SECTION 14.3. LATE PAYMENTS.
(a) Any rent due under this Lease that is not received by
Landlord within five (5) days of the date when due shall bear interest at the
rate of ten percent (10%) per annum not to exceed the maximum rate permitted by
law from the date due until fully paid. The payment of interest shall not cure
any default by Tenant under this Lease. In addition, Tenant acknowledges that
the late payment by Tenant to Landlord of rent will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult and impracticable to ascertain. Those costs may include, but
are not limited to, administrative, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any ground lease,
mortgage or trust deed covering the Premises. Accordingly, if any rent due from
Tenant shall not be received by Landlord or Landlord's designee within five (5)
days after the date due, then Tenant shall pay to Landlord, in addition to the
interest provided above, a late charge in a sum equal to the greater of five
percent (5%) of the amount overdue or Two Hundred Fifty Dollars ($250.00) for
each delinquent payment, provided that such late charge shall be waived for the
initial late payment of any rent as and when due from Tenant. Acceptance of a
late charge by Landlord shall not constitute a waiver of Tenant's default with
respect to the overdue amount, nor shall it prevent Landlord from exercising any
of its other rights and remedies.
(b) Following the third installment of rent that is not paid
within five (5) days following notice of nonpayment from Landlord, Landlord
shall have the option (i) to require that beginning with the first payment of
rent next due, rent shall no longer be paid in monthly installments but shall be
payable quarterly three (3) months in advance and/or (ii) to require that Tenant
increase the amount, if any, of the Security Deposit by one hundred percent
(100%). Should Tenant deliver to Landlord, at any time during the Term, two (2)
or more insufficient checks, the Landlord may require that all monies then and
thereafter due from Tenant be paid to Landlord by cashier's check.
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements
to be performed by Tenant under this Lease shall be performed at Tenant's sole
cost and expense and without any abatement of rent or right of set-off. If
Tenant fails to pay any sum of money, other than rent, or fails to perform any
other act on its part to
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be performed under this Lease, and the failure continues beyond any applicable
grace period set forth in Section 14.1, then in addition to any other available
remedies, Landlord may, at its election make the payment or perform the other
act on Tenant's part. Landlord's election to make the payment or perform the act
on Tenant's part shall not give rise to any responsibility of Landlord to
continue making the same or similar payments or performing the same or similar
acts. Tenant shall, promptly upon demand by Landlord, reimburse Landlord for all
sums paid by Landlord and all necessary incidental costs, together with interest
at the maximum rate permitted by law from the date of the payment by Landlord.
Landlord shall have the same rights and remedies if Tenant fails to pay those
amounts as Landlord would have in the event of a default by Tenant in the
payment of rent. Landlord shall provide Tenant with written notice and the
appropriate cure period provided in the Lease before performing any act on
behalf of Tenant and will provide Tenant with written request for any
reimbursement payable under this Section 14.4.
SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion. If Landlord shall default in the performance of any of
its obligations under the Lease (after notice and an opportunity to cure as
provided herein), Tenant shall have the right to pursue any and all remedies
available to it as set forth in this Lease, at law, or in equity, subject to the
express limitations contained in this Lease.
SECTION 14.6. EXPENSES AND LEGAL FEES. All sums reasonably incurred by
Landlord in connection with any event of default by Tenant under this Lease or
holding over of possession by Tenant after the expiration or earlier termination
of this Lease, including without limitation all costs, expenses and actual
accountants, appraisers, attorneys and other professional fees, and any
collection agency or other collection charges, shall be due and payable by
Tenant to Landlord on demand, and shall bear interest at the rate of ten percent
(10%) per annum. Should either Landlord or Tenant bring any action in connection
with this Lease, the prevailing party shall be entitled to recover as a part of
the action its reasonable attorneys' fees, and all other costs. The prevailing
party for the purpose of this paragraph shall be determined by the trier of the
facts.
SECTION 14.7. WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH
ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE
WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY
EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR
SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
AND/OR ANY CLAIM OF INJURY OR DAMAGE.
SECTION 14.8. SATISFACTION OF JUDGMENT. The obligations of Landlord do
not constitute the personal obligations of the individual partners, trustees,
directors, officers or shareholders of Landlord or its constituent partners.
Should Tenant recover a money judgment against Landlord, such judgment shall be
satisfied only out of the proceeds of sale received upon execution of such
judgment and levied thereon against the right, title and 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 shall be barred unless Tenant commences an action thereon within
twelve (12) months after the date that the act, omission, event or default upon
which the claim, demand or right arises, has occurred. The foregoing provisions,
however, shall not be applicable to any claim, demand or right of Tenant arising
from or related to any obligation on Landlord's part contained in Section 5.3
and/or 10.3(b) of this Lease.
ARTICLE XV. END OF TERM
SECTION 15.1. HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after the
expiration shall not constitute a renewal or extension of this Lease, or give
Tenant any rights under this Lease, except when in writing signed by both
parties. If Tenant holds over for any period after the expiration (or earlier
termination) of the Term without the prior written consent of Landlord, such
possession shall constitute a tenancy at sufferance only; such holding over with
the prior written consent of Landlord shall constitute a month-to-month tenancy
commencing on the first (1st) day following the termination of this Lease. In
either of such events, possession shall be subject to all of the terms of this
Lease, except that the monthly Basic Rent shall be the greater of (a) one
hundred fifty percent (150%) of the Basic Rent for the month immediately
preceding the date of termination for the initial two (2) months of holdover,
and two hundred percent (200%) of the Basic Rent for the month immediately
preceding the date of termination for each month of holdover thereafter, or (b)
the then currently scheduled Basic Rent for comparable space in the Project. 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.
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Acceptance by Landlord of rent after the termination shall not constitute a
consent to a holdover or result in a renewal of this Lease. The foregoing
provisions of this Section are in addition to and do not affect Landlord's right
of re-entry or any other rights of Landlord under this Lease or at law.
SECTION 15.2. MERGER ON TERMINATION. The voluntary or other surrender of
this Lease by Tenant, or a mutual termination of this Lease, shall terminate any
or all existing subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord's obligation
excepted, and shall, without 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 (other than holes resulting from the hanging
of pictures or other items of decoration, which Tenant shall not be obligated to
patch and fill) 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 following ten (10)
days' written notice from Landlord and failure to cure, Landlord may effect the
removal and/or make any repairs, and the cost to Landlord shall be additional
rent payable by Tenant upon demand. If Tenant fails to remove Tenant's personal
property from the Premises upon the expiration of the Term, Landlord may remove,
store, dispose of and/or retain such personal property, at Landlord's option, in
accordance with then applicable laws, all at the expense of Tenant. If requested
by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an
instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in the Premises.
ARTICLE XVI. PAYMENTS AND NOTICES
All sums payable by Tenant to Landlord shall be paid, without deduction
or offset, in lawful money of the United States to Landlord at its address set
forth in Item 12 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within five (5) days after demand. All
payments requiring proration shall be prorated on the basis of a thirty (30) day
month and a three hundred sixty (360) day year. Any notice, election, demand,
consent, approval or other communication to be given or other document to be
delivered by either party to the other may be delivered in person or by courier
or overnight delivery service to the other party, or may be deposited in the
United States mail, duly registered or certified, postage prepaid, return
receipt requested, and addressed to the other party at the address set forth in
Item 12 of the Basic Lease Provisions, or if to Tenant, at that address or, from
and after the Commencement Date, at the Premises (whether or not Tenant has
departed from, abandoned or vacated the Premises), or may be delivered by
telegram, telex or telecopy, provided that receipt thereof is telephonically
confirmed. Either party may, by written notice to the other, served in the
manner provided in this Article, designate a different address. If any notice or
other document is sent by mail, it shall be deemed served or delivered
twenty-four (24) 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. Unless the Lease expressly provides
otherwise, all payments shall be due and payable within ten (10) days of demand.
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, and Project and Common Areas (if
applicable). Landlord shall not be liable to Tenant for any violation of the
Rules and Regulations or the breach of any covenant or condition in any lease by
any other tenant or such tenant's agents, employees, contractors, quests or
invitees. One or more waivers by Landlord of any breach of the Rules and
Regulations by Tenant or by any other tenant(s) shall not be a waiver of any
subsequent breach of that rule or any other. Tenant's failure to keep and
observe the Rules and Regulations shall constitute a default under this Lease.
In the case of any conflict between the Rules and Regulations and this Lease,
this Lease shall be controlling. Tenant's agreement to abide by, keep and
observe all reasonable rules and regulations which Landlord may make shall be
limited to those rules and restrictions which are consistently applied by
Landlord to all tenants of the Project in a non-discriminatory manner.
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
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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. To the fullest extent permitted by law, Landlord agrees to
indemnify, defend and hold harmless Tenant from and against any and all costs,
expenses and liabilities for any compensation claimed by any broker, finder or
agent employed or claiming to have been employed by Landlord in connection with
the negotiation of this Lease.
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer of Landlord's interest in the Premises, the
transferor shall thereupon be automatically relieved of all obligations on the
part of Landlord accruing under this Lease from and after the date of the
transfer (but shall not be relieved of all such obligations accruing during its
period of ownership of the Premises), provided that: (i) any funds held by the
transferor in which Tenant has an interest (including, without limitation, the
Security Deposit) shall be turned over by credit to the purchase price or
otherwise, subject to that interest, to the transferee and Tenant is notified of
the transfer as required by law, and (ii) any such transferee shall assume, in
writing, all non-accrued obligations of Landlord under this Lease.
Notwithstanding the foregoing, no holder of a mortgage and/or deed of trust to
which this Lease is or may be subordinate, and no landlord under a so-called
sale-leaseback, shall be responsible in connection with the Security Deposit,
unless the mortgagee or holder of the deed of trust or the landlord actually
receives the Security Deposit. It is intended that the covenants and obligations
contained in this Lease on the part of Landlord shall, subject to the foregoing,
be binding on Landlord, its successors and assigns, only during and in respect
to their respective successive periods of ownership.
ARTICLE XX. INTERPRETATION
SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.
SECTION 20.2. HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.
SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.
SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.
SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to
the performance of every provision of this Lease.
SECTION 20.6. CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.
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. The
failure of Tenant or Landlord to seek redress for violation of, or to insist
upon the strict performance of, any term, covenant or condition of the Lease
shall not be deemed a waiver of such violation or prevent a subsequent act which
would have originally constituted a violation from having all the force and
effect of the original violation, nor shall any custom or practice which may
become established between the parties in the administration of the terms hereof
be deemed a waiver of, or in any way affect, the right of a party to insist upon
the performance by the other party of its obligations in strict accordance with
said terms. Any payment of rents or other sums hereunder by Tenant shall not, in
and of itself, be deemed a waiver of any preceding breach by Landlord of any
term, covenant or condition of this Lease, regardless of Tenant's knowledge of
such preceding breach at the time of payment of such rent or other sums.
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SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall
be delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent or from the timely performance of any other
obligation under this Lease within Tenant's reasonable control.
SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, 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
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person claiming by or through Landlord.
SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
ARTICLE XXI. EXECUTION AND RECORDING
SECTION 21.1. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation or partnership, each individual executing this Lease on behalf of
the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
partnership, and that this Lease is binding upon the corporation or partnership
in accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises. Execution of
this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.
SECTION 21.4. RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord, shall
execute and acknowledge a "short form" memorandum of this Lease for recording
purposes.
SECTION 21.5. AMENDMENTS. No amendment or termination of this Lease
shall be effective unless in writing signed by authorized signatories of Tenant
and Landlord, or by their respective successors in interest. No actions,
policies, oral or informal arrangements, business dealings or other course of
conduct by or between the parties shall be deemed to modify this Lease in any
respect.
SECTION 21.6. EXECUTED COPY. Any fully executed photocopy or similar
reproduction of this Lease shall be deemed an original for all purposes.
SECTION 21.7. ATTACHMENTS. All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease.
ARTICLE XXII. MISCELLANEOUS
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Project, either directly or indirectly,
without the prior written consent of Landlord, provided, however, that Tenant
may disclose the terms to prospective subtenants or assignees under this Lease,
in conjunction with any public offering of Tenant's stock or if required by law
to do so.
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SECTION 22.2. GUARANTY. [INTENTIONALLY OMITTED].
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 or to terminate this Lease shall result in such a release
or termination unless (a) Tenant has given notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Premises
whose address has been furnished to Tenant and (b) such beneficiary is afforded
a reasonable opportunity to cure the default by Landlord (which in no event
shall be less than sixty (60) days), including, if necessary to effect the cure,
time to obtain possession of the Premises by power of sale or judicial
foreclosure provided that such foreclosure remedy is diligently pursued. Tenant
agrees that each beneficiary of a deed of trust or mortgage covering the
Premises is an express third party beneficiary hereof, Tenant shall have no
right or claim for the collection of any deposit from such beneficiary or from
any purchaser at a foreclosure sale unless such beneficiary or purchaser shall
have actually received and not refunded the deposit, and Tenant shall comply
with any written directions by any beneficiary to pay rent due hereunder
directly to such beneficiary without determining whether an event of default
exists under such beneficiary's deed of trust.
SECTION 22.5. COVENANTS AND CONDITIONS. All of the provisions of this
Lease shall be construed to be conditions as well as covenants as though the
words specifically expressing or imparting covenants and conditions were used in
each separate provision.
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 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 Building Costs.
SECTION 22.7. JAMS ARBITRATION.
(a) All claims or disputes between Landlord and Tenant arising
out of, or relating to the Lease which either party is expressly authorized by a
provision hereof to submit to arbitration, shall be decided by the
JAMS/ENDISPUTE, or its successor, in San Diego, California ("JAMS"), 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. Any arbitration pursuant to this
Section 22.7 shall be decided within thirty (30) days of submission of JAMS. The
decision of the arbitrator shall be final and binding on the parties. All costs
associated with 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
Lease shall be filed in writing with the other party to the Lease and with JAMS
and shall be made within a reasonable time after the dispute has arisen. The
award rendered by the arbitrators 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 the Lease shall include, by
consolidation, joinder or in any other manner, any person or entity not a party
to the Lease under which such arbitration is filed if (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 the Lease and any
other written agreement to arbitrate referred to herein shall be specifically
enforceable under prevailing law.
SECTION 22.8. TENANT'S LIEN. Landlord agrees that in the event Tenant
obtains financing with regard to personal property or equipment installed by it
within the Premises, Landlord shall upon the request of the lender providing
such financing, execute and deliver to such lender a Consent of Landlord in
substantially the form of EXHIBIT H attached hereto.
SECTION 22.9. CONTINGENCY. Tenant understands and agrees that the
effectiveness of this Lease is contingent upon the mutual execution of a lease
surrender and termination agreement for the Premises between Landlord and
Medtronic Interventional Vascular, a division of Medtronic, Inc., the current
tenant in possession of the Premises for the termination of that certain lease
between Landlord and MIV regarding the Premises (the "MIV Lease").
LANDLORD: TENANT:
THE IRVINE COMPANY OPTICAL MICRO MACHINES, INC.
a California corporation
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By: /s/ Xxxxxxx X. Sim By: /s/ Hus Tigli
---------------------------- -----------------------------------
Name: Xxxxxxx X. Sim, Name: Hus Tigli
Title: Executive Vice President Title: President & CEO
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxx Xxxxx
---------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxxxx Name: Xxxxxxx Xxxxx
Title: Assistant Secretary Title: Asst. Corp. Sec.
LEGAL APPROVAL
/s/ Signature Illegible
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[EXHIBIT OMITTED]
[EXHIBIT DEPICTS A MAP OF 9410 XXXXXXX PARK DRIVE]
INITIAL
/s/ XXXXXXX XXXXX
-----------------
/s/ Signature Illegible
36
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:
INSIGNIA/ESG OF CALIFORNIA, INC.
00 Xxxxxxxxx, 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 Proposed Lease 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.
-----------------------------------------------------
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.
1
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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 ( )
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.
----------------------------------------------------------------
----------------------------------------------------------------
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 Waste of Storage Prior to Quantity
--------------- ------------------- --------
Disposal
--------------- ------------------- --------
--------------- ------------------- --------
3.2 Describe the method(s) of disposal (including recycling) for
each waste. Indicate where and how often disposal will take
place.
Location of Disposal
Hazardous Materials Site Disposal Method
------------------- ---------- ---------------
------------------- ---------- ---------------
------------------- ---------- ---------------
3.3 Is any treatment or processing of hazardous, infections 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.
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.
----------------------------------------------------------------
----------------------------------------------------------------
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.
------------------------------------------------------------
------------------------------------------------------------
5. WASTEWATER TREATMENT/DISCHARGE
5.1 Do you discharge industrial wastewater to:
_____storm drain? _____sewer?
_____surface water? _____no industrial discharge
5.2 Is your industrial wastewater treated before discharge?
Yes ( ) No ( )
If yes, describe the type of treatment conducted.
----------------------------------------------------------------
5.3 Attach copies of any wastewater discharge permits issued to your
company with respect to its operations on the premises.
6. AIR DISCHARGES
6.1 Do you have any air filtration systems or stacks that discharge
into the air? Yes ( ) No ( )
6.2 Do you operate any equipment that require air emissions permits?
Yes ( ) No( )
6.3 Attach copies of any air discharge permits pertaining to these
operations.
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Does your company handle an aggregate of at least 500 pounds, 55
gallons or 200 cubic feet of hazardous material at any given
time? 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.
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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.
----------------------------------------------------------------
----------------------------------------------------------------
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.
----------------------------------------------------------------
----------------------------------------------------------------
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.
-----------------------------------
----------------------------------------------------------------
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.
-----------------------------------
----------------------------------------------------------------
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.
----------------------------------------------------------------
----------------------------------------------------------------
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 ( )
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.
----------------------------------------------------------------
----------------------------------------------------------------
By:
----------------------------------
Name:
------------------------
Title:
-----------------------
Date:
------------------------
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EXHIBIT C
LANDLORD'S DISCLOSURES
Landlord's latest Phase I Environmental Site Assessment covering the leased
Premises does not disclose any recognized environmental condition on the subject
site, and reports that there appears to be a low potential for environmental
impairment to the subject site due to current or past land usage or from
surrounding properties.
INITIAL
/s/ XXXXXXX XXXXX
-----------------------
/s/ Signature Illegible
41
EXHIBIT D
TENANT'S INSURANCE
The following standards for Tenant's insurance shall be in effect at the
Building. Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions to those standards. Tenant agrees to obtain and
present evidence to Landlord that it has fully complied with the insurance
requirements.
1. Tenant shall, at its sole cost and expense, commencing on the date
Tenant is given access to the Premises for any purpose and during the entire
Term, procure, pay for and keep in full force and effect: (i) commercial general
liability insurance with respect to the Premises and the operations of or on
behalf of Tenant in, on or about the Premises, including but not limited to
personal injury, owned and nonowned automobile, blanket contractual, independent
contractors, broad form property damage (with an exception to any pollution
exclusion with respect to damage arising out of heat, smoke or fumes from a
hostile fire), fire and water legal liability, products liability (if a product
is sold from the Premises), liquor law liability (if alcoholic beverages are
sold, served or consumed within the Premises), and severability of interest,
which policy(ies) shall be written on an "occurrence" basis and for not less
than the amount set forth in Item 13 of the Basic Lease Provisions, with a
combined single limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily injury, death, and property damage liability, or the
current limit of liability carried by Tenant, whichever is greater, and subject
to such increases in amounts as Landlord may determine from time to time; (ii)
workers' compensation insurance coverage as required by law, together with
employers' liability insurance; (iii) with respect to improvements, alterations,
and the like required or permitted to be made by Tenant under this Lease,
builder's all-risk insurance, in an amount equal to the replacement cost of the
work; (iv) insurance against fire, vandalism, malicious mischief and such other
additional perils as may be included in a standard "all risk" form in general
use in the county in which the Premises are situated, insuring Tenant's
leasehold improvements, trade fixtures, furnishings, equipment and items of
personal property of Tenant located in the Premises, in an amount equal to not
less than ninety percent (90%) of their actual replacement cost (with
replacement cost endorsement); and (v) rental abatement insurance in amounts
satisfactory to cover at least nine (9) months of interruption of Basic Rent
payable under this Lease. 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 other than those
Hazardous Materials identified on the Environmental Questionnaire approved by
Landlord prior to execution of this Lease, then 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 Two Million Dollars ($2,000,000.00), insuring (i) any such 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 Five Thousand Dollars
($5,000.00) per occurrence must be approved in writing by Landlord prior to the
issuance of such policy. Tenant shall be solely responsible for the payment of
all deductibles.
4. All policies of insurance required to be carried by Tenant pursuant
to this Exhibit D shall be written by responsible insurance companies authorized
to do business in the State of California and with a Best's rating of not less
than "A" subject to final acceptance and approval by Landlord. Any insurance
required of Tenant may be furnished by Tenant under any blanket policy carried
by it or under a separate policy, so long as (i) the Premises are specifically
covered (by rider, endorsement or otherwise), and (ii) the policy otherwise
complies with the provisions of this Exhibit D. A true and exact copy of each
paid up policy evidencing the insurance (appropriately authenticated by the
insurer) or a certificate of insurance, certifying that the policy has been
issued, provides the coverage required by this Exhibit D and contains the
required provisions, shall be delivered to Landlord prior to the date Tenant is
given the right of possession of the Premises. Proper evidence of the renewal of
any insurance coverage shall also be delivered to Landlord not less than thirty
(30) days prior to the expiration of the coverage. Landlord may at any time, and
from time to time, inspect and/or copy any and all insurance policies required
by this Lease.
5. Each policy evidencing insurance required to be carried by Tenant
pursuant to this Exhibit D shall contain the following provisions and/or clauses
satisfactory to Landlord: (i) a provision that the policy and the coverage
provided shall be primary and that any coverage carried by Landlord shall be
noncontributory with respect to any policies carried by Tenant except as to
workers' compensation insurance; (ii) a provision including Landlord, the
Additional Insureds identified in Item 11 of the Basic Lease Provisions, and any
other parties in interest designated by Landlord as an additional insured,
except as to workers' compensation insurance; (iii) a waiver by the insurer of
any right to subrogation against Landlord, its agents, employees, contractors
and representatives which arises or might arise by reason of any payment under
the policy or by reason of any act or omission of Landlord, its agents,
employees, contractors or representatives; and (iv) a provision that the insurer
will not cancel or change the coverage provided by the policy without first
giving Landlord twenty (20) days prior written notice.
6. In the event that Tenant fails to procure, maintain and/or pay for,
at the times and for the durations specified in this Exhibit D, any insurance
required by this Exhibit D, or fails to carry insurance required by any
governmental authority, Landlord may at its election procure that insurance and
pay the premiums, in which event Tenant shall repay Landlord all sums paid by
Landlord, together with interest at the maximum rate permitted by law and any
related costs or expenses incurred by Landlord, within ten (10) days following
Landlord's written demand to Tenant.
INITIAL
/s/ Xxxxxxx Xxxxx
-----------------------
/s/ Signature Illegible
Page 1 of 1
42
EXHIBIT E
RULES AND REGULATIONS
This Exhibit sets forth the rules and regulations governing Tenant's use
of the Premises leased to Tenant pursuant to the terms, covenants and conditions
of the Lease to which this Exhibit is attached and therein made part thereof. In
the event of any conflict or inconsistency between this Exhibit and the Lease,
the Lease shall control.
1. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door, partition or wall which may appear unsightly from
outside the Premises.
2. The walls, walkways, sidewalks, entrance passages, courts and
vestibules shall not be obstructed or used for any purpose other than ingress
and egress of pedestrian travel to and from the Premises, and shall not be used
for loitering or gathering, or to display, store or place any merchandise,
equipment or devices, or for any other purpose. The walkways, entrance
passageways, courts, vestibules and roof are not for the use of the general
public and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the judgment of the Landlord
shall be prejudicial to the safety, character, reputation and interests of the
Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom Tenant normally deals in
the ordinary course of Tenant's business unless such persons are engaged in
illegal activities. No tenant or employee or invitee of any tenant shall be
permitted upon the roof of the Building, except as permitted by 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. Tenant shall not lay linoleum, tile,
carpet or other similar floor covering so that the same shall be affixed to the
floor of the Premises in any manner except as approved by Landlord in writing.
The expense of repairing any damage resulting from a violation of this rule or
removal of any floor covering shall be borne by Tenant.
5. The toilet rooms, urinals, wash bowls and other plumbing apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or
invitees, caused it.
6. Landlord shall direct electricians as to the manner and location of
any future telephone wiring. No boring or cutting for wires will be allowed
without the prior consent of Landlord (which consent shall not be unreasonably
withheld or delayed). The locations of the telephones, call boxes and other
office equipment affixed to the Premises shall be subject to the prior written
consent of Landlord (which consent shall not be unreasonably withheld or
delayed).
7. 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 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 shall be permitted at any time within the Premises.
10. Tenant shall not use the name of the Building or the Project in
connection with or in promoting or advertising the business of Tenant, except as
Tenant's address, without the written consent of Landlord. Landlord shall have
the right to prohibit any advertising by any Tenant which, in Landlord's
reasonable opinion, tends to impair the reputation of the Project or its
desirability for its intended uses, and upon written notice from Landlord any
Tenant shall refrain from or discontinue such advertising.
11. Canvassing, soliciting, peddling, parading, picketing, demonstrating
or otherwise engaging in any conduct that unreasonably impairs the value or use
of the Premises or the Project are prohibited and each Tenant shall cooperate to
prevent the same.
12. No equipment of any type shall be placed on the Premises which in
Landlord's opinion exceeds the load limits of the floor or otherwise threatens
the soundness of the structure or improvements of the Building.
1 08/02/96
43
13. No air conditioning unit or other similar apparatus shall be
installed or used by any Tenant without the prior written consent of Landlord
(which consent shall not be unreasonably withheld or delayed).
14. No aerial antenna shall be erected on the roof or exterior walls of
the Premises, or on the grounds, without in each instance, the prior written
consent of Landlord (which consent shall not be unreasonably withheld or
delayed). Any aerial or antenna so installed without such written consent shall
be subject to removal by Landlord at any time without prior notice at the
expense of the Tenant, and Tenant shall upon Landlord's demand pay a removal fee
to Landlord of not less than $200.00.
15. The entire Premises, including vestibules, entrances, doors,
fixtures, windows and plate glass, shall at all times be maintained in a safe,
neat and clean condition by Tenant. All trash, refuse and waste materials shall
be regularly removed from the Premises by Tenant and placed in the containers at
the location designated by Landlord for refuse collection. All cardboard boxes
must be "broken down" prior to being placed in the trash container. All
styrofoam chips must be bagged or otherwise contained prior to placement in the
trash container, so as not to constitute a nuisance. Pallets may not be disposed
of in the trash container or enclosures. The burning of trash, refuse or waste
materials is prohibited.
16. Tenant shall use at Tenant's cost such pest extermination contractor
as Landlord may direct and at such intervals as Landlord may reasonably require.
17. All keys for the Premises shall be provided to Tenant by Landlord
and Tenant shall return to Landlord any of such keys so provided upon the
termination of the Lease. Tenant shall not change locks or install other locks
on doors of the Premises, without the prior written consent of Landlord (which
consent shall not be unreasonably withheld or delayed). In the event of loss of
any keys furnished by Landlord for Tenant, Tenant shall pay to Landlord the
costs thereof.
18. No person shall enter or remain within the Project while intoxicated
or under the influence of liquor or drugs. Landlord shall have the right to
exclude or expel from the Project any person who, in the absolute discretion of
Landlord, is under the influence of liquor or drugs.
Landlord reserves the right to amend or supplement the foregoing
Rules and Regulations and to adopt and promulgate additional rules and
regulations applicable to the Premises. Notice of such rules and regulations and
amendments and supplements thereto, if any, shall be given to the Tenant.
INITIAL
/s/ Xxxxxxx Xxxxx
-----------------------
/s/ Signature Illegible
2
44
EXHIBIT F
IRREVOCABLE STANDBY LETTER OF CREDIT
Number:
------------------
Date:
--------------------
Amount:
------------------
Expiration:
--------------
BENEFICIARY ACCOUNT PARTY
The Irvine Company --------------
000 Xxxxxxx Xxxxxx Xxxxx --------------
Xxxxxxx Xxxxx, XX 00000 --------------
We hereby issue our Irrevocable Letter of Credit No. _____ in favor of The
Irvine Company, and its successors and assigns for the account of __________. We
undertake to honor your draft or drafts, delivered to us from time to time, for
any sum or sums not to exceed a total of __________ ($___________) in favor of
said beneficiary when accompanied by the draft described below and a letter from
an officer of The Irvine Company or such successor or assign that states as
follows: "The "Landlord" under the Lease pursuant to which this letter of credit
was issued is authorized to draw upon this Letter of Credit in the amount of the
accompanying draft according to the terms of its lease agreement with the
Account Party as 'Tenant'."
It is a condition of this letter of credit that it shall remain enforceable
against us for a period of _________ from this date and further, that it shall
be deemed automatically extended for successive one-year periods without
amendment thereafter unless thirty (30) days prior to the expiration date set
forth above, or within thirty (30) days prior to the end of any yearly
Anniversary Date thereafter, you shall receive our notice in writing by
certified mail, return receipt requested, that we elect not to renew this letter
of credit for any subsequent year. We shall reissue this letter of credit to a
new party which is a successor or assign upon written request by The Irvine
Company or such successor or assign accompanied by a certificate that the Lease
pursuant to which this letter of credit was issued was assigned to such party.
The draft must be marked "Drawn under _________ Letter of Credit No. _________
dated ______."____
There are no other conditions of this letter of credit. Except so far as
otherwise stated, this credit is subject to the Uniform Customs and Practice for
Documentary Credits (1983 Revision, International Chamber of Commerce,
Publication No. 400).
-------------------------------
-------------------------------
By:
----------------------------
By:
----------------------------
45
EXHIBIT G
Prudential Loan No. _____
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT ("Agreement") made as of the _____ day of ____, 2000, between THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA (together with its successors or assigns
in interest, collectively "Lender") and __________ ("Tenant").
RECITALS
A. Lender is the owner and the holder of a loan evidenced by a promissory note
(the "Note") dated ____ in the face amount of $_____. The Note is secured by a
[HERE INSERT THE NAME OF THE SECURITY INSTRUMENT] (the "Mortgage") dated the
same date as said Note, and recorded at [INSERT RECORDING INFORMATION] of the
Real Property Records of _____, covering the real property described therein
(the "Mortgaged Premises").
B. Tenant is the tenant under that certain Lease Agreement dated _________ (the
Lease"), between Tenant and _____________________ as landlord (said landlord and
its successors and assigns under the Lease hereinafter called "Landlord"),
covering all or part of the Mortgaged Premises as set forth under the Lease
(hereinafter called the "Demised Premises").
C. Tenant and Lender desire to confirm their understanding with respect to the
Lease and the Mortgage.
THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by all parties, Lender and Tenant
agree as follows:
1. Subordination. The Lease is now, and will at all times and for all
purposes be, subject and subordinate, in every respect, to the Mortgage,
with the provisions of the Mortgage and this Agreement controlling over
the provisions of the Lease. The Lease is subordinate and subject, in
each and every respect, to any and all increases, renewals,
modifications, extensions, substitutions, replacements and/or
consolidations of the Mortgage, (collectively a "Modification"), and all
other loan documents securing the Note, provided that any and all
Modifications shall nevertheless be subject to the terms of this
Agreement.
2. Non-Disturbance. So long as Tenant complies with all of the terms,
provisions, agreements, covenants, and obligations set forth in the
Lease, Tenant's possession of the Demised Premises under said Lease
shall not be disturbed or interfered with by Lender.
3. Attornment. If Lender or any other party succeeds to the interest of
Landlord under the Lease in any manner, including but not limited to
foreclosure, exercise of any power of sale, succession by deed in lieu
or other conveyance (a "Succession"), Tenant will attorn to and be bound
to such party (whether Lender or another party) upon such Succession and
will recognize Lender or such other party as the landlord under the
Lease. Such attornment is effective and self-operative without the
execution of any further instrument. Tenant, upon request, will sign and
deliver any instruments reasonably requested to evidence such
attornment. Tenant waives the provisions of any statute or rule of law,
now or hereafter in effect, which may give or purport to give Tenant any
right or election to terminate or otherwise adversely affect the Lease
and the obligations of Tenant thereunder as a result of any such
foreclosure or trustee's sale.
4. Limitation On Lender's Liability. Upon any Succession, Lender shall
not be (a) liable for any act or omission of the Landlord under said
Lease, (b) subject to any offsets
1
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or defenses which Tenant may have against the Landlord arising or
occurring prior to the Succession, (c) bound by any rent or additional
rent which Tenant may have paid to Landlord for more than the current
month, (d) bound by any amendment or modification of the Lease made
without Lender's prior written consent, (e) liable for any security
deposit paid by Tenant to Landlord unless such deposit is delivered to
Lender, (f) liable for or obligated to pay for repairs, replacements,
damages or allowances not made, performed or paid by the Landlord if
such performance or payment was due prior to the Succession, or (g)
liable for the payment of any leasing commissions, the triggering event
for which arose or occurred prior to the Succession. Any reference to
Landlord includes all prior landlords under the Lease. Neither Lender
nor any party taking under a Succession shall be liable for the
performance of the obligations of the Landlord under the Lease, except
for those obligations which arise during the period of Lender's or such
entity's or person's ownership of the Mortgaged Premises.
5. Tenant's Warranty. Tenant warrants to Lender, as of the date hereof,
that (a) attached is a true, correct and complete copy of the Lease, (b)
there are no known defaults on the part of Landlord, (c) the Lease is a
complete statement of the agreement of the parties with respect to the
leasing of the Demised Premises, (d) the Lease is validly executed by
Tenant and in full force and effect, and (e) all conditions to the
effectiveness or continuing effectiveness thereof required to be
satisfied as of the date hereof have been satisfied. Tenant acknowledges
and warrants to Lender that it has not subordinated the Lease or any of
its rights under the Lease to any lien or mortgage other than the
Mortgage.
6. Lender Cure Rights. Thirty (30) days before exercising any of its
rights and remedies under the Lease for a landlord default, Tenant will
send written notice to Lender at Xxxxx 0000, Xxx Xxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx 00000, referencing Loan Number _____ by certified mail, return
receipt requested, of the occurrence of any default by Landlord and will
specify with reasonable clarity the events constituting such default. If
the referenced default would entitle Tenant to cancel the Lease or xxxxx
the rent payable thereunder, no such cancellation or abatement of rent
will be effective unless Lender receives notice in the form and manner
required by this Paragraph 6 and fails (a) within thirty (30) days of
the date of the receipt of such notice by Lender to cure or cause to be
cured any default which can be cured by the payment of money and (b) to
cure or caused to be cured within sixty (60) days of the receipt of such
notice any default which cannot be cured by the payment of money
("Non-Monetary Default"); provided, however, that if the Non-Monetary
Default is not capable of cure within such sixty-day period, no
cancellation or abatement by Tenant will be effective as to Lender
unless Lender fails within the original sixty (60) day period to
commence and diligently prosecute the cure of such default to
completion. Tenant will accept cure of any Landlord default by Lender.
7. Rent Payment. Immediately upon written notice to Tenant (a) that
Lender is exercising its rights under the Mortgage or any other loan
documents acting to secure the Note following a default under the Loan,
or (b) of Lender's succeeding to the Landlord's interest under the
Lease, Tenant agrees to pay all rents due under the Lease directly to
Lender (in accordance with the Lease).
8. Complete Agreement. This Agreement supersedes, as between the parties
hereto, all of the terms and provisions of the Lease which are
inconsistent herewith.
9. No Oral Modification/Binding Effect. This Agreement may not be
modified orally or in any manner other than by an agreement in writing
signed by the parties hereto or their respective successors in interest.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their successors and assigns.
10. Laws. This Agreement shall be construed in accordance with the laws
of the State where the Mortgaged Premises are located.
2
47
11. Automatic Amendment of Lease. Upon a Succession, the Lease is
automatically amended as follows:
a. Hazardous Materials. All representations, warranties,
indemnities or hold harmless provisions in favor of Tenant from
Landlord dealing with the presence, use, transportation,
disposal, contamination, exposure to or in any way arising out
of hazardous or toxic materials, chemicals or wastes ("Hazardous
Materials") are deleted as to Lender. Lender, however, as
Landlord, covenants and agrees to (a) comply with all laws
governing Hazardous Materials ("Hazardous Materials Laws"), (b)
store, use and dispose of all Hazardous Materials at the
Mortgaged Premises in accordance with all applicable Hazardous
Materials Laws, and (c) remove, remediate and/or clean up, as
applicable, in accordance with all applicable Hazardous
Materials Laws, all Hazardous Materials at the Mortgaged
Premises (to the extent not caused by Tenant or its employees,
contractors or agents) impairing Tenant's use or access to the
Demised Premises.
b. Insurance. Tenant will at all times carry comprehensive general
liability coverage for its activities and operations at the
Demised Premises, listing Lender and Landlord as additional
insureds, in such coverage amounts as are required by the Lease
but in no event less than One Million Dollars. Lender will have
no liability to Tenant for any indemnity or hold harmless
provision under the Lease where Lender is otherwise covered by
Tenant's comprehensive general liability coverage(s) as carried
by Tenant or which Tenant is required to carry under the Lease.
All insurance required to be carried by Landlord under the Lease
may be effected by Lender by self-insurance or by a policy or
policies of blanket insurance covering additional items or
locations or assureds and with such deductibles as Lender may
from time to time determine. Tenant has no rights in any policy
or policies maintained by Lender.
c. [INSERT ADDITIONAL AMENDMENTS.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
LENDER:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
ATTEST:
By:
------------------------ -------------------------------
Assistant Secretary Name Printed:
---------------------
Title: Vice President
--------------------------
(Corporate Seal)
TENANT:
[TENANT'S NAME].
ATTEST:
By:
----------------------- -------------------------------
Secretary Name Printed:
---------------------
Title:
----------------------------
(Corporate Seal)
3
48
EXHIBIT H
CONSENT OF LANDLORD
TO:
------------------------
------------------------
------------------------
("Lessor")
Reference is made to that certain lease of personal property/equipment
(the "Equipment Lease") dated _______________, 19 _____ between Lessor and
_______________ _______________ ("Lessee"), which Lessee is currently a tenant
of the undersigned ("Landlord") in those premises located at (including suite
number): _______________________________ (the "Premises").
The Equipment Lease covers personal property/equipment described as
follows: _________________________________ (the "Personalty").
The undersigned Landlord hereby agrees that:
1. The Personalty may be installed in or affixed to the Premises in
accordance with the provisions of that lease agreement ("Premises Lease") for
the Premises executed by Landlord and Lessee, it being understood that the
Personalty shall remain personal property as between the Landlord and Lessor.
2. Landlord disclaims any interest superior to that of Lessor in the
Personalty (but only in such property) and authorizes Lessor to remove same
during normal business hours in accordance with the Equipment Lease, provided
that (a) Lessor provides Landlord with not less than ten (10) days' prior
written notice at the below address before entering the Premises to remove any
of the Personalty and (b) Lessor shall repair all structural or other damage to
the Premises caused by such removal.
3. In the event of the termination of the Premises Lease, Lessor agrees
to remove the Personalty in accordance with Paragraph 2 above within fifteen
(15) days following written notice by the undersigned to Lessor sent to the
address first set forth above. Should Lessor fail to cause such removal, the
undersigned may deal with such Personalty in accordance with the terms of the
Premises Lease or as otherwise provided by law.
4. Lessee acknowledges that the undersigned may admit Lessor into the
Premises pursuant hereto following request by Lessor and irrespective of any
protest or objection by Lessee, and Lessee hereby irrevocably consents to such
entry. Lessee further waives any right to hold the undersigned, or any of its
officers, employees or agents, liable for any damage, cost or expense resulting
from any entry by Lessor, and agrees to indemnify and hold the undersigned free
and harmless from any such claim of liability asserted by an employee, agent,
subtenant or assignee of Lessee. In addition, Lessee agrees that any such entry
shall not constitute a constructive eviction under its lease of the Premises.
49
5. This document shall be governed by California law, and any legal
action between the undersigned and Lessor pursuant hereto shall be brought in
the state courts of California.
Executed as of ____________________, 19 _____.
LANDLORD:
THE IRVINE COMPANY,
a Delaware corporation
By:
----------------------------------------
Xxxxxx X. Xxxxxxxx, Xx., President
Irvine Industrial Company,
a division of The Irvine Company
By:
----------------------------------------
Xxxxx X. Xxxxxxxx
Assistant Secretary
The foregoing is accepted and agreed to by Lender and Lessee.
LENDER: LESSEE:
----------------- ----------------------
----------------- ----------------------
----------------- ----------------------
50
EXHIBIT X
WORK LETTER
DOLLAR ALLOWANCE
[SECOND GENERATION SPACE]
The Tenant Improvement work (herein "Tenant Improvements") shall consist of any
work required to complete the Premises pursuant to approved plans and
specifications. All of the Tenant Improvement work shall be performed by a
contractor selected by Tenant and approved by Landlord and in accordance with
the procedures and requirements set forth below.
I. ARCHITECTURAL AND CONSTRUCTION PROCEDURES
A. Tenant and Landlord have approved, or shall approve within the
time period set forth below, both (i) a detailed space plan for
the Premises, prepared by Tenant's space planner or architect,
which includes interior partitions, ceilings, interior finishes,
interior office doors, suite entrance, floor coverings, window
coverings, lighting, electrical and telephone outlets, plumbing
connections, heavy floor loads and other special requirements
("Preliminary Plan"), and (ii) an estimate, prepared by Tenant's
contractor, of the cost for which Tenant will complete or cause
to be completed the Tenant Improvements ("Preliminary Cost
Estimate"). Landlord shall approve or disapprove each of the
Preliminary Plan and the Preliminary Cost Estimate by signing
copies of the appropriate instrument and delivering same to
Tenant within five (5) working days of its receipt by Landlord.
If Landlord disapproves any matter, Landlord shall specify in
detail the reasons for disapproval and Tenant shall attempt to
modify the Preliminary Plan and the Preliminary Cost Estimate to
incorporate Landlord's suggested revisions in a mutually
satisfactory manner. In all events, however, Tenant shall submit
the Preliminary Plan and Preliminary Cost Estimate no later than
the date set forth in Item 15 of the Basic Lease Provisions
("Delivery Date"), it being understood that Tenant's failure to
do so shall constitute a "Tenant Delay" for purposes of this
Lease.
B. Except as specified in the Preliminary Plan or otherwise
authorized by Landlord, the Tenant Improvements shall
incorporate Landlord's building standard materials and
specifications as previously submitted by Landlord to Tenant in
writing, if any ("Standards"). No deviations from the Standards
shall be permitted, provided that Landlord may, in its sole
discretion, authorize in writing one or more of such deviations
shall be part of "Tenant's Contribution" (as hereinafter
defined). Landlord shall in no event be required to approve any
deviations from the Standards ("Non-Standard Improvements") if
Landlord reasonably determines that such improvement (i) is of a
lesser quality than the corresponding Standard, (ii) fails to
conform to applicable governmental requirements, (iii) requires
building services beyond the level normally provided to other
tenants, or (iv) would have an adverse aesthetic impact from the
exterior of the Premises.
C. Upon Landlord's approval of the Preliminary Plan and Preliminary
Cost Estimate Tenant's architect and engineers shall prepare
working drawings and specifications ("Working Drawings and
Specifications"), and Tenant's contractor shall prepare a final
construction cost estimate ("Final Cost Estimate") for the
Tenant Improvements in conformity with the Working Drawings and
Specifications. The Final Cost Estimate and the Working Drawings
and Specifications shall be delivered to Landlord for landlord's
approval, which shall not be unreasonably delayed, conditioned
or withheld. Landlord shall have five (5) working days from the
receipt thereof to approve or disapprove the Working Drawings
and Specifications and the Final Cost Estimate. Landlord shall
not unreasonably withhold or delay its approval, and any
disapproval or requested modification shall be limited to items
not contained in the approved Preliminary Plan or Preliminary
Cost Estimate. In no event shall Tenant disapprove the Final
Cost Estimate if it does not exceed the approved Preliminary
Cost Estimate. Should Landlord disapprove the Working Drawings
and Specifications and the Final Cost Estimate, such disapproval
shall be accompanied by a detailed list of revisions. Any
revision requested by Landlord and accepted by Tenant shall be
incorporated into a revised set of Working Drawings and
Specifications and Final Cost Estimate, and Landlord shall
approve same in writing within five (5) business days of receipt
without further revision. Without limiting the rights of Tenant
for Landlord Delay's as set forth herein, in the event Landlord
has not approved or disapproved both the Working Drawings and
Specifications and the Final Cost Estimate within fifteen (15)
days following the date of receipt thereof from Tenant, then
Landlord shall be deemed to have approved such Working Drawings
and Specifications and Final Cost Estimate.
D. In the event that Tenant requests in writing a revision in the
approved Working Drawings and Specifications ("Change"),
Landlord shall approve or disapprove such change order in
writing within three (3) business days following its receipt
from Tenant. Tenant shall pay any increase in the Completion
Cost resulting from such Change. Landlord shall have the right
to decline Tenant's request for a Change for any of the reasons
set forth in Article I.B above for Landlord's approval of
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a Non-Standard Improvement. It is understood that Tenant shall
have no obligation to interrupt or modify the Tenant Improvement
work pending Landlord's approval of a change order. Any failure
by Landlord to approve or disapprove a change order within the
time period set forth in herein shall be deemed to constitute
Landlord's approval of the requested Change.
E. Landlord shall permit Tenant and its agents to enter the
Premises on the Delivery Date, and at all times thereafter prior
to the Commencement Date of the Lease, in order that Tenant may
perform any work to be performed by Tenant hereunder through its
contractors in a manner and upon terms and conditions and at
times reasonably 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 any work being performed by
Landlord in the Project. If at any time that entry shall cause
disharmony or interfere with the work being performed by
Landlord, Tenant shall take such action as may be necessary to
maintain work site order and safety in and about the Premises
and the Project. That license is further conditioned upon the
compliance by Tenant's contractors with all requirements imposed
by Landlord on third party contractors and subcontractors,
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 except to the extent reasonably attributable to
Landlord Delays.
F. Tenant hereby designates Xxxxxxx Xxxxx, Telephone No.
(000)000-0000, as its representative, agent and attorney-in-fact
for the purpose of receiving notices, approving submittals and
issuing requests for Changes, and Landlord shall be entitled to
rely upon authorizations and directives of such person(s) as if
given directly by Tenant. Landlord hereby designates Xxxx
Xxxxxxxx, Telephone No (000)000-0000, as its representative,
agent and attorney-in-fact for the purpose of receiving notices,
approving submittals and issuing requests for Changes, and
Tenant shall be entitled to rely upon authorizations and
directives of such person(s) as if given directly by Landlord.
Either party may amend the designation of its construction
representative(s) at any time upon delivery of written notice to
the other party.
II. COST OF TENANT IMPROVEMENTS
A. Tenant shall complete, or cause to be completed, the Tenant
Improvements, at the construction cost shown in the approved
Final Cost Estimate (subject to the provisions of this Work
Letter), in accordance with final Working Drawings and
Specifications approved by both Landlord and Tenant. Landlord
shall pay towards the final construction costs ("Completion
Cost") as incurred a maximum of One Million One Hundred
Eighty-Nine Thousand Nine Hundred Seventy Dollars
($1,189,970.00) ("Landlord's Contribution"), based on $10.00 per
rentable square foot of the Premises plus $200,000.00, and
Tenant shall be fully responsible for the remainder ("Tenant's
Contribution"). 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. It is further understood that Landlord's obligation to
fund the Landlord's Contribution shall only apply to such Tenant
Improvement work that is completed not later than the twelfth
(12th) month of the Term. Any portion of the Landlord's
Contribution not utilized by such date shall be considered
forfeited by Tenant.
B. The Completion Cost shall include all direct costs of Tenant in
completing the Tenant Improvements, including but not limited to
the following: (i) payments made to architects, engineers,
contractors, subcontractors and other third party consultants
relating to the performance of the work, (ii) permit fees and
other sums paid to governmental agencies, (iii) costs of all
materials incorporated into the work or used in connection with
the work, and (iv) keying and signage costs. The Completion Cost
shall also include an administrative/supervision fee to be paid
to Landlord in the amount of four percent (4%) of the Landlord's
Contribution.
C. Tenant shall pay, over the course of construction, to Tenant's
contractor the cost of construction of the Tenant Improvements
set forth in the Final Cost Estimate. Landlord shall pay to
Tenant, within ten (10) days following (a) submission of an
invoice therefor, and (b) certified copies of lien waivers from
all contractors and subcontractors receiving payment pursuant to
such invoice, ninety percent (90%) of Landlord's pro-rata
portion of such invoice, which shall be ninety percent (90%) of
the amount of such invoice times Landlord's Contribution divided
by the Final Cost Estimate. Landlord shall pay the ten percent
(10%) of all such invoices retained by Landlord during the
course of construction upon (x) completion of the Tenant
Improvements (y) receipt of a certification from Tenant's
contractor that such completion has occurred and (z) receipt by
Landlord of certified copies
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of such lien releases from the contractor and subcontractors as
Landlord may reasonably require. If the actual Completion Cost
is greater than the Final Cost Estimate because of modifications
or extras not reflected on the approved working drawings, or
because of Tenant Delays, then Tenant shall be solely
responsible for such excess cost. Notwithstanding any contrary
provision of the foregoing, Landlord may withhold from
Landlord's Contribution a sum equal to Three Hundred Ninety Five
Thousand Nine Hundred Eighty-Eight Dollars ($395,988.00), based
on $4.00 per rentable square foot of the Premises, if the
initial Tenant Improvement work does not include painting,
carpeting and tile or other flooring, in conformance with the
Standards or otherwise approved by Landlord (except as to the
warehouse area).
D. Tenant shall obtain or shall cause its contractor to obtain, and
maintain, a payment and performance bond in favor of Landlord as
to the Tenant Improvement work to be performed by Tenant under
this Work Letter, which bond shall be in form and from a surety
satisfactory to Landlord and shall be for an amount of not less
than one hundred fifty percent (150%) of the cost of the work
covered thereby.
INITIAL
/s/ Signature Illegible
