LEASE
THIS LEASE is entered into by and between Landlord and Tenant effective as of
this 26th day of October, 1994.
SECTION I. TERMS AND DEFINITIONS
The following terms as used herein shall have the meanings as set forth below:
A. "Landlord" means THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, a New York
corporation, and its successors and assigns.
B. "Tenant" means PEREGRINE SYSTEMS, INC., a Delaware corporation.
C. "Building" means Building "A" of the Project, in which the Premises are
located, which Building has approximately 69,022 square feet of Rentable
Area and is located at 00000 Xxxx Xxxxx Xxxxx in the City of San Diego,
California.
D. "Project" means Del Mar Corporate Plaza located at 12670 and 00000 Xxxx
Xxxxx Xxxxx in the City of San Diego, California in which Project the
Building is located as shown on the site plan attached hereto as EXHIBIT A.
E. "Premises" means the entire Building consisting of approximately
Sixty-Nine Thousand Twenty-Two (69,022) square feet of Rentable Area, as
more particularly shown on EXHIBIT B attached hereto and incorporated
herein by this reference.
F. "Term" means the eight (8) year and two (2) month period commencing on the
Lease Commencement Date and expiring on the Expiration Date. SEE ADDENDUM
SECTION XXXV.A.
G. "Lease Commencement Date" means the first to occur of February 1, 1995 or
the date on which Landlord tenders delivery of possession of the Premises
to Tenant; provided, however, that if the Lease Commencement Date specified
in this subsection occurs prior to Substantial Completion (as defined in
Section III.B. below) or is amended pursuant to Section III.C. below,
Landlord and Tenant shall execute and attach hereto as a new EXHIBIT F an
Amendment of Lease Commencement Date in the form of EXHIBIT F hereto, which
shall specify such amended Lease Commencement Date and, if applicable, an
amended Expiration Date.
H. "Expiration Date" means March 31, 2003 unless amended as provided in an
Amendment of Lease Commencement Date executed as provided above.
I. "Monthly Rental" means the amounts specified in Section IV. below and in
the Rent Schedule attached hereto as EXHIBIT D and incorporated herein.
J. "Rentable Area" is defined in EXHIBIT D attached hereto.
K. "Security Deposit" means Eighty-Three Thousand Five Hundred Sixteen and
62/100ths Dollars ($83,516.62). See Addendum Section XXXV.G.
L. "Permitted Use" means general office and computer-related research.
1
CONFIDENTIAL
M. "Broker" means Business Real Estate Brokerage Company.
N. "Landlord's Address for Notice" means 000 Xxxxx Xxxxx Xxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxx 00000, Attn: Real Estate Vice President.
O. "Tenant's Address for Notice" means 00000 Xxxx Xxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx.
P. "Tenant's Proportionate Share" for Tenant's reimbursement of Common
Operating Costs and other expenses to be pro-rated hereunder means 100%
which is the quotient obtained by dividing the total number of square feet
of Rentable Area in the Building into the total number of square feet of
Rentable Area within the Premises.
SECTION II. PROPERTY LEASED
A. PREMISES
Upon and subject to the terms, covenants and conditions hereinafter set
forth, Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Premises; reserving to Landlord, however, (a) the use of the
exterior walls, roof, return air plenum and the area under the Premises
floor and (b) the rights to make structural (building) modifications and
the right to install, maintain, use, repair and replace pipes, ducts,
conduits, and wires to serve or serving other tenant premises in the
Building through the Premises in locations which will not materially
interfere with Tenant's use thereof.
B. COMMON AREAS
Subject to the terms, covenants and conditions of this Lease, Tenant shall
have the right, for the benefit of Tenant and its employees, suppliers,
shippers, customers and invitees, to the non-exclusive use of all of the
Common Areas as hereinafter defined.
C. MINOR VARIATIONS IN AREA
Subject to the provisions of EXHIBIT D, the Rentable Area of the Premises
contained in Section I. is agreed to be the Rentable Area of the Premises
regardless of minor variations resulting from construction of the Building
and/or tenant improvements.
SECTION III. COMMENCEMENT OF TERM AND POSSESSION OF PREMISES
A. LEASE COMMENCEMENT DATE SEE ADDENDUM SECTION XXXV.A.
The Term of the Lease shall commence on the Lease Commencement Date (as
extended only pursuant to Section III.C. below, in applicable), and shall
continue, subject to earlier termination as provided herein, until the
Expiration Date (as extended only pursuant to subsection C. below).
B. COMPLETION OF TENANT IMPROVEMENTS AND POSSESSION OF PREMISES
Upon execution of this Lease by the parties, Landlord shall proceed to
complete the tenant improvements in the Premises described as "Landlord's
Work" in the "Construction Work Letter" attached hereto and incorporated
herein as Exhibit C. At the time such work has been substantially completed
in accordance with the Construction Work Letter, i.e., a certificate of
occupancy (or its equivalent) for the Premises has been issued, all
utilities (i.e., water, electrical and gas) to the Premises are hooked-up
and available for use and Landlord has tendered possession of the Premises
to Tenant ("Substantial Completion"), Landlord shall notify Tenant thereof
and Tenant shall take possession of the Premises on the Lease Commencement
Date. In the event permission
2
CONFIDENTIAL
is given to Tenant to enter or occupy all or a portion of the Premises
prior to the Lease Commencement Date, such occupancy shall be subject to
all of the terms and conditions of this Lease. Tenant shall complete all
tenant improvements described as "Tenant's Work" in Exhibit C hereto on or
before the Lease Commencement Date. Any professional fees or reasonable
costs and expenses incurred by Landlord in reviewing plans and
specifications for Tenant's Work shall be paid to Landlord by Tenant upon
demand as additional rent. All tenant improvements constructed in the
Premises, whether by Landlord or by (or on behalf of) Tenant and whether at
Landlord's or Tenant's expense, shall become part of the Premises and shall
be and remain the property of Landlord unless Landlord specifically agrees
otherwise in writing.
C. EXTENSION OF LEASE COMMENCEMENT DATE
If the Premises are not ready for occupancy by Tenant on the original Lease
Commencement Date specified in Section I. due to one or more delays caused
by Landlord or caused by matters beyond the control of Landlord, this Lease
and the obligations of Landlord and Tenant hereunder shall nevertheless
continue in full force and effect. However, in such event Landlord and
Tenant shall agree on an amendment of the original Lease Commencement Date
and the Expiration Date to reflect such delay or delays and shall, in each
instance, execute and attach hereto an amendment in the form of that
attached as EXHIBIT F, hereto stating such amended Lease Commencement Date
and an amended Expiration Date and no rental shall be payable by Tenant
hereunder until the amended Lease Commencement Date. In the event that the
Lease Commencement Date fails to occur within sixty (60) days of the Lease
Commencement Date specified in Section I. above (which sixty (60) day
period shall be extended one day for each day of delay caused by Tenant or
force majeure (as defined in Section XXXIII.K. below)), then Tenant's
obligation to pay Monthly Rental shall be delayed one day for each day
after expiration of such sixty (60) day period (as so, extended) and prior
to the actual Lease Commencement Date. For example, if the Lease
Commencement Date occurs May 2, 1995 a delay of ninety (90) days). solely
as a result of Landlord delay, then Tenant's obligation to pay Monthly
Rental shall commence June 1, 1995, notwithstanding the occurrence of the
Lease Commencement Date. The delay in commencement of the Term and in the
accrual of rent described in the foregoing sentences shall constitute full
settlement of all claims that Tenant might otherwise have by reason of the
Premises not being ready for occupancy on the original Lease Commencement
Date specified in Section I. above.
If the Premises are not ready for occupancy by Tenant on the Lease
Commencement Date due to one or more delays caused by Tenant, or anyone
acting under or for Tenant, Landlord shall have no liability for such delay
and the Lease Commencement Date shall begin as of that date that the Tenant
Improvements would have been substantially completed absent such delays
caused by Tenant and the Expiration Date stated in Section I. shall be
adjusted accordingly (each as extended only because of Landlord's delay
pursuant to this subsection C., if applicable).
D. ACCEPTANCE AND SUITABILITY
Within fifteen (15) days following the date Tenant takes possession of the
Premises, Tenant may provide Landlord with a "punch list" which sets forth
any itemization of any corrective work to be performed by Landlord with
respect to the Landlord's Work as set forth in the Construction Work
Letter; provided, however, that Tenant's obligation to pay Monthly Rental
as provided below shall not be affected thereby. If Tenant fails to submit
such "punch list" to Landlord within such fifteen (15) day period, Tenant
agrees that by taking possession of the Premises it will conclusively be
deemed to have inspected the Premises and found the Premises in
satisfactory condition. Tenant acknowledges that neither Landlord, nor any
agent, employee or servant of Landlord, has made any representation with
respect to the Premises or the Project, or with respect to the suitability
of them for the conduct of Tenant's business, nor has Landlord agreed to
3
CONFIDENTIAL
undertake any modifications, alterations, or improvements of the Premises
or Project, except as specifically provided in this Lease.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD HEREBY
DISCLAIMS, AND TENANT WAIVES THE BENEFIT OF, ANY AND ALL IMPLIED
WARRANTIES, INCLUDING IMPLIED WARRANTIES OF HABITABILITY, FITNESS OR
SUITABILITY FOR PURPOSE, OR THAT THE BUILDING OR THE IMPROVEMENTS IN THE
PREMISES HAVE BEEN CONSTRUCTED IN A GOOD AND WORKMANLIKE MANNER. TENANT
EXPRESSLY ACKNOWLEDGES THAT LANDLORD DID NOT CONSTRUCT OR APPROVE THE
QUALITY OF CONSTRUCTION OF THE BUILDING.
/s/ [Initials unreadable]
Tenant's Initials
Notwithstanding the foregoing, Landlord shall be responsible, as to both
performance and payment of costs for work required to (1) construct
Landlord's Work, and deliver the Premises and the Project in compliance
with laws and CC&Rs in effect and applicable thereto as of the Lease
Commencement Date, (2) render the Tenant Improvements constructed by or on
behalf of Landlord (which shall be performed using new materials) in
accordance with the Working Drawings (as defined in EXHIBIT C) in good and
workmanlike manner as of the Lease Commencement Date and (3) render the
Premises, and the electrical, mechanical, HVAC, plumbing, elevator and
other systems serving the Premises in good condition and repair as of the
Lease Commencement Date; provided, however, in no event shall the foregoing
imply any representation, covenant or warranty by Landlord as to the
adequacy of the HVAC system serving the Premises to meet Tenant's
particular demands, as Landlord's agreement herein with respect to Building
systems is simply an agreement that Landlord will be responsible to repair
the same as necessary so that, as of the Lease Commencement Date, they work
as they were originally designed to do, and provided, further, that the
report prepared by an HVAC consultant at the request of Tenant prior to the
execution and delivery hereof shall not be used as the basis for
determining Landlord's compliance herewith for the purposes of the HVAC
system serving the Premises.
SECTION IV. RENT
A. MONTHLY RENTAL
Commencing on the Lease Commencement Date (subject, however, to any
modifications or adjustments specified hereinbelow and/or in the "Rent
Schedule" attached hereto as EXHIBIT D) Tenant shall pay to Landlord during
the Term, rental for the entire Term in the total amount as set forth in
EXHIBIT D payable in monthly installments (the "Monthly Rental") in the
amount set forth in EXHIBIT D, which sum shall be payable by Tenant on or
before the first day of each month, in advance, without further notice, at
the address specified for Landlord in Section I., or such other place as
Landlord shall designate, without any prior demand therefor and without any
abatement, deduction or setoff whatsoever. If the Lease Commencement Date
should occur on a day other than the first day of a calendar month, or the
Expiration Date should occur on a day other than the last day of a calendar
month, then the rental for such fractional month shall be prorated on a
daily basis upon a thirty (30) day calendar month.
B. RENT AND ADDITIONAL RENT
As used in this Lease, the term "rent" shall mean Monthly Rental and
additional rent, and the term "additional rent" shall mean all other
amounts payable by Tenant to Landlord pursuant to this Lease other than
Monthly Rental, including Tenant's
4
CONFIDENTIAL
Proportionate Share of Common Operating Costs. All Monthly Rental and
additional rent shall be paid in lawful money of the United States which
shall be legal tender at the time of payment. Where no other time is
stated herein for payment, payment of any amount payable from Tenant to
Landlord hereunder shall be due, and made, within ten (10) days after
Tenant's receipt of Landlord's invoice or statement therefor.
SECTION V. REIMBURSEMENT OF COMMON EXPENSES
A. DEFINITIONS SEE ADDENDUM SECTION XXXV.B.
(1) "Common Areas" means all areas space, equipment and special services
provided by Landlord for the common or joint use and benefit of the
tenants, their employees, agents, servants, suppliers, customers and
other invitees, including, by way of illustration, but not
limitation, retaining walls, fences, landscaped areas, parks, curbs,
sidewalks, private roads, restrooms, stairways, elevators, lobbies,
hallways, patios, service quarters, parking areas, all common areas
and other areas within the exterior of the Building and in the
Project or as shown on the site plan attached to this Lease as
EXHIBIT A.
(2) "Taxes" shall mean all real property taxes, personal property taxes,
improvement bonds, and other charges and assessments which are levied
or assessed upon or with respect to the Building and Project and the
land on which the Building and Project are located and any
improvements, fixtures and equipment and all other property of
Landlord, real or personal, located in the Building and Project and
used in connection with the operation of the Building and Project and
the land on which the Building and Project are located, including any
increase in such taxes, whether resulting from a reassessment of the
value of the land, the Building or the Project, personal property, or
for any other reason, imposed by any governmental authority, and any
tax which shall be levied or assessed in addition to or in lieu of
such real or personal property taxes and any license fees, commercial
rental tax, or other tax upon Landlord's business of leasing the
Building and the Project, but shall not include any federal or state
income tax, or any franchise, capital stock, estate, inheritance,
succession, transfer and excess profit taxes imposed upon Landlord,
and shall also include any tax consultant fee or other costs incurred
by Landlord to review or contest any tax assessed against the
Premises, Building or Project; provided, however, that for the first
four (4) years of the initial Term (only) increases in real property
taxes resulting solely from a voluntary change in ownership of the
Project which occurs within such four (4) year period shall be
excluded from Common Operating Costs, and provided further that
assessments levied by governmental entities for public improvement
purposes shall be included in Common Operating Costs as if paid by
Landlord over the maximum period allowable without penalty.
(3) "Common Operating Costs" shall mean the aggregate of all costs and
expenses payable by Landlord in connection with the operation and
maintenance of the Premises, Building, Project and Common Areas,
including, but not limited to, (a) the cost of landscaping, repaving,
resurfacing, repairing, replacing, painting, lighting, cleaning,
removing trash, janitorial services, security services and other
similar items; (b) the total cost of compensation and benefits of
personnel to implement the services referenced herein; (c) all Taxes;
(d) the cost of any insurance obtained by Landlord in connection with
the Building and Project, including, but not limited to, the
insurance required to be obtained by Landlord pursuant to this Lease;
(e) the cost of operating, repairing and maintaining life, safety and
access systems, including, without limitation, sprinkler systems; (f)
the cost of monitoring services, if provided by Landlord, including,
without limitation, any monitoring or control devices used by
Landlord in regulating the
5
parking areas; (g) the cost of water, electricity, gas and any other
utilities; (h) legal, accounting and consulting fees and expenses;
(i) compensation (including employment taxes and fringe benefits) of
all persons who perform duties connected with the operation,
maintenance and repair of the Premises, Project, Building or Common
Areas; (j) energy allocation, energy use surcharges or environmental
charges (other than charges incurred to investigate Hazardous
Materials on, under or about the Premises, which shall be payable by
Tenant to the extent provided in Section VIII.C. below (only)); (k)
expenditures, costs, fees, assessments and other charges paid by
Landlord in connection with traffic or energy management programs
applicable to the Project in connection with Landlord's compliance
with laws or other governmental requirements; (1) municipal
inspection fees or charges; (m) any other costs or expenses incurred
by Landlord under this Lease which are incurred in prudently
operating the Property and/or in performing Landlord's obligations
under the Lease and which are not otherwise directly reimbursed by
tenants; (n) the amount charged by any management firm contracted by
Landlord to provide any or all of the foregoing services; and (o) any
fees, costs, expenses or dues payable pursuant to the terms of any
covenants, conditions or restrictions or owners' association
pertaining to the Building and/or the Project. The computation of
Common Operating Costs shall be made in accordance with generally
accepted accounting principles.
Notwithstanding the foregoing, the following shall not be included in
Common Operating Costs (or shall be deducted therefrom if included
therein):
(a) Costs incurred by Landlord due to the violation by Landlord or
any other tenant of the terms and conditions of any lease of
space in the Building or the Project;
(b) Costs which Tenant or other tenants or occupants of the
Building or the Project are obligated to pay or which are
reimbursed by insurance or condemnation proceeds or under
warranty;
(c) Subject to (d) below, costs of capital replacements (as
reasonably determined by Landlord) except: (i) to the extent
the same are amortized over the reasonable useful life of the
item as reasonably determined by Landlord and included in
Common Operating Costs as so amortized, or (ii) those designed
to reduce Common Operating Costs but only to the extent of the
reasonably estimated savings to be achieved by Tenant during
the term of this Lease;
(d) Costs of capital repairs or replacements of structural elements
of the Building;
(e) Costs incurred in connection with bringing the Premises,
Building, the Project or the Common Areas into initial
compliance with any covenants, conditions and restrictions for
the Project or with laws in effect and as applicable to the
Building as of the date of this Lease;
(f) Costs of reconstructing, modifying, altering or repairing any
structural portions of the Project due to defective, or latent
defects in, original construction;
(g) Depreciation of or other expense reserves for the Building or
the Project;
(h) Any financing or refinancing costs and expenses secured by real
estate within the Project including, but not limited to,
interest or amortization on debt and rent under any ground or
underlying lease; and
6
CONFIDENTIAL
(i) Any portion of an annual management fee paid to an affiliate of
Landlord in excess of five percent (5%) of such year's gross
rentals.
(4) In the event during all or any portion of any calendar year the
Building is not at least ninety-five percent (95%) rented and
occupied, Landlord shall make an appropriate adjustment to the Common
Operating Costs for such year, employing sound accounting and
management principles, to determine the Common Operating Costs that
would have been paid or incurred by Landlord had the Building been
ninety-five percent (95%) rented and occupied and the amount so
determined shall be deemed to have been the Common Operating Costs
for such year.
(5) Upon Tenant's request therefor, Landlord shall deliver to Tenant a
copy of the tax bills received by Landlord for the Building and, so
long as Tenant is Peregrine Systems, Inc. (unless Tenant is a
"Permitted Transferee" (hereinafter defined), in which case such
Permitted Transferee shall have the right), Tenant shall have the
right, upon timely demand by Tenant, to require Landlord to contest
the real property taxes reflected on such statement with respect to
the Building. Tenant shall pay its pro rata share (based on Tenant's
percentage of Rentable Area in the Building) of the costs and
expenses incurred in contesting taxes pursuant to the foregoing
sentence, which amount shall be additional rent and not included in
Common Operating Costs for the purposes of this Lease.
B. REIMBURSEMENT
Within a reasonable time before the commencement of each calendar year
during the Term, Landlord shall deliver to Tenant a reasonable estimate
of the anticipated Common Operating Costs for the forthcoming calendar
year. Tenant shall pay to Landlord, as additional rental, commencing on
the Lease Commencement Date, and continuing on the first day of each
calendar month thereafter, an amount equal to one-twelfth (1/12th) of the
product obtained by multiplying (1) the remainder of the then estimated
Common Operating Costs less the Base Operating Expense, times (2)
Tenant's Proportionate Share. The estimated monthly charge for Tenant's
Proportionate Share may be adjusted periodically by Landlord during the
calendar year on the basis of Landlord's reasonably anticipated costs.
Any expenditure by Landlord (e.g., resurfacing of parking areas, painting
buildings, refurbishing landscaping or walkways and similar items) during
the year which was not included in determining the estimated Common
Operating Costs, may be billed separately to Tenant according to Tenant's
Proportionate Share.
C. REBATE OR ADDITIONAL CHANGES
Within a reasonable time after the end of each calendar year, Landlord
shall furnish to Tenant a statement showing the total Common Operating
Costs less the Base Operating Expense and Tenant's Proportionate Share of
the Common Operating Costs for the calendar year just ended. In the event
Tenant reasonably disputes any item of Common Operating Costs reflected on
any such statement Tenant may, within thirty (30) days after receipt
thereof, request (in writing) Landlord to provide the reasonable
documentary back-up for such item, which Landlord shall provide to Tenant
as promptly as practicable upon receipt of such request. Tenant shall pay
to Landlord upon demand as additional rent the costs and expenses incurred
by Landlord in responding to such request. In the event that, upon
reviewing the back-up so provided by Landlord, Tenant disagrees with the
amount charged by Landlord to Tenant for any such item, Tenant may so
notify Landlord. If Landlord agrees with the findings of Tenant, then an
appropriate adjustment shall be made. In the event that there is a
disagreement, then Landlord and Tenant shall select an independent auditor,
whose determination shall be binding upon Landlord and
7
CONFIDENTIAL
Tenant. Landlord and Tenant shall share the fees of the independent
auditor, if any, equally.
If the amount of estimated Common Operating Costs less the Base Operating
Expense paid by Tenant for any year during the Term exceeds the actual
Common Operating Costs less the Base Operating Expense for such year.
Landlord shall apply any amounts due to Tenant hereunder to any outstanding
amounts due or amounts next coming due from Tenant to Landlord. If the
estimated Common Operating Costs less the Base Operating Expense for such
year are less than the actual Common Operating Costs less the Base
Operating Expense for such year, then Tenant shall pay to Landlord, within
thirty (30) days of Tenant's receipt of Landlord's statement, as additional
rent, Tenant's Proportionate Share of the amount by which the actual Common
Operating Costs less the Base Operating Expense exceeds the estimated
Common Operating Costs less the Base Operating Expense. In the event the
Term of this Lease expires, or this Lease is otherwise terminated, Landlord
shall compute and prorate the credit or deficiency up to the date the Lease
expired or was terminated and may apply any credit due Tenant to any
outstanding amounts due by Tenant hereunder at that time.
D. CONTROL OF COMMON AREAS
Landlord shall have the sole and exclusive control of the Common Areas, as
well as the right to make changes to the Common Areas. Notwithstanding the
preceding sentence, Landlord is not responsible for any harm or damage to
any of Tenant's officers, agents, or employees as a result of their use of
the Common Areas. Landlord's rights (which shall be exercised in such a
manner so as not to permanently and materially interfere with the use of
the Premises for the Permitted Use or permanently and materially reduce the
parking ratio for the Project below that required to be maintained by
applicable law) shall include, but not be limited to, the right to (a)
restrain the use of the Common Areas by unauthorized persons, (b) utilize
from time to time any portion of the Common Areas for promotional and
related matters, (c) temporarily close any portion of the Common Areas for
repairs, improvements or alterations, (d) change the shape and size of the
Common Areas or change the location of improvements within the Common
Areas, including, without limitation, parking areas, roadways and curb
cuts, and (e) prohibit access to or use of Common Areas that are designated
for the storage of supplies or operation of equipment necessary to operate
the Project or Building. As used in the parenthetical phrase in the
foregoing sentence, the term "permanently" means a material interference
which extends for a period in excess of sixty (60) consecutive days. Such
parenthetical phrase shall not be applied to prevent Landlord from, and
Landlord shall have no liability to Tenant for, performing repairs or
maintenance which are required or permitted to be performed by Landlord
pursuant to this Lease and which are reasonably necessary to maintain the
Project in good condition and repair or to comply with Section XVIII.
and/or XIX. below. Landlord may determine the nature, size and extent of
the Common Areas as well as make changes to the Common Areas from time to
time which, in its opinion, we deemed desirable.
SECTION VI. SECURITY DEPOSIT SEE ADDENDUM SECTION XXXV.G.
Upon execution of this Lease, Tenant shall deposit with Landlord the Security
Deposit defined in Section I. above, which shall be held by Landlord as security
for the performance by Tenant of all terms, covenants and conditions of this
Lease. It is expressly understood and agreed that such deposit is not an
advance rental deposit or a measure of Landlord's damages in case of Tenant's
default. If Tenant defaults with respect to any provision of this Lease,
including, but not limited to, the provisions relating to the payment of rent or
the obligation to repair and maintain the Premises or to perform any other term,
covenant or condition contained herein, Landlord may (but shall not be required
to), without prejudice to any other remedy provided herein or provided by law
and without notice to Tenant, use the Security Deposit, or any portion of it, to
cure the default or to compensate Landlord for all damages sustained by Landlord
8
CONFIDENTIAL
resulting from Tenant's default. Tenant shall pay to Landlord within ten (10)
days after Landlord's demand therefor a sum equivalent to the portion of the
Security Deposit so expended or applied by Landlord as provided in this
paragraph so as to maintain the Security Deposit in the sum initially deposited
with Landlord. Although the Security Deposit shall be deemed the property of
Landlord, if Tenant is not in default at the expiration or termination of this
Lease, Landlord shall return the Security Deposit to Tenant. Landlord shall not
be required to keep the Security Deposit separate from its general funds and
Landlord, not Tenant, shall be entitled to all interest, if any, accruing on any
such deposit. Upon any sale or transfer of its interest in the Building,
Landlord shall transfer the Security Deposit to its successor in interest and
thereupon, Landlord shall be released from any liability or obligation with
respect thereto.
SECTION VII. TENANT'S TAXES
To the extent not covered as a Common Operating Cost, Tenant shall be liable for
any tax (now or hereafter imposed by any governmental entity) applicable to or
measured by or on the rents or any other charges payable by Tenant under this
Lease, including (but not limited to) any gross income tax, gross receipts tax
or excise tax with respect to the receipt of such rent or other charges or the
possession, leasing or operation, use or occupancy of the Premises, but not
including any net income, franchise, capital stock, estate or inheritance taxes.
If any such tax is required to be paid to the governmental taxing entity
directly by Landlord, then Landlord shall pay the amount due and, upon demand,
shall be fully reimbursed by Tenant for such payment.
Tenant shall also be liable for all taxes levied against the leasehold held by
Tenant or against any personal property, leasehold improvements, additions,
alterations and fixtures placed by or for Tenant in, on or about the Premises,
Building and Project or constructed by Landlord for Tenant in the Premises; and
if any such taxes are levied against Landlord or Landlord's property, or if the
assessed value of such property is increased (whether by special assessment or
otherwise) by the inclusion therein of value placed on such leasehold, personal
property, leasehold improvements, additions, alterations and fixtures, and
Landlord pays any such taxes (which Landlord shall have the right to do
regardless of the validity thereof), Tenant, upon demand, shall fully reimburse
Landlord for the taxes so paid by Landlord or for the proportion of such taxes
resulting from such increase in any assessment.
Tenant shall have the right, upon providing Landlord with security adequate in
Landlord's sole but reasonable opinion to prevent the same from becoming a lien
on the Premises, Building or Project, to contest taxes for which Tenant is
responsible pursuant to this Section VII.
SECTION VIII. USE OF PREMISES
A. PERMITTED USES
Tenant may use the premises and Common Areas solely for the Permitted Use
specified in subsection I.M. above, and for no other use. Tenant shall, at
its own cost and expense, obtain any and all licenses and permits necessary
for any such use. Tenant shall not do or permit anything to be done in or
about the Premises, Common Areas, Building or Project which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Project or injure or annoy them or use or allow the Premises to be used for
any unlawful purpose, nor shall Tenant cause, maintain or permit any
nuisance in, on or about the Premises and Common Areas or permit any odors
to emanate from the Premises and intrude upon the Common Areas or the
premises of other tenants. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises, Common Areas, Building or
Project. Tenant shall not do or permit anything to be done in or about the
Premises, Common Areas, Building or Project which may render the insurance
thereon void or increase the insurance risk thereon, without Landlord's
prior written consent in each instance, which will not be unreasonably
withheld but which may be conditioned (without limitation) upon Tenant's
payment of
9
CONFIDENTIAL
any resultant increases in the premium. If an increase in any fire and
extended coverage insurance premiums paid by Landlord for the Building and
Project is caused by Tenant's use and occupancy of the Premises, then
Tenant shall pay as additional rental the amount of such increase to
Landlord.
B. COMPLIANCE WITH LAWS
Tenant shall not use the Premises, Building, Project or Common Areas in any
way (or permit or suffer anything to be done in or about the same) which
will conflict with any, law, statute, ordinance or governmental rule or
regulation or any covenant, condition or restriction (whether or not of
public record) affecting the Premises, Project or Building, now in force or
which may hereafter be enacted or promulgated including, but not limited
to, the provisions of any city or county zoning codes regulating the use
thereof. Tenant shall, at its sole cost and expense, promptly comply with
(a) all laws, statutes, ordinances and governmental rules and regulations,
now in force or which may hereafter be in force, applicable to Tenant or
its use of or business or operations in the Premises,(b) all requirements,
and other covenants, conditions and restrictions, now in force or which may
hereafter be in force, which affect the Premises, and (c) all requirements,
now in force or which may hereafter be in force, of any board of fire
underwriters or other similar body now or hereafter constituted relating to
or affecting the condition, use or occupancy of the Premises, Building or
Project. The judgment of any court of competent jurisdiction or the
admission by Tenant in any action against Tenant, whether Landlord be a
party thereto or not, that Tenant has violated any law, statute, ordinance,
governmental rule or regulation or any requirement, covenant, condition or
restriction shall be conclusive of the fact as between Landlord and Tenant.
Tenant agrees to fully indemnify Landlord against any liability, claims or
damages arising as a result of a breach of the provisions of this
subsection by Tenant, and against all costs, expenses, fines or other
charges arising therefrom, including, without limitation, reasonable
attorneys' fees and related costs incurred by Landlord in connection
therewith, which indemnity shall survive the expiration or earlier
termination of this Lease. Without limiting the generality of the
foregoing, it is expressly understood and agreed that, subject to
performance by Landlord of Landlord's Work described in EXHIBIT C hereto,
and performance by Landlord of its obligations pursuant to the last
unnumbered paragraph of Section III.D. above (any violation of which by
Landlord shall give rise (only) to a claim by Tenant for breach of this
Lease and damages), Tenant is accepting the Premises "AS IS", in its
present state and condition, without any representations or warranties from
Landlord of any kind whatsoever, either express or implied, with respect to
the Premises or the Building, including without limitation the compliance
of the Premises or the Building with The Americans With Disabilities Act
and the rules and regulations promulgated thereunder, as amended from time
to time (the "ADA"). Except as otherwise provided for in EXHIBIT C hereto
and the last unnumbered paragraph of Section III.D. hereof, if Tenant's use
of the Premises or operations therein cause Landlord to incur any
obligation under the ADA, as reasonably determined by Landlord, then Tenant
shall reimburse Landlord for Landlord's costs and expenses in connection
therewith. Notwithstanding the foregoing, Landlord shall be responsible
for compliance of the Common Areas with the ADA (as in effect and
applicable to the Project as of the date hereof), except if and to the
extent that such compliance is required by or relates to Tenant's
operations in the Premises. If Tenant's initial use of the Premises is not
a place of public accommodation" within the meaning of the ADA, then Tenant
may not thereafter change the use of the Premises to cause the Premises to
become a "place of public accommodation" unless such use is consistent with
the Permitted Use and Tenant pays all costs and expenses of compliance of
the Premises, Building and Project with the ADA associated therewith. In
the event that Tenant desires or is required hereby to make Alterations (as
defined in Section XII. below) to the Premises in order to satisfy its
obligations under the ADA, ten all such Alterations shall be subject to any
requirements in the Lease with respect to Alterations of the Premises, and
shall be performed at Tenant's sole cost and expense. Except for
Alterations to the Premises, nothing herein shall give Tenant any right
whatsoever to make any alterations or
10
CONFIDENTIAL
modifications to any portion of the Building or its appurtenant facilities.
Tenant shall be responsible for insuring that the Premises and Tenant's use
thereof and operations therein fully and completely comply with the ADA.
C. HAZARDOUS MATERIALS SEE ADDENDUM SECTION XXXV.C.
Tenant covenants and agrees that it shall not cause or permit any Hazardous
Material (as defined below) to be brought upon, kept, or used in or about
the Premises, Building or Project by Tenant, its agents, employees,
contractors or invitees. The foregoing covenant shall not extend to
substances typically found or used in general office applications so long
as (i) such substances and any equipment which generates such substances
are maintained only in such quantities as are reasonably necessary for
Tenant's operations in the Premises, (ii) such substances are used strictly
in accordance with the manufacturers' instructions therefor, (iii) such
substances are not disposed of in or about the Project in a manner which
would constitute a release or discharge thereof, and (iv) all such
substances and any equipment which generates such substances are removed
from the Project by Tenant upon the expiration or earlier termination of
this Lease. Any use, storage, generation, disposal, release or discharge
by Tenant of Hazardous Materials in or about the Project as is permitted
pursuant to this subsection C. shall be carried out in compliance with all
applicable federal, state and local laws, ordinances, rules and
regulations. Moreover, no hazardous waste resulting from any operations by
Tenant shall be stored or maintained by Tenant in or about the Project for
more than ninety (90) days prior to removal by Tenant. Tenant shall,
annually within thirty (30) days after Tenant's receipt of Landlord's
written request therefor, provide to Landlord a written list identifying
any Hazardous Materials then maintained by Tenant in the Project, the use
of each such Hazardous Material and the approximate quantity of each such
Hazardous Material so maintained by Tenant, together with written
certification by Tenant stating, in substance, that neither Tenant nor any
person for whom Tenant is responsible has released or discharged any
Hazardous Materials in or about the Project.
In the event that Tenant proposes to conduct any use or to operate any
equipment which will or may utilize or generate a Hazardous Material other
than as specified in the first paragraph of this subsection, Tenant shall
first in writing submit such use or equipment to Landlord for approval. No
approval by Landlord shall relieve Tenant of any obligation of Tenant
pursuant to this subsection, including the removal, clean-up and
indemnification obligations imposed upon Tenant by this subsection. Tenant
shall, within five (5) days after receipt thereof, furnish to Landlord
copies of all notices or other communications received by Tenant with
respect to any actual or alleged release or discharge of any Hazardous
Material in or about the Premises or the Project and shall, whether or not
Tenant receives any such notice or communication, notify Landlord in
writing of any discharge or release of Hazardous Material by Tenant or
anyone for whom Tenant is responsible in or about the Premises or the
Project. In the event that Tenant is required to maintain any Hazardous
Materials license or permit in connection with any use conducted by Tenant
or any equipment operated by Tenant in the Premises, copies of each such
license or permit, each renewal or revocation thereof and any communication
relating to suspension, renewal or revocation thereof shall be furnished to
Landlord within five (5) days after receipt thereof by Tenant. Compliance
by Tenant with the two immediately preceding sentences shall not relieve
Tenant of any other obligation of Tenant pursuant to this subsection.
Upon any violation of the foregoing covenants, Tenant shall be obligated,
at Tenant's sole cost, to clean-up and remove from the Project all
Hazardous Materials introduced into the Project by Tenant or any person or
entity for whom Tenant is responsible. Such clean-up and removal shall
include all testing and investigation required by any governmental
authorities having jurisdiction and preparation and implementation of any
remedial action plan required by any governmental authorities having
jurisdiction. All such clean-up and removal activities of Tenant shall, in
each instance, be conducted to
11
CONFIDENTIAL
the satisfaction of Landlord (acting as a responsible owner of real
property in directing the performance of such activities by a third party
responsible for the condition) and all governmental authorities having
jurisdiction. Landlord's right of entry pursuant to Section XI. shall
include the right to enter and inspect the Premises for violations of
Tenant's covenants herein.
Tenant shall indemnify, defend and hold harmless Landlord, its partners,
and its and their successors, assigns, partners, officers, employees,
agents, lenders and attorneys from and against any and all claims,
liabilities, losses, actions, costs and expenses (including attorneys' fees
and costs of defense) incurred by such indemnified persons, or any of them,
as the result of (A) the introduction into or about the Project by Tenant
or anyone for whom Tenant is responsible of any Hazardous Materials, (B)
the usage, storage, maintenance, generation, disposition or disposal by
Tenant or anyone for whom Tenant is responsible of Hazardous Materials in
or about the Project, (C) the discharge or release in or about the Project
by tenant or anyone for whom Tenant is responsible of any Hazardous
Materials, (D) any injury to or death of persons or damage to or
destruction of property resulting from the use, introduction, maintenance,
storage, generation, disposal, disposition, release or discharge by Tenant
or anyone for whom Tenant is responsible of Hazardous Materials in or about
the Project, and (E) any failure of Tenant or anyone for whom Tenant is
responsible to observe the foregoing covenants of this subsection.
Upon any violation of the foregoing covenants, Landlord shall be entitled
to exercise all remedies available to a landlord against a defaulting
tenant, including but not limited to those set forth in Section XX.
Without limiting the generality of the foregoing, Tenant expressly agrees
that upon any such violation Landlord may, at its option, immediately
terminate this Lease. In the event this Lease terminates prior to Tenant's
completion of its clean-up and removal covenant hereunder, Tenant shall,
nevertheless, continue to be responsible to complete the clean-up and
removal and for any damages, including without limitation payment of rental
loss, suffered by Landlord as a result of the clean-up operations and/or
contamination caused by a violation of Tenant's covenants herein. No
action by Landlord hereunder shall impair the obligations of Tenant
pursuant to this subsection.
As used in this subsection, "Hazardous Materials" is used in its broadest
sense and shall include any petroleum based products, pesticides, paints
and solvents, polychlorinated biphenyl, lead, cyanide, DDT, acids, ammonium
compounds and other chemical products and any substance or material defined
or designated as hazardous or toxic, or other similar term, by any federal,
state or local environmental statute, regulation, or ordinance affecting
the Premises, Building or Project presently in effect or that may be
promulgated in the future, as such statutes, regulations and ordinances may
be amended from time to time, including but not limited to the statutes
listed below:
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sec. 6901
ET SEQ.
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, 42 U.S.C. Sec. 9601 ET SEQ.
Clean Air Act, 42 U.S.C. Sections 7401-7626.
Water Pollution Control Act (Clean Water Act of 1977), 33 U.S.C. Sec.
1251 ET SEQ.
Insecticide, Fungicide, and Rodenticide Act (Pesticide Act of 1987),
7 U.S.C. Sec. 135 ET SEQ.
Toxic Substances Control Act, 15 U.S.C. Sec. 2601 ET SEQ.
12
CONFIDENTIAL
Safe Drinking Water Act, 42 U.S.C. Sec. 300(f)ET SEQ.
National Environmental Policy Act (NEPA) 42 U.S.C. Sec. 4321 ET SEQ.
Refuse Act of 1899, 33 U.S.C. Sec. 407 ET SEQ.
California Health and Safety Code Sec. 25316 ET SEQ.
By its signature to this Lease, Tenant confirms that it has been provided
with a copy of an environmental site assessment of the Project described in
Addendum Section XXXV. C. and that it has conducted its own examination of
the Premises and the Project with respect to Hazardous Materials. Except
as set forth in the Report, to Landlord's actual knowledge (without any
inquiry other than requesting the Report) (i) no Hazardous Material is
present on the Project or the soil, surface water or groundwater thereof,
(ii) no underground storage tanks or asbestos containing building materials
are present on the Project, and (iii) no action, proceeding or claim is
pending or threatened concerning the Project concerning any Hazardous
Material or pursuant to any Environmental Law. On the basis of the
foregoing, Tenant accepts the Premises and Project "AS IS." Notwithstanding
anything to the contrary in this Lease, in the event that Hazardous
Materials are discovered in the Project, the presence of which is not
caused by a breach of the obligations of Tenant set forth in this
subsection C., Landlord shall, at Landlord's sole cost and expense, remove,
remediate, or otherwise deal with such Hazardous Materials if, as and when
required by applicable governmental authorities. In addition, subject to
Section XV. B. below, Landlord agrees to indemnify and hold Tenant harmless
from and against any and all costs of compliance required to be incurred by
Tenant by any governmental authority with jurisdiction and/or any and all
claims, demands, costs and expenses for personal injury and property damage
asserted against Tenant and reduced to judgment against Tenant in a legal
action, including reasonable attorneys' fees incurred therein
(collectively, "Claims"), if and to the extent that the same are judicially
determined or otherwise proved to the reasonable satisfaction of Landlord
to have been caused by the presence (or later effects) in or about the
Project of Hazardous Materials introduced to the Project by Landlord.
Tenant acknowledges that incorporation of any material containing asbestos
into the Premises is absolutely prohibited. Tenant agrees, represents and
warrants that it shall not incorporate or permit or suffer to be
incorporated, knowingly or unknowingly, any material containing asbestos
into the Premises.
D. LANDLORD'S RULES AND REGULATIONS
Tenant shall, and Tenant agrees to cause its agents, servants, employees,
invitees and licensees to, observe and comply fully and faithfully with the
rules and regulations attached hereto as EXHIBIT E or such other non-
discriminatory rules and regulations which may hereafter be adopted by
Landlord (the "Rules") for the care, protection, cleanliness, and operation
of the Premises, Building and Project, and any modifications or additions
to the Rules adopted by Landlord, provided that, Landlord shall give
written notice thereof to Tenant. Landlord shall not be responsible to
Tenant for failure of any other tenant or occupant of the Building or
Project to observe or comply with any of the Rules.
E. TRAFFIC AND ENERGY MANAGEMENT
Landlord and Tenant agree to cooperate and use their best efforts to
participate in governmentally mandated or voluntary traffic management
programs generally applicable to businesses located in the area in which
the Project is situated or to the Project and, initially, shall encourage
and support van and car pooling by employees and shall encourage and
support staggered and flexible working hours for employees to the fullest
extent permitted by the requirements of Tenant's business. Neither this
subsection nor
13
CONFIDENTIAL
any other provision in this Lease, however, is intended to or shall create
any rights or benefits in any other person, firm, company, governmental
entity or the public.
Landlord and Tenant agree to cooperate and use their best efforts to comply
with any and all guidelines or controls imposed upon either Landlord or
Tenant by federal or state governmental organizations or by any energy
conservation association to which Landlord is a party concerning energy
management; provided, however, Tenant shall not be responsible (subject to
Tenant's obligations elsewhere in this Lease) to comply with voluntary
traffic or energy management programs of the type described in this Section
VIII.E. except to the extent required by law.
All costs, fees assessments and other charges paid by Landlord to any
governmental authority or voluntary association in connection with any
program of the types described in this subsection, all costs and fees paid
by Landlord to any governmental authority or third party pursuant to or to
effect such program and all costs associated with administration and
management of such program or compliance therewith, shall be included in
Common Operating Costs. However, any costs, fees, fines or other levies
assessed against Landlord as the result of failure of any tenant to comply
with this subsection shall be reimbursed by such noncomplying tenant to
Landlord as additional rent.
SECTION IX. SERVICE AND UTILITIES
A. STANDARD BUILDING SERVICES AND REIMBURSEMENT BY TENANT
So long as Tenant is not in default hereunder (including any default of a
type described in clauses (4) - (6) of Section XX.A. below), Landlord
agrees to make available to the Premises, during the Building's normal
business hours and days of 7:00 a.m. to 6:00 p.m. Monday through Friday and
8:00 a.m. to 1:00 p.m. Saturday (holidays excepted) such heat and air
conditioning (hereinafter "HVAC"), water and electricity, as may be
required in Landlord's judgment for the comfortable use and occupation of
the Premises for general office purposes and at a level which is usual and
customary in similar office buildings in the area where the Project is
located, all of which shall be subject to the Rules of the Building as well
as any governmental requirements or standards relating to, among other
things, energy conservation. Tenant agrees to pay, as a Common Operating
Cost in accordance with Section V. above, Tenant's Proportionate Share in
excess of the Base Operating Expense of the full cost of all utilities
supplied to the Premises, together with any taxes thereon; provided,
however, if any such service or utilities are separately metered to the
Premises, Tenant shall pay the cost thereof in a timely manner directly to
the utility company providing such service. Tenant's obligations in this
Section regarding utilities include, but are not limited to, initial
connection charges, all charges for gas, water and electricity used on the
Premises, and for all electric light lamps or tubes. If any such utility
or service is not separately metered to the Premises, Tenant shall be
required to pay any increased cost, as additional rent, of any such utility
and service, including without limitation water, electricity and HVAC,
resulting from any use of the Premises at any time other than the schedule
of normal business hours for providing such utilities and services as
reasonably determined by Landlord or any unusual or non-customary use
beyond that which Landlord has agreed to make available as described above,
or resulting from special electrical, cooling and ventilating needs created
in certain areas by telephone equipment, computers and other similar
equipment or uses. If the Building is designed for individual tenant
operation of the HVAC, Tenant agrees to pay the cost of operating the HVAC
at any time other than the schedule of hours for providing the same set
forth above, which cost may include the operation of the HVAC for space
located outside the Premises when such space is serviced concurrently with
the operation of the HVAC for the benefit of the Premises.
14
CONFIDENTIAL
B. LIMITATION ON LANDLORD'S OBLIGATIONS
Landlord shall not be in breach of its obligations under this Section
unless Landlord fails to make any repairs or perform maintenance which it
is obligated to perform hereunder and such failure persists for an
unreasonable time after written notice of a need for such repairs or
maintenance is given to Landlord by Tenant. Landlord agrees to investigate
the necessity of any repair or maintenance alleged to be necessary in such
written notice promptly, and shall commence any repair or maintenance that
Landlord determines is necessary within a reasonable period of time
thereafter. Landlord shall not be liable for and Tenant shall not be
entitled to any abatement or reduction of rent by reason of Landlord's
failure to furnish any of the foregoing when such failure is caused by
accidents, breakage, repairs, strikes, brownouts, blackouts, lockouts or
other labor disturbances or labor disputes of any character, or by any
other cause, similar or dissimilar, beyond the reasonable control of
Landlord, nor shall such failure under such circumstances be construed as a
constructive or actual eviction of Tenant. If, as a result of Landlord's
negligence or willful misconduct, utility service to the Premises continues
interrupted for a period of in excess of three (3) consecutive business
days after written notice thereof is given to Landlord by Tenant (which
three (3) business day period shall be extended by force majeure events
described in Section XXXIII.K. below) and which interruption materially
prohibits the use of the Premises for the Permitted Use, then Monthly
Rental and Tenant's obligation to pay Common Operating Costs shall xxxxx
from and after expiration of such three (3) business day period (as so
extended) until service is restored. Landlord shall not be liable under
any circumstances for loss or injury to property or business, however
occurring, through or in connection with or incidental to Landlord's
failure to furnish any of said service or utilities.
C. EXCESS SERVICE
Tenant shall not, without the written consent of Landlord, use any
apparatus or device in the Premises, including, without limitation,
electronic data processing machines, punch card machines or machines using
in excess of one hundred twenty (120) volts or which consumes more
electricity than is usually furnished or supplied for the Permitted Use of
the Premises, as determined by Landlord. Tenant shall not consume water or
electric current in excess of that usually furnished or supplied for the
use of the Premises (as determined by Landlord), without first procuring
the written consent of Landlord, which Landlord may refuse. The excess
cost (including any penalties for excess usage) for such water and electric
current shall be established by an estimate made by a utility company or
independent engineer hired by Landlord at Tenant's expense and Tenant shall
pay such excess costs each month with the Monthly Rental. All costs and
expenses of modifying existing equipment, cables, lines, etc. or installing
additional equipment, cables, lines, etc. to accommodate such excess usage
or use by Tenant of such apparatus or device shall be borne by Tenant.
D. SECURITY SERVICES
Certain security measures (both by electronic equipment and personnel) may
be provided by Landlord in connection with the Building and Common Areas.
However, Tenant hereby acknowledges that such security is intended to be
only for the benefit of the Landlord in protecting its property from fire,
theft, vandalism and similar perils and while certain incidental benefits
may accrue to the Tenant therefrom, such security is not for the purpose of
protecting either the property of Tenant or the safety of its officers,
employees, servants or invitees. By providing such security, Landlord
assumes no obligation to Tenant and shall have no liability arising
therefrom. If, as a result of Tenant's particular occupancy of the
Premises, Landlord in its sole discretion determines that it is necessary
to provide security or implement additional security measures or devices in
or about the Building or the Common Areas, Tenant shall be required to pay,
as additional rent, the cost or increased cost, as the case may be, of such
security.
15
CONFIDENTIAL
SECTION X. MAINTENANCE AND REPAIRS
A. Landlord's Obligations SEE ADDENDUM SECTION XXXV.D.
Except for special or non-standard systems and equipment installed for
Tenant's exclusive use, Landlord shall keep in good condition and repair,
subject to reimbursement by Tenant as a Common Operating Cost of Tenant's
Proportionate Share of the cost and expense incurred by Landlord in
connection therewith, the foundations, exterior walls, structural
condition of interior bearing walls and roof of the Premises, and the
Building, as well as the parking lots, walkways, driveways, landscaping,
fences, signs, and utility installations of the Project. Landlord shall
not be required to make any repairs that are the obligation of any other
tenant or occupant within the Building or Project or repairs for damage
caused by any negligent or intentional act or omission of Tenant or any
person claiming through or under Tenant or any of Tenant's employees,
suppliers, shippers, customers or invitees, in which event Tenant shall
repair such damage at its sole cost and expense. Tenant hereby waives
and releases its right to make repairs at Landlord's expense under any
law, statute, ordinance, rules and regulations now or hereafter in effect
in any jurisdiction in which the Project is located.
B. TENANT'S OBLIGATIONS SEE ADDENDUM SECTION XXXV.D.
Except as otherwise provided in Sections XVIII and XIX, Tenant shall, at
its sole cost and expense, make all repairs and replacements as and when
Landlord deems reasonably necessary to preserve in good working order and
condition the Premises and every part thereof, including, without
limitation, heating, ventilating and air conditioning systems which
service the Premises, plumbing within the Premises, special or
supplementary heating, ventilating and air conditioning systems
located within the Premises and installed for the exclusive use of the
Premises, electrical and lighting facilities and equipment within the
Premises and all other non-standard utility facilities and systems
exclusively serving the Premises, and all trade fixtures, interior walls,
interior surfaces of exterior walls, ceilings, windows, doors (including
entry doors), cabinets, draperies, window coverings, carpeting and other
floor coverings, plate glass and skylights located within the Premises.
Notwithstanding the foregoing, if the cost of repairing a Building system
in any one instance where the same requires repair exceeds, in Landlord's
sole but reasonable opinion, twenty-five percent (25%) of the cost,
expense and fees of all work required to replace the entire system, then
Landlord will be responsible for the cost of such system repair. Tenant
shall contract for janitorial services in the Premises with the company
providing janitorial services for the other building in the Project.
Tenant shall, at its sole cost and expense, make all repairs to the
Premises, Building and Project which are required, in the reasonable
opinion of Landlord, as a result of any misuse, neglect, negligent or
intentional act or omission committed or permitted by Tenant or by any
subtenant, agent, employee, supplier, shipper, customer, invitee or
servant of Tenant.
C. LANDLORD'S RIGHT TO MAKE REPAIRS
In the event that Tenant fails to maintain the Premises, Building or
Project in good and sanitary order, condition and repair as required by
this Lease, then, following written notification to Tenant and expiration
of the applicable grace period described in Section XX. (except in the case
of an emergency, in which case no prior notification and/or grace period
shall be required), Landlord shall have the right, but not the obligation,
to enter the Premises and to do such acts and expend such funds at the
expense of Tenant as are required to place the Premises, Building and
Project in good, safe and sanitary order, condition and repair. Any amount
so expended by Landlord shall be paid by Tenant promptly upon demand as
additional rent.
D. CONDITION OF PREMISES UPON SURRENDER
Except as otherwise provided in this Lease, Tenant shall, upon the
expiration or earlier termination of the Term, surrender the Premises to
Landlord in the same condition as on the date Tenant took possession, broom
clean, except for reasonable wear and tear,
16
CONFIDENTIAL
damage caused by an event which is insured by property insurance maintained
by Landlord pursuant to Section XIV.B.(1) below (subject to Tenant's
obligations stated in the last sentence of Section X.B.), and condemnation
(subject to Tenant's assignment to Landlord of the right to receive
proceeds of condemnation for any fixtures or other property required to be
surrendered to Landlord under this subsection D.). All appurtenances,
fixtures, improvements, additions and other property attached to or
installed in the Premises whether by Landlord or by or on behalf of Tenant,
and whether at Landlord's expense or Tenant's expense, shall be and remain
the property of Landlord unless Landlord specifically agrees or requires
otherwise in writing (which removal, with respect to Alterations, shall be
subject to Section XII. below). Any furnishings and personal property of
Tenant located in the Premises, whether the property of Tenant or leased by
Tenant (including the fixtures, improvements and other items agreed, in
writing, by Landlord to belong to the Tenant as provided in the preceding
sentence), shall be and remain the property of Tenant and shall be removed
by Tenant at Tenant's sole cost and expense at the expiration of the Term.
Tenant shall promptly repair any damage to the Premises or the Building
resulting from such removal. Any of Tenant's property not removed from the
Premises prior to the expiration of the Term shall, at Landlord's option,
either become the property of Landlord or may be removed by Landlord and
Tenant shall pay to Landlord the cost of such removal within ten (10) days
after delivery of a xxxx therefor or Landlord, at its option, may deduct
such amount from the Security Deposit. Any damage to the Premises,
including any structural damage, resulting from Tenant's use or from the
removal of Tenant's fixtures, furnishings and equipment, shall be repaired
by Tenant at Tenant's expense.
SECTION XI. ENTRY BY LANDLORD
Landlord reserves and shall at any and all times have the right to enter the
Premises at reasonable times to inspect the same to determine whether Tenant is
complying with its obligations hereunder; to supply any service to be provided
by Landlord hereunder; and to supply janitorial service and any other service to
be provided by Landlord to Tenant hereunder; and, upon reasonable notice to
Tenant, may exhibit the Premises to prospective purchasers, mortgagees or,
within the last twelve (12) months of the Term, prospective tenants; to post
notices of nonresponsibility; and to alter, improve or repair the Premises and
any portion of the Building and Project, without abatement of rent, and may for
that purpose erect scaffolding and other necessary structures that are
reasonably required by the character of the work to be performed by Landlord,
provided that the business of Tenant shall not be interfered with unreasonably.
In the event Landlord desires to enter the Premises with any third party whom
Tenant reasonably identifies as a business competitor of Tenant, Tenant shall
have the right, at Tenant's option, to designate an available representative to
accompany Landlord and such third party within the Premises. For each of the
aforesaid purposes, Landlord shall at all times have and retain a key with which
to unlock all of the doors in, upon and about 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 such doors in the event of an emergency.
Any entry to the Premises or portions thereof obtained by Landlord by any of
said means, or otherwise, shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises,
or an eviction, actual or constructive, of Tenant from the Premises, or any
portion thereof.
SECTION XII. ALTERATIONS, ADDITIONS AND TRADE FIXTURES
Tenant shall not make any alterations, additions or improvements to the
Premises, or any part thereof, whether structural or nonstructural (hereafter
"Alterations"), without Landlord's prior written consent which will not be
unreasonably withheld or delayed. Notwithstanding the foregoing, Landlord's
prior consent is not required for any non-structural alterations which do not
affect the Building systems, which are not visible from the exterior of the
Premises, which are consistent with the Tenant Improvements, which do not alter
the floor plan of the Premises
17
CONFIDENTIAL
or the flow of the Building and which cost, in any instance, less than $10,000
(inclusive of all professional, permit and other fees, costs and expenses). In
order to obtain Landlord's preliminary consent, Tenant shall submit such
information as Landlord may require, including without limitation plans and
specifications for the Alterations. Any professional fees or other reasonable
costs and expenses incurred by Landlord in reviewing such plans and
specifications shall be paid to Landlord by Tenant as additional rent upon
demand. After Landlord gives preliminary consent, in order to obtain Landlord's
final consent, which consent may not be unreasonably withheld, Tenant shall then
submit (i) permits, licenses, bonds, and the construction contract, all in
conformance with the plans and specifications preliminarily approved by
Landlord; (ii) evidence of insurance coverage in such types and amounts and from
such insurers as Landlord deems satisfactory; and (iii) such other information
as Landlord deems reasonably necessary. The construction contract shall, at a
minimum, require the general contractor and all subcontractors to obey the rules
and regulations of the Building and Project. All Alterations shall be done in a
good workmanlike manner by qualified and licensed contractors or mechanics, as
approved by Landlord. In no event shall any Alterations affect the structure of
the Building or its exterior appearance. All Alterations made by or for Tenant
(other than Tenant's moveable trade fixtures), shall, unless Landlord expressly
requires or agrees otherwise in writing, immediately become the property of
Landlord, without compensation to Tenant, but Landlord has no obligation to
repair, maintain or insure those Alterations. Carpeting, shelving and cabinetry
are considered improvements of the Premises and not movable trade fixtures,
regardless of how or where affixed. No Alterations will be removed by Tenant
from the Premises either during or at the expiration or earlier termination of
the Term, and they shall be surrendered as a part of the Premises unless
Landlord has required that Tenant remove them. At Landlord's discretion,
Alterations are subject to removal by Tenant and at Tenant's sole cost and
expense except for any Alterations which Landlord agreed in writing, in response
to a request by Tenant made at the time Tenant requested Landlord to consent to
the Alteration, that Tenant would not be required to remove at the end of the
Term. Upon any such removal, Tenant shall repair any damage caused to the
Premises thereby, and shall return the Premises to the condition they were in
prior to installation of such Alterations so removed. Tenant shall indemnify,
defend and keep Landlord free and harmless from and against all liability, loss,
damage, cost, attorneys' fees and any other expense incurred on account of
claims by any person performing work or furnishing materials or supplies for
Tenant or any person claiming under Tenant. In connection with any Alterations
for which Landlord's consent is required, Landlord may require Tenant to provide
Landlord, at Tenant's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such improvements,
to insure Landlord against any liability for mechanic's liens and to insure
completion of the work. Landlord shall have the right at all times to post on
the Premises any notices permitted or required by law, or that Landlord shall
deem proper, for the protection of Landlord, the Premises, the Building and the
Project, and any other party having an interest therein, from mechanics' and
materialmen's liens, and Tenant shall give to Landlord written notice of the
commencement of any construction in or on the Premises at least thirty (30)
business days prior thereto. Prior to the commencement of any such
construction, Landlord shall be furnished certificates of insurance, naming
Landlord as an additional insured, evidencing that each contractor performing
work has insurance acceptable to Landlord, including but not limited to general
liability insurance of not less that One Million Dollars ($1,000,000.00) and
worker's compensation insurance in the statutorily required amount.
SECTION XIII. MECHANIC'S LIENS
Tenant shall keep the Premises, the Building and the Project free from any liens
arising out of any work performed, material furnished or obligation incurred by
or for Tenant or any person or entity claiming through or under Tenant. In the
event that Tenant shall not, within ten (10) days following the imposition of
any such lien, cause the same to be released of record by payment or posting of
a proper bond, Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause such lien to be
released by such means as Landlord deems proper, including payment of the claim
giving rise to such lien. All such sums paid and all expenses incurred by
Landlord in connection therewith shall be due and payable to Landlord by Tenant
on demand.
18
CONFIDENTIAL
SECTION XIV. INSURANCE
A. TENANT
During the Term hereof, Tenant shall keep in full force and effect the
following insurance and shall provide appropriate insurance certificates to
Landlord prior to the Lease Commencement Date and annually thereafter
before the expiration of each policy:
(1) Commercial general liability insurance for the benefit of Tenant and
Landlord as an additional insured, with a limit of not less than Two
Million Dollars ($2,000,000.00)combined single limit per occurrence,
against claims for personal injury liability including, without
limitation, bodily injury, death or property damage liability and
covering (i) the business(es) operated by Tenant and by any subtenant
of Tenant on the Premises, (ii) operations of independent contractors
engaged by Tenant for services or construction on or about the
Premises, and (iii) contractual liability;
(2) Fire, extended coverage, vandalism and malicious mischief insurance,
insuring the personal property, furniture, furnishings and fixtures
belonging to Tenant located on the Premises for not less than one
hundred percent (100%) of the actual replacement value thereof;
(3) Workers' compensation in the amount required by law;
(4) Business interruption or loss of income insurance in amounts
satisfactory to Landlord, with a rental interruption rider assuring
Landlord that the rent due hereunder will be paid for a period of not
less than twelve (12) months if the Premises are destroyed or
rendered inaccessible by a risk insured against by a policy of all
risk insurance; and
(5) Such other insurance as Landlord deems reasonably necessary.
Each insurance policy obtained by Tenant pursuant to this Lease shall
contain a clause that the insurer will provide Landlord with at least
thirty (30) days prior written notice of any material change, non-renewal
or cancellation of the policy, shall be in a form satisfactory to Landlord
and shall be taken out with an insurance company authorized to do business
in the State in which the Project is located and rated not less than Best's
Financial Class X and Best's Policy Holder Rating "A". In addition, any
insurance policy obtained by Tenant shall be written as a primary policy,
and shall not be contributing with or in excess of any coverage which
Landlord may carry, and shall have loss payable clauses satisfactory to
Landlord and in favor of Landlord naming Landlord, and any other party
reasonably designated by Landlord, as an additional insured. The liability
limits of the above described insurance policies shall in no matter limit
the liability of Tenant under the terms of Section XV. below.
Not more frequently than every two (2) years, if, in the reasonable opinion
of Landlord, the amount of liability insurance specified in this Section
XIV. is not adequate, the above-described limits of coverage shall be
adjusted by Landlord, by written notification to Tenant, in order to
maintain the level of insurance protection comparable to the protection
afforded on the date the Term commences. If Tenant fails to maintain and
secure the insurance coverage required under this Section XIV., then
Landlord shall have, in addition to all other remedies provided herein and
by law, the right, but not the obligation, to procure and maintain such
insurance, the cost of which shall be due and payable to Landlord by Tenant
on demand.
19
CONFIDENTIAL
If, on account of the failure of Tenant to comply with the provisions of
this Section, Landlord is deemed a co-insurer by its insurance carrier,
then any loss or damage which Landlord shall sustain by reason thereof
shall be borne by Tenant and shall be immediately paid by Tenant as
additional rent upon receipt of a xxxx therefor and evidence of such loss.
B. LANDLORD
During the Term hereof, Landlord shall keep in full force and effect the
following insurance
(1) Fire, extended coverage and vandalism and malicious mischief
insurance insuring the Building and Project of which the Premises are
a part, in an amount not less than eighty percent (80%) (or such
greater percentage as may be required by law) of the full replacement
cost thereof; and
(2) Such other insurance as Landlord deems necessary in its sole and
absolute discretion.
All insurance policies shall be issued in the names of Landlord and
Landlord's lender, and any other party reasonably designated by Landlord as
an additional insured, as their interests appear. The insurance policies
shall provide that any proceeds shall be made payable to Landlord, or to
the holders of mortgages or deeds of trust encumbering Landlord's interest
in the Premises, Building and Project, or to any other party reasonably
designated by Landlord as an additional insured, as their interests shall
appear. All insurance premiums for Landlord's insurance shall be included
in Common Operating Costs.
C. WAIVER OF SUBROGATION
Landlord and Tenant each hereby waives any and all rights of recovery
against the other, and against any other tenant or occupant of the Project
who waives such rights as to Tenant and against the officers, employees,
agents, representatives, customers and business visitors of such other
party and of each such other tenant or occupant of the Project, for loss of
or damage to such waiving party or its property or the property of others
under its control, arising from any cause insured against under any policy
of property insurance required to be carried by such waiving party pursuant
to the provisions of this Lease (or any other policy of property insurance
carried by such waiving party in lieu thereof) at the time of such loss or
damage. The foregoing waiver shall be effective whether or not a waiving
party actually obtains and maintains the insurance which such waiving party
is required to obtain and maintain pursuant to this Lease (or any
substitute therefor). Landlord and Tenant shall, upon obtaining the
policies of insurance which they are required to maintain hereunder, give
notice to their respective insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.
SECTION XV. INDEMNITY AND EXEMPTION
A. INDEMNITY
(1) BY TENANT
Tenant agrees to indemnify, defend and hold Landlord and its
officers, directors, partners and employees entirely harmless from
and against all liabilities, losses, demands, actions, expenses or
claims, including reasonable attorneys' fees and court costs, for
injury to or death of any person or for damages to any property or
for violation of law arising out of or in any manner connected with
(i) the use,
20
CONFIDENTIAL
occupancy or enjoyment of the Premises, Building or Project by Tenant
or Tenant's agents, employees, invitees or contractors (the "Tenant's
Agents") or any work, activity or other things allowed or suffered by
Tenant or Tenant's Agents to be done in or about the Premises,
Building or Project, (ii) any breach or default in the performance of
any obligation of Tenant under this Lease, and (iii) any act or
failure to act, whether negligent or otherwise tortious; by Tenant or
Tenant's Agents in or about the Premises, Building or Project.
(2) BY LANDLORD
Subject to Section XIV.C. above and the first paragraph of XV.B.
below, Landlord hereby agrees to indemnify and hold harmless Tenant
and its officers and directors, from and against any and all losses,
liabilities, demands, actions, expenses, or claims, including
reasonable attorneys' fees and court costs, for injury to or death of
any person or for damages to any property or for violation of law
occurring within the Project or (but only if and to the extent not
covered by the insurance required to be carried by Tenant under this
Lease, regardless of whether Tenant actually maintains the same)
within the Building or Premises, if and to the extent that it is
adjudged by a court of competent jurisdiction, or otherwise proved to
the reasonable satisfaction of Landlord, that the same is caused by
(i) any default by Landlord in the performance of any obligation of
Landlord under this Lease, or (ii) any act or, where Landlord has a
specific duty under this Lease to act, omission constituting gross
negligence or willful misconduct of Landlord, its agents, contractors
or employees.
B. LIMITATION ON LANDLORD'S LIABILITY; RELEASE OF DIRECTORS, OFFICERS AND
PARTNERS OF LANDLORD
Tenant agrees that, in the event Tenant shall have any claim against
Landlord under this Lease arising out of the subject matter of this Lease,
Tenant's sole recourse shall be against the Landlord's interest in the
Building, for the satisfaction of any claim, judgment or decree requiring
the payment of money by Landlord as a result of a breach hereof or
otherwise in connection with this Lease, and no other property or assets of
Landlord, its successors or assigns, shall be subject to the levy,
execution or other enforcement procedure for the satisfaction of any such
claim, judgment, injunction or decree. Tenant further hereby waives any
and all right to assert any claim against or obtain any damages from, for
any reason whatsoever, the directors, officers and partners of Landlord,
including all injuries, damages or losses to Tenant's property, real and
personal, whether known, unknown, foreseen, unforeseen, patent or latent,
which Tenant may have against Landlord or its directors, officers or
partners. Tenant understands and acknowledges the significance and
consequence of such specific waiver.
Landlord shall not be liable or responsible to Tenant for any loss or
damage to any property or person occasioned by theft, fire, act of God,
public enemy, injunction, riot, strike, insurrection, war, court order,
requisition, or order of governmental body or authority, or for any damage
or inconvenience that may arise through repair or alteration of any part of
the Project, the Building or the Premises, or a failure to make any such
repairs, except as expressly provided in this Lease and except to the
extent proceeds of insurance required to be carried by Landlord under this
Lease are available.
SECTION XVI. ASSIGNMENT AND SUBLETTING BY TENANT
A. Tenant shall not, directly or indirectly, voluntarily or by operation of
law, sell, assign, encumber, pledge or otherwise transfer or hypothecate
all or any part of the Premises or Tenant's leasehold estate hereunder
(collectively "Assignment"), or permit the Premises to be occupied by
anyone other than Tenant or sublet the Premises ("Sublease") or any
21
CONFIDENTIAL
portion thereof without Landlord's prior written consent being had and
obtained in each instance, subject to the terms and conditions contained in
this Section.
B. If Tenant desires at any time to enter into an Assignment of this Lease or
a Sublease of the Premises or any portion thereof, Tenant shall request, in
writing, at least fifteen (15) business days prior to the effective date of
the Assignment or Sublease, Landlord's consent to the Assignment or
Sublease, and shall provide Landlord with the following information:
(1) The name of the proposed assignee, subtenant or occupant;
(2) The nature of the proposed assignee's, subtenant's or occupant's
business to be carried on in the Premises;
(3) The terms and provisions of the proposed Assignment or Sublease and a
copy of such documents; and
(4) Such financial information concerning the proposed assignee,
subtenant or occupant which Landlord shall have requested following
its receipt of Tenant's request for consent.
Tenant's notice shall not be deemed to have been served or given until such
time as Tenant has provided Landlord with all information reasonably
requested by Landlord pursuant to this subparagraph B. Tenant shall
immediately notify Landlord of any modification to the proposed terms of
such Assignment or Sublease.
C. Within fifteen (15) business days following receipt of Tenant's request and
complete documentation satisfying the requirements of this paragraph,
Landlord shall notify Tenant in writing of its election either to (a)
consent to the proposed Assignment or Sublease, (b) refuse to consent to
the proposed Assignment or Sublease, or (c) terminate this Lease in full
with respect to an Assignment or terminate in part with respect to a
proposed Sublease which would result in the Sublease by Tenant of fifty
percent (50%) or more of the total Rentable Area then leased by Tenant in
the Project and which is for a term of one-half or more of the remaining
then-current Term and enter into a lease directly with the proposed
assignee or sublessee. If Landlord approves such Assignment or Sublease,
or fails to respond within said fifteen (15) business day period, Tenant
shall be free for a period of one hundred twenty (120) days after the end
of said fifteen (15) business day period to assign its entire interest in
this Lease or to sublet such space to the entity specified in Tenant's
original request upon the terms set forth therein. If Tenant so desires,
Tenant may request Landlord to waive its recapture right for one or more
transactions of the type which would be susceptible to recapture by
Landlord pursuant to the foregoing, to which request Landlord will respond
in writing within ten (10) business days after Tenant's notice to Landlord
requesting such waiver (which notice shall specify that Landlord has
fifteen (15) business days to respond thereto and shall be sent to
Landlord's address for notices specified in Section I. above, with a copy
to H. E. Xxx Xxxxxxxx, Esq., MONY Law, also at Landlord's address for
notices). Landlord and Tenant agree (by way of example and without
limitation) that Landlord shall be entitled to take into account any fact
or factor which Landlord reasonably deems relevant to such decision,
including but not necessarily limited to the following, all of which are
agreed to be reasonable factors for Landlord's consideration:
(1) The financial strength of the proposed assignee or subtenant (which
must be reasonably acceptable to Landlord).
(2) The experience of the proposed assignee or subtenant with respect to
businesses of the type and size which such assignee or subtenant
proposes to conduct in the Premises.
22
CONFIDENTIAL
(3) The quality and nature of the business and/or services to be
conducted in or from the Premises by the proposed assignee or
subtenant and in any other locations which it has.
(4) Violation of exclusive use rights previously granted by Landlord to
other tenants of the Building or Project.
(5) The quality of the appearance of the Premises resulting from any
remodeling or renovation to be conducted by the proposed assignee or
subtenant, and the compatibility of such quality with that of other
premises in the Building.
(6) Whether the business in the Premises is, and whether the business to
be operated by the proposed assignee or subtenant will be, a "place
of public accommodation."
(7) Whether there then exists any default by Tenant pursuant to this
Lease or any non-payment or non-performance by Tenant under this
Lease which, with the passage of time and/or the giving of notice,
would constitute a default under this Lease.
Moreover, Landlord shall be entitled to be reasonably satisfied that each
and every covenant, condition or obligation imposed upon Tenant by this
Lease and each and every right, remedy or benefit afforded Landlord by this
Lease is not impaired or diminished by such Assignment or Sublease. In no
event may any assignee or subtenant use the Premises for any use other than
the Permitted Use except as expressly approved in writing by Landlord in
advance. Landlord and Tenant acknowledge that the express standards and
provisions set forth in this Lease dealing with Assignment and Sublease,
including those set forth in subsections XVI.D., E. and G. have been freely
negotiated and are reasonable at the date hereof taking into account
Tenant's proposed use of the Premises and the nature and quality of the
Building and Project. No withholding of consent by Landlord for any reason
deemed sufficient by Landlord shall entitle Tenant to terminate this Lease
or to any abatement of rent. Approval of any Assignment of Tenant's
interest shall, whether or not expressly so stated, be conditioned upon
such assignee assuming in writing all obligations of Tenant hereunder by a
written instrument satisfactory to Landlord.
D. If Landlord consents to the Sublease or Assignment within said thirty (30)
day period, Tenant may enter into such Assignment or Sublease of the
Premises or portion thereof, but only upon the terms and conditions set
forth in the notice furnished by Tenant to Landlord pursuant to subsection
B. above; provided, however, that in connection with such Assignment or
Sublease, as a condition to Landlord's consent, Tenant shall pay to
Landlord fifty percent (50%) of the excess, if any, of (i) in the case of
an Assignment, the rental and other payment obligations of the proposed
assignee under the terms of the proposed Assignment over the rental and
other payment obligations of Tenant under the terms of this Lease, or (ii)
in the case of a Sublease, the amount proposed to be paid by the sublessee
over the proportionate amount of rental and other payment obligations
required to be paid by Tenant to Landlord under the terms of this Lease as
applicable to the portion of the Premises so subleased.
E. No consent by Landlord to any Assignment or Sublease by Tenant shall
relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether arising before or after the Assignment or Sublease. The
consent by Landlord to any Assignment or Sublease shall not relieve Tenant
of the obligation to obtain Landlord's express written consent to any other
Assignment or Sublease. Any Assignment or Sublease that is not in
compliance with this Section shall be void and, at the option of Landlord,
shall constitute a material default by Tenant under this Lease. The
acceptance of rent or payment of any other monetary obligation by Landlord
from a proposed assignee or sublessee shall not constitute the consent by
Landlord to such Assignment or Sublease.
23
CONFIDENTIAL
Tenant shall promptly provide to Landlord a copy of the fully executed
Sublease or Assignment.
F. Any sale or other transfer, including transfer by consolidation, merger or
reorganization, of twenty-five percent (25%) or more of the voting stock of
Tenant, if Tenant is a corporation, or any sale or other transfer of
twenty-five percent (25%) or more of the partnership interest in Tenant, if
Tenant is a partnership, shall be an Assignment for purposes of this
Section. As used in this subsection, the term "Tenant" shall also mean any
entity that has guaranteed Tenant's obligation under this Lease, and the
prohibition hereof shall be applicable to any sales or transfers of stock
or partnership interests of said guarantor.
G. Each assignee or other transferee, other than a sublessee or Landlord,
shall assume, as provided in this subsection all obligations of Tenant
under this Lease and shall be and remain liable jointly and severally with
Tenant for the payment of Monthly Rental and all other monetary obligations
hereunder, and for the performance of all the terms, covenants, conditions
and agreements herein contained on Tenant's part to be performed for the
Term; provided, however, that the assignee or other transferee shall be
liable to Landlord for rent only in the amount set forth in the Assignment.
No Assignment shall be binding on Landlord unless the assignee or Tenant
shall deliver to Landlord a counterpart of the Assignment and an instrument
in recordable form that contains a covenant of assumption by the assignee
satisfactory in substance and form to Landlord, consistent with the
requirements of this subsection but the failure or refusal of the assignee
to execute such instrument of assumption shall not release or discharge the
assignee from its liability as set forth above.
H. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 ET SEQ., (the
"Bankruptcy Code"), any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid
or 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 and all monies or
other considerations constituting Landlord's property under the preceding
sentence not paid or delivered to Landlord shall be held in trust for the
benefit of Landlord and be promptly paid or delivered to Landlord.
I. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed, without further act or
deed, to have assumed all of the obligations arising under this Lease on
and after the date of such assignment. Any such assignee shall upon demand
execute and deliver to Landlord an instrument confirming such assumption.
J. Tenant shall pay Landlord's expenses and reasonable attorneys' fees
incurred in processing an Assignment or Sublease, but in no event less than
Five Hundred Dollars ($500.00) for each such proposed transfer to cover the
legal review and processing expenses of Landlord, whether or not Landlord
shall grant its consent to such proposed transfers.
K. All options to extend, renew or expand, if any, contained in this Lease are
personal to Tenant; provided, however, that any Permitted Transferee shall
also have the benefit of and the right to exercise any such options and
rights (including, without limitation, any signage rights granted to Tenant
pursuant to Sections XXVIII. and XXXV.E.). Consent by Landlord to any
assignment or subletting shall not include consent to the assignment or
transfer of any such rights with respect to the Premises or any special
privileges or extra services granted to Tenant by this Lease, or any
addendum or amendment hereto or letter of agreement, unless Tenant's
written request for approval of the proposed transfer specifically requests
Landlord's consent to a transfer of such privileges or services and
Landlord does, in fact, specifically consent thereto in writing. All such
24
CONFIDENTIAL
options, rights, privileges and extra services shall terminate upon such
assignment or subletting unless Landlord specifically grants in writing
such options, rights, privileges and extra services to such assignee or
subtenant. Similarly, any allowance, abatement or monetary concession
provided to Tenant as an inducement to execute this Lease is personal to
Tenant and shall be amortized (on a straight line basis) over the term of
this Lease. Upon any assignment or subletting, the then unamortized
portion thereof shall be paid by Tenant to Landlord in cash on or before
the effective date of such assignment or subletting.
L. Notwithstanding anything to the contrary in this Lease:
(1) Tenant may, without Landlord's prior written consent, without any
participation by Landlord in assignment and subletting proceeds, and
without being subject to Landlord's right to recapture the Premises
or any part thereof, sublet the Premises or assign the Lease to: (i)
a subsidiary, affiliate, division or corporation controlling,
controlled by or under common control with Tenant; (ii) a successor
corporation related to Tenant by merger, consolidation, or
nonbankruptcy reorganization; or (iii) a purchaser of substantially
all of Tenant's assets (collectively, "Permitted Transferees");
provided however, that the net worth of the assignee, sublessee or
successor corporation immediately following such transaction equals
or exceeds the net worth of Tenant as of the date immediately
preceding to such transaction, except in the case of a subletting of
only a portion of the Premises or an assignment of the Lease for less
than all of the then-remaining current Term, in which case the net
worth of the transferee must be reasonably acceptable to Landlord
(which shall not necessarily be construed as any agreement that the
net worth of the transferee need not be at least equal to that of
Tenant immediately prior to the transaction).
(2) A sale or transfer of Tenant's capital stock shall not be deemed an
assignment, subletting, or any other transfer of the Lease or the
Premises; provided however, that the entity created by reason or
resulting from such transfer has a net worth immediately following
such transaction equal to or exceeding the net worth of Tenant as of
the date immediately preceding such transaction.
(3) Any sale or transfer of Tenant's capital stock shall not be deemed an
assignment, subletting, or any other transfer of the Lease or the
Premises only (a) in connection with an initial public offering or
through any public exchange, or (b) so long as Xxxx Xxxxxx (or any
trust or estate planning device created by or on behalf of Xxxx
Xxxxxx, the voting stock of which is controlled by Xxxx Xxxxxx)
continues to control at least fifty-one percent (51 %) of the voting
stock of Tenant.
SECTION XVII. TRANSFER OF LANDLORD'S INTEREST
In the event Landlord shall sell or otherwise convey its title to the Building,
then, so long as any transferee in a voluntary transaction (e.g., other than a
lender foreclosing on a deed of trust or mortgage or accepting a deed in lieu
thereof) assumes the obligations of Landlord under the Lease accruing from and
after the date of the transfer after the effective date of such sale or
conveyance, Landlord shall have no further liability under this Lease to Tenant
except as to matters of liability which have accrued and are unsatisfied as of
the date of sale or conveyance, and Tenant shall seek performance solely from
Landlord's purchaser or successor in title. In connection with such sale or
transfer, Landlord may assign its interest under this Lease without notice to or
consent by Tenant. In such event, Tenant agrees to be bound to any successor
Landlord.
25
CONFIDENTIAL
SECTION XVIII. DAMAGE AND DESTRUCTION
A. MINOR INSURED DAMAGE
In the event the Premises or the Building, or any portion thereof, is
damaged or destroyed by any casualty that is covered by the insurance
maintained by Landlord pursuant to Section XIV. above, then Landlord shall
rebuild, repair and restore the damaged portion thereof, provided that (1)
the amount of insurance proceeds available to Landlord plus (except in the
case of earthquake damage which costs One Hundred Thousand Dollars
($100,000) or more to repair) any "deductible" amounts or coinsurance
payments applicable to such loss (which Landlord agrees to use reasonable
efforts to obtain from any lender or mortgagee to whom such proceeds may
have been assigned absolutely or as collateral for a loan secured by the
Premises or Building) equals or exceeds the cost of such rebuilding,
restoration and repair, (2) such rebuilding, restoration and repair can be
completed within one hundred eighty (180) days after the work commences in
the opinion of a registered architect or engineer appointed by Landlord,
(3) the damage or destruction has occurred more than twelve (12) months
before the expiration of the Term (which, for the purposes of this
sentence, shall include any Additional Term with respect to which Tenant
either (a) had the right to and properly exercised its option pursuant to
Addendum Section XXXV.A.), prior to the occurrence of such damage or
destruction or (b) within ten (10) days after occurrence of such damage or
destruction, Tenant has the right to and does exercise its option pursuant
to Addendum Section XXXV.A.), and (4) such rebuilding, restoration or
repair is then permitted, under applicable governmental laws, rules and
regulations, to be done in such a manner as to return the damaged portion
thereof to substantially its condition immediately prior to the damage or
destruction, including, without limitation, the same net rentable floor
area. To the extent that insurance proceeds must be paid to a mortgagee or
beneficiary under, or must be applied to reduce any indebtedness secured
by, a mortgage or deed of trust encumbering the Premises, Building or
Project, such proceeds, for the purposes of this subsection, shall be
deemed not available to Landlord unless such mortgagee or beneficiary
permits Landlord to use such proceeds for the rebuilding, restoration and
repair of the damaged portion thereof. Notwithstanding the foregoing,
Landlord shall have no obligation to repair any damage to, or to replace
any of, Tenant's personal property, furnishings, trade fixtures, equipment
or other such property or effects of Tenant.
B. MAJOR OR UNINSURED DAMAGE
In the event the Premises or the Building, or any portion thereof, is
damaged or destroyed by any casualty to the extent that Landlord is not
obligated, under subsection A. above, to rebuild, repair or restore the
damaged portion thereof, then Landlord shall, as promptly as practicable
but in any event within sixty (60) days after such damage or destruction,
notify Tenant of its election, at its option, to either, (1) rebuild,
restore and repair the damaged portions thereof, in which case Landlords
notice shall specify the time period within which Landlord estimates such
repairs or restoration can be completed; or (2) terminate this Lease
effective as of the date the damage or destruction occurred. If Landlord
does not give Tenant written notice within sixty (60) days after the damage
or destruction occurs of its election to rebuild or restore and repair the
damaged portions thereof, Landlord shall be deemed to have elected to
terminate this Lease. If Landlord elects or is deemed to have elected to
terminate this Lease, then so long as Tenant is not in default under
Section VIII.C. of this Lease or in monetary default (i.e., in each
case, after expiration or any applicable cure period) under this Lease or
the Other Lease at the time of exercise, Tenant shall have the right
to terminate the Other Lease effective as of the later of the date Tenant
specifies in its notice (which shall in no event be prior to the date
Tenant's notice is given pursuant to this sentence) or the date Tenant
vacates the Other Premises (as defined in Addendum Section XXXV.A. below),
by written notice to Landlord given, if at all, within ten (10) days after
the date of Landlord's notice or deemed election to terminate this Lease.
Notwithstanding the preceding sentence, in the event of damage or
destruction giving rise to Landlord's right to terminate the Lease under
this subsection B., Landlord may, by written notice to Tenant given prior
to expiration of the sixty (60) day period specified herein ("Landlord's
Notice"), require Tenant to advise Landlord, in writing within ten (10)
days after Landlord's Notice, to elect unconditionally either to
terminate, or to waive its right to terminate, the Other Lease if
Landlord elects or is deemed to have elected to terminate this Lease,
which election shall be binding on Tenant and the provisions the
preceding sentence shall, thereafter, not apply. In the event Tenant
fails to make an election strictly within the time and the manner specified
herein, then Tenant shall be conclusively deemed to have waived its right
to terminate the Other Lease. In the event that Landlord's notice specifies
a period of in excess of one-hundred eighty (180) days to complete repairs,
and Landlord elects not to terminate the Lease, then, so long as Tenant is
not then in default under Section VIII.C. of this Lease or in monetary
default hereunder (i.e., in each case, after expiration of any applicable
cure period), Tenant shall have the right, by written notice to Landlord
given within ten (10) days after Landlord's notice described in the first
sentence of this subsection B, is given, to either (i) terminate this
Lease (only) or (ii) terminate this Lease and the Other Lease. If this
Lease is not terminated as a result of damage or destruction, then
Landlord shall repair the balance of the Premises to the condition
existing prior to the damage, if permitted by applicable law.
26
CONFIDENTIAL
C. ABATEMENT OF RENT
There shall be an abatement of rent by reason of damage to or destruction
of the Premises or the Building, or any portion thereof to that extent to
Landlord receives insurance proceeds for loss of rental income attributable
to the Premises, commencing on the date that the damage to or destruction
of the Premises or Building has occurred.
D. WAIVER
Tenant shall have no claim against Landlord for any damage suffered by
Tenant by reason of any such damage, destruction, repair or restoration.
Tenant waives the provisions of Civil Code Sections 1932(2) and 1933(4) and
any present or future laws or case decisions to the same effect. Upon
completion of such repair or restoration, Tenant shall promptly refixture
the Premises substantially to the condition they were in prior to the
casualty and shall reopen for business if closed by the casualty.
SECTION XIX. CONDEMNATION
A. TOTAL OR PARTIAL TAKING
If all or substantially all of the Premises is condemned or taken in any
manner for public or quasi-public use, including but not limited to, a
conveyance or assignment in lieu of the condemnation or taking, this Lease
shall automatically terminate as of the earlier of the date on which actual
physical possession is taken by the condemnor or the date of dispossession
of Tenant as a result of such condemnation or other taking. If less than
all or substantially all of the Premises is so condemned or taken, this
Lease shall automatically terminate only as to the portion of the Premises
so taken as of the earlier of the date on which actual physical possession
is taken by the condemnor or the date of dispossession of Tenant as a
result of such condemnation or taking. If such portion of the Building is
condemned or otherwise taken so as to require, in the opinion of Landlord,
a substantial alteration or reconstruction of the remaining portions
thereof, this Lease may be terminated by Landlord, as of the date on which
actual physical possession is taken by the condemnor or dispossession of
Tenant as a result of such condemnation or taking, by written notice to
Tenant within sixty (60) days following notice to Landlord of the date on
which such physical possession is taken or dispossession will occur.
B. AWARD
Landlord shall be entitled to the entire award in any condemnation
proceeding or other proceeding for taking for public or quasi-public use,
including, without limitation, any award made for the value of the
leasehold estate created by this Lease. No award for any partial or total
taking shall be apportioned, and Tenant hereby assigns to Landlord any
award that may be made in such condemnation or other taking, together with
any and all rights of Tenant now or hereafter arising in or to the same or
any part thereof. Although all damages in the event of any condemnation
are to belong to Landlord whether such damages are awarded as compensation
for diminution in value of the leasehold or to the fee of the Premises,
Tenant shall have the right to claim and recover from the condemnor, but
not from Landlord, such compensation as may be separately awarded or
recoverable by Tenant in Tenant's own right on account of damages to
Tenant's business by reason of the condemnation and for or on account of
any cost or loss to which Tenant might be put in removing Tenant's
merchandise, furniture and other personal property, fixtures, and equipment
or for the interruption of or damage to Tenant's business.
27
CONFIDENTIAL
C. ABATEMENT IN RENT
In the event of a partial condemnation or other taking that does not result
in a termination of this Lease as to the entire Premises pursuant to this
Section the rent and all other charges shall xxxxx in proportion to the
portion of the Premises taken by such condemnation or other taking. If
this Lease is terminated, in whole or in part, pursuant to any of the
provisions of this Section all rentals and other charges payable by Tenant
to Landlord hereunder and attributable to the Premises taken shall be paid
up to the date upon which actual physical possession shall be taken by the
condemnor. Landlord shall be entitled to retain all of the Security
Deposit until such time as this Lease is terminated as to all of the
Premises.
D. TEMPORARY TAKING
If all or any portion of the Premises is condemned or otherwise taken for
public or quasi-public use for a limited period of time, this Lease shall
remain in full force and effect and Tenant shall continue to perform all
terms, conditions and covenants of this Lease; provided, however, the rent
and all other charges payable by Tenant to Landlord hereunder shall xxxxx
during such limited period in proportion to the portion of the Premises
that is rendered untenantable and unusable as a result of such condemnation
or other taking. Landlord shall be entitled to receive the entire award
made in connection with any such temporary condemnation or other taking.
Tenant shall have the right to claim and recover from the condemnor, but
not from Landlord, such compensation as may be separately awarded or
recoverable by Tenant in Tenant's own right on account of damages to
Tenant's business by reason of the condemnation and for or on account of
any cost or loss to which Tenant might be put in removing Tenant's
merchandise, furniture and other personal property, fixtures and equipment
or for the interruption of or damage to Tenant's business.
E. TRANSFER OF LANDLORD'S INTEREST TO CONDEMNOR
Landlord may, without any obligation to Tenant, once the condemning
authority has determined to acquire the same for public use, agree to sell
and/or convey to the condemnor the Premises, the Building, the Project or
any portion thereof, sought by the condemnor, free from this Lease and the
rights of Tenant hereunder, without first requiring that any action or
proceeding be instituted or, if instituted, pursued to a judgment.
SECTION XX. DEFAULT
A. TENANT'S DEFAULT
The failure by Tenant to perform any one or more of the following
obligations shall constitute a default hereunder by Tenant:
(1) If Tenant abandons all or a substantial portion of the Premises;
(2) If Tenant fails to pay any rent or other charges required to be paid
by Tenant under this Lease and such failure continues for three (3)
days after written notice thereof 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 Sec. 1161, ET SEQ., as amended;
(3) If Tenant involuntarily transfers Tenant's interest in this Lease or
voluntarily transfers (attempted or actual) its interest in this
Lease, without Landlord's prior written consent;
28
CONFIDENTIAL
(4) If Tenant files a voluntary petition for relief or if a petition
against Tenant in a proceeding under the Federal Bankruptcy Laws or
other insolvency laws is filed and not withdrawn or dismissed within
sixty (60) days thereafter, or if under the provisions of any law
providing for reorganization or winding up of corporations, any court
of competent jurisdiction assumes jurisdiction, custody or control of
Tenant or any substantial part of the Premises or any of Tenant's
personal property located at the Premises and such jurisdiction,
custody or control remains in force unrelinquished, unstayed or
unterminated for a period of sixty (60) days;
(5) If in any proceeding or action in which Tenant is a party, a trustee,
receiver, agent or custodian is appointed to take charge of the
Premises or any of Tenant's personal property located at the Premises
(or has the authority to do so) for the purpose of enforcing a lien
against the Premises or Tenant's personal property;
(6) If Tenant shall make any general assignment for the benefit of
creditors or convene a meeting of its creditors or any class thereof
for the purpose of effecting a moratorium upon or composition of its
debts, or any class thereof;
(7) If Tenant fails to discharge any lien placed upon the Premises, the
Building or the Project by Tenant or any person claiming under, by or
through Tenant within ten (10) days of the imposition of such lien;
(8) If Tenant fails to promptly and fully perform any other covenant,
condition or agreement contained in this Lease (other than
subparagraphs (1) through (7) above) and such failure continues for
ten (10) days after written notice thereof from Landlord to Tenant,
or if such failure cannot be completely cured within such ten (10)
day period, then if Tenant fails to commence such cure within such
ten (10) day period and thereafter proceed to completely cure such
failure within sixty (60) days after such written notice;
(9) If Tenant is a partnership or consists of more than one (1) person or
entity, if any partner of the partnership or other person or entity
is involved in any of the acts or events described in subparagraphs
(1) through (8) above; or
(10) The occurrence of a default under that certain lease of even date
herewith between Landlord, as landlord, and Tenant, as tenant, for
certain other premises located within Building "B" in the Project
consisting of approximately 26,088 square feet.
B. REMEDIES
Upon the occurrence of a default by Tenant that is not cured by Tenant
within any applicable grace period specified above, Landlord shall have the
following rights and remedies in addition to all other rights and remedies
available to Landlord at law or in equity, which shall be cumulative and
non-exclusive:
(1) The right to declare this Lease and the term of this Lease
terminated; re-enter the Premises and the improvements located
thereon, with or without process of law; to eject all parties in
possession thereof therefrom; repossess and enjoy the Premises
together with all said improvements; and to recover from Tenant all
of the following:
(a) The worth at the time of award of the unpaid rent which had
been earned at the time of termination;
(b) The worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination
until the time of award
29
CONFIDENTIAL
exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided;
(c) The worth at the time of award of the amount by which the
unpaid rent for the balance of the Term after the time of award
exceeds the amount of rental loss that Tenant proves could be
reasonably avoided; and
(d) 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 therefrom, including, but not
limited to, any attorneys' fees, broker's commissions or
finder's fees (not only in connection with the reletting of the
Premises, but also that portion of any leasing commission paid
by Landlord in connection with this Lease which is applicable
to that portion of the Term which is unexpired as of the date
on which this Lease is terminated); the then unamortized cost
of any tenant improvements constructed for or on behalf of
Tenant by or at the expense of Landlord or of any moving
allowance or other concession made available to Tenant and/or
paid by Landlord pursuant to this Lease; any costs for repairs,
clean-up, refurbishing, removal (including the repair of any
damage caused by such removal) and storage (or disposal) of
Tenant's personal property, equipment, fixtures, and anything
else that Tenant is required (under this Lease) to remove but
does not remove; any costs for alterations, additions and
renovations; and any other costs and expenses, including
reasonable attorneys' fees and costs, incurred by Landlord in
regaining possession of and reletting (or attempting to relet)
the Premises.
(2) The right to continue this Lease in effect and to enforce all of
Landlord's rights and remedies under this Lease, including the right
to recover rent and any other additional monetary charges as they
become due, for as long as Landlord does not terminate Tenant's right
to possession. Acts of maintenance or preservation, efforts to relet
the Premises or the appointment of a receiver upon Landlord's
initiative to protect its interest under this Lease shall not
constitute a termination of Tenant's right to possession.
(3) The right to have a receiver appointed for Tenant, upon application
by Landlord, to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights
and remedies granted to Landlord pursuant to this subsection.
SECTION XXI. LATE PAYMENTS/INTEREST AND LATE CHARGES
A. INTEREST
Any amount due from Tenant to Landlord which is not paid when due shall
bear interest at the maximum rate permitted by law from the date such
payment is due until paid, except that amounts spent by Landlord on behalf
of Tenant shall bear interest at such rate from the date of disbursement by
Landlord which Tenant agrees is to compensate Landlord for Tenant's use of
Landlord's money after it is due. Payment of such interest shall not
excuse or cure any default by Tenant pursuant to this Lease. Such rate
shall remain in effect after the occurrence of any breach or default
hereunder by Tenant to and until payment of the entire amount due.
B LATE CHARGES
TENANT HEREBY ACKNOWLEDGES THAT IN ADDITION TO LOST INTEREST, THE LATE
PAYMENT BY TENANT TO LANDLORD OF RENT OR ANY OTHER
30
CONFIDENTIAL
SUMS DUE HEREUNDER WILL CAUSE LANDLORD TO INCUR OTHER COSTS NOT
CONTEMPLATED IN THIS LEASE, THE EXACT AMOUNT OF WHICH WILL BE EXTREMELY
DIFFICULT AND IMPRACTICABLE TO ASCERTAIN. SUCH OTHER COSTS INCLUDE, BUT
ARE NOT LIMITED TO, PROCESSING, ADMINISTRATIVE AND ACCOUNTING COSTS, AND
LATE CHARGES WHICH MAY BE IMPOSED UPON LANDLORD BY THE TERMS OF ANY
ENCUMBRANCE COVERING THE PREMISES. ACCORDINGLY, IF ANY INSTALLMENT OF RENT
OR ANY ADDITIONAL RENT OR OTHER SUM DUE FROM TENANT SHALL NOT BE RECEIVED
BY LANDLORD WHEN SUCH AMOUNT SHALL BE DUE (AFTER EXPIRATION OF ANY GRACE
PERIOD GRANTED IN THIS LEASE), TENANT SHALL PAY TO LANDLORD AS ADDITIONAL
RENT HEREUNDER A LATE CHARGE EQUAL TO FIVE PERCENT (5 %) OF SUCH OVERDUE
AMOUNT. THE PARTIES HEREBY AGREE THAT (I) SUCH LATE CHARGE REPRESENTS A
FAIR AND REASONABLE ESTIMATE OF THE COSTS LANDLORD WILL INCUR IN PROCESSING
SUCH DELINQUENT PAYMENT BY TENANT, (II) SUCH LATE CHARGE SHALL BE PAID TO
LANDLORD AS LIQUIDATED DAMAGES FOR EACH DELINQUENT PAYMENT, AND (III) THE
PAYMENT OF THE LATE CHARGE IS TO COMPENSATE LANDLORD FOR THE ADDITIONAL
ADMINISTRATIVE EXPENSE INCURRED BY LANDLORD IN HANDLING AND PROCESSING
DELINQUENT PAYMENTS.
/s/ [Initials Unreadable] /s/ [Initials Unreadable]
Landlord's Initials Tenant's Initials
C. CONSECUTIVE LATE PAYMENT OF RENT
Following each third consecutive late payment of rent which constitutes a
default under clause (2) of subsection A. above, 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%), which additional Security Deposit shall be retained by
Landlord, and may be applied by Landlord, in the manner provided for
Security Deposits in this Lease.
D. NO WAIVER
Neither assessment nor acceptance of partial payments, interest or late
charges by Landlord shall constitute a waiver of Tenant's default with
respect to such overdue amount, nor prevent Landlord from exercising any of
its other rights and remedies under this Lease. Nothing contained in this
Section shall be deemed to condone, authorize, sanction or grant to Tenant
an option for the late payment of rent, additional rent or other sums due
hereunder, and Tenant shall be deemed in default with regard to any such
payments should the same not be made by the date on which the are due.
SECTION XXII. (INTENTIONALLY DELETED]
SECTION XXIII. HOLDING OVER
Any holding over by Tenant in the possession of the Premises, or any portion
thereof, after the expiration or earlier termination of the Term, with or
without the consent of Landlord, shall be construed to be a tenancy from month
to month and shall, for the first sixty (60) days thereof, be on the same terms
and conditions specified herein. From and after expiration of such sixty (60)
day period, such month-to-month occupancy shall be at one hundred fifty percent
(150%) of the Monthly Rental herein specified for the last month in the Term
(prorated on a monthly basis) unless Landlord shall specify a lesser amount for
rent in its sole discretion, together with an amount estimated by Landlord for
the monthly Common Operating Costs payable under this
31
CONFIDENTIAL
Lease, and shall otherwise be on the terms and conditions herein specified as
far as applicable. Any holding over without Landlord's consent shall constitute
a default by Tenant and shall entitle Landlord to pursue all remedies provided
in this Lease and Tenant shall be liable for any and all direct or consequential
damages or losses of Landlord resulting from Tenant's holding over without
Landlord's consent.
SECTION XXIV. ATTORNEYS' FEES
Tenant shall pay to Landlord all amounts for costs and expenses, reasonable
attorneys' fees and amounts paid to any collection agency or incurred by
Landlord in connection with any breach or default by Tenant under this Lease.
Tenant shall also pay to Landlord all such out-of-pocket amounts, including
reasonable attorneys' fees, incurred by Landlord in responding to any request
made by Tenant (a) to amend or modify this Lease or (b) to prepare any statement
or document in connection with this Lease, including without limitation estoppel
certificates or subordination agreements or the like. Such amounts shall be
payable upon demand. In addition, if any action shall be instituted by either
Landlord or Tenant for the enforcement or interpretation of any of its rights or
remedies in or under this Lease, the prevailing party shall be entitled to
recover from the losing party all costs incurred by the prevailing party in said
action and any appeal therefrom, including reasonable attorneys' fees and court
costs to be fixed by the court therein. In the event Landlord is made a party
to any litigation between Tenant and any third party, then Tenant shall pay all
costs and attorneys' fees incurred by or imposed upon Landlord in connection
with such litigation; provided, however, if Landlord is ultimately held to be
liable, then Landlord shall reimburse Tenant for the cost of any attorneys' fees
paid by Tenant on behalf of Landlord.
SECTION XXV. MORTGAGE PROTECTION/SUBORDINATION
A. SUBORDINATION
The rights of Tenant under this Lease are and shall be, at the option of
Landlord, either subordinate or superior to any mortgage or deed of trust
(including a consolidated mortgagee or deed of trust) constituting a lien
on the Premises, Building or Project, or Landlord's interest therein or any
part thereof, whether such mortgage or deed of trust has heretofore been,
or may hereafter be, placed upon the Premises by Landlord, and to any
ground or master lease if Landlord's title to the Premises or any part
thereof is or shall become a leasehold interest. To further assure the
foregoing subordination or superiority, Tenant shall, upon Landlord's
request, together with the request of any mortgagee under a mortgage or
beneficiary under a deed of trust or ground or master lessor, execute any
instrument (including without limitation an amendment to this Lease that
does not materially and adversely affect Tenant's rights or duties under
this Lease), or instruments intended to subordinate this Lease, or at the
option of Landlord, to make it superior to any mortgage, deed of trust, or
ground or master lease. Notwithstanding any such subordination, Tenant's
right to occupy the Premises pursuant to this Lease shall remain in effect
for the full Term as long as Tenant is not in default hereunder.
Notwithstanding anything to the contrary in this Lease, this Lease shall
not be subject to or subordinate to any ground or underlying lease or to
any lien, mortgage, deed of trust, or security interest now or hereafter
affecting the Premises, nor shall Tenant be required to execute any
documents subordinating this Lease, unless the ground lessor, lender, or
other holder of the interest to which this Lease would or shall be
subordinated executes a recognition and nondisturbance agreement which (i)
provides that this Lease shall not be terminated so long as Tenant is not
in default under this Lease and (ii) recognizes all of Tenant's rights
hereunder, (subject to normal and customary restrictions imposed by lenders
in connection therewith, including without limitation agreement that the
lender will not be required to honor security deposits not delivered to
lender by its borrower or be bound by rental paid more than one month in
advance or by amendments executed without the lender's consent).
32
CONFIDENTIAL
B. ATTORNMENT
Notwithstanding subsection A. above, Tenant agrees (1) to attorn to any
mortgagee of a mortgage or beneficiary of a deed of trust encumbering the
Premises and to any party acquiring title to the Premises by judicial
foreclosure, trustee's sale, or deed in lieu of foreclosure, and to any
ground or master lessor, as the successor to Landlord hereunder, (2) to
execute any attornment agreement reasonably requested by a mortgagee,
beneficiary, ground or master lessor, or party so acquiring title to the
Premises, and (3) that this Lease, subject to the rights under any
outstanding non-disturbance agreement, at the option of such mortgagee,
beneficiary, or ground or master lessor, or other party, shall remain in
force notwithstanding any such judicial foreclosure, trustee's sale, deed
in lieu of foreclosure, or merger of titles. Notwithstanding the
foregoing, neither a mortgagee of a mortgage or beneficiary of a deed of
trust encumbering the Premises, any party acquiring title to the Premises
by judicial foreclosure, trustee sale, or deed in lieu of foreclosure, or
any ground lessor or master lessor, as the successor to Landlord hereunder,
shall be liable or responsible for any breach of a covenant contained in
this Lease that occurred before such party acquired its interest in the
Premises or for any continuing breach thereof until after the successor
Landlord has received the notice and right to cure as provided herein, and
no such party shall be liable or responsible for any security deposits held
by Landlord hereunder which have not been transferred or actually received
by such party, and such party shall not be bound by any payment of rent or
additional rent for more than two (2) months in advance.
C. AMENDMENT
If any lending institution with which Landlord has negotiated or may
negotiate for financing for the Building or Project requires any changes to
this Lease, Tenant shall promptly execute and deliver an amendment to this
Lease prepared by Landlord and embodying such changes, so long as such
changes do not materially increase Tenant's obligations or materially
decrease Tenant's rights hereunder. In the event that Tenant shall fail to
execute and deliver such amendment within twenty (20) days after receipt
thereof by Tenant, such failure shall constitute a default hereunder by
Tenant and shall entitle Landlord to all remedies available to a landlord
against a defaulting tenant pursuant to a written lease, including but not
limited to those remedies set forth in Section XX.
SECTION XXVI. ESTOPPEL CERTIFICATE/FINANCIAL STATEMENTS
A. ESTOPPEL CERTIFICATE
Tenant, at any time and from time to time upon no less than ten (10) days'
prior written notice from Landlord, agrees to execute and deliver to
Landlord a statement in the form provided by Landlord (a) certifying that
this Lease is unmodified and in full force and effect, or, if modified,
stating the nature of such modification and certifying that this Lease, as
so modified, is in full force and effect and the date to which the rent and
other charges are paid in advance, if any; (b) acknowledging that there are
not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder, or specifying such defaults if they are claimed evidencing the
status of this Lease; (c) acknowledging the amount of the Security Deposit
held by Landlord; and (d) containing such other information regarding this
Lease or Tenant as Landlord reasonably requests. Tenant's failure to
deliver an estoppel certificate within such 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) to Tenant's knowledge there
are no uncured defaults in Landlord's performance, (iii) no rent has been
paid in advance except as set forth in this Lease, and (iv) such other
information regarding this Lease and Tenant set forth therein by Landlord
is true and complete.
33
CONFIDENTIAL
B. FURNISHING OF FINANCIAL STATEMENTS
Landlord has reviewed the financial statements, if any, requested of the
Tenant and has relied upon the truth and accuracy thereof with Tenant's
knowledge and representations of the truth and accuracy of such statements
and that said statements accurately and fairly depict the financial
condition of Tenant. Said financial statements are an inducing factor and
consideration for the entering into of this Lease by Landlord with this
particular Tenant. Tenant shall, at any time and from time to time upon
not less than ten (10) days prior written notice from Landlord, furnish
Landlord with its most recent publicly available financial statements, if
Tenant's stock or profit and loss interests is/are publicly traded, and
otherwise with (a) Tenant's most recent audited financial statements,
including a balance sheet and income statement, or a document in which
Tenant states that its books are not independently audited, and (b)
unaudited financial statements, including a balance sheet and income
statement, dated within ninety (90) days of the request from Landlord.
SECTION XXVII. PARKING SEE ADDENDUM SECTION XXXV.E.
Landlord agrees to maintain or cause to be maintained an automobile parking area
and to maintain and operate, or cause to be maintained and operated, said
automobile parking area during the Term of this Lease for the benefit and use of
the customers, service suppliers, other invitees and employees of Tenant.
Whenever the words "automobile parking area" or "parking area" are used in this
Lease, it is intended that the same shall include, whether in a surface parking
area or a parking structure, the automobile parking stalls, driveways, loading
docks, truck areas, service drives, entrances and exits and sidewalks,
landscaped areas, pedestrian passageways in conjunction therewith and other
areas designed for parking. Landlord shall keep said automobile parking area in
a neat, clean and orderly condition, lighted and landscaped, and shall repair
any damage to the facilities thereof, the cost of which shall be included in
Common Operating Costs as defined in Section V., above. Nothing contained
herein shall be deemed to impose liability upon Landlord for personal injury or
theft, for damage to any motor vehicle, or for loss of property from within any
motor vehicle, which is suffered by Tenant or any of its employees, customers,
service suppliers or other invitees in connection with their use of said
automobile parking area. Landlord shall also have the right to establish such
reasonable rules and regulations as may be deemed desirable, at Landlord's sole
discretion, for the proper and efficient operation and maintenance of said
automobile parking area. Such rules and regulations may include, without
limitation, (i) restrictions in the hours during which the automobile parking
area shall be open for use, and (ii) the establishment of charges for parking
therein (on either a reserved or unreserved basis, at Landlord's sole
discretion) by tenants of the Building and Project as well as by their
employees, customers and service suppliers.
Landlord shall at all times during the Term hereof have the sole and exclusive
control of the automobile parking area, and may at any time during the Term
hereof exclude and restrain any person from use or occupancy thereof; excepting,
however, Tenant and employees, customers, service suppliers and other invitees
of Tenant and of other tenants in the Building and Project who make use of said
area in accordance with any rules and regulations established by Landlord from
time to time with respect thereto. Notwithstanding anything to the contrary in
this Section XXVII, Landlord will not knowingly place other tenants in the
Project which Landlord knows, at the time, would, in the aggregate, impair
Tenant's utilization of the parking spaces to be allocated to Tenant based on
square footage. The rights of Tenant and its employees, customers, service
suppliers and invitees referred to in this Section XXVII shall at all times be
subject to (i) the rights of Landlord and other tenants in the Building and
Project to use the same in common with Tenant and its employees, customers,
service suppliers and invitees, (ii) the availability of parking spaces in said
automobile parking area, and (iii) Landlord's right to change the location of
any assigned reserved parking spaces in such instances as shall be determined at
Landlord's sole discretion. Notwithstanding Landlord's exclusive control and
obligations to provide a parking area, Landlord is not responsible or liable for
any damage to any automobiles or persons in the parking area.
34
CONFIDENTIAL
SECTION XXVIII. SIGNS; NAME OF BUILDING
Tenant shall not have the right to place, construct, or maintain on or about the
Premises, Building or Project, or in any interior portions of the Premises that
may be visible from the exterior of the Building or Common Areas, any signs,
names, insignia, trademark, advertising placard, descriptive material or any
other similar item ("Sign") without Landlord's prior written consent, which
consent will not be unreasonably withheld or delayed; provided, however, any
Signs are further subject to the provisions of the covenants, conditions and
restrictions for the Project and to approval of any applicable governmental
authority and/or compliance with applicable governmental requirements. In the
event Landlord consents to Tenant placing a Sign on or about the Premises,
Building or Project, any such Sign shall be subject to Landlord's approval of
the contents, color, size, style and location of such Sign, and shall conform to
any current or future Sign criteria established by Landlord for the Building or
Project. If Landlord enacts a Sign criteria or revises an existing Sign
criteria, after Tenant has erected a Sign to which Landlord has granted its
consent, if Landlord so elects, Tenant agrees, at Landlord's expense, subject to
Landlord's prior approval of the cost thereof, to make the necessary changes to
its Sign in order to conform the Sign to Landlord's Sign criteria, as enacted or
revised, provided that such changes shall be limited to the color, size, style
and location of Tenant's Sign and that Tenant shall not be required to change
the content of its Sign. In the event Landlord consents to Tenant's placement
of a Sign on the Building, Tenant shall, at its sole cost, remove such Sign from
the Building at the end of the Term, restore the Building to the same condition
as before the installation of the Sign, ordinary wear and tear excepted and
remove any discoloration of the Building caused by the presence of such sign.
Landlord reserves the right at any time it deems necessary or appropriate to (a)
place Signs at any location on the Building and Project as it deems necessary
and (b) change the name, address or designation of the Building and Project.
SECTION XXIX. QUIET ENJOYMENT SEE ADDENDUM SECTION XXXV.F
Upon payment by Tenant of the rents herein provided, and upon the observance and
performance of all the covenants, terms and conditions on Tenant's part to be
observed and performed, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Term without hindrance or interruption by Landlord or any other
person or persons lawfully or equitably claiming by, through or under Landlord,
subject, nevertheless, to the terms and conditions of this Lease, and any
mortgage and/or deed of trust to which this Lease is subordinate.
SECTION XXX. BROKER
Tenant warrants and represents that it has not dealt with any real estate broker
or agent in connection with this Lease or its negotiation except the Broker
identified in Section I.M. Tenant shall indemnify and hold Landlord harmless
from any cost, expense or liability (including costs of suit and reasonable
attorneys' fees) for any compensation, commission or fees claimed by any other
real estate broker or agent in connection with this Lease or its negotiation by
reason of any act of Tenant.
35
CONFIDENTIAL
SECTION XXXI. NOTICES
Any notice, demand, approval, consent, xxxx, statement or other communication
("Notice") required or desired to be given under this Lease shall be in writing,
shall be directed to Tenant at Tenant's Address for Notice or to Landlord at
Landlord's Address for Notice and shall be personally served or given by
pre-paid Certified U.S. Mail or "overnight" delivery service. In the case of
personal delivery, any Notice shall be deemed to have been given when delivered;
in the case of service by certified mail, any Notice shall be deemed delivered
of the date of receipt, refusal or non-delivery indicated on the return receipt;
and in the case of overnight delivery service, any Notice shall be deemed given
when delivered as evidenced by a receipt. If more than one Tenant is named
under this Lease, service of any Notice upon any one of said Tenants shall be
deemed as service upon all of such Tenants. The parties hereto and their
respective heirs, successors, legal representatives, and assigns may from time
to time change their respective addresses for Notice by giving at least fifteen
(15) days' written notice to the other party, delivered in compliance with this
Section.
SECTION XXXII. NOTICE AND CURE TO LANDLORD AND MORTGAGEE
On any act or omission by Landlord which might give, or which Tenant claims or
intends to claim gives, Tenant the right to damages from Landlord or the right
to terminate this Lease by reason of a constructive or actual eviction from all
or part of the Premises, or otherwise, Tenant shall not xxx for damages or
attempt to terminate this Lease until it has given written notice of the act or
omission to Landlord and to the holder(s) of the indebtedness or other
obligations secured by any mortgage or deed of trust affecting the Premises as
identified by Landlord, and a reasonable period of time (which, in the case of
Landlord, shall be thirty (30) days, unless the cure cannot reasonably be
completed within thirty (30) days, in which case Landlord shall commence the
cure within such thirty (30) day period and thereafter diligently prosecute the
same to completion) for remedying the act or omission has elapsed following the
giving of the notice, during which time Landlord and the lienholder(s), or
either of them, their agents or employees, may enter upon the Premises and do
therein whatever is necessary to remedy the act or omission. As used in the
foregoing sentence, a "reasonable period of time" as to a mortgagee or holder of
a deed of trust means as soon as practicable under the circumstances but not
more than sixty (60) days, unless the nature of the act or omission is such that
it cannot reasonably be cured within sixty (60) days, in which case the cure
shall be commenced within such sixty (60) day period and diligently prosecuted
to completion. During the period after the giving of notice and during the
remedying of the act or omission, the Monthly Rental payable by Tenant shall not
be abated and apportioned except to the extent that the Premises are
untenantable.
SECTION XXXIII. GENERAL
A. PARAGRAPH HEADINGS
The paragraph headings used in this Lease are for the purposes of
convenience only. They shall not be construed to limit or to extend the
meaning of any part of this Lease.
B. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS
This Lease contains all agreements of Landlord and Tenant with respect to
any matter mentioned, or dealt with, herein. No prior agreement or
understanding pertaining to any such matter shall be binding upon Landlord.
Any amendments to or modifications of this Lease shall be in writing,
signed by the parties hereto, and neither Landlord nor Tenant shall be
liable for any oral or implied agreements.
LANDLORD HAS NOT MADE, AND TENANT MAY NOT RELY ON, ANY REPRESENTATIONS OR
WARRANTIES, EXPRESSED OR IMPLIED, WITH REGARD TO THE PROJECT THE BUILDING,
THE PREMISES OR OTHERWISE
36
CONFIDENTIAL
OR THE SUITABILITY THEREOF FOR TENANT'S BUSINESS, EXCEPT AS EXPRESSLY
STATED IN THIS LEASE. IN PARTICULAR, LANDLORD HAS NOT AUTHORIZED ANY AGENT
OR BROKER TO MAKE A REPRESENTATION OR WARRANTY INCONSISTENT WITH THE TERMS
OF THIS LEASE AND TENANT MAY NOT RELY ON ANY SUCH INCONSISTENT
REPRESENTATION OR WARRANTY.
C. WAIVER
Any waiver by a party of any breach of any term, covenant, or condition
contained in this Lease shall not be deemed to be a waiver by such party of
such term, covenant, or condition or of any subsequent breach of the same
or of any other term, covenant, or condition contained in this Lease. A
party's consent to, or approval of, any act shall not be deemed to render
unnecessary the obtaining of such party's consent to, or approval of, any
subsequent act by the other party. The acceptance of rent or other sums
payable hereunder by Landlord shall not be a waiver of any preceding breach
by Tenant of any provision hereof, other than failure of Tenant to pay the
particular rent or other sum so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of acceptance of such rent,
or sum equivalent to rent.
D. SHORT FORM OR MEMORANDUM OF LEASE
Tenant agrees, at the request of Landlord, to execute, deliver, and
acknowledge a short form or memorandum of this Lease satisfactory to
counsel for Landlord, and Landlord may, in its sole discretion, record such
short form or memorandum in the county where the Premises are located.
Tenant shall not record this Lease, or a short form or memorandum of this
Lease, without Landlord's prior written consent.
E. TIME OF ESSENCE
Time is of the essence in the performance of each provision of this Lease.
F. EXAMINATION OF LEASE
Submission of this instrument for examination or signature by Tenant does
not constitute a reservation of or option for lease, and it is not
effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.
G. SEVERABILITY
If any term or provision of this Lease or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such term or provision
to persons or circumstances other than those as to which it is held invalid
or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and be enforced to the fullest
extent permitted by law.
H. SURRENDER OF LEASE NOT MERGER
Neither the voluntary or other surrender of the Lease by Tenant nor the
mutual cancellation thereof shall cause a merger of the titles of Landlord
and Tenant, but such surrender or cancellation shall, at the option of
Landlord, either terminate all or any existing subleases or operate as an
assignment to Landlord of any such subleases.
37
CONFIDENTIAL
I. CORPORATE AUTHORITY
If Tenant is a corporation, each individual executing this Lease on behalf
of Tenant represents and warrants (1) that he is duly authorized to execute
and deliver this Lease on behalf of Tenant in accordance with a duly
adopted resolution of the Board of Directors of Tenant in accordance with
the By-laws of Tenant and (2) that this Lease is binding upon and
enforceable by Landlord against Tenant in accordance with its terms. If
Tenant is a corporation, Tenant shall, concurrently with the execution and
delivery of this Lease, deliver to Landlord a certified copy of a
resolution of its Board of Directors authorizing or ratifying the execution
of this Lease.
J. GOVERNING LAW
This Lease and the rights and obligations of the parties hereto shall be
interpreted, construed and enforced in accordance with the local laws of
the State in which the Project is located.
K. FORCE MAJEURE
If the performance by a party of any provision of this Lease is delayed or
prevented by any act of God, strike, lockout, shortage of material or
labor, restriction by any governmental authority, civil riot, flood, and
any other cause not within the control of the party required to perform,
then the period for such performing party's performance of the provision
shall be automatically extended for the same time such performing party is
so delayed or hindered; provided, however, this subsection shall not delay
any period, or increase the time, for payment of rent.
L. USE OF LANGUAGE
Words of gender used in this Lease include any other gender, and words in
the singular include the plural, unless the context otherwise requires.
M. SUCCESSORS
The terms, conditions and covenants contained in the Lease inure to the
benefit of and are binding on, the parties hereto and their respective
successors in interest, assigns and legal representatives, except as
otherwise herein expressly provided. All rights, privileges, immunities
and duties of Landlord under this Lease, including without limitation,
notices required or permitted to be delivered by Landlord to Tenant
hereunder, may, at Landlord's option, be exercised or performed by
Landlord's agent or attorney.
N. NO REDUCTION OF RENTAL
Except as otherwise expressly and unequivocally provided in this Lease,
Tenant shall not for any reason withhold or reduce the amounts payable by
Tenant under this Lease, it being understood that the obligations of
Landlord hereunder are independent of Tenant's obligations. If Landlord is
required by governmental authority to reduce energy consumption or impose a
parking or similar charge with respect to the Premises, Building or
Project, to restrict the hours of operation of, limit access to, or reduce
parking spaces available at the Building, or take other limiting actions,
then Tenant is not entitled to abatement or reduction of rent or to
terminate this Lease.
0. NO PARTNERSHIP
Notwithstanding anything else to the contrary, Landlord is not, and under
no circumstances shall it be considered to be, a partner of Tenant, or
engaged in a joint venture with Tenant.
38
CONFIDENTIAL
P. EXHIBITS
All exhibits attached hereto are made a part hereof and are incorporated
herein by a reference. A complete list of said exhibits is set forth in
the Table of Contents.
Q. INDEMNITIES
The obligations of the indemnifying party under each and every
indemnification and hold harmless provision contained in this Lease shall
survive the expiration or earlier termination of this Lease to and until
the last to occur of (a) the last date permitted by law for the bringing of
any claim or action with respect to which indemnification may be claimed by
the indemnified party against the indemnifying party under such provision
or (b) the date on which any claim or action for which indemnification may
be claimed under such provision is fully and finally resolved and, if
applicable, any compromise thereof or judgment or award thereon is paid in
full by the indemnifying party and the indemnified party is reimbursed by
the indemnifying party for any amounts paid by the indemnified party in
compromise thereof or upon a judgment or award thereon and in defense of
such action or claim, including reasonable attorneys' fees incurred.
Payment shall not be a condition precedent to recovery upon any
indemnification provision contained herein.
R. NONDISCLOSURE OF LEASE TERMS
Landlord and Tenant agree that the terms of this Lease are confidential and
constitute proprietary information of the parties hereto. Disclosure of
the terms hereof could adversely affect the ability of Landlord to
negotiate with other tenants of the Project. Each of the parties hereto
agrees that such party, and its respective partners, officers, directors,
employees, agents and attorneys, shall not disclose the terms and
conditions of this Lease to any other person without the prior written
consent of the other party hereto except pursuant to an order of a court of
competent jurisdiction. Provided, however, that Landlord may
disclose the terms hereof to any lender now or hereafter having a lien on
Landlord's interest in the Project, or any portion thereof, and either
party may disclose the terms hereof to its respective independent
accountants who review its respective financial statements or prepare its
respective tax returns, to any prospective transferee of all or any
portions of their respective interests hereunder (including a prospective
sublessee or assignee of Tenant), to any lender or prospective lender to
such party, to any governmental entity, agency or person to whom disclosure
is required by applicable law, regulation or duty of diligent inquiry and
in connection with any action brought to enforce the terms of this Lease,
on account of the breach or alleged breach hereof or to seek a judicial
determination of the rights and obligations of the parties hereunder.
SECTION XXXIV. EXECUTION
This Lease may be executed in several duplicate counterparts, each of which
shall be deemed an original of this Lease for all purposes.
SECTION XXXV. ADDENDUM
See Addendum attached hereto and incorporated herein by this reference.
39
CONFIDENTIAL
IN WITNESS WHEREOF, the parties have executed this Lease, consisting of the
foregoing provisions, any typed addenda appended hereto and all Exhibits
appended hereto, on the dates indicated below, the later of which shall be
deemed the date of execution of this Lease.
"TENANT" "LANDLORD"
PEREGRINE SYSTEMS, INC., THE MUTUAL LIFE INSURANCE
a Delaware corporation COMPANY OF NEW YORK, a New York
CORPORATION
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxx, Xx.
Name: Xxxxx Xxxxxxxx Name: Xxxxxxx X. Xxxxx, Xx.
Title: VP/CFO Title: V.P.
Dated: Oct. 26, 1994
By:
Name:
Title:
Dated: 9/29/94
40
CONFIDENTIAL
ADDENDUM TO LEASE BETWEEN THE MUTUAL LIFE INSURANCE COMPANY
OF NEW YORK, AS LANDLORD, AND PEREGRINE SYSTEMS, INC., AS TENANT,
DATED October 26th, 1994
SECTION XXXV. ADDENDUM
A. OPTION TO EXTEND
Provided that Tenant is not in default hereunder (i.e., after expiration of
any applicable cure period specified in Section XX.A., without cure during
such period, if any) either at the date Tenant's notice of exercise is
given or on the date the Additional Term (as defined below) would otherwise
commence, and provided further that Tenant is entitled to and concurrently
exercises its option to extend the term of the lease between Landlord and
Tenant of even date herewith for certain other premises (the "Other
Premises") within the other building located in the Project (the "Other
Lease"), Tenant shall have the option to extend the Term by one (1)
additional period of five (5) years (the "Additional Term"). The
Additional Term shall commence, if at all, on the day after the Expiration
Date and shall continue through the fifth (5th) anniversary of the
Expiration Date specified in Section I. above (as amended pursuant to
Section III., if applicable), subject to earlier termination as provided
herein.
Such option shall be exercised, if at all, by written notice to Landlord
given at least nine (9) and no more than twelve (12) months prior to the
Expiration Date of the initial Term. If Tenant is entitled to and gives
notice in the manner and within the time set forth in this subsection A.,
then the Term shall be extended by the Additional Term, on all of the
conditions set forth in this Lease for the original Term, except that:
(1) Monthly Rental for the Additional Term and for the additional term of
the Other Lease shall be at the fair market rental value thereof, and
shall be determined concurrently, as follows:
(a) For a period of fifteen (15) days after Tenant's exercise of
the foregoing option with respect to the Additional Term,
Landlord and Tenant shall attempt to agree on the fair market
rental value for the Additional Term of this Lease and the
Other Lease. In determining fair market rental, (i) parking
charges, if any, then imposed or proposed to be imposed for
parking at the Project shall be considered and (ii) Alterations
made to the Premises by Tenant at Tenant's cost shall not be
considered. If Landlord and Tenant are unable to so agree
within such fifteen (15) day period, then each party shall, by
written notice to the other party given within ten (10) days
after expiration of such fifteen (15) day period, select an
appraiser. If either party shall fail to select an appraiser
in such manner and within such time, the single appraiser
actually selected shall perform the appraisal. Tenant shall,
by written notice to each appraiser with a copy to Landlord,
request each appraiser to obtain information from Landlord with
respect to parking charges for the Additional Term, and
Landlord shall promptly provide each appraiser the amount of
any parking charge to be assessed Tenant during the Additional
Term. If each party timely and properly selects an appraiser,
the two appraisers selected by the parties shall determine and
attempt to agree on the fair market rental value for the
Additional Term of this Lease and the Other Lease within thirty
(30) days after their appointment; if they are unable to so
agree and their appraised values differ by more than five
percent (5%) in the aggregate over the Additional Term of this
Lease and/or the Other Lease, the two appraisers shall, by
written notice to Landlord and Tenant, select a third appraiser
within five (5) days after expiration of the thirty (30) day
period within which they were to determine and agree on the
fair market
41
CONFIDENTIAL
rental, which third appraiser shall analyze the fair market
rental for the additional term for each lease with respect to
which such difference in appraisals exists. If they cannot
agree on a third appraiser within such time period, or if both
parties fail to select an appraiser in the manner and within
the time herein provided, either party may have the third (or
sole, if applicable) appraiser appointed by application to the
presiding judge of the San Diego County Superior Court or his
or her designee. If the appraised value of the first two
appraisers are within five percent (5%) in the aggregate over
the Additional Term for either or both this Lease and the Other
Lease, then Landlord shall calculate the average of the two
appraised values as a flat rental rate for the proposed term of
such lease(s), which average shall be the fair market rental
rate for the Additional Term of such lease(s).
(b) The appraisers shall have the MAI designation and a minimum of
ten (10) years experience in the San Diego office market. Each
of the first two appraisers shall analyze the fair market
rental value of the Premises and the premises which are the
subject of the Other Lease and shall give written notice to the
parties of his or her appraisal within thirty (30) days
following his or her appointment or selection, but in no event
later than the commencement of the Additional Term. If a
single appraiser is used, his or her determination shall be the
fair market rental rate. If three appraisers are used, the
third appraiser shall select one of the values determined by
the first two appraisers as the fair market rental rate for any
lease with respect to which the appraisals differ by more than
five percent (5%). The cost of the appraisals shall be shared
equally by Landlord and Tenant.
(2) The provisions of Section III. and EXHIBIT C. of this Lease shall not
apply; and
(3) There shall be no further options to extend the Term.
B. COMMON OPERATING COSTS
The Project consists of the Building and one other building, consisting in
the aggregate of approximately 122,719 square feet of Rentable Area,
together with surface parking, hardscaping and landscaping. Included in
Common Operating Costs for the purposes of this Lease are the Building's
Proportionate Share of "Project Operating Costs", which shall be the
aggregate of all commercially reasonable costs and expenses payable by
Landlord in connection with the operation and maintenance of the Common
Areas of the Project (i.e., those areas of the Project which service both
of the buildings within the Project), including, but not limited to, those
items of costs and expenses set forth in clauses (a) through (o) of Section
V.A.(3) of the Lease. Landlord may allocate one or more items included
within Project Operating Costs between the buildings within the Project
other than strictly pro rata based on their respective Rentable Area if
Landlord determines in its sole but reasonable discretion that it is
appropriate to do so in order to reflect usage of items or services
included in Project Operating Costs.
C. USE OF PREMISES/HAZARDOUS MATERIALS
Landlord has disclosed to Tenant certain information regarding the presence
(or lack thereof) of Hazardous Materials in or about the Project by
delivery to Tenant of a copy of the Phase I Environmental Assessment Report
dated January 19, 1994 prepared by Xxxxxxxx-Xxxxx Consultants with respect
to the Project (the "Report"), receipt and review of which Tenant
acknowledges by its execution and delivery of this Lease. To the extent
that the Report indicates the presence of Hazardous Materials which would
require removal, remediation or adoption of an "OEM" plan, Tenant agrees to
cooperate
42
CONFIDENTIAL
fully with Landlord in connection therewith and comply fully with the
provisions of any such plan implemented by Landlord.
D. HVAC
(1) Landlord warrants that, as of the Lease Commencement Date, the HVAC
system servicing the Building and the other building in the Project
(the "System") will be in good condition and repair; provided,
however, Tenant acknowledges and agrees that the foregoing warranty
is not and shall not be construed as any representation, warranty
and/or covenant that such System is adequate for Tenant's needs or
is capable of performing to any particular standard, it being
acknowledged and agreed that Landlord has agreed to make available
to Tenant the Loan described in Addendum Section XXXV.D.(2) of the
Other Lease as Landlord's sole agreement with respect to the
sufficiency of the System. Tenant's recourse for any breach of the
foregoing warranty shall be limited to a claim for damages.
(2) Tenant shall obtain and maintain throughout the Term a maintenance
contract for the System as it pertains to the Building with a
service company, and a scope of services, reasonably acceptable to
Landlord. Tenant shall provide to Landlord a copy of such contract,
which shall require notice to Landlord at least ten (10) days prior
to cancellation or early termination thereof by either party. Prior
to expiration of such contract, Tenant shall provide Landlord with
evidence of renewal or replacement thereof, in each case on terms
approved by Landlord in advance.
(3) Landlord has provided to Tenant a loan to enhance the HVAC system, on
the term and conditions set forth in the Other Lease.
E. PARKING
Parking within the parking area adjacent to the Building (1) is currently
provided at a ratio of 3.6 spaces for every 1,000 square feet leased, (2)
is in common with other tenants of the Project and (3) is free (subject
to applicable governmental requirements and Section V.) for the initial
Term. Access to the parking areas is and will continue to be, subject to
applicable governmental requirements, available twenty-four (24) hours
per day. Landlord will designate, for Tenant's use, up to ten (10) of
such spaces as reserved spaces, but shall have no obligation to monitor
or enforce usage of such spaces by Tenant or other persons. During the
Additional Term, if any, Landlord may charge for the use of parking stalls
so long as it is considered in the appraisal of Monthly Rental performed
pursuant to Section XXXV.A.
F. SIGNAGE
Tenant may, at Tenant's sole cost and expense, erect a sign displaying
the name specified in Section 1.B above (only) on the exterior of the
Building, the exact location, size, material, method of application and
color of which shall be in accordance with any covenants, conditions and
restrictions encumbering the Project and all applicable sign codes or
ordinances and shall be subject to Landlord's and the City of San Diego's
prior written approval. Tenant shall be responsible to remove said sign
at the expiration or earlier termination of the Term, at its sole cost
and expense, and shall repair any damage caused by such removal,
including any discoloration of the Building, in connection therewith,
also at Tenant's sole cost and expense. In no event shall Tenant's name
on any signage visible from the exterior of the Building or Project be
changed without Landlord's prior written consent, which may be withheld
(subject to Section XVI.K) in Landlord's reasonable discretion. Any
change in signage shall be subject to the provisions of the first two
sentences of this Addendum Section XXXV.F. Notwithstanding anything to
the contrary in this Lease, all Permitted Transferees and other assignees
of this Lease or subleasees of the Premises to whom Landlord consents
shall have the rights granted to Tenant pursuant to this subsection to
erect a sign on the exterior of the Building displaying the name of such
assignee or subleasee.
43
G. SECURITY DEPOSIT
In lieu of cash in the amount specified in Section I.K. of the Lease,
Tenant shall deliver to Landlord, concurrently with the execution hereof,
an irrevocable letter of credit in the amount of $83,516.62 from an
independent financial institution reasonably acceptable to Landlord in the
form of EXHIBIT G hereto (the "Letter of Credit") as security for Tenant's
obligations pursuant to this Lease. The Letter of Credit shall be renewed
by Tenant on or before its expiration date. If Tenant shall fail to cause
any new and irrevocable Letter of Credit to be issued as required
hereunder, which failure continues for three (3) days after written notice
thereof from Landlord to Tenant, then Landlord shall have the option to
terminate this Lease, and such failure by Tenant shall be deemed an event
of default by Tenant and shall be Subject to all of the provisions of
Section XXI. of the Lease. The Letter of Credit shall permit partial
draws. Landlord may draw upon the Letter of Credit in any circumstance
which would permit Landlord to use the Security Deposit described in
Section VI. of the Lease.
44
CONFIDENTIAL
H. INTERPRETATION
This Addendum is attached to and forms a part of the Lease. In the event
of any inconsistency between the provisions of this Addendum and the
balance of the Lease, the provisions of this Addendum shall control.
45
CONFIDENTIAL
EXHIBIT A
SITE PLAN FOR THE PROJECT
[Graphic Omitted}
EXHIBIT B - PG. 1
FLOOR PLAN OF THE PREMISES
[Graphic Omitted]
EXHIBIT B - PG. 2
FLOOR PLAN OF THE PREMISES
[Graphic Omitted]
EXHIBIT C
WORK LETTER
In connection with the Lease to which this Work Letter is attached and in
consideration of the mutual covenants hereinafter contained, Landlord and Tenant
agree as follows:
1. WORK SCHEDULE
Landlord shall deliver to Tenant, for Tenant's review and approval, a schedule
(the "Work Schedule") setting forth a timetable for the preparation and approval
of all space plans and working drawings and for the planning and completion of
the installation of tenant improvements to be constructed in the Premises (the
"Tenant Improvements"). The Work Schedule shall set forth each of the various
items of work to be done by or approval to be given by Landlord and Tenant in
connection with the completion of the Tenant Improvements. The Work Schedule
shall be submitted to Tenant for its approval and, upon approval by both
Landlord and Tenant, such schedule shall become the basis for completing the
Tenant Improvements. If Tenant shall fail to approve the Work Schedule, as it
may be modified after discussions between Landlord and Tenant, within five (5)
days after the date such Work Schedule is first received by Tenant, then Tenant
shall be deemed to have approved such Work Schedule.
2. SPACE PLANS AND WORKING DRAWINGS
a) SPACE PLANS. Tenant and Landlord have had Xxxxxx and Xxxxx
Architects ("H & S") prepare a space plan for the Premises AND the premises
which are subject of the Other Lease (the "Other Premises") dated June 1,
1994 (the "Space Plans"), which Landlord and Tenant agree shall be the basis
for preparation by Landlord's architect, H & S, of working drawings for the
Tenant Improvements and the tenant improvements for the Other Premises (the
"Other Tenant Improvements"). Tenant acknowledges and agrees that, absent
Landlord's written agreement to the contrary, any deviations from the Space
Plans shall be considered "Non-Building Standard Work" for the purposes of
this EXHIBIT C. Landlord shall reimburse to Tenant the lesser of $15,000.00
or the actual programming fee paid by Tenant to H & S, upon receipt by
Landlord of documentary evidence satisfactory to Landlord as to the amount of
such fee and that the services performed relate to the Space Plans.
b) WORKING DRAWINGS. Based upon the Space Plans, as the same may be
revised by mutual agreement of Landlord and Tenant as to the scope of such
revisions, and after Tenant's written acknowledgement (within three (3) days
after request therefor) of its responsibility for the costs of such revisions
and for the costs of Tenant Improvements and the Other Tenant Improvements in
the aggregate, in excess of $1,050,000.00, Landlord's architect and engineer
shall prepare final working drawings (the "Working Drawings") of the Tenant
Improvements. Landlord shall then submit such Working Drawings to Tenant for
its review, and Tenant shall approve or disapprove any such drawings within
three (3) business days after receipt thereof. If Tenant fails to so notify
Landlord within such three (3) business days, Tenant shall be deemed to have
approved such Working Drawings. If Tenant timely notifies Landlord of any
disapproval of the Working Drawings, Tenant's notice of disapproval shall also
set forth its reason for disapproval and suggested revisions to the Working
Drawings in order to satisfy the concerns of Tenant. Any delay resulting from
Tenant's failure to unconditionally approve the Working Drawings within the
later of thirty (30) days after execution of this Lease or five (5) days after
delivery of the Working Drawings to Tenant shall be Tenant Delay, and shall not
extend the Commencement Date. Landlord shall have no obligation to proceed with
Landlord's Work until Tenant has unconditionally approved the Working Drawings
therefor. The Working Drawings shall include architectural, mechanical and
electrical drawings for Landlord's Work (as defined in Section 5 below).
c) CHANGES IN PLANS. Any changes requested by Tenant in the Space
Plans, or in the Working Drawings or other plans and specifications after
approval thereof by Tenant or
EXHIBIT C, PAGE 1
submission thereof by Tenant to Landlord, shall (subject to Landlord's agreement
to be responsible for an aggregate of $1,050,000.00 of the costs of the Tenant
Improvements and the Other Tenant Improvements) be prepared at Tenant's sole
cost and expense, and any excess costs resulting from such changes, shall also
be at Tenant's sole cost and expense. Furthermore, Tenant shall be liable for
any resulting delays in completing the Tenant Improvements and the increased
costs in completing the Building Standard Work, if any, resulting from such
delays. Notwithstanding the foregoing, Landlord will not approve any change
orders without Tenant's consent and, if Landlord does so, Landlord will be
responsible for excess costs resulting from any such change order.
(d) NON-BUILDING STANDARD WORK. Tenant may request work (hereinafter
referred to as "Non Building Standard Work") different from or in addition to
the improvements reflected on the Space Plans as described in Section 2(a)
hereof to be performed by Landlord as part of the Tenant Improvements; provided,
however, that all Non-Building Standard Work shall be subject to Landlord's
prior written consent and approval, and shall be of a quality that exceeds or is
commensurate with the quality of materials included in the Space Plans. Any
plans, specifications and Working Drawings required for such Non-Building
Standard Work shall also be prepared by Landlord's architect and engineer but at
Tenant's expense.
(e) LANDLORD'S APPROVAL. All plans, specifications and Working Drawings
for the Premises and all Non-Building Standard Work requested by Tenant are
subject to Landlord's approval.
(f) COMPLIANCE WITH LAW. Tenant's plans and specifications shall not be
in conflict with building codes of the City of San Diego or with insurance
regulations for a fire resistive Class A building. All plans and specifications
shall be in a form satisfactory to appropriate governmental authorities
responsible for issuing permits and licenses required for construction. In the
event any additional work is required by any governmental authority for the
Non-Building Standard Work in order to obtain the issuance of any permit or
license for the construction of the Tenant Improvements, Tenant shall be solely
responsible for the cost of such additional work.
3. BUILDING PERMIT
After approval by Landlord and Tenant of the Working Drawings for the Tenant
Improvements, Landlord shall submit the drawings to the appropriate governmental
body for plan checking and a building permit. Landlord, with Tenant's
cooperation, shall cause to be made any change in the Working Drawings necessary
to obtain the building permit. After final approval of the Working Drawings, no
further changes thereto may be made without the prior written approval of both
Landlord and Tenant, and then only after agreement by Tenant to pay any excess
costs resulting from such changes.
4. PRICE APPROVAL; NON-BUILDING STANDARD WORK AT TENANT'S EXPENSE
(a) COST APPROVAL. Tenant agrees to pay the cost of all work necessary
to complete the Tenant Improvements and the Other Tenant Improvements in
accordance with the Working Drawings in excess of $1,050,000.00, in the
aggregate, together with the cost of any improvements to the "System" in excess
of the proceeds of the "Loan" (as such terms are defined in Section XXXV.D. of
the Lease; herein, the "Excess System Costs"), excluding only (1) architects'
and engineering fees incurred in preparing from the approved Space Plans the
Working Drawings, as initially approved by Landlord and Tenant, (2) costs
resulting from gross negligence or willful misconduct of Landlord or its agents,
employees or contractors in the performance of Landlord's Work, (3) costs
resulting from a breach by Landlord or those engaged by Landlord to perform
Landlord's Work of a contract for the Tenant Improvements or Other Tenant
Improvements, or resulting from defects in construction of Landlord's Work, (4)
costs incurred in performing Landlord's Work which are reimbursed from available
bonding or insurance proceeds, (6) costs to construct alterations or
improvements (i) to the Common Areas which are necessary to obtain permits
required for the lawful occupancy of the Premises by Tenant or (ii) to areas or
portions of the Premises or the improvements therein which are not within the
scope
EXHIBIT C, PAGE 2
of the Tenant Improvements and which are necessary to correct any violation of
law existing as of the date of execution hereof which would be required to be
corrected whether or not the Landlord's Work was being performed (i.e.,
excluding those which would have been "grandfathered" but for landlord's Work,
and excluding also plan check corrections), and (7) interest and fees charged by
Landlord for financing the construction of Landlord's work. Concurrent with the
plan checking referred to in Section 3 above, Landlord shall prepare and submit
to Tenant bids from subcontractors for all work included in the Tenant
Improvements and Other Tenant Improvements and for the Excess System Costs
required by the approved plans, specifications and Working Drawings, together
with an amount equal to twelve percent (12%) of the total of such bids which
shall be the construction management fee payable to Ares, Inc., an affiliate of
Landlord (collectively the "Bid Amount"). If Tenant approves the Bid Amount, it
shall pay Landlord such costs in advance within five (5) days after Tenant's
approval thereof. If Tenant fails to approve the Bid Amount, or fails to
deliver the excess costs within five (5) days after approving the Bid Amount,
Landlord shall not proceed with the Tenant Improvements, Other Tenant
Improvements or the work pertaining to the Excess System Costs. If Tenant fails
to approve, or disapprove, the Bid Amount, Landlord and Tenant shall thereafter
cooperate to amend the plans and specifications for the Premises as necessary to
obtain Tenant's approval of the cost of the Tenant Improvements, Other Tenant
Improvements and/or the Excess System Costs; provided, however, that the
construction management fee shall not be reduced below twelve percent (12%) of
the total bids provided, further, that Tenant shall pay any costs resulting from
such changes and Tenant shall be liable for the delay in completing the affected
Tenant Improvements and Other Tenant Improvements and Excess System
improvements, if any, resulting from such delay, which delay shall not extend
the Commencement Date or the accrual of rental under the lease.
(b) OVERHEAD COSTS. The cost of the Tenant Improvements, Other Tenant
Improvements and the Excess System Costs paid by Tenant as set forth above shall
include contractor's charges.
5. CONSTRUCTION OF TENANT IMPROVEMENTS
After the Working Drawings for the Tenant Improvements have been approved by
Tenant and Landlord and a building permit has been issued, Landlord shall cause
its construction manager, Ares, Inc., to cause the Tenant Improvements to be
completed in accordance with the approved plans, specifications and Working
Drawings ("Landlord's Work"), subject to "Force Majeure" (as that term is
defined by Section XXXIII.K. of the Lease). Landlord shall require Landlord's
construction manager to obtain competitive bids for each major trade included
within Landlord's Work, where possible, and to enter into subcontracts with
either a stipulated sum or guaranteed maximum price such that the total costs of
the work on which bids are submitted, with the construction management fee, do
not exceed the approved Bid Amount. However, and not withstanding the
foregoing, installation or construction of Non-Building Standard Work and/or
work pertaining to Excess System Costs (and the affected Tenant Improvements or
Other Tenant Improvements) shall not commence until Tenant shall have approved
and paid to Landlord the estimated cost thereof and in accordance with Section 4
above. Subject to the foregoing, landlord shall use its best efforts to secure
completion of the Tenant Improvements on or before the target Lease Commencement
Date set forth in Section I.G. of the Lease. Unless specified to the contrary
herein, all Tenant Improvements shall be included in Landlord's Work.
6. WORK
(a) TENANT IMPROVEMENTS. Subject to Tenant's payment to Landlord of
the excess costs of the Tenant Improvements, Other Tenant Improvements and
Excess System Costs pursuant to Section 4(a) above, the Landlord agrees to
furnish all of the Tenant Improvements and Other Tenant Improvements specified
in the Space Plan and Working Drawings for the Premises.
(b) WARRANTIES. Landlord hereby agrees to assign and transfer to Tenant
the benefit of any and all warranties received by Landlord from its general
contractor for the construction
EXHIBIT C, PAGE 3
of the Tenant improvements and any and all warranties received from any
suppliers of materials for the Tenant Improvements.
7. COMPLETION AND LEASE COMMENCEMENT DATE
If the Lease Commencement Date of the Lease as determined under Sections I.G.
and III. of the Lease is delayed by any of the following, then the Lease
Commencement Date of the Lease and the payment of rent shall be accelerated by
the number of days of such delay:
(a) Tenant's failure to approve or furnish Working Drawings or failure to
approve or furnish any other amount or item or perform any other obligation in
accordance with and by the dates specified herein or in the Work Schedule.
(b) Delays of any nature within Tenant's control resulting from Tenant's
decision to use any materials, finishes, or installations other than as
designated on the Space Plans.
(c) Tenant's changes in the Space Plans, Working Drawings or other plans
and specifications after the approval thereof by Tenant or submission thereof by
Tenant to Landlord.
(d) Delays in the construction of the Tenant Improvements as a result of
Tenant's failure to approve, written estimates of and pay the excess costs of
the Tenant Improvements, Other Tenant Improvements and/or Excess System Costs in
accordance with Section 4.
8. FURNITURE AND TELEPHONE SYSTEM
Tenant acknowledges and agrees that Tenant is solely responsible, both as to
performance and payment of costs, for "Tenant's Work", which includes obtaining,
delivering and installing in the Premises all necessary or desired furniture,
telephone equipment, telephone cabling (all telephone cabling provided by Tenant
shall be teflon coated), telephone service, business equipment, art work and
other similar items, and that Landlord shall have no responsibility whatsoever
with regard thereto. Tenant further acknowledges and agrees that neither the
Lease Commencement Date of the Lease nor the payment of rent shall be delayed
for any period of time whatsoever due to any delay in the furnishing of the
Premises with such items. Tenant agrees to cause all telephone, computer and
other electronic wires and cables installed within the Premises and within the
common ducts and shafts of the Building to be properly labeled in order that
they may be easily identified and distinguished from other tenants' wires and
cables installed within the Building.
9. FAILURE OF TENANT TO COMPLY
Any failure of Tenant to comply with any of the provisions contained in this
EXHIBIT C, within the times for compliance herein set forth, shall, after
expiration of the applicable cure period set forth in Section XX. of the Lease,
be deemed a default pursuant to the Lease. In addition to the remedies provided
to Landlord in this EXHIBIT C, upon the occurrence of such a default by Tenant,
Landlord shall have all remedies available at law or equity to a landlord
against a defaulting tenant pursuant to a written lease, including but not
limited to those set forth in Section XX. DEFAULT and Section XXIV. ATTORNEYS'
FEES of the Lease.
10. AUTHORIZED APPROVALS
All approvals required pursuant to the terms of this Work Letter or requests for
changes and modifications to the Space Plans, Working Drawings or any other
matter relating to the construction of the Tenant Improvements shall be deemed
given if approved or requested in writing by Tenant's construction
representative, for Tenant, and Landlord's construction representative, for
Landlord.
EXHIBIT C, PAGE 4
11. DESTRUCTION
If at any time prior to the completion of the Tenant Improvements a casualty
occurs resulting in any damage or destruction of the partially completed Tenant
Improvements or the Premises or Building, the terms and conditions of Section
XVIII. DAMAGE AND DESTRUCTION of the Lease shall govern the rights and
obligations of the parties.
EXHIBIT C, PAGE 5
EXHIBIT D
RENT SCHEDULE
Monthly Rental Monthly
Rate (Per Sq. Ft. Rental Monthly Rental
Months of Rentable Area) Waiver * Payable
------ ------------------ ---------- ----------------
1-2 $0.91 $62,810.02 $ 0.00
3-14 0.91 0.00 62,810.02
15-26 0.94 0.00 64,880.68
27-38 0.97 0.00 66,951.34
39-50 1.00 0.00 69,022.00
51-62 1.04 0.00 71,782.88
63-74 1.09 0.00 75,233.98
75-86 1.15 0.00 79,375.30
87-98 1.21 0.00 83,516.62
* Landlord hereby conditionally excuses Tenant from the payment of
Monthly Rental during the months and in the amounts designated as
"Monthly Rental Waiver" as specified above, provided that Tenant
shall pay all other charges under this Lease from and after the Lease
Commencement Date and provided further that Tenant shall not be in
material default in its obligations under this Lease. Should Tenant
at any time during the Term be in material default under the Lease
and not cure such default within the cure periods provided in the
Lease, then the total sum of such Monthly Rental so conditionally
excused shall become immediately due and payable by Tenant to
Landlord. If at the date of expiration of the Term, Tenant has not so
defaulted, Landlord shall waive any payment of all such Monthly
Rental so conditionally excused.
The term "Rentable Area" as used in the Lease shall mean:
(1) As to each floor of the Building on which the entire space rentable
to tenants is or will be leased to one tenant (hereinafter referred
to as a "Single Tenant Floor"), Rentable Area shall be the entire
area bounded by the inside surface of the four exterior glass walls
(or the inside surface of the permanent exterior wall(s) where there
is no glass) on such floor, including all areas used for elevator
lobbies, corridors, special stairways, or elevators, restrooms,
mechanical rooms, electrical rooms and telephone closets without
deduction for columns and other structural portions of the Building
or vertical penetrations that are included for the special use of the
tenant of such floor together with a portion of the covered or
enclosed common facilities which constitute a part of the Building
and which are maintained by Landlord for the common benefit of all
tenants of the Building which bears the same proportion to the total
area of such common facilities as the Rentable Area of each Single
Tenant Floor bears to the Rentable Area of the Building (excluding
such common facilities), but excluding the area contained within the
exterior walls of the Building stairs, fire towers, vertical ducts,
elevator shafts, flues, vents, stacks and pipe shafts.
EXHIBIT D
(2) As to each floor of the Building on which space is or will be leased
to more than one tenant, Rentable Area attributable to each such lease
shall be the total of (i) the entire area including within the premises
covered by such lease, being the area bounded by the inside surface of
any exterior glass walls (or the inside surface of the permanent
exterior wall(s) where there is no glass) of the Building bounding such
premises, the exterior of all walls separating such premises from any
public corridors or other public areas on such floor, and the centerline
of all walls separating such premises from other areas leased or to be
leased to other tenants on such floor, (ii) that portion outside the
Premises but within space intended for use or occupancy as premises by
another tenant utilized by Tenant for wiring, ducts, vents or other
requirements of Tenant's operation in the Premises, (iii) that portion
of the covered or enclosed common facilities which constitute a part of
the Building and which are maintained by Landlord for the common benefit
of all tenants of the Building which bears the same proportion to the
total area of such common facilities as the Rentable Area of such
Premises bears to the Rentable Area of the Building (excluding such
common facilities), and (iv) a pro rata portion of any area of the
Building devoted to common features such as elevator lobbies, corridors,
restrooms, mechanical rooms, electrical rooms and telephone closets, but
excluding any area contained within the exterior walls of the Building
for stairs, fire towers, vertical ducts, elevator shafts, flues, vents,
stacks and pipe shafts.
(3) For purposes of establishing the Monthly Rental and Tenant's
Proportionate Share of Common Operating Costs, the Rentable Area of the
Premises is deemed to be as set forth in Section I.E. above., and the
Rentable Area of the Building is deemed to be 69,022 feet.
EXHIBIT E
RULES AND REGULATIONS
ATTACHED TO AND MADE A PART OF THE LEASE
The following Rules and Regulations shall be in effect at the Building.
Landlord reserves the right to adopt reasonable modifications and additions
hereto. In the case of any conflict between these regulations and the Lease,
the Lease shall be controlling. Landlord shall have the right to waive one or
more rules for the benefit of a particular tenant in Landlord's reasonable
discretion.
1. Except with the prior written consent Landlord, no tenant shall conduct any
retail sales in or from the Premises, or any business other than that
specifically provided for in the Lease. There shall be no solicitation by
Tenant of other tenants or occupants of the Building.
2. Landlord reserves the right to prohibit personal goods and services vendors
from access to the Building except upon such reasonable terms and
conditions, including but not limited to a provision for insurance
coverage, as are related to the safety, care and cleanliness of the
Building, the preservation of good order thereon, and the relief of any
financial or other burden on Landlord occasioned by the presence of such
vendors or the sale by them of personal goods or services to a tenant or
its employees. If reasonably necessary for the accomplishment of these
purposes, Landlord may exclude a particular vendor entirely or limit the
number of vendors who may be present at any one time in the Building. The
term "personal goods or services vendors" means persons who periodically
enter the Building of which the Premises are a part for the purpose of
selling goods or services to a tenant, other than goods or services which
are used by a tenant only for the purpose of conducting its business on the
Premises. "Personal goods or services" include, but are not limited to,
drinking water and other beverages, food, barbering services, and
shoeshining services.
3. The sidewalks, halls, passages, elevators and stairways shall not be
obstructed by any tenant or used by it for any purpose other than for
ingress to and egress from their respective Premises. The halls, passages,
entrances, elevators, stairways, balconies, janitorial closets, 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 of all persons whose
presence in the judgment of 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 only for the purpose of
conducting its business on the Premises (such as clients, customers, office
suppliers and equipment vendors, and the like) unless such persons are
engaged in illegal activities. No tenant and no employees of any tenant
shall go upon the roof of the Building without the written consent of
Landlord.
4. The sashes, sash doors, windows, glass lights, and any lights or skylights
that reflect or admit light into the halls or other places of the Building
shall not be covered or obstructed. The toilet rooms, water and wash
closets and other water 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, and the expense of any breakage,
stoppage or damage, resulting from the violation of this rule shall be home
by the tenant who, or whose clerks, agents, employees, or visitors, shall
have caused it.
5. No sign, advertisement or notice visible from the exterior of the Premises
or Building shall be inscribed, painted or affixed by Tenant on any part of
the Building or the Premises without the prior written consent of Landlord.
If Landlord shall have given
EXHIBIT E, Page 1
such consent at any time, whether before or after the execution of this
Lease, such consent shall in no way operate as a waiver or release of any
of the provisions hereof or of this Lease, and shall be deemed to relate
only to the particular sign, advertisement or notice so consented to by
Landlord and shall not be construed as dispensing with the necessity of
obtaining the specific written consent of Landlord with respect to each and
every such sign, advertisement or notice other than the particular sign,
advertisement or notice, as the case may be, so consented to by Landlord.
6. In order to maintain the outward professional appearance of the Building,
all window coverings to be installed at the Premises shall be subject to
Landlord's prior reasonable approval. If Landlord, by a notice in writing
to Tenant, shall object to any curtain, blind, shade or screen attached to,
or hung in, or used in connection with, any window or door of the Premises,
such use of such curtain, blind, shade or screen shall be forthwith
discontinued by Tenant. No awnings shall be permitted on any part of the
Premises.
7. Tenant shall not do or permit anything to be done in the Premises, or bring
or keep anything therein, which shall in any way increase the rate of fire
insurance on the Building, or on the property kept therein, or obstruct or
interfere with the rights of other tenants, or in any way injure or annoy
them; or conflict with the regulations of the Fire Department or the fire
laws, or with any insurance policy upon the Building, or any part thereof,
or with any rules and ordinances established by the Board of Health or
other governmental authority. Tenant shall not bring into, or permit or
suffer in, the Building or the Project, any weapons or firearms of any
kind.
8. No safes or other objects larger or heavier than the freight elevators of
the Building are limited to carry shall be brought into or installed in the
Premises. Landlord shall have the power to prescribe the weight, method of
installation and position of such safes or other objects. The moving of
safes shall occur only between such hours as may be designated by, and only
upon previous notice to, the manager of the Building, and the persons
employed to move safes in or out of the Building must be acceptable to
Landlord. No freight, furniture or bulky matter of any description shall
be received into the Building or carried into the elevators except during
hours and in a manner approved by Landlord.
9. Landlord shall clean the Premises as provided in the Lease, and except with
the written consent of Landlord, no person or persons other than those
approved by Landlord will be permitted to enter the Building for such
purpose, but Tenant shall not cause unnecessary labor by reason of Tenant's
carelessness and indifference in the preservation of good order and
cleanliness.
10. No tenant shall sweep or throw or permit to be swept or thrown from the
Premises any dirt or other substance into any of the corridors or halls or
elevators, or out of the doors or windows or stairways of the Building, and
Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors and/or
vibrations, or interfere in any way with other tenants or those having
business therein, nor shall any animals, firearms or birds be kept in or
about the Building. The Building has been designated as non-smoking;
smoking or carrying lighted cigars or cigarettes in each and every part of
the Building, including lobbies, elevators or other common areas, is
prohibited.
11. Except for the use of microwave ovens and coffee makers for Tenant's
personal use, no cooking shall be done or permitted by Tenant on the
Premises, nor shall the Building be used for lodging.
EXHIBIT F, Page 2
12. Tenant shall not use or keep in the Building any kerosene, gasoline, or
inflammable fluid or any other illuminating material, or use any method of
heating other than that supplied by Landlord.
13. If Tenant desires telephone or telegraph connections, Landlord will direct
electricians as to where and how the wires are to be introduced. No boring
or cutting for wires or other otherwise shall be made without directions
from Landlord.
14. Each tenant, upon the termination of its tenancy, shall deliver to Landlord
all the keys of offices, rooms and toilet rooms, and security access
card/keys which shall have been furnished such tenant or which such tenant
shall have had made, and in the event of loss of any keys so furnished,
shall pay Landlord therefor.
15. No Tenant shall lay linoleum or other similar floor covering so that the
same shall be affixed to the floor of the Premises in any manner except by
a paste, or other material which may easily be removed with water, the use
of cement or other similar adhesive materials being expressly prohibited.
The method of affixing any such linoleum or other similar floor covering to
the floor, as well as the method of affixing carpets or rugs to the
Premises shall be subject to reasonable approval by Landlord. The expense
of repairing any damage resulting from a violation of this rule shall be
borne by Tenant by whom, or by those agents, clerks, employees or visitors,
the damage shall have been caused.
16. No furniture, packages or merchandise will be received in the Building or
carried up or down in the elevators, except between such Building hours and
in such elevators as shall be designated by Landlord.
17. On Saturdays, Sundays and legal holidays, and on other days between the
hours of 6:00 p.m. and 7:00 a.m. access to the Building or to the halls,
corridors, elevators or stairways in the Building, or to the Premises, may
be refused unless the person seeking access is known to the building
watchman, if any, in charge and has a pass or is properly identified.
Landlord shall in no case be liable for damages for the admission to or
exclusion from the Building of any person whom Landlord has the right to
exclude under Rule 3 above. In case of invasion, mob, riot, public
excitement, or other commotion, Landlord reserves the right but shall not
be obligated to prevent access to the Building during the continuance of
the same by closing the doors or otherwise, for the safety of the tenants
and protection of property in the Building.
18. Tenant shall see that the windows and doors of the Premises are closed and
securely locked before leaving the Building and Tenant shall exercise
extraordinary care and caution that all water faucets or water apparatus
are entirely shut off before Tenant or Tenant's employees leave the
Building, and that all electricity, gas or air shall likewise be carefully
shut off, so as to prevent waste or damage, and for any default or
carelessness Tenant shall make good all injuries sustained by other tenants
or occupants of the Building or Landlord.
19. Tenant shall hot alter any lock or install a new or additional lock or any
bolt on any door of the Premises without prior written consent of Landlord.
If Landlord shall give its consent, Tenant shall in each case furnish
Landlord with a key for any such lock. Landlord shall have the right to
impose a charge for each key issued and for rekeying any lock or bolt on
any door of the Premises.
20. Tenant shall not install equipment, such as but not limited to electronic
tabulating or computer equipment, requiring electrical or air conditioning
service in excess of those to be provided by Landlord under the Lease.
21. No bicycle, or shopping cart, or other vehicle or any animal shall be
brought into the Premises or the halls, corridors, elevators or any part of
the Building by Tenant.
EXHIBIT E, Page 3
22. Landlord shall have the right to prohibit the use of the name of the
Building or Project or any other publicity by Tenant which in Landlord's
opinion tends to impair the reputation of the Building or Project or their
desirability for other tenants, and upon written notice from Landlord,
Tenant will refrain from or discontinue such publicity.
23. Tenant shall not erect any aerial or antenna on the roof or exterior walls
of the Premises, Building, or Project without the prior written consent of
Landlord.
EXHIBIT E, Page 4
EXHIBIT F
AMENDMENT OF LEASE COMMENCEMENT DATE
In connection with that certain Lease dated September __, 1994 between The
Mutual Life Insurance Company of New York, as Landlord, and Peregrine Systems,
Inc., as Tenant concerning the Premises located at 00000 Xxxx Xxxxx Xxxxx, Xxx
Xxxxx, Xxxxxxxxxx, Landlord and Tenant hereby agree as follows:
1. The Lease Commencement Date stated in Section I. of the Lease is amended to
be ___________,19____ and the Expiration Date stated in Section I. is
amended to be ___________,19___.
2. Landlord has satisfactorily complied with all requirements and conditions
precedent to the commencement of the Term as specified in the Lease.
3. The Premises covered by the Lease and the tenant improvements therein have
been fully completed as required, are in good condition, are ready for
occupancy and have been accepted by Tenant.
4. Tenant has or shall commence paying Monthly Rental pursuant to the Office
Lease on ____________,199___.
Dated effective this ____ day of _________, 19___
"TENANT" "LANDLORD"
PEREGRINE SYSTEMS, INC., a Delaware THE MUTUAL LIFE INSURANCE
corporation COMPANY OF NEW YORK, a New York
corporation
By:
Name: By:
Title:
Name:
Title:
[SAMPLE]
EXHIBIT F
EXHIBIT G
FORM OF LETTER OF CREDIT
_______________ BANK
P.O. BOX _____, __________, _____________, _____________
CABLE ADDRESS: _________ TELEX NO. ________
SWIFT: ____________
IRREVOCABLE TRANSFERRABLE STANDBY LETTER OF CREDIT NO. __________
Date: _________, 19___
Place of Issue: ____________
Date of Expiration: ________, l9___
Beneficiary:
The Mutual Life Insurance Company
of New York
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Vice President - Real Estate
Gentlemen:
We hereby establish our irrevocable Letter of Credit No.__________ in your favor
for account of _______ ("Applicant") up to an aggregate amount of
_________________________ Dollars (US$ ________) available by your drafts on us
at sight to be accompanied by Beneficiary's signed statement that it is entitled
to draw hereunder.
This letter of credit is transferrable and Beneficiary may transfer its interest
herein to any transferee of Beneficiary's interest in that certain Lease dated
_______________, 19____, between Beneficiary and Applicant.
Drafts must be presented to ____________________ Bank not later than
_______________, 19___.
The address for presentation of drafts and accompanying documents shall be:
Bank
-------------------------
------------------------------
------------------------------
Attention:
--------------------
This credit is subject to the Uniform Customs and Practice for Documentary
Credits (1983 Revision), International Chamber of Commerce Publication No. 400.
We hereby agree with the drawers, endorsers and bona fide holders of the drafts
under and in compliance with the terms of this credit that these drafts will be
duly honored by the above drawee. All drafts must be marked; "Drawn under
______________________ Bank, Credit No. _____________________."
Very truly yours,
----------------------
Authorized Signature
EXHIBIT H
FIRST AMENDMENT TO LEASES
This First Amendment to Leases (the "Amendment") is dated as of this-day of
August, 1995, by and between THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, a
New York corporation ("Landlord"), and PEREGRINE SYSTEMS, INC., a Delaware
corporation ("Tenant'), with respect to the following:
RECITALS
A. Landlord is the landlord and Tenant is the tenant pursuant to those
certain written leases dated to be effective as of October 26, 1994, by and
between Landlord, as landlord, and Tenant, as tenant. One of the Leases (the
"Building A Lease") covers Building "A" of Del Mar Corporate Plaza (the
"Project"), which building is located at 00000 Xxxx Xxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx and consists of approximately 69,022 square feet of rentable area,
and the other lease (the "Building B Lease") covers a portion of Building "B" of
the Project, consisting of the first and second floors, containing approximately
26,088 square feet of rentable area of Building B which is located at 00000 Xxxx
Xxxxx Xxxxx. The Building A Lease and the Building B Lease are sometimes
referred to herein collectively as the "Leases."
B. Pursuant to this Amendment, Landlord and Tenant desire to confirm
their agreements regarding the cost and estimated date of completion of the
tenant improvements to be constructed by Landlord pursuant to the Leases.
AGREEMENT
NOW, THEREFORE IN CONSIDERATION OF the foregoing recitals, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINED TERMS. All capitalized terms used and not defined herein but
defined in the Leases shall have the meanings given to such terms in the Leases.
2. BID AMOUNT. Pursuant to the Leases, Tenant agreed to pay the cost of
all work necessary to complete the Tenant Improvements and the Other Tenant
Improvements (collectively, Landlord Work in excess of the sum of $1,050,000.00
(herein, the "Allowance"), together with the Excess System Costs. In connection
therewith, Tenant has the right under the Leases to approve the Bid Amount for
Landlord's Work which has been submitted by Ares, Inc., an affiliate of
Landlord. The initial Bid Amount, which is $1,946,442.00, as reflected on the
Bid Review Worksheet attached hereto as EXHIBIT A, is hereby approved by
Tenant in accordance with Section 4(a) of Exhibit C to the Leases. Landlord and
Tenant acknowledge and agree that the Bid Amount hereby approved does not
include any excluded costs described in clauses (1) through (7) of Section 4(a)
of Exhibit C to the Leases and, accordingly, that Tenant is responsible for all
costs of Landlord's Work in excess of the sum of the Allowance, a portion of
which may be financed by Tenant with the "TI Loan" (as defined below).
Notwithstanding anything to the contrary in the Leases, Tenant shall pay the
Excess System Costs and the costs of Landlord's Work in excess of the Allowance,
which are currently estimated (based on the Bid Amount) to be $696.442.00 in the
aggregate, as provided herein. The costs of the Tenant Improvements shall be
paid and/or other-wise satisfied as follows: (a) Tenant shall pay to Landlord in
cash $396,442.00 concurrently with the execution of this Amendment to reimburse
Landlord for costs incurred by Landlord prior to the date hereof which have been
previously invoiced to Tenant in detail, (b) the TI Loan will be deemed fully
disbursed and shall commence to accrue interest on August 11, 1995 to cover the
next $300,000 of such costs so incurred and paid by Landlord as of the date
hereof; (c) the next $1,250,000 of such costs shall be paid by Landlord by
disbursement of the Allowance described in paragraph 3 below; and (d) the
balance, if any, of such costs (except for costs excluded under clauses (1)
through (7) of Sections 2(c) and 4(a) of Exhibit C to the Lease) shall be paid
by Tenant to Landlord in cash within five (5) days after receipt of Landlord's
invoice therefor accompanied by reasonable back-up documentation, it being
clearly understood that Landlord shall not be required to pay such costs prior
to Tenant's payment to Landlord thereof. Landlord shall provide to Tenant the
benefit of, and shall reduce the Bid Amount by the full amount of, any rebate,
refund, credit, reduced bid or other cost savings applicable to Landlord's Work
included in the Bid Review Worksheet attached hereto as Exhibit Tenant shall
have the right, upon reasonable prior written notice to Landlord, to audit and
review all bills, invoices and other supporting documentation for the Bid
Amount.
3. THE ALLOWANCE. In the Leases, Landlord agreed to contribute
$1,050,000 (the "Allowance," as defined herein) toward the cost of Landlord's
Work. Tenant has requested Landlord to increase the Allowance to $1,250,000,
which Landlord has agreed to do. Accordingly, notwithstanding anything to the
contrary in the Leases, the Allowance is hereby increased to
CONFIDENTIAL
$1,250,000.00, which amount shall, along with Landlord's willingness to make the
TI Loan, be Landlord's total contribution, in the aggregate, toward Landlord's
Work.
4. THE LOANS.
(a) Landlord and Tenant acknowledge and agree that the Loan described in
Addendum Section XXXV.D. of the Building B Lease (herein, the "HVAC
Loan") shall not be made available by Landlord to Tenant and,
accordingly, that all provisions of the Leases pertaining or
referring to the HVAC Loan are hereby deleted.
(b) In lieu of the HVAC Loan, Tenant has agreed to borrow and Landlord
has agreed to make available to Tenant a loan to be used by Tenant to
finance Excess System Costs and/or costs of the Tenant Improvements
and Other Tenant Improvements in excess of the Allowance, on the
following terms and conditions:
(i) The sum of Three Hundred Thousand and No/ 100ths Dollars
($300,000.00) (the TI Loan") shall be made available by
Landlord to cover Excess System Costs and the costs of
Landlord's Work in excess of the Allowance for which Tenant is
responsible as provided in paragraph 2 above and the following:
(A) Commencing August 11, 1995, the entire principal balance
of the TI Loan (i.e., the sum of $300,000) shall
commence to bear interest at the rate of eight percent
(80%) per year; provided, however, in no event shall the
interest payable on the TI Loan exceed the maximum
amount which Landlord may legally collect under the then
applicable usury law. In the event it is hereafter
determined by a court of competent jurisdiction that the
interest payable or paid by Tenant with respect to the
TI Loan shall exceed the maximum interest which Landlord
may collect under the then applicable usury law, then
(1) any excess amount previously paid by Tenant to
Landlord shall be credited against principal of the TI
Loan, or refunded to Tenant if no portion of the
principal of the TI Loan then remains unpaid and (2)
interest on the TI Loan subsequent to the date of such
determination shall be reduced to the maximum amount
which it is determined that Landlord may collect under
the then applicable usury law. Interest shall accrue on
the TI Loan from and after August 11, 1995. Any
interest accrued on the TI Loan as of the Lease
Commencement Date shall be added to principal as of the
Lease Commencement Date, and shall thereafter bear
interest as if principal.
(B) The TI Loan shall be repaid by Tenant to Landlord in
ninety-eight (98) consecutive monthly installments, and
shall be due and payable in full on the Expiration Date.
Monthly payments shall be due on the first day of each
calendar month in the Term, commencing with the month in
which the Lease Commencement Date occurs (if the Lease
Commencement Date falls on the first day of a month),
and otherwise with the month after the month in which
the Lease Commencement Date occurs. Prior to the date
that the first payment of the TI Loan is due, Landlord
shall calculate the total outstanding principal balance
of the TI Loan and interest accrued thereon (which, as
described in (A) above, shall accrue from and after
August 11, 1995 and shall be added to principal as of
the Lease Commencement Date) through the day before the
first payment is due (collectively, the "Beginning
Balance"), and shall advise Tenant of the amount of the
monthly payments, which shall be an amount sufficient to
amortize the Beginning Balance in full over the Term.
Tenant may also, at any time and from time to time,
prepay all or any part of the TI Loan without penalty.
Any such payment or prepayment shall he applied first to
the payment of accrued and unpaid interest and the
balance to principal.
(C) Notwithstanding the provisions of clause (B) above, the
entire then unpaid balance of the TI Loan and all
accrued and unpaid interest thereon shall be due and
payable in full upon the first to occur of:
(1) Any early termination of one or both of the Leases
pursuant to the provisions of Sections XVIII. XIX.
or XX. of the Leases. Upon any termination of one
or both of the Leases pursuant to any such Section,
Landlord shall have the right to seek recovery
2
CONFIDENTIAL
of such unpaid balance and accrued interest against
any insurance or condemnation proceeds payable to
Tenant, and Tenant hereby assigns its interest in
such proceeds to Landlord up to the full amount of
such proceeds or the then unpaid balance of the TI
Loan and all accrued interest thereon, whichever is
lesser. Exhaustion of such proceeds shall not
limit or defeat Tenant's liability to repay to
Landlord any remaining balance of such TI Loan and
the accrued and unpaid interest thereon; provided,
however, the TI Loan balance shall be reduced by
any proceeds actually recovered by Landlord, which
amount, if previously paid by Tenant to Landlord,
shall be delivered to Tenant.
(2) An Assignment of Tenant's interest in one or both
of the Leases or a Sublease by Tenant of all of the
premises which are the subject of one, or both of
the Leases. Notwithstanding anything to the
contrary herein, Landlord may require repayment (A)
in full of the then entire unpaid balance of the TI
Loan and all accrued and unpaid interest thereon as
a condition to any consent by Landlord to
Assignment under one or both of the Leases, or to a
Sublease of the entire premises which are the
subject of one or both of the Leases, and/or (B) of
that portion of the TI Loan (and the accrued and
unpaid interest thereon) in connection with a
Sublease of a portion of the premises which are the
subject of one or both of the Leases, which portion
is determined by multiplying the outstanding
balance of the TI Loan by a fraction, the numerator
of which is the portion of the premises to be
subleased and the denominator of which is the
Rentable Area of the entire premises; provided,
however, that the provisions of this subclause (B)
shall not apply to a Sublease of a portion of the
premises which are the subject of a Lease to an
entity which is under common control with Tenant.
(3) The occurrence of a default by Tenant under one or
both of the Leases, as defined in Section XX. of
the Leases. Upon the occurrence of such a default.
Landlord may seek to recover the then unpaid
balance of the TI Loan and all accrued and unpaid
interest thereon in any unlawful detainer or other
action instituted by Landlord upon such default.
Such balance shall be deemed due and payable in
full upon the occurrence of such default and may be
recovered in such action as if additional rent
whether or not included in any notice given by
Landlord to Tenant prior to or as a condition to
the institution of such action.
(D) Failure of Tenant to pay any amount due pursuant to
clause (B) above when due, which failure continues for
three (3) days after written notice thereof from
Landlord to Tenant (which notice shall be in lieu of,
and not in addition to, any notice required under
California Code of Civil Procedure Sec. 1161, ET SEQ.,
as amended), shall be deemed a default pursuant to the
Leases to the same extent as if such amount were
additional rent due pursuant to the Leases. In such
event, such unpaid amount (but not the accrued and
unpaid interest thereon) shall bear interest at the rate
provided for in Section XXI. A. of the Leases from the
date such payment was due and not paid until payment of
such amount in full and, upon the declaration by
Landlord of a default pursuant to Section XX.A.(2) of
one or both of the Leases, the entire then unpaid
balance of the TI Loan and all accrued and unpaid
interest thereon shall automatically be due and payable
in full and the unpaid principal balance shall bear
interest at the rate provided in Section XXI.A. of the
Leases from the date of acceleration until payment in
full. Upon the occurrence of any such default and
acceleration pursuant to this clause (D), Landlord shall
be entitled to all remedies against a defaulting tenant
pursuant to a written lease, including but not limited
to those provided in Section XX.B. of the Leases.
(E) The early termination of one or both of the Leases
pursuant to Section XVIII., XIX. or XX. thereof shall
not defeat or diminish the obligation
3
CONFIDENTIAL
of Tenant to repay to Landlord the TI Loan and all
accrued and unpaid interest thereon.
(ii) Landlord may credit against the proceeds of the TI Loan any and
all costs in excess of the Allowance which are not paid to
Landlord as and when the same are due, which are incurred by
Landlord in connection with the design and/or performance of
improvements to or enhancements of the System and/or Landlord's
Work, including without limitation any construction management
fee payable by Landlord (whether to an affiliate of Landlord or
otherwise) in connection therewith.
(c) It is clearly understood and agreed that the TI Loan shall be
available only for initial Landlord's Work performed prior to the
Lease Commencement Date.
5. WORK SCHEDULE. The four-page progress schedule attached hereto as
EXHIBIT B is hereby agreed by Landlord and Tenant to be the "Work Schedule"
defined in Section I of Exhibit C to the Leases, and is hereby approved by
Landlord and Tenant. In connection with such approval, Tenant agrees to
reasonably cooperate with Landlord and Landlord's architect, engineers,
construction manager and contractor to ensure timely completion of Landlord's
Work in accordance with its obligations under the Leases.
6. CHANGES BY TENANT. Any changes requested by Tenant in the Space
Plans, Working Drawings or otherwise pursuant to Exhibit C to the Lease shall,
notwithstanding Section 10 of Exhibit C to the Lease, be made in writing by
Xxxxx Xxxxxxxx or another officer of Tenant designated by written notice to
Landlord. Landlord will not accept or consider any proposed changes to the
Tenant Improvements requested by any other agent of Tenant, including without
limitation by Tenant's architect and/or coordinator. Landlord shall not be
required to proceed with the performance of Landlord's Work affected by any such
proposed change by any agent of Tenant other than Xxxxx Xxxxxxxx or such other
officer as Tenant may designate in writing and any resulting delay shall
constitute Tenant delay. Landlord's agents for the purpose of approving changes
in the Space Plans, Working Drawings, or otherwise pursuant to Exhibit C of the
Lease are Xxxxxx Xxxxx, Xxxx Xxxxxxx or such other person as Landlord may
designate in writing.
7. LEASE COMMENCEMENT DATE. Subject to Section III.C. of the Leases,
the Lease Commencement Date of the Leases is hereby revised to be the first to
occur of tender of delivery of the premises which are the subject of the Leases
to Tenant or September 1, 1995, and the Expiration Date of the Leases as hereby
revised to be the expiration of the ninety-eighth (98th) full calendar month
after the Lease Commencement Date. Notwithstanding any prior verbal or written
communications by Landlord and/or Tenant to the contrary, Landlord and Tenant
hereby acknowledge and agree that there has not occurred, as of the date hereof,
delay by Landlord with respect to Landlord's Work within the meaning of Section
III.C. and/or Exhibit C of the Leases, and hereby waive any and all rights to
claim to the contrary, and further specifically acknowledge that the sixty (60)
day period referred to in Section III.C. of the Leases shall be changed to
thirty (30) days, shall commence, if at all, on September 1, 1995, and shall be
subject to extension as provided in Section III. and for any mutual decision to
perform or proceed with Landlord's Work in such a manner as to cause delay in
the Lease Commencement Date which is confirmed in writing within two (2)
business days of such decision and which is not objected to in writing within
two (2) business days after such written confirmation is given.
8. LEASES IN EFFECT. Landlord and Tenant acknowledge and agree that the
Leases, as hereby amended, remain in full force and effect in accordance with
its terms. To the extent that any provision of this Amendment shall conflict
with the Leases as in effect prior to the date hereof, this Amendment shall
prevail.
4
CONFIDENTIAL
IN WITNESS WHEREOF, the undersigned have executed this Amendment to be
effective as of the day and year first above written.
LANDLORD TENANT
THE MUTUAL LIFE INSURANCE PEREGRINE SYSTEMS, INC, a Delaware
COMPANY OF NEW YORK, a New York corporation
corporation
By: /s/ [Unreadable Officer of Landlord] By: /s/ Xxxxx Xxxxxxxx
Title: [Unreadable] Title: VP Finance/CFO
9\11\95
By:
Title:
5
EXHIBIT A
[Graphic Omitted}
EXHIBIT A TO AMENDMENT
CONFIDENTIAL
EXHIBIT B
[Graphic Omitted}
Exhibit B to Amendment, Page 1
CONFIDENTIAL
EXHIBIT B
[Graphic Omitted}
Exhibit B to Amendment, Page 2
CONFIDENTIAL
EXHIBIT B
[Graphic Omitted}
Exhibit B to Amendment, Page 3
CONFIDENTIAL
EXHIBIT B
[Graphic Omitted}
Exhibit B to Amendment, Page 4
CONFIDENTIAL
BY CERTIFIED MAIL
RETURN RECEIPT REQUESTED
------------------------
June 14, 1996
Xx. Xxxxxxxx Xxxx
Peregrine Systems, Inc.
00000 Xxxx Xxxxx
Xxx Xxx, XX 00000
RE: Corporate Plaza (the "Building")
Dear Xx. Xxxx:
With reference to your lease of space in the Building, ARES Realty
Capital, Inc., investment manager for The Mutual Life Insurance Company of
New York ("Seller"), would like to advise you that Seller has this day sold,
transferred and assigned the Building and your lease to WCB II MORE Limited
Partnership, a Delaware limited partnership, having an address at 000
Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 ("Purchaser").
Please be further advised that any deposit under your lease and the
accrued interest thereon, if any, have been delivered to Purchaser.
ARES, Inc. ("Manager"), which has been managing the Building on
Seller's behalf, will continue to manage the Building on behalf of
Purchaser. From and after the date hereof, all rent checks should be made
payable to Purchaser, and delivered to the following address:
ARES Realty Capital, Inc., as agent for
WCB II MORE, Limited Partnership
00000 XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000
If you have any questions regarding this letter or the operation of
the Building, please contact Xxxxx Xxxxxx, at (000) 000-0000.
Sincerely yours,
SELLER: THE MUTUAL LIFE INSURANCE
COMPANY OF NEW YORK,
a New York Corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
ARES Realty Capital, Inc.
Authorized Signatory
PURCHASER: WBC II MORE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: /s/ Xxx Xxxxx
--------------------------------
By:
--------------------------------
Name:
Title:
[LETTERHEAD]
December 9, 1996
PEREGRINE SYSTEMS, INC.
12670 & 00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
RE: DEL MAR COOPERATE PLAZA
12670/12680 HIGH BLUFF
Dear Xxxxxxxx Xxxx:
Please be advised that the premises of which you are a tenant at the above
referenced property, and the landlord's interest in your lease, were
purchased on December 12, 1996 by CarrAmerica Realty Corporation, a Maryland
corporation ("Owner"). Any security deposits and Letters of Credit were
transferred to Owner.
Any notices required to be sent pursuant to your lease and any inquiries or
concerns should be directed to:
CarrAmerica Realty Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Mr. Xxxxxx Xxxxxxx
All future rent payments should also be sent to this address, unless Owner
informs you otherwise.
Sincerely,
WCB II MORE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB II MORE, INC.
a Delaware corporation
General Partner
By: /s/ Xxxx X. Xxxxx
-----------------------------
Xxxx X. Xxxxx
Its: Senior Vice President-Southern California
