EXHIBIT 10.KK
OFFICE LEASE
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15253 BAKE PARKWAY BUILDING
Magellan Property Corporation,
an Arizona corporation
as Landlord,
and
Matsushita Avionics Systems Corporation,
a Delaware corporation
as Tenant.
Dated April __, 1996
15253 BAKE PARKWAY BUILDING
[Matsushita Avionics Systems]
SUMMARY OF BASIC LEASE INFORMATION
The undersigned hereby agree to the following terms of this Summary of Basic
Lease Information (the "Summary"). This Summary is hereby incorporated into and
made a part of the attached Office Lease (this Summary and the Office Lease to
be known collectively as the "Lease") which pertains to the office building (the
"Building") which is located at 00000 Xxxx Xxxxxxx Xxxxxxxx, Xxxxxx, Xxxxxxxxxx
00000. Each reference in the Office Lease to any term of this Summary shall
have the meaning as set forth in this Summary for such term. In the event of a
conflict between the terms of this Summary and the Office Lease, the terms of
the Office Lease shall prevail. Any capitalized terms used herein and not
otherwise defined herein shall have the meaning as set forth in the Office
Lease.
TERMS OF LEASE
(References are to
the Office Lease) DESCRIPTION
--------------------- -----------
1. Date: April __, 1996.
2. Landlord: Magellan Property Corporation,
an Arizona corporation
3. Address of Landlord Magallen Property Corporation
(Section 29.16): 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxx
4. Tenant: Matsushita Avionics Systems Corporation,
a Delaware corporation
5. Address of Tenant Matsushita Electric Corporation of America
(Section 29.16): 0 Xxxxxxxxx Xxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx, Esq.
15253 BAKE PARKWAY BUILDING
[Matsushita Avionics Systems]
(i)
and Xxxxxxxx, Xxxx and Xxxxxxxxxx & Xxxxxxx
000 X Xxxxxx , Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx, Esq.
6. Premises (Article 1): Approximately 63,417 rentable square feet of space in the
aggregate, consisting of the entire Building as set forth in
Exhibit A attached hereto.
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7. Term (Article 2).
7.1 Lease Term: 7 years
7.2 Lease Commencement Date: July 15, 1996 The Lease Commencement Date shall be one hundred
twenty (120) days after the date Landlord delivers possession of
the Premises to Tenant so that Tenant can begin construction of
the Tenant Improvements, provided, the one hundred twenty (120)
days shall be extended by delays caused by force majeure and
Landlord Caused Delays (as defined in Work Letter Paragraph 5.1).
Landlord shall cooperate with Tenant to assist Tenant in
expediting the necessary building permits to construct the Tenant
Improvements.
7.3 Lease Expiration Date: July 14, 2003 Seven (7) years after the Lease Commencement Date.
8. Base Rent (Article 3)
Monthly Rental Rate
Annual Monthly Installment per Rentable Square
Lease Month Base Rent of Base Rent Foot
----------- ----------- ------------------- -------------------
1 thru 8 $ 0.00 $ 0.00 $ 0.00
9 thru 12* $550,553.64 $45,879.47 $10.92
00000 XXXX XXXXXXX BUILDING
[Matsushita Avionics Systems]
(ii)
13 thru 30 $692,513.64 $57,709.47 $10.92
31 thru 60 $715,343.76 $59,611.98 $11.28
61 thru 84 $741,978.90 $61,831.58 $11.70
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*Base Rent payable on only 50,417 square feet of the Premises during months
9 thru 12 of the Lease Term
9. Brokers (Section 29.20): Xxxxxx-Xxxxxxx Commercial
0000 Xxxx Xxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxx (Landlord's Broker)
and
Xxxxxxx Realty Corporation
0000 XxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xx. Xxxx X. Xxxxxx (Tenant's Broker)
10. Guarantor Matsushita Electric Corporation of America,
(Section 29.15): a Delaware corporation
15253 BAKE PARKWAY BUILDING
[Matsushita Avionics Systems]
(iii)
INDEX
SUBJECT MATTER PAGE
ARTICLE -------------- ----
ARTICLE 1 REAL PROPERTY, BUILDING AND PREMISES 1
ARTICLE 2 LEASE TERM 1
ARTICLE 3 BASE RENT 5
ARTICLE 4 ADDITIONAL RENT 5
ARTICLE 5 USE OF PREMISES 8
ARTICLE 6 SERVICES AND UTILITIES 8
ARTICLE 7 REPAIRS 10
ARTICLE 8 ADDITIONS AND ALTERATIONS 12
ARTICLE 9 COVENANT AGAINST LIENS 13
ARTICLE 10 INSURANCE 13
ARTICLE 11 DAMAGE AND DESTRUCTION 16(1)
15253 BAKE PARKWAY BUILDING
[Matsushita Avionics Systems]
(iv)
ARTICLE 12 NONWAIVER 18
ARTICLE 13 CONDEMNATION 18
ARTICLE 14 ASSIGNMENT AND SUBLETTING 19
ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP AND
REMOVAL OF TRADE FIXTURES 21
ARTICLE 16 HOLDING OVER 22
ARTICLE 17 ESTOPPEL CERTIFICATES 22
ARTICLE 18 SUBORDINATION 23
ARTICLE 19 DEFAULTS; REMEDIES 23
ARTICLE 20 OF QUIET ENJOYMENT 25
ARTICLE 21 FORCE MAJEURE 25
ARTICLE 22 ATTORNEYS' FEES 25
ARTICLE 23 SIGNS 26
15253 BAKE PARKWAY BUILDING
[Matsushita Avionics Systems]
(v)
ARTICLE 24 COMPLIANCE WITH LAW 26
ARTICLE 25 LATE CHARGES 27
ARTICLE 26 LANDLORD'S RIGHT TO CURE
DEFAULT; PAYMENTS BY TENANT 27
ARTICLE 27 ENTRY BY LANDLORD 28
ARTICLE 28 TENANT PARKING 28
ARTICLE 29 MISCELLANEOUS PROVISIONS 28
EXHIBITS
A OUTLINE OF PREMISES
A-1 OUTLINE OF THE REAL PROPERTY
B TENANT WORK LETTER
C FORM OF NOTICE OF LEASE TERM DATES
D FORM OF LEASE TERMINATION AGREEMENTRULES AND REGULATIONS
E FORM OF TENANT'S ESTOPPEL CERTIFICATE
F BUILDING SIGNAGE
G GUARANTY OF LEASE
15253 BAKE PARKWAY BUILDING
[Matsushita Avionics Systems]
(vi)
INDEX OF MAJOR DEFINED TERMS
LOCATION
OF DEFINITION
DEFINED TERMS IN OFFICE LEASE
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Additional Rent.................................Section 4.1
Base Rent.........................................Article 3
Building........................................Section 1.1
Direct Expenses...............................Section 4.2.3
Expense Year..................................Section 4.2.4
Force Majeure.................................Section 29.17
Hazardous Material..........................Section 29.29.1
Lease Commencement Date...........................Article 2
Lease Expiration Date.............................Article 2
Lease Term........................................Article 2
Lease Year........................................Article 2
Notices.......................................Section 29.19
Operating Expenses............................Section 4.2.5
Parking Areas...................................Section 1.1
Premises........................................Section 1.1
Real Property...................................Section 1.1
Rent............................................Section 4.1
Security Deposit.................................Article 21
Statement.....................................Section 4.3.2
Tax Expenses..................................Section 4.2.7
Transfer Notice................................Section 14.1
Transfer Premium.............................Section 14.3.1
Transferee.....................................Section 14.1
Transfers.........................Sections 14.1, 14.6, 14.7
00000 XXXX XXXXXXX BUILDING
[Matsushita Avionics Systems]
(vii)
OFFICE LEASE
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This Office Lease, which includes the preceding Summary of Basic Lease
Information (the "Summary") attached hereto and incorporated herein by this
reference (the Office Lease and Summary to be known sometimes collectively
hereafter as the "Lease"), dated as of the date set forth in Section 1 of the
Summary, is made by and between Magellan Property Corporation, an Arizona
corporation ("Landlord"), and Matsushita Avionics Systems Corporation, a
Delaware Corporation ("Tenant").
ARTICLE 1
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REAL PROPERTY, BUILDING AND PREMISES
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1.1 Real Property, Building and Premises. Upon and subject to the terms,
------------------------------------
covenants and conditions hereinafter set forth in this Lease, Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the premises set forth
in Section 6 of the Summary (the "Premises"), which Premises consists of the
entire "Building," as that term is defined in this Section 1.1. The outline of
the floor plan of each floor the Premises is set forth in Exhibit A attached
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hereto. The "Building" is located at 00000 Xxxx Xxxxxxx, Xxxxxx, Xxxxxxxxxx
00000. The Building, the surface parking areas, outside land surrounding the
Building which are, subject to the provisions of this Lease, appurtenant to or
servicing the Building, and the land upon which any of the foregoing are
situated, are herein sometimes collectively referred to as the "Real Property,"
which Real Property is outlined on the "Outline of the Real Property," attached
hereto as Exhibit A-1.
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1.2 Verification of Rentable Square Feet of Premises and Building. For
---------------------------------------------
purposes of this Lease, "rentable square feet" shall mean the lesser of 63,417
square feet or the square footage calculated by use of the "drip line" method of
measurement; i.e., the square footage determined by a hypothetical flooding of
---
the roof of the Building and measuring from the line where the water would drip
to the ground. The rentable square feet of the Premises and Building are
subject to verification and audit which shall be completed prior to the
occupancy of the Premises by Tenant and by Landlord's planners and designers.
In the event that such planner/designer determines that the amounts thereof are
different from those set forth in this Lease, all amounts, percentages and
figures appearing or referred to in this Lease based upon such incorrect amount
(including, without limitation, the amount of the "Rent" as that term is defined
in Article 4 of this Lease) shall be modified in accordance with such
determination. If such determination is made, it will be confirmed in writing
by Landlord to Tenant.
1.3 Delivery of the Premises. Upon the full execution and delivery of
------------------------
this Lease, Landlord shall deliver the Premises to Tenant. Except as
specifically set forth in this Lease and in the Tenant Work Letter attached to
this Lease as Exhibit B, Landlord shall not be obligated to provide or pay for
---------
any improvement work or services related to the improvement of the Premises.
Tenant acknowledges that Landlord has made no representation or warranty
regarding the condition of the Premises or the Building except as specifically
set forth in this Lease and the Tenant Work Letter.
ARTICLE 2
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LEASE TERM
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2.1 Initial Term. The terms and provisions of this Lease shall be
------------
effective as of the date of this Lease except for the provisions of this Lease
relating to the payment of Rent. The term of this Lease and any validly
exercised option (the "Lease Term") shall be as set forth in Section 7.1 of the
Summary and shall commence on the date (the "Lease Commencement Date") set forth
in Section 7.2 of the Summary (subject, however, to the terms of Section 5 of
the Tenant Work Letter), and shall terminate on the date (the "Lease Expiration
Date") set forth in Section 7.3 of the Summary, unless this Lease is sooner
terminated as hereinafter provided. For purposes of this Lease, the term "Lease
Year" shall mean each consecutive twelve (12) month period during the Lease
Term. At any time within six (6) months following the Lease Commencement Date,
Landlord may deliver to Tenant a notice of Lease Term dates in the form as set
forth in Exhibit C, attached hereto, which notice Tenant shall execute and
---------
return to Landlord within ten (10) business days of receipt thereof (provided
that if said notice is not factually correct, Tenant shall make any necessary
revisions prior to returning such notice to Landlord). Notwithstanding the
definition of the Lease Commencement Date for the Premises set forth in Section
3.2 of the Summary, if Tenant commences business operations from any portion of
the Premises prior to the occurrence of the Lease Commencement Date (the "Pre-
Occupancy Space"), all of the terms and conditions of this Lease shall apply to
that portion of the Premises containing the Pre-Occupancy Space, except that
Tenant shall have no obligation to pay Base Rent (but will be obligated to pay
Direct Expense payments) during the period commencing on the date Tenant
commences business operations from the applicable Pre-Occupancy Space and
continuing until the Lease Commencement Date (the "Pre-Occupancy Period"). For
purposes of the immediately preceding sentence, Tenant will not be deemed to
have "commenced business operations" if Tenant has entered the Building for the
purpose of performing its work of construction in the Premises; rather, the
"commencement of business operations" will occur when Tenant is conducting
business from the Premises in its normal course with one or more employees. At
such time as the Lease Commencement Date occurs, and Tenant has relocated its
business operations from the buildings located at 16255, 26267 and 00000 Xxxxxx
Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxx, into the Premises, the rent shall cease in the
former premises pursuant to a Lease Termination Agreement, in the form attached
hereto as Exhibit D. Tenant shall have the right to commence business
---------
operations from any portion of the Premises during the Pre-Occupancy Period,
provided that (i) Tenant shall give Landlord at least ten (10) days prior notice
of any such use of the Premises, and (ii) a certificate of occupancy or its
equivalent permitting occupancy shall have been issued by the appropriate
governmental authorities for the Pre-Occupancy Space.
2.2. Option Terms.
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2.2.1 Option Rights. Landlord hereby grants Tenant two (2) options
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to extend the Lease Term for a period of five (5) years each (the "Option
Terms"), which option shall be exercisable only by written notice delivered by
Tenant to Landlord as provided below, provided that, as of the date of delivery
of each of such notices there is not an outstanding Event of Default by Tenant.
Upon the proper exercise of an option to extend, the Lease Term, as it then
applies to the Premises, shall be extended for a period of five (5) years. The
rights contained in this Section 2.2 may only be exercised by Tenant, its
"Affiliates" (as defined in Section 14.5 below) or an assignee of Tenant to whom
an assignment of this Lease has been made in accordance with Article 14 (and not
any sublessee or other transferee of Tenant's interest in this Lease).
2.2.2 Option Rent.
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2.2.2.1 Rent. The Rent payable by Tenant during the Option
----
Term (the "Option Rent") shall be equal to (A) ninety-five percent (95%) of the
face or stated rental rate which face or stated rate may be a flat or escalating
rate, as applicable, and (B) ninety-five percent (95%) of the other non-
discounted economic terms, at which, as of the commencement of the Option Term,
tenants are leasing non-expansion, non-affiliated, non-sublease, non-encumbered,
non-equity space comparable in size, location and quality to the Premises for a
term of five (5) years, which comparable space is located in other comparable
buildings and building projects located in the Irvine area of Southern
California, of similar age, location and quality of initial construction (the
"Comparable Buildings") taking into consideration, and accounting for any
relevant differences in all or any of the following to the extent applicable:
(a) Use, location, size and/or floor level(s) of the space in
question;
(b) The time the particular rental rate under consideration
was agreed upon and became or is to become effective;
(c) Abatement or free rent provisions reflecting free rent
(with respect to base rental, operating expenses, real estate taxes and/or
parking charges) or absence thereof during any period of the lease term, except
as set forth below;
(d) Inclusion (or absence) of parking charges in rental,
and/or, subject to the terms of Article 28, below, the extent of associated
parking rights and the cost thereof and the amount of parking available for use
by the tenant (it being understood that Tenant shall not be required to pay for
parking, which shall remain at a ratio of six (6) spaces per 1,000 square feet
of rentable area in the Building);
(e) Lease takeovers/assumptions;
3
(f) Relocation/moving allowances;
(g) Space planning allowances;
(h) Tenant improvement, refurbishment and/or repainting
allowances;
(i) Any other concessions or inducements;
(j) The base year or expense-stop, if any, applicable to such
comparable space;
(k) Any other adjustments (including by way of Consumer Price
Index or other indexes) to base rental; and
(l) Term of lease.
Notwithstanding the foregoing, however, in calculating the Option
Rent, no consideration shall be given to (1) any period of rent abatement given
such tenants in connection with the construction of improvements in such
comparable space or (2) the presence or absence of a brokerage commission in
connection with Tenant's exercise of the Option Term, or in connection with such
comparable deals.
2.2.2.2 Concessions. The arbitrator shall inform Landlord and
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Tenant of the amount of any concessions to be granted Tenant pursuant to items
(e) through (i), above (the "Option Concessions") as a component of the Option
Rent. Landlord or Tenant may make a binding election that, in lieu of granting
any or a portion the Option Concessions to Tenant in the form and at the times
as granted in the comparable transactions, the rental rate component of the
Option Rent shall be adjusted to be an effective rental rate which takes into
consideration the total present dollar value (with interest at the Interest
Rate) of that portion of such Option Concessions which Landlord or Tenant has
elected not be granted to Tenant (in which case that portion of the Option
Concessions evidenced in the effective rental rate shall not be granted to
Tenant).
2.2.3 Exercise of Option. The options contained in this Section 2.2
------------------
shall be exercised by Tenant, if at all, and only in the following manner: (i)
Tenant shall deliver written notice to Landlord (the "Option Interest Notice")
not more than nineteen (19) months nor less than fifteen (15) months prior to
the expiration of the initial Lease Term or the initial Option Term, as
applicable, stating that Tenant is interested in exercising its option, and
within thirty (30) days after receipt of Tenant's Option Interest Notice
Landlord shall deliver to Tenant notice containing Landlord's proposed Option
Rent; (ii) Landlord and Tenant shall thereafter use their reasonable good-faith
efforts to agree upon the Option Rent before the first day of the thirteenth
(13th) month prior to the expiration of the initial Lease Term or the initial
Option Term, as applicable; (iii) whether or not Tenant has previously delivered
an Option Interest Notice to Landlord, not later
4
than the first day of the thirteenth (13th) month prior to the expiration of the
initial Lease Term or the initial Option Term, as applicable, Tenant may, by
notice to Landlord, request Landlord's determination of the Option Rent which
Landlord would submit to arbitration, if arbitration were to occur under Section
1.5.7, above, and within ten (10) business days of such request, Landlord and
Tenant shall each concurrently deliver to the other the determinations of the
Option Rent that each would submit to arbitration if arbitration were to occur
under Section 1.5.7, above (the "Arbitration Option Rent"); and (iv) if Tenant
wishes to exercise its option Tenant shall, on or before the date occurring
twelve (12) months prior to the expiration of the initial Lease Term or the
initial Option Term, as applicable, exercise the option by delivering written
notice thereof to Landlord and upon, and concurrent with, such exercise Tenant
may, at its option, elect to arbitrate the Option Rent, in which case the
parties shall follow the procedure, and the Option Rent shall be determined, as
set forth in Section 2.2.4, below. Notwithstanding the foregoing, if Tenant
fails to deliver the Option Interest Notice, Tenant may nevertheless, on or
before the date which is twelve (12) months prior to the expiration of the
initial Lease Term or the initial Option Term, as applicable, deliver to
Landlord notice that Tenant is thereby irrevocably electing to exercise its
option to extend the Lease Term, in which case the Option Rent shall be
determined pursuant to the procedure set forth in Section 2.2.4, below.
2.2.4 Determination of Option Rent. In the event Tenant timely
----------------------------
elects to arbitrate the Option Rent, pursuant to the terms of Section 2.2.3,
Landlord and Tenant shall attempt to agree upon the Option Rent using their best
good-faith efforts. If Landlord and Tenant fail to reach agreement within
fifteen (15) days following Tenant's election to arbitrate (the "Outside
Agreement Date"), then each party shall make a separate determination of the
Option Rent within ten (10) business days after the Outside Agreement Date, and
such determinations (which for purposes of this Section 2.2.4 shall also be
known as "Arbitration Option Rents") shall be submitted to arbitration in
accordance with Sections 2.2.4.1 through 2.2.4.7, below; provided, however, that
if the Arbitration Option Rents have been established pursuant to Section 2.2.3,
then such Arbitration Option Rents shall be submitted to arbitration in
accordance with Sections 2.2.4.1 through 2.2.4.7, below.
2.2.4.1 Landlord and Tenant shall each appoint one arbitrator
who shall by profession be a real estate broker or appraiser who shall have been
active over the five (5) year period ending on the date of such appointment in
the leasing (or appraisal, as the case may be) of Irvine, California-area
commercial buildings such as the Comparable Buildings, exclusive of any broker
from any brokerage firm currently representing (or who had previously
represented within the preceding two (2) year period) either party or any
affiliate thereof. The determination of the arbitrators shall be limited solely
to the issue area of whether Landlord's or Tenant's submitted Arbitration Option
Rent is the closest to the actual Option Rent as determined by the arbitrators,
taking into account the requirements of Section 2.2.2. Each such arbitrator
shall be appointed within fifteen (15) days after the applicable Outside
Agreement Date.
5
2.2.4.2 The two arbitrators so appointed shall within fifteen
(15) days of the date of the appointment of the last appointed arbitrator agree
upon and appoint a third arbitrator who shall be qualified under the same
criteria set forth hereinabove for qualification of the initial two arbitrators.
2.2.4.3 The three arbitrators shall within thirty (30) days of
the appointment of the third arbitrator reach a decision as to whether the
parties shall use Landlord's or Tenant's submitted Arbitration Option Rent and
shall notify Landlord and Tenant thereof.
2.2.4.4 Subject to the following provisions, the decision of
the majority of the three arbitrators shall be binding upon Landlord and Tenant.
2.2.4.5 If either Landlord or Tenant fails to appoint an
arbitrator within 15 days after the applicable Outside Agreement Date, the
arbitrator appointed by one of them shall reach a decision, notify Landlord and
Tenant thereof, and, subject to the provisions of this Section 2.2.4, such
arbitrator's decision shall be binding upon Landlord and Tenant.
2.2.4.6 If the two arbitrators fail to agree upon and appoint a
third arbitrator, or both parties fail to appoint an arbitrator, then the
appointment of the third arbitrator or any arbitrator shall be dismissed and the
matter to be decided shall be forthwith submitted to arbitration under the
provisions of the American Arbitration Association, but subject to the
instruction set forth in this Section 2.2.4.
2.2.4.7 The cost of the arbitration shall be paid by the party
whose submitted Arbitration Option Rent is not selected.
ARTICLE 3
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BASE RENT
---------
Tenant shall pay, without notice or demand, to Landlord at the address set
forth in Section 3 of the Summary, or at such other place in the continental
United States as Landlord may from time to time designate in writing, by check
drawn upon a bank located in the United States of America, base rent ("Base
Rent") as set forth in Section 8 of the Summary, payable in equal monthly
installments as set forth in Section 8 of the Summary in advance on or before
the first day of each and every month during the Lease Term, without any setoff
or deduction whatsoever, except as otherwise expressly provided in this Lease.
If any rental payment date (including the Lease Commencement Date) falls on a
day of the month other than the first day of such month or if any rental payment
is for a period which is shorter than one month, then the rental for any such
fractional month shall be a proportionate amount of a full calendar month's
rental based on the proportion that the number of days in such fractional month
bears to the number of days in the calendar month during which such fractional
month occurs. All other payments or adjustments
6
required to be made under the terms of this Lease that
require proration on a time basis shall be prorated on the same basis.
ARTICLE 4
---------
ADDITIONAL RENT
---------------
4.1 Additional Rent. In addition to paying the Base Rent specified in
---------------
Article 3 of this Lease, and except to the extent which Tenant elects to manage
the Real Property and pay such expenses on a direct basis (subject to a review
thereof by Landlord on a semi-annual basis, with Landlord reserving the right to
reinstate itself in the management role if Landlord determines, in good faith
that Tenant is not performing its management responsibilities in a manner which
appropriately preserves the value of the Real Property) Tenant shall pay as
additional rent for each "Expense Year," as that term is defined in Section
4.2.4 of this Lease, all of the annual "Direct Expenses," as that terms is
defined in Section 4.2.2 of this Lease. Such additional rent, together with any
and all other amounts payable by Tenant to Landlord pursuant to the terms of
this Lease, shall be hereinafter collectively referred to as the "Additional
Rent." The Base Rent and Additional Rent are herein collectively referred to as
the "Rent." All amounts payable to under this Article 4 as Additional Rent
shall be payable for the same periods and in the same manner and place as the
Base Rent. All direct payments by Tenant to vendors, suppliers, and other
providers of services to the Premises shall be timely made. Without limitation
on other obligations which shall survive the expiration of the Lease Term, the
obligations of Tenant and Landlord provided for in this Article 4 shall survive
the expiration of the Lease Term.
4.2 Definitions. As used in this Article 4, the following terms shall
-----------
have the meanings hereinafter set forth:
4.2.1 "Calendar Year" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.
4.2.2 "Direct Expenses" shall mean "Operating Expenses" and "Tax
Expenses."
4.2.3 "Expense Year" shall mean each Calendar Year.
4.2.4 "Operating Expenses" shall mean all direct and indirect costs,
expenses, and assessments charged to the Real Property with respect to its
operation (including insurance premiums for the insurance policies described in
Section 10.2, 10.3 and 10.5 below), management, use, maintenance and repair,
other than those which are set forth in Section 6.1 below.
4.2.5 "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees or other impositions of every kind and
nature, whether general, special, ordinary or extraordinary, (including, without
limitation, real estate taxes, general and special
7
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Building),
which are allocable to a particular Expense Year (without regard to any
different fiscal year used by such governmental or municipal authority) in
connection with the ownership, leasing and operation of the Real Property or
Landlord's interest therein.
4.2.5.1 Tax Expenses shall include, without limitation:
(i) Any governmental tax on Landlord's rent, right to rent or
other income from the Real Property or as against Landlord's business of
leasing any of the Real Property;
(ii) Any assessment, tax, fee, levy or charge in addition to,
or in substitution, partially or totally, of any assessment, tax, fee, levy
or charge previously included as of the date hereof within the definition
of real property tax;
(iii) Any governmental assessment, tax, fee, levy, or charge
allocable to or measured by the area of the Premises or the rent payable
hereunder, including, without limitation, any gross income tax with respect
to the receipt of such rent; and
(iv) Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises.
4.2.5.2 With respect to any assessment otherwise includable within
Tax Expenses that may be levied against or upon the Real Property and that under
the laws then in force may be evidenced by improvement or other bonds, or may be
paid in annual installments, there shall be included within the definition of
Tax Expenses with respect to any tax fiscal year only the amount currently
payable on such bonds, including interest, for such tax fiscal year, or the
current annual installment for such tax fiscal year, in each case utilizing the
payment or installment method which will minimize the amount of Tax Expenses.
4.2.5.3 If the method of taxation of real estate prevailing at the
time of execution hereof shall be, or has been, altered so as to cause the whole
or any part of the taxes now, hereafter or heretofore levied, assessed or
imposed on real estate to be levied, assessed, or imposed upon Landlord, wholly
or partially, as a capital levy or otherwise, or on or measured by the rents
received therefrom, then such new or altered taxes attributable to the Real
Property shall be included within the term "Tax Expenses" except that the same
shall not include any enhancement of said tax attributable to other income of
Landlord.
8
4.2.5.4 Subject to the provisions of this Lease, any reasonable
expenses reasonably incurred by Landlord in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are paid.
4.2.5.5 Tax refunds shall be deducted from Tax Expenses in the
Expense Year to which the same are attributable.
4.2.5.6 Subject to the terms of Section 4.5, below, if Tax
Expenses for any period during the Lease Term or any extension thereof are
increased after payment thereof by Landlord for any reason, including, without
limitation, error or reassessment by applicable governmental or municipal
authorities, such increase shall be included in Tax Expenses in the Expense Year
to which such increase is attributable, and Tenant shall pay Landlord Tenant's
Share of such increased Tax Expenses to the extent there exists an Excess for
such Expense Year.
4.2.5.7 Notwithstanding anything to the contrary contained in
this Lease, there shall be excluded from Tax Expenses (i) all excess profits
taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and
succession taxes, estate taxes, federal and state income taxes, and other taxes
to the extent applicable to Landlord's general or net income (as opposed to
rents, receipts or income attributable to operations at the Building), (ii) any
items included as Operating Expenses, and (iii) any items paid by Tenant under
Section 4.4 of this Lease.
4.3 Calculation and Payment of Additional Rent.
------------------------------------------
4.3.1 Payment Direct Expenses. For any Expense Year ending or
-----------------------
commencing within the Lease Term Tenant shall pay directly, or, as applicable,
to Landlord, in the manner set forth in Section 4.3.2, below, and as Additional
Rent, an amount equal to the Direct Expenses for such Expense Year.
4.3.2 Statement of Actual Direct Expenses and Payment by Tenant.
---------------------------------------------------------
Landlord shall endeavor to give to Tenant on or before the first day of April
following the end of each Expense Year, a statement (the "Statement"), certified
by an appropriate official of Landlord or independent certified public
accountant, which shall state that portion of the Direct Expenses not directly
paid by Tenant, and which portion is allocable to such preceding Expense Year.
Tenant shall pay, within thirty (30) days after receipt of the Statement, the
full amount of the Landlord-billed Direct Expenses for such Expense Year, less
the amounts, if any, paid during such Expense Year as an "Estimated Payment," as
that term is defined in Section 4.3.3, below. In the event the amount paid by
Tenant as an Estimated Payment exceeds the amount of the Landlord-billed Direct
Expenses, Tenant shall receive a credit against the next payment of Additional
Rent due under this Lease. The failure of Landlord to timely furnish the
Statement for any Expense Year shall not prejudice either party from enforcing
its rights under this Article 4; provided, however, that except with regard to
the recalculation of those items of Direct Expenses which are not under
Landlord's reasonable control, specifically including Tax Expenses and public
utility charges, Landlord shall not be permitted to add to Direct Expenses or
xxxx for the first time any portion of
9
Direct Expenses more than three (3) years following the last day of the
Expense Year to which such Direct Expenses relate.
Subject to the provisions of this Lease, even though the Lease Term
has expired and Tenant has vacated the Premises, when the final determination is
made of the Direct Expenses for the Expense Year in which this Lease terminates,
(i) if Tenant has not paid all of the Direct Expenses for such Expense Year,
Tenant shall pay to Landlord, within thirty (30) days after receipt of a
reasonably detailed xxxx therefor, an amount as calculated pursuant to the
provisions of Section 4.3.1 of this Lease, and (ii) if Tenant has made an
overpayment of Additional Rent, Landlord shall pay the same to Tenant within
thirty (30) days of such determination. The provisions of this Section 4.3.2
shall survive the expiration or earlier termination of the Lease Term.
4.3.3 Statement of Estimated Direct Expenses. In addition, Landlord
--------------------------------------
shall endeavor to give Tenant a yearly expense estimate statement (the "Estimate
Statement") within one hundred twenty (120) days of the commencement of each
Expense Year, which Estimate Statement shall set forth Landlord's reasonable
estimate (the "Estimate") of what the total amount of Landlord-billed Direct
Expenses for the then-current Expense Year shall be (the "Estimated Payment").
The failure of Landlord to timely furnish the Estimate Statement for any Expense
Year shall not preclude Landlord from enforcing its rights to collect any
Estimated Payment under this Article 4. Tenant shall pay, within thirty (30)
days of Tenant's receipt of such Estimate Statement, a fraction of the Estimated
Payment for the then-current Expense Year (reduced by any amounts paid pursuant
to the last sentence of this Section 4.3.3). Such fraction shall have as its
numerator the number of months which have elapsed in such current Expense Year
to the month of such payment, both months inclusive, and shall have twelve (12)
as its denominator. Until a new Estimate Statement is furnished, Tenant shall
pay monthly, with the monthly Base Rent installments, an amount equal to one-
twelfth (1/12) of the total Estimated Payment set forth in the previous Estimate
Statement delivered by Landlord to Tenant.
4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible.
----------------------------------------------------------------
Tenant shall reimburse Landlord, within thirty (30) days of Tenant's receipt of
a reasonably detailed written demand accompanied by appropriate supporting
evidence (but in any case prior to delinquency), for any and all taxes or
assessments required to be paid by Landlord (except to the extent included in
Tax Expenses by Landlord), excluding state, local and federal personal or
corporate income taxes measured by the net income of Landlord from all sources
and estate and inheritance taxes, whether or not now customary or within the
contemplation of the parties hereto, when said taxes are required to be paid by
Tenant and said taxes are measured by or reasonably attributable to the cost of
Tenant's equipment, furniture, fixtures and other personal property located in
the Premises, or by the cost of all leasehold improvements made in or to the
Premises by or for Tenant.
10
ARTICLE 5
---------
USE OF PREMISES
---------------
5.1 Permitted Use. Tenant shall use the Premises for general office
-------------
purposes, manufacturing, warehousing, testing, assembly and for other purposes
ancillary thereto and consistent therewith and for any other legally permitted
purpose.
5.2 Prohibited Uses. Tenant shall not use the Premises or any part
---------------
thereof for any use or purpose contrary to the provisions of the Declaration of
the Covenants, Conditions and Restrictions for the Irvine Spectrum recorded on
___________ as Instrument No. ______, Official Records of Orange County,
California (the "CC&Rs"). Tenant shall comply with all other recorded
covenants, conditions and restrictions now or (so long as no negative impact
affects the Premises or Tenant's occupancy of the Premises) hereafter affecting
the Premises. Tenant shall not use or allow another person or entity to use any
part of the Premises for the storage, use, treatment, manufacture or sale of
"Hazardous Material" as that term is defined in Section 29.24 of this Lease.
ARTICLE 6
---------
SERVICES AND UTILITIES
----------------------
6.1 In General. Tenant will be responsible, at its sole cost and expense,
----------
for the furnishing of all services and utilities to the Premises, including, but
not limited to heating, ventilation and air-conditioning, electricity, water,
telephone janitorial and security services.
6.2 Interruption of Use. Except as provided in Sections 6.4 and 19.5,
------------------- ---------------------
below, Tenant agrees that Landlord shall not be liable for damages, by abatement
of Rent or otherwise, for failure of Tenant to receive any service (including
telephone and telecommunication services) or utility for any reason whatsoever,
or for any diminution in the quality or quantity thereof, and such failures or
delays or diminution shall never be deemed to constitute an eviction or
disturbance of Tenant's use and possession of the Premises or relieve Tenant
from paying Rent or performing any of its obligations under this Lease, except
as provided in this Lease to the contrary. Furthermore, Landlord shall not be
liable under any circumstances for a loss of, or injury to, property or for
injury to, or interference with, Tenant's business, including, without
limitation, loss of profits, however occurring, through or in connection with or
incidental or any such failure of Tenant to receive any services or utilities.
6.3 No Obligation. Landlord shall have no obligation to provide any
-------------
services or utilities to the Premises including, but not limited to heating,
ventilation and air-conditioning, electricity, water, telephone, janitorial and
security services.
11
6.4 Abatement Conditions.
--------------------
6.4.1 Notwithstanding anything to the contrary contained in this
Lease, if Tenant is prevented from using all or a portion of the Premises for
its normal business operations, and Tenant does not, in fact, use the all or a
portion of the Premises for a period of three (3) consecutive business days or
more, (i) due to any service or utility, meaning HVAC, electricity or water
(collectively, the "Essential Services"), not being provided to the Premises, or
portion thereof, as required by the terms of this Lease, (ii) because of the
presence, in a form or concentration in violation of applicable law then in
effect, of Hazardous Materials regarded as unhealthful under applicable
regulations then in effect in or about the Premises (which Hazardous Materials
were not brought onto the Premises by Tenant or Tenant's employees, agents, or
licensees), or (iii) due to a "Service Interruption" (meaning an interruption in
services as described in Section 6.2 above), because Tenant does not have access
to the Building, the Premises, or portion thereof, and such prevention from use
is not caused by Tenant and/or its agents, or if caused by Tenant and/or its
agents, such prevention from use is covered by insurance required to be carried
by Landlord under the provisions of Article 10 of this Lease, the following
Sections 6.4.1.1 and 6.4.1.2 shall apply (the conditions set forth in items (i)
through (iii), above, to be known as an "Abatement Condition"). Notwithstanding
the foregoing, this Section 6.4 shall not apply to the damage or destruction of
the Premises or the parking area pursuant to Article 11, or to the condemnation
of the Premises pursuant to Article 13. To the extent an Abatement Condition
affects only a portion of the Premises, and such portion is a material portion
of the Premises, and Tenant is not reasonably able to conduct its business from
the remaining portion of the Premises, the Abatement Condition shall be deemed
to affect the entire Premises.
6.4.1.1 Tenant shall promptly deliver to Landlord notice (the
"Cure Notice") of such condition and if Landlord fails to cure such condition
within two (2) business days after delivery to it of the Cure Notice, then Rent
applicable to the affected portion of the Premises shall be abated from the date
which occurred three (3) full business days prior to delivery to Landlord of the
Cure Notice until the date when such failure is cured; provided, however, that
if Tenant has previously paid Rent to Landlord for a period of time subsequent
to the commencement of Tenant's right to xxxxx Rent hereunder, then Landlord
shall, within ten (10) business days following the date of such abatement,
credit to Tenant an amount equivalent to such excess payments against the sums
next due under this Lease, or, if after the expiration or termination of this
Lease, reimburse to Tenant the amount of such excess payments. The right to
xxxxx Rent set forth in this Section 6.4 shall be Tenant's sole and exclusive
Rent Abatement remedy for the occurrence of an Abatement Condition.
6.4.1.2 If any Abatement Condition shall not be cured within
ninety (90) days after Landlord's receipt of the Cure Notice, the Abatement
Condition applies to the entire Premises and Tenant does not use a commercially
tenantable portion of the Premises during a significant portion of the period of
the Abatement Condition, then Tenant, upon notice to Landlord and "Lender" (as
that term is defined in Article 18 hereof) (the "Services Termination Notice")
within thirty (30) days after the expiration of such ninety (90) day period (the
"Termination Cure
12
Period"), may terminate this Lease, which termination shall be deemed effective
upon Tenant's vacation of the entire Premises, but in no event more than two (2)
years after the receipt of the Services Termination Notice by Landlord and
Lender.
6.4.2 If any governmental entity promulgates or revises any statute,
ordinance, building code, fire code or other code or imposes mandatory controls
on Landlord or any part thereof, relating to the use or conservation of energy,
water, gas, light or electricity or the reduction of automobile or other
emissions or the provision of any other utility or service provided with respect
to this Lease or if Landlord is required to make alterations to the Building or
any other part in order to comply with such mandatory controls or guidelines
(which compliance shall be subject to the terms of Article 7 of this Lease),
then Landlord shall comply with such mandatory controls or make such alterations
to the Building or any other part of the Real Property related thereto without
creating any liability of Landlord to Tenant under this Lease, provided that the
Premises are not thereby rendered untenantable and provided further that
Landlord shall use reasonable efforts to minimize the impact of such compliance
and alterations on Tenant's use and occupancy of the Premises. Such compliance
and the making of such permitted alterations shall, except as provided in
Section 6.4.1, not entitle Tenant to any damages, relieve Tenant of the
obligation to pay the full Rent reserved hereunder or constitute or be construed
as a constructive or other eviction of Tenant.
ARTICLE 7
---------
REPAIRS
-------
7.1 Tenant's Obligations.
--------------------
7.1.1 Tenant Required Actions. Subject to the provisions of Section
----------------
7.2, Articles 11 and 13 and Section 29.29, Tenant shall, at Tenant's sole cost
and expense, operate, keep, and maintain, and. as necessary, repair, restore,
replace, and make any capital improvements to (collectively, the "Tenant
Required Actions") (i) the structural portions of the Building (excluding the
structural skeleton of the Building described in Section 7.2 below), including
the ceilings, floor surface, interior walls and wall covering, roof membrane
(Landlord will replace the roof membrane when it is no longer reasonably and
economically subject to repair, and the cost of such replacement shall be
amortized (including interest on the unamortized cost) over its useful life as
Landlord shall reasonably determine, payable by Tenant as an Operating Expense;
Landlord is to repair and maintain roof membrane), shafts, stairs, parking
areas, stairwells, elevator cabs, washrooms, and Building mechanical, electrical
and telephone closets (collectively, "Building Structure"), and (ii) the
Building mechanical, electrical, life safety, plumbing, sprinkler systems, and
heating, ventilation and air-conditioning systems (the "Building Systems"), in
good order and repair and in good and safe working order and condition at all
times during the Lease Term, including any items of the Building Structure or
Building Systems included in the "Tenant Improvements", as that term is defined
in the Tenant Work Letter, or "Alterations", as that term is defined in Section
8.1, below (collectively, the "Tenant Maintenance Items"). All
13
repairs and maintenance of the Premises by Tenant as required under the Lease
shall be performed in a good and safe manner by contractors and other personnel
reasonably approved by Landlord, and in compliance with the provisions of
Article 8, below. Tenant shall also be obligated to pay, as an Operating
Expense, the following costs: the cost of any capital improvements made by
Landlord which are intended as a labor saving device or to effect other
economies in the operation or maintenance of the Real Property, or any portion
thereof, or made to all or any portion, or any portion thereof, after the Lease
Commencement Date which are required under any governmental law or regulation
which was not applicable at the time that permits for the construction of the
Building were obtained; provided, however, that each such permitted capital
expenditure shall be amortized (including interest on the unamortized cost) over
its useful life as Landlord shall reasonably determine, provided, however, that
Tenant shall not be responsible for such amortization payments to the extent
that the capital expenditure was for an item as to which Landlord is solely
responsible under the provisions of Section 7.2 below.
7.1.2 Maintenance Contracts. As a part of Tenant's Required Actions,
------------
Tenant shall, at Tenant's sole cost and expense, maintain contracts for the
inspection, maintenance and service of the (i) heating, air conditioning and
ventilation equipment, (ii) boiler, fired or unfired pressure vessels, (iii)
fire sprinkler and/or standpipe and hose or other automatic fire extinguishing
systems, including fire alarm and/or smoke detection, and (iv) electrical
systems.
7.2 Lessor's Obligations. It is intended by the parties hereto that
--------------------
Lessor have no obligation, in any manner whatsoever, to take any of the Tenant
Required Actions with respect to the Building Systems or Building Structure,
except as set forth in this Section 7.2, below. It is the intention of the
parties that the terms of this Lease govern the respective obligations of the
parties as to maintenance and repair of the Premises. Tenant waives the right
to make repairs at the expense of Landlord or to terminate this Lease by reason
of any needed repairs under Sections 1941 and 1942 of the California Civil Code,
or any similar law, statute, or ordinance, now or hereafter in effect.
Notwithstanding the foregoing, during the Lease Term, Landlord shall maintain
and repair the structural skeleton of the Building consisting only of the floor
slabs, foundation, roof structure, roof membrane (subject to Tenant's
replacement amortization payment responsibility described in Section 7.1.1
above), curtain walls and exterior glass and mullions ("Landlord Maintenance
Items"). Further, Landlord shall provide Tenant with a Title 19 Inspection
Report for the fire sprinkler system for the Building. The Building shall be
delivered with all of the Building Systems described in Section 7.1.1. above in
proper working condition including also the restrooms, sewer and gas systems
serving the Premises. Landlord hereby agrees that to the extent that the
Building and its component parts were not constructed in accordance with
applicable building codes at the time of construction, Landlord shall at its
sole cost and expense, remedy any and all such portions of the Building or its
component parts so long as such non-compliance is ascertained within one (1)
year from the Commencement Date. Lessor shall provide written certification
from a State-licensed electrical inspector, that the Building's main switchboard
meets the DL standard in existence at the time of installation.
14
7.3 Tenant's Right to Make Repairs. If Tenant provides written
------------------------------
notice to Landlord of an event or circumstance which requires the action of
Landlord with respect to the Landlord Maintenance Items, and Landlord fails to
provide or commence to provide (and thereafter diligently proceed with such
efforts to completion), such action as required by the terms of this Lease
within ten (10) days after receipt of such written notice (or such lesser period
of time as may be applicable in the event of an emergency), Tenant may proceed
to take the required action upon delivery of an additional five (5) business
days notice to Landlord (or within the applicable and appropriate time period
based on an emergency) specifying that Tenant is taking such required action,
and if such action was required under the terms of this Lease to be taken by
Landlord, then Tenant shall be entitled to prompt reimbursement by Landlord of
Tenant's costs and expenses in taking such action plus interest at the Interest
Rate during the period from the date Tenant incurs such costs and expenses until
such time as payment is made by Landlord. Tenant shall use only those
contractors used by Landlord for such work unless such contractors are unwilling
or unable to perform such work, in which event Tenant may utilize the services
of any other qualified contractor which normally and regularly performs similar
work in Comparable Buildings. Further, if Landlord does not deliver a detailed
written objection to Tenant, within thirty (30) days after receipt of an invoice
by Tenant of its costs of taking action which Tenant claims should have been
taken by Landlord, and if such invoice from Tenant sets forth a reasonably
particularized breakdown of its costs and expenses in connection with taking
such action on behalf of Landlord, then Tenant shall be entitled to deduct from
Rent payable by Tenant under this Lease, the amount set forth in such invoice
together with interest at the Interest Rate. If, however, Landlord in good faith
delivers to Tenant, within thirty (30) days after receipt of Tenant's invoice, a
written objection to the payment of such invoice, setting forth with reasonable
particularity Landlord's reasons for its claim that such action did not have to
be taken by Landlord pursuant to the terms of this Lease or that the charges are
excessive (in which case Landlord shall pay the amount it contends would not
have been excessive), then Tenant shall not be entitled to such deduction from
Rent, but Tenant may proceed to institute legal proceedings against Landlord to
collect the amount set forth in the subject invoice. If Tenant receives a non-
appealable final judgment against Landlord in connection with such legal
proceedings, Tenant may deduct the amount of the judgment, not to exceed the
amount of the unpaid portion of the relevant invoice, together with interest
thereon at the Interest Rate from the Base Rent next due and owing under this
Lease.
ARTICLE 8
---------
ADDITIONS AND ALTERATIONS
-------------------------
8.1 Landlord's Consent to Alterations. Tenant may, without the need to
---------------------------------
obtain the consent or approval of Landlord, make any improvements, alterations,
additions or changes to the Premises (collectively, the "Alterations") desired
by Tenant which do not create a Design Problem, by providing Landlord with
written notice not less than six (6) business days prior to the
15
commencement thereof. For purposes of this Lease, "Design Problem" shall mean
any alteration, repair, modification, or improvement by Tenant which (a)
materially and adversely affects the Building Systems or Building Structure, (b)
is not in compliance with applicable laws, or (c) affects the exterior
appearance of the Building. Tenant may not make any Alteration which may create
a Design Problem (collectively, "Consent Alterations"), without first procuring
the prior written consent of Landlord to such Alterations, which consent shall
be requested by Tenant not less than ten (10) business days prior to the
commencement thereof, and which consent shall not be unreasonably withheld by
Landlord. In the event Tenant proposes to make a Consent Alteration, Tenant's
notice regarding the proposed Alteration shall include the plans and
specifications for the Alterations. Landlord shall grant or withhold its consent
to any Consent Alterations within ten (10) business days of receipt of Tenant's
notice; Landlord's failure to respond within three (3) business days of a second
notice given after such ten (10) business day period shall be deemed to evidence
Landlord's approval with respect to the same. The construction of the initial
improvements to the Premises shall be governed by the terms of the Tenant Work
Letter and not the terms of this Article 8.
8.2 Manner of Construction. In connection with the making of Alterations,
----------------------
except for minor or purely cosmetic Alterations such as painting or replacement
of wall covering ("Finish Work"), Tenant shall utilize only contractors and
subcontractors selected from the list of contractors and subcontractors attached
to this Lease as Schedule "1" to Exhibit "B", or which have been otherwise
------------ -----------
approved by Landlord, which approval shall not be unreasonably withheld or
delayed. Subject to the terms of Article 24, below, Tenant shall construct all
Alterations in conformance with any and all applicable rules and regulations of
any federal, state, county or municipal code or ordinance and, when required
pursuant to applicable law, pursuant to a valid building permit issued by the
City of Irvine. Landlord's approval of the plans, specifications and working
drawings for Tenant's Alterations shall create no responsibility or liability on
the part of Landlord for their completeness, design sufficiency, or compliance
with all laws, rules and regulations of governmental agencies or authorities.
All work with respect to any Alterations must be done in a good and workmanlike
manner. Upon completion of any Alterations, Tenant agrees to cause a Notice of
Completion to be recorded in the office of the Recorder of Orange County in
accordance with Section 3093 of the Civil Code of the State of California or any
successor statute, and, except as to Finish Work, Tenant shall deliver to
Landlord a reproducible copy of the construction set of drawings of the
Alterations (or, at Tenant's election, a copy of the final working drawings for
such Alterations, with field changes shown thereon) within thirty (30) days
following completion thereof.
8.3 Construction Insurance. Prior to the commencement of any Alteration,
----------------------
Tenant shall provide Landlord with reasonable evidence that Tenant carries
"Builder's All Risk" insurance in a commercially reasonable amount given the
scope of such Alterations, covering the construction of such Alterations, it
being understood and agreed that all of such Alterations shall be insured by
Tenant pursuant to Article 10 of this Lease immediately upon completion thereof.
In addition, Landlord may, in its discretion, require any "Transferee," as that
term is defined in Section 14.1, below, other than any Affiliate, to obtain a
lien and completion bond or some alternate form of
16
security satisfactory to Landlord in an amount sufficient to ensure the lien-
free completion of such Alterations and naming Landlord as a co-obligee.
8.4 Landlord's Property. Subject to the terms of this Lease, all
-------------------
Alterations, improvements, fixtures and/or equipment which may be installed or
placed in or about the Premises, from time to time, shall be at the sole cost of
Tenant and shall be and become the property of Landlord, except that Tenant
shall have the right to remove any such Alterations, improvements, fixtures
and/or equipment which Tenant can reasonably substantiate to Landlord have not
been paid for with any tenant improvement allowance funds provided to Tenant by
Landlord, together with any non-affixed personal property in the Premises,
provided Tenant repairs any damage to the Premises and Building caused by such
removal. Upon the expiration or early termination of the Lease Term, Landlord
may, by written notice to Tenant, require Tenant at Tenant's expense remove any
improvements in the Premises, including the initial Tenant Improvements and any
Alterations, and repair any damage to the Premises and Building caused by such
removal, and leave the Premises in a broom-clean condition. If Tenant fails to
complete such removal and/or to repair any damage caused by the removal of any
such improvement, after notice to Tenant from Landlord, and a reasonable
opportunity (based on the then current circumstances) for Tenant to complete
such removal and/or repair, Landlord may do so and may charge the cost thereof
to Tenant.
ARTICLE 9
---------
COVENANT AGAINST LIENS
----------------------
Tenant has no authority or power to cause or permit any lien or encumbrance
of any kind whatsoever, whether created by act of Tenant, operation of law or
otherwise, to attach to or be placed upon the Real Property, Building or
Premises, and any and all liens and encumbrances created by Tenant shall attach
to Tenant's interest only. Landlord shall have the right at all times to post
and keep posted on the Premises customary notices of non-responsibility which it
deems necessary for protection from such liens. Tenant covenants and agrees not
to suffer or permit any lien of mechanics or materialmen or others to be placed
against the Real Property, the Building or the Premises with respect to work or
services claimed to have been performed for or materials claimed to have been
furnished to Tenant or the Premises, and, in case of any such lien attaching or
notice of any such lien, Tenant covenants and agrees to cause it to be
immediately released and removed of record by bond or otherwise within ten (10)
business days after notice by Landlord, and if Tenant shall fail to do so
Landlord, at its sole option, may, after an additional five (5) business days
notice to Tenant, take all action necessary to release and remove such lien,
without any duty to investigate the validity thereof, and all sums, costs and
expenses, including reasonable attorneys' fees and costs, incurred by Landlord
in connection with such lien shall be deemed Additional Rent under this Lease
and shall be due and payable by Tenant within thirty (30) days of receipt of an
invoice therefor.
17
ARTICLE 10
----------
INSURANCE
---------
10.1 Indemnification and Waiver.
--------------------------
10.1.1 Waiver. Tenant hereby assumes all risk of damage to
------
property or injury to persons in or upon the Premises from any cause whatsoever
and agrees that Landlord, its partners and their respective officers, agents,
servants, and employees (collectively, the "Landlord Parties") shall not be
liable for any damage either to person or property or resulting from the loss of
use thereof, which damage is sustained by Tenant or by other persons claiming
through Tenant, except to the extent caused by the negligence or wilful
misconduct of the Landlord Parties.
10.1.2 Tenant's Indemnity. Tenant shall indemnify, defend,
------------------
protect, and hold harmless Landlord and the Landlord Parties from any and all
claims, loss, cost, damage, expense and liability (including without limitation
court costs and reasonable attorneys' fees) (collectively, "Claims") incurred in
connection with or arising from (1) any cause in or on the Premises during the
Lease Term or any holdover period and (2) subject to the terms of the last
sentence of Section 10.1.3, below, any acts or omissions or wilful misconduct of
Tenant or any person claiming by, through or under Tenant, its partners, and
their respective officers agents, servants or employees of Tenant or any such
person (collectively, "Tenant Parties"), in or on or about the Premises or the
Real Property either prior to, during, or after the expiration of the Lease
Term, provided that, except as set forth below, the terms of the foregoing
indemnity shall not apply to the extent such Claims arise from the negligence or
wilful misconduct of the Landlord Parties in connection with the Landlord
Parties' activities in, on or about the Real Property, including the Premises.
Notwithstanding the foregoing, because Tenant must carry insurance pursuant to
Section 10.3.2, below, to cover its personal property and all office furniture,
--------------
trade fixtures, office equipment and merchandise within the Premises and the
Tenant Improvements and Alterations, Tenant hereby agrees to protect, defend,
indemnify and hold Landlord harmless from any Claim with respect to any such
property within the Premises, to the extent such Claim is covered by Tenant's
insurance, even if resulting from the negligence or wilful misconduct of the
Landlord Parties.
10.1.3 Landlord's Indemnity. Landlord shall indemnify, defend,
--------------------
protect, and hold harmless Tenant and the Tenant Parties from any Claims
incurred in connection with or arising from (1) any cause in or about the Real
Property during the Lease Term (to the extent covered by Landlord's insurance
policies carried pursuant to the terms of Section 10.2, below), or (2) any
negligent acts or omissions or wilful misconduct of any of the Landlord Parties
in, on, or about the Premises (subject to the terms of the last sentence of
Section 10.1.2, above) or the
18
Real Property, either prior to, during, or after the expiration of the Lease
Term, provided that, except as set forth below, the terms of the foregoing
indemnity shall not apply to the extent such Claims arise from the negligence or
wilful misconduct of the Tenant Parties in connection with the Tenant Parties'
activities in, on, or about the Real Property. Notwithstanding the foregoing,
because Landlord is required to maintain pursuant to the terms of Section 10.2,
below, insurance on the Building and Real Property and Tenant compensates
Landlord for such insurance as part of Operating Expenses, Landlord hereby
agrees to protect, defend, indemnify and hold Tenant harmless from any Claims
with respect to the Building and Landlord's equipment and property on the Real
Property to the extent such Claim is covered by Landlord's insurance, even if
resulting from the negligent acts or wilful misconduct of the Tenant Parties.
10.1.4 Waiver of Consequential Damages. Notwithstanding any
-------------------------------
contrary provision of this Lease, neither Landlord nor Tenant shall be liable to
the other party for any consequential damages for a breach or default under this
Lease, provided that this sentence shall not be applicable to any consequential
damages which may be incurred by the Landlord Parties relating to or in
connection with (i) action taken by or on behalf of Tenant pursuant to the
provisions of Section 7.3, above, or (ii) any holdover by Tenant following the
------------
expiration of the Lease Term, subject to and in accordance with the provisions
of Article 16 hereof.
----------
10.1.5 General Terms. The provisions of this Section 10.1 shall
-------------
survive the expiration or sooner termination of this Lease with respect to any
claims or liability occurring prior to such expiration or termination.
10.2 Landlord's Fire and Casualty Insurance. Landlord shall maintain
--------------------------------------
during the Lease Term "all-risk" insurance insuring the Building against loss or
damage due to fire and other casualties covered within the classification of
fire and extended coverage, vandalism coverage and malicious mischief, sprinkler
leakage, water damage, earthquake and flood damage and special extended. Such
coverage shall be written for one hundred percent (100%) of the replacement cost
value of the Building, without deduction for depreciation, and shall be from
such companies, and on such other terms and conditions as Landlord may from time
to time reasonably determine. Such insurance coverage shall also include a
rental loss endorsement and one or more loss payee endorsements in favor of the
holders of any mortgages or deeds of trust encumbering the interest of Landlord
in the Real Property or the ground or underlying lessors of the Real Property,
or any portion thereof. Notwithstanding the foregoing provisions of this
Section 10.2, the coverage and amounts of insurance carried by Landlord in
------------
connection with the Building shall at a minimum be comparable to the coverage
and amounts of insurance which are carried by reasonably prudent landlords of
Comparable Buildings, and Worker's Compensation and Employee's Liability
coverage as required by applicable law. Upon inquiry by Tenant, from time to
time, Landlord shall inform Tenant of all such insurance carried by Landlord.
Tenant shall, at Tenant's expense, comply as to the Premises with all customary
insurance company requirements pertaining to the use of the Premises to the
extent consistent with the insurance company requirements imposed at the
Comparable Buildings. If Tenant's conduct or use of the Premises other than for
the uses permitted under Section 5.1 of this Lease causes any increase in the
premium for such insurance
19
policies, then Tenant shall, following notice from Landlord either (i) cease
such conduct or use, or (ii) reimburse Landlord for any such increase. Tenant,
at Tenant's expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board
of Fire Underwriters) and with any similar body to the extent consistent with
the rules, orders, regulations or requirements imposed at the Comparable
Buildings.
10.3 Tenant's Insurance. Tenant shall maintain the following coverages in
------------------
the following amounts.
10.3.1 Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage arising out
of Tenant's operations or use of the Premises, including a Broad Form Commercial
General Liability endorsement covering the insuring provisions of this Lease
and, to the extent customarily and commercially available, covering the
performance by Tenant of the indemnity agreements set forth in Section 10.1 of
this Lease, for limits of liability not less than:
Bodily Injury and
Property Damage Liability $5,000,000 each occurrence
$5,000,000 annual aggregate
$5,000,000 each occurrence
Personal Injury Liability
$5,000,000 annual aggregate
10.3.2 "All-Risk" Insurance, with commercially reasonable
deductibles, covering (i) all office furniture, trade fixtures, office
equipment, merchandise and all other items of Tenant's property on the Premises
installed by, for, or at the expense of Tenant, (ii) the Tenant Improvements,
and (iii) all other improvements, alterations and additions to the Premises,
including any improvements, alterations or additions installed at Tenant's
request above the ceiling of the Premises or below the floor of the Premises.
Such insurance shall be written for the full replacement cost value, new,
without deduction for depreciation, of the covered items and in amounts that
meet any co-insurance clauses of the policies of insurance and may include, at
Tenant's sole option, a vandalism and malicious mischief endorsement, and
sprinkler leakage coverage.
10.3.3 Form of Policies. The minimum limits of policies of
----------------
liability insurance required of Tenant or Landlord under this Lease shall in no
event limit the liability of Tenant or Landlord under this Lease. Each party's
insurance shall (i) name the other party (including, as to Landlord, the
"Lender," as described in Article 18 below), as an additional insured; (ii)
specifically cover the Tenant's indemnity obligations of the insuring party set
forth in Section 10.1 of this Lease to the extent customarily and commercially
available; (iii) be issued by an insurance company having a rating of not less
than B+/VII in Best's Insurance Guide or which is otherwise reasonably
acceptable to the named party and licensed to do business in the State of
California; (iv) be primary insurance as to all claims thereunder and provide
that any
20
insurance carried by the named party is not excess and is non-contributing with
any insurance requirement of the insuring party; and (v) contain a cross-
liability endorsement or severability of interest clause acceptable to the named
party. The insuring party shall use its good faith efforts to cause its
insurance carrier to provide that said insurance carrier shall endeavor to give
thirty (30) days' prior written notice to the named party and any mortgagee or
ground or underlying lessor of the named party prior to the date said insurance
is canceled. The parties agree that the insuring party may satisfy its insurance
requirements herein with a "blanket" or "umbrella" insurance policy covering the
Premises and other premises of the insuring party. The insuring party shall
deliver said policy or policies or certificates thereof to the named party on or
before the Lease Commencement Date and at least thirty (30) days before the
expiration dates thereof. In the event the insuring party shall fail to procure
such insurance, or to deliver such policies or certificate at least thirty (30)
days before the expiration dates thereof, the named party may, at its option, if
such failure continues for ten (10) business days following written notice to
the insuring party, procure such policies for the account of the insuring party,
and the cost thereof shall be paid to the named party as Additional Rent within
thirty (30) days after delivery to the insuring party of bills therefor.
10.4 Subrogation. Landlord and Tenant agree to have their respective
-----------
insurance companies issuing property damage insurance waive any rights of
subrogation that such companies may have against Landlord or Tenant, as the case
may be. Landlord and Tenant hereby waive any right that either may have against
the other on account of any loss or damage to their respective property to the
extent such loss or damage is insurable under the types of policies of insurance
set forth in Sections 10.2 and 10.3.2, above.
10.5 Additional Insurance Obligations. Tenant shall carry and maintain
--------------------------------
during the entire Lease Term, at Tenant's sole cost and expense, such increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10, and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord; provided that such requests shall be
consistent with the treatment of comparable tenants in the Comparable Buildings.
ARTICLE 11
----------
DAMAGE AND DESTRUCTION
----------------------
11.1 Repair of Damage to Premises by Landlord. Except in the case where
----------------------------------------
Landlord or its agents are already aware of the same, Tenant shall notify
Landlord of any material damage to the Premises resulting from fire or any other
casualty promptly following the date Tenant becomes aware of such damage. If
the Building or Premises shall be damaged by fire or other casualty, Landlord
shall promptly and diligently, subject to reasonable delays for insurance
adjustment or other matters beyond Landlord's reasonable control, and subject to
all other terms
21
of this Article 11, restore the Building, the Building Structure and Building
Systems, except for those items which were constructed by or for the benefit of
Tenant above and beyond the Tenant Improvement Allowance (the "Base, Shell and
Core") . Such restoration shall be to substantially the same condition of the
Base, Shell and Core prior to the casualty, except for modifications required by
zoning and building codes and other laws. Notwithstanding any other provision of
this Lease, upon the occurrence of any damage to the Premises, Tenant shall
assign to Landlord (or to any party designated by Landlord) all insurance
proceeds payable to Tenant under Tenant's insurance required under items (ii)
and (iii) of Section 10.3.2 of this Lease, and Landlord shall repair any injury
or damage to the Tenant Improvements installed in the Premises and shall return
such Tenant Improvements to their original condition. If the cost of such repair
by Landlord is estimated, after review of the costs by Tenant, to exceed the
amount of insurance proceeds scheduled to be received by Landlord from Tenant's
insurance carrier, as assigned by Tenant, Tenant shall pay any such short fall
to Landlord prior to Landlord's repair of the damage. In the event this Lease
shall terminate as a result of such damage, Tenant shall assign to Landlord the
right to receive any insurance proceeds received from Tenant's insurance carrier
related to the Tenant Improvements constructed utilizing the proceeds of the
Tenant Improvement Allowance, and Tenant shall retain the insurance proceeds
related to those of the Tenant Improvements which were constructed utilizing
funds provided by Tenant over and above the Tenant Improvement Allowance. Tenant
shall retain all insurance proceeds related to Tenant's personal property,
furniture, fixtures and equipment. In connection with such repairs and
replacements, Tenant shall, prior to the commencement of construction, submit to
Landlord, for Landlord's review and approval, which approval shall not be
unreasonably withheld, conditional, or delayed, all plans, specifications and
working drawings relating thereto, and Landlord shall select the contractors to
perform such improvement work; provided, however, that Tenant shall have the
right to approve the contractor and the primary subcontractors if the contractor
and/or its subcontractors are other than those listed on Schedule "1" to Exhibit
------------ -------
"B" to this Lease, which approval shall not be unreasonably withheld or delayed.
---
Landlord shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant's business resulting in any way from such damage
or the repair thereof; provided however, that as a result of such damage Tenant
may be entitled to abatement of Rent pursuant to the terms of this Lease.
11.2 Landlord's Option to Repair.
---------------------------
11.2.1 Landlord Right To Terminate. Notwithstanding the terms of
---------------------------
Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises and/or Building and/or Real Property and instead terminate this Lease
by notifying Tenant in writing (the "Landlord Termination Notice") of such
termination within sixty (60) days after the date of Landlord's discovery of
damage (the "Damage Date"), such notice to include a termination date giving
Tenant ninety (90) days to vacate the Premises, but Landlord may so elect only
if the Premises, Building and/or Real Property shall be damaged by fire or other
casualty or cause, whether or not the Premises are affected, and one or more of
the following conditions is present: (i) repairs cannot reasonably be completed
within two hundred forty (240) days of the Damage Date (when such repairs are
made without the payment of overtime or other premiums); (ii) over
22
One Million Dollars ($1,000,000.00) of the cost of the damage is not covered,
excluding deductible amounts, by Landlord's insurance policies (which One
Million Dollar ($1,000,000.00) amount shall decline, on a straight line basis,
over the seven (7) years of the term of this Lease, each year reducing such
amount by One Hundred Forty-Three Thousand Dollars ($143,000.00)),or (iii) the
holder of any mortgage on the Building or Real Property shall require (based on
such holders legal right to so require) that the insurance proceeds or any
portion thereof be used to retire the mortgage debt and the remaining proceeds
are more than Two Hundred Fifty Thousand and 00/100 Dollars ($250,000) less than
the amount required to repair the damage.
11.2.2 Tenant's Right to Terminate. If Landlord does not elect
---------------------------
to terminate this Lease pursuant to Landlord's termination right as provided
above, and the repairs of such damage cannot, in the reasonable judgment of the
contractor selected by Landlord to complete such repairs, be completed to the
standard set forth in Section 11.1, above, within two hundred forty (240) days
after the Damage Date (which two hundred forty (240) day period shall not be
subject to extension as a result of any "Force Majeure" as that term is defined
in Section 29.16, below), Landlord shall, within sixty (60) days after the
Damage Date, deliver notice of such fact to Tenant. Within thirty (30) days
after Tenant's receipt of such notice, Tenant may elect to terminate this Lease
by written notice to Landlord effective as of the date specified in Tenant's
notice, which date may be up to ninety (90) days following the date of the
notice. Furthermore, if neither Landlord nor Tenant has terminated this Lease,
and the repairs are not actually completed within such two hundred forty (240)
day period, Tenant shall have the right to terminate this Lease within five (5)
business days of the end of such period and thereafter during the first five (5)
business days of each calendar month following the end of such period until such
time as the repairs are complete, by notice to Landlord (the "Damage Termination
Notice"), effective as of a date set forth in the Damage Termination Notice (the
"Damage Termination Date"), which Damage Termination Date shall not be less than
five (5) business days following the end of such period or each such month, as
the case may be. Notwithstanding the foregoing, if Tenant delivers a Damage
Termination Notice to Landlord, then Landlord shall have the right, which may
only be exercised once with respect to any specific event of damage or
destruction, to suspend the occurrence of the Damage Termination Date for a
period ending thirty (30) days after the Damage Termination Date set forth in
the Damage Termination Notice by delivering to Tenant, within five (5) business
days of Landlord's receipt of the Damage Termination Notice, a certificate of
Landlord's contractor responsible for the repair of the damage certifying that
it is such contractor's good faith judgment that the repairs shall be
substantially completed within thirty (30) days after the Damage Termination
Date. If repairs shall be substantially completed prior to the expiration of
such thirty-day period, then the Damage Termination Notice shall be of no force
or effect, but if the repairs shall not be substantially completed within such
thirty-day period, then this Lease shall terminate upon the expiration of such
thirty-day period. At any time, from time to time, after the date occurring
thirty (30) days after the Damage Date, Tenant may request that Landlord provide
Tenant with a certificate from the architect or contractor described above
setting forth such architect's or contractor's reasonable opinion of the date of
completion of the repairs and Landlord shall respond to such request within
five (5) business days.
23
11.3 Waiver of Statutory Provisions. The provisions of this Lease,
------------------------------
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Real Property, and any statute or
regulation of the State of California, including, without limitation, Sections
1932(2) and 1933(4) of the California Civil Code, with respect to any rights or
obligations concerning damage or destruction in the absence of an express
agreement between the parties, and any other statute or regulation, now or
hereafter in effect, shall have no application to this Lease or any damage or
destruction to all or any part of the Premises, the Building or the Real
Property.
ARTICLE 12
----------
NONWAIVER
---------
No waiver of any provision of this Lease shall be implied by any failure of
either party to enforce any remedy on account of the violation of such
provision, even if such violation shall continue or be repeated subsequently,
any waiver by either party of any provision of this Lease may only be in
writing, and no express waiver shall affect any provision other than the one
specified in such waiver and that one only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term.
ARTICLE 13
----------
CONDEMNATION
------------
13.1 Permanent Taking. If the whole or any part of the Premises or
----------------
Building shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent
property or street shall be so taken or condemned, or reconfigured or vacated by
such authority in such manner as to require the use, reconstruction or
remodeling of any part of the Premises or Building, or if Landlord shall grant a
deed or other instrument in lieu of such taking by eminent domain or
condemnation (collectively, a "Taking"), and if such Taking involves a Taking of
all or substantially all of the Premises, Landlord shall have the option to
terminate this Lease upon delivery of ninety (90) days' notice, provided such
notice is given no later than one hundred eighty (180) days after the date of
such taking, condemnation, reconfiguration, vacation, deed or other instrument.
If more than twenty-five percent (25%) of the rentable square feet of the
Premises is taken, or if less than twenty five percent (25%) of the rentable
square feet of the Premises is taken and Tenant is unable to reasonably conduct
its business within the Premises, or if parking is substantially interfered
with, or if access to the Premises is substantially interfered with, Tenant
shall have the option to terminate this Lease upon delivery of ninety (90) days'
notice, provided such notice is given no later than one hundred eighty (180)
days after the date of such taking. Landlord shall be entitled
24
to receive the entire award or payment in connection therewith, except that
Tenant shall have the right to receive an award for fifty percent (50%) of the
"bonus value" of its leasehold interest hereunder (which bonus value shall be
equal to the sum paid by the condemning authority as the award for compensation
for taking the leasehold created by this Lease), its relocation expenses,
damages to Tenant's personal property, trade fixtures, and loss of goodwill. All
Rent shall be apportioned as of the date of such termination, or the date of
such taking, whichever shall first occur. If any part of the Premises shall be
taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated or reduced based on the number of rentable square feet of
the Premises so taken. Tenant hereby waives any and all rights it might
otherwise have pursuant to Section 1265.130 of The California Code of Civil
Procedure.
13.2 Temporary Taking. Notwithstanding anything to the contrary contained
----------------
in this Article 13, in the event of a temporary taking of all or any portion of
the Premises for a period of one hundred and eighty (180) days or less, then
this Lease shall not terminate but the Base Rent and the Additional Rent shall
be abated for the period of such taking (commencing on the date of such taking)
in proportion to the ratio that the amount of rentable square feet of the
Premises taken bears to the total rentable square feet of the Premises; provided
that if the remaining portion of the Premises is not sufficient to allow Tenant
to effectively conduct its business therein, and if Tenant does not conduct its
business from such remaining portion, then Base Rent and the Additional Rent
shall be abated for the entire Premises for such time as Tenant continues to be
so prevented from using, and does not use, the Premises. Landlord shall be
entitled to receive the entire award made in connection with any such temporary
taking.
ARTICLE 14
----------
ASSIGNMENT AND SUBLETTING
-------------------------
14.1 Transfers. Subject to the provisions of this Article 14, Tenant shall
---------
not, without the prior written consent of Landlord, assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer,
this Lease or any interest hereunder, permit any assignment or other transfer of
this Lease or any interest hereunder by operation of law, sublet the Premises or
any part thereof, or otherwise permit the occupancy or use of the Premises by
any persons other than Tenant, its Affiliates and their employees (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "Transferee"). Any Transfer with respect to which
Landlord's consent is required under this Article 14 and with respect to which
such consent requirement is not exempted under this Article 14 is referred to
herein as a "Consent Transfer." If Tenant desires Landlord's consent to any
Consent Transfer, Tenant shall notify Landlord in writing, which notice (the
"Transfer Notice") shall include (i) the proposed effective date of the
Transfer, which shall not be less than (a) in the case of a sublease of less
than 12,000 rentable square feet, ten (10) business days, (b) in the case of a
sublease of 12,000 square feet or
25
more, fifteen (15) business days, and (c) in the case of an assignment of this
Lease or any other Transfer, twenty (20) business days after the date of
delivery of the Transfer Notice, (ii) a description of the portion of the
Premises to be transferred (the "Subject Space"), (iii) all of the principal
terms of the proposed Transfer and the consideration therefor, including a
calculation of the "Transfer Premium," as that term is defined in Section 14.3
below, in connection with such Transfer, the name and address of the proposed
Transferee, and a copy of all existing and/or proposed documentation pertaining
to the proposed Transfer, including all then existing material, executed
operative documents to evidence such Transfer or the agreements incidental or
related to such Transfer, (iv) current financial statements of the proposed
Transferee and (v) to the extent reasonably available, any other reasonable
information reasonably and customarily required by landlords of Comparable
Buildings in connection with the review of similar Transfers. Subject to the
terms of this Article 14, any Consent Transfer made without Landlord's prior
written consent shall, at Landlord's option, be null, void and of no effect.
Whether or not Landlord consents to any Consent Transfer, Tenant shall pay
Landlord's review and processing fees, as well as any reasonable legal fees
incurred by Landlord, within thirty (30) days after written request by Landlord.
14.2 Landlord's Consent. Landlord shall not unreasonably withhold, delay
------------------
or condition its consent to any proposed Consent Transfer. Subject to the
provisions of this Section 14.2, the parties hereby agree that it shall be
reasonable under this Lease and under any applicable law for Landlord to
withhold consent to any proposed Consent Transfer where one or more of the
following apply, without limitation as to other reasonable grounds for
withholding consent:
14.2.1 The Transferee is of a character or reputation or engaged in a
business which is materially inconsistent with the quality of the Building; or
14.2.2 The Transferee intends to use the Subject Space for purposes
which are materially inconsistent with those permitted under this Lease; or
14.2.3 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested; provided that the
provisions of this Section 14.2.4 shall be applicable only if (i) the proposed
--------------
Transfer is an assignment of Tenant's interest in the Lease, (ii) the proposed
Transfer concerns ten thousand (10,000) rentable square feet or more of the
Premises, or (iii) upon the consummation of the proposal Transfer, the Original
Tenant and/or its Affiliates will not continue to directly occupy (i.e., have
not subleased or otherwise transferred its space) at least twenty thousand
(20,000) rentable square feet of the Premises.
If Landlord consents to any Consent Transfer pursuant to the
terms of this Section 14.2, Tenant may within nine (9) months after Landlord's
consent, but not later than the expiration of said nine-month period, enter into
such Transfer of the Premises or portion thereof, provided that if there are any
material changes in the terms and conditions from those specified in the
Transfer Notice such that Landlord would initially have been entitled to refuse
its
26
consent to such Transfer under this Section 14.2, Tenant shall again submit the
Transfer to Landlord for its consent under this Article 14.
14.3 Transfer Premium.
----------------
14.3.1 Definition of Transfer Premium. Subject to the terms of this
------------------------------
Article 14, if Landlord consents to a Consent Transfer, as a condition thereto
which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty
percent (50%) of any "Transfer Premium," as that term is defined in this Section
14.3, received by Tenant from such Transferee. "Transfer Premium" shall mean all
rent, additional rent or other consideration payable by such Transferee in
connection with the Transfer in excess of the Rent and Additional Rent payable
by Tenant under this Lease during the term of the Transfer on a per rentable
square foot basis if less than all of the Premises is transferred (unless all or
a portion of the Subject Space is subject to different Rent and Additional Rent
terms, in which case, to the extent applicable, such different terms shall be
applicable), after deducting the actual, out-of-pocket expenses incurred or to
be incurred by Tenant for the following (collectively, the "Subleasing Costs")
(i) any changes, alterations and improvements to the Premises in connection with
the Transfer, (ii) any space planning, architectural or design fees or expenses
incurred in marketing such space or in connection with such Transfer, (iii) any
improvement allowance or other monetary concessions provided to the Transferee,
(iv) any brokerage commissions incurred by Tenant in connection with the
Transfer, (v) legal fees incurred in connection with the Transfer, including
those fees and costs reimbursed to Landlord pursuant to the last sentence of
Section 14.1, (vi) any lease takeover costs incurred by Tenant in connection
with the Transfer, (vii) out-of-pocket costs of advertising the space which is
the subject of the Transfer, and (viii) the amount of any Base Rent and
Additional Rent paid by Tenant to Landlord with respect to the Subject Space
during the period, not to exceed four (4) months, commencing on the later of (a)
the earlier of the date Tenant contracts with a reputable broker to market the
Subject Space or commences negotiations with the Transferee as evidenced by an
exchange of proposals, or (b) the date Tenant vacates the Subject Space, until
the commencement of the term of the Transfer. "Transfer Premium" shall also
include, but not be limited to, key money, bonus money or other cash
consideration paid by Transferee to Tenant in connection with such Transfer, but
shall exclude any payment which is not in excess of fair market value for (i)
services rendered by Tenant to Transferee or (ii) for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer.
14.3.2 Payment of Transfer Premiums. The determination of the amount
----------------------------
of the Transfer Premium shall be made on a monthly basis in accordance with the
terms of this Section 14.3.2, as rent or other consideration is received by
Tenant by under the Transfer. For purposes of calculating the Transfer Premium,
Tenant's Subleasing Costs shall be credited against the first amounts received
by Tenant as a result of the Transfer.
14.4 Effect of Transfer. Subject to the terms of this Article 14, if
------------------
Landlord consents to a Consent Transfer, (i) the terms and conditions of this
Lease shall in no way be deemed to have been waived or modified, (ii) such
consent shall not be deemed consent to any further Consent
27
Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer, and (iv) Tenant shall furnish upon
Landlord's request a reasonable statement, certified by an independent certified
public accountant, or Tenant's chief financial officer or other appropriate
officer of Tenant, setting forth in reasonable detail the computation of any
Transfer Premium Tenant has derived and expects to derive from such Transfer.
Except as set forth in Section 14.4, above, no Transfer relating to this Lease
or agreement entered into with respect thereto, whether with or without
Landlord's consent, shall relieve Tenant from liability under this Lease,
including, without limitation, in connection with the Subject Space. Landlord or
its authorized representatives shall have the right at all reasonable times
during Business Hours following ten (10) business days advance notice to audit
the books, records and papers of Tenant directly relating to any Consent
Transfer. If the Transfer Premium respecting any Consent Transfer shall be found
understated, or overstated, the appropriate party shall within thirty (30) days
after demand, pay to the other the deficiency or excess, and if understated by
more than ten percent (10%), Tenant shall pay Landlord's costs of such audit.
14.5 Non-Transfers. Notwithstanding anything to the contrary contained in
-------------
this Article 14, an assignment of this Lease or subletting of all or a portion
of the Premises to an entity (an "Affiliate") which is controlled by, controls,
or is under common control with, Tenant or Tenant's parent or any subsidiary of
Tenant or Tenant's parent, or to a resulting entity from a merger or
consolidation of Tenant with another entity, shall not be deemed a Transfer
under this Article 14, and Landlord's consent shall not be required in
connection therewith, provided that Tenant notifies Landlord of any such
assignment or sublease and promptly supplies Landlord with any documents or
information reasonably requested by Landlord regarding such assignment or
sublease or such Affiliate or resulting entity, and further provided that such
assignment or sublease is not a subterfuge by Tenant to avoid its obligations
under this Lease and shall in no way relieve Tenant from any liability under
this Lease. "Control," as used in this Section 14.5, shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through the ownership of
voting securities, by contract or otherwise. As used in this Section 14.5,
"Affiliate" shall also include any entity which is subleasing from Tenant less
than 6,000 square feet of rentable area of the Premises and with respect to
which no demising wall is to be erected, and with the only identification of
such subtenant appearing on the door or doors to the offices, if any, in that
portion or portions of the Premises being occupied by such sublessee.
ARTICLE 15
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SURRENDER OF PREMISES; OWNERSHIP
---------------------------------
AND REMOVAL OF TRADE FIXTURES
-----------------------------
15.1 Surrender of Premises. No act or thing done by Landlord or any agent
---------------------
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of
28
a surrender of the Premises unless such intent is specifically acknowledged in a
writing signed by Landlord. The delivery of keys to the Premises to Landlord or
any agent or employee of Landlord shall not constitute a surrender of the
Premises or effect a termination of this Lease, whether or not the keys are
thereafter retained by Landlord, and notwithstanding such delivery Tenant shall
be entitled to the return of such keys at any reasonable time upon request until
this Lease shall have been properly terminated. The voluntary or other surrender
of this Lease by Tenant, whether accepted by Landlord or not, or a mutual
termination hereof, shall not work a merger.
15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
------------------------------------
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in good order and condition, reasonable wear and tear,
casualty events, damage resulting from the negligence or misconduct of the
Landlord Parties, and repairs which are specifically made the responsibility of
Landlord hereunder excepted. Upon such expiration or termination, Tenant shall,
without expense to Landlord, remove or cause to be removed from the Premises all
debris and rubbish, and such items of free-standing furniture, equipment,
cabinet work, and other personal property owned by Tenant or installed or placed
by Tenant at its expense in the Premises, and such similar articles of any other
persons claiming under Tenant, as Landlord may, in its sole discretion, require
to be removed, and, subject to the terms of this Lease, Tenant shall repair at
its own expense all damage to the Premises and Building resulting from such
removal.
ARTICLE 16
----------
HOLDING OVER
------------
(a) If Tenant holds over after the expiration of the Lease Term
hereof, with or without the express or implied consent of Landlord, such tenancy
shall be from month-to-month only, and shall not constitute a renewal hereof or
an extension for any further term, and in such case Base Rent shall be payable
at a monthly rate equal to one hundred twenty-five percent (125%) of the Base
Rent applicable during the last rental period of the Lease Term under this
Lease. Such month-to-month tenancy shall be subject to every other term,
covenant and agreement contained herein. Nothing contained in this Article 16
shall be construed as consent by Landlord to any holding over by Tenant, and
Landlord expressly reserves the right to require Tenant to surrender possession
of the Premises to Landlord as provided in this Lease upon the expiration or
other termination of this Lease. Except for the time limitation on Landlord's
right to seek consequential damages set forth in the next sentence (which time
limitation shall also apply to Landlord's rights to seek damages other than by
reason of the following sentence), the provisions of this Article 16 shall not
be deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law. If Tenant fails to surrender the Premises
within sixty (60) days after the termination or expiration of this Lease, then,
in addition to any other liabilities to Landlord accruing therefrom, Tenant
shall protect, defend, indemnify and hold Landlord harmless from all loss, costs
(including reasonable attorneys' fees) and liability resulting from such
failure,
29
including, without limiting the generality of the foregoing, any claims made by
any succeeding tenant founded upon such failure to surrender, and any lost
profits to Landlord resulting therefrom.
(b) Notwithstanding the foregoing, by written notice to Landlord given
at least one hundred twenty (120) days prior to the expiration of the original
Term, Tenant shall have one time right to elect to holdover in the Premises
(which holdover will be deemed to be with Landlord's consent) for one (1), two
(2), or three (3) full months (as specified in Tenant's notice) at the same
Monthly Base Rent and Additional Rent in effect under this Lease immediately
prior to such holdover, and such continued occupancy by Tenant shall be subject
to all of the other terms, covenants and conditions of this Lease, so far as
applicable. The Lease Term will be extended for the period specified in such
notice by Tenant to Landlord and a vacation of the Premises by Tenant prior to
such date will not relieve Tenant of liability for Monthly Base Rent and
Additional Rent accruing under this Lease through the expiration of the Term, as
extended pursuant to Tenant's notice. The provisions of this Subsection 16(b)
will survive the expiration or earlier termination of this Lease.
ARTICLE 17
----------
ESTOPPEL CERTIFICATES
---------------------
Within fifteen (15) business days following a request in writing by
Landlord, Tenant shall execute and deliver to Landlord an estoppel certificate,
which, as submitted by Landlord, shall be substantially in the form of Exhibit
-------
E, attached hereto, indicating therein any exceptions thereto that may exist at
-
that time, and shall also contain any other customary factual information
certified to Tenant's knowledge, without a duty of investigation or inquiry by
Tenant, reasonably requested by Landlord or Landlord's mortgagee or prospective
mortgagee. Tenant shall execute and deliver whatever other instruments may be
reasonably required for such purposes. Landlord hereby agrees to provide to
Tenant an estoppel certificate signed by Landlord, containing the same types of
information, and within the same periods of time, as set forth above, with such
changes as are reasonably necessary to reflect that the estoppel certificate is
being granted to Tenant by Landlord, rather than being granted by Tenant to
Landlord or to a lender.
ARTICLE 18
----------
SUBORDINATION
-------------
Subject to the terms of this Article 18, this Lease shall be subject and
subordinate to all future ground or underlying leases of the Real Property and
to the lien of any "Lender," which in this Lease shall mean any mortgage under a
mortgage or beneficiaries under any trust deeds
30
hereafter in force against the Real Property and the Building, if any, and to
all renewals, extensions, modifications, consolidations and replacements
thereof, and to all advances made or hereafter to be made upon the security of
such mortgages or trust deeds, unless the Lenders or the lessors under such
ground lease or underlying leases, require in writing that this Lease be
superior thereto. As of the date of execution and delivery of this Lease,
Landlord has not acquired title to the Real Property; therefore, Landlord will
not be in a position to provide a Non-Disturbance Agreement to Tenant from the
entity presently holding a recorded interest in the Real Property. However,
following Landlord's acquisition of title to the Real Property, Landlord's
delivery to Tenant of commercially reasonable non-disturbance agreement(s) in
favor of Tenant from any ground lessors, or who come into existence at any time
prior to the expiration of the Lease Term shall be in consideration of, and a
condition precedent to, Tenant's agreement to be bound by the terms of this
Article 18. Such commercially reasonable non-disturbance agreements shall
include the obligation of any such successor ground lessor, or Lender to
recognize Tenant's rights specifically set forth in this Lease to offset certain
amounts against Rent due hereunder, or to otherwise receive certain credits
against Rent as set forth herein, and shall require the recognition by any such
successor ground lessor or Lender to pay for the construction of the Tenant
Improvements and further must acknowledge the free rent concessions granted to
Tenant under the Lease. Subject to the non-disturbance agreements described
above, Tenant covenants and agrees in the event any proceedings are brought for
the foreclosure (or deed lieu thereof) of any such mortgage, or if any ground or
underlying lease is terminated, to attorn, to the lien holder or purchaser or
any successors thereto upon any such foreclosure sale (or deed in lieu thereof),
or to the lessor of such ground or underlying lease, as the case may be, if so
requested to do so by such purchaser or lessor, and to recognize such purchaser
or lessor as the lessor under this Lease. Tenant shall, within fifteen (15)
business days of request by Landlord, execute such further instruments or
assurances as Landlord may reasonably deem necessary to evidence or confirm the
subordination or superiority of this Lease to any such mortgages, trust deeds,
ground leases or underlying leases, subject to the terms of this Article 18.
31
ARTICLE 19
----------
DEFAULTS; REMEDIES
------------------
19.1 Events of Default. The occurrence of any of the following shall
-----------------
constitute an event of default ("Event of Default") under this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, within ten (10)
business days after delivery of written notice to Tenant that such sum is past
due; or
19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written notice
thereof from Landlord to Tenant; provided that if the nature of such default is
such that the same cannot reasonably be cured within a thirty (30)-day period,
Tenant shall not be deemed to be in default if it commences such cure within
such period and thereafter proceeds to rectify and cure said default with
reasonable diligence; or
19.1.3 The failure by Tenant to observe or perform according to the
provisions of Article 17 or Article 18 of this Lease where such failure
continues for more than ten (10) business days after notice from Landlord.
All notices to be given pursuant to this Section 19.1 shall be in
addition to and not in lieu of the notice requirements of the California Code of
Civil Procedure (S) 1161 et seq.
-- ---
19.2 Remedies Upon Default. Upon the occurrence of any Event of Default by
---------------------
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity, the option to pursue any one or more of the
following remedies, each and all of which shall be cumulative and nonexclusive,
without any notice or demand whatsoever.
19.2.1 Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
subject to due process of law and without prejudice to any other remedy which it
may have for possession or arrearages in rent, enter upon and take possession of
the Premises and expel or remove Tenant and any other person who may be
occupying the Premises or any part thereof; and Landlord may recover from Tenant
the following:
(i) The worth at the time of award of any unpaid rent which
has been earned at the time of such termination; plus
32
(ii) 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 exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) The worth at the time of award of the amount by which
the unpaid rent for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iv) Any other amount reasonably 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, specifically including but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and
(v) At Landlord's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by applicable
law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant to Landlord pursuant to
the terms of this Lease. As used in Paragraphs 19.2.1(i) and (ii), above, the
"worth at the time of award" shall be computed by allowing interest at the rate
set forth in Article 25 of this Lease, but in no case greater than the maximum
amount of such interest permitted by law. As used in Paragraph 19.2.1(iii)
above, the "worth at the time of award" shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).
19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
19.3 Sublessees of Tenant. In the event Landlord elects to terminate this
--------------------
Lease on account of any Event of Default by Tenant Landlord shall have the right
to terminate any and all subleases, licenses, concessions or other consensual
arrangements for possession entered into by Tenant and affecting the Premises or
may, in Landlord's sole discretion, succeed to Tenant's interest in such
subleases, licenses, concessions or arrangements. In the event of Landlord's
election to succeed to Tenant's interest in any such subleases, licenses,
concessions or
33
arrangements, Tenant shall, as of the date of notice by Landlord of such
election, have no further right to or interest in the rent or other
consideration receivable thereunder.
19.4 Waiver of Default. No waiver by Landlord or Tenant of any violation
-----------------
or breach of any of the terms, provisions and covenants herein contained shall
be deemed or construed to constitute a waiver of any other or later violation or
breach of the same or any other of the terms, provisions, and covenants herein
contained. Forbearance by Landlord or Tenant in enforcement of one or more of
the remedies herein provided upon an Event of Default shall not be deemed or
construed to constitute a waiver of such default. The acceptance of any Rent or
other payment hereunder by Landlord or Tenant following the occurrence of any
default, whether or not known to Landlord or Tenant, as the case may be, shall
not be deemed a waiver of any such default, except only a default in the payment
of the Rent or other payment so accepted.
19.5 Landlord Default. Notwithstanding anything to the contrary set forth
----------------
in this Lease, Landlord shall be in default in the performance of any obligation
required to be performed by Landlord pursuant to this Lease if (i) Landlord is
obligated to make a payment of money to Tenant, and Landlord fails to pay such
unpaid amounts within ten (10) days of written notice from Tenant that the same
was not paid when due, or (ii) such failure is other than the obligation to pay
money, and Landlord fails to perform such obligation within thirty (30) days
after the receipt of notice from Tenant specifying in detail Landlord's failure
to perform; provided, however, if the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, then Landlord
shall not be in default under this Lease if it shall commence such performance
within such thirty (30) day period and thereafter diligently pursue the same to
completion. Upon any such default by Landlord under this Lease, Tenant may,
except as otherwise specifically provided in this Lease to the contrary,
exercise any of its rights provided at law or in equity.
ARTICLE 20
----------
COVENANT OF QUIET ENJOYMENT
---------------------------
Subject to Landlord's rights following an Event of Default, Landlord
covenants that during the Lease Term Tenant shall peaceably and quietly have,
hold and enjoy the Premises subject to the terms, covenants, conditions,
provisions and agreements hereof without interference by any persons lawfully
claiming by or through Landlord. The foregoing covenant is in lieu of any other
covenant express or implied, except as otherwise expressly provided in this
Lease.
34
ARTICLE 21
-----------
FORCE MAJEURE
-------------
Any prevention, delay or stoppage due to strikes, lockouts, labor disputes,
acts of God, inability to obtain services, labor, or materials or reasonable
substitutes therefore after reasonable efforts to do so, governmental actions,
civil commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other monetary charges to be paid
pursuant to this Lease, and except with regard to the time periods set forth in
Article 11 of this Lease (collectively, the "Force Majeure"), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.
ARTICLE 22
----------
ATTORNEYS' FEES
---------------
If either party commences litigation against the other for the specific
performance of this Lease, for damages for the breach hereof or otherwise for
enforcement of any remedy hereunder, the parties hereto agree that the
prevailing party shall be entitled to recover from the other party such costs
and reasonable attorneys' fees as may have been incurred, including any and all
costs incurred in enforcing, perfecting and executing such judgment.
ARTICLE 23
----------
SIGNS
-----
23.1 Monument Signage.
----------------
23.1.1 Design and Approval. Subject to the provisions of this
-------------------
Section 23.1, and subject to the terms of the CC&Rs, and any applicable
governmental requirements, Tenant shall have the right to have a "Tenant Name"
as that term is defined below, placed upon the existing monument sign (the
"Monument Sign") located in front of the Building.
35
23.1.2 Tenant Name. Tenant shall have the right at Tenant's expense,
-----------
to designate from time to time during the Lease Term, including any Option Term,
as the "Tenant Name", either (i) the name of Tenant, or (ii) the name of a
Transferee of Tenant properly approved by Landlord pursuant to the terms of
Article 14, and which Transferee occupies at least fifty percent (50%) of the
Premises, provided that such Tenant Name shall not be an "Objectionable Name" as
that term is defined in this Section 23.1.2, below. The term "Objectionable
Name" shall mean any name which relates to an entity which is of a character or
reputation, or is associated with a political orientation or faction, which is
inconsistent with the quality of the Real Property, or which would otherwise
reasonably offend a landlord of a Comparable Building..
23.1.3 Repair and Maintenance; Government Approval. Tenant shall be
-------------------------------------------
responsible for the cost of the design, permitting, construction and
installation of the Monument Sign and Tenant Name (the "Sign Cost"), and shall
also be responsible for the repair and maintenance during the Lease Term of the
Monument Sign. Tenant shall also be responsible for the cost and expense of the
removal of its name from and restoration of the Building, if affected by the
Monument Sign (or from the sign itself, but without restoration obligations) as
of the expiration or earlier termination of the Lease. Tenant acknowledges and
agrees that the Monument Sign shall be subject to all necessary approvals and
permits from governmental agencies and from any "Approving Agent" under the
CC&Rs.
23.2 Building Signage. Tenant shall have the right, during the Lease Term,
----------------
at Tenant's sole cost and expense, to install a sign, with the specifications as
set forth on Exhibit F, attached hereto, on the exterior of the Building
---------
containing the Tenant Name (the "Building Signage"), provided that such Building
Signage shall be subject to all of the terms of the CC&Rs and any applicable
governmental requirements. Except as provided in this Lease, Tenant shall be
responsible, at Tenant's sole cost and expense, to repair and maintain the
Building Signage in first class condition during the Lease Term. In addition
Tenant shall be responsible for the cost and expense of the removal of the
Building Signage as of the termination or earlier expiration of the Lease Term,
and for the cost of repair of any damage to the Building resulting from such
removal.
23.3 Prohibited Signage and Other Items. Any signs, notices, logos,
----------------------------------
pictures, names or advertisements which are installed and visible from the
exterior of the Premises and/or Building and that have not been individually
approved by Landlord may be removed without notice by Landlord at the sole
expense of Tenant. Tenant may not install any signs on the exterior or roof of
the Building. Any signs, window coverings, or blinds (even if the same are
located behind the Landlord approved window coverings for the Building), or
other items visible from the exterior of the Premises or Building are subject to
the prior approval of Landlord, in its sole discretion.
36
ARTICLE 24
----------
COMPLIANCE WITH LAW
-------------------
Neither Landlord nor Tenant shall do anything in or about the Premises
which will in any way conflict with any law, statute, ordinance or other
governmental rule, regulation or requirement now in force or which may hereafter
be enacted or promulgated (collectively, "Laws"). Should any Laws now or
hereafter be imposed on Landlord or Tenant by a state, federal or local
governmental body charged with the establishment, regulation and enforcement of
occupational, health or safety standards for employers, employees or tenants,
then (i) Tenant agrees, at its sole cost and expense, to comply promptly with
such Laws if they relate to any of the Tenant Maintenance Items, the Tenant
Improvements or the Alterations and to make all alterations to the Premises,
Building, and/or Real Property as are required to comply with such Laws and (ii)
Landlord shall comply with any Laws which relate to the Landlord Maintenance
Items, unless such compliance obligations are triggered by the construction of
the Tenant Improvements or Alterations, in which event such compliance
obligations to the Landlord Maintenance Items shall be at Tenant's sole cost and
expense.
ARTICLE 25
----------
LATE CHARGES
------------
Each party hereby acknowledges that late payment by the other of Rent or
other sums due hereunder will cause such party to incur costs not contemplated
by this Lease, the exact amount of which is extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting charges,
and late charges which may be imposed upon Landlord by the terms of any
mortgage, deed of trust, or ground or underlying lease covering the Premises.
Accordingly, if any installment of Rent or any other sum due from either party
shall not be received by the other within five (5) business days after notice
that said amount is over due, then the defaulting party shall pay to the other a
late charge equal to two percent (2.0%) of the amount due, provided that three
(3) times in any twenty-four (24) month period, Landlord shall first deliver a
second five (5) business day notice prior to such late charge becoming due. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs that will be incurred by reason of such late payment.
Acceptance of such late charge shall in no event constitute a waiver of any
default with respect to such overdue amount, nor prevent the non-defaulting
party from exercising any of the other rights and remedies granted hereunder.
Any late charge owed by Tenant shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law other than for damages for the late payment of Rent. In
37
addition to the late charge described above, any Rent or other amounts owing
hereunder which are not paid within five (5) business days after notice the same
are over due shall thereafter bear interest until paid at a rate (the "Interest
Rate") per annum equal to the Xxxxx Fargo Bank (or other "money center" national
bank reasonably selected by Landlord) "reference rate" or "base rate" publicly
announced from time to time, plus two percent (2%), provided that in no case
shall such rate be higher than the highest rate permitted by applicable law.
ARTICLE 26
----------
LANDLORD'S RIGHT TO CURE DEFAULT;
----------------------------------
PAYMENTS BY TENANT
------------------
26.1 Landlord's Cure. Except as otherwise specifically set forth in this
---------------
Lease, all covenants and agreements to be kept or performed by Tenant under this
Lease shall be performed by Tenant at Tenant's sole cost and expense and without
any reduction of Rent. If Tenant shall fail to perform any of its obligations
under this Lease within a reasonable time after such performance is required by
the terms of this Lease, Landlord may, but shall not be obligated to, after
thirty (30) days prior notice to Tenant (or in the case of an emergency, after
such notice as is reasonable under the circumstances), make any such payment or
perform any such act on Tenant's part without waiving its right based upon any
default of Tenant and without releasing Tenant from any obligations hereunder.
26.2 Tenant's Reimbursement. Except as may be specifically provided to the
----------------------
contrary in this Lease, Tenant shall pay to Landlord, within fifteen (15) days
after delivery by Landlord to Tenant of statements therefor, sums equal to
expenditures reasonably made and obligations reasonably incurred by Landlord in
connection with the remedying by Landlord of Tenant's
38
defaults pursuant to the provisions of Section 26.1. Tenant's obligations under
this Section 26.2 shall survive the expiration or sooner termination of the
Lease Term.
ARTICLE 27
----------
ENTRY BY LANDLORD
-----------------
Subject to the provisions of this Lease, and provided Landlord uses
commercially reasonable efforts to minimize any interference with Tenant's
business, Landlord reserves the right at all reasonable times and upon
reasonable notice to the Tenant (or in the case of an emergency upon such notice
as is reasonable under the circumstances) to enter the Premises to (i) inspect
them; (ii) show the Premises to prospective purchasers, mortgagees or tenants,
ground or underlying lessors or insurers (provided that such right shall not
extend to prospective tenants until twelve (12) months prior to the Lease
Expiration Date); (iii) post notices of nonresponsibility; or (iv) alter,
improve or repair the Premises or the Building if necessary to comply with Laws,
or for alterations, repairs or improvements to the Landlord Maintenance Items.
Notwithstanding anything to the contrary contained in this Article 27, and
subject to the notice requirements set forth in Section 19.1.2, above, and
Landlord's compliance with the terms of Section 26.1, Landlord may enter the
Premises at any time to perform any covenants of Tenant which Tenant fails to
perform. Except as otherwise expressly provided in this Lease, any such entries
shall be without the abatement of Rent and shall include the right to take such
reasonable steps as required to accomplish the stated purposes. Tenant hereby
waives any claims (not including claims for physical property damages or
personal injury damages) for any injuries or inconvenience to or interference
with Tenant's business or lost profits, occasioned thereby. For each of the
above purposes, Landlord shall at all times have a key with which to unlock all
the doors in the Premises, excluding Tenant's vaults, safes and special security
areas designated in advance by Tenant. In an emergency, Landlord shall have the
right to use any means that Landlord may in good xxxxx xxxx proper to open the
doors in and to the Premises. Subject to the provisions of this Lease, any entry
into the Premises by Landlord in the manner hereinbefore described shall not be
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises,
or an actual or constructive eviction of Tenant from any portion of the
Premises. Notwithstanding the foregoing, as reasonably necessary in connection
with Tenant's business use of the Premises, Tenant may designate certain secure
areas, and on prior written notice to Landlord of these areas, Tenant may deny
Landlord access to such areas except in an emergency or when Landlord is
accompanied by Tenant. Subject to the provisions of this Lease, no provision of
this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed to be performed
by Landlord herein.
ARTICLE 28
----------
39
TENANT PARKING
--------------
During the Lease Term, Tenant shall have the right to use, without charge,
the parking areas contained within the Real Property (currently striped to
provide six (6) spaces per 1,000 rentable square feet of space in the Building),
subject to the CC&Rs.
ARTICLE 29
----------
MISCELLANEOUS PROVISIONS
------------------------
29.1 Terms. The necessary grammatical changes required to make the
-----
provisions hereof apply either to corporations or partnerships or individuals,
men or women, as the case may require, shall in all cases be assumed as though
in each case fully expressed.
29.2 Binding Effect. Each of the provisions of this Lease shall extend to
--------------
and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Article 14 of this Lease.
29.3 No Air Rights. No rights to any view or to light or air over any
-------------
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease.
29.4 Modification of Lease. Should any prospective mortgagee or ground
---------------------
lessor for the Building or Real Property require a modification or modifications
of this Lease, which modification or modifications will not directly or
indirectly cause an increased cost or expense to Tenant under this Lease or in
connection with Tenant's business operations, or in any other way adversely
change the rights and obligations of Tenant hereunder including, without
limitation, all rights and obligations of Tenant with respect to renewal,
assignment and subletting, insurance proceeds and Tenant's rights to terminate
this Lease, or receive abatement of Rent, then and in such event, Tenant agrees
that this Lease may be so modified at Landlord's sole cost and expense
(including Tenant's reasonable attorneys' fees for review of the same), and
agrees to execute whatever reasonable documents are required therefor and
deliver the same to Landlord within thirty (30) days following the request
therefor. Should Landlord or any such prospective mortgagee or ground lessor
require execution of a short form of Lease for recording, containing, among
other customary provisions, the names of the parties, a description of the
Premises and the Lease Term, Tenant agrees to execute such short form of Lease
and to deliver the same to Landlord within fifteen (15) business days following
Tenant's receipt of written request therefor.
40
29.5 Transfer of Landlord's Interest. Notwithstanding the provisions of
-------------------------------
this Section 29.5, Landlord shall not be released from its liabilities or
obligations under this Lease, until the Tenant Improvements have been completed
pursuant to Section 2 of Exhibit 'B" and Landlord has satisfied all of its
-----------
financial obligations with respect thereto. Tenant acknowledges that Landlord
has the right to transfer all or any portion of its interest in the Real
Property and Building and in this Lease. Tenant agrees that in the event of a
transfer of fee title and provided that such transferee is a bona fide purchaser
and agrees in writing to perform all of Landlord's obligations thereafter
accruing, Landlord shall automatically be released from all liability under this
Lease thereafter accruing and Tenant agrees to look solely to such transferee
for the performance of Landlord's obligations hereunder arising or accruing
after the date of transfer upon agreement by such transferee to fully assume and
be liable for all obligations of this Lease to be performed by Landlord which
first accrue or arise after the date of the conveyance, and Tenant shall attorn
to such transferee. Tenant further acknowledges that Landlord may assign its
interest in this Lease to a mortgage lender as additional security and agrees
that such an assignment shall not release Landlord from its obligations
hereunder and that unless and until such mortgage lender succeeds to Landlord's
interest and obligations hereunder, Tenant shall continue to look to Landlord
for the performance of its obligations hereunder.
29.6 Prohibition Against Recording. Except as provided in Section 29.4 of
-----------------------------
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant, without the prior written consent of Landlord,
which consent may be conditioned upon Tenant's agreement to deliver to Landlord
an executed, recordable, memorandum of termination of the same, within ten (10)
business days after the expiration or earlier termination of this Lease.
29.7 Landlord's Title. Subject to and except for the rights of Tenant
----------------
expressly set forth in this Lease, Landlord's title is and always shall be
paramount to the title of Tenant, and nothing herein contained shall empower
Tenant to do any act which can, shall or may encumber the title of Landlord.
29.8 Captions. The captions of Articles and Sections are for convenience
--------
only and shall not be deemed to limit, construe, affect or alter the meaning of
such Articles and Sections.
29.9 Relationship of Parties. Nothing contained in this Lease shall be
-----------------------
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
29.10 Time of Essence. Time is of the essence of this Lease and each of
---------------
its provisions.
29.11 Partial Invalidity. If any term, provision or condition contained
------------------
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
41
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
29.12 No Warranty. Except as otherwise expressly set forth in this Lease,
-----------
in executing and delivering this Lease, Tenant has not relied on any
representation, including, but not limited to, any representation whatsoever as
to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.
29.13 Landlord Exculpation. It is expressly understood and agreed that,
--------------------
notwithstanding anything in this Lease to the contrary, the liability of
Landlord or the Landlord Parties to Tenant for performance of Landlord's
obligation under the Lease shall be (i) limited solely and exclusively to an
amount which is equal to the interest of Landlord in the Building and Real
Property and to the proceeds of any insurance (the cost of which is included in
Operating Expenses) or condemnation awards received by Landlord pursuant to the
items of Article 13 of this Lease and (ii) subject to the waiver of
consequential damages set forth in Section 10.1, above. Neither Landlord, nor
any of the Landlord Parties shall have any personal liability therefor, and
Tenant hereby expressly waives and releases such personal liability on behalf of
itself and all persons claiming by, through or under Tenant. The limitations of
liability contained in this Section 29.13 shall inure to the benefit of
Landlord's and the Landlord Parties' present and future partners, beneficiaries,
officers, directors, trustees, shareholders, agents and employees, and their
respective partners, heirs, successors and assigns.
29.14 Entire Agreement. It is understood and acknowledged that there are
----------------
no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease
(including all exhibits attached hereto) and any side letter or separate
agreement executed by Landlord and Tenant in connection with this Lease and
dated of even date herewith contain all of the terms, covenants, conditions,
warranties and agreements of the parties relating in any manner to the rental,
use and occupancy of the Premises, shall be considered to be the only agreement
between the parties hereto and their representatives and agents, and none of the
terms, covenants, conditions or provisions of this Lease can be modified,
deleted or added to except in writing signed by the parties hereto. All
negotiations and oral agreements acceptable to both parties have been merged
into and are included herein. There are no other representations or warranties
between the parties, and all reliance with respect to representations is based
totally upon the representations and agreements contained in this Lease.
42
29.15 Guaranty of Lease.
-----------------
29.15.1 Form of Guaranty. This Lease is to be guaranteed by
----------------
Matsushita Electric Company of America. The form of the Guaranty to be executed
shall be in the form attached hereto as Exhibit G. Guarantor shall have the
---------
same obligations as Tenant under this Lease, including but not limited to the
obligations to provide the estoppel certificate and information required in
Article 17.
29.15.2 Additional Obligations of Guarantor. It shall constitute
-----------------------------------
an Event of Default of Tenant under this Lease if Guarantor fails or refuses,
upon reasonable request by Landlord to give: (a) evidence of the due execution
of the guaranty called for by this Lease, including the authority of the
Guarantor (and of the party signing on Guarantor's behalf) to obligate such
Guarantor on said guaranty, and resolution of its board of directors authorizing
the making of such guaranty, together with a certificate of incumbency showing
the signatures of the persons authorized to sign on its behalf, (b) current
financial statements of Guarantor as may from time to time be requested by
Landlord, (c) an estoppel certificate, or (d) written confirmation that the
guaranty is still in effect.
29.16 Notices. All notices, demands, statements, designations, approvals
-------
or other communications (collectively, "Notices") given or required to be given
by either party to the other hereunder or by law shall be in writing, and shall
be delivered personally or by nationally recognized overnight courier service
(i) to Tenant at the appropriate addresses set forth in Section 5 of the
Summary, or to such other place in the continental United States as Tenant may
from time to time designate in a Notice to Landlord; or (ii) to Landlord at the
addresses set forth in Section 3 of the Summary, or to such other firm or to
such other place in the continental United States as Landlord may from time to
time designate in a Notice to Tenant. Any Notice will be deemed given on the
date delivery is made.
29.17 Authority. If either party is a corporation or partnership, each
---------
individual executing this Lease on behalf of such party hereby represents and
warrants that such party is a duly formed and existing entity and that such
party has full right and authority to execute and deliver this Lease and that
each person signing on behalf of such party is authorized to do so.
29.18 Governing Law. This Lease shall be construed and enforced in
-------------
accordance with the laws of the State of California.
29.19 Submission of Lease. Submission of this instrument for examination
-------------------
or signature by Tenant does not constitute a reservation of or an option for
lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
29.20 Brokers. Landlord and Tenant hereby warrant to each other that they
-------
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease,
43
excepting only the real estate brokers or agents specified in Section 9 of the
Summary (the "Brokers"), and that they know of no other real estate broker or
agent who is entitled to a commission in connection with this Lease. Each party
agrees to indemnify and defend the other party against and hold the other party
harmless from any and all claims, demands, losses, liabilities, lawsuits,
judgments, and costs and expenses (including without limitation reasonable
attorneys' fees) with respect to any leasing commission or equivalent
compensation alleged to be owing on account of the indemnifying party's dealings
with any real estate broker or agent other than the Brokers. If Landlord fails
to pay any amounts due a Broker in connection with a written agreement with
respect to this Lease by and between Landlord and such Broker, which agreement
was fully executed and delivered and is in full force and effect as of the date
of execution and delivery of this Lease by the parties hereto, such Broker may
send written notice to Landlord and Tenant of such failure and if Landlord fails
to pay such amounts within thirty (30) days after said notice, Tenant shall be
entitled to offset such amounts owed to such Broker from Landlord against
Tenant's next rental obligations which may become due under this Lease. Any
amounts so offset from Tenant's rental obligations hereunder shall no longer be
owed from Landlord to such Broker.
29.21 Independent Covenants. If Landlord fails to perform its obligations
---------------------
set forth herein, Tenant shall not, except as expressly provided in this Lease
to the contrary, be entitled (i) to make any repairs or perform any acts
hereunder at Landlord's expense or (ii) to any setoff of the Rent or other
amounts owing hereunder against Landlord; provided, however, that the foregoing
shall in no way impair the right of Tenant to commence a separate action against
Landlord for any violation by Landlord of the provisions hereof so long as, to
the extent required in this Lease, notice is first given to Landlord and an
opportunity is granted to Landlord to correct such violations as provided in
Section 19.5, above.
29.22 Landlord Signage. Landlord shall have the right at any time to
----------------
install, affix and maintain a sign on the Building identifying Landlord's
interest in the Building, in a commercially reasonable size and with graphics
which are consistent with landlord-identification signage on the Comparable
Buildings.
29.23 Transportation Management. To the extent required by Laws, Tenant
-------------------------
shall fully comply with all present or future programs intended to manage
parking, transportation or traffic in and around the Building.
29.24 Hazardous Material.
------------------
29.24.1 Definition. As used herein, the term "Hazardous Material"
----------
means any hazardous or toxic substance, material or waste which is or becomes
regulated by any local governmental authority, the State of California or the
United States Government. The term "Hazardous Material" includes, without
limitation, any material or substance which is (i) defined as a "hazardous
waste," "extremely hazardous waste" or "restricted hazardous waste" under
Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the
California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste
Control Law), (ii) defined as a
44
"hazardous substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and
Inventory), (iii) defined as a "hazardous substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage
of Hazardous Substances), (iv) petroleum, (v) asbestos or asbestos containing
materials, (vi) listed under Article 9 or defined as hazardous or extremely
hazardous pursuant to Article 11 of Title 22 of the California Administrative
Code, division 4, Chapter 20, (vii) designated as a "hazardous substance"
pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C.
(S) 1317), (viii) defined as a "hazardous waste" pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. (S) 6902 et seq. (42
U.S.C. (S) 6903), or (ix) defined as a "hazardous substance" pursuant to Section
101 of the Compensation and Liability Act, 42 U.S.C. (S) 9601 et seq. (42 U.S.C.
(S) 9601).
29.24.2 Operating Expenses. Tenant agrees that the costs incurred by
------------------
Landlord with respect to, or in connection with, complying with laws, codes,
regulations or ordinances relating to Hazardous Material shall be an Operating
Expense, except to the extent provided in Section 29.23.3 or 29.23.4 below. To
the extent any such Operating Expense relating to Hazardous Material is
subsequently recovered or reimbursed through insurance, or recovery from
responsible third parties, or other action, Tenant shall be entitled to a
proportionate share of such Operating Expense to which such recovery or
reimbursement relates.
29.24.3 Asbestos. Landlord agrees to (i) remove, at Landlord's sole
--------
cost and expense any asbestos or asbestos containing materials from the Premises
and restore the Premises to the condition existing prior to removal, except
where such restoration is unnecessary due to the installation of by the Tenant
Improvements, and (ii) provide to Tenant copies of any and all asbestos surveys
conducted on the Premises by Landlord, or furnished to Landlord..
29.24.4 Landlord's Representation. Landlord hereby represents to
-------------------------
Tenant that to the best of Landlord's knowledge, there are no Hazardous
Materials located in, on or under the Building, the Real Property or the
Premises, and there has been no violation thereon of any law governing Hazardous
Materials. To the extent that there has, in fact, been any such violation,
Landlord hereby agrees to remove, at Landlord's sole cost and expense, any such
Hazardous Materials unless Tenant has caused such violation. Landlord shall
cause the Premises, the Building and the Real Property be in full compliance
with any governmental laws, ordinances, regulations or orders relating to
environmental conditions on, under or about the Premises, the Building or the
Real Property, including but not limited to asbestos, soil and ground water
conditions and Hazardous Materials. Landlord further represents that to the
best of Landlord's knowledge, the Building complies with all applicable
earthquake codes. To the extent that the Building is not in such compliance,
Landlord shall promptly cause such compliance, at Landlord's sole cost and
expense.
29.25 Confidentiality. The parties acknowledge that the content of this
---------------
Lease and any related documents are confidential information. Each party agrees
to exercise reasonable efforts to keep all terms of this Lease which are not
public (and remain so) confidential and shall not
45
disclose the same to any other person not a party hereto without the prior
written consent of the other party; however, each party may disclose such terms
hereof as may be reasonably necessary to comply with any subpoena, law or
directive of government authority (including, without limitation, as may be
required to comply with any governmental order, regulation or standard in
connection with any securities offering or securities law disclosure, as may be
required by underwriters, stock exchange rules or other relevant sources in
connection with any securities offering of the maintenance of a public market in
such party's securities), or to its real estate broker, proposed assignees or
sublessees, Affiliates and their real estate brokers, accountants or attorneys,
to the extent reasonably necessary for such party's business purposes and so
long as, to the extent reasonably possible, such party receiving such disclosure
agrees to maintain the confidentiality of such information.
29.26 Reasonable Consent. Except for matters for which there is a
------------------
standard of consent or approval specifically set forth in this Lease, in which
case the express standard shall control, and except for matters which could (i)
adversely affect the Systems and Equipment, (ii) adversely affect the Building
structure, or (iii) affect the exterior appearance of the Building, in which
case Landlord shall have the right to act in its sole and absolute discretion
(but at all times in good faith) as to the matters described in items (i), and
(ii) and (iii) above, any time the consent or approval of Landlord or Tenant is
required under this Lease, such consent or approval shall not be unreasonably
withheld, conditioned or delayed. Subject to the foregoing, and except for
matters pertaining to the exercise by either party of any remedies in the event
of a default by the other party, in the event this Lease grants Landlord or
Tenant the right to take action, exercise discretion, establish rules and
regulations or make an allocation or other determination, Landlord and Tenant
shall act reasonably and in good faith.
29.27 Counterparts. This Lease may be executed in counterparts, each of
------------
which shall be deemed an original, but such counterparts, when taken together
shall constitute one agreement.
29.28 Termination of Existing Leases. Upon the full execution and
------------------------------
delivery of this Lease and the acquisition of the Real Property by Landlord,
Tenant and its Guarantor shall be conditionally released from all of its
financial and legal obligations with respect to Tenant's existing Leases with
Laguna Canyon Corporation at 16255, 16267 and 00000 Xxxxxx Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxxxx(xxxxxxxx to the Lease Termination Agreement attached hereto as
Exhibit D), as well as all temporary Space Leases between Landlord and Tenant
----------
within the Irvine Oaks Project in the Irvine area of Southern California;
provided, however, the existing Leases should not be terminated and Tenant
should not be obligated to move from the existing Premises until Landlord's Work
and Tenant's Work is substantially completed and the certificate of occupancy or
its equivalent has been issued so that the Tenant can take occupancy of the
Premises and commence doing business therein. The condition to such release is
the compliance by Tenant with all of the surrender obligations set forth in such
Leases.
29.29 General Compliance. Landlord hereby represents to Tenant, that
------------------
Landlord shall, throughout the initial term of the Lease and any extension of
the term of the Lease, cause the
46
Premises (including all parking lots and entrances serving the Premises) to
comply with all applicable laws, ordinances, rules and regulations of
governmental authorities, including but not limited to, the Americans with
Disabilities Act, and all regulations and orders promulgated pursuant to such
act ("Applicable Laws") with the cost of such compliance to be at Landlord's
sole cost and expense; provided that such compliance by Landlord shall be
applicable to any of the Tenant Improvement work contemplated by the provisions
of Section 2 of this Work Letter.
29.30 Future Construction [THE PARTIES NEED TO DISCUSS THE APPLICABLE
-------------------
PROVISION REGARDING EXPANSION OF THE BUILDING AS CONTEMPLATED BY PARAGRAPHS ON
PAGE 4 OF THE FEBRUARY 23, 1996 LETTER OF INTENT.]
29.31 Telecommunication Equipment.
----------------------------
29.31.1 Installation. At any time during the Lease Term, Tenant
------------
shall have the exclusive right, so long as Tenant is the sole lessee of all non-
common areas of the Building and thereafter a non-exclusive right, to install at
Tenant's sole cost and expense, antenna, satellite, microwave dish or any other
type of telecommunications or communications device ("Communications Equipment")
upon the roof of the Building at a location designated by Tenant, which location
as well as Tenant's plans and specifications relating to the installation of
Tenant's Communications Equipment shall be subject to Landlord's reasonable
approval, without the payment of operating expenses; provided, however, Tenant
shall pay all cost of such Communications Equipment, including, without
limitation, the utilities and maintenance necessary to Tenant's operation of the
Communications Equipment and liability insurance for such Communications
Equipment. In addition, Tenant shall, at Tenant's sole cost and expense,
install a submeter and submeter the electricity for the Communications Equipment
on the roof of the Building. Tenant's Communications Equipment shall, to the
extent required by the restrictions on the Building, not be visible from the
portion of the streets adjacent to and adjoining the boundaries of the project
at the areas of such streets which abut the building, and Landlord may
reasonable require Tenant to install screening around such Communications
Equipment, at Tenant's sole cost and expense, as reasonably designated by
Landlord. The Communications Equipment shall comply with all governmental laws
and ordinances and shall not pose any unreasonable safety hazards to any tenant
of the Building.
29.31.2 Maintenance and Repair. Tenant shall maintain, repair or
----------------------
replace Communications Equipment, at Tenant's sole cost and expense. During the
Lease Term, Tenant shall have the obligation to repair all damage to the
Building rooftop caused by the installation, repair, maintenance and use of the
Communications Equipment. If Landlord's or any other tenant's Communications
Equipment interferes with the operation or signal of Tenant's Communications
Equipment, then, promptly following notice from Tenant to Landlord of such
interference, Landlord shall have the option either to (i) immediately
discontinue its use, or cause any other Tenant in the Building causing such
interference to discontinue its use, of the communications equipment causing
such interference, or (ii) reposition Landlord's or any other tenant's
communications equipment to a location designated by Tenant which will remedy
the
47
situation. If Tenant's Communications Equipment interferes with the use of
normal office equipment by any_existing tenant in its space in the Building,
Tenant shall either (i) discontinue its use, or (ii) reposition its
Communications Equipment to a location designated by Tenant, and
subject to Landlord's reasonable approval, which will remedy the situation.
Further, Tenant shall have the obligation to repair any damage to the Building
rooftop caused by Tenant's Communications Equipment, reasonable wear and tear,
casualty and repairs which are specifically made the responsibility of Landlord
hereunder excepted.
29.31.3 Termination. Tenant shall be entitled at any time to
-----------
terminate such use of space on the roof, in which case Tenant shall be relieved
of all of its obligations to pay any utilities and/or maintenance charges
attributable to the operation of Tenant's Communications Equipment upon removal
of all such equipment from the roof of the Building by Tenant. Upon Tenant's
termination of the use of space on the roof and removal of its Communications
Equipment therefrom, Tenant shall have the obligation to repair all damage to
the Building rooftop caused by such removal of the Communications Equipment,
reasonable wear and tear, casualty and repairs which are specifically made the
responsibility of Landlord under this Lease excepted.
29.32 Acquisition of the Real Property. If Landlord fails to purchase the
--------------------------------
Property on or before June 1, 1996, Tenant may cancel this Lease. If Tenant
does not deliver written notice to Landlord canceling this Lease, then beginning
July 1, 1996, Tenant shall be entitled to an abatement of rent equal to two (2)
days for each one (1) day after July 1, 1996 by which Landlord has not purchased
the Real Property.
48
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
"Landlord":
MAGELLAN PROPERTY CORPORATION,
an Arizona corporation
By:
------------------------------
Its:
------------------------------
By:
------------------------------
Its:
------------------------------
49
"Tenant":
MATSUSHITA AVIONICS SYSTEMS CORPORATION,
a Delaware corporation
By:
------------------------------
Its:
------------------------------
By:
------------------------------
Its:
------------------------------
50
EXHIBIT A
---------
OUTLINE OF FLOOR PLAN OF PREMISES
---------------------------------
DRYWALL: PAINT/WALLCOVERING:
-------- -------------------
Xxxxxxx Interiors Xxxxxxx Xxx Basat
Xxxxxx Interiors Xxxxxxx XxxXxxxxx
Xxxxxxx Drywall Xxxxxxxx Xxxxx
Superior Wall Systems X.X. Xxxxxx
Xxxxxx Xxxxxxxx
ELECTRICAL: PLUMBING:
----------- ---------
Xxxxxxxx Xxxxxx Western Supply
Xxxxx Xxxx Xxxxx Plumbing
Xxxxxx Maclot Plumbing
Sasco ectric
FIRE SPRINKLERS: ROUGH CARPENTRY:
---------------- ----------------
Indicom Amort
Cosco Cantebury
Xxxxxxxx Fire Xxxxxx
Sentry Turelk, Inc.
Xxxxxx
FLOORING: STRUCTURAL STEEL:
--------- -----------------
Xxxx Xxxxxx Washington Iron
Floor Mart Riverton Steel
Metro Flooring Xxxxxxxxx Iron
FIRE SAFETY:
------------
Tele Fire
EXHIBIT A
EXHIBIT A-1
OUTLINE OF REAL PROPERTY
------------------------
[TO BE ATTACHED]
----------------
EXHIBIT B
TENANT WORK LETTER
------------------
This Tenant Work Letter shall set forth the terms and conditions relating to the
construction of the Premises. This Tenant Work Letter is essentially organized
chronologically and addresses the issues of the construction of the Premises, in
sequence, as such issues will arise during the actual construction of the
Premises. All references in this Tenant Work Letter to Articles or Sections of
this "Lease" shall mean the relevant portions of Articles 1 through 29 of this
Lease to which this Tenant Work Letter is attached as Exhibit B, and all
---------
references in this Tenant Work Letter to Sections of "this Tenant Work Letter"
shall mean the relevant portions of Sections 1 through 6 of this Tenant Work
Letter. All capitalized terms used in this Tenant Work Letter without
definition shall have the meanings as set forth in the Lease.
SECTION 1
---------
DELIVERY OF THE PREMISES
------------------------
As soon as reasonably possible following the full execution and delivery of this
Lease by Landlord and Tenant, Landlord shall deliver the Premises to Tenant in
the condition required by the provisions of Section 7.2 of the Lease, and Tenant
shall accept the Premises from Landlord in such condition. In addition to the
foregoing, Tenant shall have the right to inspect the Building and the Real
Property with the assistance of mechanical, electrical and structural engineers.
Tenant and its consultants shall have the right to review all reports produced
as a result of the acquisition of the Property by Landlord (i.e., any Phase I
Environmental Reports in the possession of Landlord). Furthermore, Landlord
shall be responsible for all compliance issues (e.g., compliance with the
Americans with Disabilities Act, and compliance with fire, life safety, seismic
and Title 24 issues) relating to the Building and Real Property as of the date
of execution of this Lease. Landlord shall also be responsible for the
replacement of any capital items such as the existing roof membrane, to the
extent necessary as of the date of execution of this Lease in order to cause the
Building to be in "good condition", and Landlord shall re-slurry and repair and
re-stripe the parking lot, replace the light-weight concrete on the second floor
of the Building, provide reasonable landscaping modifications consistent with
the Comparable Buildings, and repair other Building and site deficiencies
existing as of the date of execution of this Lease, all at Landlord's sole cost
and expense. Landlord shall contract with Tenant's selected general contractor
(as described in Section 4 of this Tenant Work Letter) to complete the work
required in this Section 1 in order to mitigate disruption of Tenant's work of
improvement in the Building.
SECTION
TENANT IMPROVEMENTS
2.1 Tenant Improvement Allowance. Tenant shall be entitled to a tenant
----------------------------
improvement allowance (the "Tenant Improvement Allowance") in the amount equal
to One Million Fourteen Thousand Six Hundred Seventy Two Dollars and No/100
($1,014,672.00) (Sixteen Dollars and No/100 ($16.00) per rentable square foot
contained in the Premises) for the costs relating to the initial design and
construction of Tenant's improvements in the Premises (the "Tenant
Improvements"). Except as otherwise set forth in this Tenant Work Letter or in
this Lease, Landlord shall not be obligated to make disbursements pursuant to
this Tenant Work Letter in a total amount which exceeds the Tenant Improvement
Allowance. Notwithstanding anything to the contrary in this Section 2.1, if
Landlord does not distribute the Tenant Improvement Allowance pursuant to
Section 2.2 and Section 2.3 below, within thirty (30) days following demand by
Tenant in writing, then, subject to Landlord's right to seek equitable relief if
Landlord objects in good faith to Tenant's assertion that Landlord has failed to
make such distribution, Tenant shall have the option of completing the Tenant
Improvements at Tenant's sole cost and expense, and withholding such amounts
including interest thereon, from any rents and/or other charges due under the
Lease.
2.2 Disbursement of the Tenant Improvement Allowance. Except as otherwise
------------------------------------------------
set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord (each of which disbursement shall be made pursuant to
Landlord's disbursement process as set forth in Section 2.3, below) only for the
following items and costs (collectively the "Tenant Improvement Allowance
Items"):
2.2.1 Payment of the fees of (i) the "Architect" and the "Engineers,"
as those terms are defined in Section 3.1 of this Tenant Work Letter, and (ii)
any consultant engaged by Tenant in connection with Tenant's, design and/or
construction of the Premises or Tenant Improvements;
2.2.2 The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements;
2.2.3 The cost of construction of the Tenant Improvements;
EXHIBIT B
Page 2
2.2.4 The cost of any changes in the Building when such changes are
required by the "Construction Drawings," as defined in Section 3.1, below, such
cost to include all direct architectural and/or engineering fees and expenses
incurred in connection therewith;
2.2.5 Sales and use taxes and Title 24 fees in connection with the
construction of the Tenant Improvements; and
2.2.6 The cost of furniture, fixtures, freestanding work stations,
built-ins, related cabinets, reception desks, telecommunications and other
equipment and related wiring, audiovisual equipment, security systems and all
carpets and floor coverings covered by the Final Working Drawings or ordered
directly by Tenant for the Premises and the costs of Tenant's moving into and
relocation to the Premises with respect to which Tenant seeks reimbursement
hereunder, provided that the foregoing amounts do not exceed $126,834.
2.3.8 All costs and expenses incurred by Tenant in connection with
the design, construction, permitting and installation of the Monument Sign; andy
2.3.9 Any other cost, expense or amount incurred or expended by
Tenant which is payable by Tenant pursuant to the provisions of this Tenant Work
Letter with respect to which Tenant seeks payment or reimbursement hereunder.
2.3 Disbursement of Tenant Improvement Allowance. Prior to, during and
--------------------------------------------
following the design and construction of the Tenant Improvements, as the case
may be, Landlord shall make monthly disbursements of the Tenant Improvement
Allowance for Tenant Improvement Allowance Items as follows.
2.3.1 Monthly Disbursements.
2.3.1.1 Request for Payment. On or before the 25th day (the
-------------------
"Submittal Date") of each calendar month commencing with the first calendar
month following the execution of the Lease, the Contractor, shall deliver to
Landlord and Tenant, or Tenant shall deliver to Landlord, as applicable: (i) in
the case of Contractor only, a request for payment, on the standard AIA (G702)
form showing, by trade, the percentage of completion of the Tenant Improvements
in the Premises (as reasonably extrapolated by Contractor through the end of the
applicable month), detailing the portion of the work completed, and reasonably
demonstrating that the relationship between the cost of the work completed and
the cost of the work to be completed,
EXHIBIT B
Page 3
including invoices from all "Subcontractors," as that term is defined in Section
4.2, below, (ii) invoices from all of Tenant's agents, contractors, materialmen,
laborers and suppliers which are directly retained by Tenant (collectively
"Tenant's Agents"), for labor rendered and materials delivered to the Premises
for the applicable payment period; (iii) executed conditional mechanic's lien
releases from all of the Subcontractors and Tenant's Agents, as applicable,
which shall comply with the appropriate provisions of California Civil Code
Section 3262(d); provided, however, that with respect to fees and expenses of
the Architect or Engineers, or Tenant's Agent's which are equipment suppliers,
movers or consultants, for which the payment scheme set forth in items (ii) and
(iii), above, is not applicable (collectively, the "Non-Construction Allowance
Items"), Tenant shall only be required to deliver to Landlord on or before the
applicable Submittal Date, reasonable evidence of incurring the cost for the
applicable Non-Construction Allowance Items (unless Landlord has received a
preliminary notice in connection with such costs in which event conditional lien
releases must be submitted in connection with such costs); and (iv) all other
customary information reasonably requested in good faith by Landlord. Submittal
of the Contractor's request for payment shall be deemed to constitute Tenant's
authorization for Landlord to disburse the amounts requested to Contractor set
forth in the request for payment and to deduct those portions thereof to be
borne by Tenant under this Tenant Work Letter from the Tenant Improvement
Allowance. Tenant's request for payment of invoices from Tenant's Agents shall
be deemed Tenant's acceptance and approval of the work furnished and/or the
materials supplied as set forth in Tenant's payment request vis-a-vis Landlord
(but not vis-a-vis Tenant's Agents).
2.3.1.2 Payment. On or before the date which is thirty (30)
-------
days after Landlord's receipt of the payment requests set forth above (the
"Payment Date"), and assuming Landlord receives the applicable information
described in items (i) through (iv), above, and unconditional lien releases, as
applicable, for all work paid for from the Tenant Improvement Allowance as of
the previous Payment Date, Landlord shall deliver a check to Contractor in
payment of the lesser of: (A) the amounts so requested, as set forth in Section
2.3.1.1, above, less a ten percent (10%) retention (the aggregate amount of such
retentions to be known as the "Final Retention"), and (B) the balance of any
remaining available portion of the Tenant Improvement Allowance (not including
the Final Retention), provided that Landlord does not dispute any request for
payment based on material non-compliance of any work with the "Approved Working
Drawings", as that term is defined in Section 3.3, below, or due to any
materially substandard work as identified in good faith by Landlord.
2.3.2 Final Retention. Subject to the provisions of this Tenant Work
---------------
Letter, checks for the Final Retention payable to Contractor shall be delivered
by Landlord to Contractor following the completion of construction of the
Premises, provided that (i) Contractor delivers to Landlord
EXHIBIT B
Page 4
properly executed mechanics lien releases in compliance with both California
Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or Section
3262(d)(4), and (ii) Landlord has reasonably determined that no materially
substandard work exists which materially and adversely affects the mechanical,
electrical, plumbing, heating, ventilating and air conditioning, life-safety or
other systems of the Building, the curtain wall of the Building, or the
structure or exterior appearance of the Building.
2.3.3 Failure to Disburse Tenant Improvement Allowance. In the event
------------------------------------------------
that Landlord fails to fulfill its obligation to disburse the Tenant Improvement
Allowance in accordance with the terms of this Section 2.3, above, following
thirty (30) days notice from Tenant and Landlord's failure to cure such failure
within such period, Tenant shall have the right, which right shall be in
addition to any rights or remedies available to Tenant under this Tenant Work
Letter or at law or in equity, to pay any such amount due and offset any such
amount paid by Tenant, together with interest at the Interest rate, against
Tenant's obligation for Rent next coming due under this Lease.
2.4 Unused Tenant Improvement Allowance. Any portion of the Tenant
-----------------------------------
Improvement Allowance which is not disbursed by Landlord pursuant to the terms
of Section 2.3, above, for Tenant Improvement Allowance Items within three (3)
months following the Lease Commencement Date shall, thereafter be credited
against Base Rent becoming due for the 9th and 10th months of the Lease Term.
EXHIBIT B
Page 5
SECTION 3
CONSTRUCTION DRAWINGS
---------------------
3.1 Selection of Architect/Construction Drawings. Tenant shall retain
--------------------------------------------
________________________ ("_______") or any other reputable architect/space
planner selected by Tenant (the "Architect") and reasonably approved by
Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed by Landlord, to prepare the Construction Drawings. Tenant shall retain
an engineering consultant (the "Engineers") approved by Landlord, which approval
shall not be unreasonably withheld, conditioned or delayed by Landlord, to
prepare all plans and engineering working drawings relating to the mechanical,
electrical, plumbing, HVAC, lifesafety, sprinkler and structural work in the
Premises. Landlord hereby approves _______________________________ as the
Engineers. The plans and drawings to be prepared by Architect and the Engineers
hereunder with respect to the Tenant Improvements shall be known collectively as
the "Construction Drawings." Tenant and Architect shall verify, in the field,
the dimensions and conditions as shown on the relevant portions of the Base
Building Plans, and Tenant and Architect shall be solely responsible for the
same, and Landlord shall have no responsibility in connection therewith.
3.2 Review Liability. Landlord's review of the Construction Drawings as
----------------
set forth in this Section 3, shall be for its sole purpose and shall not imply
Landlord's review of the same, or obligate Landlord to review the same, for
quality, design, compliance with Applicable Law or other like matters.
Accordingly, notwithstanding that any Construction Drawings are reviewed by
Landlord or its space planner, architect, engineers and consultants, and
notwithstanding any advice or assistance which may be rendered to Tenant by
Landlord or Landlord's space planner, architect, engineers, and consultants,
Landlord shall have no liability whatsoever in connection therewith, except to
the extent that Landlord has specifically requested modification to the
Construction Drawings as a condition of Landlord's approval of the same, and
shall not be responsible for any omissions or errors contained in the
Construction Drawings.
3.3 Final Working Drawings. Architect and the Engineers shall prepare or
----------------------
reasonably complete set of architectural and engineering drawings for the Tenant
Improvements to be constructed in the Premises, and Architect shall compile a
reasonably complete coordinated set of architectural, structural, mechanical,
electrical and plumbing working drawings in a form which is sufficiently
complete to allow subcontractors to bid on the work and to obtain all applicable
permits
EXHIBIT B
Page 6
(collectively, the "Final Working Drawings") and shall submit the same to
Landlord for Landlord's approval. The Final Working Drawings may be submitted in
one or more stages at one or more times,provided that Tenant shall ultimately
supply Landlord with four (4) completed copies signed by Tenant of such Final
Working Drawings. Within ten (10) business days following Landlord's receipt of
the Final Working Drawings, Landlord shall either approve or disapprove the
Final Working Drawings, provided that Landlord may only disapprove or condition
its approval of the same for (i) an adverse affect on the structural integrity
of the Building; (ii) non-compliance with Applicable Laws; (iii) an adverse
affect on the Systems and Equipment; (iv) an adverse affect on the exterior
appearance of the Building; (individually or collectively, a "Design Problem").
If Landlord disapproves the Final Working Drawings, Landlord shall specify in
reasonable detail the corrections required to rectify the Design Problem or
Design Problems, as the case may be, and Tenant shall make the changes necessary
in order to correct the Design Problem or Design Problems and deliver the
revised Final Working Drawings to Landlord. Landlord shall either approve or
disapprove the revised Final Working Drawings. If Landlord again disapproves the
revised Final Working Drawings, Tenant shall make the changes necessary in order
to correct the Design Problem or Design Problems and deliver the revised Final
Working Drawings to Landlord.
3.4 Approved Working Drawings. The Final Working Drawings shall be
-------------------------
approved by Landlord (the "Approved Working Drawings") prior to the commencement
of the construction of the Tenant Improvements. Tenant shall submit the
Approved Working Drawings to the appropriate municipal authorities for all
applicable building permits necessary to allow Contractor to commence the
construction of the Tenant Improvements (the "Permits"), ; provided, however,
that in the event that portions of the Tenant Improvements may be lawfully
commenced prior to issuance of permits therefor, to the extent it is lawful to
do so, Tenant may cause performance of such work to be commenced. Tenant hereby
agrees that with respect to Tenant's Work neither Landlord nor Landlord's
consultants shall be responsible for obtaining any building permit or
certificate of occupancy for the Premises and that the obtaining of the same
shall be Tenant's responsibility; provided, however, that Landlord shall, in any
event, cooperate with Tenant in executing permit applications and performing
other ministerial acts reasonably necessary to enable Tenant to obtain any such
permit or certificate of occupancy and Landlord shall be responsible for these
items with respect to Landlord's work.
3.5 Change Orders. In the event that Tenant requests any material changes
-------------
to the Approved Working Drawings ("Changes"), Landlord shall not unreasonably
withhold or condition its consent to any such Changes, and shall grant its
consent to such Changes within three (3) business days after Landlord's receipt
of Tenant's request for the same, provided the proposed Change does not create a
Design Problem.
EXHIBIT B
Page 7
3.6 Suspension of Tenant Improvements. In the event that, at any time and
---------------------------------
from time to time and for any reason, Tenant elects not to proceed with or to
suspend (a) the design or construction of the Tenant Improvements, or (b) its
move into the Premises, then, such election shall not excuse any performance of
Landlord under the Lease or this Tenant Work Letter, and shall not result in an
Event of Default (as defined in Section 19.1 of the Lease).
EXHIBIT B
Page 8
SECTION 4
CONSTRUCTION OF THE
--------------------
TENANT IMPROVEMENTS
-------------------
4.1 Selection of Contractor. The contractors to perform the construction
-----------------------
of the Tenant Improvements (the "Contractors") shall be selected by Tenant from
the three (3) general contractors listed in Schedule 1 attached hereto (the
"Bidding Contractors"), each of whom is hereby approved by Landlord and Tenant.
4.2 Subcontractors. Each line item and trade to be performed under the
--------------
general construction contract shall be performed by subcontractors (the
"Subcontractors") listed in Schedule 1 to this Exhibit B or otherwise approved
by Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed.
4.3 Construction Contract.
---------------------
4.3.1 Required Construction Contract Provisions. Following the
-----------------------------------------
selection of the Contractor, Tenant shall independently retain Contractor to
construct the Tenant Improvements in accordance with the Approved Working
Drawings.
4.3.2 Construction Contract Guarantees and Warranties. Contractor
-----------------------------------------------
and each Subcontractor shall guarantee and warrant for the benefit of Landlord
and Tenant that (i) the portion of the Tenant Improvements for which it is
responsible shall be free from any defects in workmanship and materials for a
period of not less than one (1) year (unless a longer period is expressly
required in the Approved Working Drawings) from the date of Substantial
Completion of the Tenant Improvements (the "Warranty Period") and (ii) such
Contractor and
EXHIBIT B
Page 9
Subcontractors shall be responsible for the replacement or repair, without
additional charge, of all work done or furnished in accordance with its contract
within such Warranty Period. All such guarantees and warranties shall be
expressly set forth in the general construction contract. The correction of any
such work shall include, without additional charge, all additional expenses and
damages in connection with such removal or replacement of all or any part of the
Tenant Improvements.
4.3.3 No Chargebacks. To the extent that Landlord has performed, or
--------------
will perform, any extra or other work in or for the benefit of the Premises
which is not specifically called for by the Approved Working Drawings, except in
the case where such work is not required hereunder to be performed by Landlord
and Tenant requests Landlord to perform such work, such work shall not be
charged to Tenant or deducted from the Tenant Improvement Allowance. Unless
otherwise approved in writing by Tenant, neither Tenant nor Contractor shall be
required to use any materials or supplies prestocked or otherwise furnished or
specified by Landlord.
4.3.4 Presence of Hazardous Materials. In the event that (i) at
-------------------------------
any point during the period ("Construction Period") commencing with the date of
this Lease and ending with completion of the Tenant Improvements, the Premises
or any portion thereof are determined to contain Hazardous Materials which were
not put there after the date of this Lease, and which require remediation under
applicable laws, (ii) Landlord shall fail to remediate the same with reasonable
promptness and diligence pursuant to (and in accordance with the requirements
of) of the Lease, and (iii) such failure shall continue for ten (10) days
following written notice of such failure from Tenant, Tenant shall have the
right to remove, encapsulate, contain, or otherwise dispose of such Hazardous
Materials, and the cost incurred by Tenant in connection therewith shall be
reimbursed by Landlord to Tenant within five (5) days after receipt by Landlord
from Tenant of an invoice documenting and evidencing such costs. In addition, in
the event that the discovery, presence, investigation and/or remediation of such
Hazardous Materials delays the design or construction of the Tenant
Improvements, or increases in any way the costs to be borne by Tenant hereunder,
such delay shall constitute a Landlord Caused Delay and such costs (if and to
the extent paid or borne by Tenant instead of Landlord) shall be reimbursable to
Tenant by Landlord within fifteen (15) days of Tenant's delivery to Landlord of
reasonable evidence of such increased costs. The amount of such reimbursements
shall be separate and apart from, and in addition to, the Tenant Improvement
Allowance and shall not be deducted from the Tenant Improvement Allowance.
EXHIBIT B
Page 10
4.3.5 Bonding. Except for Contractor's obligation to remove or bond
-------
over liens under the general construction contract at no cost to either Landlord
or Tenant, notwithstanding any provision to the contrary set forth in this
Tenant Work Letter or in the Lease, neither Contractor nor Tenant shall be
required to obtain or provide any completion, performance or other bond in
connection with the Tenant Improvements.
4.4 Tenant's Covenants.
------------------
4.4.1 Tenant's Agents.
4.4.1.1 Landlord's General Conditions for Tenant's Agents
--------------------------------------------------
and Tenant Improvement Work. The Tenant Improvements shall be constructed in
---------------------------
strict accordance with the Approved Working Drawings; provided however that
Tenant may make changes to the Approved Working Drawings which changes would not
represent reasonable grounds for Landlord to disapprove of the Final Space Plan.
EXHIBIT B
Page 11
4.4.1.2 Indemnity. Tenant's indemnity of Landlord as set forth in
---------
Section 10.1 of this Lease shall also apply with respect to any and all costs,
losses, damages, injuries and liabilities related in any way to any act or
omission of Tenant or Tenant's Agents, or anyone directly or indirectly employed
by any of them, or in connection with Tenant's non-payment of any amount arising
out of the Tenant Improvements and/or Tenant's disapproval of all or any portion
of any request for payment.
4.4.1.3 Requirements of Tenant's Agents. Each of Tenant's Agents
-------------------------------
shall guarantee to Tenant and for the benefit of Landlord that the portion of
the Tenant Improvements for which it is responsible shall be free from any
defects in workmanship and materials for a period of not less than one (1) year
from the date of completion thereof. Each of Tenant's Agents shall be
responsible for the replacement or repair, without additional charge, of all
work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the
work performed by such contractor or subcontractors and (ii) the Lease
Commencement Date. The correction of such work shall include, without
additional charge, all additional expenses and damages incurred in connection
with such removal or replacement of all or any part of the Tenant Improvements,
and/or the Building and/or the Real Property that may be damaged or disturbed
thereby. All such warranties or guarantees as to materials or workmanship of or
with respect to the Tenant Improvements shall be contained in the Contract or
subcontract and shall be written such that such guarantees or warranties shall
inure to the benefit of both Landlord and Tenant, as their respective interests
may appear, and can be directly enforced by either. Tenant covenants to give to
Landlord any assignment or other assurances which may be necessary to effect
such right of direct enforcement.
4.4.1.4 Insurance Requirements.
4.4.1.4.1 General Coverages. All of Tenant's Agents
-----------------
shall carry worker's compensation insurance covering all of their respective
employees, and shall also carry commercial general liability, including property
damage, all with limits, in form and with companies as are required to be
carried by Tenant as set forth in Article 10 of this Lease, and the policies
therefor shall insure Landlord, Tenant, Contractor and subcontractors, all as
additional insureds.
EXHIBIT B
Page 12
4.4.1.4.2 Special Coverages. Tenant shall carry
-----------------
"Builder's All Risk" insurance covering the construction of the Tenant
Improvements and such other insurance as Landlord may require, it being
understood and agreed that the Tenant Improvements shall be insured by Tenant
pursuant to Article 10 of this Lease immediately upon completion thereof.
4.4.1.4.3 General Terms. Certificates for all insurance
-------------
carried pursuant to this Section 4.4.1.4.3 shall be delivered to Landlord before
the commencement of construction of the Tenant Improvements and before the
Contractor's equipment is moved onto the site. All such policies of insurance
must contain a provision that the company writing said policy will give Landlord
thirty (30) days prior written notice of any cancellation or lapse of the
effective date or any reduction in the amounts of such insurance. In the event
that the Tenant Improvements are damaged by any cause during the course of the
construction thereof, Tenant shall immediately repair the same at Tenant's sole
cost and expense. Tenant's Agents shall maintain all of the foregoing insurance
coverage in force until the Tenant Improvements are fully completed, except for
any Products and Completed Operation Coverage insurance required by Landlord,
which is to be maintained for ten (10) years following completion of the work
and acceptance by Landlord and Tenant. All insurance, except Workers'
Compensation, maintained by Tenant's Agents shall preclude subrogation claims by
the insurer against anyone insured thereunder. Such insurance shall provide that
it is primary insurance as respects the owner and that any other insurance
maintained by owner is excess and noncontributing with the insurance required
hereunder. The requirements for the foregoing insurance shall not derogate from
the provisions for indemnification under Section 4.4.1.2 of this Tenant Work
Letter.
4.4.2 Governmental Compliance. The Tenant Improvements shall comply
-----------------------
in all respects with the following: (i) the Code and other state, federal, city
or quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer's specifications.
4.4.3 Inspection by Landlord. Landlord shall have the right to
----------------------
inspect the Tenant Improvements at all times, provided however, that Landlord's
failure to inspect the Tenant Improvements shall in no event constitute a waiver
of any of Landlord's rights hereunder nor shall Landlord's inspection of the
Tenant Improvements constitute Landlord's approval of the same. Should Landlord
disapprove any portion of the Tenant Improvements, Landlord shall notify Tenant
in writing of such disapproval and shall specify the items disapproved; provided
however that Landlord shall not disapprove of any portion of the Tenant
Improvements which
EXHIBIT B
Page 13
have been constructed in accordance with the Approved Working Drawings. Any
defects or deviations in, and/or disapproval by Landlord of, the Tenant
Improvements shall be rectified by Tenant at no expense to Landlord, provided
however, that in the event Landlord determines that a defect or deviation exists
or disapproves of any matter in connection with any portion of the Tenant
Improvements and such defect, deviation or matter might adversely affect the
mechanical, electrical, plumbing, heating, ventilating and air conditioning or
life-safety systems of the Building, the structure or exterior appearance of the
Building or any other tenant's use of such other tenant's leased premises,
Landlord may, take such action as Landlord deems necessary, at Tenant's expense
and without incurring any liability on Landlord's part, to correct any such
defect, deviation and/or matter, including, without limitation, causing the
cessation of performance of the construction of the Tenant Improvements until
such time as the defect, deviation and/or matter is corrected to Landlord's
satisfaction.
4.5 Notice of Completion; Copy of Plans. Within ten (10) days after the
-----------------------------------
issuance of the permanent or temporary certificate of occupancy for the Tenant
Improvements, Tenant shall cause a Notice of Completion to be recorded in the
office of the Recorder of the County of Los Angeles in accordance with Section
3093 of the Civil Code of the State of California or any successor statute, and
shall furnish a copy thereof to Landlord upon such recordation; provided however
that if Tenant fails to do so, Tenant shall not be in breach hereunder, but
Tenant shall protect, defend, indemnify and hold Landlord harmless from any
loss, cost, damage, claim or expense incurred by Landlord in connection with
Tenant's failure to record the Notice of Completion. At the conclusion of
construction, (i) Tenant shall cause the Architect and Contractor (A) to update
the Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings during the course of construction, (B) to certify to
the best of their knowledge that the "field grade" of drawings are true and
correct, which certification shall survive the expiration or termination of this
Lease, and (C) to deliver to Landlord two (2) sets of such as-built drawings
within ninety (90) days following issuance of a certificate of occupancy for the
Premises, and (ii) Tenant shall deliver to Landlord a copy of all warranties,
guaranties, and operating manuals and information relating to the improvements,
equipment, and systems in the Premises.
SECTION 5
DELAY OF LEASE COMMENCEMENT DATE
--------------------------------
EXHIBIT B
Page 14
5.1 Lease Commencement Date Delays. The Lease Commencement Date shall
------------------------------
occur as provided in Article 2 of this Lease, provided that the Lease
Commencement Date shall be delayed by the number of days of delay of the
"substantial completion of the Tenant Improvements," as that term is defined
below in this Section 5, in the Premises which is caused solely by a "Lease
Commencement Date Delay." As used herein, the term "Lease Commencement Date
Delay" shall mean only a "Force Majeure Delay" or a "Landlord Caused Delay," as
those terms are defined below in this Section 5.1. As used herein, the term
"Force Majeure Delay" shall mean only an actual delay resulting from fire,
earthquake, explosion, flood, hurricane, the elements, acts of God or the public
enemy, war, invasion, insurrection, rebellion, riots, industry-wide labor
strikes or lockouts (which objectively preclude Tenant from obtaining from any
reasonable source of union labor or substitute materials at a reasonable cost
necessary for completing the Tenant Improvements), or governmental acts (which
do not specifically relate to the construction of the Tenant Improvements and
which objectively preclude construction of tenant improvements by any person).
Notwithstanding anything to the contrary contained herein, a Force Majeure Delay
shall not include any of the foregoing delays to the extent caused by the
negligence or wilful misconduct of Tenant, its contractors or agents. As used in
this Tenant Work Letter, "Landlord Caused Delay" shall mean only an actual delay
resulting from the acts or omissions of Landlord including, but not limited to,
(i) failure of Landlord to timely approve or disapprove any Construction
Drawings; (ii) unreasonable and material interference by Landlord, its agents or
contractors with the completion of the Tenant Improvements and which objectively
preclude construction of tenant improvements in the Building by any person,
which interference relates to access by Tenant, its agents and contractors to
the Building during normal construction hours, or the use thereof during normal
construction hours; and (iii) delays due to the acts or failures to act of
Landlord, its agents or contractors with respect to payment of the Tenant
Improvement Allowance and/or any cessation of work upon the Tenant Improvements
as a result thereof.
5.2 Determination of Lease Commencement Date Delay. If Tenant contends
----------------------------------------------
that a Lease Commencement Date Delay has occurred, Tenant shall notify Landlord
in writing within two (2) business days of each of (i) the date upon which such
Lease Commencement Date Delay becomes known to Tenant, Architect, or Contractor
and (ii) the date upon which such Lease Commencement Date Delay ends (the
"Termination Date"). Tenant's failure to deliver either or both of such notices
to Landlord within the required time period shall be deemed to be a waiver by
Tenant of the contended Lease Commencement Date Delay to which such notices
would have related. If such actions, inaction or circumstances described in the
notice set forth in clause (i), above (the "Delay Notice") are not cured by
Landlord within two (2) business day of receipt of the Delay Notice and if such
actions, inaction or circumstances otherwise qualify as a Lease Commencement
Date Delay, then a Lease Commencement Date Delay shall be deemed to have
occurred commencing as of the date of Landlord's receipt of the Delay Notice and
ending as of the Termination Date.
EXHIBIT B
Page 15
SECTION 6
MISCELLANEOUS
-------------
6.1 Tenant's Representative. Tenant has designated ___________________ as
-----------------------
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who shall have full authority and responsibility to act on behalf
of the Tenant as required in this Tenant Work Letter. Tenant shall have the
right to designate a replacement and/or alternate representative by delivery of
written notice thereof to Landlord.
EXHIBIT B
Page 16
6.2 Landlord's Representative. Landlord has designated Xxxxx Xxxxxx as
-------------------------
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
6.3 Time of the Essence in This Tenant Work Letter. Unless otherwise
----------------------------------------------
indicated, all references herein to a "number of days" shall mean and refer to
calendar days.
6.4 Miscellaneous Charges. Tenant shall be charged for the use of
---------------------
electricity and water during the completion of the Tenant Improvements.
EXHIBIT B
Page 17
SCHEDULE 1 TO EXHIBIT B
APPROVED TENANT AGENTS
----------------------
_______________________________________________________
GENERAL CONTRACTORS
------------------------------
Xxxxxx Building Corporation
Turelk, Inc.
_______________________________________________________
ACOUSTICAL: GLASS/GLAZING:
------------------------------ ----------------------
Diamond National Xxxxx
Xxxxxxx Interiors GoldCoast Glass
Elljay Acoustical Xxxxxxxxx
Xxxxxx Integrated Jewel
Imperial Tenant
_______________________________________________________
DEMOLITION: HVAC:
------------------------------ ----------------------
ACCO
American Demo Air Mechanical
Packard Control Air
Turelk, Inc. Air Tec
X. X. Xxxx
J & G Industries
_______________________________________________________
DOORS/FRAMES/HARDWARE: MILLWORK:
------------------------------ ----------------------
Eppink of California
Architectural Doors A.M. Cabinets
Cabo Door Xxxxxx Brothers
Xxxxxx Brothers X.X. Xxxxxxxx
Xxxx
_______________________________________________________
FIRE SPRINKLERS: ROUGH CARPENTRY:
------------------------------ ----------------------
Amort
Indicom Cantebury
Cosco Xxxxxx
Xxxxxxxx Fire Turelk, Inc.
Sentry
Xxxxxx
_______________________________________________________
EXHIBIT B
Page 1
EXHIBIT C
NOTICE OF LEASE TERM DATES
--------------------------
To: __________________________
__________________________
__________________________
__________________________
Re: Office Lease dated ________________________, 19__, between Magellan
Property Corporation, an Arizona corporation ("Landlord"), and
Matsushita Avionics Systems Corporation, a Delaware corporation
("Tenant") concerning the Office Building located at 00000 Xxxx
Xxxxxxx Xxxxxxxx, Xxxxxx, Xxxxxxxxxx.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:
1. The Lease Term commence as of ________________ for a term of
_______________ending on _______________.
2. That in accordance with the Lease, Rent commenced to accrue on
_______________________.
"Landlord":
MAGELLAN PROPERTY CORPORATION,
an Arizona corporation
By:
---------------------------
Its:
--------------------------
EXHIBIT C
Page 1
greed to and Accepted as
of _____________, 19__.
Tenant":
MATSUSHITA AVIONICS SYSTEMS CORPORATION,
a Delaware corporation
By:
-------------------------------
Its:
----------------------------
EXHIBIT C
Page 2
EXHIBIT D
FORM OF LEASE TERMINATION AGREEMENT
-----------------------------------
THIS AGREEMENT, made as of ________________, 1996, by and between Magellan
Property Corporation, an Arizona corporation ("Landlord"), and Matsushita
Avionics Systems Corporation, a Delaware corporation, ("Tenant"), collectively,
the "Parties," and individually, a "Party."
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Landlord has entered into an agreement with the landlord under
those certain leases dated __________, 19__ ("Lease A"), __________, 19__
("Lease B") and _________, 19__ ("Lease C") by and between Laguna Canyon,
Corporation, a California corporation ("LCC") as Landlord and Tenant relating to
properties located at, respectively, 16255, 26267 and 00000 Xxxxxx Xxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxx (the "Existing Leases"); and; and
WHEREAS, Landlord and Tenant have entered into a new lease of premises in
Irvine, California , commonly known as 00000 Xxxx Xxxxxxx, Xxxxxx, Xxxxxxxxxx
00000 (the "New Lease"); and (the "New Lease"); and
WHEREAS, Tenant has vacated and surrendered possession to LCC, and Landlord
has delivered possession of the Premises described in the New Lease to Tenant
for the purposes described therein; and'
WHEREAS, Landlord and Tenant desire to terminate the Existing Leases upon
the terms hereinafter stated, and LCC desires to evidence its approval with such
termination by its counter signature of this Lease Termination Agreement below;
NOW, THEREFORE, in consideration of the foregoing and the provisions
hereinafter stated, and for other valuable consideration, IT IS AGREED as
follows:
1. The Existing Leases shall be and hereby are terminated as of the date
first above written.
2. Fixed minimum rent, Tenant's share of real property taxes and
assessments and costs of maintaining and operating the real property and any
other items of additional rent or other charges payable under the Existing
Leases shall be prorated as of the date of this
EXHIBIT D
Page 1
Agreement and an appropriate adjustment shall be made between LCC and Tenant
hereunder respecting payment of such items within sixty (60) days following the
date of this Agreement
3. Subject to the provisions of the New Lease, Tenant and LCC are hereby
released and relieved of all further obligations or liability to the other
arising under the Existing Leases from and after the date of this Agreement.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement as of
the date first above written.
MAGELLAN PROPERTY CORPORATION,
an Arizona corporation
By: _______________________________
Its: ________________________
By: _______________________________
Its: _________________________
MATSUSHITA AVIONICS SYSTEMS
CORPORATION,
a Delaware corporation
By: _______________________________
Its: ________________________
EXHIBIT D
Page 2
By: _______________________________
Its: ________________________
The foregoing is hereby agreed to and accepted this ___ day of __________,
1996.
LAGUNA CANYON CORPORATION,
a California corporation
By: _______________________________
Its:___________________________
By: _______________________________
Its:___________________________
EXHIBIT D
Page 3
EXHIBIT E
FORM OF TENANT'S ESTOPPEL CERTIFICATE
-------------------------------------
The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of April __, 1996 and between Magellan Property
Corporation, an Arizona corporation, as Landlord, and the undersigned as Tenant,
for Premises being the entire Office Building located at _______________________
certifies as follows:
1. Attached hereto as Exhibit A is a true and correct copy of the Lease
---------
and all amendments and modifications thereto. The documents contained in
Exhibit A represent the entire agreement between the parties as to the Premises.
---------
2. The undersigned has commenced occupancy of the Premises described in
the Lease, currently occupies the Premises, and the Lease Term commenced on
_________.
3. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
---------
4. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
5. Base Rent became payable on _______________.
6. The Lease Term expires on _________________.
7. To the actual knowledge of Tenant, without investigation or inquiry
and except as specified herein, all conditions of the Lease to be performed by
Landlord necessary to the enforceability of the Lease have been satisfied and
Landlord is not in default thereunder.
8. No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.
9. To the actual knowledge of Tenant, without investigation or inquiry
and except as specified herein, as of the date hereof, there are no existing
defenses or offsets that the undersigned has, which preclude enforcement of the
Lease by Landlord.
10. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through _________________. The current monthly installment of Base Rent is
$__________.
EXHIBIT E
Page 1
11. The undersigned acknowledges that this Estoppel certificate may be
delivered to Landlord's prospective mortgagee, or a prospective purchaser, and
acknowledges that it recognizes that if same is done, said mortgagee,
prospective mortgagee, or prospective purchaser will be relying upon the
statements contained herein in making the loan or acquiring the property of
which the Premises are a part, and in accepting an assignment of the Lease as
collateral security, and that receipt by it of this certificate is a condition
of making of the loan or acquisition of such property.
Executed at ______________ on the _____ day of ______________, 19___.
"Tenant":
Matsushita Avionics Systems Corporation,
a Delaware corporation
By: __________________________________
Its: __________________________
By: __________________________________
Its: __________________________
EXHIBIT E
Page 2
EXHIBIT F
BUILDING SIGNAGE
----------------
[TO BE SUBMITTED]
EXHIBIT F
Page 1
EXHIBIT G
GUARANTY OF LEASE
-----------------
THIS GUARANTY OF LEASE ("Guaranty") is executed as of ___________, 1994, by
MATSUSHITA ELECTRIC CORPORATION OF AMERICA, a Delaware corporation
("Guarantor"), whose address is 0 Xxxxxxxxx Xxx, Xxxxxxxx, Xxx Xxxxxx 00000 for
the benefit of Laguna Canyon, Inc., a California corporation ("Landlord"), whose
address is 00000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, with
reference to the following facts:
A. Landlord and Matsushita Avionics Development Corporation, a Delaware
corporation ("Tenant") intend to enter into that certain Standard Form Lease
(Office) and Addendum thereto dated as of July __, 1994 (the "Lease") pursuant
to which Tenant shall lease from Landlord the real property commonly known as
00000 Xxxxxx Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxx;
B. As a condition to Landlord's execution of the Lease, Landlord requires
that the undersigned guaranty the full and timely performance of the obligations
of Tenant under said Lease; and
C. The undersigned desires that Landlord enter into the Lease with
Tenant. Capitalized terms not expressly defined herein shall have the
definitions set forth in the Lease.
NOW, THEREFORE, in consideration of the execution of the Lease by Landlord,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Guarantor unconditionally guaranties, without deduction by reason of
setoff, defense or counterclaim, to Landlord and its successors and assigns the
full and punctual payment, and the performance and observance by Tenant, of all
sums, terms, covenants and conditions in the Lease to be paid, kept, performed
or observed by Tenant.
EXHIBIT G
Page 1
2. If Tenant shall at any time default in the performance or observance
of any of the terms, covenants or conditions of the Lease to be kept, performed
or observed by Tenant, Guarantor will keep, perform and observe same, as the
case may be, in the place and stead of Tenant. Guarantor has the right to cure
any default of Tenant, provided such cure is performed in accordance with the
terms and within the time periods set forth in the Lease. Notice of default
shall be given to Guarantor, it being specifically agreed and understood that
the guarantee of the undersigned is a continuing guarantee under which Landlord
may proceed immediately against Tenant or Guarantor following any breach or
default by Tenant or for the enforcement of any rights which Landlord may have
as against Tenant pursuant to or under the terms of the Lease or at law or in
equity. 3. Any act or omission of Landlord, or of its successors or assigns,
constituting a waiver of any of the terms or conditions of the Lease (including,
without limitation, concerning any consent required under the Lease); or the
granting of any indulgences or extensions of time to Tenant, may be done without
notice to Guarantor and without releasing Guarantor from any of its obligations
hereunder.
4. The obligations of Guarantor hereunder shall not be released by Landlord's
receipt, application or release of any security given for the performance and
observance of any covenant or condition of the Lease to be performed or observed
by Tenant, nor by any modification of the Lease, regardless of whether Guarantor
consents thereto or receives notice thereof.
5. The liability of Guarantor hereunder shall in no way be affected by (a) the
release or discharge of Tenant in any creditor's receivership, bankruptcy or
other proceeding; (b) the impairment, limitation or modification of the
liability of Tenant or the estate of Tenant in bankruptcy, or of any remedy for
the enforcement of Tenant's liability under the Lease resulting from the
operation of any present or future provision of any federal or state bankruptcy
or insolvency law or other statute or from the decision of any court; (c) the
rejection or disaffirmance of the Lease in any such proceedings; (d) the
assignment or transfer of the Lease by Tenant; (e) any disability or other
defense of tenant; (f) the cessation from any cause whatsoever of the liability
of Tenant; (g) the exercise by Landlord of any of its rights or remedies
reserved under the Lease or by law; or (h) any termination of the Lease.
6. Guarantor further agrees that it may be joined in any action against Tenant
in connection with the obligations of Tenant and recovery may be had against
Guarantor in any such action. Landlord may enforce the obligations of Guarantor
hereunder without first taking any action whatsoever against Tenant or its
successors and assigns, or pursue any other remedy or apply any security it may
hold, and Guarantor hereby waives (a) notice of acceptance of this
EXHIBIT G
Page 2
Guaranty, (b) demand of payment, presentation and protest, (c) all right to
assert or plead any statute of limitations relating to this Guaranty and/or the
Lease, (d) any right to require Landlord to proceed against Tenant or any other
guarantor or any other person or entity liable to Landlord, (e) any right to
require Landlord to apply to any default any security deposit or other security
it may hold under the Lease, (f) any right to require Landlord to proceed under
any other remedy Landlord may have before proceeding against Guarantor, (g) any
right of subrogation, and (h) and any and all surety or other defenses in the
nature thereof including, without limitation, the provisions of California Civil
Code Section 2918 and 2845 or any similar, related or successor provisions of
law.
7. This Guaranty shall apply to the Lease, any extension, renewal,
modification or amendment thereof, and to any assignment, subletting or other
tenancy thereunder or to any holdover term following the term granted under the
Lease or any extension or renewal thereof; provided, however, that with respect
to any assignment to other than an Affiliate, this guaranty shall not apply to
any modification or amendment to the Lease made after such an assignment solely
to the extent of any additional obligations or modifications to existing
obligations. It is specifically agreed and understood that the terms of the
Lease may be altered, affected, modified or changed by agreement between
Landlord and Tenant, or by a course of conduct, and said Lease may be assigned
by Landlord or any assignee of Landlord without consent or notice to Guarantor
and that this Guaranty shall thereupon and thereafter guaranty the performance
of said Lease as so changed, modified, altered or assigned.
8. In the event this Guaranty shall be held ineffective or unenforceable by
any court of competent jurisdiction or in the event of any limitation of
Guarantor's liability hereunder other than as expressly provided herein, then
Guarantor shall be deemed to be a tenant under the Lease with the same force and
effect as if Guarantor were expressly named as a joint and several tenant
therein.
9. In the event of any litigation between Guarantor and Landlord with respect
to the subject matter hereof, the unsuccessful party to such litigation agrees
to pay to the successful party all fees, costs and expenses thereof, including
reasonable attorneys' fees and expenses.
10. No delay on the part of Landlord in exercising any right hereunder or under
the Lease shall operate as a waiver of such right or of any other right of
Landlord under the Lease or hereunder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar to or a waiver of the same or any other
right on any future occasion. This Guaranty shall not be released,
EXHIBIT G
Page 3
modified or affected by failure or delayed on the part of Landlord to enforce
any of the rights or remedies of Tenant under the Lease, whether pursuant to the
terms thereof or at law or in equity.
11. If there is more than one undersigned Guarantor, the term Guarantor, as
used herein, shall include all of the undersigned; each and every provision of
this Guaranty shall be binding on each and every one of the undersigned; they
shall be jointly and severally liable hereunder; and Landlord shall have the
right to join one or all of them in any proceeding or to proceed against them in
any order.
12. This instrument constitutes the entire agreement between Landlord and
Guarantor with respect to the subject matter hereof, superseding all prior oral
or written agreements or understandings with respect thereto and may not be
changed, modified, discharged or terminated orally or in any manner other than
by an agreement in writing signed by Guarantor and Landlord.
13. This Guaranty shall be governed by and construed in accordance with the
laws of the State of California. The parties further agree that venue shall be
proper in the Superior Court or federal district court for Orange County,
California, in the event of any litigation between the parties with respect to
this Guaranty.
14. All notices or other communications required or permitted hereunder shall
be in writing, and shall be personally delivered or sent either to Guarantor at
the address set forth on Page 1 hereof to the attention of V.P. - Logistics with
a copy to the same address to the attention of General Counsel, or to Landlord,
at the address set forth on Page 1 hereof with a copy to Riverbank Financial
Group, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, by
registered or certified mail, postage prepaid, return receipt requested,
telegraphed, delivered or sent by telex, telecopy or cable and shall be deemed
received upon the earlier of (i) if personally delivered, the date of delivery
to the address of the person to receive such notice; (ii) if mailed, four (4)
business days after the date of posting by the United States Post Office; (iii)
if given by telegraph or cable, when delivered to the telegraph company with
charges prepaid; or (iv) if given by telex or telecopy, when sent. Any notice,
request, demand, direction or other communication sent by cable, telex, or
telecopy must be confirmed within forty-eight (48) hours by letter mailed or
delivered in accordance with the foregoing.
15. If Landlord desires to sell, finance or refinance the 'Building" or the
"Premises" (as such terms are defined in the Lease), or any part thereof,
Guarantor hereby agrees to deliver to any lender or buyer designated by Landlord
such estoppel statements of Guarantor as may be reasonably required by such
lender or buyer. All such statements shall be received by any such
EXHIBIT G
Page 4
lender or buyer in confidence and shall be used only for the foregoing purposes,
and such lender or buyer shall acknowledge the same to Guarantor in writing
(should Guarantor require such an acknowledgment) as a precondition to
Guarantor's obligations under this Paragraph 15. In addition, Guarantor shall
not be obligated to deliver estoppel statements hereunder more frequently than
two (2) times in any calendar year.
16. The term "Landlord" whenever hereinabove used refers to and means the
Landlord in the Lease specifically named and also any assignee of said Landlord,
whether by outright assignment or by assignment for security, and also any
successor to the interest of said Landlord of any assignee in such Lease or any
part thereof, whether by assignment or otherwise. So long as the Landlord's
interest in or to the leased premises or the rents, issues and profits
therefrom, or in, to or under said Lease, are subject to any mortgage or deed of
trust or assignment for security, no acquisition by Guarantor of Landlord's
interest in the leased premises or under said Lease shall affect the continuing
obligation of Guarantor under this Guarantee which shall nevertheless continue
in full force and effect for the benefit of the mortgagee, beneficiary, trustee
or assignee under such mortgage, deed of trust or assignment, or any purchase at
sale by judicial foreclosure or under private power of sale, and of the
successors and assigns of any such mortgagee, beneficiary, trustee, assignee or
purchaser.
The term "Tenant" wherever hereinabove used refers to and means the Tenant in
the foregoing Lease specifically named and also any assignee or sublessee of
said Lease and also any successor to the interests of said Tenant, assignee or
sublessee of such Lease or any part thereof, whether by assignment, sublease or
otherwise.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first
above written.
"GUARANTOR"
MATSUSHITA ELECTRIC CORPORATION OF AMERICA,
a Delaware corporation
By:
-------------------------------
Its:
---------------------------
By:
-------------------------------
Its:
---------------------------
EXHIBIT G
Page 5
