EXHIBIT 10.1
OFFICE LEASE
IMPERIAL PROMENADE ASSOCIATES, LLC
LANDLORD,
AND
XXX.XXXXXXXX CORPORATION,
TENANT
OFFICE LEASE
THIS LEASE ("Lease") is made between IMPERIAL PROMENADE ASSOCIATES,
LLC ("Landlord"), and the Tenant described in Item 1 of the Basic Lease
Provisions.
LEASE OF PREMISES
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord,
subject to all of the terms and conditions set forth herein, those certain
premises (the "Premises") described in Item 3 of the Basic Lease Provisions and
as shown in the drawings attached hereto as Exhibit "A-I". The Premises are
located in that certain office building (the "Building") shown on Exhibit "A-2".
The Building is located on that certain land (the "Land") described on Exhibit
"A-3" attached hereto, which is also improved with landscaping, parking
facilities and other improvements and appurtenances. The Land, together with all
such improvements and appurtenances and the Building, are, subject to Paragraph
18, collectively referred to herein as the "Project". However, Landlord reserves
the right to make such changes, additions and/or deletions to the Land, the
Building and the Project as it shall determine from time to time.
BASIC LEASE PROVISIONS
1. Tenant: XXX.XXXXXXXX CORPORATION, a Delaware corporation ("Tenant")
2. Building: Tower West, Twin Towers
Address: _____________ MacArthur Plaza (to be determined by Landlord)
South Coast Metro, California
3. Description of Premises: Floor(s): 2 - 6 and portion of 1 Suites:
100, 200, 300, 400, 500, 600
Rentable Area: Approximately 125,043 square feet (see Exhibit "A-4")
4. Tenant's Proportionate Share of Operating Costs: 30.7%
5. Basic Annual Rent (see Paragraphs 2 and 20) shall be twelve (12)
times the following monthly amounts:
Partial Lease Month: $ 6,210.47 per day ($1.49/rentable sq. ft./mo NNN)
Months 1-5 $ 0.00 (but see Paragraph 20(a))
Months 6-65: $ 186,314.07 ($1.49/rentable sq. ft/mo NNN)
Months 66-125: $__________ *
Months 126-149: $__________ **
* Commencing on the first day of the sixty-sixth (66th) month of the term,
Basic Annual Rent shall be increased by the percentage increase, if any, in
the Consumer Price Index, Urban Wage Earners and Clerical Workers (Los
Angeles-Anaheim-Riverside region; "Xxx Items"; Reference Base Year
1982-1984=100), as published by the United States Department of Labor, Bureau
of Labor Statistics or its successor (the "Index"), as follows: The Index for
the second month preceding the first day of the sixty-sixth (66th) month of
the term shall be compared with the Index for the second month preceding the
Commencement Date, and the Basic Annual Rent then in effect shall be
increased by the lesser of (i) the amount of the percentage increase, if any,
between them, or (ii) ten percent (10%); PROVIDED HOWEVER, in no event shall
the Basic Annual Rent be reduced by reason of such computation. If the Index
ceases to be published, is published less frequently or is altered in any
material respect, then Landlord shall adopt, at its reasonable discretion, a
substitute index or substitute procedure which reasonably reflects and
monitors changes in consumer prices.
** Commencing on the first day of the one hundred twenty-sixth (126th) month
of the term, Basic Annual Rent shall be increased by the percentage increase,
if any, in the Index, as follows: The Index for the second month preceding
the first day of the one hundred twenty-sixth (126th) month of the term shall
be compared with the effect shall be increased by the lesser of (i) the
amount of the percentage increase, if any, between them, or (ii) ten percent
(10%); PROVIDED HOWEVER, in no event shall the Basic Annual Rent be reduced
by reason of such computation. If the Index ceases to be published, is
published less frequently or is altered in any material respect, then
Landlord shall adopt, at its reasonable discretion, a substitute index or
substitute procedure which reasonably reflects and monitors changes in
consumer prices.
6. Initial Monthly Installment of Basic Annual Rent Payable upon
Execution: $ 186,314.07
($1.49 per square foot of Rentable Area)
7. Estimated Final Monthly Installment of Basic Annual Rent payable upon
execution: $0.00
8. Security Deposit: $0.00
9. Term: Twelve (12) years and five (5) months
10. Target Commencement Date: January 5, 2001
11. Broker[s]: Equis of California
12. Permitted Use: General office, computer generated software
production, computerized printing of software manuals and shipping
of software products and storage, subject to and in accordance with
applicable Laws and any permits and approvals relating to such uses
to be obtained by Tenant at Tenant's expense.
13. Number of Parking Spaces (see Paragraph 18): three (3) spaces per 1,000
square feet of Premises, with ten percent (10%) of such spaces,
reserved for the exclusive use of Tenant, to be located at an area
proximate to the Building as designated by Landlord.
14. Addresses for Notices:
To: Tenant To: Landlord Imperial Promenade Associates, LLC
0 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxxx Xxxxx, Xxxxxxxxxx 00000
Prior to occupancy of the Premises:
XXX.Xxxxxxxx Corporation
000 Xxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
After occupancy of the Premises:
XXX.Xxxxxxxx Corporation
_____________MacArthur Place [the Premises]
Xxxxx Xxxxx Xxxxx, Xxxxxxxxxx 00000
15. All payments payable under this Lease shall be sent to Landlord at the
address specified in Item 14 or to such other address as Landlord may
designate.
16. Guarantor: None
17. Date of this Lease: June 28, 1999
18. Options: Extend Term - see Paragraph 20(c)
Expand Premises - see Paragraph 20(d)
IN WITNESS WHEREOF, the parties hereto have executed this Lease,
consisting of the foregoing Basic Lease Provisions, the provisions of the
Standard Lease Provisions (the "Standard Lease Provisions") (consisting of
Paragraphs 1 through 20 which follow) and Exhibits "A-i" through "AA" and "B"
through "G", inclusive, all of which are incorporated herein by this reference.
In the event of any conflict between the provisions of the Basic Lease
Provisions and the provisions of the Standard Lease Provisions, the Standard
Lease Provisions shall control.
LANDLORD TENANT
IMPERIAL PROMENADE ASSOCIATES, LLC, MSC SOFTWARE CORPORATION,
a Delaware limited liability company a Delaware Corporation
By: /S/ XXXXXX X. XXXXX By: /S/ XXXXX XXXXX, XX.
----------------------------------- ------------------------------
Xxxxxx X. Xxxxx, Sole Member Its: CEO
--------------------------
Date September 7, 1999
-------------------------------- Date: August 31, 1999
----------------------------
By: /S/ XXXXX X. XXXXX
------------------------------
Its: CFO
--------------------------
Date: AUGUST 31, 1999
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TABLE OF CONTENTS
PAGE
1. TERM.......................................................................................1
2. BASIC ANNUAL RENT..........................................................................1
3. ADDITIONAL RENT............................................................................1
4. IMPROVEMENTS AND ALTERATIONS...............................................................4
5. REPAIRS....................................................................................4
6. USE OF PREMISES............................................................................5
7. UTILITIES AND SERVICES.....................................................................6
8. NONLIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE....................................6
9. FIRE OR CASUALTY...........................................................................8
10. EMINENT DOMAIN.............................................................................9
11. ASSIGNMENT AND SUBLETTING..................................................................9
12. DEFAULT...................................................................................11
13. ACCESS; CONSTRUCTION......................................................................13
14. BANKRUPTCY................................................................................13
15. INTENTIONALLY LEFT BLANK..................................................................13
16. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES..........................................13
17. SALE BY LANDLORD; NONRECOURSE LIABILITY...................................................14
18. PARKING; COMMON FACILITIES................................................................15
19. MISCELLANEOUS.............................................................................15
(a) Attorneys' Fees..................................................................15
(b) Waiver...........................................................................15
(c) Notices..........................................................................15
(d) Labor............................................................................16
(e) Security.........................................................................16
(f) Storage..........................................................................16
(g) Holding Over.....................................................................16
(h) Condition of Premises............................................................16
(i) Landlord Warranty................................................................16
(j) Quiet Possession.................................................................16
(k) Matters of Record................................................................16
(l) Project Financing................................................................17
(m) Successors and Assigns...........................................................17
(n) Brokers..........................................................................17
(o) Name.............................................................................17
(p) Examination of Lease, Confidentiality.......................................... .17
(q) Time.............................................................................17
(r) Defined Terms and Marginal Headings..............................................17
(s) Conflict of Laws: Prior Agreements: Separability.................................17
(t) Authority........................................................................17
(u) Common Areas.....................................................................18
(v) Joint and Several Liability......................................................18
(w) Rental Allocation................................................................18
(x) Rules and Regulations............................................................18
(y) Financial Statements.............................................................18
20. ADDENDA...................................................................................18
(a) Rental Abatement.................................................................18
(b) Landlord Delay...................................................................18
(c) Options to Extend Term...........................................................18
(d) Expansion Option.................................................................19
(e) Nondisturbance Agreement.........................................................20
(f) INTENTIONALLY LEFT BLANK.........................................................20
(g) Definition - Nondiscriminatory...................................................20
(h) INTENTIONALLY LEFT BLANK.........................................................20
(i) Nonliability and Indemnification of Landlord.....................................20
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(j) Americans with Disabilities Act..................................................20
(k) Transportation Management........................................................20
(l) Operating Costs Cap..............................................................20
(m) Moving-Related Allowance.........................................................20
(n) Signage..........................................................................20
(o) Exclusivity......................................................................21
(p) Environmental Release............................................................21
21. CONSTRUCTION OF BUILDING..................................................................21
TABLE OF EXHIBITS
Exhibit "A-1' Floor Plan[s]
Exhibit "A-2" Plot Plan of Building and the Project
Exhibit "A-3" Legal Description of the Project
Exhibit "A-4" Rentable Area
Exhibit "B" Work Letter
Schedule "1" Preliminary Plans
Exhibit "C" Requirements for Alterations
Exhibit "D" Standards for Utilities and Services
Exhibit "E" Building Rules and Regulations
Exhibit "F" Form Estoppel Certificate
Exhibit "G" Tenant's Initial Certificate
Exhibit "H" Outline Specifications
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STANDARD LEASE PROVISIONS
1. TERM
(a) Unless earlier terminated in accordance with the provisions hereof
the initial term of this Lease shall be the period shown in Item 9 of the Basic
Lease Provisions; provided, however, in the event the Commencement Date (defined
below) occurs on a date other than the first (1st) day of a calendar month,
there shall be added to the term the partial month (the "Partial Lease Month")
from the Commencement Date to the first (1st) day of the calendar month
following the Commencement Date. As used herein, "term" shall refer to the
initial term described in Item 9 of the Basic Lease Provisions and, provided the
same is duly exercised and commences, the Extension Term described in
Subparagraph 20(c).
(b) Subject to the provisions of this Paragraph 1, the term shall
commence on the date (the "Commencement Date") which is the earlier of the
date Landlord delivers the Premises to Tenant or the date Tenant takes
possession or commences use of the Premises for any business purpose
(including moving in). Landlord shall be deemed to have delivered the
Premises to Tenant or the date determined by Landlord's Space Planner
(defined in the Work Letter described below) to be the date of substantial
completion of the Tenant Work (defined in the Work Letter). Notwithstanding
the foregoing, in the event that Landlord is delayed in delivering the
Premises by reason of any act or omission of Tenant, including, without
limitation, those specified in the Work Letter (the "Work Letter") attached
hereto as Exhibit "B" (a "Tenant Delay"), the term shall commence (unless
Tenant takes possession or commences use of the Premises prior thereto) on
the date the Premises would have been delivered by Landlord had the Tenant
Delay(s) not occurred. This Lease shall be a binding contractual obligation
effective upon execution hereof by Landlord and Tenant, notwithstanding the
later commencement of the term of this Lease.
(c) Landlord may deliver the Premises to Tenant on or after the
Target Commencement Date described in Item 10 of the Basic Lease Provisions.
Landlord shall use reasonable efforts to give Tenant at least fifteen (15)
days' notice of the date upon which, in Landlord's opinion, the Commencement
Date shall occur: provided, however, that in the event the Commencement Date
is delayed or otherwise does not occur on the date specified, this Lease
shall not be void or voidable, nor shall Landlord be liable to Tenant for any
loss or damage resulting therefrom.
2. BASIC ANNUAL RENT
(a) Tenant agrees to pay during the Partial Lease Month and each
Lease Year (defined below) of the term of this Lease as Basic Annual Rent
("Basic Annual Rent") for the Premises the sums shown for such periods in
Item 5 of the Basic Lease Provisions. For purposes of this Lease, a "Lease
Year" shall be each twelve (12) calendar month period commencing on (i) the
Commencement Date (or anniversary thereof) if the Commencement Date occurs on
the first (1st) day of a month, or otherwise (ii) the first (1st) day of the
calendar month following the Commencement Date (or anniversary thereof) if
the Commencement Date occurs other than on the first (1st) day of a month.
(b) Except as expressly provided to the contrary in Subparagraph
20(a) below, Basic Annual Rent shall be payable in equal consecutive monthly
installments, in advance, without deduction or offset, commencing on the
Commencement Date and continuing on the first (1st) day of each calendar
month thereafter. The first (1st) full monthly installment of Basic Annual
Rent, described in Item 6 of the Basic Lease Provisions, shall be payable
upon Tenant's execution of this Lease. If the Commencement Date is a day
other than the first (1st) day of a calendar month, then the Rent (defined
below) for the Partial Lease Month (the "Partial Lease Month Rent) shall be
calculated on the per diem basis shown therefor in Item 5 of the Basic Lease
Provisions for the number of days of such month from and including the
Commencement Date. The Partial Lease Month Rent shall be payable by Tenant
prior to the date that Tenant takes possession or commences use of the
Premises for any business purpose (including moving in). Basic Annual Rent,
all forms of additional rent payable hereunder by Tenant and all other
amounts, fees, payments or changes payable hereunder by Tenant shall (i) each
constitute rent payable hereunder (and shall sometimes collectively be
referred to herein as "Rent"), (ii) be payable to Landlord when due without
any prior demand therefor in lawful money of the United States and. except as
may be expressly provided to the contrary herein, without any offset or
deduction whatsoever, and (iii) be payable to Landlord at the address of
Landlord described in Item 14 of the Basic Lease Provisions or to such other
person or to such other place as Landlord may from time to time designate in
writing to Landlord.
(c) The parties agree that for all purposes hereunder the Premises
shall be stipulated to contain the number of square feet of Rentable Area
(defined in Exhibit "A-4") described in Item 3 of the Basic Lease Provisions.
Prior to the Commencement Date, Landlord's Space Planner shall verify the
exact number of square feet of Rentable Area in the Premises, utilizing the
BOMA Standard as defined in Exhibit "A-4" attached to this Lease. In the
event there is any variation from the number of square feet specified in Item
3 of the Basic Lease Provisions, Landlord and Tenant shall execute an
amendment to this Lease for the purpose of making appropriate adjustments to
the Basic Annual Rent, the Security Deposit, Tenant's Proportionate Share
(defined below) and such other provisions hereof as shall be appropriate
under the circumstances.
3. ADDITIONAL RENT
(a) Subject to the provisions of this Lease, Tenant shall pay to
Landlord, monthly, as additional rent an amount equal to Tenant's
Proportionate Share of Operating Costs (defined below).
(b) "Tenant's Proportionate Share" is, subject to the provisions of
this Paragraph 3, the percentage number described in Item 4 of the Basic
Lease Provisions. Tenant's Proportionate Share represents a fraction, the
numerator of which is the number of square feet of Rentable Area in the
Premises, as determined by Landlord or pursuant to Subparagraph 2(c) above,
and the denominator of which is the number of square feet of Rentable Area in
the Project, as determined by Landlord.
(c) "Operating Costs" means all costs, expenses and obligations
incurred or payable by Landlord in connection with the operation, ownership,
repair, management or maintenance of the Project during or allocable to the term
of this Lease, including, without limitation, the following:
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(i) All real property taxes, assessments, license fees,
excises, levies, charges or impositions and other similar governmental ad
valorem or other charges levied on or attributable to the Project or its
ownership, operation or transfer, and all taxes, charges, assessments or
similar impositions imposed in lieu of the same (collectively, "Real Estate
Taxes"). "Real Estate Taxes" shall also include all taxes, assessments,
license fees, excises, levies, charges or similar impositions imposed by any
governmental agency, district, authority or political subdivision (A) on any
interest of Landlord, any mortgagee of Landlord or any interest of Tenant in
the Project, the Premises or in this Lease, or on the occupancy or use of
space in the Project or the Premises; (B) on the gross or net rentals or
income from the Project, the Rent received hereunder, or on Landlord's
"right" or "rights" to any of the foregoing or on Landlord's business of
leasing the Premises, the Building or the Project, including, without
limitation, any gross income tax or excise tax levied by any federal, state
or local governmental entity with respect to the receipt of Rent or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy of the Project, or portions thereof; (C)
measured by the gross square footage of the Project, the Premises, or any
portion thereof or by the number of actual, estimated or potential occupants
of the Project, the number of vehicular trips generated by or associated with
the Project, or the number of parking spaces contained within the Project, or
for any transportation, arts, housing or environmental plan, fund or system
instituted within or for any geographic area in which the Building is
located, or any similar measure; (D) on the construction, removal or
alteration of improvements in the Project; (E) for the provision of
amenities, services or rights of use, whether or not exclusive, public,
quasi-public or otherwise made available on a shared use basis, including
amenities, services or rights of use such as fire protection, police
protection, street, sidewalk, lighting, sewer or road maintenance, refuse
removal or janitorial services or for any other service, without regard to
whether such services were formerly provided by governmental or quasi
governmental agencies to property owners or occupants at no cost or at
minimal cost; and (F) related to any transportation plan, fund or system
instituted within the geographic area of the Project or otherwise applicable
to the Premises, the Project, or any portion thereof "Real Estate Taxes"
shall not include any income, capital stock, estate or inheritance tax
imposed by the State of California or the federal, county or city
governments; and
(ii) The cost of utilities (including taxes and other charges
incurred in connection therewith), fuel, supplies, equipment, tools,
materials, service contracts, janitorial services, waste and refuse disposal,
gardening and landscaping, insurance (including, but not limited to, public
liability, fire, property damage, flood, rental loss
[for a period of two years], boiler machinery, contractual indemnification,
earthquake and All Risk coverage insurance for up to the full replacement
cost of the Project and such other insurance as is customarily carried by
operators of other first-class buildings in the County of Orange) to the
extent carried by Landlord in its discretion (and the deductible portion of
any insured loss otherwise covered by such insurance), the cost of
compensation, including employment, welfare and social security taxes, paid
vacation days, disability, pension, medical and other fringe benefits of all
persons (including independent contractors) who perform services to the
extent of such performance or exclusively connected with the operation,
maintenance or repair of the Project, personal property taxes on and
maintenance and repair of equipment and other personal property used in
connection with the operation, maintenance or repair of the Project, such
auditors' fees, consultant fees and legal fees as are incurred in connection
with the operation, maintenance or repair of the Project, costs incurred for
administration and management of the Project, whether by Landlord or by an
independent contractor, administrative expenses, management fees, management
office operational expenses, rental expenses for or a reasonable allowance
for depreciation of personal property used in the operation, maintenance or
repair of the Project, license, permit and inspection fees, association fees
applicable to the Project (including without limitation the Project's share
of any such fee assessed in connection with the Specific Development Plan as
described in Subparagraph 21(b) below, all costs and expenses required by any
governmental or quasi-governmental authority or by applicable law, for any
reason, including capital improvements, whether capitalized or not the cost
of any capital improvements made to the Project by Landlord that improve life
safety systems or reduce operating expenses (such costs to be amortized over
such reasonable periods as Landlord shall determine with a return on capital
at a rate equal to the prime rate plus two (2) percent [the "prime rate" as used
herein shall mean the prime rate or base rate of interest then being charged by
the banking or financial institution commonly utilized by Landlord]
, the cost of air conditioning, heating, ventilating, plumbing, elevator
maintenance and repair, sign maintenance, and Common Area (defined in
Paragraph 18) repair, resurfacing, operation and maintenance, the cost of
providing Security services, and any other cost or expense incurred or
payable by Landlord in connection with the operation, repair, management or
maintenance of the Project.
(d) Operating Costs for any calendar year during which actual
occupancy of the Project is less than ninety-five percent (95%) of the
Rentable Area of the Project shall be appropriately adjusted to reflect
ninety-five percent (95%) occupancy of the existing Rentable Area of the
Project during such period. In determining Operating Costs, if any services
or utilities are separately charged to tenants of the Project or others,
Operating Costs shall be adjusted by Landlord to reflect the amount of
expense which would have been incurred for such services or utilities on a
full-time basis for normal Project operating hours. In the event (i) the
Commencement Date shall be a date other than January 1, (ii) the date fixed
for the expiration of the term shall be a date other than December 31, (iii)
of any early termination of this Lease, or (iv) of any increase or decrease
in the size of the Premises, then in each such event, an appropriate
adjustment in the application of this Paragraph 3 shall, subject to the
provisions of this Lease, be made to reflect such event on a basis determined
by Landlord to be consistent with the principles underlying the provisions of
this Paragraph 3.
(e) Prior to the commencement of each calendar year of the term
following the Commencement Date, Landlord shall have the right to give to
Tenant a written estimate of Tenant's Proportionate Share of the Operating
Costs for the Project for the ensuing year. Subject to Paragraph 20(l),
Tenant shall pay such estimated amount to Landlord in equal monthly
installments, in advance on the first (1st) day of each month during such
year. Subject to the provisions of this Lease, Landlord shall endeavor to
furnish to Tenant within 120 days after the end of each calendar year, a
statement indicating in reasonable detail the Operating Costs for such
period, and the parties shall, within thirty (30) days thereafter, make any
payment or allowance necessary to adjust Tenant's estimated payments to
Tenant's actual share of such Operating Costs as indicated by such annual
statement. Any payment due Landlord shall be payable by Tenant on demand from
Landlord. Any amount due Tenant shall be credited against installments next
becoming due under this Subparagraph 3(e).
(f) Tenant shall pay ten (10) days before delinquency, all taxes and
assessments (i) levied against any personal property or trade fixtures of
Tenant In or about the Premises, (ii) based upon the gross or net Rent
payable hereunder, and (iii) based upon this Lease or any document to which
Tenant is a party creating or transferring an interest in this Lease or an
estate in all or any portion of the Premises. If any such taxes or
assessments are levied against Landlord or Landlord's property or if the
assessed value of the Project is increased by the inclusion therein of a
value placed upon such
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personal property or trade fixtures, Tenant shall, upon demand, reimburse
Landlord for the taxes and assessments so levied against Landlord, or such
taxes, levies and assessments resulting from such increase in assessed value.
(g) Any delay or failure of Landlord in (I) delivering any estimate
or statement described in this Paragraph 3, or (ii) computing or billing
Tenant's Proportionate Share of Operating Costs shall not constitute a waiver
of its right to require an increase in Rent, or in any way impair, the
continuing obligations of Tenant under this Paragraph 3. Without limiting the
generality of the foregoing, Landlord may at any time during me term hereof
recalculate and correct me amount of Tenant's Proportionate Share of
Operating Costs, and Tenant shall pay to Landlord any amount due on demand by
Landlord; provided however, Tenant shall only be responsible for paying mat
portion of the corrected amount of Tenant's Proportionate Share of Operating
Costs accruing within one (1) year of the date of Landlord's accounting. In
the event of any dispute as to any Rent due under this Paragraph 3, Tenant
shall have the right after reasonable notice and at reasonable times to
inspect Landlord's accounting records at the accounting office of Landlord's
management company. If after such inspection, Tenant still disputes such
additional rental, upon Tenants written request therefore, a certification as
to the proper amount of Operating Costs and the amount due to or payable by
Tenant shall be made by Landlord's independent certified public accountant.
Such certification shall be final and conclusive as to all parties. In the
event of a discrepancy in Tenants favor, Landlord agrees to make the
adjustments in Tenant's favor and, at Landlord's option, (i) promptly pay any
such amount due to Tenant, or (ii) credit any such amount due to Tenant
against Tenant's next installment of Additional Rent In the event of a
discrepancy in Landlord's favor, Tenant shall pay such amount due to Landlord
with the next installment of Additional Rent. Tenant agrees to pay the cost
of such certification and the investigation with respect thereto, unless it
is determined that Landlord's original statement was in error in Landlord's
favor by more than two percent (2%). Tenant waives the right to dispute any
matter relating to the calculation of Operating Costs or other forms of Rent
under this Paragraph 3 if any claim or dispute is not asserted by Tenant in
writing to Landlord within one (1) year of delivery to Tenant of the original
billing statement with respect thereto.
(h) Subject to the provisions of this Paragraph 3, the rights and
obligations of Landlord and Tenant with respect to payments to be made
hereunder in regard to Operating Costs incurred or allocable to periods prior
to the expiration or sooner termination of this Lease shall survive such
expiration or termination.
(i) Notwithstanding the foregoing, for purposes of this Lease,
Operating Expenses shall not include:
(1) to the extent that any portion of Operating Expenses are
attributable to any other property (other than the Building and Project) or
any other business of Landlord (other than the business of maintaining,
managing and operating the Building and Project), then such expenses, costs
and amounts shall be equitably allocated in the Landlord's reasonable
discretion between the Building, the Project, and such other property or
business, and only the portion thereof attributable to the Building and
Project, as reasonably determined by Landlord, shall be included herein as
Operating Expenses.
(2) costs for which Landlord is reimbursed by any tenant or
occupant of the Project, or by any equipment warranties or by insurance by
its carrier or any tenant's carrier or by anyone else (including costs
reimbursed by reason of judgments or settlements);
(3) amounts paid as ground rental or as rental for the Building
by Landlord;
(4) costs of capital improvement or replacements except to the
extent specifically permitted in this PARAGRAPH 3; provided that even such
permitted costs shall be Operating Expenses in any given year only to the
extent of straight line amortization over the useful life of the improvement;
(5) electrical power costs for which any tenant directly
contracts with the local public service company or any costs paid by tenants to
Landlord for separately metered or special services such as after hours HVAC and
excess usage by other tenants;
(6) electric power and all other utility and other costs and
expenses associated with any retail space in the Building;
(7) costs of leasing commissions, attorneys' fees and other
costs and expenses incurred in connection with negotiations or disputes with
present or prospective tenants or other occupants of the Project;
(8) costs, including permit, license and inspection costs,
incurred with respect to the installation of tenant improvements made for new
tenants in the Building or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other
occupants of the Building;
(9) costs incurred to comply with laws relating to the
investigation, removal, cleanup or remediation of Hazardous Material (as
defined in PARAGRAPH 6(f) hereof); provided, that Tenant may be obligated to
indemnify Landlord from and against any such costs in certain circumstances
pursuant to and in accordance with PARAGRAPH 6ff) HEREOF;
(10) costs and expenses incurred in connection with the
replacement (but not repair) of structural elements of the Building;
(11) costs of interest on debt or amortization and other charges,
costs and expenses payable under any loan secured by the Project;
(12) fines and penalties;
(13) costs incurred by Landlord in the repairs. capital
additions, alterations or replacements made or incurred to rectify or correct
defects in the initial design and construction of the Project;
(14) Landlord's general overhead and general and administrative
expenses;
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(15) costs and expenses of items paid to the Landlord or to
subsidiaries or affiliates of the Landlord to the extent the same exceeds the
costs of such services rendered by qualified, unaffiliated third parties on a
competitive basis;
(16) any management fee in excess of 3% of gross revenues derived
from the Project;
(17) premiums for earthquake insurance in excess of such premiums
paid for comparable buildings as the Building in the greater Xxxx Xxxxx
Airport area; and
(18) costs or assessments levied on Landlord by the City of Santa
Xxx or associations due to Landlord's failure to comply with the requirements
of the City of Santa Xxx or applicable CC&Rs with respect to the initial
construction of the Premises.
4. IMPROVEMENTS AND ALTERATIONS
(a) Landlord's sole construction obligation under this Lease with
respect to the Premises is set forth in the Work Letter attached hereto as
Exhibit "B"
(b) Tenant shall not make any alterations, additions or improvements
to the Premises (collectively, "Alterations") without (i) the prior written
consent of Landlord not to be unreasonably withheld or delayed, and (ii)
compliance with such nondiscriminatory requirements concerning such
Alterations as may be imposed by Landlord from time to time. Notwithstanding
the foregoing, Tenant shall be permitted to repaint and or re-carpet the
Premises without obtaining Landlord's prior written consent. Without limiting
the foregoing, Landlord may require, at a minimum, compliance with the
requirements set forth in Exhibit "C" attached hereto. All Alterations shall
be made by Tenant, at Tenants sole cost and expense, and shall be diligently
prosecuted to completion. The cost of any modifications of Project
improvements outside or inside of the Premises required by any governmental
agency as a condition or the result of Tenants Alterations shall be borne by
Tenant. Any contractor or person making such Alterations shall first be
approved in writing by Landlord. Upon the expiration or earlier termination
of this Lease, Landlord may elect to have Tenant either (i) surrender with
the Premises any or all of such Alterations as Landlord shall determine
(except trade fixtures not attached to the Premises), in which case, such
Alterations shall become the property of Landlord, or (ii) promptly remove
any or all of such Alterations designated by Landlord to be removed, in which
case, Tenant shall repair and restore the Premises to its original condition
as of the date of substantial completion of the Tenant Work, reasonable wear
and tear excepted. Notwithstanding the foregoing, Tenant shall have the
right, at any time it requests Landlord's prior written consent to an
Alteration, to further request that Landlord elect whether the Alterations
for which consent is requested be allowed to remain or be required to be
removed upon the expiration or earlier termination of this Lease. Unless
Landlord responds in writing to Tenant at the time of granting such consent
that any such Alterations may remain upon the Premises upon the expiration or
earlier termination of this Lease, then Tenant shall be required to remove
such Alterations in accordance herewith. Tenant shall have the right to
install a passive video surveillance system in the Premises and an antennae
on the roof of the Building solely for Tenants use, provided that (1) such
installations shall be at the sole cost and expense of Tenant and otherwise
in compliance with this Paragraph 4, (2) Tenant shall comply with the
requirements of any and all applicable laws, rules, CC&Rs, and governmental
agencies regarding such installations, (3) the location, specifications and
other physical aspects of such installations shall be pre-approved by
Landlord in writing, such approval to not be unreasonably withheld, and (4)
Tenant shall be responsible, at Tenants expense, for the maintenance and
repair of such items (including without limitation any repairs to other
portions of the Building or Project damaged arising out of the installation
or maintenance of such items), and (5) at Landlord's discretion, Tenant shall
remove such installations upon the expiration or earlier termination of the
Lease at Tenants sole expense and repair any damage caused thereby.
(c) Tenant shall keep the Premises, the Building and the Project
free from any and all liens arising out of any work performed, materials
furnished, or obligations incurred by or for Tenant. In the event that Tenant
shall not, within ten (10) days following the imposition of any such lien,
cause the same to be released of record by payment or posting of a bond in a
form and issued by a surety acceptable to Landlord, Landlord shall have the
right, but not the obligation, to cause such lien to be released by such
means as it shall deem proper (including payment of or defense against the
claim giving rise to such lien); in such case, Tenant shall reimburse
Landlord for all amounts so paid by Landlord in connection therewith,
together with all of Landlord's costs and expenses, with interest thereon at
the Default Rate (defined below). Such rights of Landlord shall be in
addition to all other remedies provided herein or by law.
5. REPAIRS
(a) Landlord shall use commercially reasonable efforts to keep the
Common Areas of the Building and the Project in a clean and neat condition
similar to other first class office buildings in the area of the Project.
Subject to Subparagraph 5(b) below, Landlord shall make all necessary
repairs, within a reasonable period following receipt of notice of the need
therefor from Tenant, to the foundation, root exterior walls, exterior doors
and windows of the Building, and to public corridors and other public areas
of the Project not constituting a portion of any tenant's premises and shall
use commercially reasonable efforts to keep all Building standard equipment
and systems used by Tenant in common with other tenants in good condition and
repair, reasonable wear and tear excepted. Notwithstanding the foregoing,
Tenant shall be solely responsible for the repair and maintenance of and all
damage to, the Building or the Project resulting from the design and
operation of all improvements which are not Building Standard Installations
(described in the Work Letter) in or serving the Premises installed at the
request of Tenant (regardless of whether installed by Landlord, its agents or
contractors or third-party contractors). Except as provided in Paragraph 9,
there shall be no abatement of Rent, and Landlord shall not be liable for any
injury to, or damage suffered by Tenant, including, without limitation,
interference with Tenants business arising from the making of any repairs,
alterations or improvements in or to any portion of the Premises, the
Building or the Project. Tenant waives the right to make repairs at
Landlord's expense under Sections 1941 and 1942 of the California Civil Code,
and under all other similar laws, statutes or ordinances now or hereafter in
effect.
(b) Tenant, at its expense, (i) shall keep the Premises and all
fixtures contained therein in a safe, xxxx and neat condition, and (ii) shall
bear the cost of maintenance and repair, by contractors selected by Tenant
and reasonably approved by Landlord, of all facilities which do not
constitute the Outline Specifications as set forth in Exhibit "H" attached
hereto located in the Premises, including, without limitation, lavatory,
shower, toilet, wash basin and kitchen facilities, and
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Premises specific heating and air conditioning Systems (including all
plumbing connected to said facilities or systems installed by or on behalf of
Tenant or existing in the Premises at the time of Landlord's delivery of the
Premises to Tenant). Tenant shall make all repairs to the Premises not
required to be made by Landlord under Subparagraph 5(a) above with
replacements of any materials to be made by use of materials of equal or
better quality. Tenant shall do all decorating, remodeling, alteration and
painting required by Tenant during the term of this Lease. Tenant shall pay
for the cost of any repairs to the Premises, the Building or the Project made
necessary by any negligence or willful misconduct of Tenant or any of its
assignees, subtenants, employees or their respective agents, representatives,
contractors, or other persons permitted in or invited to the Premises or the
Project by Tenant
(c) Upon the expiration or earlier termination of this Lease, Tenant
shall surrender the Premises in a safe, clean and neat condition; ordinary
wear and tear excepted. Tenant shall remove from the Premises all trade
fixtures (which are not required to be surrendered with the Premises pursuant
to the provisions of Subparagraph 4(b) hereof), furnishings and other
personal property of Tenant shall repair all damage caused by such removal,
and shall restore the Premises to its original condition, reasonable wear and
tear excepted. In addition to all other rights Landlord may have, in the
event Tenant does not so remove any such fixtures, furnishings or personal
property, Tenant shall be deemed to have abandoned the same, in which case,
Landlord may store the same, at Tenant's sole cost and expense, appropriate
the same for itself, and/or sell the same in its discretion.
6. USE OF PREMISES
a) Tenant shall use the Premises only for the purposes set forth in
Item 12 of the Basic Lease Provisions and shall not use the Premises or
permit the Premises to be used for any other purpose.
(b) Tenant shall not at any time use or occupy the Premises, or
permit any act or omission in or about the Premises in violation of any law,
statute, ordinance or any governmental rule, regulation or order
(collectively, "Law"), and Tenant shall, upon written notice from Landlord,
discontinue any use of the Premises which is a violation of Law. If any Law
shall, by reason of the nature of Tenant's specific use or occupancy of the
Premises, impose any duty upon Tenant or Landlord with respect to (i)
modification, operation or other maintenance of the Premises, the Building or
the Project, or (ii) the use, alteration or occupancy thereof, Tenant shall
comply in lull at its expense with such Law.
(c) Tenant shall not at any time use or occupy the Premises in
violation of the certificates of occupancy issued for the Building or the
Premises, and in the event that any department of the State of California or
the city or county in which the Project is located shall at any time contend
or declare that the Premises am used or occupied in violation of such
certificate or certificates of occupancy, any Law or any recorded covenants,
conditions and restrictions affecting the Project, Tenant shall, upon five
(5) days' notice from Landlord or any such governmental agency, immediately
discontinue such use of the Premises (and otherwise immediately remedy such
violation). The failure by Tenant to discontinue such use shall be considered
a default under this Lease, and Landlord shall have the right to exercise any
and all rights and remedies provided herein or by Law. Tenant shall be solely
responsible for making its own independent investigation with the City of
Santa Xxx and other applicable governmental agencies to determine that the
nature of the business to be conducted by Tenant in the Premises is in
compliance with all Laws and permissible uses under any certificate of
occupancy issued for the Building or the Premises and that Tenant is not
relying upon any independent representation or guaranty by Landlord, written
or verbal, that such business will constitute a lawful or permissible use
under any certificate of occupancy issued for the Building or the Premises,
or otherwise permitted by Law.
(d) Tenant shall not do or permit to be done anything, which may
invalidate or increase the cost of any All Risk, property damage, liability
or other insurance policy covering the Building, the Project and/or property
located therein and shall comply with all rules, orders, regulations and
requirements of the Pacific Fire Rating Bureau or any other organization
performing a similar function. In addition to all other remedies of Landlord,
Landlord may require Tenant, promptly upon demand, to reimburse Landlord for
the full amount of any additional premiums charged for such policy or
policies by reason of Tenant's failure to comply with the provisions of this
Paragraph 6.
(e) Tenant shall not in any way interfere with the rights or quiet
enjoyment of other tenants or occupants of the Premises, the building or the
Project. Tenant shall not use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain, or permit any nuisance in, on or about the Premises, the Building
or the Project. Tenant shall not place a load upon any portion of the
Premises exceeding the structural floor load (per square foot of area), as
set forth in Exhibit "H,TM which such area was designated (and is permitted
by Law) to carry or otherwise use any Building system in excess of its
capacity or in any other manner which may damage such system or the Building.
Business machines and mechanical equipment shall be placed and maintained by
Tenant, at Tenants sole cost and expense, in locations and in settings
sufficient in Landlord's reasonable judgment to absorb and prevent vibration,
noise and annoyance. Tenant shall not commit or suffer to be committed any
waste in, on, upon or about the Premises, the Building or the Project.
(f) 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 Slate of California or the United
States Government, including, without limitation, (i) any material or
substance which is defined or listed as a `hazardous waste," "extremely
hazardous waste," "restricted hazardous waste," "hazardous substance" or
"hazardous material" under any federal, state or local law, statute,
ordinance or any governmental rule, regulation or order governing or in any
way relating to the release, use, generation, handling, leakage, dumping,
discharge or disposal of any of the above (collectively, "Hazardous Material
Laws") (ii) petroleum or any petroleum derivative, (iii) any flammable
explosive or radioactive material, (iv) any polychlorinated biphenyl, and (v)
asbestos or any asbestos containing material or derivative. Tenant hereby
agrees that (i) Tenant and each of its Affiliates (defined below), assignees,
subtenants, and their respective agents, servants, employees, representatives
and contractors shall not bring onto the Premises or the Project any
Hazardous Material (other than customary amounts of Hazardous Materials used
for office supplies and cleaning materials brought into the Premises by
Tenant in the normal course of its tenancy and in full compliance with all
Hazardous Material Laws), (ii) Tenant shall immediately notify Landlord in
writing in the event Tenant becomes aware of or suspects that there has been
any release of any Hazardous Materials in, on or about the Premises or the
Project, or that any person has stored or otherwise brought onto the Project,
or any portion thereof, any Hazardous Material (other than customary amounts
of office supplies and cleaning materials). Tenant agrees to indemnify,
defend (with counsel selected by Landlord), protect and hold Landlord and
each of its Affiliates harmless from and against any and all claims, actions,
administrative proceedings (including informal
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proceedings), judgments, damages, punitive damages, penalties, fines, costs,
liabilities, interest or losses, including reasonable attorneys' fees and
expenses, consultant fees, and expert fees, together with all other costs and
expenses of any kind or nature that arise during or after the term of this
Lease directly or indirectly from or in connection with the presence,
handling, storage, release or discharge of any Hazardous Material in or into
the air, soil, surface water or groundwater at on, about, under or within the
Premises or the Project, or any portion thereof generated, released,
discharged or otherwise brought onto, under, or about the Project by Tenant
or any Affiliate thereof. Each of the covenants and agreements of Tenant set
forth in this Subparagraph 6(f) shall survive the expiration or earlier
termination of this Lease. Landlord agrees to use reasonable efforts to
generally include the terms and provisions of this Subparagraph 6(f) in
leases with other tenants of the Building; provided however, in no event
shall the failure to include the provisions of this Subparagraph 6(f) in any
other lease of the Building constitute Landlord's default hereunder.
7. UTILITIES AND SERVICES
(a) Provided that Tenant is not in default beyond any applicable
grace and cure period hereunder, Landlord shall furnish, or cause to be
furnished to the Premises, the utility service and other services described
in Exhibit "D" attached hereto, subject to the conditions and in accordance
with the standards set forth therein and in this Lease.
(b) Tenant agrees to cooperate fully at all times with Landlord and
to comply with all regulations and requirements, which Landlord may from time
to time, prescribe for the use of the utilities and services described herein
and in Exhibit "D". Landlord shall not be liable to Tenant for the failure of
any other tenant, or its assignees. subtenants, employees, or their
respective invitees, licensees, agents or other representatives to comply
with such regulations and requirements.
(c) Landlord reserves the right at all times to separately meter
electrical service provided to all or any portion of the Premises, and in
such event Tenant shall directly pay such electric service bills to the
utility provider and such costs shall not be part of Operating Costs. If
Tenant requires utility service or other services in quantities greater than,
at times other than or of a type or quality different than that generally
furnished by Landlord pursuant to Exhibit "D" Tenant shall pay to Landlord,
upon receipt of a written statement therefor, Landlord's charge for such
additional or different utility service or services; provided, however, it in
Landlord's judgment, such excess or different service cannot be furnished
unless additional risers, conduits, feeders, switchboards and/or other
facilities are installed in the Building, or otherwise are not then being
provided to other tenants in the Project (at the rate or level requested by
Tenant), the provision of such additional or different services shall be
subject to Landlord's nondiscriminatory requirements and conditions;
provided, further, however, that in no case shall Landlord have any
obligation to provide such additional or different utility or other services
if (i) the same is not generally available in first class office buildings in
the area of the Project, (ii) in the case where additional risers, conduits,
feeders, switchboards and/or other appurtenances would be required to be
installed in the Building to provide such service, (A) the installation,
maintenance or use of such facilities is not permitted under applicable
Project financing documents, Law or insurance regulations, could result in
permanent damage or injury to the Building or Building systems, could create
a dangerous or hazardous condition or disturb or interfere with the use,
occupancy or quiet enjoyment of other tenants or otherwise adversely affect
the income stream, financeability, reputation or value of the Project, (B)
Tenant shall not commit in advance to bear the cost (and to provide security
satisfactory to Landlord for performance of such obligation) of installation,
use, maintenance, repair and removal of such facilities, or (C) Landlord
determines in good faith that installation, operation, maintenance and/or
removal of such facilities is otherwise infeasible under the circumstances.
Subject to the foregoing, Landlord shall, upon reasonable prior notice by
Tenant, furnish to the Premises additional elevator, heating, air
conditioning and/or cleaning services upon such terms and conditions as shall
be reasonably determined by Landlord, including payment of Landlord's
Building-standard charge therefor. In the case of any additional utilities or
services to be provided hereunder, Landlord may require a switch and metering
system to be installed so as to measure the amount of such additional
utilities or services. The cost of installation, maintenance and repair of
such system shall be paid by Tenant upon demand.
(d) Landlord shall not be liable for, and Tenant shall not be
entitled to, any damages, abatement or reduction of Rent, or other liability
by reason of any failure to furnish any services or utilities described
herein or in Exhibit "D" for any reason, including, without limitation, when
caused by accident, breakage, repairs, Alterations or other improvements to
the Project, strikes, lockouts or other labor disturbances or labor disputes
of any character, governmental regulation, moratorium or other governmental
action, inability to obtain electricity, water or fuel, or any other cause
beyond Landlord's reasonable control; provided, however, that if Tenant's use
and occupancy of the Premises is materially disrupted by reason of the
failure of such services, then Landlord shall xxxxx Tenant's Rent in
proportion to the disruption, but only if and to the extent that Landlord
actually receives rental loss insurance proceeds therefor. Landlord shall be
entitled to cooperate with the energy conservation efforts of governmental
agencies or utility suppliers. No such failure, stoppage or interruption of
any such utility or service shall be construed as an eviction of Tenant, nor
shall the same relieve Tenant from any obligation to perform any covenant or
agreement under this Lease. In the event of any failure, stoppage or
interruption thereof Landlord shall use reasonable efforts to attempt to
restore all services promptly. No representation is made by Landlord with
respect to the adequacy or fitness of the Building's ventilating, air
conditioning or other systems to maintain temperatures as may be required for
the operation of any computer, data processing or other special equipment of
Tenant or for any other purpose.
(e) Landlord reserves the right from time to time to make reasonable
and nondiscriminatory modifications to the above standards (including,
without limitation, those described in Exhibit "D") for utilities and
services; provided such modifications do not materially disrupt Tenants
operations at the Premises.
8. NONLIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE
(a) Landlord shall not be liable to Tenant and Tenant hereby waives
all claims against Landlord, its partners, officers, trustees, affiliates,
directors, employees, contractors, agents and representatives (collectively,
"Affiliates") for any injury or damage to any person or property occurring or
incurred in connection with or in any way relating to the Premises, the
Building or the Project from any cause, including, without limitation, by
reason of the active or passive negligence of Landlord or its Affiliates, but
subject to Paragraph 20(i) below. Without limiting the foregoing, neither
Landlord nor any of its Affiliates shall be liable for and there shall be no
abatement of Rent for (i) any damage to Tenant's property stored with or
entrusted to Affiliates of Landlord, (ii) loss of or damage to any property
by theft or any other wrongful or illegal act, or (iii) any injury or damage
to persons or property resulting from fire, explosion, falling plaster,
steam, gas, electricity, water or rain which may leak from any part of the
Building or the Project or from the pipes, appliances, appurtenances or
plumbing works therein or from the root street or sub-surface or from any
other place or resulting from dampness or any other cause
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whatsoever or from the acts or omissions of other tenants, occupants or other
visitors to the Building or the Project, or from any other cause whatsoever,
(iv) any diminution or shutting off of light, air or view by any structure
which may be erected on lands adjacent to the Building, whether within or
outside of the Project, or (v) any latent or other defect in the Premises,
the Building or the Project. In addition and without limitation to the other
provisions of Subparagraphs (a) and (b) of this Paragraph 8, Tenant agrees
that in no case shall Landlord ever be responsible or liable on any theory
for any injury to Tenant's business, loss of profits, loss of income or any
other form of consequential damage. Tenant shall give prompt notice to
Landlord in the event of (A) the occurrence of a fire or accident in the
Premises or in the Building, or (B) the discovery of any defect therein or in
the fixtures or equipment thereof. The foregoing limitation on liability
shall not apply to any third party claim for personal injury or damage to
property made against the Tenant, which arises from the sole negligent acts
or omissions of Landlord or its Affiliates accruing prior to the Commencement
Date.
(b) Tenant shall indemnity, defend (with legal counsel selected by
Landlord), protect and hold Landlord harmless from and against any and all
claims, suits, judgments, losses, costs, obligations, damages, expenses,
interest and liabilities, including, without limitation, reasonable
attorneys' fees, for any injury or damage to any person or property
whatsoever arising out of or in connection with this Lease, the Premises or
Tenants activities in the Project, including, without limitation, when such
injury or damage has been caused in whole or in part by the act, negligence,
fault or omission of Tenant, its agents, servants, contractors, employees,
representatives, licensees or invitees, but subject to Paragraph 20(i)below.
Without limiting the foregoing, Tenant shall reimburse Landlord for all
expenses, damages and fines incurred or suffered by Landlord by reason of any
breach, violation or non-performance by Tenant, its agents, servants or
employees, of any covenant or provision of this Lease, or by reason of damage
to persons or property caused by moving property of or for Tenant in or out
of the Building, or by the installation or removal of furniture or other
property, or by reason of carelessness, negligence or improper conduct of
Tenant or its agents, employees or servants in the use or occupancy of the
Premises. The provisions of this Subparagraph 8(b) shall survive the
expiration or earlier termination of this Lease.
(c) Tenant hereby agrees to maintain in full force and effect at all
times during the term of this Lease, at its sole cost and expense, for the
protection of Tenant and Landlord, as their interests may appear, policies of
insurance issued by a responsible carrier or carriers, qualified to do
business in the State of California, with a financial class rating of not
less than X and a policy holder rating of not less than A in the most recent
Bests Key Rating Guide and otherwise acceptable to Landlord, which afford the
following coverages:
(i) Comprehensive general liability insurance (or commercial
general liability Insurance) or such successor comparable form of coverage,
including blanket contractual liability, broad form property damage,
independent contract's coverage, personal injury, completed operations,
product liability, cross liability and severability of interest clauses, and
fire damage, written on an *occurrence" basis with coverage of not less than
Five Million Dollars ($5,000,000.00) combined single limit per occurrence for
both bodily injury (including death) and property damage;
(ii) All Risk Insurance, including, without limitation,
insurance covering loss or damage resulting or arising from sprinkler
leakage, in an amount sufficient to cover the full cost of replacement of all
improvements to the Premises (other than Building Standard Installations) and
all of Tenant's fixtures and other personal property. The proceeds of such
insurance shall be devoted exclusively to the replacement of the same unless
this Lease shall cease and terminate pursuant to the provisions of Paragraph
9 hereof; and
(iii) Workers Compensation and Employers Liability Insurance
(as required by law).
(d) Tenant may, with the prior written consent of Landlord, elect to
have reasonable deductibles (not to exceed Ten Thousand Dollars ($10,000.00))
under the policy required pursuant to Subparagraph 8(c)(ii).
(e) Tenant shall deliver to Landlord at least thirty (30) days prior
to the time such insurance is first required to be carried by Tenant, and
thereafter at least thirty (30) days prior to expiration of each such policy,
certificates of insurance evidencing the coverage required hereunder with
limits not less than those specified above. Such policies of insurance shall
be written as primary policies, not contributing with, and not in excess of
coverage which Landlord may carry. The certificate of insurance with respect
to the coverage described in Subparagraph 8(c)(i) above shall specifically
reflect insurance of Tenant's obligations under Subparagraph 8(b) above. Such
certificates shall name Landlord as an additional insured and shall expressly
provide that the interest of the same therein shall not be affected by any
breach by Tenant of any policy provision for which such certificates evidence
coverage. Further, all certificates shall expressly provide that not less
than thirty (30) days' prior written notice shall be given Landlord in the
event of material alteration to or cancellation of the coverages evidenced by
such certificates. If on account of the failure of Tenant to comply with the
provisions of this Paragraph 8, Landlord is adjudged a insurer by its
insurance carrier, then, in addition to all other remedies available to
Landlord, any loss or damage Landlord shall sustain by reason thereof shall
be borne by Tenant and shall be immediately paid by Tenant upon receipt of a
xxxx therefor and evidence of such loss.
(f) Upon demand, Tenant shall provide Landlord, at Tenants sole cost
and expense, with such increased amount of existing insurance and such other
insurance with such limits as Landlord may require and such other hazard
insurance as the nature and condition of the Premises may require. in the
opinion of Landlord, to afford Landlord adequate protection for such risks.
However, in all cases such adjustments shall be based upon the requirements
of an institutional lender of Landlord or otherwise reasonable and consistent
with the requirements of other first class office projects in the County of
Orange.
(g) Landlord makes no representation that the insurance coverage
specified to be carried by Tenant pursuant to this Paragraph S is adequate to
protect Tenant against Tenant's undertaking under the terms of this Lease or
otherwise, and in the event Tenant believes that any such insurance coverage
called for under this Lease is insufficient Tenant shall provide, at its own
cost and expense, such additional insurance as Tenant deems adequate.
(h) Notwithstanding any provision of this Paragraph 8 to the
contrary, Landlord hereby waives any and all rights of recovery against
Tenant for or arising out of damage to, or destruction of; the Premises, the
Building or the Project from causes then included under standard fire and All
Risk insurance policies or endorsements; provided, however, that such waiver
of subrogation shall be limited exclusively to insurance proceeds actually
received by Landlord for such damage or destruction. Tenant hereby waives any
and all rights of recovery against Landlord for or arising out of damage to,
or
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destruction of any property of Tenant, from causes then included under
standard fire and All Risk insurance policies or endorsements. Tenant
represents that its present insurance policies now in force permit such
waiver. If at any time during the term of this Lease (i) either party shall
give less than five (5) days' prior written notice to the other party
certifying that any insurance carrier which has issued any such policy shall
refuse to consent to the aforesaid waiver of subrogation, or (ii) such
insurance carrier shall consent to such waiver only upon the payment of an
additional premium (and such additional premium is not paid by the other
party hereto), or (iii) such insurance carrier shall revoke a consent
previously given or shall cancel or threaten to cancel any policy previously
issued and then in force and effect, because of such waiver of subrogation,
then, in any of such events, the waiver of subrogation contained herein shall
thereupon be of no further force or effect as to the loss, damage or
destruction covered by such policy. It however, at any time thereafter, a
consent to such waiver of subrogation shall be obtained without an additional
premium from any existing or substitute insurance carrier, the waiver
hereinabove provided for shall again become effective. Nothing contained
herein shall abrogate or limit Tenant's waiver and indemnity contained in
Subparagraphs 8(a) and 8(b).
(i) Tenant shall not keep, use, sell or offer for sale in or upon
the Premises any article, which may be prohibited by any insurance policy
periodically in force covering the Premises, the Building or the Project. If
any of Landlord's insurance policies shall be cancelled or cancellation shall
be threatened or the coverage thereunder reduced or threatened to be reduced
in any way because of a non-permitted use of the Premises, or any part
thereof by Tenant or any assignee, subtenant, licensee or invitee of Tenant
and, if Tenant fails to remedy the condition giving rise to such
cancellation, threatened cancellation, reduction of coverage, or threatened
reduction of coverage, within such time period as Landlord determines is
reasonably sufficient to prevent cancellation of coverage as set forth in
said notice, or if such coverage has been cancelled within forty eight (48)
hours after notice thereof Landlord may, at its option, either terminate this
Lease or enter upon the Premises and attempt to remedy such condition, and
Tenant shall promptly pay the cost thereof to Landlord as additional Rent.
Landlord shall not be liable for any damage or injury caused to any property
of Tenant or of others located on the Premises resulting from such entry. If
Landlord is unable, or elects not to remedy such condition, then Landlord
shall have all of the remedies provided for in this Lease in the event of a
default by Tenant
(j) Tenant shall not do or permit to be done any act or things upon
or about the Premises or the Building, which will (i) result in the assertion
of any defense by the insurer to any claim under, (ii) invalidate, or (iii)
be in conflict with, the insurance policies of Landlord or Tenant covering
the Building, the Premises or fixtures and property therein, or which would
increase the rate of fire insurance applicable to the Building to an amount
higher than it otherwise would be; and Tenant shall neither do nor permit to
be done any act or thing upon or about the Premises or the Building which
shall or might subject Landlord to any liability or responsibility for injury
to any person or persons or to property, provided that nothing in this
Paragraph 8 shall prevent or limit Tenants use of the Premises for the
purposes stated in Paragraph 6 hereof.
(k) It as a result of any act or omission by or on the part of
Tenant or violation of this Lease, whether or not Landlord has consented to
the same, the rate of "All Risk" or other type of insurance maintained by
Landlord on the Building and fixtures and property therein, shall be
increased to an amount higher than it otherwise would be, Tenant shall
reimburse Landlord for all increases of Landlord's fire insurance premiums so
caused, such reimbursement to be Additional Rent payable within five (5) days
after demand therefor by Landlord.
(l) Landlord shall provide any or all of the following types of
insurance, with commercially reasonable deductibles as determined by Landlord
and in amounts and coverages as may be determined by Landlord in its
discretion: "all risk" property insurance subject to standard exclusions,
covering the Building or Project, and such other risks as Landlord or its
mortgagees may from time to time deem appropriate; and commercial general
liability coverage. Landlord shall not be required to carry insurance of any
kind on Tenants alterations, trade fixtures, furnishings, equipment interior
plate glass, signs and all other items of personal property and alterations,
and shall not be obligated to repair or replace that property should damage
occur. All proceeds of insurance maintained by Landlord upon the Building and
the Project shall be the property of Landlord, whether or not Landlord is
obligated to or elects to make any repairs.
9. FIRE OR CASUALTY
(a) Subject to the provisions of this Paragraph 9, in the event the
Premises, or access thereto, is wholly or partially destroyed by fire or other
casualty, Landlord shall (to the extent permitted by Law and covenants,
conditions and restrictions then applicable to the Project) rebuild, repair or
restore the Premises and access thereto to substantially the same condition as
existing immediately prior to such destruction, and this Lease shall continue in
full force and effect. Notwithstanding the foregoing, (i) Landlord's obligation
to rebuild, repair or restore the Premises shall not apply to any personal
property or other items installed or contained in the Premises which are not
installed as part of the initial tenant improvements, and (ii) Landlord shall
have no obligation whatsoever to rebuild, repair or restore the Premises with
respect to any damage or destruction occurring during the last twelve (12)
months of the term of this Lease or the Extension Term.
(b) Landlord may elect to terminate this Lease in any of the following
cases of damage or destruction to the Premises or the Building: (i) where the
cost of rebuilding, repairing and restoring the Building (collectively,
"Restoration"), would, regardless of the lack of damage to the Premises or
access thereto, in the opinion of Landlord, exceed twenty percent (20%) of the
then replacement cost of the Building; (ii) where, in the case of any damage or
destruction to any portion of the Building by uninsured casualty, the cost of
Restoration of the Building, in the opinion of Landlord, exceeds One Million
Dollars ($1,000,000.00); or (iii) where, in the case of any damage or
destruction to the Premises or access thereto by uninsured casualty, the cost of
Restoration of the Premises or access thereto, in the opinion of Landlord,
exceeds twenty percent (20%) of the replacement cost of the Premises. Any such
termination shall be made by thirty (30) days' prior written notice to Tenant
given within sixty (60) days of the date of such damage or destruction.
(c) Subject to the later terms hereof Tenant shall have the right to
terminate this Lease following the destruction of the Premises (or damage to
the Premises so extensive as to reasonably prevent Tenants substantial use
and enjoyment of the Premises) if any of the following occurs: (i) the
Premises cannot, with reasonable diligence, be repaired by Landlord within
three hundred sixty (360) days after the date of the damage or destruction,
as determined by Landlord's architect Completion Period"); (ii) the Premises
cannot safely be repaired because of the presence of hazardous factors,
including Hazardous Materials. earthquake faults, radiation, chemical waste
and other similar dangers: or (iii) the damage or destruction occurs during
the last twelve (12) months of the Term and cannot, with reasonable
diligence, be repaired by Landlord within ninety (90) days after the date of
the damage or destruction, as determined by Landlord's architect. If Tenant
elects to terminate this Lease pursuant hereto, Tenant shall give Landlord
written notice of its election to terminate within
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fifteen (15) days after the date of the determination by Landlord's
architect, and this Lease shall terminate thirty (30) days after the date of
such notice. Notwithstanding the foregoing, (1) in the event Landlord's
architect makes a determination that the Premises can be repaired within the
Completion Period as set forth in clause (i) above, and thereafter Landlord's
architect makes a determination that the damage or destruction will not,
despite Landlord's reasonable diligence, be repaired within the Completion
Period, Landlord shall give Tenant written notice of such determination
together with Landlord's architect's estimated date that the damage or
destruction will be repaired, and if such estimated completion date is more
than an aggregate of sixty (60) days from the expiration of the Completion
Period plus delays outside of the reasonable control of Landlord, Tenant
shall have a period of fifteen (15) days after receipt of said notice to
elect to terminate this Lease and this Lease will terminate within thirty
(30) days after the date of said notice, or (2) if the Premises are not
repaired within eighteen (18) months after the damage or destruction
(including delays outside of the reasonable control of Landlord), then Tenant
shall have a period of ten (10) days after said time period to elect to
terminate this Lease by providing written notice to Landlord of such election
and this Lease will terminate within thirty (30) days after Tenants notice.
Notwithstanding the foregoing, Tenant shall not have the right to terminate
hereunder if a Tenant Default has occurred and is continuing at the time of
such damage or destruction, or at the time of exercising such right to
terminate, or the damage or destruction was caused, in whole or in part, from
the fault or neglect of Tenant, its agents, contractors, assignees,
subtenants, employees, licensees or invitees.
(d) If this Lease is not terminated by Landlord or Tenant pursuant
to subparagraphs (a), (b) or (c) hereof and as the result of any damage or
destruction, the Premises, or a portion thereof are rendered untenantable,
the Basic Annual Rent shall xxxxx ratably during the period of Restoration
(based upon the extent to which such damage and Restoration materially
interfere with Tenants business in the Premises) unless such damage or
destruction shall have resulted from the fault or neglect of Tenant, its
agents, servants, contractors, representatives, employees, licensees or
invitees. This Lease shall be considered an express agreement governing any
case of damage to or destruction of the Premises, the Building or the
Project. Tenant hereby waives the provisions of California Civil Code
Sections 1932(2) and 1933(4) and the provisions of any successor or other law
of like import.
10. EMINENT DOMAIN
In the event the whole of the Premises, the Building or the Project
shall be taken under the power of eminent domain, or sold to prevent the
exercise thereof (collectively, a "`Taking"), this Lease shall automatically
terminate as of the date of such Taking. In the event of a Taking of such
portion of the Project, the Building or the Premises as shall, in the opinion
of Landlord, substantially interfere with Landlord's operation thereof
Landlord may terminate this Lease upon thirty (30) days' written notice to
Tenant given at any time within sixty (60) days following the date of such
Taking. For purposes of this Lease, the date of Taking shall be the earlier
of the date of transfer of title resulting from such Taking or the date of
transfer of possession resulting from such Taking. In the event that a
portion of the Premises is so taken and this Lease is not terminated,
Landlord shall, with reasonable diligence, proceed to restore (to the extent
permitted by Law and covenants. conditions and restrictions then applicable
to the Project) the Premises (other than Tenant's personal property and
fixtures, and tenant improvements not constituting Building Standard
Installations) to a complete, functioning unit In such case, the Basic Annual
Rent shall be reduced proportionately based on the portion of the Premises so
taken. If all or any portion of the Premises is the subject of a temporary
Taking, this Lease shall remain in full force and effect, and Tenant shall
continue to perform each of its obligations under this Lease; in such case,
Tenant shall be entitled to receive the entire award allocable to the
temporary Taking of the Premises. Except as provided herein, Tenant shall not
assert any claim against Landlord or the condemning authority for, and hereby
assigns to Landlord, any compensation in connection with any such Taking, and
Landlord shall be entitled to receive the entire amount of any award
therefor, without deduction for any estate or interest of Tenant, Nothing
contained in this Paragraph 10 shall be deemed to give Landlord any interest
in, or prevent Tenant from seeking any award against the condemning authority
for the Taking of personal property or fixtures of Tenant, or for relocation
or business interruption expenses recoverable by Tenant from the condemning
authority. In addition, in the event of a Taking of the whole or any part of
the Premises only, Tenant shall have the right to seek an award for up to
fifty, percent (50%) of Tenant's leasehold interest in this Lease, provided
that in no event shall any such claim by Tenant diminish any award payable to
Landlord. This Paragraph 10 shall be Tenant's sole and exclusive remedy in
the event of a Taking. Each party hereby waives the provisions of Sections
1265.130 and 1265.150 of the California Code of Civil Procedure and the
provisions of any successor or other law of like import.
11. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, assign, sublet, mortgage,
hypothecate or otherwise encumber all or any portion of its interest in this
Lease or in the Premises or grant any license in or suffer any person other
than Tenant or its employees to use or occupy the Premises, or any part
thereof without obtaining the prior written consent of Landlord, which
consent shall, subject to Subparagraphs 11(d), (e), (0' and (g) below, not be
unreasonably withheld. Any such attempted assignment, subletting, license,
mortgage, hypothecation. other encumbrance or other use or occupancy without
the consent of Landlord shall be null and void and of no effect. For purposes
of application of Subparagraphs 11(b), (c), (d), (e), (0. and (g) below, any
mortgage, hypothecation or encumbrance of all or any portion of Tenant's
interest in this Lease or in the Premises and any grant of a license or
sufferance of any person other than Tenant or its employees to use or occupy
the Premises, or any part thereof shall be deemed to be an "assignment" of
this Lease. In addition, as used in this Paragraph 11, the term "`Tenant"
shall also mean any entity that has guaranteed Tenants obligations under this
Lease, and the restrictions applicable to Tenant contained herein shall also
be applicable to such guarantor.
(b) No permitted assignment or subletting shall relieve Tenant of
its obligation to pay the Rent and to perform all of the other obligations to
be performed by Tenant hereunder. The acceptance of Rent by Landlord from any
other person shall not be deemed to be a waiver by Landlord of any provision
of this Lease or to be a consent to any subletting or assignment. Consent by
Landlord to one (1) subletting or assignment shall not be deemed to
constitute a consent to any other or subsequent attempted subletting or
assignment.
(c) If Tenant desires at any time to assign this Lease or to sublet
the Premises, or any portion thereof it shall first notify Landlord of its
desire to do so and shall submit in writing to Landlord (i) the name of the
proposed assignee or subtenant; (ii) the nature of the proposed assignee's or
subtenants business to be carried on in the Premises; (iii) the terms and
provisions of the proposed assignment or sublease, which shall be expressly
subject to the provisions of this Lease;
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(iv) in the case of a sublease, the portion of the Premises proposed to be
sublet; and (v) such financial and other information as Landlord may
reasonably request concerning the proposed assignee or subtenant.
(d) INTENTIONALLY LEFT BLANK
(e) Tenant acknowledges that it shall be reasonable for Landlord to
withhold its consent to a proposed assignment or sublease if (i) the use to
be made of the Premises by the proposed assignee or subtenant is (A) not
generally consistent with the character and nature of other tenants in the
Building or the Project or would result in a heavier burden (in comparison to
that resulting from Tenant's use of such portion of the Premises) on the
Building, the Project, the systems, the structures or the Common Areas
thereof, (B) in conflict with any TM exclusive" or similar use or signage
rights of another Project tenant, or (C) prohibited by any provision of this
Lease, including, without limitation, the rules and regulations then in
effect; (ii) the character, moral stability, reputation or financial
responsibility of the proposed assignee or subtenant are not reasonably
satisfactory to Landlord; (iii) in the case of a proposed mortgage,
hypothecation or other encumbrance of Tenant's leasehold estate, (A) the
proposed assignee or subtenant requests relief from any provision of this
Paragraph 11 or this Lease, including, without limitation, in the case of an
assignment of this Lease, those provisions requiring assumption of this Lease
by each assignee, (B) the proposed mortgage, hypothecation or encumbrance is
of less than the entire leasehold estate, or (C) the proposed assignee or
subtenant cannot reasonably demonstrate to Landlord that such mortgage,
hypothecation or encumbrance will not impair or adversely affect any of
Landlord's rights hereunder; (iv) in the case of a sublease, the portion of
the Premises proposed to be sublet is not a single, self contained unit of
space with access to restrooms and exits in conformance with applicable Law
or otherwise cannot be the subject of a valid certificate of occupancy; or
(v) the proposed assignee or subtenant is an existing tenant or subtenant in
the Project and Tenant is offering such assignment or sublease at a rental
rate less than that being offered by Landlord for similar space within the
Project.
(f) The voluntary or other surrender of this Lease by Tenant or a
mutual cancellation hereof shall not constitute a merger, and shall, at the
option of Landlord, either terminate all or any existing subleases or
subtenancies or shall operate as an assignment to Landlord of such subleases
or subtenancies. Notwithstanding anything to the contrary contained in this
Paragraph 11 or Paragraph 20(n): (i) an assignment of this Lease or sublease
of all or a portion of the Premises to (A) an affiliate of Tenant, (B) an
entity which Tenant is merged with, consolidated into, or reconstituted as,
or (C) an entity which acquires all or substantially all of the assets or
stock of Tenant shall not be deemed an assignment or transfer under this
Paragraph 11, provided that (1) Tenant notifies Landlord of any such
transaction and promptly supplies Landlord with supporting documents or
Information requested by Landlord regarding such transaction or such
affiliate or successor, (2) such transaction is not a subterfuge by Tenant to
avoid its economic obligations under this Lease or to reduce its net worth or
ability to pay obligations generally, and (3) Tenant shall warrant to
Landlord that the parties to the transaction were not attempting to avoid the
specific assignment and subleasing restrictions of Tenant under this Lease,
including without limitation the application of subparagraphs (e) and (g) of
this Paragraph ii. For purposes of the foregoing, a person or entity will be
deemed to be an affiliate of any other person or entity who is controlling,
controlled by, or under common control with such person or entity, and
"control" shall mean the ownership, directly or indirectly, of at least
fifty-one percent (51%) of the voting securities of, or possession of the
right to vote, in the ordinary direction of its affairs, of at least
fifty-one percent (51%) of the voting interests in, any person or entity;
(ii) If Tenant is a publicly traded company, the shares of which are freely
traded on a generally recognized national stock exchange or over the counter,
the transfer of shares on such exchange or over the counter shall not be
deemed to be an assignment or transfer under this Paragraph ii; and (iii) a
sale of capital stock by Tenant in a public offering shall not be deemed an
assignment or transfer under this Paragraph 11. Each assignee, sublessee,
licensee, mortgagee or other transferee, other than Landlord, shall assume in
a writing satisfactory to Landlord, all applicable obligations of Tenant
under this Lease and except with respect to transactions not deemed
assignments or transfers as identified in subparts (I), (ii) and (iii) above,
shall be jointly and severally liable for the performance of all of the
applicable provisions hereof. Notwithstanding the foregoing and without
prejudice to Landlord's right to require a written assumption from each
assignee, any person or entity to whom this Lease is assigned, including,
without limitation, assignees pursuant to the provisions of the Bankruptcy
Code, 11 U.S.C xx.xx. 101 ET seq.. (the "Bankruptcy Code"), shall
automatically be deemed to have assumed all applicable obligations of Tenant
arising under this Lease. Tenant agrees to reimburse Landlord for Landlord's
reasonable costs and attorneys' fees incurred, in an amount not to exceed
$5,000.00, in connection with the processing, investigation and documentation
of any requested assignment or sublease subject to this Paragraph.
(g) If Landlord shall give its consent to any assignment of this
Lease or to any sublease of all or any portion of the Premises, Tenant shall
pay to Landlord as Additional Rent hereunder
(i) In the case of an assignment, an amount equal to fifty
percent (50%) of all sums and other consideration paid to the assignor Tenant
by the assignee for, or by reason of, such assignment, but deducting from
such sums and consideration, all legal fees and brokerage commissions
actually paid to lawyers and independent brokers in connection with such
transaction and any tenant improvement allowance granted to the assignee to
the extent actually devoted exclusively to the installation of leasehold
improvements in the Premises (such commissions and allowance being referred
to herein as "`Transaction Inducements"); and
(ii) In the case of a sublease, fifty, percent (50%) of all
sums, rents, additional charges, key money and other consideration payable
under the sublease by the subtenant to Tenant in excess of Rent accruing
during the term of the sublease with respect to the subleased portion of the
Premises (at the rate per square foot of Rentable Area payable by Tenant).
Tenant shall be entitled to deduct all Transaction Inducements related to
such sublease.
The obligation to make the payments described in this
Subparagraph 11(g) shall be a joint and several obligation of the Tenant and
the assignee or sublessee, as the case may be. The amounts payable under
Subparagraph 11(g) shall be paid to Landlord as and when payable by the
assignee or sublessee to Tenant Landlord agrees to accept payments directly
from any assignee or sublessee. Within fifteen (15) days after written
request therefor by Landlord, Tenant shall furnish evidence to Landlord of
the amount of consideration received or expected to be received from such
assignment or sublease.
(h) Notwithstanding any provision of this Lease to the contrary, in the
event this Lease is assigned to any person or entity pursuant to the provisions
of the Bankruptcy Code, any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid or
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute the property of Tenant or Tenants estate within the
meaning of the
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Bankruptcy Code. All such money and other consideration not paid or delivered
to Landlord shall be held in trust for the benefit of Landlord and shall be
promptly paid or delivered to Landlord.
12. DEFAULT
(a) The occurrence of any of the following shall constitute a
material default and breach of This Lease by Tenant (a "Tenant Default):
(i) Any failure by Tenant to pay any installment of Basic
Annual Rent or to make any other payment required to be made by Tenant
hereunder when due, where such failure continues for five (5) days after
delivery of written notice of such failure by Landlord to Tenant: provided,
however, That any such notice shall be in lieu of and not in addition to, any
notice required under Sections 1161 !1 in.' of The California Code of Civil
Procedure;
(ii) The abandonment of The Premises by Tenant;
(iii) Any failure by Tenant to execute and deliver any
statement described in Paragraph 16 requested by Landlord, where such failure
continues for five (5) days after delivery of written notice of such failure
by Landlord to Tenant; provided, however, That any such notice shall be in
lieu of and not in addition to, any notice required under Sections 1161 ET
SEQ., of the California Code of Civil Procedure;
(iv) Any failure by Tenant to observe and perform any Other
provision of this Lease, including, without limitation, any provision of The
Exhibits attached hereto, as They may exist from time to time, to be observed
or performed by Tenant, where such failure continues for Thirty (30) days
(except where a different period of time is specified in This Lease, in which
case, such different time period shall apply) after delivery of written
notice of such failure by Landlord to Tenant; provided, however, That any
such notice shall be in lieu of and not in addition to, any notice required
under Sections 1161 ET SEQ., of the California Code of Civil Procedure. If
The nature of such default is such that the same cannot reasonably be cured
within such thirty (30) day period, Tenant shall not be deemed to be in
default if Tenant shall, commence such cure within such thirty (30) day
period, and thereafter diligently prosecute such cure to completion;
(v) The making or furnishing by Tenant of any warranty,
representation or statement to Landlord in connection with this Lease, or any
other agreement to which Tenant and Landlord are parties, which Tenant knows,
or has reason to know, is false or misleading in any material respect when
made or furnished;
(vi) Any transfer in violation of Paragraph 11 above;
(vii) Any instance whereby Tenant or any general partner of
Tenant shall cease doing business as a going concern, make an assignment for
the benefit of creditors, generally not pay its debts as they become due or
admit in writing its inability to pay its debts as They become due, file a
petition commencing a voluntary case under any chapter of the Bankruptcy
Code, be adjudicated an insolvent, file a petition seeking for itself any
reorganization, composition, readjustment, liquidation, dissolution or
similar arrangement under The Bankruptcy Code or any other present or future
similar statute, law, rule or regulation, or file an answer admitting The
material allegations of a petition filed against it in any such proceeding,
consent to The filing of such a petition or acquiesce in the appointment of a
trustee, receiver, custodian or other similar official for it or of all or
any substantial part of its assets or properties, or take any action looking
to its dissolution or liquidation;
(viii) Any instance whereby a case, proceeding or other action
shall be instituted against Tenant or any general partner of Tenant seeking
The entry of an order for relief against Tenant or any general partner
Thereof as debtor, to adjudicate Tenant or any general partner thereof as a
bankrupt or insolvent, or seeking reorganization, arrangement, readjustment,
liquidation, dissolution or similar relief against Tenant or any general
partner thereof under The Bankruptcy Code or any other present or future
similar statute, law, rule or regulation, which case, proceeding or other
action either results in such entry, adjudication or issuance or entry of any
other order or judgment having a similar effect, or remains undismissed for
sixty (60) days, or within sixty (60) days after the appointment (without
Tenants or such general partners consent) of any trustee, receiver, custodian
or other similar official for it or such general partner, or of all or any
substantial part of its or such general partners' assets and properties, such
appointment shall not be vacated;
(ix) The appointment of a receiver, trustee or custodian to
take possession of all or any substantial portion of the assets of Tenant, or
The formation of any committee of Tenants creditors, or any class thereof for
The purpose of monitoring or investigating the financial affairs of Tenant or
enforcing such creditors' rights.
(b) In the event of any such default by Tenant, then in addition to
any other remedies available to Landlord at law or in equity, Landlord shall
have the immediate option to terminate this Lease and all rights of Tenant
hereunder by giving written notice of such termination. In the event That
Landlord shall elect to so terminate this Lease, then Landlord may recover
from Tenant:
(i) The worth at The time of award of any unpaid Rent which had
been earned at The time of such termination; plus
(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 Tenant proves reasonably could
have been avoided: plus
(iii) The worth at The time of award of the amount by which
The unpaid Rent for the balance of The term after the time of award exceeds The
amount of such rental loss That Tenant proves reasonably could be avoided;
(iv) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in The ordinary course would be likely to result
therefrom; and
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(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 California Law.
(c) As used in Subparagraphs 1 2(b)(i) and 1 2(b)(ii) above, the
"worth at the time of award" is computed by allowing interest at the rate
specified in Subparagraph 12(i) below. As used in Subparagraph 12(b)(iii)
above, the `worth at the time of award" is 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%).
(d) In the event of any such default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to enter the Premises
and remove all persons and property from the Premises; such property may be
removed and stored in a public warehouse or elsewhere at the cost and risk of
and for the account of Tenant
(e) In the event of the abandonment of the Premises by Tenant or in
the event that Landlord shall elect to reenter as provided in Subparagraph
12(d) or shall take possession of the Premises pursuant to legal proceedings,
or pursuant to any notice provided by Law, then if Landlord does not elect to
terminate this Lease as provided in this Xxxxxxxxx 00, Xxxxxxxx may from time
to time, without terminating this Lease, either recover all rentals as they
become due or relet the Premises, or any pan thereof for such term or terms
and at such rental or rentals and upon such other terms and conditions as
Landlord, in its sole and absolute discretion, may deem advisable, with the
right to make alterations and repairs to the Premises.
(f) In the event that Landlord shall elect to relet, Then rentals
received by Landlord from such reletting shall be applied: first, to the
payment of any indebtedness (other than Rent) due hereunder from Tenant to
Landlord; second, to the payment of any cost of such reletting (including
brokerage commissions); third, to the payment of the cost of any alterations
and repairs to the Premises; fourth, to the payment of Rent due and unpaid
hereunder; and the residue, if any. shall be held by Landlord and applied in
payment of future Rent as the same may become due and payable hereunder.
Should reletting, during any month to which such Rent is applied, result in
the actual payment of rentals at less than the Rent payable during that month
by Tenant hereunder, then Tenant shall pay such deficiency to Landlord
immediately upon demand thereof by Landlord. Such deficiency shall be
calculated and paid monthly. Tenant shall also pay to Landlord as soon as
ascertained, any costs and expenses incurred by Landlord in such reletting or
in making such alterations and repairs not covered by the rentals received
from such reletting.
(g) No re-entry or taking of possession of the Premises by Landlord
pursuant to this Paragraph 12 shall be construed as an election to terminate
this Lease unless a written notice of such election shall be given to Tenant
or unless the termination thereof be decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord,
Landlord may, at any time after such reletting, elect to terminate this Lease
for any such default. Upon the occurrence of a default by Tenant under
Subparagraph 12(a), if the Premises, or any portion thereof are sublet,
Landlord in addition and without prejudice to any other remedies herein
provided or provided by Law, may, at its option, collect directly from the
sublessee all rentals becoming due to the Tenant and apply such rentals
against other sums due hereunder to Landlord.
(h) In addition and without prejudice to any other right or remedy
of Landlord, if Tenant shall be in default under this Lease, Landlord may
cure the same at the cost and expense of Tenant immediately and without
notice in the case (A) of emergency, (B) where such default unreasonably
interferes with any other tenant in the Project, or (C) where such default
will result in the violation of Law or the cancellation of any insurance
policy maintained by Landlord. All costs incurred by Landlord in curing such
default(s), including, without limitation, attorneys' fees, shall be
reimbursable by Tenant as additional Rent hereunder upon demand, together
with interest thereon, from the date such costs were incurred by Landlord, at
the rate specified in Subparagraph 12(i) below.
(i) Tenant acknowledges and agrees that any late payment by Tenant
of Rent or any other amount payable by Tenant hereunder will result in damage
to Landlord, the exact amount of which will be extremely difficult to
ascertain. Such damage includes, without limitation, administrative expenses,
accounting and processing costs and late charges, which may be payable by
Landlord on mortgage financing or other obligations of Landlord relating to
the Project. As a result, Landlord and Tenant agree that in the event Tenant
is more than ten (10) days an paying any amount of Rent or any other payment
due under this Lease, then without the need for any further notice to Tenant,
Tenant shall pay Landlord a late charge equal to that penalty charged by any
mortgagee of the Project as a late charge or penalty not to exceed five
percent (5%) of the delinquent amount. Landlord and Tenant agree that such
late charge is a fair and reasonable estimate of the damage Landlord will
incur by reason of such delinquent payment. Following the occurrence of three
(3) instances of payment of Rent more than ten (10) days late in any twelve
(12) month period, Landlord may, without prejudice to any other rights or
remedies available to it, upon written notice to Tenant, (i) require that all
remaining monthly installments of Rent shall be payable three (3) months in
advance; and in addition or in the alternative at Landlord's election, (ii)
require that Tenant increase the amount of the Security Deposit (if any) by
an amount equal to one (1) month's Rent In addition, any amount due from
Tenant to Landlord hereunder which is not paid within thirty (30) days of the
date due shall bear interest at an annual rate (the "Default Rate") equal to
four percent (4%) in excess of the discount rate being charged by the Federal
Reserve Bank of San Francisco on advances to member banks pursuant to
Sections 13 and 13(a) of the Federal Reserve Act, as amended, as of the
twenty-fifth (25th) day of the month preceding the date hereof (or such
lesser amount as shall be the maximum rate then permitted by applicable use).
The payment of such interest by Tenant shall not constitute a waiver of any
default by Tenant hereunder.
(j) The performance by Landlord of any agreement, concession or
grant for "free rent," Rent abatement, a "credit fund" to be applied against
Rent otherwise payable hereunder or any grant or payment by Landlord to or
for the benefit of Tenant of any cash or other bonus, allowance or other
payment or inducement or any assumption of obligations by Landlord to or for
the benefit of Tenant given or granted to or for the benefit of Tenant as
consideration for execution and delivery of this Lease by Tenant (all such
agreements, concessions, grants, payments and assumptions are collectively
referred to herein as `Tenant Inducements") shall be continuously conditional
upon Tenants full and complete performance of its obligations under this
Lease during months 1-144 of the Lease term only, as this Lease may be
amended or extended. Effective immediately upon the occurrence of a Tenant
Default during months 1-144 of the Lease term only, (A) any provision of this
Lease providing for performance of a Tenant Inducement shall be automatically
deemed terminated and of no further force or effect, and (B) any Tenant
inducement previously granted, issued, paid or given to or for the benefit of
Tenant shall be immediately due and payable by Tenant to Landlord as Rent
hereunder Notwithstanding phrase (B) above
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at the end of each consecutive twenty four (24) month period, commencing from
me Commencement Date, so long as a Tenant Default shall not have occurred
during such 24 month period, for purposes of this paragraph, Tenant shall be
deemed to have earned one (1) month of me Fixturization Period or Deferred
Rent Period, as me case may be. If a Tenant Default occurs during months
1-144 of me Lease Term, men Tenant shall immediately pay Landlord, in
addition to all other remedies at law, in equity, or under this Lease, an
amount equal to the Tenant Inducement minus me Rent for such "earned" months.
At the expiration of the Lease, if mere is no Tenant Default, men Landlord
shall at its election either reimburse Tenant for amounts paid by Tenant to
Landlord pursuant to me preceding sentence for unearned Tenant Inducement, or
credit such amounts against any monies owed by Tenant to Landlord pursuant to
this Lease.
(k) Tenant hereby waives for Tenant and for all those claiming under
Tenant all rights now or hereafter existing to redeem by order or judgment of
any court or by any legal process or writ, Tenants right of occupancy of the
Premises after any termination of this Lease. Notwithstanding any provision
of this Lease to the contrary, the expiration or termination of this Lease
and or the termination of Tenants rights to possession of the Premises shall
not discharge, relieve or release Tenant from any obligation or liability
whatsoever under any indemnity provision of this Lease, including, without
limitation, the provisions of Paragraphs 6 and 8 hereof
(l) To the full extend permitted by law, Tenant hereby waives the
right to trial by jury in any action, proceeding or counterclaim brought by
Tenant on any mailer whatsoever arising out or of in any way connected with
this Lease, the relationship of Landlord and Tenant, Tenants use or occupancy
of the Premises and or any claim of injury or damage.
(m) Should a dispute arise between me parties regarding any mailer
described above or in Subparagraph 17(c) below, then except with respect to
actions for unlawful or forcible retainer either party may cause me dispute
to be submitted to Jams/Endispute or its successor ("JAMS") in the County in
which the building is situated for binding arbitration before a single
arbitrator. However, each party reserves the right to seek a provisional
remedy by judicial action. No arbitration election by either party pursuant
to this subsection shall be effective if made later than thirty (30) days
following service of a judicial summons and complaint by or upon such party
concerning the dispute. The arbitration shall be conducted in accordance with
the rules of practice and procedure of JAMS and otherwise pursuant to the
California Arbitration Act (Code of Civil Procedure Sections 1280 et seq.).
Notwithstanding the foregoing, the arbitrator is specifically directed to
limit discovery to that which is essential to the effective prosecution or
defense of the action. The arbitrator shall apportion the costs of the
arbitration, together with the attorneys' fees of the parties, in the manner
deemed equitable by the arbitrator, it being the intention of the parties
that the prevailing party ordinarily be entitled to recover its reasonable
costs and fees. Judgment upon any award rendered by the arbitrator may be
entered by any court having jurisdiction.
13. ACCESS; CONSTRUCTION
Landlord reserves the right to use the roof and exterior walls of
the Premises and the area beneath, adjacent to and above me Premises,
together with the right to install, use, maintain, repair, replace and
relocate equipment, machinery, meters, pipes, ducts, plumbing, conduits and
wiring (within the walls of the Premises) throughout the Premises, which
serve other portions of the Building or the Project in a manner and in
locations which do not unreasonably interfere with Tenant's use of the
Premises. In addition, Landlord shall have free access to any and all
mechanical installations of Landlord or Tenant, including, without
limitation, machine rooms, telephone rooms and electrical closets. Tenant
agrees that there shall be no construction of partitions or other
obstructions which interfere with or which threaten to interfere with
Landlord's free access thereto, or interfere with the moving of Landlord's
equipment to or from the enclosures containing said installations. Landlord
reserves and shall at any time and all times have the right to enter the
Premises upon reasonable prior notice (except in an emergency or following a
Tenant Default) and subject to Tenants reasonable security precautions, to
inspect the same, to supply janitorial service and any other service to be
provided by Landlord to Tenant hereunder, to exhibit the Premises to
prospective purchasers, lenders or tenants, to post notices of
nonresponsibility, to alter, improve, restore, rebuild or repair the
Premises, or any other portion of the Building, or to do any other act
permitted or contemplated to be done by Landlord hereunder, all without being
deemed guilty of an eviction of Tenant and without liability for abatement of
Rent or otherwise. For such purposes. Landlord may also erect scaffolding and
other necessary structures where reasonably required by the character of the
work to be performed. Landlord shall conduct all such inspections and/or
improvements, alterations and repairs so as to minimize, to the extent
reasonably practical and without additional expense to Landlord, any
interruption of or interference with the business of Tenant. Tenant hereby
waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment
of the Premises, and any other loss occasioned thereby. For each of such
purposes, Landlord shall at all times have and retain a key with which to
unlock all of the doors in, upon and about the Premises (excluding Tenant's
vaults and safes, access to which shall be provided by Tenant upon Landlord's
reasonable request). Landlord shall have the right to use any and all means
which Landlord may deem proper in an emergency in order to obtain entry to
the Premises, or any portion thereof Any entry into the Premises obtained by
Landlord by any of such means shall not under any circumstances be construed
to be a forcible or unlawful entry into, or a detainer of, the Premises, or
any eviction of Tenant from the Premises, or any portion thereof No provision
of this Lease shall be construed as obligating Landlord to perform any
repairs, Alterations or decorations to the Premises or the Project except as
otherwise expressly agreed to be performed by Landlord pursuant to the
provisions of this Lease.
14. INTENTIONALLY LEFT BLANK
15. INTENTIONALLY LEFT BLANK
16. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES
(a) Tenant agrees that this Lease and the rights of Tenant hereunder
shall be subject and subordinate to any and all deeds of trust, security
interests, mortgages, master leases, ground leases or other security
documents and any and all modifications, renewals, extensions, consolidations
and replacements thereof (collectively, "5ecurity Documents") which now or
hereafter constitute a lien upon or affect the Project, the Building or the
Premises. Such subordination shall be effective without the necessity of the
execution by Tenant of any additional document for the purpose of evidencing
or effecting such subordination. In addition, Landlord shall have the right
to subordinate or cause to be subordinated any such Security Documents to
this Lease, and in such case, in the event of the termination or transfer of
Landlord's estate or interest in the Project by reason of any termination or
foreclosure of any such Security Documents, Tenant shall, notwithstanding
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such subordination, attom to and become the Tenant of the successor in
interest to Landlord. Furthermore, Tenant shall within fifteen (15) days of
demand therefor execute any instruments or other documents consistent with
Tenant's rights under this Lease which may be required by Landlord or the
holder of any Security Document and specifically Tenant shall execute,
acknowledge and deliver within fifteen (15) days of written demand therefor a
subordination of lease or subordination of deed of trust, in the form
reasonably required by the holder of the Security Document requesting the
document; the failure to do so by Tenant within such time period shall be a
material default hereunder. Notwithstanding any provision of this Lease to
the contrary, the subordination of this Lease and the rights of Tenant to any
Security Documents which are executed or entered into after the date of this
Lease (and Tenants duty hereunder to execute any documents evidencing such
subordination) shall be subject to the holder of such Security Document
agreeing pursuant to such holders standard form for such purpose (or
otherwise pursuant to any other form in common use by institutional lenders)
that Tenant's possession and this Lease shall not be disturbed by such holder
so long as no default hereunder shall occur, and Tenant shall attom to the
record owner of the Project.
(b) Tenant shall, upon not less than fifteen (15) days' prior notice
by Landlord, execute, acknowledge and deliver to Landlord a statement in
writing certifying to those customary and reasonable facts for which
certification has been requested by Landlord or any current or prospective
purchaser, holder of any Security Document, ground lessor or master lessor,
including, but without limitation, that (i) this Lease is unmodified and in
full force and effect (or if there have been modifications, that the same is
in full force and effect as modified and stating the modifications), (ii) the
dates to which the Basic Annual Rent, Rent and other charges hereunder have
been paid, if any, and (iii) whether or not to the best knowledge of Tenant,
Landlord is in default in the performance of any covenant, agreement or
condition contained in this Lease and, if so, specifying each such default of
which Tenant may have knowledge. The form of the statement attached hereto as
Exhibit "F" is hereby approved by Tenant for use pursuant to this
Subparagraph 16(c); however, at Landlord's option, Landlord shall have the
right to use other forms for such purpose. Tenant's failure to execute and
deliver such statement within such time shall, at the option of Landlord,
constitute a material default under this Lease and, in any event, shall be
conclusive upon Tenant that this Lease is in full force and effect without
modification except as may be represented by Landlord in any such certificate
prepared by Landlord and delivered to Tenant for execution. In addition,
Landlord is hereby irrevocably appointed and authorized as agent and
anomey4n-fact of Tenant to execute and deliver such statement in the event
that Tenant tails to execute and deliver such statement within fifteen (15)
days after notice from Landlord requesting execution and delivery thereof.
Any statement delivered pursuant to this Paragraph 16 may be relied upon by
any prospective purchaser of the fee of the Building or the Project or any
mortgagee, ground lessor or other like encumbrances thereof or any assignee
of any such encumbrance upon the Building or the Project. Under no
circumstances shall Tenant be obligated to sign any such statement which
requires or contains terms that would materially and adversely modify or
amend Tenant's rights or obligations under this Lease.
(c) In addition, and not in lieu of the foregoing, as a condition of
Landlord's obligation to deliver the Premises to Tenant hereunder, on or
before the date that Tenant takes possession or commences use of the Premises
for any business purpose (including moving in), Tenant shall execute and
deliver to Landlord a certificate substantially in the form of Exhibit "G"
attached hereto, indicating thereon any exceptions thereto which Tenant
claims to exist at that time.
(d) Landlord agrees to execute a certificate substantially in the
form of Exhibit "G" attached hereto, in favor of such party as Tenant may
reasonably request, indicating thereon any exceptions thereto which Landlord
to its actual knowledge claims to exist at that time.
17. SALE BY LANDLORD; NONRECOURSE LIABILITY
(a) In the event of a sale or conveyance by Landlord of the Building
or the Project, Landlord shall be released from any and all liability under
this Lease. If the Security Deposit has been made by Tenant prior to such
sale or conveyance, Landlord may transfer the Security Deposit to the
purchaser, and upon delivery to Tenant of notice thereof pursuant to the
provisions of Section 1950.7 of the California Civil Code, Landlord shall be
discharged from any further liability in reference thereto.
(b) Landlord and each of its officers, directors, Affiliates,
shareholders and constituent shareholders shall in no event or at any time be
personally liable for the payment or performance of any obligation required
or permitted of the Landlord under this Lease or under any document executed
in connection herewith. In the event of any actual or alleged failure, breach
or default by Landlord under this Lease or any such document, the sole
recourse of Tenant shall be against the interest of Landlord in the Project,
or in the event that Landlord has admitted in writing it is or is adjudicated
by a court of competent jurisdiction to be insolvent and a court of competent
jurisdiction has finally adjudicated Landlord's breach or default hereunder,
Tenant's recourse shall be extended to offset any damage resulting from such
breach or default against Tenant's obligation to pay Basic Annual Rent
hereunder. No attachment, execution, writ or other process shall be sought or
obtained, and no judicial proceeding shall be initiated by or on behalf of
Tenant, against Landlord (or any of Landlord's officers, directors,
Affiliates or constituent partners or shareholders) personally or Landlord's
assets (other than Landlord's interest in the Project) as a result of any
such failure, breach or default.
(c) Landlord shall not be in default of any obligation of Landlord
hereunder unless and until it has failed to perform such obligation within
thirty (30) days after receipt of written notice of such failure from Tenant,
provided, however, that if the nature of Landlord's obligation is such that
more than thirty (30) days are required for its performance, Landlord shall
not be in default if Landlord commences to cure such default within the
thirty (30) day period and thereafter diligently prosecutes the same to
completion. Tenant's sole remedy for breach of this Lease by Landlord shall
be pursuant to Subparagraph 12(m), an action for damages, injunction or
specific performance; Tenant shall have no right to terminate this Lease on
account of any breach or default by Landlord. Notwithstanding any provision
of this Lease, all liability of Landlord under this Lease or otherwise with
respect to any acts or omissions of Landlord or events which occur during the
term of this Lease and which in any way relate to Tenant's tenancy hereunder
or occupancy of the Premises shall terminate two (2) years following the
expiration or sooner termination of this Lease other than as to those claims,
if any, asserted in reasonable detail in a writing delivered by Tenant to
Landlord prior to the expiration of such two (2) year period.
(d) As a condition to the effectiveness of any notice of default
given by Tenant to Landlord, Tenant shall also concurrently give such notice
under the provisions of Subparagraph 17(c) to each beneficiary under a deed
of trust encumbering the Project of whom Tenant has received written notice
(such notice to specify the address of the beneficiary). In the event
Landlord shall fail to cure any breach or default within the time period
specified in Subparagraph 17(c) then prior
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to the pursuit of any remedy therefor by Tenant, such beneficiary(ies) shall
have one additional Thirty (30) day period within which to cure such default,
or if such default cannot reasonably be cured within such period, Then such
beneficiary(ies) shall have such additional time as shall be necessary to
cure such default, provided that within such Thirty (30) day period, any of
such beneficiary(ies) has commenced and is diligently pursuing The remedies
available to it which are necessary to cure such default (including, without
limitation, as appropriate, commencement of foreclosure proceedings).
18. PARKING; COMMON FACILITIES
(a) Tenant shall have the right to the nonexclusive use of The
number of parking spaces located in The parking facilities of The Project
specified in Item 13 of the Basic Lease Provisions, in the general location
designated on Exhibit "A-2" attached hereto, free of charge Throughout the
initial term of This Lease and any Extension, for The parking of motor
vehicles used by Tenant, its officers, employees, assignees, subtenants,
guests and invitees only. Landlord reserves The right, at any time upon
written notice to Tenant, to change The location of Tenant's parking spaces
within The parking facility originally designated for such use, if any, as
determined by Landlord in its reasonable discretion. The use of such spaces
shall be subject to the rules and regulations adopted by Landlord from time
to time for the use of such facilities. Landlord further reserves the right
to make such changes to the parking system as Landlord may deem necessary or
reasonable from time to time (i.e., Landlord may provide for one or a
combination of parking systems, including, without limitation, self parking,
and valet assist parking: provided however, in no event shall there be tandem
or double stall parking). Landlord may require execution of an agreement with
respect to The use of such parking facilities by Tenant and/or its officers
and employees in form satisfactory to Landlord as a condition of any such use
by Tenant, its officers and employees, provided such agreement is consistent
with Tenants rights under This Lease. A default by Tenant, its officers,
employees, assignees, subtenants, guests and invitees in compliance with such
rules and regulations not cured by Tenant as provided in Paragraph 12 above,
or the performance of such agreement(s) shall constitute a material default
by Tenant hereunder. Tenant shall not permit or allow any vehicles that
belong to or are controlled by Tenant or Tenants officers, employees,
suppliers, shippers, customers or invitees to be loaded, unloaded or parked
in areas other than Those designated by Landlord for such activities. If
Tenant permits or allows any of the prohibited activities described in This
Paragraph 18, Then Landlord shall have The right, without notice, in addition
to such other rights and remedies that it may have, to remove or tow away The
vehicle involved and charge The cost to Tenant, which cost shall be
immediately payable, upon demand by Landlord.
(b) Subject to Subparagraphs 18(a) and 18(c) hereof and The
remaining provisions of This Lease, Tenant shall have the non-exclusive
right, in common with others, to The use of The garage and such entrances,
lobbies, restrooms, elevators, ramps, drives, stairs, and similar access ways
and service ways and other common areas and facilities in and adjacent to The
Building and The Project as are designated from time to time by Landlord for
The general nonexclusive use of Landlord, Tenant and The other tenants of the
Project and Their respective employees, agents, representatives, licensees
and invitees ("Common Areas"). The use of such Common Areas shall be subject
to the rules and regulations contained herein and The provisions of any
covenants, conditions and restrictions affecting The Project. Landlord
reserves The right to make 5uch changes, alterations, additions, deletions,
improvements, repairs or replacements in or to The Building, The Project
(including the Premises) and the Common Areas as Landlord may deem necessary
or desirable, including, without limitation, constructing new buildings and
making changes in The location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading areas, landscaped areas and
walkways; provided, however, That There shall be no unreasonable permanent
obstruction of access to or use of the Premises resulting therefrom. In the
event that the Building or the Project is not completed on the date of
execution of This Lease, Landlord shall have the sole judgment and discretion
to determine The architecture, design, appearance, construction, workmanship,
materials and equipment with respect to construction of the Building and The
Project; provided such elements are consistent with The Outline
Specifications and the plans and specifications derived therefrom for The
Project set forth in Exhibit "H" attached hereto. Notwithstanding any
provision of This Lease to The contrary, The Common Areas shall not in any
event be deemed to be a portion of or included within the Premises leased to
Tenant, and the Premises shall not be deemed to be a portion of The Common
Areas.
(c) Landlord reserves The right (i) to change The configuration,
size and dimensions of The Project and its Common Areas. (ii) to add or sever
from its ownership any portion of the Project at any time, and (iii) to
exclude from The rights of use granted to Tenant any rights of passage over
or use of any portion of The Project. In no event shall Landlord's exercise
of the foregoing (1) change the dimensions of The Premises, (2) be
inconsistent with Exhibit "H" attached hereto, or (3) materially impair or
inhibit Tenant's rights of access and use of the parking areas to be used by
Tenant and The Building.
19. MISCELLANEOUS
(a) ATTORNEYS' FEES. In the event of any legal action or proceeding
brought by either party against The other arising out of this Lease, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred in such action. Such amounts shall be included in any judgment
rendered in any such action or proceeding. In The event Tenant shall become
insolvent, or any action is filed in any court or tribunal, administrative
agency or any other forum having jurisdiction, pursuant to any applicable
law, for a petition in bankruptcy or insolvency, or for reorganization of
Tenant, or for The appointment of a receiver, trustee or conservator of all
or portion of Tenant's property, Landlord shall be entitled to collect all
reasonable attorneys' fees and costs incurred in connection therewith as a
precondition to the curing of any Tenant Default as a result thereof.
(b) WAIVER. No waiver by Landlord or Tenant of any provision of this
Lease or of any breach by Tenant hereunder shall be deemed to be a waiver of
any other provision hereof or of any subsequent breach by Tenant or Landlord.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval under this Lease shall not be deemed to render
unnecessary the obtaining of Landlord's consent to or approval of any
subsequent act of Tenant. No act or Thing done by Landlord or Landlord's
agents during the term of This Lease shall be deemed an acceptance of a
surrender of the Premises, unless in writing signed by Landlord. The delivery
of The keys to any employee or agent of Landlord shall not operate as a
termination of the Lease or a surrender of the Premises. The acceptance of
any Rent by Landlord following a breach of this Lease by Tenant shall not
constitute a waiver by Landlord of such breach or any other breach unless
such waiver is expressly stated in a writing signed by Landlord.
(c) NOTICES. All notices which Landlord or Tenant may require, or
may desire, to serve on The other must be in writing and may be served by
personal service, or as an alternative to personal service, by mailing the
same by registered or certified mail, postage prepaid, addressed as set forth
in Item 14 of The Basic Lease Provisions, or addressed to such other address
or addresses as either Landlord or Tenant may from time to time designate to
The other in writing. However, any
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notice (including a summons and complaint) which Landlord may require or may
desire to serve on Tenant shall be deemed sufficiently served and given if
personally served or delivered by registered or certified mail, postage
prepaid, to Tenant at the Premises. In addition, any xxxx, statement, consent
or other communication which Landlord may desire or is required to give to
Tenant shall be deemed sufficiently given or rendered if in writing, hand
delivered to the Premises or sent to Tenant at the Premises by registered or
certified mail, postage prepaid.
(d) LABOR. Tenant shall not at any time prior to or during the term
hereof, either directly or indirectly, use any contractors, labor or
materials, the use of which would create any difficulty with other
contractors or labor engaged by Tenant, Landlord or by others in the
construction, maintenance or operation of the Premises, the Building or the
Project.
(e) SECURITY. Landlord shall be the sole determinant of the type and
amount of security services, if any, to be provided to the Project. In all
events, Landlord shall not be liable to Tenant, and Tenant hereby waives any
claim against Landlord, for, and expressly assumes the risk of (I) any
unauthorized or criminal entry of third parties into the Premises, the
Building or the Project, (ii) any injury to persons, or (iii) any loss or
damage of property in and about the Premises, the Building or the Project, by
or from any unauthorized or criminal acts of third parties, regardless of any
action, inaction, failure, breakdown, malfunction and/or insufficiency of the
security services provided by Landlord, or any actual or alleged passive or
active negligence of Landlord.
(f) STORAGE. Any storage space at any time demised to Tenant
hereunder shall be used exclusively for storage, subject to the other
provisions of this Lease. Notwithstanding any other provision of this Lease
to the contrary,(i) Landlord shall have no obligation to provide heating,
cleaning. water or air conditioning therefor, and (ii) Landlord shall be
obligated to provide to such storage space only such electricity as will, in
Landlord's judgment, be adequate to light said space as storage space.
(g) HOLDING OVER. Tenant shall have no right to holdover or retain
possession of any portion of the Premises after the expiration or sooner
termination of this Lease. If Tenant holds over after the expiration or
earlier termination of the term hereof, with the express consent of Landlord,
Tenant shall become and be only a month-to-month tenant, or without the
express consent of Landlord, Tenant shall become and be only a tenant at
sufferance. In either event, Tenant shall pay rent during such holdover equal
to the greater of the then prevailing market rate being charged by the
Landlord at the Project or (A) 120% in first three months, and (B) thereafter
one hundred fifty percent (150%), of the Basic Annual Rent payable by Tenant
immediately prior to such expiration or termination, and otherwise upon the
terms, covenants and conditions herein specified, so far as applicable.
Neither any provision hereof nor acceptance by Landlord of Rent after such
expiration or earlier termination shall be deemed a consent to a holdover
hereunder or result in a renewal of this Lease or an extension of the term.
Notwithstanding any provision to the contrary contained herein, (i) Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises upon the expiration of the term of this Lease or upon the earlier
termination hereof, the right to reenter the Premises, and the right to
assert any remedy at law or in equity to evict Tenant and/or collect damages
in connection with any such holding over, and (ii) Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all claims,
demands, actions, losses, damages, obligations, costs and expenses,
including, without Limitation, attorneys' fees incurred or suffered by
Landlord by reason of Tenant's failure to surrender the Premises on the
expiration or earlier termination of this Lease in accordance with the
provisions of this Lease; provided however, Tenant shall not be required to
indemnify Landlord for any consequential damages arising from first three (3)
months of Tenants holdover of the Premises after the expiration or sooner
termination of this Lease if such holdover is with Landlord's express written
consent.
(h) CONDITION OF PREMISES. Except as set forth in Subparagraph 19(i)
next below, Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the
Premises, the Building or the Project or with respect to the suitability of
any part of the Project for the conduct of Tenant's business. Subject to the
provisions of Subparagraph 19(i) next below, Paragraph 21 below and the Work
Letter, the taking of possession of the Premises by Tenant shall conclusively
establish that the Premises, the Building and the Project were at such time
in good and sanitary order, condition and repair and that the Tenant Work had
been finally completed, without defect and otherwise in accordance with the
Tenant's Plans (described in the Work Letter).
(i) LANDLORD WARRANTY. Landlord covenants that, as of the Lease
Commencement Date, the Building, the Common Areas and the Premises, will have
been completed in accordance with the Outline Specifications, in a good and
workmanlike manner, in full compliance with applicable law, free from latent
or other defects. In the event of a breach of this covenant, Landlord shall
promptly, after receipt of notice from Tenant specifying the alleged breach,
correct and repair the defect (or other problem) at its sole cost and
expense. The cost thereof shall not be treated as an Operating Expense. The
foregoing covenant shall survive as a Landlord warranty for a period of one
(1) year following the Commencement Date. This covenant and warranty shall be
specifically enforceable by Tenant and the violation hereof shall be a
material default by Landlord under this Lease, Costs associated with general
operations, maintenance and repair of the Building, the Common Areas and/or
the Premises, which are associated with customary use, wear and/or tear,
shall not be covered by this Subparagraph.
(j) QUIET POSSESSION. Upon Tenant's paying the Rent reserved
hereunder and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant
shall have quiet possession of the Premises for the term hereof without
hindrance or ejection by any person lawfully claiming under Landlord, subject
to the provisions of this Lease and to the provisions of any (i) covenants,
conditions and restrictions, or (ii) deed of trust to which this Lease is
subordinate or may be subordinated pursuant to the terms of this Lease.
(k) MATTERS OF RECORD. Except as otherwise provided herein, this
Lease and Tenant's rights hereunder are subject and subordinate to all
matters affecting Landlord's title to the Project recorded in the official
records of Orange County, California, prior to and subsequent to the date
hereof including, without limitation, all covenants, conditions and
restrictions ("CC&RS") and the provisions of all loan documents relating to
each loan secured by a mortgage or deed of trust encumbering the Project.
Tenant agrees for itself and all persons in possession or holding under it
that it will comply with and not violate any such covenants, conditions and
restrictions, loan documents, or other matters of record. Landlord reserves
the right, from time to time, to grant such easements, rights and dedications
as Landlord deems necessary or desirable, and to cause the recordation of
parcel maps and covenants, conditions and restrictions affecting the
Premises, the Building or the Project, as long as such easements, rights,
dedications, maps, and covenants, conditions and restrictions do not
materially interfere with the use of the Premises by Tenant. At Landlord's
request, Tenant shall join in the execution of
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any of the aforementioned documents. If a Declarant under CC&Rs requests
Landlord's consent to a modification to such CC&Rs and Landlord believes such
consent may adversely affect Tenant, then Landlord shall consult with Tenant
regarding such modification and if Tenant states that such modification shall
adversely affect Tenants business, then Landlord shall not consent to the
requested modification.
(l) PROJECT FINANCING. Notwithstanding anything to the contrary
contained in this Lease, Landlord shall have a period of one hundred twenty
(120) days following Tenants execution and delivery of this Lease to attempt
to secure financing for the construction of the Project, the tenant
improvements, all common and parking areas, and other ancillary improvements
in connection therewith. If Landlord is unable to obtain such financing, on
terms acceptable to Landlord in its sole and absolute discretion, (1) within
such one hundred twenty (120) day period, then Landlord shall thereafter have
the right, upon written notice to Tenant, to terminate this Lease or (2)
within one hundred eighty (180) days from execution of this Lease, then
Tenant shall thereafter have the right, upon written notice to Landlord, to
terminate this Lease, in which event Landlord shall (i) return to Tenant all
funds deposited by Tenant with Landlord and thereafter neither party shall
have any further rights or obligations under this Lease, and (ii) reimburse
Tenant for Tenant's reasonable out of pocket costs and expenses incurred in
connection with this Lease as of such date, including without limitation
reasonable attorneys' fees, in an amount not to exceed $25,000.00; provided
however, Landlord shall not be required to reimburse Tenant for such out of
pocket costs and expenses if Landlord's failure to secure such financing is
due, in whole or in substantial part, to the creditworthiness of Tenant.
Tenant acknowledges that as a material inducement to Landlord to execute this
Lease, (i) Tenant shall timely acknowledge and deliver to Landlord all such
documents and instruments as may be customarily required by any lender
providing financing to Landlord from time to time during the term hereof
including, without limitation, those documents and instruments which may be
required under Paragraph 16, and (ii) if any prospective lender to Landlord
shall request or require in connection with the placement of any financing to
Landlord or pursuant to the provisions of any Security Document any
modification of this Lease, Tenant shall not delay or withhold its agreement
to such proposed modification provided the same shall not modify the Basic
Annual Rent payable hereunder nor materially and adversely affect the
obligations or rights of Tenant hereunder. Tenant shall be responsible for
any and all liability, loss, cost, damage and expense, including, without
limitation, attorneys' fees, which Landlord shall incur in connection with
Tenant's failure or delay in executing, acknowledging and delivering such
documents and instruments or Tenants breach of any other covenant or
agreement embodied in this Lease that results in the delay, impairment or
cancellation of such financing.
(m) SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Lease, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns. Tenant
shall attom to each purchaser, successor or assignee of Landlord in
accordance with Paragraph 16(a).
(n) BROKERS. Tenant warrants that it has had no dealings with any
real estate broker or agent in connection with the negotiation of this Lease,
excepting only the broker named in Item 11 of the Basic Lease Provisions and
that it knows of no other real estate broker or agent who is or might be
entitled to a commission in connection with this Lease. Landlord covenants
and agrees to pay all real estate commissions due in connection with this
Lease to the broker described in Item 11 of the Basic Lease Provisions.
(o) NAME. Tenant shall not, without the prior written consent of
Landlord (which consent shall not be unreasonably withheld), use the name,
insignia or logotype of the Building or the Project for any purpose, and in
no event shall Tenant acquire any rights in or to such names. Tenant shall
not use any picture of the Building or of the Project in its advertising,
stationery or in any other manner; however, Landlord agrees to Tenant's use
of a picture of the Building or Project in Tenants public reports. Landlord
expressly reserves the right at any time to change the name, number,
designation or logotype of the Building or the Project or the exterior or
interior signage thereon and therein without the consent of Tenant without in
any manner being liable to Tenant therefor.
(p) EXAMINATION OF LEASE, CONFIDENTIALITY. Submission of this
instrument for examination or signature by Tenant does not constitute a
reservation of or option for lease, and it is not effective as a lease or
otherwise until execution by and delivery to both Landlord and Tenant.
Landlord and Tenant agree that (i) the terms and provisions of this Lease are
confidential and constitute proprietary information of Landlord and Tenant,
and (ii) neither party shall disclose, nor shall it permit its partners,
officers, directors, shareholders, employees, brokers and attorneys to
disclose any term or provision of this Lease to any other person without
first obtaining the prior written consent of the other party, except as
otherwise legally required in public reports, or in connection with the
financing or takeover of Tenant. The foregoing covenant of confidentiality
shall not apply to the extent such information is being disseminated in
connection with the financing or sale of the Premises.
(q) TIME. Time is of the essence of this Lease and each and all of
its provisions.
(r) DEFINED TERMS AND MARGINAL HEADINGS. The words "Landlord" and
"Tenant" as used herein shall include the plural as well as the singular. If
more than one (1) person is named as Tenant, the obligations of such persons
are joint and several. The marginal headings and titles to the paragraphs of
this Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.
(s) CONFLICT OF LAWS: PRIOR AGREEMENTS: SEPARABILITY. This Lease
shall be governed by and construed pursuant to the laws of the State of
California. This Lease contains all of the agreements of the parties hereto
with respect to any matter covered or mentioned in this Lease. No prior
agreement, understanding or representation pertaining to any such matter
shall be effective for any purpose. No provision of this Lease may be amended
or added to except by an agreement in writing signed by the parties hereto or
their respective successors in interest. The illegality, invalidity or
unenforceability of any provision of this Lease shall in no way impair or
invalidate any other provision of this Lease, and such remaining provisions
shall remain in full force and effect.
(t) AUTHORITY. If either party is a corporation, each individual
executing this Lease on its behalf hereby covenants and warrants that it is a
duly authorized and existing corporation, that it has and is qualified to do
business in California, that the corporation has full right and authority to
enter into this Lease, and that each person signing on behalf of the
corporation is authorized to do so. If either party is a partnership or
trust, each individual executing this Lease on its behalf hereby covenants
and warrants that he is duly authorized to execute and deliver this Lease on
its behalf in accordance with the terms of such entity's partnership or trust
agreement. Tenant shall provide Landlord on demand with
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such evidence of such authority as Landlord shall reasonably request,
including, without limitation, resolutions, certificates and opinions of
counsel.
(u) COMMON AREAS. The rights of Tenant hereunder in and to the
Common Areas shall at all times be nonexclusive with the rights of Landlord
and other tenants of Landlord who use the same in common with Tenant, and ft
shall be the duty of Tenant to keep all of the Common Areas free and clear of
any obstructions created or permitted by Tenant or resulting from Tenant's
operations, and to use the Common Areas only for normal activities, parking
and ingress and egress by Tenant and its employees, agents, representatives,
licensees and invitees to and from the Premises, the Building or the Project
If, in the opinion of Landlord, unauthorized persons are using the Common
Areas by reason of the presence of Tenant in the Premises, Tenant upon demand
of Landlord, shall correct such situation by appropriate action or
proceedings against all such unauthorized persons. Nothing herein shall
affect the rights of Landlord at any time to remove any such unauthorized
persons from said areas or to prevent the use of any of said areas by
unauthorized persons.
(v) JOINT AND SEVERAL LIABILITY. If two (2) or more individuals,
corporations, partnerships or other business associations (or any combination
of two (2) or more thereof) shall sign this Lease as Tenant, the liability of
each such individual, corporation, partnership or other business association
to pay Rent and perform all other obligations hereunder shall be deemed to be
joint and several, and all notices, payments and agreements given or made by,
with or to any one of such individuals, corporations, partnerships or other
business associations shall be deemed to have been given or made by, with or
to all of them. in like manner, if Tenant shall be a partnership or other
business association, the members of which are, by virtue of statute or
federal law, subject to personal liability, then the liability of each such
member shall be joint and several.
(w) INTENTIONALLY OMITTED.
(x) RULES AND REGULATIONS. Tenant agrees to comply with all rules
and regulations of the Building and the Project imposed by Landlord as set
forth on Exhibit "El. attached hereto, as the same may be changed from time
to time in a reasonable nondiscriminatory manner upon reasonable notice to
Tenant. Landlord shall not be liable to Tenant for the failure of any other
tenant or any of its assignees, subtenants, or their respective agents,
employees, representatives, invitees or licensees to conform to such rules
and regulations. To the extent of inconsistency between the Rules and
Regulations with other provisions of this Lease, the provisions of this Lease
shall apply.
(y) FINANCIAL STATEMENTS. Upon Landlord's written request no more
than annually, Tenant shall promptly furnish Landlord, from time to time,
with the next current audited financial statements, if any, prepared in
Tenant's customary manner, certified by Tenant and an independent auditor to
be true and correct, reflecting Tenant's then current financial condition.
20. ADDENDA
The provisions of this Paragraph 20 shall supersede and override
any other provision of this Lease to the extent the same are inconsistent:
(a) RENTAL ABATEMENT As consideration for Tenant's performance of
all of its obligations under the Lease, Landlord hereby conditionally (i)
grants Tenant a rent free fixturization period during months one (1) and two
(2) of the Lease Term in the amount of $372,628.14 I.E. $186,314.07 per
month) ("Fixturization Period"), and (ii) excuses Tenant from the payment of
the monthly installment of Basic Annual Rent during Months three (3) through
five (5) of the term of this Lease in the amount of $558,942.21 (I.E.
$186,314.07 per month) ("Deferred Rent Period"), together with Tenant's
Proportionate Share of Operating Costs during such period, provided that
Tenant shall not be in an uncured material default in its obligations under
this Lease during months 1-144 of the Lease term only. Should Tenant at any
time during months 1-144 of the Lease term be in default under this Lease and
not cure such default within the cure periods provided in this Lease, then
the total sum of such Rent so conditionally excused shall become immediately
due and payable by Tenant to Landlord. If at the expiration of the 144th
month of the term, Tenant has not so defaulted, Landlord shall waive any
payment of all such Rent so conditionally excused.
(b) LANDLORD DELAY. If Landlord shall not have delivered possession
of the Premises to Tenant with the Tenant Work substantially completed by the
date which is ninety (90) days following the Target Commencement Date plus
periods attributable to Tenant Delays or prevention, delay, or stoppage
caused by strikes, lockouts, labor disputes, acts of God, unavailability of
services, labor or materials or reasonable substitutes for those items,
government actions, civil commotion, fire, inclement weather, or other
casualty or causes outside of the reasonable control of Landlord commonly
considered FORCE MAJEURE (collectively "Penalty-Free Period"), Landlord shall
thereafter (so long as no Tenant's Default exists under this Lease) credit to
Basic Annual Rent first due under this Lease an amount equal to Two Thousand
Dollars ($2,000.00) per day for each day that Landlord has failed to so
deliver possession of the Premises to Tenant from the expiration of the
Penalty-Free Period until the date upon which Landlord has so delivered the
Premises to Tenant. At Tenant's written request, landlord will advise Tenant
of any such FORCE MAJEURE delays.
(c) OPTIONS TO EXTEND TERM. Landlord hereby grants to Tenant two (2)
options (Individually referred to hereinafter as an "Option" and collectively
referred to hereinafter as the "Options") to extend the term of this Lease
for additional consecutive terms of five (5) years and zero (0) months (each
is called an "Extension"), on the same terms and conditions as set forth in
this Lease, except the Basic Annual Rent shall be the amount determined as
set forth below. Tenant shall have the opportunity to exercise the initial
Option with respect to only four (4) contiguous floors of the Premises. The
second Option shall be exercised only with respect to the Premises so leased
during the first Extension. Each Option shall be exercised only by written
notice delivered to Landlord at least two hundred seventy (270) days before
the expiration of the initial term of this Lease or the immediately preceding
Extension ("Exercise Date"), as the case may be. If Tenant fails to deliver
to Landlord written notice of the exercise of the Option within the time
period prescribed above, such Option and any succeeding Options shall lapse,
and there shall be no further right to extend the term of this Lease. Each
Option shall be exercisable by Tenant on the express conditions that (i) at
the time of the exercise of such Option, and thereafter at all times prior to
the commencement of such Extension, a Tenant's Default shall not have
occurred and be continuing under this Lease, and (ii) Tenant has not been ten
(10) or more days late in the payment of Rent more than a total of nine (9)
times
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during the term of this Lease. If Tenant property exercises an Option,
"term", as used herein and in this Lease, shall be deemed to include the
applicable Extension, unless specified otherwise herein.
The Basic Annual Rent during each Extension shall be increased,
as of the commencement of each Extension (each is called a "Rental Adjustment
Date") to ninety-five percent (95%) of the "Fair Market Value" of the
Premises, determined in the following manner: Not later than ninety (90) days
prior to any applicable Exercise Date, Tenant shall give written notice to
Landlord of its preliminary interest in the applicable Option, and thereafter
Landlord and Tenant shall meet in an effort to negotiate, in good faith, the
Fair Market Value of the Premises as of the applicable Rental Adjustment
Date. If Landlord and Tenant have not agreed upon the Fair Market Value of
the Premises at least eighty (80) days prior to the applicable Exercise Date,
the Fair Market Value shall be determined by the following appraisal method:
(i) If Landlord and Tenant are not able to agree upon the
Fair Market Value of the Premises within the time period described above,
then Landlord and Tenant shall attempt to agree in good faith upon a single
appraiser not later than seventy-five (75) days prior to the applicable
Exercise Date. If Landlord and Tenant are unable to agree upon a single
appraiser within such time period, then Landlord and Tenant shall each
appoint one appraiser not later than sixty-five (65) days prior to the
applicable Exercise Date, and Landlord and Tenant shall each give written
notice to the other of such appointment at the time of such appointment
Within ten (10) days thereafter, the two appointed appraisers shall appoint a
third appraiser. If either Landlord or Tenant fails to appoint its appraiser
and to give written notice thereof to the other party within the prescribed
time period, the single appraiser appointed shall determine the Fair Market
Value of the Premises. If both parties fail to appoint appraisers within the
prescribed time periods, then the first appraiser thereafter selected by a
party (such selection to be by written notice thereof to such appraiser and
the other party) shall determine the Fair Market Value of the Premises. Each
party shall bear the cost of its own appraiser and the parties shall share
equally the cost of the single or third appraiser if applicable. All
appraisers shall have at least two (5) years' experience in the appraisal of
commercial/industrial real property in the area in which the Premises am
located and shall be members of professional organizations such as MAI or its
equivalent.
(ii) For the purposes of such appraisal, the term "Fair
Market Value" shall mean the price that a ready and willing tenant would pay
and Landlord would accept, as of the applicable Rental Adjustment Date, as
monthly rent, for comparable space within comparable high-rise office
buildings in the greater Xxxx Xxxxx Airport area if such space, including all
incidental amenities, such as parking, were exposed for lease on the open
market for a reasonable period of time. If a single appraiser is chosen, then
such appraiser shall determine the Fair Market Value of the Premises.
Otherwise, the Fair Market Value of the Premises shall be the arithmetic
average of the two (2) of the three (3) appraisals which are closest in
amount, and the third appraisal shall be disregarded. Landlord and Tenant
shall instruct the appraiser(s) to complete their determination of the Fair
Market Value not later than thirty (30) days prior to the applicable Exercise
Date. If the Fair Market Value is not determined prior to the applicable
Exercise Date, then Tenant may elect not to exercise the applicable Extension
option, or Landlord may agree to extend the applicable Exercise Date for an
additional period of time, not to exceed thirty (30) days, so as to inalize
the determination of Fair Market Value.
(iii) In no event shall the Basic Annual Rent be reduced
below the Basic Annual Rent applicable to the Premises immediately prior to
the applicable Rental Adjustment Date.
Promptly following the commencement of each exercised Extension
Landlord shall at Landlord's expense, repaint and re-carpet the Premises
utilizing equivalent type, grade and quality materials as originally
installed.
(d) EXPANSION OPTION. Provided no Tenant's Default has occurred and
is continuing, if rentable space on Floors 7-9 of the Building (collectively,
the "Adjacent Space") shall become available for leasing by other than any
existing tenant(s), Landlord shall make said Adjacent Space available to
Tenant to lease, upon the terms and conditions hereinafter set forth ("Right
of First Offer'). When all or any portion of the Adjacent Space first becomes
available as set forth above, Landlord shall, prior to making the Adjacent
Space available to other third parties, deliver written notice of such
availability to Tenant ("Landlord's Notice"). For a period of fifteen (15)
days following Tenants receipt of Landlord's Notice, Tenant shall have the
first opportunity to lease the Adjacent Space upon the terms and conditions
set forth below, by delivering to Landlord within said fifteen (15) day
period written notice ("Election Notice") of its election to exercise its
Right of First Offer. If Tenant fails or elects not to exercise its Right of
First Offer granted pursuant to this paragraph with in said fifteen (15) day
period. the Right of First Offer shall automatically terminate without
further action of the panics, and Landlord shall thereafter be free to lease
the Adjacent Space to any third party upon such terms and conditions as
Landlord desires. If Tenant timely and properly exercises its Right of First
Offer as hereinabove provided, Tenant shall, within fifteen (15) days after
receipt from Landlord, enter into an amendment of this Lease with Landlord
upon Landlord's then current standard lease amendment form for the Building,
which amendment shall incorporate the Adjacent Space Into the Premises upon
the terms and conditions hereinafter set forth. If Tenant fails to execute
and deliver such amendment within said fifteen (15) day period, the Right of
First Offer shall automatically terminate without further action of the
parties, and Landlord shall thereafter be free to lease the Adjacent Space to
any third party upon such terms and conditions as Landlord desires.
Notwithstanding the foregoing, should Tenant initially fail to exercise the
Right of First Offer, Tenant shall thereafter be permitted to periodically
inquire as to whether Adjacent Space is leaseable". If Adjacent Space is
leaseable, Tenant shall be permitted to lease such Adjacent Space as provided
in this Subparagraph 20(d). For purposes of this Subparagraph 20(d),
unleaseable shall mean any Adjacent Space which is then vacant and for which
Landlord is not currently negotiating for lease to a third party.
Upon Tenant's timely and proper exercise of the Right of First
Offer, the Adjacent Space shall be incorporated into the Premises and shall
be leased to Tenant upon the same terms and conditions as are then in effect
under this Lease, for the remaining term as set forth in this Lease and at
the rate of Basic Annual Rent in effect, except that:
(i) If Tenant is leasing any portion of floor 7, then
Monthly installments of Basic Annual Rent due under this Lease shall be
increased to reflect such rent upon the Adjacent Space with respect to such
floor 7 at the rate then in effect under this Lease for floors 1-6 ; If
Tenant is leasing any portion of floor 8, then Monthly installments of Basic
Annual Rent due under this Lease shall be increased to reflect such rent upon
the Adjacent Space with respect to such floor 8 at a rate equal to the sum of
the rate then in effect under this Lease (for floors 1-6) plus nine cents
($0.09)/per month per square foot of such floor 8; If Tenant is leasing any
portion of floor 9 then
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Monthly installments of Basic annual Rent due under this Lease shall be
increased to reflect such rent upon the Adjacent Space with respect to such
floor 9 at a rate equal to the sum of the rate then in effect under this
Lease (for floors 1) plus nineteen cents ($0.19 per month per square foot of
such floor 9.
(ii) Tenant's Proportionate Share shall be increased to
reflect the Rentable Area of the Adjacent Space;
(iii) The parking spaces available for Tenant shall
be increased at the ratio of three (3) spaces per 1,000 square feet of
Adjacent Space.
(e) NONDISTURBANCE AGREEMENT Landlord shall use best efforts to
provide Tenant with a reasonable nondisturbance agreement from mortgagees of
Landlord, should they exist, to be delivered within a reasonable time period
after the closing of any such loan.
(f) INTENTIONALLY LEFT BLANK
(g) DEFINITION - NONDISCRIMINATORY. For purposes of Paragraphs 4(b)
and 7(c) of this Lease, the term "nondiscriminatory" refers to those rules
and requirements established from time to time by Landlord for general
application to and enforcement against all or substantially all tenants in
the Project, including, with respect to Paragraph 4(b), work site rules,
regulations regarding time of work, notice requirements and bonding
requirements.
(h) INTENTIONALLY LEFT BLANK
(i) NONLIABILITY AND INDEMNIFICATION OF LANDLORD. Notwithstanding
any provision set forth in Section 8(a), 6(b) or 19(e) of the Lease to the
contrary, Landlord shall not be exempted from liability under Section 8(a),
and Tenant shall not be required to indemnity Landlord under Paragraph 8(b),
if, but only if, Landlord's conduct, which gives rise to such claim, amounts
to gross negligence or willful misconduct.
(j) AMERICANS WITH DISABILITIES ACT Landlord agrees to be
responsible for and shall pay all remedial costs associated with, and shall
comply with, the Americans with Disabilities Act ("ADA"), as it relates to
the Common Areas of the Building only, based solely on requirements existing
or Imposed on Landlord as of the Commencement Date. Any changes,
modifications, rehabilitation or repair to the Common Area required by any
amendment to ADA or any regulations thereunder which are enacted or become
effective after the Commencement Date, shall be Landlord's responsibility,
but the cost thereof shall be an Operating Cost for purposes of this Lease.
Notwithstanding any other provision of the Lease, Landlord shall have no
duty, obligation or responsibility, nor shall Landlord be obligated to expend
any monies over and above the work specified in the Work Letter, to the
extent caused by a Tenant requested Change Order, to make the Premises comply
with any requirement of ADA or any other similar laws, including life-fire
safety codes, physical handicap codes and/or earthquake safety codes.
(k) TRANSPORTATION MANAGEMENT Tenant shall fully comply with all
present or future governmentally mandated programs intended to manage
parking, transportation or traffic in and around the Building, and in
connection therewith, Tenant shall take responsible action for the
transportation planning and management of all employees located at the
Premises by working directly with Landlord, any governmental transportation
management organization or any other transportation-related committees or
entities.
(l) OPERATING COSTS CAP. Notwithstanding anything to the contrary
contained in Paragraph 3 of this Lease, provided no Tenant's Default has
occurred and is continuing, annual increases in Tenants Proportionate Share
of Operating Costs (exclusive of taxes, insurance, repairs, capital
expenditures, and items outside of Landlord's reasonable control) shall not
exceed the lesser of (i) the percentage increase in the Index (as defined in
Item 5 of the Basic Lease Provisions) from the prior year, or (ii) four
percent (4%) per year. Tenant acknowledges and agrees that Tenant shall be
responsible for Tenant's Proportionate Share of all increases in taxes,
insurance, repairs, capital expenditures, and items outside of the reasonable
control of Landlord. In addition, Tenant shall not be liable for Tenant's
Proportionate Share of any increase in real property taxes arising solely due
to reassessment of all or any portion of the Project as a result of a sale,
exchange or other transfer of an interest in the Project.
(m) MOVING-RELATED ALLOWANCE. As an additional Tenant Inducement (as
that term is defined in Paragraph 120) of this Lease), Landlord shall provide
to Tenant an allowance in the amount of One Dollar ($1.00) per square foot of
Rentable Area of the Premises as of the Commencement Date to be used towards
moving, cabling, and other moving-related expenses, including without
limitation miscellaneous consultant expenses in connection therewith. Tenant
shall provide to Landlord, as a condition to receiving any payment under this
allowance, copies of paid invoices or other evidence satisfactory to Landlord
of all such paid expenses.
(n) SIGNAGE. As defined in Specific Development Plan No. SD43, as
amended pursuant to Ordinance NS-2390 ("Applicable Ordinance"), Tenant shall
have the right to two (2) Building Identification Signs at the top of the
Building (which shall be exclusive to Tenant and is hereby granted personally to
Tenant and not to any other assigning subtenant or transferor of Tenant), one
(1) identification sign on an Entryway Sign to the Building (if two (2) tenant
names are identified on an Entryway Sign, Tenant's name shall be located above
such other tenant's name), and if Landlord decides to erect any Ground
Identification Sign(s) within the Project and Landlord chooses to include any
tenant names on any such Ground Identification Sign(s), then Tenant shall have
the right to one (1) identification sign on a Ground Identification Sign. Each
Building Identification Sign, Entryway Sign and Ground Identification Sign shall
be in such location as designated by Landlord. Tenant shall have no right to
maintain identification signs in any other location in, on or about the Building
or Project and shall not display or erect any other signs, displays or other
advertising materials that are visible from the exterior of the Premises. The
size, design, color and other physical aspects of the permitted signs shall be
subject to Landlord's written approval prior to installation (not to be
unreasonably withheld or delayed), any covenants, conditions and restrictions
applicable to the Project, all applicable municipal or other governmental
permits and approvals, and any other signage criteria applicable to the Building
or Project and approved by the applicable governmental authorities including,
but not limited to, the Applicable Ordinance. The cost of all signs, including
the installation, maintenance and removal thereof shall be at Tenant's sole cost
and expense. If Tenant fails to maintain its signs, or if Tenant fails to
remove same upon
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termination of this Lease and repair any damage caused by such removal
(including, but not limited to, resurfacing the affected area, if required by
Landlord), Landlord may do so at Tenant's expense.
(o) EXCLUSIVITY. Provided no Tenant's Default has occurred and is
continuing and that Tenant has not sublet the entire Premises or assigned its
interest in this Lease pursuant to Paragraph 11 to other than an affiliated
company, Landlord agrees that Landlord shall not lease any other space within
the Building throughout the term of this Lease to another business or entity
whose business is in direct competition with the business of Tenant.
(p) ENVIRONMENTAL RELEASE. Landlord shall make available to Tenant
copies of any environmental assessment reports in Landlord's possession
relating to the Project as of the Commencement Date. Tenant shall have no
liability or responsibility with respect to any Hazardous Materials
disclosures contained therein.
21. CONSTRUCTION OF BUILDING
Tenant and Landlord understand and agree that the Building is to be
constructed by Landlord as part of the Project.
(a) The Building will be a 9-story building containing approximately
205,000 square feet of Rentable Area substantially as shown on the Site Plan
attached as Exhibit "A-2" of this Lease. Access to the main entrance to the
Building and the parking area from Columbine Avenue will be as shown on the
Site Plan. The ratio of usable to Rentable Area in the Building will be no
less than ninety percent (90%) for a full floor tenant.
(b) The Project consists of two 9-story office buildings over a
2-level parking garage. The Project is situated on approximately 5.9 acres.
The Project is a part of an approximately 6&acre Specific Development Plan
known as MacArthur Place. Parking of approximately 1,400 parking spaces for
the Project will be provided on two levels underneath the buildings as well
as the upper parking deck where the buildings are situated.
(c) The Project is subject to the Master Declaration of Covenants,
Conditions, Easements and Restrictions or MacArthur Place, as the same may be
amended from time to time. Landlord reserves the right, prior to or upon
completion of the Project, to record a Reciprocal Easement Access and
Maintenance Agreement or like instrument ("REA") against the Project for the
mutual benefit of all owners of property within the Project and their
tenants, and which will impose certain restrictions, covenants, easements and
obligations upon the Premises, Landlord and Tenant, in order to obtain such
benefit The REA will be reasonable in form and content, will not be
inconsistent with Tenant's rights under the Lease, and will contain those
features and provisions in similar instruments executed and recorded by
Landlord on similar properties. The REA will likely contain, without
limitation, the following:
(i) Reciprocal easements for vehicular and pedestrian
access, circulation and parking;
(ii) Covenants for the maintenance and repair (or
reimbursement for the costs thereof if done by an `Operator' or similar
entity designated in the REA) of the exterior of all buildings, landscaping
and parking area; and
(iii) Assessment provisions for the reimbursement of costs
incurred by an `Operator' or similar entity designated in the REA who is
authorized to enforce the REA and/or perform certain maintenance and repair
functions specified therein. Such assessments will be allocated by either a
separate charge attributable directly to work or services provided for the
Premises, or an in-common basis for the whole Project, in which case a pro
rata allocation to the Premises will be made based upon the gross square
footage of the Building compared with the gross square footage of all
completed buildings within the Project.
Tenant agrees that this Lease and the Tenants occupancy of the
Premises hereunder shall, upon the recordation of the REA in the Official
Records of Orange County, be subject and subordinate to the REA, and Tenant
agrees to abide thereby. Landlord shall make a copy of the REA available to
Tenant concurrently with or promptly following its recordation.
(d) Landlord shall, at Landlord's sole cost and expense, construct
and complete the Building, the Common Areas and the parking area as described
in the Outline Specifications attached as Exhibit "H" to this Lease, in a
good and workmanlike manner, substantially in compliance with the plans and
specifications therefor prepared by Landlord and approved by the City of
Santa Xxx, and in compliance with applicable Laws.
(e) Notwithstanding any other provision in this Lease to the
contrary, if the Commencement Date of this Lease has not occurred on or
before January 5, 2002 (i.e., one year following the Target Commencement
Date), then Tenant shall thereafter, upon written notice to Landlord and any
lender previously identified to Tenant under Section 19(l), have the right to
terminate this Lease in the same manner as is provided in Section 19(l)
including subparts (i) and (ii) thereof. The January 5, 2002 date shall be
extended for the period of any Tenant Delay under the Work Letter.
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