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EXHIBIT 10.20
FIRST AMENDMENT TO LEASE AGREEMENT
This First Amendment to Lease Agreement ("Amendment") is entered
into as of January __, 1996, by and between The Campus, LLC, a California
limited liability company ("Landlord"), and Viasat, Inc., a California
corporation ("Tenant"), with reference to the following:
A. Landlord and Tenant entered into that certain Lease Agreement
dated December 8, 1994 ("Lease"), for the lease of certain Premises commonly
described as 0000 Xx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx, as more
particularly described in the Lease ("Premises"). The Premises are a part of an
industrial building project known as The Campus, in Carlsbad, California
("Project").
B. The parties desire to amend the Lease in certain particulars,
as described herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the
covenants and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. The Premises does not include the East Wing as defined in
Section 2.5 of the Lease. The Premises consists only of the West Wing as defined
in Section 2.5 of the Lease, which as of the date of the Lease consisted of
Thirty One Thousand Nine Hundred Ninety One (31,991) rentable square feet.
Landlord and Tenant have constructed certain improvements and amended the size
of the Premises contained in the West Wing to reduce the size of the Premises to
Thirty Thousand Nine Hundred Fourteen (30,914) rentable square feet.
2. The Premises were constructed and occupied in two phases.
Phase 1 of the Premises consists of Eighteen Thousand Nine Hundred Fourteen
(18,914) rentable square feet and Phase 2 consists of Twelve Thousand (12,000)
rentable square feet.
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3. Due to certain structural additions to portions of the Project
not contained within the Building, the Project Rentable Area has increased.
Pursuant to the increase in the rentable area of the Project and the revision to
the rentable area of the Premises as described above, Section 6 of the Summary
of Basic Lease Information is hereby amended to read as follows:
6. Suite number: 150
Premises Project Rentable Area: 157,886
(Section 2.1 of square feet
Lease):
Building Rentable Area: 49,675
square feet
Premises Rentable Area: 30,914
square feet
Tenant's Building Proportional
Share: 62.23%
Tenant's Project Proportional
Share: 19.58%
4. Tenant exercised the option to change the Lease Term from
sixty months (60) to forty-eight (48) months as set forth in Section 2.5 of the
Lease. Accordingly, Section 8 of the Summary of Basic Lease Information is
revised to reflect that the Lease Term is forty-eight (48) months and that the
Lease expiration date is July 31, 1999, for the entire Premises.
5. Because of the reduction in the rentable area of the Premises,
Section 9 of the Summary of Basic Lease Information is revised to reflect that
the Initial Base Monthly Rent is sixty-seven cents ($.67) per rentable square
foot of the Premises, or Twenty Thousand Seven Hundred Twelve Dollars and
Thirty-Eight Cents ($20,712.38) per month, and that the Initial Base Annual Rent
is Two Hundred Forty-Eight Thousand Five Hundred Forty-Eight Dollars and
Fifty-Six Cents ($248,548.56).
6. The revised Initial Base Monthly Rent, the revised Initial
Base Annual Rent, the revised Tenant's Building Proportional Share and the
revised Tenant's Project Proportional
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Share became effective July 19, 1995, for Phase 1 of the Premises and July 27,
1995 for Phase 2 of the Premises.
7. Section 4.1 of the Lease is amended to provide that the Base
Monthly Rent and the Base Annual Rent shall be increased in accordance with the
following schedule:
Lease Year Base Monthly Rent Base Annual Rent
---------- ----------------- ----------------
2 $21,639.80 $259,677.60
3 $23,185.50 $278,226.00
4 $23,803.78 $285,645.36
8. Exhibit "E" to the Lease is deleted and in its place is
inserted Exhibit "E-1" attached hereto and by this reference incorporated
herein. For all purposes, the Premises will be as described in this Amendment
and as shown on Exhibit "E-1."
9. All initial capitalized terms which are not otherwise defined
in this Amendment shall have the meanings set forth in the Lease.
10. Except as set forth in this Amendment, the Lease is
unmodified and in full force and effect.
Landlord:
THE CAMPUS, LLC, a California
limited liability company
By: NEWPORT NATIONAL CORPORATION, a
California corporation, Member
By:___________________________
Its:_______________________
Tenant:
VIASAT, INC., a California
corporation
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By:_______________________________
Its:___________________________
By:_______________________________
Its:___________________________
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SECOND AMENDMENT TO LEASE AGREEMENT
This Second Amendment to Lease Agreement ("Amendment") is entered
into as of April __, 1996, by and between The Campus, LLC, a California limited
liability company ("Landlord"), and ViaSat, Inc., a California corporation
("Tenant"), with reference to the following:
A. Landlord and Tenant entered into that certain Lease Agreement
dated December 8, 1994, amended by a First Amendment to Lease Agreement ("First
Amendment") dated as of January 12, 1996 (as amended, the "Lease"), for the
lease of certain Premises commonly described as 0000 Xx Xxxxx Xxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxx, as more particularly described in the Lease ("Original
Premises"). The Original Premises are a part of an industrial building project
known as The Campus, in Carlsbad, California ("Project").
B. Tenant desires to expand its occupancy of space in the
Project, and the parties have agreed to amend the Lease to add the additional
space described as 0000 Xx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx, as
further described in this Amendment ("Additional Premises"), pursuant to certain
terms and conditions as described herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the
covenants and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Upon execution hereof, the Lease shall be deemed amended as
set forth in this Amendment.
2. The Premises shall, for all purposes except as specifically
set forth in this Amendment, be deemed to include the Original Premises and the
Additional Premises.
3. Section 6 of the Summary of Base Lease Information is hereby
amended to read as follows:
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6. Premises Suite Numbers: 100 and 150
(Section 2.1 of
Lease): Project Rentable Area: 157,886
square feet
Building Rentable Area: 49,675
square feet
Premises Rentable Area: 49,675
square feet
Original Premises Rentable Area:
30,914 square feet
Additional Premises Rentable Area:
18,761 square feet
Tenant's Building Proportional
Share: 100%
Tenant's Project Proportional
Share: 31.46%
4. Section 8 of the Summary of Basic Lease Information is hereby
amended to read as follows:
8. Lease Term Lease Term: The expiration date
(Article 3 of for the entire Premises is the
Lease): later to occur of July 31, 1999,
or three (3) years
after the Commencement
Date for the payment of
Rent for the Additional
Premises as set forth
in Section 3.2 of the
Lease.
5. Section 9 of the Summary of Basic Lease Information is hereby
amended to read as follows:
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9. Rent Base Rent:
(Article 4 of
Lease): Original Premises: Subject to adjustment
as set forth in Section 4.1, Initial Base
Monthly Rent (from the effective date set
forth in the First Amendment) equal to
$0.67 per rentable square foot of the
Original Premises, or Twenty Thousand
Seven Hundred Twelve Dollars and
Thirty-Eight Cents ($20,712.38), and
Initial Base Annual Rent equal to Two
Hundred Forty-Eight Thousand Five Hundred
Forty-Eight Dollars and Fifty-Six Cents
($248,548.56).
Additional Premises: Subject to
adjustment as set forth in Section 4.1,
Initial Base Monthly Rent equal to $0.68
per rentable square foot of the
Additional Premises, or Twelve Thousand
Seven Hundred Fifty-Seven Dollars and
Forty- Eight Cents ($12,757.48), and
Initial Base Annual Rent of One Hundred
Fifty-Three Thousand Eighty-Nine Dollars
and Seventy- Six Cents ($153,089.76).
Late Charge: Ten percent (10%) of the
overdue amount.
Lease Interest Rate: Ten percent (10%)
per annum.
6. Section 12 of the Summary of Basic Lease Information is hereby
amended to read as follows:
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12. Brokers Landlord's Broker:
(Section 19.17 of Newport National Corporation
Lease):
Tenant's Broker:
Xxxx Xxxxxx, Business Real
Estate Brokerage Company.
7. Section 14 of the Basic Lease Information is hereby amended to
read as follows:
14. Tenant Ten Dollars ($10.00) per rentable
Improvement square foot of the Original
Allowance (See Premises and zero ($0.00) for the
Work Letter-- Additional Premises.
Exhibit C for
Original Premises
and Work Letter -
Additional
Premises -
Exhibit C-1 for
Additional
Premises):
8. Section 1.27 of the Lease is deemed amended so that "Work
Letter" means either the Work Letter for the Original Premises which was
attached to the Lease as Exhibit "C" or the Work Letter - Additional Premises
for the Additional Premises which is attached hereto as Exhibit "C-1," as the
case may be.
9. Section 2.4 of the Lease is deemed amended so that it applies
only to the Original Premises. As set forth in the Work Letter-Additional
Premises attached, Tenant is performing all of the tenant improvement work
within the Additional Premises and Landlord shall have no responsibility or
liability therefor, except as expressly set forth in the Work Letter -
Additional Premises. Tenant specifically acknowledges that Tenant is accepting
the Additional Premises from Landlord in their present condition, "As Is," and
without any representation or warranty from Landlord as to the condition of the
Additional Premises; provided, however, that Landlord hereby warrants to Tenant
that the HVAC System serving the Additional Premises shall be in good
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condition and proper working order for ninety (90) days following the
Commencement Date with regards to the payment of Rent relating to the Additional
Premises (as described below). Tenant waives any claims against and releases
Landlord from any liability or responsibility for the condition of the
Additional Premises, whether such condition is latent or patent, except as
specifically aforesaid or as set forth in the Work Letter Additional Premises.
10. Section 2.6.2 of the Lease is deemed amended so that
Landlord's obligation to deliver an Option Expansion Notice shall be one time
each calendar quarter.
11. Section 3.2 of the Lease is deemed amended to acknowledge
that the Commencement Date with regards to the Original Premises has occurred.
The Commencement Date with regards to the payment of Rent relating to the
Additional Premises shall be the earlier of (a) completion by Tenant of the
Tenant Improvements in the Additional Premises pursuant to the Work Letter -
Additional Premises, or (b) August 15, 1996; provided, however, that to the
extent the Additional Premises Possession Date (as hereinafter defined) is later
than July 1, 1996, then the date set forth in (b) in this sentence shall be
extended by the same number of days. All of Tenant's other obligations with
respect to the Additional Premises set forth in the Lease (including, but not
limited to, obtaining insurance) shall commence as of the date Landlord makes
the Additional Premises available to Tenant for purposes of Tenant constructing
the Tenant Improvements in the Additional Premises pursuant to the Work Letter -
Additional Premises ("Additional Premises Possession Date").
12. Section 3.3 of the Lease is amended to provide that a delay
in the Additional Premises Possession Date shall affect only the portion of the
Lease relating to the Additional Premises. If the Additional Premises Possession
Date has not occurred by October 1, 1996 ("Termination Date"), due to the
previous occupant of such space not timely moving out or for any other reason
except a Tenant Delay (in which case the Termination Date shall be extended for
the period of such Tenant Delay), then Tenant may terminate this Lease as to the
Additional Premises only by written notice thereof to Landlord by the date which
is thirty (30) days after the Termination Date. If Tenant fails to
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timely deliver such notice of termination, Tenant's right to terminate this
Lease as to the Additional Premises shall be deemed waived. If Tenant does
timely terminate this Lease as to the Additional Premises pursuant to the
foregoing, Landlord shall have no liability or responsibility to Tenant for the
delay or as a result of such termination. The parties agree that Tenant and
Landlord will acknowledge in writing the Additional Premises Possession Date
within five (5) days after such date has occurred.
13. Section 3.4 is deemed amended so that it does not apply to
the Additional Premises.
14. Except as hereinafter set forth, Section 3.5 of the Lease is
amended so that it applies to the entire Premises. The Base Annual Rent for the
first year of each Extension Term shall be equal to (a) ninety-five percent
(95%) of the fair market rental for a two (2) year lease with regards to the
Original Premises only, and (b) one hundred percent (100%) of the fair market
rental for a two (2) year lease with regard to the Additional Premises. The
Extension Options may only be exercised with regards to the entire Premises, and
the Fair Market Rental Calculation shall contain two portions, one relating to
the Original Premises and one relating to the Additional Premises. All other
parts of the process described in Section 3.5 shall apply.
15. The parties acknowledge that Lease Year 2 under the Lease
commences (a) August 1, 1996 for the Original Premises, and (b) the Commencement
Date (as defined in Section 12 above) with regard to the payment of Rent for the
Additional Premises. Given the foregoing, Section 4.1 of the Lease is amended to
provide that the Base Monthly Rent and the Base Annual Rent shall be increased
in accordance with the following schedule:
Additional
----------
Lease Original Premises Premises Total Premises
----- ----------------- ---------- --------------
Year Base Monthly Rent Base Monthly Rent Base Monthly Rent
----- ----------------- ----------------- -----------------
2 $21,639.80 $12,757.48 $34,397.28
3 23,185.50 13,320.31 36,505.81
4 23,803.78 13,883.14 37,686.92
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Additional
----------
Lease Original Premises Premises Total Premises
----- ----------------- ---------- --------------
Year Base Monthly Rent Base Monthly Rent Base Monthly Rent
----- ----------------- ----------------- -----------------
Base Annual Rent Base Annual Rent Base Annual Rent
---------------- ---------------- ----------------
2 $259,677.60 $153,089.76 $412,767.36
3 278,226.00 159,843.72 438,069.72
4 285,645.36 166,597.68 452,243.04
16. Section 5.5.3 of the Lease is amended so that the limitation
contained therein on Tenant's obligation to pay Common Area Maintenance Charges,
Property Taxes and Project Insurance Charges shall apply only to such charges
incurred with respect to the Original Premises. Tenant shall be liable without
limitation for all such charges with regards to the Additional Premises.
17. Section 11.1 of the Lease is amended to provide that Landlord
shall respond within five (5) days of Tenant's request for approval of any such
Alterations.
18. A typographical error in Section 11.6 of the Lease is hereby
corrected so that the reference in the third line from the end is to "this
Section 11.6."
19. Section 18.1 of the Lease is amended so that Tenant shall be
required to surrender the Original Premises to Landlord broom clean and in the
same condition as received except for ordinary wear and tear, which Tenant was
not otherwise obligated to remedy under any provision of this Lease. Tenant
shall be required to surrender the Additional Premises to Landlord broom clean
and in the condition improved with the Tenant Improvements contemplated by the
Work Letter - Additional Premises but without the Tenant Improvements identified
by Landlord for removal at the expiration of the Lease Term during the
Construction Documents approval process as set out in Section 1.3 of the Work
Letter Additional Premises, except for ordinary wear and tear which Tenant was
not otherwise obligated to remedy under any provision of this lease. Thirty (30)
days prior to the expiration of the Lease, Landlord and Tenant will inspect the
Premises for the purposes of Landlord identifying in writing within ten (10)
days
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of such inspection which improvements are to remain and which improvements
are to be removed by Tenant prior to the expiration of the Lease Term pursuant
to the terms of the Lease and the Work Letter - Additional Premises. Tenant's
obligation to remove those improvements identified by Landlord for removal must
be completed prior to the termination of the Lease. If Tenant enters or should
enter any portion of the Premises after the termination of the Lease for the
purpose of removing such improvements, then such entry (or requirement to enter)
shall be deemed to be holding over the entire Premises pursuant to the
provisions of Section 18.5 below. Section 18.2 of the Lease shall be deemed
amended to be consistent with the foregoing requirements.
20. Exhibit "E-1" to the Lease is deleted and in its place is
inserted Exhibit "E-2" attached hereto and by this reference incorporated
herein. For all purposes, the Premises will be as described in this Amendment
and as shown on Exhibit "E-2."
21. All initial capitalized terms which are not otherwise defined
in this Amendment shall have the meanings set forth in the Lease.
22. Except as set forth in this Amendment, the Lease is
unmodified and in full force and effect.
Landlord:
THE CAMPUS, LLC, a California
limited liability company
By: NEWPORT NATIONAL
CORPORATION, a California
corporation, Member
By:____________________________
Its:___________________________
Tenant:
VIASAT, INC., a California
corporation
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By:______________________________
Its:_____________________________
By:______________________________
Its:_____________________________
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LEASE AGREEMENT
THE CAMPUS
LANDLORD
THE CAMPUS, LLC, A CALIFORNIA
LIMITED LIABILITY COMPANY
TENANT
VIASAT, INC., A CALIFORNIA CORPORATION
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TABLE OF CONTENTS
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SUMMARY OF BASIC LEASE INFORMATION....................................................................... i
ARTICLE 1 DEFINITIONS................................................................. 1
1.1 Additional Rent............................................................. 1
1.2 Base Annual Rent............................................................ 1
1.3 Base Monthly Rent........................................................... 1
1.4 Basic Terms................................................................. 1
1.5 Business Days............................................................... 1
1.6 Common Area Maintenance Charges............................................. 1
1.7 Declarations................................................................ 1
1.8 Estimated Commencement Date................................................. 1
1.9 Hazardous Materials......................................................... 1
1.10 Hazardous Materials Laws.................................................... 2
1.11 Landlord.................................................................... 2
1.12 Landlord's Indemnitees...................................................... 2
1.13 Lease Interest Rate......................................................... 2
1.14 Lease Term.................................................................. 2
1.15 Lease Year.................................................................. 2
1.16 Premises.................................................................... 2
1.17 Project..................................................................... 2
1.18 Project Common Area......................................................... 2
1.19 Property Taxes.............................................................. 2
1.20 Rent........................................................................ 3
1.21 Rules and Regulations....................................................... 3
1.22 Site Plan................................................................... 3
1.23 Tenant...................................................................... 3
1.24 Tenant Improvements......................................................... 3
1.25 Tenant's Indemnitees........................................................ 3
1.26 Tenant's Proportional Share................................................. 3
1.27 Work Letter................................................................. 3
ARTICLE 2 PREMISES.................................................................... 3
2.1 Premises.................................................................... 3
2.2 Lease of the Premises....................................................... 4
2.3 Suitability of Premises..................................................... 4
2.4 Landlord's Work in the Premises............................................. 4
2.5 Reduction in Premises and Lease Term........................................ 4
2.6 Right of First Refusal/Option to Expand..................................... 5
2.6.1 Grant of Right of First Refusal.............................. 5
2.6.2 Option to Expand............................................. 6
2.6.3 Absence of Default........................................... 7
2.6.4 New Lease or Amendment to Lease.............................. 8
2.6.5 Option to Expand and Right of First Refusal Personal......... 8
ARTICLE 3 LEASE TERM.................................................................. 8
3.1 Lease Term.................................................................. 8
3.2 Commencement Date; Condition Precedent to Effectiveness..................... 8
3.3 Delay in Commencement....................................................... 8
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3.4 Early Occupancy........................................................................ 9
3.5 Option to Extend....................................................................... 9
ARTICLE 4 RENTAL AND OTHER PAYMENTS.............................................................. 11
4.1 Base Monthly Rent...................................................................... 11
4.2 Interest on Past Due Obligations....................................................... 12
4.3 Late Charges........................................................................... 12
4.4 Security Deposit....................................................................... 12
4.4.1 Deposit of Funds........................................................ 12
4.4.2 Transfer of Security Deposit............................................ 12
ARTICLE 5 OTHER CHARGES PAYABLE BY TENANT........................................................ 12
5.1 Additional Rent and Rent............................................................... 12
5.2 Property Taxes......................................................................... 12
5.2.1 Tenant Right to Contest Taxes........................................... 13
5.2.2 Consultation Regarding Taxes............................................ 13
5.2.3 Landlord Right to Contest Taxes; Tax Consulting Service................. 13
5.2.4 Liability for Penalties/Interest........................................ 13
5.3 Insurance Charges...................................................................... 13
5.4 Common Area Maintenance Charges........................................................ 13
5.4.1 Tenant to Bear Proportional Share of Common Area Maintenance Charges.... 13
5.4.2 Landlord's Common Area Maintenance Charges.............................. 13
5.4.3 Charges Under Declarations.............................................. 14
5.5 Payment of Common Area Maintenance Charges, Property Taxes and Project Insurance
Charges................................................................................ 14
5.5.1 Year-End Adjustments.................................................... 15
5.5.2 Disputes Regarding Charges.............................................. 15
5.5.3 Limitation on Increase in Charges....................................... 15
5.6 Personal Property Taxes................................................................ 15
5.6.1 Payment Prior to Delinquency............................................ 15
5.6.2 Contest of Personal Property Taxes...................................... 16
ARTICLE 6 USE OF PROPERTY........................................................................ 16
6.1 Permitted Uses......................................................................... 16
6.2 Manner of Use.......................................................................... 16
6.2.1 Interference with Use/Nuisance.......................................... 16
6.2.2 Violation of Law/Insurance Provisions................................... 16
6.2.3 Permits................................................................. 17
6.3 Rules and Regulations.................................................................. 17
6.4 Landlord's Access...................................................................... 17
6.5 Quiet Possession....................................................................... 17
ARTICLE 7 HAZARDOUS MATERIALS.................................................................... 18
7.1 Prohibition of Storage................................................................. 18
7.2 Disclosure and Warning Obligations..................................................... 18
7.3 Notice of Actions...................................................................... 18
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TABLE OF CONTENTS
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7.4 Hazardous Materials Indemnities........................................................ 19
7.5 Assignment and Subletting.............................................................. 20
7.6 Environmental Tests and Audits......................................................... 20
7.7 Lease "As Is".......................................................................... 20
7.8 Landlord's Representation and Warranty................................................. 20
7.9 Survival............................................................................... 21
7.10 Tenant's Limited Right of Cancellation................................................. 21
ARTICLE 8 SERVICES AND UTILITIES................................................................. 21
8.1 Payment and Arrangement................................................................ 21
8.2 Interruption of Services and Utilities................................................. 21
ARTICLE 9 PARKING AND CONTROL OF COMMON AREAS.................................................... 22
9.1 Control of Project Common Areas by Landlord............................................ 22
9.2 License................................................................................ 22
9.3 Parcelization of the Project........................................................... 23
9.4 Underground Line....................................................................... 23
9.5 Installation of Satellite Dish......................................................... 23
9.5.1 Governmental Approvals.................................................. 23
9.5.2 Maintenance and Surrender............................................... 23
9.5.3 Taxes................................................................... 24
9.5.4 Utilities............................................................... 24
9.5.5 Terms of Lease.......................................................... 24
ARTICLE 10 CONDITION OF PREMISES; MAINTENANCE OF THE PREMISES..................................... 24
10.1 Tenant's Obligations................................................................... 24
10.1.1 Maintenance of the Premises............................................. 24
10.1.2 Repairs Due to Misuse................................................... 24
10.2 Repair by Landlord..................................................................... 24
10.3 Landlord's Obligations................................................................. 25
10.3.1 Landlord's Limited Warranty............................................. 25
ARTICLE 11 ALTERATIONS, IMPROVEMENTS AND SIGNAGE.................................................. 25
11.1 Changes/Alterations.................................................................... 25
11.2 Manner of Construction................................................................. 25
11.3 Intentionally Omitted.................................................................. 26
11.4 Construction Insurance................................................................. 26
11.5 Liens.................................................................................. 26
11.6 Signage................................................................................ 26
ARTICLE 12 INSURANCE AND INDEMNITY................................................................ 27
12.1 Fire and Casualty Insurance............................................................ 27
12.2 Insurance to be Obtained by Tenant..................................................... 27
12.2.1 Liability Insurance..................................................... 27
12.2.2 Insurance of Personal Property.......................................... 27
12.2.3 Additional Insurance Obligations........................................ 28
12.3 Waiver of Subrogation.................................................................. 28
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(continued)
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12.4 Form of Policies....................................................................... 28
12.5 Indemnification........................................................................ 28
12.5.1 Indemnification of Landlord............................................. 28
12.5.2 Landlord's Nonliability................................................. 29
12.5.3 Indemnification of Tenant............................................... 29
ARTICLE 13 ASSIGNMENT AND SUBLETTING.............................................................. 29
13.1 Landlord's Consent Required............................................................ 30
13.2 Intentionally Omitted. ................................................................ 30
13.3 Transfer Without Consent............................................................... 30
13.4 No Release of Tenant................................................................... 30
13.5 Effect of a Transfer................................................................... 30
13.6 Event of Bankruptcy.................................................................... 31
13.7 No Merger.............................................................................. 31
13.8 Assignment Fees and Procedures......................................................... 31
ARTICLE 14 DAMAGE OR DESTRUCTION.................................................................. 31
14.1 Repair of Damage by Landlord........................................................... 31
14.2 Rent Abatement Due to Casualty......................................................... 32
14.3 Landlord's Option to Repair............................................................ 32
14.4 Damage Near End of Term................................................................ 32
14.5 Waiver of Statutory Provisions......................................................... 32
ARTICLE 15 CONDEMNATION........................................................................... 33
15.1 Total Condemnation..................................................................... 33
15.2 Partial Condemnation................................................................... 33
15.3 Condemnation of Parking Area........................................................... 33
15.4 Distribution of Condemnation Award..................................................... 33
15.5 Waiver................................................................................. 33
ARTICLE 16 DEFAULTS; REMEDIES..................................................................... 33
16.1 Covenants and Conditions............................................................... 33
16.2 Defaults by Tenant..................................................................... 34
16.3 Remedies............................................................................... 34
16.4 The Right to Relet the Premises........................................................ 35
16.5 Waiver of Rights of Redemption......................................................... 36
16.6 Cumulative Remedies.................................................................... 36
16.7 Additional Remedies Upon Default....................................................... 36
16.8 Default by Landlord.................................................................... 37
16.9 Landlord's Cure........................................................................ 37
ARTICLE 17 PROTECTION OF CREDITORS................................................................ 38
17.1 Subordination.......................................................................... 38
17.2 Attornment............................................................................. 38
17.3 Signing of Documents................................................................... 38
17.4 Estoppel Certificates.................................................................. 38
17.5 Tenant's Financial Condition........................................................... 39
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17.6 Mortgagee Protection Clause............................................................ 39
ARTICLE 18 TERMINATION OF LEASE................................................................... 39
18.1 Condition Upon Termination............................................................. 39
18.2 Non-Removal by Tenant.................................................................. 39
18.3 Abandoned Property..................................................................... 40
18.4 Landlord's Actions on Premises......................................................... 40
18.5 Holding Over........................................................................... 40
ARTICLE 19 MISCELLANEOUS PROVISIONS............................................................... 41
19.1 Obligation to Refrain from Discrimination.............................................. 41
19.2 Successors............................................................................. 41
19.3 Severability........................................................................... 41
19.4 Interpretation......................................................................... 41
19.5 Other Tenancies........................................................................ 41
19.6 Entire Agreement....................................................................... 41
19.7 Landlord's Liability................................................................... 42
19.8 Notices................................................................................ 42
19.9 Waivers................................................................................ 42
19.10 No Recordation......................................................................... 42
19.11 Choice of Law.......................................................................... 42
19.12 Corporate Authority; Partnership Authority............................................. 42
19.13 No Partnership......................................................................... 43
19.14 Joint and Several Liability............................................................ 43
19.15 Attorneys' Fees........................................................................ 43
19.16 Lender Modification.................................................................... 43
19.17 Brokers................................................................................ 43
19.18 Force Majeure.......................................................................... 43
19.19 Tenant Obligations Survive Termination................................................. 43
19.20 Tenant's Waiver........................................................................ 43
19.21 Submission of Lease.................................................................... 44
EXHIBITS
Exhibit "A"...............................Site Plan
Exhibit "B"...................Rules and Regulations
Exhibit "C".............................Work Letter
Exhibit "D" ......................Acceptance Letter
Exhibit "E"............................CADD Diagram
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LEASE AGREEMENT
SUMMARY OF BASIC LEASE INFORMATION
1. Lease Date: December 8, 1994
2. Landlord: The Campus, LLC, a California
limited liability company
3. Address of Landlord: c/o Newport National Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxxxx
4. Tenant: ViaSat, Inc., a California
corporation
5. Address of Tenant: 0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
6. Premises (Section Suite No.: 150
2.1 of Lease):
Project Rentable Area: 156,436
square feet
Building Rentable Area:
49,675 square feet
Premises Rentable Area:
Approximately 49,675 square feet.
The Premises are comprised of the
East Wing and the West Wing as set
forth in Section 2.5. The East Wing
and the West Wing will be delivered
to Tenant on separate dates as set
forth in Section 3.3 and the Work
Letter. The East Wing consists of
approximately 17,684 rentable square
feet and the West Wing consists of
approximately 31,991 rentable square
feet. The West Wing consists of two
phases, the First Phase and the
Second Phase. The First Phase
contains approximately (20,000)
square feet. The Second Phase
consists of approximately twelve
thousand (12,000) square feet.
Tenant's Building Proportional
Share: 100%
Tenant's Project Proportional Share:
31.75%
7. Project: The Campus, Carlsbad
Building: 0000 Xx Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000
8. Lease Term
(Article 3 of Lease): Lease Term: Sixty (60) months
Estimated Lease Commencement Date:
May 1, 1995
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Estimated Lease Expiration Date:
April 30, 2000
9. Rent Base Rent:
(Article 4 of Lease) $.67 per rentable square foot of the
Premises, subject to adjustment as
set forth in Section 4.1
Initial Base Monthly Rent:
$33,282.25
Initial Base Annual Rent:
$399,387.00
First Month's Base Monthly Rent due
upon the date Landlord acquires
title to the Project pursuant to
Section 3.2
Late Charge: Ten percent (10%) of
the overdue amount
Lease Interest Rate: Ten percent
(10%)
10. Use (Article 6 of General Office, Assembly and
Lease): Manufacturing
11. Security Deposit None
(Article 4 of Lease):
12. Brokers (Section Landlord's Broker: None
19.17 of Lease): Tenant's Broker: Xxxx Xxxxxx,
Business Real Estate
13. Lease Guarantors: None
14. Tenant Improvement Ten Dollars ($10.00) per rentable
Allowance square foot of the Premises
(See Work Letter -
Exhibit "C")
15. Exhibits and Addenda: The following exhibits and addenda are
attached hereto and incorporated into this Lease:
EXHIBITS:
Exhibit "A"..........................................Site Plan
Exhibit "B"..............................Rules and Regulations
Exhibit "C"........................................Work Letter
Exhibit "D" .................................Acceptance Letter
Exhibit "E".......................................CADD Diagram
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OTHER EXHIBITS
None
ADDENDA:
None
The foregoing Summary of Basic Lease Information is hereby
incorporated into and made a part of this Lease. Each reference in this Lease to
the Summary of Basic Lease Information shall mean the information set forth
above and shall be construed to incorporate all of the terms provided under the
particular lease paragraph pertaining to such information. In the event of a
conflict between the Summary of Basic Lease Information and the Lease, the terms
of the Lease shall prevail.
LANDLORD:
The Campus, LLC, a California limited liability company
By: Newport National Corporation, a California corporation
Its: Manager
By:/s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
TENANT:
ViaSat, Inc., a California corporation
By: /s/ Xxxx Xxxxxxx
---------------------------
Name: Xxxx Xxxxxxx
------------------------
Title:Vice President
------------------------
By:___________________________
Name:_________________________
Title:________________________
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LEASE
This Lease, which includes the Basic Terms (as hereinafter
defined) ("Lease"), is made as of December 8, 1994, by and between The Campus,
LLC, a California limited liability company ("Landlord") and ViaSat, Inc., a
California corporation ("Tenant").
ARTICLE 1
DEFINITIONS
In addition to the defined terms set forth elsewhere in this
Lease, unless the context otherwise requires, the following terms shall have the
meanings set forth below.
1.1 ADDITIONAL RENT. "Additional Rent" refers collectively to the
Tenant's Proportional Share of Common Area Maintenance Charges, Property Taxes
and Project Insurance Charges and any other charges due and payable by Tenant
under this Lease other than Base Monthly Rent or Base Annual Rent.
1.2 BASE ANNUAL RENT. "Base Annual Rent" means the Base Monthly
Rent calculated on an annual basis.
1.3 BASE MONTHLY RENT. "Base Monthly Rent" means the rental
specified in Article 4 of this Lease.
1.4 BASIC TERMS. "Basic Terms" means the Summary of Basic Lease
Information set forth at the beginning hereof.
1.5 BUSINESS DAYS. "Business Days" means any day on which
business is conducted by federal savings banks in San Diego County, California.
1.6 COMMON AREA MAINTENANCE CHARGES. "Common Area Maintenance
Charges" means the costs and expenses described in Section 5.4.2 of this Lease.
1.7 DECLARATIONS. "Declarations" means any Declaration or
Declarations of Covenants, Conditions and Restrictions which have been or may be
recorded against all or a portion of the Project, including but not limited to,
the Declaration of Restrictions recorded April 22, 1982 in the San Diego County
Recorder's Office as Instrument No. 82-114942 and recorded May 12, 1982 as
Instrument No. 82- 141190, as amended from time to time.
1.8 ESTIMATED COMMENCEMENT DATE. "Estimated Commencement Date"
refers to the date specified in Item 8 of the Basic Terms.
1.9 HAZARDOUS MATERIALS. The term "Hazardous Material(s)" shall
mean any toxic or hazardous substance, material or waste or any pollutant or
contaminant or infectious or radioactive material which are, or in the future
become, regulated under applicable local, state or federal law for the
protection of health or the environment, or which are classified as hazardous or
toxic substances, materials or wastes, pollutants or contaminants, as defined,
listed or regulated by any federal, state or local law, regulation or order or
by common law decision, including, without limitation, (i) trichloroethylene,
tetrachloroethylene, perchloroethylene and other chlorinated solvents, (ii) any
petroleum products or
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fractions thereof, (iii) asbestos, (iv) polychlorinated biphenyls, (v) flammable
explosives, (vi) urea formaldehyde and (vii) radioactive materials and waste.
1.10 HAZARDOUS MATERIALS LAWS. The term "Hazardous Materials
Law(s)" shall mean any federal, state or local laws, ordinances, codes,
statutes, regulations, administrative rules, policies and orders, and other
authority, existing now or in the future, which classify, regulate, list or
define hazardous substances, materials, wastes contaminants, pollutants and/or
the Hazardous Materials.
1.11 LANDLORD. "Landlord" means the person or entity described in
Item 2 of the Basic Terms.
1.12 LANDLORD'S INDEMNITEES. "Landlord's Indemnitees" shall refer
collectively to Landlord's agents, partners, members, managers, shareholders,
officers, directors, employees, successors and/or assigns.
1.13 LEASE INTEREST RATE. "Lease Interest Rate" means the
interest rate specified in Item 9 of the Basic Terms.
1.14 LEASE TERM. "Lease Term" means the entire period commencing
with the Commencement Date and continuing for the period specified in Item 8 of
the Basic Terms, plus any extensions, renewals or holding over periods.
1.15 LEASE YEAR. "Lease Year" or "lease year" shall mean a
consecutive twelve (12) month period during the Lease Term commencing on the
Commencement Date provided that the Lease Year may be adjusted by Landlord to
commence on the first day of a calendar month after the Commencement Date.
1.16 PREMISES. "Premises" means the space described in Section
2.1 and delineated on the Site Plan.
1.17 PROJECT. "Project" means the office and industrial project
commonly known as The Campus at Carlsbad, and is more particularly described in
Exhibit "A," together with all fixtures, equipment and personal property owned
by Landlord, now or hereafter situated or located therein or thereupon and used
in connection with the operation and maintenance thereof.
1.18 PROJECT COMMON AREA. "Project Common Area" means all areas,
space, equipment and special services which are from time-to-time provided by
Landlord for the common or joint use and benefit of the occupants of the Project
and Building, their employees, agents, servants, customers and other invitees,
including without limitation, parking areas, access roads, driveways, retaining
walls, landscaped areas, truck service-ways, stairs, ramps, sidewalks, pools,
patios, hardscapes, electrical rooms, mailrooms, common area restrooms and
locker rooms and hallways.
1.19 PROPERTY TAXES. "Property Taxes" means: (i) general real
property and improvements taxes, any form of assessment, special assessment or
reassessment, any fee, license fee, license tax, business license fee,
commercial rental tax, levy, charge, assessment, penalty or other tax imposed by
any authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agriculture, lighting,
drainage or other improvement district thereof, as against any legal or
equitable interest of Landlord in the Project; (ii) any tax on the Landlord's
right to receive, or the receipt of, rent or income from the Project or against
Landlord's business of leasing the Project; (iii) any tax or charge for fire
protection, streets, sidewalks, road maintenance, refuse or other services
provided to the Project by any governmental agency; (iv) any tax imposed upon
this transaction or based upon a reassessment of the Project due to a change in
ownership or transfer of all or part of Landlord's interest in
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the Project; and (v) any charge or fee replacing any tax previously included
within the definition of Property Taxes. "Property Taxes" does not, however,
include Landlord's Federal or State income, franchise, inheritance or estate
taxes.
1.20 RENT. "Rent" and/or "rent" shall mean the Base Monthly Rent,
Additional Rent and any other amounts Tenant is required to pay under this
Lease.
1.21 RULES AND REGULATIONS. "Rules and Regulations" mean the
rules and regulations set forth in Exhibit "B" attached to this Lease.
1.22 SITE PLAN. "Site Plan" refers to the Site Plan attached as
Exhibit "A."
1.23 TENANT. "Tenant" means the person or entity described in
Item 4 of the Basic Terms.
1.24 TENANT IMPROVEMENTS. "Tenant Improvements" shall refer to
the Tenant Improvements as defined in the Work Letter attached hereto as Exhibit
"C."
1.25 TENANT'S INDEMNITEES. "Tenant's Indemnitees" shall refer
collectively to Tenant's agents, partners, members, managers, shareholders,
officers, directors, employees, successors and/or assigns.
1.26 TENANT'S PROPORTIONAL SHARE. "Tenant's Proportional Share"
shall mean both Tenant's Building Proportional Share and Tenant's Project
Proportional Share. Tenant's Building Proportional Share shall be the percentage
obtained by dividing the square footage of the Premises by the total square
footage of the Building and Tenant's Project Proportional Share shall be the
percentage obtained by dividing the square footage of the Premises by the total
leasable square footage of the Project. Tenant's Building Proportional Share and
Tenant's Project Proportional Share shall initially be as set forth in Item 6 of
the Basic Lease Provisions.
1.27 WORK LETTER. "Work Letter" means the Work Letter which is
attached to this Lease as Exhibit "C."
ARTICLE 2
PREMISES
2.1 PREMISES. Upon and subject to the terms, covenants and
conditions hereinafter set forth, Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the Premises. The Premises are located in the
Building. The Building is, in turn, located in and constitutes a portion of the
Project. Landlord reserves the right to change the shape, size, location, number
and extent of the improvements shown on the Site Plan and eliminate or add any
improvements to any portion of the Project as provided in Article 5. The
rentable area of the Premises, Building and Project are set forth on the CADD
Diagram attached hereto and incorporated herein as Exhibit "E." In the first
thirty (30) days after the Commencement Date, Landlord and Tenant shall verify
the rentable area of the Premises, Building and/or Project and a change shall be
made to such rentable area amounts only to the extent the Tenant Improvements
are constructed in a configuration other than as set forth on the CADD Diagram.
In the event that Landlord determines during such thirty (30) day period that
the rentable area of either the Premises, Building, and Project differ from the
amount set forth in Item 6 of the Basic Terms, all amounts, percentages and
figures appearing or referred to in this Lease, including, without limitation,
Tenant's Proportional Share, based upon such incurred amount shall be revised
accordingly and such revised figures shall be deemed to be the rentable area of
the Premises, Building or Project, respectively. In such case, the Base Monthly
Rent and any other payments due hereunder which are based on a rentable
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square footage basis shall be increased or decreased accordingly. The purpose of
the Site Plan is to show the approximate location of the Premises.
Notwithstanding any other provision contained in this Lease except Section 9.1
with respect to the provision of a minimum number of parking spaces, Landlord
reserves the right at any time to vary and adjust the size of the various
buildings, the location of any other tenant, automobile parking areas, and other
common areas as shown on said Site Plan, provided, however, that said parking
area (including landscaped common areas) shall at all times provide for not less
than the minimum parking required by the local jurisdiction in which the Project
is located and the minimum requirements established under any deed restrictions
or covenants, conditions and restrictions encumbering the Premises.
2.2 LEASE OF THE PREMISES. Tenant acknowledges that this Lease is
subordinate and subject to the Declarations, all liens, encumbrances, deeds of
trust, reservations, restrictions and other matters affecting the Project or the
Premises and any law, regulation, rule, order or ordinance of any governmental
entity applicable to the Project or the Premises or the use or occupancy
thereof, in effect on the execution of this Lease or thereafter promulgated.
Landlord grants Tenant during the Lease Term the concurrent right to use the
Project Common Area on a nonexclusive basis and subject to the provisions of
this Lease. Easements for light and air are not included in the leasing of these
Premises to Tenant. Landlord further reserves the exclusive right of access to
the roof, except for any rights of access specifically granted to Tenant under
the terms of this Lease or any rights of access approved by Landlord, in its
sole discretion, in writing.
2.3 SUITABILITY OF PREMISES. Tenant acknowledges that, except as
expressly set forth herein, Landlord has made no representation or warranty
regarding the condition of the Premises or the Project or the suitability of
such Premises or the Project for the operation or conduct of Tenant's business
thereon or for any other purpose. The taking of possession of the Premises by
Tenant shall conclusively establish that the Premises and the Project were
acceptable to Tenant and in satisfactory condition to conduct business at such
time.
2.4 LANDLORD'S WORK IN THE PREMISES. The Premises shall be
completed as set forth in the Work Letter. Except as specifically set forth in
this Lease and the Work Letter, Landlord shall not provide or pay for any
interior improvement work or services related to the improvement of the
Premises.
2.5 REDUCTION IN PREMISES AND LEASE TERM. In the event that
Landlord does not obtain assurances acceptable to Landlord and Tenant, each
acting in their own reasonable discretion, on or before March 15, 1995 from
Xxxxxx Xxxxx Research ("Existing Tenant") that Existing Tenant will abandon that
portion of the Premises shown on Exhibit "A" attached hereto and incorporated
herein and identified as the "East Wing," on or before October 1, 1995, then (a)
the area of the "Premises" for purpose of this Lease shall be automatically
reduced by the area of the East Wing so that the Premises only includes that
portion of the Premises shown on Exhibit "A" as the "West Wing," and the
provisions set forth in the Summary of Basic Lease Provisions which are
determined by the rentable square footage of the Premises, including Tenant's
Building Proportionate Share, Tenant's Project Proportional Share, Base Rent,
and the Security Deposit, shall be reduced proportionally in accordance with the
percent reduction in the rentable area of the Premises and (b) Tenant shall have
the option, which option may be exercised in Tenant's sole discretion, to give
notice to Landlord on or before July 1, 1995 electing to change the Lease Term
from sixty (60) months to forty-eight (48) months. For purposes of this Section
2.5, the parties agree that the rentable square footage of the East Wing is
seventeen thousand six hundred eighty-four (17,684) rentable square feet. In the
event that Landlord obtains assurances acceptable to Landlord that the Existing
Tenant will abandon by October 1, 1995 the East Wing then Landlord shall provide
notice thereof to Tenant together with such assurances and Tenant, within ten
(10) days thereafter, shall deliver notice to Landlord whether such assurances
are acceptable. If Tenant fails to deliver such notice, Tenant shall be
deemed to approve the assurances provided by Landlord. If Tenant delivers notice
to Landlord that such
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assurances are not acceptable, the parties shall meet within four (4) days
thereafter to discuss the assurances provided and determine what additional
assurances are reasonably necessary, if any. On the date that such assurances
are reasonably approved by Tenant or deemed approved by Tenant, the provisions
of the Work Letter shall be triggered for the East Wing. After the Lease Date
and until March 15, 1995, Landlord shall use its best efforts to cause Existing
Tenant to agree before March 15, 1995 to abandon the East Wing on or before
October 1, 1995, provided, however, that Landlord shall not be required to incur
any cost, expense or liability to obtain such agreement. In the event that
Landlord is unable to obtain reasonable assurances on or before March 15, 1995
and the Premises are reduced as provided herein, but Existing Tenant abandons
the East Wing on or before July 1, 1995 without the requirement of payment or
any other consideration by Landlord to do so, Landlord shall give written notice
to Tenant thereof. Within five (5) Business Days after such notice, Tenant may
elect, by written notice to Landlord, to lease the East Wing on the terms and
conditions contained in this Lease, provided, however, that the Lease Term shall
be sixty (60) months regardless of whether or not Tenant has delivered a notice
under subsection (b) above.
2.6 RIGHT OF FIRST REFUSAL/OPTION TO EXPAND.
2.6.1 GRANT OF RIGHT OF FIRST REFUSAL. Subject to the
conditions set forth herein, Landlord hereby grants to Tenant a right of first
refusal ("Right of First Refusal") to lease certain rentable space within the
Project. If at any time during the Lease Term, Landlord receives an offer to
lease (the "Offer") all or any of the rentable space in the Project ("Expansion
Space"), Landlord shall notify Tenant that Landlord has received an offer to
lease such Expansion Space, which notice shall specify the amount of Base
Monthly Rent for such Expansion Space, the allowance for tenant improvements for
such Expansion Space, the term of the lease for such Expansion Space and the
other terms and conditions contained in the Offer ("Refusal Expansion Notice").
Tenant agrees that the term "Offer" shall not include any exercise of an option
or right of first refusal held by any third party as of the Lease Date. Within
thirty (30) days after the satisfaction of the contingencies contained in
Section 3.2, Landlord shall provide Tenant with a list of those parties holding
a right of first refusal or an option to expand for any portion of the Project
as of the Lease Date.
a. If Tenant, within four (4) Business Days after
receipt of the Refusal Expansion Notice, indicates in writing its agreement to
lease such Expansion Space, such Expansion Space shall be included within the
Premises and leased to Tenant pursuant to the terms and conditions contained in
the Offer, including, but not limited to, with respect to the building located
at 0000 Xx Xxxxx Court, any requirement in the Offer that Tenant use Landlord's
standard form of lease agreement for such Expansion Space which standard form
shall be commercially reasonable given the particularities of the Project and
such Expansion Space.
b. If Tenant does not notify Landlord in writing within
such four (4) Business Day period of its agreement to lease the Expansion Space,
or if Tenant delivers notice of its intent to lease the Expansion Space but
Tenant fails to execute an Amendment of Lease or New Lease as described in
Section 2.6.4 below within five (5) Business Days of delivery of such Amendment
of Lease or ten (10) Business Days after delivery of the New Lease by Landlord
to Tenant (or five (5) Business Days to the extent Landlord and Tenant have
previously negotiated the form of and entered into a New Lease), then this Right
of First Refusal shall expire. If Tenant fails to exercise its Right of First
Refusal and thereafter Landlord fails to execute a lease for such Expansion
Space within one hundred twenty (120) days after delivery of Landlord's Refusal
Expansion Notice with the prospective tenant identified in the Offer, then this
Right of First Refusal shall be reinstated and Tenant shall have the right to
exercise the Right of First Refusal on the same terms as set forth in this
Section 2.6.1.
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2.6.2 OPTION TO EXPAND. Subject to the conditions set forth
herein, Landlord hereby grants to Tenant an Option to Expand ("Option to
Expand") to lease the Expansion Space. If at any time during the Lease Term,
Landlord determines that a portion of the Expansion Space will become available
for lease at any time within the next twelve (12) months and that no third party
has a right of first refusal or option to lease such Expansion Space or upon the
failure of any such third party to exercise any right of first refusal or option
to lease such Expansion Space, Landlord shall notify Tenant that such Expansion
Space is available for lease ("Option Expansion Notice"). Tenant may, in its
sole discretion, elect to exercise the Option to Expand only by delivery of
written notice to Landlord ("Notice of Intention to Expand") within seventy-two
(72) days after receiving the Option Expansion Notice. The parties acknowledge
and agree that this Option to Expand is subordinate to the Right of First
Refusal. Accordingly, if Landlord receives an Offer pursuant to Section 2.6.1 at
any time prior to Tenant's notice to institute the arbitration procedure
pursuant to Section 2.6.2(b) below, Tenant shall have the Right of First Refusal
with respect to such Offer but shall have no further Option to Expand with
respect to such Expansion Space except to the extent Landlord fails to enter
into a lease with respect to the Expansion Space in the time period prescribed
in Section 2.6.1(b).
a. In the event Tenant gives a Notice of Intention to
Expand for such Expansion Space, Tenant shall be subject to all the terms and
conditions of this Lease other than the Business Terms (as such term is defined
below) with respect to any lease of Expansion Space at 0000 Xx Xxxxx Xxxxx or
the Building or the terms and conditions of a New Lease (as defined in Section
2.6.4) with respect to any Expansion Space located at 0000 Xx Xxxxx Xxxxx with
respect to such Expansion Space; provided, however, that Base Annual Rent for
such Expansion Space shall be equal to ninety-five percent (95%) of the fair
market rental for the Expansion Space if the Expansion Space is located at 0000
Xx Xxxxx Xxxxx or in the Building and ninety-eight percent (98%) of the fair
market rental for the Expansion Space if the Expansion Space is located at 0000
Xx Xxxxx Xxxxx. For purposes of this Lease, fair market rental ("Fair Market
Rental") shall be the market rental for such Expansion Space, taking into
account the quality of such Expansion Space, the lease term, the quality and
nature of existing tenant improvements, the cap on the tenant improvement set
forth in subsection (b) below, the financial strength of Tenant, the square
footage of such Expansion Space, the other amenities in the Project and any
other Business Terms (as defined in subsection b below).
b. Concurrently with the delivery of the Notice of
Intention to Expand, Tenant shall deliver to Landlord, Tenant's good faith
determination of Tenant's calculation of the Fair Market Rental ("Fair Market
Rental Calculation") and Tenant's other proposed business terms for the lease of
the Expansion Space, including, but not limited to, the lease term (which shall
not be less than eighteen (18) months), the desired tenant improvement allowance
(which shall not be greater than Five Dollars ($5.00) per rentable square foot
except on the East Wing, in the event that the area of the Premises is reduced
pursuant to the terms of Section 2.5 of this Lease, which shall not be greater
than Ten Dollars ($10.00) per rentable square foot), the proposed use of such
Expansion Space (which use shall be consistent with the Permitted Uses or
otherwise consistent with the Project), or any limitation or cap on Tenant's
obligation to pay Tenant's share of common area maintenance or other common
charges applicable to the Project (collectively, "Business Terms"). Such Fair
Market Rental Calculation shall include a narrative explanation of the reasons
justifying Tenant's determination, information regarding rental rates paid at
other comparable projects in the vicinity of the Project and any other
information reasonably requested by Landlord. Landlord shall have the right, in
its reasonable discretion, to accept or reject Tenant's calculation of Fair
Market Rental or the proposed Business Terms. Landlord shall deliver notice of
acceptance or rejection within five (5) Business Days of receipt of Tenant's
calculation of the Fair Market Rental ("Landlord's Notice"). If Landlord rejects
Tenant's calculation of Fair Market Rental or the other proposed Business Terms,
Landlord and Tenant shall meet and negotiate in good faith to attempt to reach
agreement on the Fair Market Rental and the Business Terms. If Landlord and
Tenant are unable to reach agreement within ten (10) days of the delivery of
Landlord's Notice ("Negotiation
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Period"), (a) in the case such Expansion Space is less than one thousand five
hundred (1,500) rentable square feet, Tenant's Expansion Option for such
Expansion Option shall expire and be of no further force and effect until the
expiration of any future lease for such Expansion Space but Tenant shall retain
its Right of First Refusal with respect to such Expansion Space or (b) in the
case such Expansion Space is one thousand five hundred (1,500) or more rentable
square feet, Tenant may elect, by written notice to Landlord within one (1)
Business Day of the expiration of the Negotiation Period, to elect to institute
the arbitration procedure set forth in Subsection (c) below. In the event Tenant
fails to give such notice, Tenant shall be deemed to waive its rights to
institute the arbitration procedure and the Option to Expand for such Expansion
Space shall expire and be of no further force and effect until the expiration of
any future lease for such Expansion Space but Tenant shall retain its Right of
First Refusal with respect to such Expansion Space.
c. Within five (5) days after delivery by Tenant of its
notice to institute the arbitration procedure, Landlord and Tenant shall meet
and appoint a mutually acceptable appraiser to determine the Business Terms and
Fair Market Rental based upon the Business Terms, taking into account the
quality of such Expansion Space, the quality and nature of existing tenant
improvements, the financial strength of Tenant, the square footage of such
Expansion Space and the other amenities in the Project. The appraiser shall be
an appraiser with at least five (5) years experience in appraising similar
projects in San Diego County and an employee or principal of either Xxxxxx,
Xxxxxxx & Xxxxxxxx, Inc. (San Diego office) or X.X. Xxxxx Real Estate, Inc. (San
Diego office). If Landlord and Tenant are unable to select a mutually agreeable
appraiser from either of such companies within such five (5) day period, the
President (or officer of similar stature) of Xxxxxx, Xxxxxxx & Xxxxxxxx, Inc.
(San Diego office) shall choose an appraiser from such company who meets the
above experience requirement and such appraiser appointed shall be the appraiser
for purposes of this subsection (c). If Xxxxxx, Xxxxxxx & Xxxxxxxx, Inc. (San
Diego office) is dissolved or not otherwise in business in San Diego County at
the time the appraisal procedure is implemented, the President (or officer of
similar stature) of X.X. Xxxxx Real Estate, Inc. (San Diego office) shall select
an appraiser from such company. The appraiser shall not have any financial or
personal interest in the result of the appraisal and shall disclose any
circumstances likely to create a presumption of bias or prevent a prompt meeting
with the parties. After selection or appointment of the appraiser, Landlord and
Tenant shall submit information regarding the proposed Business Terms and Fair
Market Rental to the appraiser. To the extent that the parties are able to
stipulate to any or all of the Business Terms, such stipulation shall also be
submitted to the appraiser, otherwise no evidence of negotiations between the
parties shall be submitted to the appraiser. Within fifteen (15) days after
submission of information by Landlord and Tenant to the appraiser, the appraiser
shall determine any remaining Business Terms and the Fair Market Rental for the
Expansion Space. The fees for the arbitrator shall be paid by the party whose
calculation of Fair Market Rental (given the Business Terms) varied the most
from the Fair Market Rental as determined by the arbitrator.
2.6.3 ABSENCE OF DEFAULT. Notwithstanding the foregoing, if
Tenant is in default under this Lease Term, Tenant may not exercise the Option
to Expand or the Right of First Refusal. In addition to the foregoing, all
rights of Tenant to the Option to Expand or the Right of First Refusal shall
terminate and be of no further force and effect, even after Tenant's due and
timely exercise thereof, if, after such exercise, but prior to the commencement
date of the lease for the applicable Expansion Space: (a) Tenant fails more than
three (3) times during the Lease Term to pay to Landlord a monetary obligation
of Tenant for a period of ten (10) days after such obligation has become due;
(b) Tenant fails to cure a material nonmonetary default in a timely fashion
after receiving notice with respect thereto from Landlord as set forth in
Section 16.2.5; or (c) Landlord gives to Tenant three (3) or more notices of
default after defaults by Tenant, whether or not such defaults are ultimately
cured. Landlord's waiver of its right to terminate this Lease due to Tenant's
default in any instance shall not be deemed a waiver of the foregoing conditions
precedent and conditions subsequent to the exercise of the Option to Expand and
Right of First Refusal.
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2.6.4 NEW LEASE OR AMENDMENT TO LEASE. Tenant shall, within
five (5) Business Days after delivery to Tenant, execute a new lease upon the
applicable terms and conditions for any Expansion Space located in the building
at 0000 Xx Xxxxx Court ("New Lease") (except to the extent that Landlord and
Tenant have not previously negotiated the form of and executed a lease for the
building at 0000 Xx Xxxxx Court in which event Tenant shall execute within ten
(10) Business Days) or an amendment to this Lease for any Expansion Space
located in the building located at 0000 Xx Xxxxx Court or in the Building upon
the applicable terms and conditions and only including the Business Terms in
this Lease for the Expansion Space to the extent determined as set forth in
Section 2.6.2 ("Amendment to Lease").
2.6.5 OPTION TO EXPAND AND RIGHT OF FIRST REFUSAL PERSONAL.
The Option to Expand and Right of First Refusal granted to Lessee in this Lease
are personal to the original Lessee and may be exercised only by the original
Lessee while occupying the Premises, and may not be exercised or be assigned,
voluntarily or involuntarily, by or to any person or entity. The Option to
Expand and Right of First Refusal herein granted to Lessee are not assignable
separate and apart from this Lease, nor may the Option to Expand or Right of
First Refusal be separated from the Lease in any manner, either by reservation
or otherwise.
ARTICLE 3
LEASE TERM
3.1 LEASE TERM. The term of this Lease ("Lease Term") shall be
for the period of time specified in the Basic Terms, but shall be extended to
include any fraction of a calendar month between the commencement of the Lease
Term and the first day of the first full calendar month thereof. Notwithstanding
the Lease Term, this Lease is a binding contract between Landlord and Tenant
from and after the date of full execution and delivery hereof by both parties,
enforceable in accordance with its terms.
3.2 COMMENCEMENT DATE; CONDITION PRECEDENT TO EFFECTIVENESS. The
commencement date of the Lease Term ("Commencement Date") shall be the later to
occur of the Substantial Completion of the First Phase of the West Wing (as
defined in the Work Letter) or April 15, 1995. The date of Substantial
Completion of the East Wing or the Second Phase of the West Wing shall not in
any way affect the Commencement Date of this Lease and the expiration date for
the lease of the East Wing and Second Phase of the West Wing shall be the same
date as the expiration date for the lease of the First Phase of the West Wing.
The parties agree that this Lease shall not be effective unless and until
Landlord acquires the Project pursuant to the terms and conditions of that
certain Purchase and Sale Agreement dated October 26, 1994 by and between
Metropolitan Life Insurance Company, as Seller, and NTN Communications, as
Buyer, as amended from time to time. In the event Landlord has not acquired the
Project on or before January 6, 1995, this Lease shall terminate and be of no
further force and effect.
3.3 DELAY IN COMMENCEMENT. If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant by the Estimated
Commencement Date, this Lease shall not be void or voidable, nor shall Landlord
be liable to Tenant for any loss or damage resulting therefrom provided,
however, that in the event that the existing tenant in the West Wing, Greenfield
Environmental Systems, Inc. ("Greenfield"), does not vacate the West Wing on or
before May 31, 1995, Landlord shall give written notice thereof to Tenant.
During the two (2) months after delivery of such notice, Tenant can elect, by
written notice to Landlord, to terminate this Lease if Greenfield has not
abandoned the West Wing as of the date of such notice and neither party shall
have any further
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obligations hereunder or be liable for any loss or damage resulting from such
termination. If Greenfield has not abandoned the West Wing on or before July 31,
1995, this Lease shall automatically terminate and neither party shall have any
further obligations hereunder or be liable for any loss or damages resulting
from such termination. The parties also acknowledge and agree that any delay by
Greenfield in abandoning the West Wing on or before May 31, 1995 will result in
similar delays in Landlord's ability to deliver the West Wing and the parties
ability to meet certain of the Tenant Improvement deadlines set forth herein.
Landlord agrees to use commercially reasonable efforts to prosecute an unlawful
detainer action against Greenfield in the event Greenfield does not abandon the
space occupied by Greenfield at the expiration of Greenfield's lease. In
addition to the above, Tenant may terminate this Lease on or before fifteen (15)
days after the Latest Delivery Date (as defined below) by written notice thereof
to Landlord in the event Landlord is unable to deliver possession of the West
Wing after Substantial Completion thereof (as defined in the Work Letter) on or
before August 1, 1995, as such date shall be extended for the period of any
Tenant Delays (as defined in the Work Letter) or Force Majeure ("Latest Delivery
Date"). Furthermore, the parties recognize that any delay in the Commencement
Date will result in the adjustment of certain dates in this Lease that are
dependent upon or tied to the Commencement Date. Upon delivery of possession of
the Premises to Tenant, Tenant shall, within five (5) days of request therefor
by Landlord, execute an acceptance letter ("Acceptance Letter") in substantially
the form of the Acceptance Letter attached hereto as Exhibit "D"; provided,
however, that the failure of Tenant to execute such Acceptance Letter shall not
affect any obligation of Tenant hereunder or Landlord's determination of the
Commencement Date. If the Tenant fails to execute and deliver such Acceptance
Letter in the form proposed by Landlord, then Landlord and any prospective
purchaser or encumbrancer may conclusively presume and rely upon the following
facts: (i) that the Premises were in an acceptable condition and were delivered
in compliance with all requirements of the Work Letter and (ii) the Commencement
Date is the date specified in the Acceptance Letter proposed by Landlord. In
addition to the above, the parties recognize and acknowledge that the Premises
are comprised of the East Wing and the West Wing and that possession to the East
Wing will be delivered to Tenant subsequent to the delivery of the West Wing.
During the period prior to Substantial Completion of the East Wing, the Rent
associated with the East Wing, including the Base Monthly Rent and Tenant's
Proportional Share, shall be abated and waived.
3.4 EARLY OCCUPANCY. Landlord shall notify Tenant of the
anticipated Commencement Date at least twenty (20) days but not more than forty
(40) days prior to the Commencement Date. Tenant shall have the right, but not
the obligation, to enter the Premises, from and after the date which is fifteen
(15) days prior to the anticipated Commencement Date set forth in the Landlord's
notice for the purpose of installing furniture, fixtures and special
improvements on the terms and conditions contained in the Work Letter; provided
however, Tenant shall not unreasonably interfere with Landlord's construction
and installation of Tenant Improvements. If Tenant enters or occupies the
Premises prior to the Commencement Date solely for the purpose of preparing the
Premises for the conduct of business thereon and not for the purposes of
conducting business thereon, Tenant's entry and/or occupancy of the Premises
shall be subject to all of the provisions of this Lease and the Work Letter with
the exception of the payment of Base Annual Rent and Additional Rent, which
obligations shall commence as of the Commencement Date. Tenant shall not be
charged for electrical consumption during any period prior to the Commencement
Date. If requested by Landlord, Tenant shall execute a hold harmless agreement
in a form prepared by Landlord. Early occupancy of the Premises shall not
advance the expiration date of this Lease.
3.5 OPTION TO EXTEND. Landlord hereby grants to Tenant two (2)
options (individually, an "Extension Option") to extend the term of this Lease
for one (1) period of two (2) years each (individually, an "Extension Term").
Tenant shall be required to give written notice of the exercise of each
Extension Option ("Notice of Intention to Extend") to Landlord not later than
nine (9) months eighteen (18) days prior to the expiration date of the Lease,
or, if applicable, prior to the expiration of the then effective Extension Term.
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3.5.1 In the event Tenant elects to exercise an Extension
Option, Tenant shall be subject to all the terms and conditions of this Lease
during the term of the Extension Term; provided, however, that Base Annual Rent
for the first year of each Extension Term shall be equal to ninety-five percent
(95%) of the fair market rental for a two (2) year lease. For purposes of this
Lease, fair market rental shall be the market rental for the Premises, taking
into account the quality of space leased to the Tenant, the length of the
Extension Term, the quality of the existing Tenant Improvements, the financial
strength of Tenant, the square footage of the Premises, the other amenities in
the Project and the other terms of this Lease ("Fair Market Rental").
3.5.2 Concurrently with the delivery of the Notice of
Intention to Extend, Tenant shall deliver to Landlord, Tenant's good faith
determination of Tenant's calculation of the Fair Market Rental ("Fair Market
Rental Calculation") based upon this Lease and the terms, covenants, and rights
provided for in the Lease. Such Fair Market Rental Calculation shall include a
narrative explanation of the reasons justifying Tenant's determination,
information regarding rental rates paid at other comparable projects in the
vicinity of the Project and any other information requested by Landlord.
3.5.3 Landlord shall have the right, exercised in good
faith, to accept or reject Tenant's calculation of Fair Market Rental, provided,
however, that Landlord may only reject Tenant's calculation if Landlord
reasonably determines that Tenant's calculation of Fair Market Rental does not
reflect at least ninety-five percent (95%) of the Fair Market Rental for the
Premises. Landlord shall deliver notice of acceptance or rejection within five
(5) Business Days of receipt of Tenant's calculation of the Fair Market Rental
("Landlord's Notice"). If Landlord delivers Landlord's Notice, Landlord and
Tenant shall meet to attempt to reach agreement on the Fair Market Rental. If
Landlord and Tenant are unable to reach agreement within ten (10) days of the
delivery of Landlord's Notice, Tenant may elect, by written notice to Landlord
within One (1) Business Day of the expiration of the Negotiation Period, to
elect to institute the arbitration procedure set forth in Subsection (c) below.
In the event Tenant fails to give such notice, Tenant shall be deemed to waive
its rights to institute the arbitration procedure and the Option to Extend shall
expire and be of no further force and effect.
a. Within five (5) days after delivery by Tenant of its
notice to institute the arbitration procedure, Landlord and Tenant shall meet
and appoint a mutually acceptable appraiser to determine the Fair Market Rental,
taking into account the quality of such Expansion Space, the quality and nature
of existing tenant improvements, the financial strength of Tenant, the square
footage of the Premises and the other amenities in the Project. The appraiser
shall be an appraiser with at least five (5) years experience in appraising
similar projects in San Diego County and an employee or principal of either
Xxxxxx, Xxxxxxx & Xxxxxxxx, Inc. (San Diego office) or X.X. Xxxxx Real Estate,
Inc. (San Diego office). If Landlord and Tenant are unable to select a mutually
agreeable appraiser from either of such companies within such five (5) day
period, the President (or officer of similar stature) of Xxxxxx, Xxxxxxx &
Xxxxxxxx, Inc. (San Diego office) shall choose an appraiser from such company
who meets the above experience requirement and such appraiser appointed shall be
the appraiser for purposes of this subsection (c). If Xxxxxx, Xxxxxxx &
Xxxxxxxx, Inc. (San Diego office) is dissolved or not otherwise in business in
San Diego County at the time the appraisal procedure is implemented, the
President (or officer of similar stature) of X.X. Xxxxx Real Estate, Inc. (San
Diego office) shall select an appraiser from such company. The appraiser shall
not have any financial or personal interest in the result of the appraisal and
shall disclose any circumstances likely to create a presumption of bias or
prevent a prompt meeting with the parties. After selection or appointment of the
appraiser, Landlord and Tenant shall submit information regarding the Fair
Market Rental to the appraiser. No evidence of negotiations between the parties
shall be submitted to the appraiser. Within fifteen (15) days after submission
of information by Landlord and Tenant to the appraiser, the appraiser shall
determine the Fair Market Rental for the Premises. The fees for the arbitrator
shall be paid by the party whose calculation of Fair Market Rental varied the
most from the Fair Market Rental, as determined by the arbitrator.
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3.5.4 In the event Landlord and Tenant reach agreement on
the Fair Market Rental, Landlord and Tenant shall execute an amendment to this
Lease within five (5) days thereafter extending the Lease Term for the period of
the Extension Term at ninety-five percent (95%) of the Fair Market Rental.
3.5.5 Notwithstanding the foregoing, if Tenant is in default
under this Lease Term, Tenant may not exercise the Extension Option. In addition
to the foregoing, all rights of Tenant to the Extension Option shall terminate
and be of no further force and effect, even after Tenant's due and timely
exercise thereof, if, after such exercise, but prior to the commencement date of
the Extension Term: (a) Tenant fails more than three (3) times during the Lease
Term to pay to Landlord a monetary obligation of Tenant for a period of ten (10)
days after such obligation has become due; (b) Tenant fails to cure a material
nonmonetary default in a timely fashion after receiving notice with respect
thereto from Landlord as set forth in Section 16.2.5; or (c) Landlord gives to
Tenant three (3) or more notices of default after defaults by Tenant, whether or
not such defaults are ultimately cured. Landlord's waiver of its right to
terminate this Lease due to Tenant's default in any instance shall not be deemed
a waiver of the foregoing conditions precedent and conditions subsequent to the
exercise of the Extension Option.
ARTICLE 4
RENTAL AND OTHER PAYMENTS
4.1 BASE MONTHLY RENT. Subject to Sections 2.5 and 3.3 hereof,
from and after the Commencement Date, Tenant shall pay to Landlord in advance,
on the first day of each and every calendar month during the Lease Term, the
Base Monthly Rent.
Subject to Sections 2.5 and 3.3 hereof, commencing as of the
first (1st) anniversary of the Commencement Date and continuing on every
subsequent anniversary of the Commencement Date, Base Monthly Rent shall be
increased in accordance with the following schedule:
Lease Year Base Monthly Rent Base Annual Rent
---------- ----------------- ----------------
2 $34,772.50 $417,270.00
3 $37,256.25 $447,075.00
4 $38,249.75 $458,997.00
5 $39,243.25 $470,919.00
The Base Monthly Rent for any fraction of a month at the
beginning of the Lease Term will be prorated and paid within three (3) days of
the Commencement Date. Payment of the Base Monthly Rent, Additional Rent and all
other charges deemed to be Rent under this Lease shall be without prior notice,
deduction, offset or demand, shall be in lawful money of the United States of
America and shall be made at the address set forth for Landlord in the Basic
Terms or at such other place as Landlord may direct. Base Monthly Rent payable
for any period of less than one (1) month shall be prorated based upon a thirty
(30) day month. Tenant shall pay to Landlord as prepaid Base Monthly Rent, upon
Landlord's acquisition of the Project (in addition to the security deposit
required), the amount specified in the Basic Terms, which sum shall be applied
to the first calendar month of the Lease Term for which payment of Base Monthly
Rent is due. Notwithstanding the provisions of this Section 4.1, (a) in the
event the area of the Premises has not been reduced pursuant to the terms of
Section 2.5 of this Lease, Base Monthly Rent shall be waived for the East Wing
until the later to occur of (i) Substantial Completion of the East Wing
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or (ii) December 1, 1995 and (b) Base Monthly Rate shall be waived for the
Second Phase of the West Wing until the later to occur of (i) Substantial
Completion of the Second Phase or (ii) July 1, 1995.
4.2 INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by Tenant
to Landlord which is not paid when due shall bear interest from the due date at
the Lease Interest Rate but if such Lease Interest Rate exceeds the maximum
interest rate permitted by law, such Lease Interest Rate shall be reduced to the
highest rate allowed by law under the circumstances. Interest shall not be
payable on late charges to be paid by Tenant under this Lease. The payment of
interest on such amounts shall not excuse or cure any default by Tenant under
this Lease and the parties agree that such amounts are a reasonable estimate of
the costs Landlord will incur as a result of its loss of the use of its money
due to such late payment by Tenant.
4.3 LATE CHARGES. Tenant's failure to pay any Rent promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord under any mortgage or trust deed encumbering the Premises.
Therefore, if Landlord does not receive any Rent payment within ten (10) days
after it becomes due, Tenant shall pay Landlord a late charge in the amount
specified in Item 9 of the Basic Terms. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of such late payment. Acceptance of such late charge by Landlord shall,
in no event, constitute a waiver of Tenant's default with respect to such
overdue amount. The late charge shall be deemed Rent and the rights to require
it shall be in addition to all of Landlord's rights and remedies hereunder or at
law and shall not be construed as liquidated damages or as limiting Landlord's
remedies in any manner.
4.4 SECURITY DEPOSIT.
4.4.1 DEPOSIT OF FUNDS. Upon Landlord's acquisition of the
Project as set in Section 3.2, Tenant shall deposit with Landlord a cash
security deposit ("Security Deposit") in the amount set forth in Item 11 of the
Basic Terms. Landlord may, but shall not be obligated to, apply all or part of
the Security Deposit to any unpaid Rent or other charges due from Tenant or to
cure any other defaults of Tenant. If Landlord uses any part of the Security
Deposit, Tenant shall restore the Security Deposit to its full amount within ten
(10) days after Landlord delivers a written request to Tenant. Tenant's failure
to do so shall be a default under this Lease. No interest shall be paid on the
Security Deposit. Landlord shall not be required to keep the Security Deposit
separate from its other accounts and no trust relationship is created with
respect to the Security Deposit.
4.4.2 TRANSFER OF SECURITY DEPOSIT. Landlord may deliver the
funds deposited hereunder by Tenant to a purchaser of Landlord's interest in the
Premises, in the event that such interest be sold; and thereupon Landlord shall
be discharged from any further liability with respect to such Security Deposit,
except as may otherwise be agreed upon in writing.
ARTICLE 5
OTHER CHARGES PAYABLE BY TENANT
5.1 ADDITIONAL RENT AND RENT. All Additional Rent and Rent under
this Lease, other than Base Monthly Rent, shall, unless this Lease expressly
provides otherwise, be paid with the next installment of Base Monthly Rent
falling due.
5.2 PROPERTY TAXES. Tenant agrees to pay to Landlord, as
Additional Rent, Tenant's Proportional Share of all Property Taxes. Tenant shall
pay said portion of Property Taxes in accordance
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with the requirements of Section 5.5 of this Lease. All Property Taxes for the
year in which this Lease commences shall be prorated by Landlord.
5.2.1 TENANT RIGHT TO CONTEST TAXES. Tenant may attempt to
have the assessed valuation of the Project or Building reduced or may initiate
proceedings to reasonably contest the Property Taxes. Landlord agrees to
cooperate with Tenant's reasonable requests in any proceedings brought by
Tenant. However, Tenant shall pay all costs of the proceedings, including any
reasonable costs or fees incurred by Landlord, and shall pay Tenant's
Proportional Share of any Property Taxes prior to delinquency which are the
subject of the proceedings. Landlord shall provide Tenant with an estimate of
such costs or fees to be incurred by Landlord at the time such proceeding is
commenced. Any increase to the Property Taxes which results from Tenant's
contest shall be paid by Tenant and Landlord shall have no responsibility for
the payment of such an increase.
5.2.2 CONSULTATION REGARDING TAXES. Upon the reasonable
request of Tenant, Landlord shall consult with Tenant or Tenant's tax advisor(s)
from time to time regarding the assessment or payment of Property Taxes.
5.2.3 LANDLORD RIGHT TO CONTEST TAXES; TAX CONSULTING
SERVICE. Tenant agrees to cooperate with Landlord's reasonable requests in any
proceedings brought by Landlord to contest the Property Taxes. Notwithstanding
any other provision in this Lease, Tenant shall not be liable for the
proportionate share of any costs incurred by Landlord for the use of a tax
consulting service when such costs are pursuant to a contingency or utility or
similar fee, unless Landlord obtains Tenant's written consent, which shall not
be unreasonably withheld, prior to entering into such an arrangement or
incurring such costs. Such costs, however, shall be deducted from any savings
obtained by the tax consulting service prior to including any such savings in
the calculation of Property Taxes.
5.2.4 LIABILITY FOR PENALTIES/INTEREST. Neither party shall
be liable for any penalties or interest which become due as a result of the
other party's failure to timely pay, file or otherwise comply with applicable
law regarding the payment of taxes.
5.3 INSURANCE CHARGES. Tenant agrees to pay to Landlord, as
Additional Rent, Tenant's Proportional Share of all premiums for liability,
property damage, fire and other types of casualty insurance maintained by
Landlord on the Project Common Area and all improvements within the Project,
Building and the Premises and any other insurance obtained by Landlord under
this Lease ("Project Insurance Charges").
5.4 COMMON AREA MAINTENANCE CHARGES.
5.4.1 TENANT TO BEAR PROPORTIONAL SHARE OF COMMON AREA
MAINTENANCE CHARGES. Tenant agrees to pay to Landlord, as further Additional
Rent, its Proportional Share of the Common Area Maintenance Charges.
5.4.2 LANDLORD'S COMMON AREA MAINTENANCE CHARGES. For the
purpose of this Lease the "Common Area Maintenance Charges" means the total cost
and expense incurred by Landlord in operating, maintaining, managing and
repairing the Project Common Area, including, without limitation, costs and
expenses for the following: gardening and landscaping; maintenance and repair of
the roof; pest extermination services; utilities, water and sewer charges (other
than with respect to utilities separately metered and paid directly by Tenant or
other tenants in the Project); maintenance of parking areas; fees, charges and
other costs (including, without limitation, consulting, accounting and legal
fees, but excluding legal and accounting fees directly attributable to other
tenants) reasonably necessary to manage the Building and Project (including a
fee to Landlord for management of the Project and Project Common
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Areas not to exceed four percent (4%) of the aggregate basic monthly rent
collected from tenants in the Project); costs of compliance with any and all
governmental laws, ordinances, and regulations applicable to the Building and
Project which were not imposed as of the Commencement Date; installation,
maintenance and replacement of signs identifying the Building and Project (other
than Tenant's signs); all personal property taxes levied on or attributable to
personal property used in connection with the Building and Project Common Area;
rental or lease payments paid by Landlord for rented or leased personal property
used in the operation or maintenance of the Building and Project Common Area;
fees for required licenses and permits; repairing, resurfacing, repaving,
maintaining, painting, lighting, cleaning, refuse removal, security, and similar
items; reserves; a fee to Landlord not to exceed ten percent (10%) of the total
of all other Common Area Maintenance Charges (exclusive of the 4% management
fee) for Landlord's supervision and administration of the Building and Project;
the amortized costs (as reasonably determined by Landlord over the appropriate
useful life) to repair, maintain or install capital improvements to comply with
governmental regulations or undertaken in good faith with a reasonable
expectation of reducing operating costs; and costs to repair or maintain other
buildings within the Building and Project leased to other tenants. Landlord may
cause any or all of such services to be provided by an independent contractor.
For purposes of this Lease, "Common Area Maintenance Charges" shall not include
items or services for which Tenant or any other tenant of the Building or
Project reimburses Landlord (other than its or their pro rata share of Common
Area Maintenance Charges) or which Landlord provides for the exclusive use of
one or more tenants (other than Tenant) without reimbursement. Landlord shall
reasonably allocate general Project expenses to the entire Project and building
specific expenses to each building in the Project. In addition, no deferred
maintenance charges shall be included in Common Area Maintenance Charges.
5.4.3 CHARGES UNDER DECLARATIONS. Tenant acknowledges that
certain aspects of the maintenance and repair of Project Common Area and payment
of Property Taxes may be controlled by the Declarations and Tenant agrees that
charges imposed for such items under the Declarations shall be included in
Common Area Maintenance Charges and Property Taxes for purposes of this Lease.
Tenant agrees to abide by the rules and requirements imposed under the
Declarations. Tenant shall also pay to Landlord as Additional Rent any special
assessments imposed under the Declarations due to Tenant's use or activities.
Tenant shall pay to Landlord all amounts under this Section at least ten (10)
days before such amounts are due under the Declarations.
5.5 PAYMENT OF COMMON AREA MAINTENANCE CHARGES, PROPERTY TAXES
AND PROJECT INSURANCE CHARGES. Tenant shall pay Tenant's annual Proportional
Share of all estimated Common Area Maintenance Charges, Property Taxes and
Project Insurance Charges, in advance, in monthly installments on the first day
of each month during the Lease Term (prorated for any fractional month).
Landlord shall provide to Tenant a written estimate of the Common Area
Maintenance Charges, Property Taxes and Project Insurance Charges, approximately
thirty (30) days prior to the commencement of each calendar year (which amount
may be re-estimated from time to time by Landlord during the calendar year) and
an estimate of Tenant's share thereof for the ensuing year or portion thereof.
Tenant shall pay to Landlord, monthly in advance, one-twelfth (1/12th) of the
estimate of each of such charges as Additional Rent, provided, however, that if
Tenant is not in default under this Lease, any installment of Property Taxes
shall be collected from Tenant no earlier than thirty (30) days prior to the
applicable due date for such installment of Property Taxes. Similarly, for any
partial calendar year at the commencement or the end of the Lease Term, Tenant
shall pay the Common Area Maintenance Charges, Property Taxes and Project
Insurance Charges, in equal monthly installments. If, for any reason, Landlord
is unable to provide to Tenant the estimate of any of such charges at least
thirty (30) days prior to the commencement of any calendar year during the Lease
Term, then Tenant shall continue to pay monthly the same amount of any of such
charges as was applicable for the most recent previous month ("Previous
Charges") until thirty (30) days after receipt of such estimate at which time
Tenant shall commence paying as of the first day of the
first calendar month after delivery of such new estimate, the new estimated
amounts. Tenant shall also
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pay, together with its next installment, the difference between the Previous
Charges and the amount of the new estimated Common Area Maintenance Charges,
Property Taxes and Project Insurance Charges for such preceding months. Any
delay by Landlord in delivering the new estimated charges shall not be deemed a
waiver of any such Common Area Maintenance Charges, Property Taxes and Project
Insurance Charges.
5.5.1 YEAR-END ADJUSTMENTS. Within one hundred twenty (120)
days after the end of each calendar year during the Lease Term, Landlord shall
provide Tenant with a written statement showing in reasonable detail the actual
Common Area Maintenance Charges, Property Taxes and Project Insurance Charges
incurred by Landlord for such year with a written statement of Tenant's
Proportional Share of each of such charges based thereon. Landlord and Tenant
shall, within thirty (30) days thereafter, make any payment or credit necessary
to bring Tenant's previously estimated Common Area Maintenance Charges, Property
Taxes and Project Insurance Charges, into conformance with the actual Common
Area Maintenance Charges, Property Taxes and Project Insurance Charges incurred
by Landlord, as reasonably determined by Landlord pursuant to this Lease. Any
amount due Tenant as a credit shall be credited against installments next coming
due from Tenant under the Lease and any amounts owed to Landlord shall be paid
with the next installment of Base Monthly Rent; provided, however, that if the
Lease Term has terminated and no other amounts are then owing to Landlord from
Tenant pursuant to this Lease, any such amount due Tenant or Landlord shall be
remitted to the party owed such amount within thirty (30) days of the date
Landlord calculates and notifies Tenant of the amount of such adjustment.
5.5.2 DISPUTES REGARDING CHARGES. In the event of any
dispute as to the amount of Property Taxes, Project Insurance Charges and Common
Area Maintenance Charges for any Lease Year (collectively, "Charges"), Tenant
shall have the right, after reasonable notice and at reasonable times (and in
any event no more than once in any Lease Year), to inspect at Landlord's office
Landlord's records which pertain to the amounts of any such Charges. If after
such inspection, Tenant still disputes the amount of the Charges, and such
dispute relates to the calculation of the amount of the Charge, a certification
as to the proper amount shall be made, at Tenant's expense, by an independent
certified public accountant reasonably acceptable to both Landlord and Tenant,
which certification shall be final, conclusive and binding as to the calculation
of the amount of such item. If such certification shows that Landlord's
calculation of the aggregate Charges was in error to the detriment of Tenant by
more than five percent (5%), Landlord shall pay the cost of the independent
certified public accountant. Disputes regarding any issue other than the amount
of the Charges shall not be decided by the independent certified public
accountant.
5.5.3 LIMITATION ON INCREASE IN CHARGES. Notwithstanding any
provision in this Lease, with respect to calendar years 1996 and beyond Tenant
shall not be liable for Tenant's annual Proportional Share of the aggregate of
Common Area Maintenance Charges, Property Taxes and Project Insurance Charges in
excess of one hundred four percent (104%) of Tenant's annual Proportional Share
of the aggregate of such items for the previous calendar year. For purposes of
this limitation, increases in Property Taxes due to a reassessment of the
Project or any portion thereof pursuant to a change of ownership of the Project
or any portion thereof shall not be included in the calculation of such
limitation. Tenant acknowledges that the limitation contained in this Section
5.5.3 shall not be applicable to any portion of the Expansion Space except to
the extent contained in any Offer (with respect to the Right of First Refusal)
or included as part of the Business Terms (with respect to the Option to
Expand).
5.6 PERSONAL PROPERTY TAXES.
5.6.1 PAYMENT PRIOR TO DELINQUENCY. Tenant shall pay prior
to delinquency all taxes charged against trade fixtures, furnishings, equipment
or any other personal property belonging to Tenant. Tenant shall use its best
efforts to have such personal property taxed separately from the
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Premises. If any of Tenant's personal property is taxed with the Premises or
Project, Tenant shall pay Landlord the taxes for the personal property within
fifteen (15) days after Tenant receives a written statement from Landlord for
such personal property taxes.
5.6.2 CONTEST OF PERSONAL PROPERTY TAXES. If any such taxes
on Tenant's personal property are levied against Landlord or Landlord's
property, or if the assessed value of the Premises is increased by the inclusion
therein of a value placed upon such personal property or trade fixtures of
Tenant, then Landlord shall have the right to pay the taxes based upon such
increased assessments, regardless of the validity thereof and any amounts paid
by Landlord allocable to Tenant's personal property or trade fixtures shall be
reimbursed to Landlord as Additional Rent, within ten (10) days after delivery
of a statement therefor from Landlord. Tenant may request that Landlord protest
the assessment of such personal property taxes, which request Landlord may grant
or deny in Landlord's sole discretion. If Landlord shall agree to protest such
taxes, then Tenant shall, upon demand, repay to Landlord the taxes levied
against Landlord, or the proportion of such taxes resulting from such increase
in the assessment, together with the costs incurred by Landlord as a result of
any contest of taxes on behalf of Tenant. In any such event, however, Tenant, at
Tenant's sole cost and expense, shall have the right to bring suit in any court
of competent jurisdiction to recover the amount of any such taxes so paid under
protest. Any amount so recovered shall belong to Tenant.
ARTICLE 6
USE OF PROPERTY
6.1 PERMITTED USES. Tenant shall use the Premises only for the
Permitted Uses set forth in Item 10 of the Basic Terms and for no other use or
purpose without the prior written consent of Landlord, which consent may be
withheld in the sole, absolute and/or arbitrary discretion of Landlord.
6.2 MANNER OF USE.
6.2.1 INTERFERENCE WITH USE/NUISANCE. Tenant shall not do or
permit anything to be done in or about the Premises which will in any way
unreasonably obstruct or interfere with or infringe on the rights of other
occupants or customers of the Project, or injure or annoy them, or use or allow
the Premises to be used for any improper, immoral, or objectionable purposes;
nor shall Tenant cause, maintain or permit any nuisance in, on or about the
Premises or commit or suffer to be committed any waste in, on or about the
Premises. Tenant shall keep the Premises, and every part thereof, in a clean
condition, free from any noises, vibrations, music volumes, lighting (including,
without limitation, strobe lighting), speakers, videos, odors or nuisances
reasonably deemed objectionable by Landlord, and shall comply with all health
and police regulations in all respects. Tenant shall not display or sell
merchandise, or place carts, portable signs, devices or any other objects,
outside the defined exterior walls or roof and permanent doorways of the
Premises or in corridors, without the prior written consent of Landlord.
6.2.2 VIOLATION OF LAW/INSURANCE PROVISIONS. Tenant shall
not use or occupy the Premises in violation of any law, ordinance, regulation or
requirement or other directive of any federal, state or local governmental or
quasi-governmental authority having or exercising jurisdiction over the Project.
Tenant shall, at its sole cost and expense, fully comply with all laws,
ordinances, regulations, requirements and other directives of any federal,
local, governmental or quasi-governmental authority having jurisdiction over the
Premises and the Project, including, without limitation, operational and other
requirements imposed upon either owners or operators of any public accommodation
under the Americans with Disabilities Act 42 U.S.C. Section 12101 et. seq.
(subject to Landlord's obligations set forth in Section 10.3), and shall
immediately discontinue any use of the Premises which is declared by any
governmental authority having or exercising jurisdiction thereover to be a
violation of any law, ordinance, regulation or directive.
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If requested by Landlord, Tenant shall provide evidence satisfactory to Landlord
of Tenant's compliance. Tenant shall not do or permit to be done anything which
will (i) increase the premium of any insurance policy covering the Premises or
the Project and/or the property located therein; (ii) cause a cancellation of or
be in conflict with any such insurance policies; or (iii) result in a refusal by
insurance companies in good standing to issue or continue any such insurance in
amounts satisfactory to Landlord. Tenant shall, at Tenant's expense, comply with
all rules, orders, regulations and requirements of insurers and of the American
Insurance Association or any other organization performing a similar function.
Tenant shall promptly, upon demand, reimburse Landlord for any additional
premium charges for such policy or policies caused by reason of Tenant's failure
to comply with the provisions of this Section . Additionally, Tenant agrees at
its sole cost to install any improvements, changes or alterations in the
Premises authorized in writing by Landlord and required by any governmental
authority as a result of Tenant's proposed use of the Premises or its manner of
operation thereunder, and Tenant's failure to perform same shall constitute a
default by Tenant hereunder.
6.2.3 PERMITS. Tenant shall obtain and pay for all permits
required for Tenant's occupancy of the Premises and shall promptly take all
substantial and non-substantial actions necessary to comply with all applicable
statutes, ordinances, rules, regulations, orders and requirements regulating the
use by Tenant of the Premises, including the Occupational Health and Safety Act.
6.3 RULES AND REGULATIONS. Tenant shall comply with the Rules and
Regulations and any reasonable amendments, modifications and/or additions
thereto as may hereafter be adopted and published by Landlord which do not
unreasonably interfere with the Permitted Uses. Landlord shall not be liable to
Tenant for any violation of such Rules and Regulations or the breach in any
provision in any lease by any other tenant or other party however, Landlord
shall use reasonable efforts to enforce the Rules and Regulations. In the event
of any inconsistency between the Rules and Regulations and this Lease, this
Lease shall prevail.
6.4 LANDLORD'S ACCESS. Tenant holds a security clearance from the
United States Government. Landlord and its agents, independent contractors and
designated representatives, may enter the Premises at all reasonable times to
post notices of non-responsibility, to make repairs and/or to show the Premises
to holders of any encumbrances, potential buyers, mortgagees, investors or
tenants or other parties, or for any other purpose Landlord deems reasonably
necessary. Landlord shall give Tenant written notice of such entry at least
twenty-four (24) hours before such entry, except in the case of an emergency, in
which case no prior notice need be given. Tenant shall have the right to escort
any such entrant and to limit Landlord's access to the Premises as Tenant in
good faith determines is beneficial or necessary for national defense purposes.
Any entry to the Premises by Landlord in the event of an emergency shall not,
under any circumstances, be construed or deemed to be a forcible or unlawful
entry onto the Premises or to be an eviction of Tenant from the Premises or any
part thereof. Landlord may place customary "For Lease" signs on the exterior of
the Premises during the last one hundred eighty (180) days of the Lease Term.
6.5 QUIET POSSESSION. If Tenant pays the Rent and complies with
all other terms of this Lease, Tenant may occupy and enjoy the Premises for the
full Lease Term, subject to the provisions of this Lease and to any mortgages or
deeds of trust encumbering the Project. Landlord acknowledges and agrees that
Landlord's obligation to comply with applicable laws with respect to the Project
and Landlord's obligations under this Lease is an integral part of Tenant's
right of quiet enjoyment of the Premises.
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ARTICLE 7
HAZARDOUS MATERIALS
7.1 PROHIBITION OF STORAGE.
a. Tenant shall not cause or permit any Hazardous
Materials to be brought upon, kept, or used in connection with the Premises or
Project by Tenant, its agents, employees, contractors or invitees, in a manner
or for a purpose prohibited by or which reasonably would be expected to result
in liability under any applicable law, regulation, rule or ordinance, including
without limitation, the Hazardous Materials Laws. Tenant shall, at its own
expense, at all times and in all respects comply with all Hazardous Materials
Laws, including, without limitation, any Hazardous Materials Laws relating to
industrial hygiene, environmental protection or the use, analysis, generation,
manufacture, storage, disposal or transportation of any Hazardous Materials.
b. Tenant shall, at its own expense, procure, maintain
in effect and comply with all conditions of any and all permits, licenses and
other governmental and regulatory approvals relating to the presence of
Hazardous Materials within, on, under or about the Premises or required for
Tenant's use of any Hazardous Materials in or about the Premises in conformity
with all applicable Hazardous Materials Laws and prudent industry practices
regarding management of such Hazardous Materials.
c. Upon termination or expiration of the Lease, Tenant
shall, at its own expense, cause all Hazardous Materials placed in or about the
Premises by Tenant or at Tenant's direction to be removed from the Premises and
Project and transported for use, storage or disposal in accordance and
compliance with all applicable Hazardous Materials Laws.
d. Landlord recognizes and agrees that Tenant may use materials in
normal quantities that are applicable to Tenant's permitted use and that such
use by Tenant shall not be deemed a violation of this Section , so long as the
levels are not in violation of any Hazardous Materials Laws. Landlord
acknowledges that it is not the intent of this Article 7 to prohibit Tenant
from operating its business as described in Section 6.1 above. Tenant may
operate its business according to the custom of the industry so long as the use
or presence of Hazardous Materials is strictly and properly monitored according
to all applicable governmental requirements.
7.2 DISCLOSURE AND WARNING OBLIGATIONS. Tenant shall comply with
all laws, ordinances and regulations in the State where the Premises is located
regarding the disclosure of the presence or danger of Hazardous Materials.
Tenant acknowledges and agrees that all reporting and warning obligations
required under the Hazardous Materials Laws are the sole responsibility of
Tenant, whether or not such Hazardous Materials Laws permit or require Landlord
to provide such reporting or warnings, and Tenant shall be solely responsible
for complying with Hazardous Materials Laws regarding the disclosure of, the
presence or danger of Hazardous Materials, including, without limitation, all
notices or other requirements under California Health and Safety Code Section
25915 et. seq., and 25249.5 et. seq. and California Code of Regulations Section
12000 et. seq.
7.3 NOTICE OF ACTIONS; HAZARDOUS MATERIALS LIST. Tenant shall
immediately notify Landlord in writing of (a) any enforcement, cleanup, removal
or other governmental or regulatory action instituted, completed or threatened
pursuant to any Hazardous Materials Laws; (b) any claim made or threatened by
any person against Landlord, or the Premises, relating to damage, contribution,
cost recovery, compensation, loss or injury resulting from or claimed to result
from any Hazardous Materials; (c) any reports made to any environmental agency
arising out of or in connection with any Hazardous Materials in, on or about the
Premises or with respect to any Hazardous Materials removed from the Premises,
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including, any complaints, notices, warnings, reports or asserted violations in
connection therewith; and (d) any release of a Hazardous Material that Tenant
knows or has reason to believe has or will come to be released or located
within, on, under or about the Premises. Tenant shall also provide to Landlord,
as promptly as possible, and in any event within five (5) Business Days after
Tenant first receives or sends the same, copies of all claims, reports,
complaints, notices, warnings or asserted violations relating in any way to the
Premises or Tenant's use thereof. Upon written request of Landlord (to enable
Landlord to defend itself from any claim or charge related to any Hazardous
Materials Law), Tenant shall promptly deliver to Landlord notices of hazardous
waste manifests reflecting the legal and proper disposal of all such Hazardous
Materials removed or to be removed from the Premises. All such manifests shall
list the Tenant or its agent as a responsible party and in no way shall
attribute responsibility for any such Hazardous Materials to Landlord. As a
material inducement to Landlord to allow Tenant to use Hazardous Materials in
connection with its business, Tenant agrees to deliver to Landlord prior to the
Commencement Date, a list identifying each type of Hazardous Material to be
present on the Premises and setting forth any and all governmental approvals or
permits required in connection with the presence of Hazardous materials on the
Premises ("Hazardous Materials List"). Tenant shall deliver to Landlord an
updated Hazardous Materials List at least once a year and shall also deliver an
updated list before any new Hazardous Materials are brought onto the Premises or
on or before the date Tenant obtains any additional permits or approvals.
7.4 HAZARDOUS MATERIALS INDEMNITIES. Tenant shall indemnify,
defend (by counsel reasonably acceptable to Landlord), protect, and hold
Landlord and each of Landlord's Indemnitees free and harmless from and against
any and all claims, liabilities, penalties, forfeitures, losses and/or expenses,
attorneys' fees, consultant fees and expert fees, judgments, administrative
rulings or orders, fines, costs for death of or injury to any person or damage
to any property whatsoever (including, without limitation, water tables, sewer
systems and atmosphere), arising from, or caused or resulting, in whole or in
part, directly or indirectly, by the release, presence or discharge in, on,
under or about the Premises or Project of any Hazardous Materials caused by or
arising from the activities of Tenant, Tenant's agents, employees, licensees, or
invitees, or from the transportation or disposal of any Hazardous Materials to
or from the Premises or Project by Tenant, Tenant's agents, employees, licensees
or invitees or at Tenant's direction, or by Tenant's failure to comply with any
Hazardous Materials Laws, or from Tenant's failure to provide adequate
disclosures or warnings required by the Hazardous Materials Laws, or from any
breach by Tenant of the obligations in this Article 7 but only to the extent
that Landlord or Landlord's agents, employees or invitees did not materially
contribute to or exacerbate the harm created or caused by such Hazardous
Materials. Tenant's indemnification obligations hereunder shall include, without
limitation, and whether foreseeable or unforeseeable, all costs of any required
or necessary Hazardous Materials management plan, investigation, repairs,
cleanup or detoxification or decontamination of the Premises or Project, and the
presence and implementation of any closure, remedial action or other required
plans in connection therewith, and shall survive the expiration of or early
termination of the Lease Term. Tenant shall further be solely responsible for
and shall indemnify, protect, defend and hold the Landlord, and Landlord's
Indemnitees harmless from and against all claims, costs and liabilities
including actual attorneys' fees and costs, arising out of or in connection with
any removal, remediation, clean up, restoration and materials required hereunder
to return the Premises and any other property of whatever nature to their
condition existing prior to the appearance of the Hazardous Materials.
Notwithstanding the above, Tenant shall not be required to indemnify, defend,
protect and hold Landlord or Landlord's Indemnitees harmless for any Hazardous
Materials which were released or existed on the Premises or Project prior to the
Commencement Date or which did not arise out of or relate to the items set forth
in the first sentence of this Section 7.4. In addition, Landlord shall
indemnify, defend (by counsel reasonably acceptable to Tenant), protect, and
hold Tenant and each of Tenant's Indemnitees free and harmless from and against
any and all claims, liabilities, penalties, forfeitures, losses and/or expenses,
attorneys' fees, consultant fees and expert fees, judgments, administrative
rulings or orders, fines, costs for death of or injury to any
person or damage to any property whatsoever (including, without limitation,
water tables, sewer systems
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and atmosphere), arising from, or caused or resulting, in whole or in part,
directly or indirectly, by the release, presence or discharge in, on, or under
the Premises or Project of any Hazardous Materials which release, presence or
discharge occurred or existed prior to the Commencement Date and only to the
extent Tenant or Tenant's agents, employees or invitees did not materially
contribute to or exacerbate the harm created or caused by such Hazardous
Materials. Landlord's indemnification obligations hereunder shall include,
without limitation, and whether foreseeable or unforeseeable, all costs of any
required or necessary Hazardous Materials management plan, investigation,
repairs, cleanup or detoxification or decontamination of the Premises or
Project, and the presence and implementation of any closure, remedial action or
other required plans in connection therewith, and shall survive the expiration
of or early termination of the Lease Term.
7.5 ASSIGNMENT AND SUBLETTING. If (i) any anticipated use of the
Premises by any proposed assignee or sublessee involves the generation, storage,
use, treatment or disposal of Hazardous Materials in a manner or for a purpose
prohibited by any governmental agency or authority, (ii) the proposed assignee
or sublessee has been required by any prior landlord, lender or governmental
authority to take remedial action in connection with Hazardous Material
contaminating a property if the contamination resulted from such party's action
or use of the property in question or (iii) the proposed assignee or sublessee
is subject to an enforcement order issued by any governmental authority in
connection with the use, disposal or storage of a Hazardous Material, it shall
not be unreasonable for Landlord to withhold its consent to an assignment or
subletting to such proposed assignee or sublessee. Landlord may require a
written statement from the proposed assignee or sublessee attesting to such
matters.
7.6 ENVIRONMENTAL TESTS AND AUDITS. Tenant shall not perform or
cause to be performed any Hazardous Materials surveys, studies, reports or
inspections, relating to the Premises or Project, without obtaining Landlord's
prior written consent. At any time prior to the expiration of the Lease Term, if
Landlord has a reasonable basis to believe that Hazardous Materials are present
in, on or about the Premises in violation of any Hazardous Materials Laws,
Landlord shall have the right to enter upon the Premises in order to conduct
appropriate tests and to deliver to Tenant the results of such tests to
demonstrate that levels of any Hazardous Materials in excess of permissible
levels has occurred as a result of Tenant's use of the Premises. Such testing
shall be at Tenant's expense if Landlord has a reasonable basis for suspecting
and confirms the presence of Hazardous Materials in the soil or surface or
ground water in, on, under, or about the Premises, or the Project which has been
caused by or resulted from the activities of Tenant, its agents, employees,
contractors or invitees.
7.7 LEASE "AS IS". Tenant acknowledges that Tenant has reviewed
the Phase I Assessment provided by Landlord dated December 2, 1994 ("Phase I
Assessment") and is satisfied with the contents and conclusions of the Phase I
Assessment. Tenant, however, in entering into this Lease, is leasing the
Premises "As Is" and, except to the extent of Landlord's indemnification
obligation set forth in Section 7.4 and Landlord's representation and warranty
contained in Section 7.7, is relying solely upon its own inspections,
investigations and analyses of the Premises relating to Hazardous Materials and
further acknowledges Tenant is not relying in any way upon any representations,
statements, warranties, studies, reports, or other information of Landlord or
its representatives, whether oral or written, of any nature whatsoever regarding
any Hazardous Materials.
7.8 LANDLORD'S REPRESENTATION AND WARRANTY. To the best of
Landlord's knowledge, the Premises and Project do not contain Hazardous
Materials in violation of Hazardous Materials Laws except as disclosed in the
Phase I Assessment. For purposes of this Section 7.7, the phrase "to the best of
Landlord's knowledge" means the actual knowledge as of the Lease Date of
Landlord's Manager's management and professional officers actually involved in
the purchase or management of the Project, without the obligation to conduct
investigation or inquiries of any third parties. The parties acknowledge
that Landlord has done no independent investigation of whether Hazardous
Materials are present in, on or
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under the Premises or the Project other than reviewing the Phase I Assessment
prepared by a consultant chosen by Landlord's prospective lender on the Project,
Xxxxx Fargo Bank.
7.9 SURVIVAL. The respective rights and obligations of Landlord
and Tenant under this Article 7 shall survive the expiration or termination of
this Lease. During any period of time employed by Tenant after the termination
of this Lease to complete the removal from the Premises or Project or
remediation of any such Hazardous Materials, Tenant shall continue to pay the
full rental in accordance with this Lease, which rental shall be prorated daily.
7.10 TENANT'S LIMITED RIGHT OF CANCELLATION. In the event that
(a) Hazardous Materials are discovered in, on or under the Premises or Project
which were released, present or discharged on the Premises or Project on or
before the Commencement Date, (b) Tenant did not contribute to or exacerbate the
harm created or caused by such Hazardous Materials, and (c) a qualified
environmental expert verifies by methods or means generally accepted as valid in
the scientific community that the presence of Hazardous Materials presents a
significant risk to the health and safety of persons on the Premises or Project
given the daily exposure and length of exposure of such persons to such
Hazardous Materials or the presence of Hazardous Materials on the Premises or
Project physically denies Tenant of the beneficial uses of the Premises or
Project (e.g., removal or remediation efforts block Tenant's access or
materially encroaches into the Premises), Tenant can give notice thereof to
Landlord. Within thirty (30) days of such notice, Landlord can elect to cure
such condition, or in the event that thirty (30) days are not satisfactory to
cure such condition, Landlord can elect to commence a cure within such thirty
(30) day period and diligently prosecute the cure to completion. In the event,
however, that such condition cannot be cured within a one hundred twenty (120)
day period of Tenant's notice, Tenant may cancel this Lease by written notice to
Landlord given within three (3) months of the expiration of such period. In the
event of any cancellation by Tenant pursuant to this Section 7.10, Landlord
shall not be liable under any circumstances for a loss of, injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits however occurring through or in connection with such condition.
ARTICLE 8
SERVICES AND UTILITIES
8.1 PAYMENT AND ARRANGEMENT. Tenant shall arrange for and pay,
directly to the appropriate supplier, the cost of all natural gas, heat, light,
power, sewer service, telephone, water and other utilities and services supplied
to the Premises. If any services or utilities to the Premises are jointly
metered and such services are not otherwise included as a Common Area
Maintenance Charge, Landlord shall determine, and Tenant shall pay, Tenant's
share of the monthly costs of such utilities and services. Tenant's share shall
be determined by the ratio of the rentable square footage of the Premises as
compared to the rentable square footage of all the property within the Project
subject to the common metering. Landlord shall have the right to xxxx Tenant for
such amounts on an estimated basis, in which case, such estimated statements
shall be delivered to Tenant and Tenant shall pay such amounts to Landlord
concurrently with its payment of Base Monthly Rent. The Tenant shall pay such
charges, as Rent, within ten (10) days of notification of the amount by the
Landlord. Landlord reserves the right to require Tenant to install and maintain,
at Tenant's sole expense, separate meters for any public utility servicing the
Premises for which a separate meter is not presently installed.
8.2 INTERRUPTION OF SERVICES AND UTILITIES. Except as to the
extent specifically provided herein, Landlord shall not be liable for, and
Tenant shall not be entitled to any reduction of, the Base Monthly Rent,
Additional Rent or any other Rent payable hereunder by reason of Landlord's
failure to make available any of the services or utilities described in this
Lease, when such failure or interruption is caused by acts of God, accident,
breakage, repairs, strikes, lockouts or other labor disturbances or disputes,
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necessary repairs, installations, construction and expansion, non-payment of
utility charges due from Tenant, or by reason of governmental regulation,
statute, ordinance, restriction or decree or any other similar cause.
Furthermore, Landlord shall not be liable under any circumstances for a loss of,
or injury to, property or for injury to, or interference with, Tenant's
business, including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish any of the
foregoing services or utilities. Tenant, as a material part of the consideration
to be rendered to Landlord, hereby waives all claims against Landlord for the
foregoing damages from any cause arising at any time. The provisions of this
Section 8.3 shall not, however, exempt Landlord from liability for Landlord's
negligence or willful misconduct. Notwithstanding the above, in the event
services or utilities vital to the operation of Tenant's business are
discontinued for any continuous ninety-six (96) hour period during the Lease
Term, Rent shall be abated under this Lease commencing on the fifth (5th) day of
such interruption and continuing until such services or utilities are again
restored to Tenant. Furthermore, in the event services or utilities vital to the
operation of Tenant's business are discontinued for any continuous sixty (60)
day period, Tenant shall have the right to terminate this Lease by giving
written notice thereof to Landlord within three (3) months thereafter. In the
event of any Rent abatement or Tenant's election to terminate this Lease,
Landlord shall not be liable under any circumstances for a loss of, or injury
to, property or for injury to, or interference with, Tenant's business,
including, without limitation, loss of profits, however occurring, through or in
connection with or incidental to a failure to furnish any of the foregoing
services or utilities.
ARTICLE 9
PARKING AND CONTROL OF COMMON AREAS
9.1 CONTROL OF PROJECT COMMON AREAS BY LANDLORD. All Project
Common Area and all automobile parking areas, driveways, entrances and exits
thereto, and other facilities furnished by Landlord in or near the Project,
shall at all times be subject to the exclusive control and management of
Landlord, Landlord's designated agent. Landlord shall have the right to
construct, maintain and operate lighting facilities on all said areas and
improvements; to police the same; from time to time to change the area, level,
location and arrangement of parking areas and other facilities hereinabove
referred to; to restrict parking by tenants, their officers, agents and
employees to employee parking areas; to close all or any portion of said areas
or facilities to such extent as may, in the opinion of Landlord, be legally
sufficient to prevent a dedication thereof or the accrual of any rights to any
person or the public therein; to close temporarily all or any portion of the
parking areas or facilities; to discourage non-customer parking; to convert such
areas into leasable areas; to construct additional parking facilities and to do
and perform such other acts in and to said areas and improvements as, in the use
of good business judgment, the Landlord shall determine to be advisable with a
view to the improvement of the convenience and use thereof by tenants, their
officers, agents, employees and customers, provided that such changes shall not
reduce the number of parking spaces below the number required by law. No such
change shall entitle Tenant to an abatement of Rent. Landlord, or the
Association, will operate and maintain the Project Common Area and other
facilities referred to above in such manner as Landlord, in its sole discretion,
shall determine from time to time. Without limiting the scope of such
discretion, Landlord and the Association shall have the full right and authority
to employ all personnel and to make all rules and regulations pertaining to and
necessary for the proper operation and maintenance of the Project Common Area.
Notwithstanding the foregoing, Landlord shall not permanently (a) reduce the
parking spaces available to Tenant on a non-exclusive basis below four (4)
spaces per one thousand (1,000) rentable square feet in the Premises or (b)
materially impair Tenant's access to the Building or Premises.
9.2 LICENSE. All Project Common Area are to be used and occupied
under a license which may be revoked by Landlord in the event of a default by
Tenant and termination of the Lease, and if any such license be revoked, or if
the amount of such areas be diminished, Landlord shall not be subject to any
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liability nor shall Tenant be entitled to any compensation or diminution or
abatement of Rent, or shall such revocation or diminution of such areas be
deemed constructive or actual eviction.
9.3 PARCELIZATION OF THE PROJECT. Landlord reserves the right to
divide the Project into two or more separate parcels and to sell the other
buildings located at the Project. Upon such parcelization and/or sale, Landlord
shall have the right to make reasonable changes to the common area. Landlord
shall also have the right to alter the parking area and relocate the parking
spaces available to Tenant. Tenant acknowledges that the amount of Project
Common Area Maintenance Charges and/or Property Taxes may increase as a result
of any parcelization and that Tenant shall be responsible for Tenant's Building
Proportional Share and Tenant's Project Proportional Share, as the case may be,
of any such increased Common Area Maintenance Charges and Property Taxes.
9.4 UNDERGROUND LINE. In the event Tenant leases space in other
Buildings in the Project or in buildings on property contiguous to the Project,
Tenant shall have the right to install an underground line between the Building
and such other buildings on terms reasonably acceptable to Landlord. Tenant
acknowledges that terms acceptable to Landlord shall include, but shall not be
limited to, protections against mechanics' liens, the requirement that Tenant
obtain all necessary governmental approvals or approvals from any third parties,
the payment of all associated taxes, charges and utilities, indemnification by
Tenant for any damages or injuries caused by such installation and Landlord's
approval of plans and specifications relating to the underground line. At the
expiration or earlier termination of this Lease, Tenant shall cap to adequately
protect the safety of persons or property or remove the underground line or
lines and restore the Project to its original condition.
9.5 INSTALLATION OF SATELLITE DISH. During the Lease Term, Tenant
may install, operate and maintain, at Tenant's sole expense and risk, satellite
dishes in locations on the roof of the Building or in the parking lot near the
Building acceptable to Landlord and Tenant (collectively "Satellite Dishes").
Such Satellite Dishes shall be subject to Landlord's approval as to the location
and size, which approval may not be unreasonably withheld, but which may be
conditioned upon terms and conditions reasonably acceptable to Landlord. Any
Satellite Dishes located in the parking lot shall be considered Tenant's use of
such parking spaces. The Satellite Dishes shall be installed by vendors or
subcontractors approved by Landlord in accordance with plans and specifications
acceptable to Landlord. The plans and specifications shall include plans for
screens to mitigate the visual impact of the Satellite Dishes acceptable to
Landlord. Tenant shall keep the Project free from any mechanics', materialmens'
or other liens arising out of any work performed, materials furnished or
obligations incurred by or for Tenant or any person or entity claiming by,
through or under Tenant.
9.5.1 GOVERNMENTAL APPROVALS. Tenant shall have the
responsibility to secure all necessary approvals relating to installation and
operation of the Satellite Dishes from all applicable governmental authorities.
Tenant shall construct, operate and maintain the Satellite Dishes in accordance
with all applicable laws, ordinances, rules and regulations and in compliance
with the requirements of any insurers of the Project. Tenant and Landlord shall
give to each other notice of any notices which it receives from third parties
that any portion of the Satellite Dishes is or may be in violation of any law,
ordinance or regulation.
9.5.2 MAINTENANCE AND SURRENDER. Tenant shall be responsible
for repairs required to the Project, arising out of the construction, operation
or removal of the Satellite Dishes, made necessary by the acts, omissions or
negligence of Tenant. At the conclusion of the term, Tenant will remove the
Satellite Dishes, make all repairs necessary to the Project as a result of said
removal of property, and surrender the site to Landlord in substantially the
same order and condition as originally delivered to Tenant, excepting ordinary
wear and tear.
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9.5.3 TAXES. Tenant shall pay all taxes of any kind or
nature whatsoever levied upon the Satellite Dishes and all licensing fees,
franchise taxes and other charges, expenses and costs of any nature whatsoever
relating to the construction, ownership, maintenance and operation of the
Satellite Dishes.
9.5.4 UTILITIES. Tenant shall be responsible for the costs
and expenses of any and all utilities and services supplied to the Premises
which are consumed by Tenant in constructing and operating the Satellite Dishes,
whether by Landlord or directly by utility companies.
9.5.5 TERMS OF LEASE. In addition to the terms set forth
above, Tenant's use, operation and ownership of the Satellite Dishes shall be on
the other terms and provisions of this Lease.
ARTICLE 10
CONDITION OF PREMISES;
MAINTENANCE OF THE PREMISES
10.1 TENANT'S OBLIGATIONS.
10.1.1 MAINTENANCE OF THE PREMISES. Tenant shall keep the
Premises (including all nonstructural, interior and exterior portions, systems
and equipment, all glass, glazing, window moldings, windows, partitions, all
doors (exterior and interior), door hardware, ceilings, interior painting,
fixtures and appurtenances thereof including electrical, lighting, plumbing and
plumbing fixtures) in good order, condition and repair during the Lease Term.
Except to the extent provided in Section 10.3.1, Tenant shall be obligated to
pay to Landlord, as Rent under this Lease, with the next payment of Base Monthly
Rent, the reasonable costs for the reasonable servicing, maintenance and repair
of any heating/ventilation/air conditioning system ("HVAC System") servicing the
Premises. To the extent the HVAC System services more than one tenant, the costs
of maintenance, service and repair shall be allocated by Landlord among the
tenants using such HVAC System. Landlord may either (a) include such charges as
a Common Area Maintenance Charge (b) xxxx Tenant, directly therefor, in which
case, Tenant, upon presentation of a xxxx therefor, shall promptly pay Landlord,
or its agent or assigns, for such maintenance service or (c) if such maintenance
charges occur on a repeated basis, require Tenant to pay an estimated portion of
such charges in the same manner and on the same terms as set forth in Section
5.5 of this Lease. Tenant shall promptly replace any portion of the Premises or
system or equipment in the Premises which cannot be fully repaired, regardless
of whether the benefit of such replacement extends beyond the Lease Term. Tenant
shall be solely responsible and shall indemnify, protect, defend and hold
Landlord harmless as a result of any penetrations or perforations of the roof
caused by Tenant. It is the intention of Landlord and Tenant that, at all times
during the Lease Term, Tenant shall maintain the Premises in an attractive,
first-class and fully operative condition.
10.1.2 REPAIRS DUE TO MISUSE. Tenant shall be responsible
for all repairs to the Project which are made necessary by any misuse or neglect
by (a) Tenant or any of its agents, employees, contractors, or subtenants or (b)
any visitors, patrons, guests or invitees of Tenant while in or upon the
Premises.
10.2 REPAIR BY LANDLORD. All of Tenant's obligations to maintain
and repair shall be accomplished at Tenant's sole expense. If Tenant refuses or
neglects to repair properly as required hereunder and to the reasonable
satisfaction of Landlord, Landlord may, on ten (10) days prior notice (except
that no notice shall be required in case of emergency) enter the Premises and
perform such repair and maintenance on behalf of Tenant without liability to
Tenant for any loss or damage that may accrue to Tenant's merchandise, fixtures,
or other property or to Tenant's business by reason thereof, and upon
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completion thereof, Tenant shall pay Landlord's costs for making such repairs
plus ten percent (10%) for administrative and overhead expense, upon
presentation of a xxxx therefor, as Rent. Said xxxx shall include interest at
the Lease Interest Rate on said costs from the date of completion of repairs by
Landlord. Except as provided in Article 14, there shall be no abatement of Rent
and no liability of Landlord by reason of any injury to or interference with
Tenant's business arising from the making of any repairs, alterations or
improvements under this Lease.
10.3 LANDLORD'S OBLIGATIONS. Landlord shall be responsible for
the maintenance and repair of structural portions of the Building. As used
herein, structural portions of the Building shall only refer to the foundation
and slabs (including plumbing in the slab), exterior walls, and structural
portions of the roof of the Building. Landlord shall also maintain and repair
the HVAC System, the costs of which will be borne by Tenant pursuant to Section
10.1.1 above. Landlord shall be responsible for any modifications to the
Building exterior or Project Common Areas required under the Americans With
Disabilities Act, 42 U.S.C. Section 12101 et seq., except to the extent such
modifications arise because of Tenant's activities or use of the Premises, in
which event Tenant shall have the responsibility to make such modifications.
Landlord shall also be responsible for ensuring that the Premises (other than
the Tenant Improvements) are in compliance with the commercial facility
provisions of the Americans with Disabilities Act prior to constructing the
Tenant Improvements and delivering the Premises to Tenant. Tenant waives the
benefit of any present or future law which might give Tenant the right to repair
the Premises at Landlord's expense or to terminate the Lease due to the
condition of the Premises.
10.3.1 LANDLORD'S LIMITED WARRANTY. Notwithstanding the
provisions of Section 10.1, Landlord shall be responsible for maintaining and
repairing the HVAC System for the first Lease Year at Landlord's sole cost and
expense except to the extent such repair and maintenance arises from Tenant's
negligence or breach of this Lease.
ARTICLE 11
ALTERATIONS, IMPROVEMENTS AND SIGNAGE
11.1 CHANGES/ALTERATIONS. Tenant shall not make any alterations,
additions, or changes, including, without limitation, installation of any
permanently attached trade fixtures, exterior signs, exterior machinery, floor
coverings, interior or exterior lighting, plumbing fixtures, shades or awnings
(collectively "Alterations") in and to the Premises or any part thereof without
the prior written consent of Landlord which consent may not be unreasonably
withheld; provided, however, that Tenant may make nonstructural Alterations that
do not affect the electrical, plumbing, heating, ventilation, air conditioning
or other systems of the Premises and that cost less than $5,000 without
Landlord's consent. Any construction undertaken in or to the Premises shall be
performed in accordance with this Article and the other obligations of this
Lease.
11.2 MANNER OF CONSTRUCTION.
11.2.1 Landlord may impose, as a condition of its
consent to any Alterations or repairs on or about the Premises, such
requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirements that Tenant obtain bonds and
that Tenant utilize for such purposes only contractors, materials, mechanics and
materialmen approved by Landlord, in its reasonable discretion. Tenant shall
construct such Alterations or repairs in strict conformance with any and all
applicable rules and regulations of any federal, state, county or municipal code
or ordinance and pursuant to a valid building permit, issued by the local
governing entity. All fixtures installed by Tenant shall be new or completely
reconditioned.
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11.2.2 In any event, a contractor approved by Landlord
shall perform all mechanical, electrical, plumbing, air conditioning, permanent
partition and ceiling tile work, and such work shall be performed at Tenant's
cost. If Landlord's consent is required, Landlord reserves the right to approve,
in Landlord's reasonable discretion, the contractor selected by Tenant for the
completion of any Alterations.
11.2.3 In the event Tenant orders any construction,
alteration, decorating or repair work and fails to pay amounts when due to the
contractor or contractors in connection with such items, Landlord, without any
obligation to do so, may pay any such amounts directly to such contractor or
contractors and the amounts paid by Landlord shall be deemed Rent under this
Lease, payable upon billing therefor, provided, however, that if Tenant posts a
proper bond within ten (10) days of the filing of any lien against the Premises
or Project, Landlord shall not make such payment.
11.2.4 All work with respect to any Alterations or
repairs must be done in a good and workmanlike manner and diligently prosecuted
to completion to the end that the Premises shall at all times be a complete unit
except during the period of work. Upon completion of any Alterations, Tenant
agrees to deliver to the Landlord's management office a copy of the "as built"
drawings of the Alterations, if the Alterations would customarily generate "as
builts" and record any necessary notices to evidence completion. In performing
the work of any such Alterations, Tenant shall have the work performed in such
manner as not interfere with or to obstruct the access to the Project Common
Area and to any other tenant of the Project.
11.3 INTENTIONALLY OMITTED.
11.4 CONSTRUCTION INSURANCE. Whether or not Landlord's consent is
required, Tenant agrees to obtain, carry and deliver to Landlord prior to the
commencement of any Alterations and maintain in effect until completion of all
Alterations "Builder's All Risk" insurance in an appropriate amount covering the
construction of such Alterations, and such other insurance as Landlord may
require, it being understood and agreed that all of such Alterations shall be
insured by Tenant pursuant to Section 12.2.2 of this Lease immediately upon
completion thereof.
11.5 LIENS. Tenant shall keep the Premises and the Project free
from any mechanics', materialmen's, designer's or other liens arising out of any
work performed, materials furnished or obligations incurred by or for Tenant or
any person or entity claiming by, through or under Tenant. If any such liens are
filed and are not released of record by payment or posting of a proper bond
within ten (10) days after such filing, Landlord may, without waiving its rights
and remedies based on such breach by Tenant and without releasing Tenant from
any obligations hereunder, cause such liens to be released by any means it shall
deem proper, including payment of the claim giving rise to such lien, in which
event all amounts paid by Landlord shall immediately be due and payable by
Tenant as Rent. Tenant hereby indemnifies, protects, defends (with legal counsel
acceptable to Landlord) and holds Landlord and Landlord's Indemnitees, the
Premises and the Project harmless from any liability, cost, obligation, expense
(including, without limitation, reasonable attorneys' fees and expenses), or
claim of any mechanics', materialmen's, design professional's or other liens in
any manner relating to any work performed, materials furnished or obligations
incurred by or for Tenant or any person or entity claiming by, through or under
Tenant. Whether or not Landlord's consent is required, Tenant shall notify
Landlord in writing within fifteen (15) days prior to commencing any Alterations
so that Landlord shall have the right to record and post notices of
non-responsibility or any other notices deemed necessary by Landlord on the
Premises.
11.6 SIGNAGE. Tenant shall have the right to have its name and
logo displayed on the face of the Building at a highly visible and prominent
location mutually chosen by Landlord and Tenant. In the event that the City of
Carlsbad or other government agency with jurisdiction over the Project does not
permit Tenant's building signage, Tenant shall have the right to construct a
monument sign at a highly
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visible and prominent location on the Project which is acceptable to Landlord,
in Landlord's reasonable discretion or to affix such signage to the existing
monument sign at the Project in a manner acceptable to Landlord in Landlord's
reasonable discretion. Any building or monument signage shall also be subject to
the requirements of the City of Carlsbad, or other government agencies with
jurisdiction over the Project, and the Declarations. Tenant shall pay all costs
of Landlord associated with installing such signage within ten (10) days of
receiving an invoice from Landlord setting forth such costs. Tenant may apply up
to Seven Thousand Five Hundred Dollars ($7,500.00) of the Tenant Improvement
Allowance which is not used in the fabrication and installation of the other
Tenant Improvements to the fabrication and installation of any such signage
designed, constructed and installed pursuant to this Section 11.5. All such
signage shall be subject to Landlord's specifications and approval as to size,
graphics and style, which approval may be withheld in Landlord's reasonable
discretion.
ARTICLE 12
INSURANCE AND INDEMNITY
12.1 FIRE AND CASUALTY INSURANCE. Landlord shall maintain during
the Lease Term a policy or policies of insurance insuring the Premises and, at
Landlord's election, other portions of the Project, against all direct physical
loss or damage, whether due to fire or other casualties covered within the
classification of fire and extended coverage, vandalism coverage and malicious
mischief, sprinkler leakage, water damage and special extended coverage. Such
coverage shall be for full replacement value, and may include, at the option of
Landlord, the risks of earthquakes and/or flood damage and additional hazards
(to the extent that coverage for earthquake or such additional hazards is
required by the holder of any mortgage or deed of trust encumbering the interest
of Landlord in all or any portion of the Project or is reasonably commercially
available in Landlord's sole and absolute discretion exercised in good faith), a
rental loss endorsement and one or more loss payee endorsements in favor of the
holders of any mortgages or deeds of trust encumbering the interest of Landlord
in all or any portion of the Project or the interest of any ground or underlying
lessors in the Project. The costs of such insurance shall be included as part of
the Project Insurance Charges or may, at the election of Landlord, be included
as a component of the Common Area Maintenance Charges.
12.2 INSURANCE TO BE OBTAINED BY TENANT.
12.2.1 LIABILITY INSURANCE. During the Lease Term, Tenant
shall, at Tenant's expense, maintain a commercial general liability insurance
policy, or an equivalent, written on an occurrence form that includes personal
injury coverage, bodily injury, death, property damage, advertising injury
coverage and contractual liability coverage including Tenant's indemnity
obligations under this Lease, insuring against liability arising out of the
ownership, use, occupancy or maintenance of the Premises, the sidewalks in front
of the Premises, and the business operated by Tenant and any subtenants or
licensees of Tenant in the Premises. The initial amount of such insurance shall
be One Million Dollars ($1,000,000.00) each occurrence/Two Million Dollars
($2,000,000.00) general aggregate on a per location basis and One Million
Dollars ($1,000,000.00) for personal injury and advertising injury coverage. If
alcohol will be served from or in the Premises, such coverage shall contain
endorsements deleting any liquor liability exclusion and adding a liquor
liability endorsement.
12.2.2 INSURANCE OF PERSONAL PROPERTY. Tenant shall at all
times during the Lease Term, and at its own expense, maintain a policy or
policies of standard fire, extended coverage and special extended coverage
insurance ("All Risks") with extended coverage in the name of the Tenant, and
naming Landlord as an additional insured, in an amount adequate to cover the
cost of replacement of all trade fixtures, alterations, decorations, inventory
additions or improvements, and all plate and tempered glass in or covering the
Premises, made to the Premises by Tenant or by Landlord on Tenant's behalf in
the event
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of fire or extended coverage loss in an amount equal to the full replacement
value. Notwithstanding such insurance coverage by Tenant for plate glass,
Landlord may replace, at the expense of Tenant, any and all plate and other
glass, frames or glazing damaged or broken from any cause whatsoever in and
about the Premises.
12.2.3 ADDITIONAL INSURANCE OBLIGATIONS. Landlord may
require Tenant to increase the amounts of coverage and/or to maintain additional
coverage based on insurance coverages and amounts maintained by lessees of
similar space in San Diego County, provided that Landlord may not require such
changes more often than one (1) time every two (2) years.
12.3 WAIVER OF SUBROGATION. Landlord and Tenant each hereby waive
any and all rights of recovery against the other or against the officers,
employees, agents and representatives of the other, on account of loss or damage
occasioned to such waiving party or its property or the property of others under
its control, to the extent that such loss or damage is insured against under any
fire and extended coverage insurance policy which either may have in force at
the time of such loss or damage or under the insurance policies required to be
maintained under this Article. Landlord and Tenant shall, if required, for each
of the policies of insurance required under this Lease, give notice to the
insurance carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this Lease.
12.4 FORM OF POLICIES. The minimum limits of policies of
insurance required of Tenant under this Lease shall in no event limit the
liability of Tenant under this Lease. Such insurance shall: (i) be an occurrence
policy (or policies); (ii) name Landlord, the Project or Building manager or
managers, and any other party having an interest in the Project as an additional
insured; (iii) be issued by an insurance company having a General Policyholders
Rating of B+ or better and a financial size of "VI" or better, as set forth in
the most current issue of Best's Rating Guide, or which is otherwise acceptable
to Landlord and licensed to do business in California; (iv) be primary insurance
as to all claims thereunder and provide that any insurance carried by Landlord
is excess and noncontributing with any insurance required of Tenant; (v) provide
that said insurance shall not be canceled or coverage changed unless thirty (30)
days prior written notice shall have been given to Landlord and any mortgagee of
Landlord's; and (vi) with respect to the liability insurance described in
Section 12.2.1, contain a cross-liability endorsement or severability of
interest clause acceptable to Landlord. Any insurance policies required
hereunder may be part of a blanket policy with a "per project, per location"
endorsement so long as such blanket policy contains all provisions required
hereby and does not reduce the coverage, impair the rights of either party or
negate the requirements of this Lease. Tenant shall deliver said policy or
policies or certificates thereof, together with any endorsements reflecting the
changes to the policy required to comply with the requirements of this Lease, to
Landlord on or before the Commencement Date and at least thirty (30) days before
the expiration date of such policies. In the event Tenant shall fail to procure
such insurance, or to deliver such policies or certificates and appropriate
endorsements, Landlord may, at its option, procure such policies for the account
of Tenant, and the cost thereof plus a ten percent (10%) handling charge shall
be paid by Tenant to Landlord as Additional Rent within five (5) days after
delivery to Tenant of bills therefor.
12.5 INDEMNIFICATION.
12.5.1 INDEMNIFICATION OF LANDLORD. To the fullest extent
permitted by law, Tenant shall indemnify, protect, defend (with legal counsel
acceptable to Landlord) and save Landlord and Landlord's Indemnitees harmless
from and against any and all claims, actions, damages, liabilities and expenses,
including attorneys' fees, in connection with loss of life, personal injury,
bodily injury and/or damage to property arising from or out of any occurrence
in, upon or about the Premises, or the occupancy or use by Tenant of the
Premises or any part thereof, or occasioned wholly or in part by any act or
omission of Tenant, its agents, contractors, employees, servants, tenants or
concessionaires, except to the extent caused
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by Landlord's negligence or willful misconduct. Tenant shall further indemnify,
defend, protect and hold Landlord and Landlord's Indemnitees harmless from and
against any and all claims arising from any breach or default in performance of
any obligation on Tenant's part to be performed under the terms of this Lease,
or arising from any act, neglect, fault or omission of Tenant or its agents,
contractors, employees, servants, tenants or concessionaires, and from and
against all costs, attorneys' fees, expenses and liabilities incurred in
connection with such claim or any action or proceeding brought thereon. In case
any action or proceeding shall be brought against Landlord by reason of any such
claim, Tenant, upon notice from Landlord, shall defend the same at Tenant's
expense by counsel approved in writing by Landlord. Tenant, as a material part
of the consideration to Landlord, hereby assumes all risk of (and waives all its
claims in respect thereof against Landlord for) damage to property or injury to
persons in, upon or about the Premises from any cause whatsoever except
Landlord's negligence or intentional misconduct.
12.5.2 LANDLORD'S NONLIABILITY. Landlord shall not be
liable for injury or damage which may be sustained by a person, goods, wares,
merchandise, or other property of Tenant, or Tenant's employees, invitees,
customers, or of any other person in or about the Premises caused by or
resulting from any peril which may affect the Premises, including, without
limitation, fire, steam, electricity, gas, water, or rain which may leak or flow
from or into any part of the Premises, or from the breakage, leakage,
obstruction, or other defects of the pipes, sprinklers, wires, appliances,
plumbing, air conditioning, or lighting fixtures of the Premises, whether such
damage or injury results from conditions arising upon the Premises or upon other
portions of the Project or from other sources. Landlord shall not be liable for
any damages arising from any act or neglect of: (a) any other tenant or occupant
of the Project; or (b) any officer, employee, agent, representative, customer,
business visitor, or invitee of any such tenant. Notwithstanding the foregoing,
nothing contained in this Lease shall operate to relieve Landlord of the
consequences of its own negligence or willful misconduct or the negligence or
willful misconduct of its agents or employees.
12.5.3 INDEMNIFICATION OF TENANT. To the fullest extent
permitted by law and except as expressly provided elsewhere in this Lease,
Landlord shall indemnify, protect, defend (with legal counsel reasonably
acceptable to Tenant) and save Tenant and Tenant's agents, partners, members,
managers, shareholders, officers, directors, employees, successor and/or assigns
("Tenant's Indemnitees") harmless from and against any and all claims, actions,
damages, liabilities and expenses, including attorneys' fees, in connection with
loss of life, personal injury, bodily injury and/or damage to property arising
from or out of any occurrence in, upon or about the Project occasioned wholly or
in part by any act or omission of Landlord, its agents, contractors, employees,
servants, tenants or concessionaires, except to the extent caused by Tenant's
negligence or willful misconduct. Landlord shall further indemnify, defend,
protect and hold Tenant and Tenant's Indemnitees harmless from and against any
and all claims arising from any breach or default in performance of any
obligation on Landlord's part to be performed under the terms of this Lease, or
arising from any act, neglect, fault or omission of Landlord or its agents,
contractors, employees, servants, tenants or concessionaires, and from and
against all costs, attorneys' fees, expenses and liabilities incurred in
connection with such claim or any action or proceeding brought thereon. In case
any action or proceeding shall be brought against Tenant by reason of any such
claim, Landlord, upon notice from Tenant, shall defend the same at Landlord's
expense by counsel reasonably approved in writing by Tenant.
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ARTICLE 13
ASSIGNMENT AND SUBLETTING
13.1 LANDLORD'S CONSENT REQUIRED.
13.1.1 Tenant shall not either voluntarily or by operation
of law, assign, mortgage, pledge, hypothecate or encumber this Lease or the
leasehold interest created hereby or any interest herein, or sublet the Premises
or any portion thereof, or license the use of all or any portion of the Premises
or permit any other person to occupy or use the Premises or any portion thereof
(collectively referred to herein as a "Transfer"), without the prior written
consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed and is subject to the following conditions: (i) the
proposed transferee's use of the Premises must be consistent with Article 6
hereof; (ii) the transferee is of a character and engaged in a business which is
in keeping with the Landlord's standards for the Project; (iii) the proposed
Transfer must not breach any financing agreement or any other agreement relating
to the Project; and (iv) the net worth of the proposed transferee must not be
less than One Million Five Hundred Thousand Dollars ($1,500,000.00).
13.1.2 Prior to a Transfer, Tenant shall request Landlord's
consent in writing, and shall include with such request a copy of all proposed
contracts, agreements, subleases, or other documents describing the Transfer or
between Tenant and the proposed transferee. Landlord shall respond to Tenant's
request for consent to a proposed Transfer within ten (10) days after receipt of
all information described above and reasonably necessary to allow Landlord to
evaluate all the conditions set forth in Section 13.1.1 above.
13.2 INTENTIONALLY OMITTED.
13.3 TRANSFER WITHOUT CONSENT. Any Transfer without Landlord's
prior written consent shall, at the option of the Landlord, constitute a
non-curable breach of this Lease.
13.4 NO RELEASE OF TENANT. No Transfer shall release Tenant or
any guarantor or change Tenant's primary liability to pay the Rent and to
perform all other obligations of Tenant under this Lease. Landlord's acceptance
of Rent from any other person is not a waiver of any provision of this Article
13. Consent to one Transfer is not a consent to any subsequent Transfer. If
Tenant's transferee defaults under this Lease, Landlord may proceed directly
against Tenant without pursuing remedies against the transferee and without
releasing such transferee from its obligations under this Lease. Landlord may
consent to subsequent assignments or modifications of this Lease by Tenant's
transferee, without notifying Tenant or obtaining its consent. Such action shall
not relieve Tenant's liability under this Lease.
13.5 EFFECT OF A TRANSFER. Whether or not Landlord's consent is
required, the transferee shall agree to comply with and be bound by all of the
terms, covenants, conditions, provisions and agreements of this Lease to the
extent of the space transferred, assigned or sublet; and Tenant shall deliver to
Landlord promptly after execution an executed copy of each such Transfer
document between Tenant and the transferee. In addition, any sublease shall
provide that it shall be subject and subordinate to this Lease and to all
mortgages; that Landlord may enforce the provisions of the sublease, including
collection of rents; and that in the event of termination of this Lease for any
reason, including without limitation a voluntary surrender by Tenant, or in the
event of any reentry or repossession of the Premises by Landlord, Landlord may,
at its option, either (i) terminate the sublease, or (ii) take over all of the
right, title and interest of Tenant, as sublessor, under such sublease, in which
case such sublessee shall attorn to Landlord but in such event Landlord shall
not (a) be liable for any previous act or omission of Tenant under such
sublease, (b) be subject to any defense or offset previously accrued in favor of
the sublessee against
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Tenant, or (c) be bound by any previous modification of any sublease made
without Landlord's written consent, or by any previous prepayment by sublessee
of more than one month's rent.
13.6 EVENT OF BANKRUPTCY. If this Lease is assigned to any person
or entity pursuant to the provisions of the United States Bankruptcy Code, 11
U.S.C. Section 101 et seq. (the "Bankruptcy Code"), any and all monies or other
consideration payable or otherwise to be delivered in connection with such
assignment shall be paid or delivered to Landlord, shall be and remain the
exclusive property of Landlord, and shall not constitute the property of Tenant
or of the estate of Tenant within the meaning of the Bankruptcy Code. Any and
all monies or other considerations constituting Landlord's property under this
Section 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. Any person or
entity to which this Lease is assigned pursuant to the provisions of the
Bankruptcy Code shall be deemed without further act or deed to have assumed all
of the obligations arising under this Lease on and after the date of such
assignment.
13.7 NO MERGER. No merger shall result from Tenant's sublease of
the Premises under this Article 13, Tenant's surrender of this Lease or the
termination of this Lease in any other manner.
13.8 ASSIGNMENT FEES AND PROCEDURES. In the event Landlord shall
be requested to consent to a Transfer, Tenant shall pay Landlord a reasonable
fee not to exceed Two Thousand Dollars ($2,000.00) to reimburse Landlord for
costs and expenses, including attorneys' fees, incurred in connection with
reviewing Tenant's request for consent.
ARTICLE 14
DAMAGE OR DESTRUCTION
14.1 REPAIR OF DAMAGE BY LANDLORD. Tenant agrees to promptly
notify Landlord in writing of any damage to the Premises resulting from fire,
earthquake or any other casualty (such events referred to collectively as
"Casualty"). If the Premises, or any common areas of the Building providing
access to the Premises (such that Tenant does not have reasonable access to the
Premises) shall be damaged by a Casualty, Landlord shall, within sixty (60) days
after the date of the Casualty, provide written notice to Tenant indicating the
anticipated time period for repairing the Casualty (the "Repair Period Notice").
In the event the Repair Period Notice indicates that the time period for
repairing the Casualty is estimated to exceed two hundred twenty-five (225) days
from the date of the Repair Period Notice, Landlord (pursuant to the provisions
of Section 14.3 below) or Tenant may elect to terminate this Lease ("Tenant's
Termination Election"). Such election must be made by Tenant within thirty (30)
days after the receipt of the Repair Period Notice or will be deemed waived by
Tenant. If Tenant elects to terminate the Lease, the termination shall be
effective thirty (30) days after Landlord's receipt of Tenant's Termination
Election. If the Repair Period Notice indicates that the time period for
repairing the Casualty is estimated to not exceed two hundred twenty-five (225)
days from the date of the Repair Period Notice, or if Tenant does not exercise
Tenant's Termination Election as provided above, then subject to the other
provisions of this Article, Landlord will repair the damage pursuant to the
provisions hereof. If Landlord is obligated to or elects to repair the Casualty
as provided herein, Landlord agrees to promptly and diligently, subject to
reasonable delays for insurance adjustment and other matters beyond Landlord's
reasonable control, and subject to the other provisions of this Article, restore
the Premises and the Tenant Improvements originally constructed by Landlord to
substantially the same condition as existed prior to the Casualty, except for
modifications required by building codes and other laws, and any other
modifications to the common areas deemed desirable by Landlord provided that
access to the Premises shall not thereby be materially impaired. If Tenant
requests that Landlord make any modifications to the Tenant Improvements in
connection with the rebuilding, Landlord may condition its consent to such
modifications on (i) Tenant's payment to Landlord prior to commencement of
construction of any sums necessary to
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complete the Tenant Improvements in excess of the amount of insurance proceeds
received by Landlord and (ii) confirmation by Landlord's architect that the
modifications will not increase the scope of work or time period necessary to
complete the Tenant Improvements.
14.2 RENT ABATEMENT DUE TO CASUALTY. Landlord and Tenant agree
and acknowledge that Tenant shall be provided with full abatement of Rent during
the time period commencing on the last to occur of (i) the date of the Casualty
or (ii) the date Tenant ceases to enjoy the substantial benefit of the Premises,
and continuing until Substantial Completion of Landlord's restoration
obligations as provided herein ("Abatement Period"), provided that if Tenant is
only able to occupy a portion of the Premises and receive the substantial
benefit of such portion for Tenant's uses of the Premises, Rent shall be abated
during the Abatement Period for the portion of the Premises not occupied by
Tenant. Landlord and Tenant acknowledge and agree that the Rent abatement as
provided in this Section is Tenant's sole remedy due to the occurrence of the
Casualty and that Landlord shall not be liable to Tenant or any other person for
any indirect or consequential damage (including, but not limited to, lost
profits of Tenant or loss of or interference with Tenant's business, or
otherwise), whether or not caused by the negligence of Landlord or Landlord's
employees, contractors, licensees, or invitees, due to or arising out of or as a
result of the Casualty (including but not limited to the termination of the
Lease in connection therewith) but Landlord shall be liable for Tenant's direct
damages as a result of the Casualty arising from Landlord's negligence or wilful
misconduct. Tenant acknowledges and agrees that Tenant shall maintain adequate
business interruption insurance to provide coverage as to such indirect or
consequential damages.
14.3 LANDLORD'S OPTION TO REPAIR. Notwithstanding the terms of
Section 14.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises and/or Building and to instead terminate this Lease by notifying Tenant
in writing of such termination within sixty (60) days after the date of the
Casualty in the event the Building shall be damaged by Casualty (whether or not
the Premises are affected) and one or more of the following conditions exists:
(i) Landlord determines that the time period for repair will exceed two hundred
twenty-five (225) days as provided in Section 14.1 above; (ii) the damage is not
fully covered, except for deductible amounts, by insurance required to be
carried by Landlord under the terms of this Lease; (iii) the holder of the
mortgage on the Building or ground lessor with respect to the Project requires
that the insurance proceeds or a portion thereof be used to retire the mortgage
debt, or terminates the ground Lease, as the case may be; or (iv) Landlord
elects not to rebuild the Building for any reason, provided that in connection
with such election Landlord also terminates all other leases in the Building.
14.4 DAMAGE NEAR END OF TERM. In the event that the Premises or
the Building is destroyed or damaged by a Casualty during the last twenty-four
(24) months of the Lease Term, notwithstanding anything else contained in this
Article, either party shall have the option to terminate this Lease by giving
written notice to the other party of the exercise of such option within thirty
(30) days after such damage or destruction, in which event this Lease shall
cease and terminate as of the date of the notice. In such event or in the event
of a termination pursuant to the other provisions of this Article, Tenant shall
pay Rent, properly apportioned up to the date of the Casualty, and both parties
shall thereafter be freed and discharged of all future obligations hereunder,
except for any provisions of this Lease which by their terms survive the
expiration or earlier termination of the Lease Term.
14.5 WAIVER OF STATUTORY PROVISIONS. The provisions of this
Lease, including this Article 14, constitute an express agreement between
Landlord and Tenant with respect to the occurrence of any Casualty to the
Premises and/or Building or any other portion of the Project and Tenant
therefore fully waives the provisions of any statute or regulation, including,
without limitation, Sections 1932(2) and 1933(4) of the California Civil Code,
with respect to any rights or obligations concerning a Casualty.
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ARTICLE 15
CONDEMNATION
15.1 TOTAL CONDEMNATION. If the whole of the Premises shall be
acquired or condemned by eminent domain for any public or quasi-public use or
purpose, then the Lease Term shall cease and terminate as of the date of title
vesting in such proceeding and all rentals shall be paid up to that date.
15.2 PARTIAL CONDEMNATION. If any part of the Premises shall be
acquired or condemned by eminent domain for any public or quasi-public use or
purpose, and if such partial taking or condemnation renders the Premises
unsuitable for the business of the Tenant in Tenant's reasonable business
judgment, then Tenant shall have the right to terminate the Lease Term as of the
date of title vesting in such proceeding by delivering written notice thereof to
Landlord within thirty (30) days after Tenant becomes aware of the proposed
condemnation. In the event of a partial taking or condemnation which is not
extensive enough to render the Premises unsuitable for the business of the
Tenant then this Lease shall continue in full force and effect.
15.3 CONDEMNATION OF PARKING AREA. If the whole or any part of
the parking area in the Project shall be acquired or condemned by eminent domain
for any public or quasi-public use or purpose and if, as the result of such
partial taking, the ratio of square feet of parking area does not conform to the
parking requirements of the Specific Plan, zoning ordinances or any deed
restrictions or covenants, conditions and restrictions encumbering the Premises,
if any ("Parking Restrictions"), in effect at the time that title to such
parking area is acquired through such condemnation process, then the Lease Term
shall cease and terminate from the date of title vesting in such proceeding
unless Landlord provides substantially equal parking facilities in the vicinity
of the Project within sixty (60) days after the date of acquisition and such
alternative parking satisfies the requirements of the Parking Restrictions and
this Lease.
15.4 DISTRIBUTION OF CONDEMNATION AWARD. Any condemnation award
or payment shall be distributed in the following order: (a) first, to any ground
lessor, mortgagee or beneficiary under a deed of trust encumbering the Premises,
the amount of its interest in the Premises; (b) second, to Tenant, only the
amount, if any, of any award specifically designated for loss of or damage to
Tenant's movable trade fixtures or removable personal property, and the Tenant
hereby assigns any other rights which the Tenant may have now or in the future
to any other award to the Landlord; and (c) third, to Landlord, the remainder of
such award, whether as compensation for reduction in the value of the leasehold,
the taking of the fee, or otherwise. In no event shall Tenant have any claim
against Landlord for the value of any unexpired term of this Lease. If this
Lease is not terminated, Landlord shall repair any damage to the Premises caused
by the condemnation, except that Landlord shall not be obligated to repair any
damage for which Tenant has been reimbursed by the condemning authority.
15.5 WAIVER. Tenant hereby waives any statutory rights of
termination which may arise by reason of any taking of the Premises under the
power of eminent domain, including, without limitation, the provisions of
Section 1265.130 of the California Code of Civil Procedure.
ARTICLE 16
DEFAULTS; REMEDIES
16.1 COVENANTS AND CONDITIONS. Tenant's performance of each of
Tenant's obligations under this Lease is a condition as well as a covenant.
Tenant's right to continue in possession of the Premises is
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conditioned upon such performance. Time is of the essence in the performance of
all covenants and conditions.
16.2 DEFAULTS BY TENANT. Tenant shall be in default under this
Lease:
16.2.1 If Tenant abandons or vacates the Premises for a
period greater than ninety (90) days;
16.2.2 If Tenant fails to pay Base Monthly Rent, Additional
Rent or any Rent required to be paid by Tenant, as and when due after the
expiration of any applicable grace periods provided in this Lease;
16.2.3 If Tenant fails or refuses to occupy and operate the
Premises in accordance with Article 6;
16.2.4 If (i) Tenant's use of the Premises involves the
generation or storage, use, treatment or disposal of Hazardous Material in a
manner or for a purpose prohibited by any Hazardous Materials Law; (ii) Tenant
has been required by any lender or governmental authority to take remedial
action in connection with Hazardous Material contaminating the Premises if the
contamination resulted from Tenant's action or use of the Premises; or (iii)
Tenant is subject to an enforcement order issued by any governmental authority
in connection with the use, disposal or storage of a Hazardous Material on the
Premises.
16.2.5 If Tenant fails to perform any of Tenant's
nonmonetary obligations under this Lease (other than Tenant's obligations under
Sections 16.2.3, 16.2.4, 16.2.5 and 16.2.6 for which there will be no additional
cure periods) for a period of ten (10) days after written notice from Landlord;
provided that if such cure is not reasonably susceptible of being cured within
such ten (10) day period, Tenant shall not be in default if Tenant commences
such performance within the ten (10) day period and uses its best efforts and
due diligence to promptly cure the default. However, Landlord shall not be
required to give such notice if Tenant's failure to perform constitutes a
non-curable breach of this Lease. The notice required by this Section is
intended to satisfy any and all notice requirements imposed by law on Landlord
prior to the commencement of an unlawful detainer action and is not in addition
to any such requirement;
16.2.6 (i) If Tenant makes a general assignment or general
arrangement for the benefit of creditors; (ii) if Tenant files a petition for
adjudication of bankruptcy or for reorganization or rearrangement or any similar
proceeding; (iii) if a petition for adjudication of bankruptcy or for
reorganization or rearrangement is filed against Tenant and is not dismissed
within forty-five (45) days; (iv) if a trustee or receiver is appointed to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease and possession is not restored to Tenant within
forty-five (45) days; or (v) if substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease is subjected to attachment,
execution or other judicial seizure which is not discharged within forty-five
(45) days. If a court of competent jurisdiction determines that any of the acts
described in this subsection is not a default under this Lease, and a trustee is
appointed to take possession (or if Tenant remains a debtor in possession) and
such trustee or Tenant transfers Tenant's interest hereunder, then Landlord
shall receive, as Additional Rent, the difference between the Rent (or any other
consideration) paid in connection with such assignment or sublease and the Rent
payable by Tenant hereunder.
16.3 REMEDIES. On the occurrence of any default by Tenant,
Landlord may, at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have:
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16.3.1 Terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. In
such event Landlord shall have the immediate right to re-enter the Premises and
remove all persons and property and such property may be removed and stored in a
public warehouse or elsewhere at the cost of, and for the account of Tenant, all
without service of notice or resort to legal process and without being deemed
guilty of trespass, or becoming liable for any loss or damage which may be
occasioned thereby; and Landlord shall be entitled to recover from Tenant all
damages incurred by Landlord by reason of Tenant's default, including (i) the
worth at the time of the award of all Base Monthly Rent, Additional Rent and
other charges which were earned or were payable at the time of the termination;
(ii) the worth at the time of the award of the amount by which the unpaid Base
Monthly Rent, Additional Rent and other charges which would have been earned or
were payable after termination until the time of the award exceeds the amount of
such rental loss that Tenant proves could have been reasonably avoided; (iii)
the worth at the time of the award of the amount by which the unpaid Base
Monthly Rent, Additional Rent and other charges which would have been payable
for the balance of the term after the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; and (iv) any
other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant's failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result therefrom, including,
but not limited to, any costs or expenses incurred by Landlord in maintaining or
preserving the Premises after such default, the cost of recovering possession of
the Premises, expenses of reletting, including, without limitation, necessary
renovation or alteration of the Premises, Landlord's reasonable attorneys' fees,
and any real estate commissions or other such fees paid or payable. Any such
sums which are based on percentages of income, increased costs or other data
shall be reasonable estimates or projections computed by Landlord on the basis
of the amounts thereof accruing during the twenty-four (24) month period
immediately prior to the default, except that if it becomes necessary to compute
such sums before a twenty-four (24) month period has expired, then the
computation shall be made on the basis of the amounts accruing during such
shorter period. As used in subsections (i) and (ii) above, the "worth at the
time of the award" is computed by allowing interest on unpaid amounts at the
rate of ten percent (10%) per annum, but if such rate exceeds the maximum
interest rate permitted by law, such rate shall be reduced to the highest rate
allowed by law under the circumstances. As used in subsection (iii) above, the
"worth at the time of the award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of the
award, plus two percent (2%). If Tenant shall have abandoned the Premises,
Landlord shall have the option of (a) retaking possession of the Premises and
recovering from Tenant the amount specified in this Section 16.3.1, or (b)
proceeding under Section 16.3.2 below;
16.3.2 Maintain Tenant's right to possession, in which case
this Lease shall continue in effect whether or not Tenant shall have abandoned
the Premises. In such event, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the Rent as it becomes due hereunder; and/or
16.3.3 Whether or not Landlord elects to terminate this
Lease on account of any default by Tenant, Landlord shall have all rights and
remedies at law or in equity including, but not limited to, the right to
re-enter the Premises, and Landlord shall have the right to terminate any and
all subleases, licenses, concessions or other arrangements for possession
entered into by Tenant and affecting the Premises or may, in Landlord's sole
discretion, succeed to Tenant's interest in such subleases, licenses,
concessions or arrangements. In the event of Landlord's election to succeed to
Tenant's interest in any such subleases, licenses, concessions or arrangements,
Tenant shall, as of the date of notice by Landlord of such election, have no
further right to or interest in the Rent or other consideration receivable
thereunder.
16.4 THE RIGHT TO RELET THE PREMISES. Should Landlord elect to
re-enter, as herein provided, or should it take possession pursuant to legal
proceedings or pursuant to any notice provided for by law, it
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may either terminate this Lease or it may from time to time without terminating
this Lease, make such alterations and repairs as may be necessary in order to
relet the Premises, and relet said Premises or any part thereof for such term or
terms (which may be for a term extending beyond the Lease Term) and at such
rental or rentals and upon such other terms and conditions as Landlord in its
sole discretion may deem advisable; upon each such reletting all rentals
received by the Landlord from such reletting shall be applied, first, to the
repayment of any indebtedness other than Rent due hereunder from Tenant to
Landlord; second, to the payment of any costs and expenses of such reletting,
including brokerage fees and attorneys' fees and of costs of such alterations
and repairs; third, 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. If such rentals received from
such reletting during any month are less than that to be paid during that month
by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. No such re-entry or taking
possession of said Premises by Landlord shall be construed as an election on its
part to terminate this Lease unless a written notice of such intention be given
to Tenant or unless the termination thereof be decreed by a court of competent
jurisdiction.
16.5 WAIVER OF RIGHTS OF REDEMPTION. Tenant hereby expressly
waives any and all rights of redemption granted by or under any present or
future laws in the event of Tenant being evicted or dispossessed for any cause,
or in the event of Landlord obtaining possession of the Premises, by reason of
the violation by Tenant of any of the covenants or conditions of this Lease, or
otherwise.
16.6 CUMULATIVE REMEDIES. Landlord's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy which may
be provided by law or this Lease, whether or not stated in this Lease. The
termination of this Lease under this Article 16 shall not release Tenant from
obligations arising as a result of any acts or omissions occurring prior to such
expiration or termination, including, without limitation, any indemnity
obligations of Tenant and any obligations of Tenant under Article 7 of this
Lease and all such obligations shall survive such termination.
16.7 ADDITIONAL REMEDIES UPON DEFAULT. In addition to any rights
or remedies hereinbefore or hereinafter conferred upon Landlord under the terms
of this Lease, the following remedies and provisions shall specifically apply in
the event Tenant engages in any one or more of the acts contemplated by the
provisions of Section 16.2.8 of this Lease:
16.7.1 In all events, any receiver or trustee in bankruptcy
shall either expressly assume or reject this Lease within sixty (60) days
following the entry of an "Order for Relief" or within such earlier time as may
be provided by applicable law;
16.7.2 In the event of an assumption of this Lease by a
debtor or by a trustee, such debtor or trustee shall within fifteen (15) days
after such assumption (i) cure any default or provide adequate assurance that
defaults will be promptly cured; (ii) compensate Landlord for actual monetary
loss or provide adequate assurance that compensation will be made for actual
monetary loss, including, but not limited to, all attorneys' fees and costs
incurred by Landlord resulting from any such proceedings; and (iii) provide
adequate assurance of future performance;
16.7.3 Where a default exists under this Lease, the trustee
or debtor assuming this Lease may not require Landlord to provide services or
supplies incidental to this Lease before its assumption by such trustee or
debtor, unless Landlord is compensated under the terms of this Lease for such
services and supplies provided before the assumption of such Lease;
16.7.4 The debtor or trustee may only assign this Lease if
(i) it is assumed and assignee agrees to be bound by this Lease, (ii) adequate
assurance of future performance by the assignee is
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provided, whether or not there has been a default under this Lease, and (iii)
the debtor or trustee has received Landlord's prior written consent pursuant to
the provisions of Section 13.1 of this Lease. Any consideration paid by any
assignee in excess of the rental reserved in this Lease shall be the sole
property of, and paid to, Landlord;
16.7.5 Landlord shall be entitled to the fair market value
for the Premises and the services provided by Landlord (but in no event less
than the Rent reserved in this Lease) subsequent to the commencement of a
bankruptcy event;
16.7.6 Any Security Deposit given by Tenant to Landlord to
secure the future performance by Tenant of all or any of the terms and
conditions of this Lease shall be automatically transferred to Landlord upon the
entry of an "Order of Relief"; and
16.7.7 The parties agree that Landlord is entitled to
adequate assurance of future performance of the terms and provisions of this
Lease in the event of an assignment under the provisions of the Bankruptcy Code.
For purposes of any such assumption or assignment of this Lease, the parties
agree that the term "adequate assurance" shall include, without limitation, at
least the following:
a. Any proposed assignee must have, as demonstrated to
Landlord's satisfaction, a net worth (as defined in accordance with generally
accepted accounting principles consistently applied) in an amount sufficient to
assure that the proposed assignee will have the resources to meet the financial
responsibilities under this Lease, including the payment of all Rent. The
financial condition and resources of Tenant are material inducements to Landlord
entering into this Lease.
b. Any proposed assignee must not be engaged in any
business or activity which it will conduct on the Premises and which will
subject the Premises to contamination by any Hazardous Materials.
c. Any proposed assignee must agree in writing to be
bound by all the terms and provisions of this Lease.
16.8 DEFAULT BY LANDLORD. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any first mortgage or deed of trust covering
the Premises whose name and address shall have theretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance, then Landlord
shall not be in default if Landlord commences performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion.
16.9 LANDLORD'S CURE. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction or abatement of Base Monthly
Rent, Additional Rent or any other Rent payable under the Lease except for any
abatement specifically permitted under Article 14 of this Lease. If Tenant shall
default in the performance of its obligations under this Lease, Landlord may,
but shall not be obligated to, make any such payment or perform any such act on
Tenant's part without waiving its right based upon any default of Tenant and
without releasing Tenant from any obligations hereunder and Tenant shall, within
fifteen (15) days after delivery by Landlord to Tenant of statements therefor
reimburse Landlord for all such expenditures, losses, costs, liabilities,
damages and expenses. All sums so paid by Landlord and all necessary incidental
costs, and interest thereon at the Lease Interest Rate accruing from the date
paid or incurred by Landlord until reimbursed to Landlord by Tenant, shall be
payable to Landlord by Tenant
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as Rent on demand and Tenant covenants to pay all such sums. Tenant's
obligations under this Section shall survive the expiration or sooner
termination of the Lease Term.
ARTICLE 17
PROTECTION OF CREDITORS
17.1 SUBORDINATION. Landlord shall have the right to require
Tenant to subordinate this Lease to any ground lease, deed of trust, mortgage or
the Declarations encumbering the Premises, any advances made on the security
thereof and any renewals, modifications, consolidations, replacements or
extensions thereof, whenever made or recorded. Landlord may, by written notice
to Tenant, subordinate this Lease to any new Declarations. If any beneficiary
under a deed of trust or mortgagee under a mortgage elects to have this Lease
prior to the lien of its deed of trust or mortgage and gives written notice
thereof to Tenant, this Lease shall be deemed prior to such deed of trust or
mortgage whether this Lease is dated prior or subsequent to the date of said
deed of trust or mortgage or the date of recording thereof. As a condition to
any such subordination, Landlord's lender shall provide to Tenant a commercially
reasonable nondisturbance agreement (which may be part of a subordination and
attornment agreement) recognizing Tenant's right to possession of the Premises
so long as Tenant is not in default under this Lease beyond any applicable cure
period.
17.2 ATTORNMENT. If Landlord's interest in the Premises is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale, or by any other person or entity, as a result
of any other transfer by Landlord, Tenant shall attorn to the transferee of or
successor to Landlord's interest in the Premises and recognize such transferee
or successor as Landlord under this Lease. Tenant waives the protection of any
statute or rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Premises upon the transfer
of Landlord's interest.
17.3 SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to effectuate or evidence any
such attornment or subordination or agreement to do so. If Tenant fails to do so
within ten (10) days after written request, such failure shall constitute a
default under this Lease entitling Landlord to terminate this Lease.
17.4 ESTOPPEL CERTIFICATES.
17.4.1 Upon either party's written request ("Requesting
Party"), the other party ("Responding Party") shall execute, acknowledge and
deliver to the Requesting Party a written statement certifying: (i) that none of
the terms or provisions of this Lease have been changed (or if they have been
changed, stating how they have been changed); (ii) that this Lease has not been
canceled or terminated and is in full force and effect; (iii) the last date of
payment of the Base Monthly Rent, and other charges and the time period covered
by such payment; (iv) that the Requesting Party is not in default under this
Lease (or, if the Requesting Party is claimed to be in default, stating why) and
(v) such other statements as reasonably required by the Requesting Party, or any
lender or prospective lender, investor or purchaser. The Responding Party shall
deliver such statement to the Requesting Party within ten (10) days after the
Requesting Party's request. Any such statement by the Responding Party may be
given by the Requesting Party to any prospective purchaser or encumbrancer of
the Premises. Such purchaser or encumbrancer may rely conclusively upon such
statement as true and correct.
17.4.2 If the Responding Party does not deliver such
statement to the Requesting Party within such ten (10) day period and the
Requesting Party's written request specifically states "The failure to respond
to the request within ten (10) days might cause a default under the Lease" then
such failure
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shall constitute a default under this Lease. Further, the Requesting Party and
any prospective purchaser or encumbrancer, may conclusively presume and rely
upon the following facts: (i) that the terms and provisions of this Lease have
not been changed except as otherwise represented by the Requesting Party; (ii)
that this Lease has not been canceled or terminated except as otherwise
represented by the Requesting Party; (iii) that not more than one month's Base
Monthly Rent or other charges have been paid in advance; and (iv) that Landlord
is not in default under this Lease. In such event, the Requesting Party shall be
estopped from denying the truth of such facts.
17.5 TENANT'S FINANCIAL CONDITION. Within ten (10) days after
written request from Landlord, Tenant shall deliver to Landlord such financial
statements as are reasonably required by Landlord to verify the net worth of
Tenant, or any assignee, subtenant, or guarantor of Tenant. In addition, Tenant
shall deliver to any lender or proposed purchaser of the Premises or any portion
of the Project designated by Landlord any financial statements required by such
lender or purchaser to facilitate the sale, financing or refinancing of the
Premises or any portion of the Project. Tenant represents and warrants to
Landlord that each such financial statement is a true and accurate statement as
of the date of such statement. All financial statements shall be confidential
and shall be used only for the purposes set forth herein. Each such financial
statement shall be executed by Tenant and shall be certified by Tenant to be
true and correct.
17.6 MORTGAGEE PROTECTION CLAUSE. Tenant agrees to give any
mortgagees and/or trust deed holders, by registered mail, a copy of any notice
of default served upon the Landlord, provided that prior to such notice Tenant
has been notified in writing of the addresses of such mortgagees and/or trust
deed holders. Tenant further agrees that if Landlord shall have failed to cure
such default within the time provided for in this Lease, then the mortgagees
and/or trust deed holders shall have an additional thirty (30) days within which
to cure such default or if such default cannot be cured within that time, then
such additional time as may be necessary if within such thirty (30) days any
mortgagee and/or trust deed holder has commenced and is diligently pursuing the
remedies necessary to cure such default (including but not limited to
commencement of foreclosure proceedings if necessary to effect such cure), in
which event this Lease shall not be terminated while such remedies are being so
diligently pursued.
ARTICLE 18
TERMINATION OF LEASE
18.1 CONDITION UPON TERMINATION. Upon the termination of this
Lease, Tenant shall surrender the Premises to Landlord, broom clean and in the
same condition as received except for ordinary wear and tear which Tenant was
not otherwise obligated to remedy under any provision of this Lease. However,
Tenant shall not be obligated to repair any damage which Landlord is required to
repair under Article 14 of this Lease. No act done by Landlord or any agent or
employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing and signed by Landlord. The delivery of
keys to the Premises to Landlord or any agent or employee of Landlord shall not
constitute a surrender of the Premises or effect a termination of this Lease,
whether or not the keys are thereafter retained by Landlord and, notwithstanding
such delivery, Tenant shall be entitled to the return of such keys at any
reasonable time upon request until this Lease shall have been properly
terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a
merger, and, at the option of Landlord, shall operate as an assignment to
Landlord of all subleases or subtenancies affecting the Premises.
18.2 NON-REMOVAL BY TENANT. All permanently attached Alterations,
including signs and sign cases, made by Tenant, or made by the Landlord on the
Tenant's behalf and for which Tenant has paid
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Landlord in accordance with this Lease, shall remain the property of the Tenant
for the Lease Term. Such permanently attached Alterations shall not be removed
from the Premises. At the expiration or termination of this Lease Term, all such
permanently attached Alterations become the property of the Landlord; provided,
however, Landlord may require that Tenant, at Tenant's sole cost, remove any
such Alterations (but not including the Tenant Improvements constructed by
Landlord or Tenant Work (as defined in the Work Letter)) or utility
installations at the expiration of the Lease Term and to restore the Premises to
their prior condition. In removing any such Alterations as may be required by
the Landlord, the Tenant shall remove any of its personal property and shall
repair any damage to the Premises caused by such removal and, prior to such
removal, Tenant shall post a bond or other security as may be required by the
Landlord in order to insure the Landlord that the Premises will be repaired in a
prompt and workmanlike manner. If Tenant fails promptly to commence and
diligently pursue to completion such removal and restoration required by the
provisions of this Article 18, Tenant shall pay to Landlord the cost of such
removal and restoration, such cost to include a reasonable charge for Landlord's
overhead. Tenant shall continue to pay Rent for the portion of the Premises not
completely vacated during such time together with all costs and expenses
incurred by Landlord in removing, storing and disposing of such property
together with all costs and expenses of repair to and clean up of the Premises.
Thereafter, Landlord may retain or dispose of in any manner the personal
property not so removed, without liability to Tenant.
18.3 ABANDONED PROPERTY. Any property of Tenant not removed by
Tenant upon the expiration of the Lease Term or any period of holding over (or
within ten (10) days after a termination by reason of Tenant's default) shall be
considered abandoned, and Landlord may remove any or all such items and dispose
of the same in any manner or store the same in a public warehouse or elsewhere
for the account of and at the expense and risk of Tenant. If Tenant shall fail
to pay the cost of storing any such property after it has been stored for a
period of thirty (30) days or more, Landlord may sell any or all of such
property at public or private sale, in such manner and at such times and places
as Landlord, in its sole discretion, may deem proper, without notice to or
demand upon Tenant. Landlord shall apply the proceeds of such sale (a) first, to
the costs and expenses of such sale, including reasonable attorneys' fees
actually incurred; (b) second, to the payment of the expense of or charges for
removing and storing any such property; and (c) the balance to Landlord.
18.4 LANDLORD'S ACTIONS ON PREMISES. Tenant hereby waives all
claims for damages or other liability in connection with Landlord's re-entering
and taking possession of the Premises or removing, retaining, storing or selling
the property of Tenant as herein provided, and Tenant hereby indemnifies and
holds Landlord and Landlord's Indemnitees harmless from any such damages or
other liability, and no such re-entry shall be considered or construed to be a
forcible entry.
18.5 HOLDING OVER. Tenant shall vacate the Premises upon the
expiration or earlier termination of this Lease. Tenant shall reimburse Landlord
for and indemnify Landlord and Landlord's Indemnitees against all damages
incurred by Landlord from any delay by Tenant in vacating the Premises. If
Tenant remains in possession of all or any part of the Premises after the
expiration of the Lease Term with or without the express or implied consent of
Landlord, such tenancy shall be from month-to-month only and not a renewal
hereof or an extension for any further term, and in such case, Base Monthly Rent
then in effect shall be increased by thirty percent (30%) and other monetary
sums due hereunder shall be payable in the amount and at the time specified in
this Lease, and such month-to-month tenancy shall be subject to every other
term, covenant and agreement contained herein, except that the month-to-month
tenancy will be terminable on thirty (30) days notice given at any time by
either party.
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ARTICLE 19
MISCELLANEOUS PROVISIONS
19.1 OBLIGATION TO REFRAIN FROM DISCRIMINATION. The Tenant herein
covenants by and for itself, its successors and assigns, and all persons
claiming under or through them, and this Lease is made and accepted upon and
subject to the following conditions:
That there shall be no discrimination against or segregation of
any person or group of persons, on account of sex, race, color, creed, religion,
national origin, or ancestry, in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the land herein leased nor shall the Tenant
itself, or any person claiming under or through it, establish or permit such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sublessees,
subtenants or vendees in the land herein leased.
19.2 SUCCESSORS. Subject to limitations expressed elsewhere in
this Lease, all rights and liabilities herein given to, or imposed upon, the
respective parties hereto shall extend to and bind the several respective heirs,
executors, administrators, successors, and assigns of the said parties; and if
there shall be more than one Tenant, they shall all be bound jointly and
severally by the terms, covenants and agreements herein. No rights, however,
shall inure to the benefit of any assignee of Tenant unless the assignment to
such assignee has been approved by Landlord in writing as provided in Article 13
hereof.
19.3 SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.
19.4 INTERPRETATION. The captions of the Articles or Sections of
this Lease are to assist the parties in reading this Lease and are not a part of
the terms or provisions of this Lease. Whenever required by the context of this
Lease, the singular shall include the plural and the plural shall include the
singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Premises with Tenant's expressed or
implied permission.
19.5 OTHER TENANCIES. Landlord reserves the absolute right to
effect such other tenancies in the Project as Landlord, in the exercise of its
sole business judgment, shall determine to best promote the interest of the
Project. Tenant does not rely on the fact, nor does Landlord represent, that any
specific tenant or type or number of tenants shall, during the term of this
Lease, either (i) enter into a lease for any space in the Project or (ii)
continue to lease any space in the Project under any lease which is in effect as
of the date of this Lease, or that any tenant under any lease in effect as of
the date of this Lease will not assign or transfer its interest under its lease
or change the use of the premises under such lease. By executing this Lease,
Tenant acknowledges that Landlord has not made any representations, warranties
or statements as to any of the foregoing and agrees that the occurrence of any
of the foregoing or any similar event shall not affect Tenant's obligations
under this Lease.
19.6 ENTIRE AGREEMENT. Any Exhibits, Addenda and schedules
attached hereto shall be incorporated herein as though fully set forth herein.
This Lease and the Exhibits, Addenda and schedules, if any, attached hereto and
forming a part hereof, set forth all the covenants, promises, agreements,
conditions and understandings, either oral or written, between Landlord and
Tenant concerning the Premises and there are no covenants, promises, agreements,
conditions or understandings, either oral, or
written, between them other than are herein set forth. Except as herein
otherwise provided, no subsequent
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alteration, amendment, change or addition to this Lease shall be binding upon
Landlord or Tenant unless reduced to writing and signed by the party to be
charged with their performance.
19.7 LANDLORD'S LIABILITY. As used in this Lease, the term
"Landlord" means only the current owner or owners of the fee title to the
Premises or the leasehold estate under a ground lease of the Premises at the
time in question. Each Landlord is obligated to perform the obligations of
Landlord under this Lease only during the time such Landlord owns such interest
or title. Any Landlord who transfers its title or interest is relieved of all
liability with respect to the obligations of Landlord under this Lease to be
performed on or after the date of transfer. However, each Landlord shall deliver
to its transferee all funds previously paid by Tenant if such funds have not yet
been applied under the terms of this Lease. The obligations of Landlord under
this Lease do not constitute personal obligations of Landlord, or its partners,
directors, employees, officers, members, managers or shareholders and Tenant
shall look solely to the Project and to no other assets of Landlord for
satisfaction of any liability with respect to this Lease and will not seek
recourse against the partners, directors, officers, members, managers or
shareholders of Landlord herein, nor against any of their personal assets for
such satisfaction.
19.8 NOTICES. All notices required or permitted under this Lease
shall be in writing and shall be personally delivered or sent by certified mail,
return receipt requested, postage prepaid or by overnight courier marked for
delivery next Business Day. Notices to Tenant shall be delivered to the address
specified in Item 5 of the Basic Terms, except that upon Tenant's taking
possession of the Premises, the Premises shall be Tenant's address for notice
purposes. Notices to Landlord shall be delivered to the address specified in
Item 3 of the Basic Terms or such other address as may be instructed by
Landlord. All notices shall be effective upon personal delivery or three (3)
Business Days after deposit in the U.S.
Mail or one (1) Business Day after deposit with an overnight courier.
19.9 WAIVERS. All waivers must be in writing and signed by the
waiving party. Landlord's failure to enforce any provision of this Lease or its
acceptance of Rent shall not be a waiver and shall not prevent Landlord from
enforcing that provision or any other provision of this Lease in the future. No
statement on a payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.
19.10 NO RECORDATION. Tenant shall not record this Lease or a
memorandum hereof without prior written consent from Landlord. However, Landlord
may require that a "Short Form" memorandum of this Lease be executed by both
parties and recorded.
19.11 CHOICE OF LAW. The internal laws without regard to choice
of law rules of the State of California shall govern this Lease.
19.12 CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant is a
corporation, each person signing this Lease on behalf of Tenant represents and
warrants that he or she has full authority to do so and that this Lease binds
the corporation. Concurrently with execution of this Lease, Tenant shall deliver
to Landlord a certified copy of a resolution of Tenant's Board of Directors
authorizing the execution of this Lease or other evidence of such authority
reasonably acceptable to Landlord. If Tenant is a partnership, each person
signing this Lease for Tenant represents and warrants that he or she is a
general partner of the partnership, that he or she has full authority to sign
for the partnership and that this Lease binds the partnership and all general
partners of the partnership. Tenant shall give written notice to Landlord of any
general partner's withdrawal or addition. Concurrently with execution of this
Lease, Tenant shall deliver to Landlord a copy of Tenant's recorded statement of
partnership or certificate of limited partnership.
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19.13 NO PARTNERSHIP. Landlord shall not by virtue of this Lease,
in any way or for any purpose, be deemed to have become a partner of Tenant in
the conduct of its business, or otherwise, or joint venturer or a merger of a
joint enterprise with Tenant, nor is Tenant an agent of Landlord for any reason
whatsoever.
19.14 JOINT AND SEVERAL LIABILITY. All parties signing this Lease
as Tenant shall be jointly and severally liable for all obligations of Tenant.
19.15 ATTORNEYS' FEES. If either party commences litigation
against the other for the specific performance of this Lease, the interpretation
of this Lease, for damages for the breach hereof or otherwise for enforcement of
any remedy hereunder, the parties hereto agree to and hereby do waive any right
to a trial by jury and, in the event of any such commencement of litigation, the
prevailing party shall be entitled to recover from the other party such costs
and reasonable attorneys' fees as may have been incurred. Further, if Landlord
is named as a defendant in any suit brought against Tenant in connection with or
arising out of Tenant's occupancy hereunder, Tenant shall be obligated to pay to
Landlord, in addition to all other amounts for which Tenant is obligated
hereunder, all of Landlord's reasonable costs and expenses incurred in
connection with any such acts, including reasonable attorneys' fees.
19.16 LENDER MODIFICATION. If, in connection with obtaining any
loans including but not limited to a construction loan, permanent financing or
refinancing for the Project, a lender shall request reasonable modifications to
this Lease as a condition to such financing, Tenant will not unreasonably
withhold, delay or defer its consent thereto, provided that such modifications
do not increase the obligations of Tenant hereunder or materially adversely
affect the leasehold interest hereby created or Tenant's rights hereunder.
19.17 BROKERS. Landlord shall pay Tenant's Broker a commission
pursuant to a separate agreement between Landlord and Tenant's Broker. Landlord
and Tenant hereby warrant to each other that they have had no dealings with any
real estate broker or agent in connection with the negotiation of this Lease,
excepting only the real estate brokers or agents specified in Item 12 of the
Basic Terms, and that they know of no other real estate broker or agent who may
be entitled to a commission in connection with this Lease. Each party agrees to
indemnify and defend the other party against and hold the other party harmless
from any and all claims, demands, losses, liabilities, lawsuits, judgments, and
costs and expenses (including, without limitation, reasonable attorneys' fees)
with respect to any leasing commission or equivalent compensation alleged to be
owing on account of the indemnifying party's dealings with any real estate
broker or agent other than that specified herein.
19.18 FORCE MAJEURE. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Landlord's control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions.
19.19 TENANT OBLIGATIONS SURVIVE TERMINATION. All obligations of
Tenant hereunder not fully performed as of the expiration or earlier termination
of the Lease Term shall, survive the expiration or earlier termination of the
Lease Term, including, without limitation, all payment obligations and all
obligations concerning the condition of the Premises.
19.20 TENANT'S WAIVER. Any claim which Tenant may have against
Landlord for default in performance of any of the obligations herein contained
to be kept and performed by Landlord shall be deemed waived unless such claim is
asserted by written notice thereof to Lessor within ten (10) days of
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commencement of the alleged default or of accrual of the cause of action and
unless suit be brought thereon within six (6) months subsequent to the accrual
of such cause of action.
19.21 SUBMISSION OF LEASE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or an
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
ADDITIONAL PROVISIONS ARE SET FORTH IN THE EXHIBITS AND ADDENDA
ATTACHED HERETO.
Landlord and Tenant have signed this Lease at the place and on
the dates specified adjacent to their signatures below and have initialled all
Exhibits and Addenda which are attached to or incorporated by reference in this
Lease.
LANDLORD:
Dated:12/9/94 The Campus, LLC,
_____________ a California limited liability company
By: Newport National Corporation,
a California corporation
Its: Manager
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TENANT:
Dated:__12/9/94______ ViaSat, Inc., a California corporation
By:____/s/ Xxxx Monahan___________________
Name: Xxxx Xxxxxxx
Title: Vice president
By:_______________________________________
Name:_____________________________________
Title:____________________________________
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EXHIBIT "A"
Site Plan
[To be Attached]
12/8/94 Landlord's Initials:__/s/__
Tenant's Initials:__/s/__
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EXHIBIT "B"
THE CAMPUS
RULES AND REGULATIONS
1. WALKWAYS. The sidewalks, roadways, and other public portions
in the Project shall be used by the Tenant for the purpose solely of ingress and
egress to and from the Premises of the Tenant. Tenant, its employees and agents,
shall not loiter in the entrances or corridors, nor in any way obstruct the
sidewalks, halls, stairways or elevators, and shall use the same only as a means
of ingress and egress for the Premises.
2. CONDITIONS OF PREMISES. The Tenant shall keep the exterior and
interior portion of the Premises, to include all windows, doors, and all other
glass, plate fixtures, and trim in a clean condition. No improvements,
additions, or materials of any kind are permitted to be placed on the outside of
any of the Premises by Tenant.
3. STORAGE OF REFUSE. All waste paper, garbage and refuse shall
be kept in the kind of container specified by Landlord, and shall be placed
outside of the Premises in specified trash containers prepared for collection in
the manner and at the times and places specified by Landlord. Landlord may
implement a recycling program and in such case, Tenant shall deposit refuse in
accordance with any requirements of such recycling program. If Landlord shall
provide or designate a service for picking up refuse and garbage, Tenant shall
use same at Tenant's cost whether billed directly or as part of Common Area
Maintenance Charges.
4. AERIALS. Except as set forth in the Lease, no aerial shall be
erected on the roof or exterior walls of the Premises, or within the Project,
without in each instance, the written consent of the Landlord, which may be
withheld in Landlord's sole discretion. Any aerial so installed without such
written consent shall be subject to removal without notice at any time.
5. CONDUCT. Tenant shall conduct its business in an orderly
manner in the best interests of the Project. No loudspeakers, televisions,
phonographs, radios, or other devices shall be used in a manner so as to be
heard or seen outside of the Premises without the prior written consent of the
Landlord, which may be withheld in Landlord's sole discretion.
6. OUTSIDE AREAS. The outside areas immediately adjoining the
Premises shall be kept clean and free from dirt and rubbish by the Tenant to the
satisfaction of the Landlord and Tenant shall not place or permit any
obstruction or materials in such areas, including, without limitation,
inventory, costs or signage of any type or kind. No exterior storage shall be
allowed without permission in writing from Landlord.
7. PARKING. Tenant and Tenant's employees shall park only in
those portions of the parking area designated for that purpose by Landlord.
Landlord has the right to make changes in the parking procedures and guidelines
from time-to-time, to benefit the Project, in Landlord's sole opinion.
8. PLUMBING. The plumbing facilities shall not be used for any
purpose other than that for which they are constructed, and no foreign substance
of any kind shall be thrown therein, and the expense
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of any breakage, stoppage, or damage resulting from a violation of this
provision shall be borne by Tenant, who shall, or whose employees, agents or
invitees shall have caused it.
9. PEST EXTERMINATORS. Tenant shall use, at Tenant's cost, such
pest extermination contractor as Landlord may direct and at such intervals as
Landlord may require.
10. FLAMMABLE MATERIALS. The Tenant shall not keep or permit to
be kept on the Premises any flammable or combustible fluid, chemical, or
explosive material of any kind. Tenant shall not burn any trash or garbage of
any kind in or about the Premises, or the Project.
11. AUCTIONS. Tenant shall not hold any auction, fire, or
bankruptcy sale in the Premises.
12. NO ANIMALS. Tenant shall not bring into the Premises at the
Project any animals of any type or kind, except animals necessary to assist
persons with disabilities.
13. SAFES. Landlord shall have the right to prescribe the weight,
size and position of all safes and other heavy property brought into the Project
to be located at any location other than the first floor of the Building and
also the times and manner of moving the same in and out of the Project. Safes
and other heavy objects shall, if considered necessary by Landlord, stand on
supports of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property in any case. All damage done to any part of the Project, its contents,
occupants or visitors by moving or maintaining any such safe or other property
shall be the sole responsibility of Tenant and any expense of said damage or
injury shall be borne by Tenant.
14. SAFETY PROCEDURES. Tenant shall comply with all safety, fire
protection and evacuation procedures and regulations established by Landlord or
any governmental agency.
15. PROTECTION FROM THEFT. Tenant shall assume any and all
responsibility for protecting the Premises from theft, robbery and pilferage,
which includes keeping doors locked and other means of entry to the Premises
closed.
16. WAIVER BY LANDLORD. Landlord may waive any one or more of
these Rules and Regulations for the benefit of any particular tenant or tenants,
but no such waiver by Landlord shall (i) be effective unless in writing, or (ii)
be construed as a waiver of such Rules and Regulations in favor of any other
tenant or tenants, or (iii) prevent Landlord from thereafter enforcing any such
Rules and Regulations against any or all tenants of the Project.
17. CHANGES TO RULES. Landlord reserves the right from time to
time to reasonably amend or supplement the foregoing rules and regulations, and
to adopt and promulgate reasonable additional rules and regulations applicable
to the Premises. Notice of such rules and regulations and amendments and
supplements thereto, if any, shall be given to the Tenant and Tenant agrees to
comply with all such rules and regulations upon receipt of notice. Landlord
shall not be liable in any way to Tenant for any damage or inconvenience caused
by any other tenant's non-compliance with these rules and regulations.
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POOL & SPA RULES AND REGULATIONS
PERSONS USING POOL AND SPA FACILITIES DO SO AT THEIR OWN RISK. MANAGEMENT
ASSUMES NO RESPONSIBILITY FOR ACCIDENT OR INJURY. MANAGEMENT IS NOT
RESPONSIBLE FOR ARTICLES LOST, DAMAGED OR STOLEN.
1. Pool and Spa hours are 6AM to 9PM, Monday through Friday.
2. Pool and Spa are reserved exclusively for use by the Tenants.
3. No children under the age of 14 will be allowed in the Pool at any time,
unless accompanied and supervised by a responsible adult.
4. The use of the Spa is strictly reserved for adults.
5. No glass containers are allowed at any time.
6. No alcoholic beverages shall be consumed or allowed in or around the Pool
or Spa area at any time. No person(s) under the influence of alcohol
is(are) permitted in or near the Pool.
7. No running, jumping, "horseplay," fighting, boisterous or dangerous
conduct, radios, record players, or other musical instruments, and/or any
noisy behavior disturbing to the other Tenants is allowed in the Pool area.
8. Showering is required prior to using the Pool.
9. The use of personal towels over Pool furniture is required when using
suntan oil or other lotions.
10. No toys, innertubes or any other objects whatsoever will be allowed in the
Pool area at any time.
11. Safety equipment is not to be used except in cases of emergency.
12. Pets are not permitted in the Pool area by order of the Health Department.
13. Furniture other than provided by the management shall not be used in the
Pool area. Pool furniture and any other equipment belonging to the premises
shall not be removed at any time.
14. Diving is not allowed at any time.
15. NO LIFEGUARD WILL BE ON DUTY.
16. Remaining in the Spa for longer than thirty (30) minutes is prohibited.
17. Persons using the Pool area are advised to discuss with their physicians
the appropriate use of hats, sunscreen and other protective devises.
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EXHIBIT "C"
THE CAMPUS
WORK LETTER AGREEMENT
[TENANT ALLOWANCE]
The Campus, LLC, a California limited liability company
("Landlord"), and ViaSat, Inc., a California corporation "Tenant", as of this
8th day of December, 1994, are executing simultaneously with this Work Letter
Agreement ("Work Letter"), a written lease (the "Lease") covering the Premises
described in the Lease.
This Work Letter defines the scope of Tenant Improvements (as
defined below) which Landlord shall be obligated to construct or install on the
Premises. If there is a conflict between the terms and provisions of this Work
Letter and the Lease, this Work Letter shall control. Terms which have initial
capital letters and are not otherwise defined in this Letter shall have the
meaning set forth in the Lease.
The parties recognize and acknowledge that this Work Letter will
be applicable for the East Wing and the West Wing at two (2) separate stages.
Upon execution of this Lease, the provisions of this Work Letter shall be
triggered for the West Wing (except as set forth in the next paragraph). Upon
the provision of reasonable assurances by Landlord on or before March 15, 1995,
that the Existing Tenant will abandon the East Wing on or before October 1, 1995
as set forth in Section 2.5 of the Lease, the provisions of this Work Letter
shall be triggered for the East Wing.
The parties also recognize and acknowledge that this Work Letter
will be applicable for the West Wing at two (2) separate stages. With respect to
Phase 1 of the West Wing, the provisions of Section 1 of this Work Letter shall
be triggered immediately. With respect to Phase 2 of the West Wing, the
Construction Drawings for Phase 2 must be completed by Tenant on or before the
date set forth herein.
This Work Letter is a part of the Lease and shall be subject to
all of its terms and conditions, including all definitions contained therein. In
consideration of the mutual covenants hereinafter contained, Landlord and Tenant
mutually agree as set forth below.
SECTION 1
PLANNING AND CONSTRUCTION DOCUMENTS
1.1 SPACE PLAN. If not already approved, a space planner selected
by Tenant and approved by Landlord in Landlord's reasonable discretion, will
prepare a preliminary space plan for the Premises within ten (10) days of the
date of the execution of the Lease. Tenant will cooperate with and submit to
Landlord or the Space Planner information required by the Space Planner
necessary for the Space Planner to prepare a space plan for the Premises which
shall include, without limitation, a layout designation of all counters,
fixtures, and partitioning and their intended use, and the equipment to be
contained therein ("Space Plan"). The Space Plan shall be subject to the
approval of Landlord which approval shall not be unreasonably withheld or
delayed.
Tenant Allowance
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1.2 CONSTRUCTION DOCUMENTS. Based on the approved Space Plan,
Tenant shall cause the preparation of all drawings, plans and specifications
necessary to construct the Tenant Improvements (the "Construction Documents").
The Construction Documents shall be prepared by consultants selected by Tenant
and reasonably approved by Landlord. Tenant shall be responsible for ensuring
that (a) the Construction Drawings for Phase 1 of the West Wing are completed on
or before February 1, 1995, (b) the Construction Drawings for Phase 2 of the
West Wing are completed on or before April 1, 1995, and (c) the Construction
Drawings for the East Wing are completed on or before August 1, 1995.
1.3 TENANT APPROVAL. After Tenant's approval, no significant
changes, modifications or alterations may be made without the prior written
consent of both Landlord and Tenant; provided, however, if any changes are
required (i) by any governmental agency with jurisdiction over the Project (ii)
as a result of field conditions, or (iii) to substitute reasonably equivalent
materials to avoid unanticipated delays, strikes or shortages, then Landlord
shall be authorized to make such changes. The costs of any such changes are to
be included within the Total Cost (as hereinafter defined). Any changes to the
Construction Documents after approval thereof, other than any changes required
under Subsections (i), (ii) and (iii) above, shall constitute a Change Order (as
hereinafter defined).
1.4 SPACE PLAN AND CONSTRUCTION DOCUMENT COSTS. All costs and
fees associated with the preparation of the Space Plan and Construction
Documents, including, without limitation, all consultant or subcontractor design
fees, shall be deducted from the Tenant Improvement Allowance (as hereafter
defined).
SECTION 2
TENANT IMPROVEMENTS
2.1 TENANT IMPROVEMENTS. All improvements for the Premises to be
constructed by Landlord before Landlord delivers possession of the Premises to
Tenant, in substantial conformance with the Construction Documents, shall
constitute the "Tenant Improvements." The Tenant Improvements are and shall
remain Landlord's property and shall be surrendered to Landlord upon expiration
or earlier termination of the Lease in accordance with the provisions of the
Lease.
2.2 PREMISES FURNISHINGS. It is expressly understood that
Landlord's obligation to construct Tenant Improvements in the Premises is
limited to construction of the Tenant Improvements specifically contemplated by
the Construction Documents. Tenant shall be solely responsible for the
performance and expense of the design, layout, provision, delivery and
installation of any furniture, furnishings, equipment, and any other personal
property Tenant will use at the Premises. In arranging for the performance of
any of the work referred to in the preceding sentence, Tenant shall be permitted
to enter the Premises only upon the prior consent of Landlord and shall adopt a
schedule in conformance with the schedule(s) of Landlord's Contractor (as
hereinafter defined) and conduct its work in such a manner as to maintain
harmonious labor relations so as not to interfere unreasonably with or delay the
work of Landlord's contractors in substantially completing the Tenant
Improvements.
Tenant Allowance
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SECTION 3
TENANT IMPROVEMENT ALLOWANCE
3.1 TENANT IMPROVEMENT ALLOWANCE. Landlord has agreed to contribute a
one-time tenant improvement allowance for the cost of preparing the Space
Plan and Construction Documents and toward the cost of constructing the Tenant
Improvements, including any necessary demolition work ("Tenant Improvement
Allowance"), in the amount specified in Item 14 of the Basic Terms of the
Lease, subject to adjustment as set forth in Section 3.2.2 below. The parties
recognize and agree that the Tenant Improvement Allowance will be applied
separately to the East Wing and the West Wing. Tenant shall be solely
responsible for any and all costs of constructing the Tenant Improvements in
excess of the Tenant Improvement Allowance pursuant to the provisions of
Section 3.2.2 below. The total of all costs incurred by Landlord in connection
with the design and construction of the Tenant Improvements shall be referred
to as the "Total Costs." Tenant may, at its option, use any portion of the
Tenant Improvement Allowance in excess of the Total Costs to pay or reimburse
Tenant for the costs of any Tenant Work or costs of moving expenses, including,
but not limited to, labor, material, and equipment required to relocate and/or
install all furnishings, communication equipment and office effects, upon
presentation of bills to Landlord evidencing the cost thereof.
3.2 COST OF TENANT IMPROVEMENT WORK.
3.2.1 OBTAINING COST QUOTATION. At the election of Tenant,
in Tenant's sole discretion, Landlord shall obtain a cost quotation ("Cost
Quotation") to construct the Tenant Improvements based upon the approved
Construction Documents from each of the following general contractors: X.X.
Xxxxx, Si-Mac, Xxxxx Xxxxx Construction and Newport National Construction Co.
("NNC") to the extent that each of these entities is willing and able to give a
Cost Quotation within a reasonable time period after request by Landlord.
Landlord shall use reasonable efforts to obtain a Cost Quotation from each of
these entities within a reasonable time period. The Cost Quotations shall
include a complete cost breakdown by line item, including without limitation,
architectural and engineering fees, permit fees and other government fees, sales
and use taxes and all other costs to be expended by or on behalf of the Landlord
in connection with the construction and installation of the Tenant Improvements.
Landlord agrees to meet with Tenant, at Tenant's request, to discuss the Cost
Quotations. Within five (5) days after Tenant's receipt of the Cost Quotations,
Tenant shall select the general contractor to construct the Tenant Improvements
("General Contractor") based upon the Cost Quotations and shall give notice
thereof to Landlord. Notwithstanding the above, Tenant shall be required to
select NNC if NNC agrees to match the Cost Quotation given by the General
Contractor selected by Tenant within five (5) days after receipt of such notice
from Tenant.
3.2.2 APPROVAL OF COST QUOTATION BY TENANT. If the Cost
Quotation exceeds the Tenant Improvement Allowance, Tenant shall, within five
(5) Business Days of receipt thereof, either: (i) agree in writing to pay the
cost by which the Cost Quotation exceeds the Tenant Improvement Allowance
("Excess Cost"), or (ii) in cooperation with the Space Planner and Landlord
revise the Construction Documents or Space Plan so that the Cost Quotation is
either (a) no more than the Tenant Improvement Allowance, or (b) in excess of
the Tenant Improvement Allowance by the amount of Excess Cost which Tenant
agrees to pay. If Tenant elects to revise the Construction Documents or Space
Plan in order to reduce the Cost Quotation, the period of time between Tenant's
election to revise the Construction Documents or Space Plan and the approval of
the revised Construction Documents by
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Tenant shall constitute a Tenant Delay (as defined below). If the Cost Quotation
is less than the Tenant Improvement Allowance, the Tenant Improvement Allowance
shall be deemed to be an amount equal to the Cost Quotation. The failure of
Tenant to respond within the five (5) Business Day period shall be a Tenant
Delay. Upon approval by Tenant, Landlord shall be authorized to proceed with the
Tenant Improvements in accordance with the approved Construction Documents. All
costs of revising the Construction Documents, including, without limitation,
re-engineering, estimating, printing of drawings, costs of any space planner,
architect, engineering consultants and other consultants and any other
incidental expenses, shall be chargeable against the Tenant Improvement
Allowance and the Total Cost.
3.3 LANDLORD COSTS FOR TENANT IMPROVEMENTS. All costs incurred by
Landlord in connection with (a) the design, construction and installation of the
Tenant Improvements, (b) any demolition or modification of any existing
improvements as may be necessary to accomplish construction of the Tenant
Improvements in conformance with the Space Plan and the Construction Documents,
or (c) any other measures taken by Landlord which may be reasonably required to
accomplish Landlord's construction of the Tenant Improvements, including but not
limited to Landlord's procurement of bonds, insurance policies and governmental
permits, and Landlord's construction management and/or on-site supervision shall
be charged against the Tenant Improvement Allowance.
3.4 TENANT COSTS FOR TENANT IMPROVEMENTS. Tenant shall deliver to
Landlord at least twenty (20) days prior to the commencement of construction of
the Tenant Improvements cash equal to fifty percent (50%) of the amount of the
Excess Costs. Forty percent (40%) of the Excess Costs shall be paid in cash to
Landlord within ten (10) days after Substantial Completion (as defined below) of
the Tenant Improvements with the remaining ten percent (10%) paid in cash within
ten (10) days after punchlist items are completed. Tenant shall be solely
responsible for all Excess Costs.
SECTION 4
CONSTRUCTION OF TENANT IMPROVEMENTS
4.1 CONSTRUCTION OF TENANT IMPROVEMENTS. After approval of the
Construction Documents, Landlord's Contractor shall use its diligent efforts to
Substantially Complete (as defined below) the Tenant Improvements on or before
the Estimated Lease Commencement Date set forth in the Lease.
4.2 COMPLETION OF TENANT'S IMPROVEMENTS. Landlord shall be
responsible for the construction of the Tenant Improvements in substantial
conformance with the approved Construction Documents. Landlord shall be
authorized to use its discretion and judgment, which discretion and judgment
shall be exercised reasonably, in entering into a construction contract with the
Contractor to construct the Tenant Improvements authorized hereunder. Upon
Substantial Completion (as defined below) of the Tenant Improvements, Landlord
and Tenant shall provide a "punchlist" identifying the corrective work of the
type commonly found on an architectural punchlist with respect to the Tenant
Improvements, which list shall be in Landlord's reasonable discretion based on
whether such items were required by the approved Construction Documents. Within
ten (10) Business Days after delivery of the punchlist, Landlord shall commence
the correction of punchlist items and diligently pursue such work to completion.
The punchlist procedure to be followed by Landlord and Tenant shall in no way
limit Tenant's obligation to occupy the Premises under the Lease nor shall it in
any way excuse Tenant's
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obligation to pay Rent as provided under the Lease, unless such punchlist items
reasonably precludes Tenant from occupying the Premises, as reasonably
determined by Landlord and Tenant.
4.3 SUBSTANTIAL COMPLETION. "Substantial Completion" or
"Substantially Completed" as used herein shall mean both (a) delivery of written
a certificate of Landlord to Tenant certifying the completion of construction of
the Tenant Improvements in the Premises pursuant to the approved Construction
Documents with the exception of minor details of construction installation,
decoration, or mechanical adjustments and punchlist items as certified to by
Landlord and (b) the issuance by the City of Carlsbad of a certificate of
occupancy, a temporary certificate of occupancy or some other authorization
necessary to permit Tenant to occupy and receive the beneficial use of the
Premises. Substantial Completion shall be deemed to have occurred, and
completion of the Tenant Improvements shall be deemed to have occurred,
notwithstanding the requirement to complete "punchlist" items or similar
corrective work. Tenant agrees that if Landlord shall be delayed in causing such
work to be Substantially Completed as a result of any of the events as defined
below (referred to herein as a "Tenant Delay"), then such delay shall be the
responsibility of Tenant, and will result in the Commencement Date of the Term
or, as applicable, the commencement of any portion of Tenant's Base Monthly Rent
obligations hereunder being the earlier of: (i) Tenant's opening of the Premises
for business; (ii) the date of Substantial Completion or (iii) the date when
Substantial Completion would have occurred if there had been no
Tenant Delay, providing that Landlord shall not be required to work on an
overtime basis in order to bring the Premises to Substantial Completion. For the
purposes of this Work Letter, a Tenant Delay is defined as follows: (a) Tenant's
failure to comply with any time frames set forth herein or in the Lease, (b) any
changes in the Construction Documents after the dates set forth in Section 1.2
of Exhibit C requested by Tenant after Landlord's and Tenant's approval of the
Construction Documents, including, without limitation, any changes made to
reduce the Cost Quotation pursuant to Section 3.2.2 of this Work Letter, (c)
Tenant's failure to furnish any documents required herein or approve any item or
any cost estimates as required herein, (d) Tenant's request for materials,
finishes, or installations other than Landlord's Building Standard items, (e)
Tenant's failure to perform any act or obligation imposed on Tenant by the Lease
or this Work Letter as and when requested thereunder or hereunder, or (f) any
other delay otherwise caused by Tenant, its agents, employees or contractors
which operates to delay Landlord's Substantial Completion of the Tenant
Improvements, as reasonably determined by Landlord.
SECTION 5
TENANT WORK
5.1 FINISH WORK. All finish work and decoration and other work
desired by Tenant and not included within the Tenant Improvements as set forth
in the approved Construction Documents, including specifically, without
limitation, all computer systems, telephone systems, telecommunications systems
and other items (the "Tenant Work") shall be furnished and installed by Tenant
at Tenant's sole expense and shall not be chargeable against the Tenant
Improvement Allowance.
5.1.1 CONSENT OF LANDLORD. If any Tenant Work is not set
forth on the approved Construction Documents, Tenant shall secure Landlord's
prior consent for such Tenant Work in the same manner and following the same
procedures provided for in the Lease. Tenant shall not commence the construction
or installation of any improvements on the Premises, including, specifically,
the Tenant Work, without Landlord's prior written approval (which shall not be
unreasonably withheld)
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of: (i) Tenant's contractor, (ii) detailed plans and specifications for the
Tenant Work, and (iii) a certificate(s) of insurance accurately showing that
Tenant's contractor maintains insurance coverage in amounts, types, form and
with companies reasonably acceptable to Landlord. All such certificates or
policies shall be endorsed to show Landlord as an additional insured and
insurance shall be maintained by Tenant or Tenant's contractor at all times
during the performance of the Tenant Work.
5.2 LANDLORD'S OBLIGATIONS. Landlord is under no obligation to
construct or supervise construction of any of the Tenant Work and any inspection
by Landlord shall not be construed as a representation that the Tenant Work is
in compliance with the final plans and specifications therefor or that the
construction will be free from faulty material or workmanship or that the Tenant
Work is in conformance with any building codes or other applicable regulations.
All of the Tenant Work shall be undertaken and performed in strict accordance
with the provisions of the Lease and this Work Letter.
SECTION 6
CHANGE ORDERS
Tenant may authorize changes in the work during construction only
by written instructions to Landlord, or its designated representative, on a form
approved by Landlord. All such changes will be subject to Landlord's prior
written approval, which shall be approved or disapproved by Landlord in its
discretion, which discretion shall be exercised reasonably, within three (3)
Business Days of receipt. Prior to commencing any change, Landlord will prepare
and deliver to Tenant, for Tenant's approval, a change order (the "Change
Order") setting forth the total costs of such change which will include
associated architectural, engineering and construction contractor's fees. Within
two (2) Business Days after delivery to Tenant of the total costs of the Change
Order, Tenant shall deliver notice of approval, together with a cash payment
equal to fifty percent (50%) of the cost of the Change Order to the extent such
cost exceeds any uncommitted balance of the Tenant Improvement Allowance ("First
Payment"). If Tenant fails to deliver written notice of Tenant's approval of
such Change Order and deliver the First Payment within five (5) days after
delivery by Landlord, then Tenant will be deemed to have withdrawn the proposed
Change Order and Landlord will not proceed to perform the change. Upon
Landlord's receipt of Tenant's approval and First Payment, Contractor will
proceed to perform the change. To the extent such cost exceeds any uncommitted
balance of the Tenant Improvement Allowance, forty percent (40%) of the balance
shall be paid to Landlord in cash within ten (10) days after Substantial
Completion and the remaining ten percent (10%) shall be paid in cash within ten
(10) days after the punchlist items are completed.
SECTION 7
RESPONSIBILITY FOR FUNCTION AND MAINTENANCE
Tenant will be responsible for the function and maintenance of
all Tenant Improvements whether or not approved by Landlord or installed by
Landlord at Tenant's request. Landlord's preparation and/or approval of any
design or construction documents will not constitute any representation or
warranty as to the adequacy, efficiency, performance or desirability of the
Tenant Improvements in the Premises.
Tenant Allowance
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SECTION 8
TENANT AND LANDLORD OBLIGATIONS
8.1 ACCESS AND ENTRY. During Landlord's construction of the
Premises, Landlord agrees to provide reasonable access as described herein to
the Premises to Tenant and its agents, for the purpose of installing Tenant's
fixtures, Tenant Work and furniture, so long as such access does not interfere
with the conduct of Landlord's construction activities or affect Landlord's
ability to diligently bring the Premises to Substantial Completion. Landlord
acknowledges that access during the construction of the Tenant Improvements for
purpose of performing Tenant Work is important to Tenant. If Landlord, in its
reasonable discretion, determines that the providing of such access may affect
its ability to bring the Premises to Substantial Completion on the estimated
Commencement Date as set forth in this Lease, Landlord shall have the right to
deny or otherwise restrict such access to Tenant and its agents until
Substantial Completion of the Tenant Improvements. The terms of such access may
require that Tenant and Tenant's agents perform work at times and in the manner
designated by Landlord, including nights, weekends, and holidays. Also, Tenant
and its agents may be required to utilize only certain access areas at certain
times, designated by Landlord. With respect to any approved Tenant Work, Tenant
shall adopt a schedule in conformance with the schedule of Landlord's Contractor
and conduct its work in such a manner as to maintain harmonious labor relations
so as not to interfere unreasonably with or delay the work of Landlord's
Contractor. Tenant's contractors and agents shall be subject to the supervision
of Landlord's construction supervisor.
8.2 RISK OF LOSS. All materials, work, installations and
decorations of any nature brought upon or installed in the Premises before the
Commencement Date shall be at the risk of the party who brought such materials
or items onto the Premises. Neither Landlord nor any party acting on Landlord's
behalf shall be responsible for any damage or loss or destruction of such items
brought to or installed in the Premises by Tenant prior to such date, except in
the event of negligence or willful misconduct on the part of Landlord or any
party acting on Landlord's behalf. As a condition to such early entry, Landlord
may require Tenant to execute a hold harmless agreement, in a form acceptable to
Landlord. Such early occupancy shall be subject to the terms and provisions of
Section 3.4 of the Lease.
8.3 CONFORMANCE WITH LAWS. Tenant shall cause all Tenant Work and
Landlord shall cause all Tenant Improvements to be constructed or installed in
conformity with applicable codes and regulations of governmental authorities
having jurisdiction over the Project and the Premises and valid building permits
and other necessary authorizations from appropriate governmental agencies when
required, which in the case of the Tenant Work, shall be obtained by Tenant at
Tenant's expense. Any Tenant Work not acceptable to the applicable governmental
authority or not reasonably satisfactory to Landlord in accordance with the
standard listed above (unless previously approved by Landlord), shall be
promptly corrected, replaced, or brought into compliance with such applicable
codes and regulations at Tenant's expense. Notwithstanding any failure by
Landlord to object to any such Tenant Work, Landlord shall have no
responsibility therefor.
8.4 LIENS. Tenant shall keep the Premises and Project free from
any mechanics', materialmen's or other liens arising out of (1) any work
performed upon or materials or furniture, fixtures or improvements delivered to
the Premises including but not limited to any Tenant Work performed by or for
Tenant or any person or entity claiming by, through or under Tenant, or (2)
materials furnished or obligations incurred by or for Tenant or any person or
entity claiming by, through or under Tenant.
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Landlord shall have the right at all times to post and keep posted on the
Premises any notices which it deems necessary for its protection from such
liens. If any such liens are filed and are not released of record by payment or
posting of a proper bond within ten (10) days after such filing, Landlord, may,
without waiving its rights and remedies based on such breach by Tenant and
without releasing Tenant from any obligations hereunder or under the Lease,
cause such liens to be released by any means it shall deem proper, including
payment of the claim giving rise to such lien in which event all amounts paid by
Landlord shall immediately be due and payable by Tenant.
SECTION 9
TENANT'S REPRESENTATIVE
Tenant has designated Xx. Xxxxxxx X. Xxxxxxx as its sole
representative with respect to the matters set forth in this Work Letter, who
shall have full authority and responsibility to act on behalf of Tenant as
required in this Work Letter. Tenant may change its representative under this
Work Letter at any time by providing five (5) days prior written notice to
Landlord. All inquiries, requests, instructions, authorizations and other
communications with respect to matters covered by this Work Letter from Landlord
will be made to Tenant's Representative. Landlord will communicate fully with
Tenant's Representative and will not make any inquiries of or to, and will not
give any instructions or authorizations to, any other employee or agent of
Tenant with regard to matters covered by this Work Letter except to the extent
necessary to preserve the safety of the Premises or Project or persons thereon.
SECTION 10
LANDLORD'S REPRESENTATIVE
Landlord has designated Xx. Xxxxx X. Xxxxxxxx as its sole
representative with respect to the matters set forth in this Work Letter, who
shall have full authority and responsibility to act on behalf of Landlord as
required in this Work Letter. Landlord may change its representative under this
Work Letter at any time by providing five (5) days prior written notice to
Tenant. All inquiries, requests, instructions, authorizations and other
communications with respect to the matters covered by this Work Letter from
Landlord will be made to Tenant's representative. Tenant will communicate solely
with Landlord's Representative and will not make any inquiries of or requests
to, and will not give any instructions or authorizations to, any other employee
or agent of Landlord, including Landlord's architect, engineers, and contractors
or any of their agents or employees, with regard to matters covered by this Work
Letter.
SECTION 11
MISCELLANEOUS
11.1 SOLE OBLIGATIONS. Except as herein expressly set forth with
respect to the Tenant Improvements or in the Lease, Landlord has no agreement
with Tenant and has no obligation to do any work with respect to the Premises.
Any other work in the Premises which may be permitted by Landlord pursuant to
the terms and conditions of the Lease, including any alterations or improvements
as contemplated in the Lease, shall be done at Tenant's sole cost and expense
and in accordance with the terms and conditions of the Lease.
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11.2 APPLICABILITY. This Work Letter shall not be deemed
applicable to: (a) any additional space added to the original Premises at any
time, whether by the exercise of any options under the Lease or otherwise, or
(b) any portion of the original Premises or any additions thereto in the event
of a renewal or extension of the original Lease Term, whether by the exercise of
any options under the Lease or any amendment or supplement thereto. The
construction of any additions or improvements to the Premises not contemplated
by this Work Letter shall be effected pursuant to a separate work letter
agreement, in the form then being used by Landlord and specifically addressed to
the allocation of costs relating to such construction.
11.3 AUTHORITY; COUNTERPARTS. Any person signing this Work Letter
on behalf of Tenant warrants and represents that such person has authority to do
so. This Work Letter may be executed in counterparts, each of which shall be
deemed an original, but all of which together constitute one instrument.
11.4 BINDING ON SUCCESSORS. Subject to the limitations on
assignment and subletting contained in the Lease, this Work Letter shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns.
11.5 LANDLORD'S APPROVAL RIGHTS. Landlord may withhold its
approval of the Space Plan, including any revisions requested by Tenant, the
Construction Documents, Change Orders or other work requested by Tenant which
require work which: (i) exceeds or affects the structural integrity of the
Project, or any part of the heating, ventilating, air conditioning, plumbing,
mechanical, electrical, communication or other systems of the Project; (ii) is
not approved by the holder of any mortgage or deed of trust encumbering the
Project at the time the work is proposed; (iii) would not be approved by a
prudent owner of property similar to the Project; (iv) violates any agreement
which affects the Project or binds Landlord; (v) Landlord reasonably believes
will increase the cost of operation or maintenance of the common areas within or
any of the systems of the Project; (vi) Landlord reasonably believes will reduce
the market value of the Premises or Project at the end of the Lease Term; (vii)
does not conform to applicable building codes or is not approved by any
governmental authority with jurisdiction over the Premises; (viii) is not a
Building Standard item or an item of equal or higher quality; (ix) in Landlord's
determination detrimentally affects the uniform exterior appearance of the
Project; or (x) is reasonably disapproved by Landlord for any other reason not
set forth herein.
11.6 TIME OF THE ESSENCE. Time is of the essence as to each and
every term and provision of this Work Letter. In all instances where Tenant is
required to approve an item, if no written notice of disapproval is given within
the stated time period at the end of said period the item shall automatically be
deemed approved and the next succeeding time period shall commence. Except as
otherwise provided, all references herein to a "number of days" shall mean and
refer to calendar days.
11.7 ATTORNEYS' FEES. In any action to enforce or interpret the
terms of this Work Letter, the party prevailing in that action shall be entitled
to recover its reasonable attorneys' fees and costs of suit, both at trial and
on appeal.
11.8 INCORPORATION. This Work Letter is and shall be incorporated
by reference in the Lease and all of the terms and provisions of the Lease are
incorporated herein for all purposes. Any default by Tenant hereunder also
constitutes a default under the Lease.
Tenant Allowance
12/18/94 Landlord Initials /s/
-----
Tenant Initials /s/
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EXHIBIT "C"
Page 9 of 10
80
IN WITNESS WHEREOF, the Work Letter has been made and executed as
of the date set forth below.
LANDLORD:
The Campus, LLC,
a California limited liability company
By: Newport National Corporation,
a California corporation
Its: Manager
By:/s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
TENANT:
Dated:__12/9/94______ ViaSat, Inc., a California corporation
By: /s/ Xxxx Xxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxx
Title: V.P.
By:________________________________________
Name:______________________________________
Title:_____________________________________
Tenant Allowance
12/18/94 Landlord Initials /s/
-----
Tenant Initials /s/
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EXHIBIT "C"
Page 10 of 10
81
EXHIBIT "D"
TENANT ACCEPTANCE LETTER
[DATE]
[TENANT'S NAME]
[ADDRESS]
Re: [ADDRESS AND SPACE LEASED]
Dear [TENANT'S NAME]:
Please sign below to confirm that you accept the Premises under that certain
Lease Agreement dated _________, by and between The Campus, LLC, and
_________________, [AS AMENDED BY ______________________,] and that the
Commencement Date is ________________________ and the expiration date is
____________________.
Sincerely,
____________________________________
By: ________________________________
Acknowledged and Agreed:
Tenant: _______________________ Date:_________________________
By:__________________________
Name:________________________
Title:_______________________
12/18/94 Landlord Initials /s/
-----
Tenant Initials /s/
-----
EXHIBIT "D"
82
EXHIBIT "E"
CADD Diagram
[Building One First Floor]
[To Be Attached]
83
EXHIBIT "E"
CADD Diagram
[Building One Mezzanine]
[To Be Attached]
Page 2 of 2
