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EXHIBIT 10.17
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (the "Amendment") is made as of the 20th
day of August, 1997, by and between THE MUTUAL LIFE INSURANCE COMPANY OF NEW
YORK, a New York corporation ("Landlord"), and SPARTA, INC., a Delaware
corporation ("Tenant"), with respect to the following:
RECITALS
A. Landlord is the landlord and Tenant is the tenant pursuant to that
certain written Office Lease dated August 12, 1992, between Landlord as landlord
and Tenant as tenant, as amended by that certain First Amendment to Lease dated
December _, 1994 (collectively, the "Lease"). The Lease covers certain premises
commonly known as Suite 325 in a building located at 00000 Xxxxxxx xx xx
Xxxxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx (the "Premises"), which are located in a
project (the "Project") commonly known as Plaza Pointe. The Premises consists of
12,327 square feet of net rentable area, which is 20.45% of the total net
rentable area of the Building.
B. The Term of the Lease expires on December 12, 1997, unless sooner
terminated pursuant to the terms of the Lease. Tenant desires to extend the term
of the Lease, and Landlord is willing to consent thereto, but only on the terms
and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION OF the foregoing Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
1. Capitalized Terms. Capitalized terms used herein and not otherwise defined
shall have the meanings given to such terms in the Lease.
2. Term. The Term of the Lease is hereby extended for one additional term of
sixty-five (65) months (the "First Additional Term"), and the Expiration Date of
the Lease is hereby extended to May 12, 2003. Tenant acknowledges that the First
Additional Term is the "Extension Period" referred to in Addendum No. 6 of the
Lease prior to giving effect to this Amendment. During the First Additional
Term, Tenant shall perform all obligations of the Tenant pursuant to the Lease,
as amended hereby, and shall occupy the Premises on the terms and conditions set
forth in the Lease, as amended hereby, except that the provisions of Exhibit F
shall have no application thereto. During the First Additional Term, Exhibit E
to the Lease is hereby deleted and is replaced by Exhibit E hereto.
3. Monthly Rental. Monthly Rental for the First Additional Term shall be as
follows, and shall otherwise be payable as and when set forth in the Lease with
respect to Monthly Rental for the original Term:
Monthly Rental Rate Monthly
Months* (psf of Rentable Area) Rental
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1-14 $1.39 $17,134.53
15-24 $1.44 $17,750.88
25-36 $1.49 $18,367.23
37-48 $1.54 $18,983.58
49-60 $1.59 $19,599.93
61-65 $1.64 $20,216.28
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* Month 1 is the period from and after December 13, 1997 through
January 12, 1998.
4. Services and Utilities. Landlord and Tenant acknowledge and agree that a
supplemental HVAC unit (the "Roof Unit") located on the roof of the Building
services the Premises. There is also located above the ceiling of the Premises
an additional "mini" HVAC unit (the "Mini Unit") which shall be Tenant's
responsibility to insure and maintain. Landlord shall, at Landlord's cost,
install a submeter with respect to the Mini Unit and Tenant shall pay to
Landlord all bills for utilities provided to such unit. Landlord agrees to
perform routine maintenance and repairs on the Roof Unit, and Tenant agrees that
it will be responsible, as additional rent under the Lease, for any costs of
such maintenance and/or repairs in excess of normal and routine maintenance and
repair costs imposed due to repairs and/or maintenance performed other than
during standard Building hours. Tenant shall pay to Landlord, on the first day
of each month in the Term commencing December 1, 1997, as additional rent, a
monthly base Building cost of $304.00 with respect to Tenant's usage of the Roof
Unit; provided, however, in the event that
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Landlord hereafter permits another tenant to use the Roof Unit for its cooling
needs, such base Building charge shall be reduced so as to allocate the same
between Tenant and such other tenant(s) pro rata in accordance with their
respective utility usage. In the event that Tenant discontinues its use of the
Roof Unit (and, consequently, the Mini Unit, which operates through the Roof
Unit), Tenant shall be responsible to pay for any and all costs of disconnecting
the same from the Premises, and, from and after such disconnection, Tenant shall
not be required to pay either the base Building charge with respect to the Roof
Unit or charges for any utility service provided, after the date of such
disconnection, to the Mini Unit (but Tenant shall remain responsible to pay for
any utility service separately submetered to the Mini Unit prior to the date of
disconnection).
5. Condition of Premises. Tenant accepts the Premises "AS IS" during the First
Additional Term and agrees and acknowledges that Landlord shall have no
obligations to perform any improvement work therein on behalf of Tenant except
as set forth on Exhibit B hereto. Tenant agrees that Landlord has made no
representations regarding the Premises, the Building or the Project or the
suitability thereof for Tenant's business, except as specifically provided in
this Amendment.
6. Brokers. Tenant represents that it has not dealt with any broker, agent or
finder in connection with this Amendment other than CB Commercial Real Estate
Group, Inc. and Xxx Xxxxxxxx of Structure Company Business Investment and Real
Estate, and that no such other broker, agent or finder has any claim under, by
or through Tenant for a commission or fee in connection with the extension of
the Term effected hereby.
7. Miscellaneous
a. Notices. Section I.O. of the Lease shall be amended to read in its
entirety as follows:
"Landlord's Address for Notice" means:
THE MUTUAL LIFE INSURANCE COMPANY
OF NEW YORK
00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Real Estate Vice President
b. Rules. Exhibit C to the Lease is hereby deleted and replaced with
Exhibit A to this Amendment.
8. Lease in Effect. Landlord and Tenant acknowledge and agree that the Lease,
except as amended by this Amendment, remains unmodified and in full force and
effect in accordance with its terms.
9. Entire Agreement. This Amendment embodies the entire understanding between
Landlord and Tenant with respect to the subject matter hereof and can be changed
only by an instrument in writing executed by both Landlord and Tenant.
10. Conflict of Terms. In the event that there is any conflict or inconsistency
between the terms and conditions of the Lease and those of this Amendment, the
terms and conditions of this Amendment shall control and govern the rights and
obligations of the parties.
11. Condition to Effectiveness. Tenant's execution and delivery to Landlord of
this Amendment in form and substance satisfactory to Landlord on or before
August 1, 1997 is a condition to the effectiveness of this Amendment.
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IN WITNESS WHEREOF, the undersigned have entered into this Amendment to
be effective as of the date first above written.
LANDLORD: TENANT:
THE MUTUAL LIFE INSURANCE SPARTA, INC., a Delaware corporation
COMPANY OF NEW YORK, a New York
corporation
By: [SIG] By: /s/ XXXXX X. XXXXXX
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Title: Reg. V.P. Title: Vice President
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Director, Business
Administration
By: [SIG]
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Title: CEO 7/31/97
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EXHIBIT A
RULES AND REGULATIONS
ATTACHED TO AND MADE A PART OF THE LEASE
The following Rules and Regulations shall be in effect at the Building, Landlord
reserves the right to adopt reasonable modifications and additions hereto. In
the case of any conflict between these regulations and the Lease, the Lease
shall be controlling. Landlord shall have the right to waive one or more rules
for the benefit of a particular tenant in Landlord's reasonable discretion.
1. Except with the prior written consent of Landlord, no tenant shall
conduct any retail sales in or from the Premises, or any business other
than that specifically provided for in the Lease. There shall be no
solicitation by Tenant of other tenants or occupants of the Building.
2. Landlord reserves the right to prohibit personal goods and services
vendors from access to the Building except upon such reasonable terms and
conditions, including but not limited to a provision for insurance
coverage, as are related to the safety, care and cleanliness of the
Building, the preservation of good order thereon, and the relief of any
financial or other burden on Landlord occasioned by the presence of such
vendors or the sale by them of personal goods or services to a tenant or
its employees. If reasonably necessary for the accomplishment of these
purposes, Landlord may exclude a particular vendor entirely or limit the
number of vendors who may be present at any one time in the Building. The
term "personal goods or services vendors" means persons who periodically
enter the Building of which the Premises are a part for the purpose of
selling goods or services to a tenant, other than goods or services which
are used by a tenant only for the purpose of conducting its business on
the Premises. "Personal goods or services" include, but are not limited
to, drinking water and other beverages, food, barbering services, and
shoeshining services.
3. The sidewalks, halls, passages, elevators and stairways shall not be
obstructed by any tenant or used by it for any purpose other than for
ingress to and egress from their respective Premises. The halls,
passages, entrances, elevators, stairways, balconies, janitorial closets,
and roof are not for the use of the general public, and Landlord shall in
all cases retain the right to control and prevent access thereto of all
persons whose presence in the Judgment of Landlord shall be prejudicial
to the safety, character, reputation and interests of the Building and
its tenants, provided that nothing herein contained shall be construed to
prevent such access to persons with whom Tenant normally deals only for
the purpose of conducting its business on the Premises (such as clients,
customers, office suppliers and equipment vendors, and the like) unless
such persons are engaged in illegal activities. No tenant and no
employees of any tenant shall go upon the roof of the Building without
the written consent of Landlord.
4. The sashes, sash doors, windows, glass lights, and any lights or
skylights that reflect or admit light into the halls or other places of
the Building shall not be covered or obstructed. The toilet rooms, water
and wash closets and other water apparatus shall not be used for any
purpose other than that for which they were constructed, and no foreign
substance of any kind whatsoever shall be thrown therein, and the expense
of any breakage, stoppage or damage, resulting from the violation of this
rule shall be borne by the tenant who, or whose clerks, agents,
employees, or visitors, shall have caused it.
5. No sign, advertisement or notice visible from the exterior of the
Premises or Building shall be inscribed, painted or affixed by Tenant on
any part of the Building or the Premises without the prior written
consent of Landlord. If Landlord shall have given such consent at any
time, whether before or after the execution of this Lease, such consent
shall in no way operate as a waiver or release of any of the provisions
hereof or of this Lease, and shall be deemed to relate only to the
particular sign, advertisement or notice so consented to by Landlord and
shall not be construed as dispensing with the necessity of obtaining the
specific written consent of Landlord with respect to each and every such
sign, advertisement or notice other than the particular sign,
advertisement or notice, as the case may be, so consented to by Landlord.
6. In order to maintain the outward professional appearance of the Building,
all window coverings to be installed at the Premises shall be subject to
Landlord's prior reasonable approval. If Landlord, by a notice in writing
to Tenant, shall object to any curtain, blind, shade or screen attached
to, or hung in, or used in connection with, any window or door of
EXHIBIT A
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the Premises, such use of such curtain, blind, shade or screen shall be
forthwith discontinued by Tenant. No awnings shall be permitted on any
part of the Premises.
7. Tenant shall not do or permit anything to be done in the Premises, or
bring or keep anything therein, which shall in any way increase the rate
of fire insurance on the Building, or on the property kept therein, or
obstruct or Interfere with the rights of other tenants, or in any way
injure or annoy them; or conflict with the regulations of the Fire
Department or the fire laws, or with any insurance policy upon the
Building, or any part thereof, or with any rules and ordinances
established by the Board of Health or other governmental authority.
Tenant shall not bring into, or permit or suffer in, the Building or the
Project, any weapons or firearms of any kind.
8. No safes or other objects larger or heavier than the freight elevators of
the Building are limited to carry shall be brought into or installed in
the Premises. Landlord shall have the power to prescribe the weight,
method of installation and position of such safes or other objects. The
moving of safes shall occur only between such hours as may be designated
by, and only upon previous notice to, the manager of the Building, and
the persons employed to move safes in or out of the Building must be
acceptable to Landlord. No freight, furniture or bulky matter of any
description shall be received into the Building or carried into the
elevators except during hours and in a manner approved by Landlord.
9. Landlord shall clean the Premises as provided in the Lease, and except
with the written consent of Landlord, no person or persons other than
those approved by Landlord will be permitted to enter the Building for
such purpose, but Tenant shall not cause unnecessary labor by reason of
Tenant's carelessness and indifference in the preservation of good order
and cleanliness.
10. No tenant shall sweep or throw or permit to be swept or thrown from the
Premises any dirt or other substance into any of the corridors or halls
or elevators, or out of the doors or windows or stairways of the
Building, and Tenant shall not use, keep or permit to be used or kept any
foul or noxious gas or substance in the Premises, or permit or suffer the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise, odors
and/or vibrations, or interfere in any way with other tenants or those
having business therein, nor shall any animals, firearms or birds be kept
in or about the Building. The Building is a non-smoking building. Smoking
or carrying lighted cigars or cigarettes in any buildings located in the
Project, including the Building and the elevators of the Building, is
prohibited.
11. Except for the use of microwave ovens and coffee makers for Tenant's
personal use, no cooking shall be done or permitted by Tenant on the
Premises, nor shall the Building be used for lodging,
12. Tenant shall not use or keep in the Building any kerosene, gasoline, or
inflammable fluid or any other illuminating material, or use any method
of heating other than that supplied by Landlord.
13. If Tenant desires telephone or telegraph connections, Landlord will
direct electricians as to where and how the wires are to be introduced.
No boring or cutting for wires or other otherwise shall be made without
directions from Landlord.
14. Each tenant, upon the termination of its tenancy, shall deliver to
Landlord all the keys of offices, rooms and toilet rooms, and security
access card/keys which shall have been furnished such tenant or which
such tenant shall have had made, and in the event of loss of any keys so
furnished, shall pay Landlord therefor.
15. No Tenant shall lay linoleum or other similar floor covering so that the
same shall be affixed to the floor of the Premises in any manner except
by a paste, or other material which may easily be removed with water, the
use of cement or other similar adhesive materials being expressly
prohibited. The method of affixing any such linoleum or other similar
floor covering to the floor, as well as the method of affixing carpets or
rugs to the Premises shall be subject to reasonable approval by Landlord.
The expense of repairing any damage resulting from a violation of this
rule shall be borne by Tenant by whom, or by those agents, clerks,
employees or visitors, the damage shall have been caused.
EXHIBIT A
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16. No furniture, packages or merchandise will be received in the Building or
carried up or down in the elevators, except between such Building hours
and in such elevators as shall be designated by Landlord.
17. On Saturdays, Sundays and legal holidays, and on other days between the
hours of 6:00 p.m. and 7:00 a.m. access to the Building or to the halls,
corridors, elevators or stairways in the Building, or to the Premises,
may be refused unless the person seeking access is known to the building
watchman, if any, in charge and has a pass or is properly identified.
Landlord shall in no case be liable for damages for the admission to or
exclusion from the Building of any person whom Landlord has the right to
exclude under Rule 3 above. In case of invasion, mob, riot, public
excitement, or other commotion, Landlord reserves the right but shall not
be obligated to prevent access to the Building during the continuance of
the same by closing the doors or otherwise, for the safety of the tenants
and protection of property in the Building.
18. Tenant shall see that the windows and doors of the Premises are closed
and securely locked before leaving the Building and Tenant shall exercise
extraordinary care and caution that all water faucets or water apparatus
are entirely shut off before Tenant or Tenant's employees leave the
Building, and that all electricity, gas or air shall likewise be
carefully shut off, so as to prevent waste or damage, and for any default
or carelessness Tenant shall make good all injuries sustained by other
tenants or occupants of the Building or Landlord.
19. Tenant shall not alter any lock or install a new or additional lock or
any bolt on any door of the Premises without prior written consent of
Landlord. If Landlord shall give its consent, Tenant shall in each case
furnish Landlord with a key for any such lock. Landlord shall have the
right to impose a charge for each key issued and for rekeying any lock or
bolt on any door of the Premises.
20. Tenant shall not install equipment, such as but not limited to electronic
tabulating or computer equipment, requiring electrical or air
conditioning service in excess of those to be provided by Landlord under
the Lease.
21. No bicycle, or shopping cart, or other vehicle or any animal shall be
brought into the Premises or the halls, corridors, elevators or any part
of the Building by Tenant.
22. Landlord shall have the right to prohibit the use of the name of the
Building or Project or any other publicity by Tenant which in Landlord's
opinion tends to impair the reputation of the Building or Project or
their desirability for other tenants, and upon written notice from
Landlord, Tenant will refrain from or discontinue such publicity.
23. Tenant shall not erect any aerial or antenna on the roof or exterior
walls of the Premises, Building, or Project without the prior written
consent of Landlord.
EXHIBIT A
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EXHIBIT B
WORK LETTER
(Turn Key - Building Standard Work)
In connection with the Amendment to which this Work Letter is attached and in
consideration of the mutual covenants hereinafter contained, Landlord and Tenant
agree as follows:
1. SCOPE OF WORK, WORK SCHEDULE
(a) Scope of Work. Tenant acknowledges and agrees that only minor (in
terms of time and amount) modifications to the Premises are required for
Tenant's occupancy thereof. Accordingly, promptly upon execution hereof Landlord
shall enlarge the existing conference room in the Premises (and, in connection
therewith, shall relocate the existing automatic screen within the conference
room), install new carpeting in the Premises in a color selected by Tenant from
carpet samples provided by Landlord and repaint the Premises in a color selected
by Tenant from a paint palette provided by Landlord, in each case using Building
Standard materials ("Landlord's Work"). Any other work necessary or desirable
for Tenant's use of the Premises shall be Tenant's sole responsibility, both as
to performance and payment of costs. Landlord will use reasonable efforts to
conduct Landlord's Work so as to minimize interference with Tenant's business in
the Premises, including with respect to carpet installation and with respect to
other portions of Landlord's Work only if so determined by Landlord in its sole
discretion, performing the same on weekends and/or after the Building's normal
business hours on business days. Notwithstanding the foregoing, Tenant hereby
waives all claims of interference with Tenant's business in the Premises arising
from the performance by Landlord of Landlord's Work, whether prior to or after
the commencement of the First Additional Term, and agrees that there shall be no
abatement of rent payable with respect to the Premises on account of such work
or any inconvenience to Tenant's business occasioned thereby.
(b) Work Schedule. Landlord shall deliver to Tenant, for Tenant's
review and approval, a schedule (the "Work Schedule") setting forth a timetable
for the preparation and approval of all space plans and working drawings and for
the planning and completion of the installation of Landlord's Work. The Work
Schedule shall set forth each of the various items of work to be done by or
approval to be given by Landlord and Tenant in connection with the completion of
Landlord's Work. The Work Schedule shall be submitted to Tenant for its approval
and, upon approval by both Landlord and Tenant, such schedule shall become the
basis for completing Landlord's Work. If Tenant shall fail to approve the Work
Schedule, as it may be modified after discussions between Landlord and Tenant,
within seven (7) days after the date such Work Schedule is first received by
Tenant, then Tenant shall be deemed to have approved such Work Schedule.
2. SPACE PLANS AND WORKING DRAWINGS
(a) Space Plank. Tenant agrees to cooperate with Landlord's space
planner and/or architect, who shall prepare detailed space plans for Landlord's
Work. Tenant shall approve such space plans in writing within seven (7) days
following receipt from Landlord (the "Space Plan Approval Date"). If Tenant
fails to so notify Landlord within such seven (7) days, Tenant shall be deemed
to have approved such space plans. If Tenant timely notifies Landlord of any
disapproval of the space plans, Tenant's notice of disapproval shall also set
forth its reasons for disapproval and suggested revisions to the space plans in
order to satisfy the concerns of Tenant. Tenant may have its own architect
prepare space plans, at its expense, prior to the Space Plan Approval Date, If
Tenant does so, Landlord shall be entitled, in all respects, to rely upon all
plans, drawings, and information so supplied.
(b) Working Drawings. Based upon the approved space plans for the
Premises, if necessary, Landlord's architect and engineer shall prepare final
working drawings (the "Working Drawings") for Landlord's Work. Landlord shall
then submit such Working Drawings to Tenant for its review, and Tenant shall
approve or disapprove any such drawings within seven (7) days after receipt
thereof. If Tenant fails to so notify Landlord within such seven (7) days,
Tenant shall be deemed to have approved such Working Drawings. If Tenant timely
notifies Landlord of any disapproval of the Working Drawings, Tenant's notice of
disapproval shall also set forth its reason for disapproval and suggested
revisions to the Working Drawings in order to satisfy the concerns of Tenant.
The Working Drawings shall include architectural, mechanical and electrical
drawings for "Building Standard Work" to be furnished by Landlord as described
in Section 6 below.
(c) Changes in Plans. Any changes requested by Tenant in the space
plans, Working Drawings or other plans and specifications after approval thereof
by Tenant or submission thereof by Tenant to Landlord shall be prepared at
Tenant's sole cost and expense, and any excess costs
EXHIBIT B
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(including without limitation a construction management fee of five percent (5%)
of such costs) resulting from such changes shall also be at Tenant's sole cost
and expense. Furthermore, Tenant shall be liable for any resulting delays in
completing Landlord's Work and the increased costs in completing the Building
Standard Work, if any, resulting from such delays.
(d) Non-Building Standard Work. Tenant may require work (hereinafter
referred to as "Non-Building Standard Work") different from or in addition to
Building Standard Work as described in Section 6 hereof; provided, however, that
all Non-Building Standard Work shall be of a quality that exceeds or is
commensurate with the quality of materials included in Building Standard, Any
plans, specifications and Working Drawings required for such Non-Building
Standard Work shall also be prepared by Landlord's architect and engineer but at
Tenant's expense.
(e) Landlord's Approval. All plans, specifications and Working
Drawings for the Premises and all Non-Building Standard Work requested by Tenant
are subject to Landlord's approval, which approval shall not be unreasonably
withheld.
(f) Compliance with Law. Tenant's plans and specifications shall not
be in conflict with building codes of the City of Laguna Hills or with insurance
regulations for a fire resistive building. All plans and specifications shall be
in a form satisfactory to appropriate governmental authorities responsible for
issuing permits and licenses required for construction. In the event any
additional work is required by any governmental authority over and above the
Building Standard Work in order to obtain the issuance of any permit or license
for the construction of Landlord's Work, Tenant shall be solely responsible for
the cost of such additional work.
3. BUILDING PERMIT
After approval by Landlord and Tenant of the Working Drawings for Landlord's
Work, if necessary, Landlord shall submit the drawings to the appropriate
governmental body for plan checking and a building permit. Landlord, with
Tenant's cooperation, shall cause to be made any change in the Working Drawings
necessary to obtain the building permit. After final approval of the Working
Drawings, no further changes thereto may be made without the prior written
approval of both Landlord and Tenant, and then only after agreement by Tenant to
pay any excess costs resulting from such changes.
4. INTENTIONALLY DELETED
5. CONSTRUCTION OF LANDLORD'S WORK
After the Working Drawings for Landlord's Work have been approved by Tenant and
Landlord and a building permit has been issued, Landlord shall cause its
contractor to complete Landlord's Work in accordance with the approved plans,
specifications and Working Drawings, subject to force majeure. However, and
notwithstanding the foregoing, installation or construction of Non-Building
Standard Work (and the affected Building Standard Work) shall not commence until
Tenant shall have approved the estimated cost thereof in accordance with Section
4 above. Landlord shall use reasonable efforts to secure completion of
Landlord's Work on or before December 13, 1997.
6. BUILDING STANDARD WORK AT LANDLORD'S EXPENSE
(a) Building Standard Work. Landlord agrees to furnish all of the
Building Standard Work specified in the final approved plans, specifications and
Working Drawings for the Premises at its sole cost and expense. A description of
Landlord's Building Standard Work for the Building may be obtained at any time
upon request to Landlord.
(b) Building Standard Work Specifications. The specifications for
Building Standard Work shall be as listed in Landlord's Building Standard Work
Specifications, a copy of which may be obtained at any time upon request to
Landlord.
(c) Warranties. Landlord hereby agrees to assign and transfer to
Tenant the benefit of any and all warranties received by Landlord from its
general contractor for the construction of Landlord's Work and any and all
warranties received from any suppliers of materials for Landlord's Work.
7. FAILURE OF TENANT TO COMPLY
Any failure of Tenant to comply with any of the provisions contained in this
Exhibit B, within the times for compliance herein set forth, shall, after
expiration of the applicable cure period set forth in
EXHIBIT B
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Section XVII. of the Lease, be deemed a default pursuant to the Lease. In
addition to the remedies provided to Landlord in this Exhibit B, upon the
occurrence of such a default by Tenant, Landlord shall have all remedies
available at law or equity to a landlord against a defaulting tenant pursuant to
a written lease, including but not limited to those set forth in Section XVII
DEFAULT and Section XX. ATTORNEYS' FEES of the Lease.
8. AUTHORIZED APPROVALS
All approvals required pursuant to the terms of this Work Letter or requests for
changes and modifications to the Space Plans, Working Drawings or any other
matter relating to the construction of Landlord's Work shall be deemed given if
approved or requested in writing by Tenant's Construction Representative, for
Tenant, and Landlord's Construction Representative, for Landlord.
9. DESTRUCTION
If at any time prior to the completion of Landlord's Work a casualty occurs
resulting in any damage or destruction of the partially completed Tenant
Improvements or the Premises or Building, the terms and conditions of Section
XVI. DESTRUCTION of the Lease shall govern the rights and obligations of the
parties.
EXHIBIT B
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EXHIBIT E
ADDENDA TO LEASE
This Exhibit, Addenda to Lease, is attached to and made a part of that certain
Lease dated August 12, 1992, as amended, by and between The Mutual Life
Insurance Company of New York, a New York corporation, as Landlord, and Sparta,
Inc., a Delaware corporation, as Tenant.
ADDENDUM NO. 1 THE PREMISES
Tenant acknowledges that Tenant is currently in possession of the Premises
pursuant to the Lease, and that nothing is required of Landlord to Put Tenant in
possession thereof.
ADDENDUM NO. 2 INTENTIONALLY DELETED
ADDENDUM NO. 3 BASE OPERATING EXPENSE
A. The Base Operating Expenses shall be an amount equal to the sum of the
actual Common Operating Costs incurred during the 1998 calendar year,
adjusted to that amount which would have been paid by Landlord had the
Building been ninety-five percent (95%) occupied and fully assessed.
B. Notwithstanding anything to the contrary in the Lease, including Section
XI. thereof, Tenant shall be solely responsible for providing and paying
for janitorial services for the Premises; provided, however, Common
Operating Costs shall include janitorial services provided to common
areas.
C. Tenant shall pay Tenant's Proportionate Share (which is 20.45%) of Common
Operating Costs in excess of the Base Operating Expense as provided in
Section XII. of the Lease; provided, however, that, if Common Operating
Costs increase, in the aggregate, by in excess of six percent (6%) in any
year, then Tenant shall not be required to pay its Proportionate Share of
such excess if and to the extent that "Landlord's Controllable Expenses"
(as defined below) increased, in the aggregate, by more than six percent
(6%) for such year. "Landlord's Controllable Expenses" shall mean Common
Operating Costs incurred pursuant to the following:
HVAC Maintenance Contract
Elevator Maintenance Contract
Common Area Music Contract
Lobby Plant Maintenance Contract
Restroom Supplies
Janitorial Contract (common area)
Window Washing Contract
Dayporter Services
Trash Removal Contract
Exterminating Contract
Landscape Maintenance Contract
Lot Sweeping Contract
Alarm Monitoring Contract
Security System Maintenance Contract
Management Fees
D. Common Operating Costs shall not be adjusted as a result of a change in
property taxes due to the sale, transfer or exchange of the Building
during the Term, nor shall Landlord's direct costs incurred in connection
with the sale or transfer of the Building be included in Common Operating
Costs. In addition, Common Operating Costs shall exclude the following:
(1) All capital improvements due to major overhaul or replacement of
major mechanical and air conditioning systems, except if and to
the extent the same are completed in 1998 and are designed to
reduce the Building's energy costs, in which case the same may be
included in common Operating Costs as amortized over the
reasonable useful life thereof as determined by Landlord;
(2) The costs of services or other items provided only to the premises
of other tenants and which do not benefit all tenants in common.
Whether costs benefit all tenants or specific tenants only shall
be determined by Landlord in its sole discretion; and
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(3) Costs of providing janitorial services and utilities benefitting
specific tenants. Landlord may determine in its sole discretion
the allocation of such costs benefitting all tenants and those
benefitting specific tenants only.
Tenant shall have the right, by written notice to Landlord given within thirty
(30) days after receipt of an annual statement pursuant to Article XII.C. of the
Lease (an "Annual Statement"), to protest specific items on the most recent
Annual Statement; to be effective, Tenant's notice must state with specificity
the item(s) to which Tenant objects. Upon Tenant's specific request therefor,
Landlord shall provide to Tenant reasonable (in Landlord's opinion)
documentation regarding the item(s) to which Tenant has objected. Tenant's
failure to object to an Annual Statement as, when and in the manner provided in
the preceding sentence shall render such Annual Statement binding on Tenant. Any
objections raised by Tenant in Tenant's notice must be resolved within sixty
(60) days after the same are raised and Landlord provides reasonable back-up
documentation requested by Tenant as aforesaid, unless Landlord agrees otherwise
in writing. Common Operating Costs shall be adjusted by Landlord to the amount
of Common Operating Costs which would have been paid or incurred by Landlord had
the Building been ninety-five percent (95%) rented and occupied.
ADDENDUM NO. 4 SERVICE AND UTILITIES
Notwithstanding Section IX. of the Lease, Tenant may override the Building's
energy management system and furnish HVAC to the Premises after the normal hours
of operating stated in Section IX. of the Lease by activating the energy
management system's reader which is located on the first floor of the Building.
Landlord shall monitor Tenant's use of such after-hours HVAC and, if Tenant
activates said system then Tenant shall pay to Landlord, as additional rent, the
sum of $35.00 per hour, per floor, for each hour of after-hours HVAC usage.
Landlord shall have the same rights and remedies for collection of this charge
as referenced in the Lease for unpaid rent or additional rent. Landlord shall
have the right to install a separate meter in the Premises to monitor the usage
of any services to the Premises which are in excess of Building standard, normal
and customary usage, and, if Landlord elects to do so, Tenant shall pay directly
to the utility company providing such service the cost of such services provided
to the Premises and so separately metered.
ADDENDUM NO. 5 PARKING
Notwithstanding Section XXIV. of the Lease, ten (10) of the parking stalls to be
provided to Tenant shall be located in the reserved and covered parking area,
the designation of which will be determined by Landlord in its sole discretion.
Tenant acknowledges that, while Landlord agrees to identify the covered spaces
so reserved with Tenant's name ("Sparta reserved") plus numbers, the "reserved"
markings are intended merely to deter other tenants and invitees of the Building
from parking in these stalls, and further acknowledges and agrees that Landlord
does not intend to monitor or police the use of any reserve stalls and shall not
be liable for any use thereof by persons other than Tenant's employees, invitees
or agents.
All reserved parking shall be provided to Tenant at no additional cost to Tenant
through the expiration of the First Additional Term of the Lease. All open and
reserved parking shall be free for the entire Lease Term.
ADDENDUM NO. 6 TERM
A. Option to Extend.
Tenant shall have the right to extend the Term of the Lease for
all of the Premises, including any space leased by Tenant
pursuant to Addendum 7 below or otherwise, for one (1)
additional period of three (3) years (the "Second Additional
Term"), provided that (a) Tenant is not in default under any
provision of the Lease at the time of exercise and at the time
the Second Additional Term would otherwise commence, (b) Tenant
has not assigned the Lease or subleased without Landlord's
consent all or any portion of the Premises or subleased with
Landlord's consent more than fifteen percent (15%), in the
aggregate, of the net rentable area of the Premises, in each
case both at the time of exercise and at the time the Second
Additional Term would otherwise commence, and (c) Tenant's
financial statements are acceptable to Landlord both at the time
of exercise and at the time the Second Additional Term would
otherwise commence. Accordingly, concurrently with the exercise
by Tenant of the foregoing option, and within thirty (30) days
prior to the date the second Additional Term would otherwise
commence, Tenant shall deliver to Landlord its most recent
audited financial statements, including a balance sheet and
income statement, or a document in which Tenant states that its
books are not independently audited and unaudited financial
statements, including a balance sheet and income
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statement, dated within ninety (90) days of the date of such
delivery. Tenant shall exercise the foregoing option, if at all,
by delivering written notice to Landlord of Tenant's desire to
so extend the Term (together with the financial statements
referred to above) two hundred seventy (270) days prior to the
Expiration Date (the "Extension Notice"). So long as Tenant is
entitled to and properly exercises its option in the manner and
within the time specified above, and provided further that
Landlord approves the financial statements delivered by Tenant
in accordance with the foregoing, the Term shall be extended for
three (3) years as follows:
(i) Upon receipt of the Extension Notice, Landlord shall
prepare and deliver to Tenant an amendment to this Lease
(the "Extension Amendment") or, if Landlord is then
utilizing a form of lease different from this Lease,
Landlord shall deliver to Tenant a new lease (the "New
Lease"). The Extension Amendment or New Lease shall
provide for a Monthly Rental equal to the fair market
rental for the Premises (taking into consideration the
amount of tenant improvements required), determined by
Landlord according to the rental then being charged for
comparable space in the general geographic area of the
building, including the Irvine Spectrum area, and shall
otherwise be on the same terms and conditions set forth
in this Lease (except to the extent that the form of the
New Lease differs from the form of this Lease).
(ii) Tenant shall execute the Extension Amendment or New
Lease, as the case may be, within thirty (30) days after
receipt of the same and return it to Landlord. If Tenant
fails to execute and return the same to Landlord, the
option shall be deemed lapsed and of no further force or
effect and Landlord shall be free to lease the Premises
to a third party as provided in the foregoing sentence.
(iii) The option granted herein is granted solely to Tenant
and is not assignable or transferable and any attempt to
assign or transfer this option shall be void and of no
force or effect.
B. Option to Terminate
Provided that Tenant is the original tenant under this Lease and
is not in default under this Lease and there has not occurred an
event which, with notice and/or lapse of time, would constitute
a default hereunder both at the time of exercise and as of the
"Early Termination Date" (as defined herein), Tenant shall have
a one-time option to terminate this Lease as of the expiration
of the forty-first (41st) month of the First Additional Term
only (the "Early Termination Date") by giving written notice of
its election to do so to Landlord six (6) months prior to the
Early Termination Date, which notice, to be effective, shall be
accompanied by a "Termination Payment" equal to the sum of the
then-unamortized amount of all of Landlord's out-of-pocket costs
incurred in connection with the negotiation and execution of
this Lease and the performance of Landlord's Work, including
attorneys' fees and costs (which fees and costs shall not exceed
$1,500) and brokers' commissions ("Landlord's Costs"), with
interest thereon at the rate of ten percent (10%) per annum from
and after December 1, 1997, plus the amount of $18,983.58 (i.e.,
one (1) month's worth of Monthly Rental for the thirty (30) day
period after the Early Termination Date). In the event that
Tenant is either not entitled to or fails to exercise the
foregoing option strictly in the time and manner specified
herein, such option shall lapse and shall not thereafter be
exercisable by Tenant. Within sixty (60) days after Tenant's
request therefor, which shall be made, if at all, within one
year after commencement of the First Additional Term, Landlord
shall advise Tenant of the total amount of Landlord's Costs so
incurred, and the burden shall be on Tenant to ascertain such
amount within sufficient time to timely and properly exercise
the option set forth herein. Tenant shall have the right, by
written notice to Landlord given within thirty (30) days after
receipt of Landlord's statement of Landlord's Costs in
accordance with the foregoing, to request additional information
from Landlord as to the amount thereof, and Landlord shall
provide to Tenant within thirty (30) days after Tenant's request
therefor, reasonable back-up documentation as to the amount of
Landlord's Costs. Tenant's failure to request such additional
information when and in the manner provided in the preceding
sentence shall render Landlord's statement of Landlord's Costs
binding on Tenant,
EXHIBIT E
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ADDENDUM NO. 7 RIGHT OF FIRST OPPORTUNITY
During the First Additional Term, Tenant shall have a right of first
opportunity, subject to the rights of existing tenants, to lease contiguous
space which becomes available for lease on the third floor of the Building (the
"First Offer Space"). Landlord shall notify Tenant in writing ("Landlord's
Notice") of the terms and conditions on which Landlord would be willing to lease
the First Offer Space and Tenant shall, within three (3) business days following
its receipt of Landlord's Notice, indicate in writing its intention to add to
the Premises the entire First Offer Space. Any failure by Tenant to respond to
Landlord's Notice within such three (3) business day period, or any notice by
Tenant specifying Tenant's acceptance of the First Offer Space on terms other
than those set forth in Landlord's Notice or of only a portion of the First
Offer Space, shall cause such right to lapse and Landlord shall thereafter be
free to lease such First Offer Space to another party at any rate and on any
terms Landlord chooses.
ADDENDUM NO. 8 [INTENTIONALLY DELETED]
ADDENDUM NO. 9 SIGNAGE
Tenant may maintain its existing parapet sign which is installed on the north
wall of the Building and its existing Building directory signage. Tenant shall
be solely responsible to insure and maintain in first class condition such
signage at all times; provided, however, if Tenant fails to insure, repair or
otherwise maintain any such signage within ten (10) days after request therefor
by Landlord, Landlord may obtain insurance and/or perform any necessary repairs
or maintenance for the account of Tenant, which amount shall be due and payable
by Tenant to Landlord within ten (10) days after demand therefor as additional
rent. Notwithstanding anything to the contrary in this Lease, upon the
expiration or earlier termination of this Lease, Tenant shall be responsible, as
to both cost and performance, for removing any signs installed by Tenant and
returning the surface to which such signs were affixed to the condition they
were in prior to such installation, including without limitation removal of any
discoloration.
ADDENDUM NO. 10 LANDLORD'S LIABILITY LIMITATION
Tenant agrees to look solely to the Landlord's interest in the Building of which
the Premises are a part for the satisfaction of any claim, judgment or decree
requiring the payment of money by Landlord based upon any default hereunder, and
no other property or assets of Landlord, its successors or assigns shall be
subject to the levy, execution or other enforcement procedure for the
satisfaction of any such claim, judgment, injunction or decree; Tenant further
hereby waives any and all right to assert any claim against or obtain any
damages from, for any reason whatsoever, the shareholders, officers or directors
of Landlord.
ADDENDUM NO. 11 USE OF PREMISES
A. The provisions of Section VIII.B. of the Lease shall not be deemed
breached by Tenant where Tenant's violation of law, statute, ordinance,
governmental rule or regulation does not directly or indirectly relate
to Tenant's use of the Premises.
B. Nothing in Section VIII.B. of the Lease shall obligate Tenant to alter,
maintain or restore the Premises unless such alterations, maintenance or
restoration are required as a result of Tenant's operation in or use of
the Premises. Landlord shall make any alterations, maintenance or
restoration to the Premises required to be made by such law, ordinance,
statute, governmental rule or regulation that Tenant is not obligated to
make, as and when required to do so by governmental authorities, unless
the cost thereof exceeds $250,000,00, in which case Landlord shall have
the option, in its sole discretion, to terminate this Lease.
C. Notwithstanding anything to the contrary in this Lease, and without
limiting the generality of Tenant's obligations under this Lease with
respect to the use of the Premises and compliance with laws, it is
expressly understood and agreed that, except as set forth herein, Tenant
is accepting the Premises "AS IS," in its present state and condition,
without any representations or warranties from Landlord of any kind
whatsoever, either express or implied, with respect to the Premises or
the Building, including without limitation the compliance of the
Premises or the Building with The Americans With Disabilities Act and
the rules and regulations promulgated thereunder, as amended from time
to time (the "ADA"). Notwithstanding the foregoing, but subject to the
balance of this Addendum Section II.C., Landlord shall be responsible
for compliance of the Building common area lobbies and restroorns with
the ADA. If Tenant's initial use of the Premises is not a "place of
public accommodation" within the meaning of the ADA, then Tenant may not
thereafter change the use of the Premises to cause the Premises to
become a
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"place of public accommodation." In the event that Tenant desires or is
required hereby to perform any work in the Premises in order to satisfy
its obligations under the ADA, then all such work shall be subject to
any requirements in the Lease with respect to Alterations (as defined in
Section XIII.) of the Lease in the Premises, and shall be performed at
Tenant's sole cost and expense. Except for Alterations in the Premises,
Tenant shall have no right whatsoever to make any alterations or
modifications to any portion of the Building or its appurtenant
facilities. Tenant shall be responsible for ensuring that any future
Alterations to the Premise (other than those performed by Landlord) and
Tenant's use thereof and operations therein fully and completely comply
with the ADA.
D. Landlord and Tenant agree to cooperate and use their best efforts to
participate in governmentally mandated or voluntary traffic management
programs generally applicable to businesses located in the area in which
the Building is situated or to the Office Park and, initially, shall
encourage and support van and car pooling by employees and shall
encourage and support staggered and flexible working hours for employees
to the fullest extent permitted by the requirements of Tenant's
business. Neither this paragraph nor any other provision in this Lease,
however, is intended to or shall create any rights or benefits in any
other person, firm, company, governmental entity or the public. Landlord
and Tenant agree to cooperate and use their best efforts to comply with
any and all guidelines or controls imposed upon either Landlord or
Tenant by federal or state governmental organizations or by any energy
conservation association to which Landlord is a party concerning energy
management. All costs, fees, assessments and other charges paid by
Landlord to any governmental authority or voluntary association in
connection with any program of the types described in this paragraph
shall be included in Common Operating Costs. Notwithstanding the
foregoing, any costs, fees, fines or other levies assessed against
Landlord as the result of failure of Tenant to comply with this
paragraph shall be reimbursed by Tenant to Landlord as additional rent.
E. Without limiting the generality of Section VIII. of the Lease, Tenant
covenants and agrees that Tenant, its employees, agents and other third
parties entering upon the Office Park at the request or invitation of
Tenant shall not bring into, maintain upon or release or discharge in or
about the Office Park any hazardous or toxic substances or hazardous
waste (collectively, "hazardous materials"). The foregoing covenant
shall not extend to substances typically found or used in general office
applications so long as (1) such substances are maintained only in such
quantities as are reasonably necessary for Tenant's operations in the
Premises, (2) such substances and any equipment which generates such
substances are used strictly in accordance with the manufacturers'
instructions therefor, (3) such substances are not disposed of in or
about the Office Park in a manner which would constitute a release or
discharge thereof and (4) all such substances and any equipment which
generates such substances are removed from the Office Park by Tenant
upon the expiration or earlier termination of this Lease, Tenant shall,
within thirty (30) days after each anniversary of the Commencement Date,
provide to Landlord a written list identifying any hazardous materials
then maintained by Tenant in the Office Park, the use of each such
hazardous material and the approximate quantity of each such hazardous
material so maintained by Tenant, together with written certification by
Tenant stating, in substance, that neither Tenant nor any person for
whom Tenant is responsible has released or discharged any hazardous
materials in or about the Office Park.
In the event that Tenant proposes to conduct any use or to operate any
equipment which will or may utilize or generate a hazardous material
other than as specified in the first paragraph of this Addendum Section
11.E., Tenant shall first in writing submit such use or equipment to
Landlord for approval. No approval by Landlord shall relieve Tenant of
any obligation of Tenant pursuant to this subsection, including the
removal, clean-up and indemnification obligations imposed upon Tenant by
this subsection. Tenant shall, within five (5) days after receipt
thereof, furnish to Landlord copies of all notices or other
communications received by Tenant with respect to any actual or alleged
release or discharge of any hazardous material in or about the Premises,
the Building or the Office Park and shall, whether or not Tenant
receives any such notice of communication, notify Landlord in writing of
any discharge or release of hazardous material by Tenant or anyone for
whom Tenant is responsible in or about the Premises, the Building or the
Office Park. In the event that Tenant is required to maintain any
hazardous materials license or permit in connection with any use
conducted by Tenant or any equipment operated by Tenant in the Premises,
copies of each such license or permit, each renewal thereof and any
communication relating to suspension, renewal or revocation thereof
shall be furnished to Landlord within five (5) days after receipt
thereof by Tenant. Compliance by Tenant with the two immediately
preceding sentences shall not relieve Tenant of any other obligation of
Tenant pursuant to this subsection.
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Upon any violation of the foregoing covenants, Tenant shall be
obligated, at Tenant's sole cost, to cleanup and remove from the Office
Park all hazardous materials introduced into the Office Park by Tenant
or any third party for whom Tenant is responsible. Such clean-up and
removal shall include all testing and investigation required by any
governmental authorities having jurisdiction and preparation and
implementation of any remedial action plan required by any governmental
authorities having jurisdiction, All such clean-up and removal
activities of Tenant shall, in each instance, be conducted to the
satisfaction of Landlord and all governmental authorities having
jurisdiction. Landlord's right of entry pursuant to the Lease shall
include the right to enter and inspect the Premises for violations of
Tenant's covenants herein.
Tenant shall indemnify, defend and hold harmless Landlord, its partners,
officers, employees, agents, lenders and attorneys from and against any
and all claims, liabilities, losses, actions, costs and expenses
(including attorneys' fees and costs of defense) incurred by such
indemnified persons, or any of them, as the result of (a) the
introduction into or about the Office Park by Tenant or anyone for whom
Tenant is responsible for any hazardous materials, (b) the usage by
Tenant or anyone for whom Tenant is responsible of hazardous materials
in or about the Office Park, (c) the discharge or release in or about
the Office Park by Tenant or anyone for whom Tenant is responsible of
any hazardous materials, (d) any injury to or death of persons or damage
to or destruction of property resulting from the use by Tenant or anyone
for whom Tenant is responsible of hazardous materials in or about the
Office Park, and (e) any failure of Tenant or anyone for whom Tenant is
responsible to observe the foregoing covenants of this Addendum Section
11.E. Payment shall not be a condition precedent to enforcement of the
foregoing indemnification provision,
Upon any violation of the foregoing covenants Landlord shall be entitled
to exercise all remedies available to a landlord against a defaulting
tenant, including but not limited to these set forth in Section XVII.
Without limiting the generality of the foregoing, Tenant expressly
agrees that upon any such violation Landlord may, at its option, (i)
immediately terminate this Lease or (ii) continue this Lease in effect
until compliance by Tenant with its clean-up and removal covenant
notwithstanding an earlier expiration date of the Term of this Lease. No
action by Landlord hereunder shall impair the obligations of Tenant
pursuant to this Addendum Section 11.E.
As used in this subsection E., "hazardous materials" shall include all
petroleum substances and all hazardous materials, hazardous wastes and
hazardous or toxic substances as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Sections 9601 et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901
et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Sections 2601 et seq.) and California Health and Safety Code
Section 25316, including such hazardous or toxic substances or wastes as
are identified, defined or listed elsewhere where such identifications,
definitions or lists are incorporated into such acts or section by
reference, as well as all products containing such hazardous substances.
By its signature to this lease, Tenant confirms that it has conducted
its own examination of the Premises, the Building and the Office Park
with respect to hazardous materials and accepts the same "AS IS" with no
hazardous materials present thereon, excerpt as otherwise provided
herein.
ADDENDUM NO. 12 INTENTIONALLY DELETED
ADDENDUM NO. 13 DEFINED TERMS
Any capitalized terms not otherwise defined in this Addenda shall have the same
meaning in this Addenda as such terms have in the Lease.
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ADDENDUM NO. 14 INTERPRETATION
This Addenda is attached to and forms a part of the Lease. In the event of any
inconsistency between the provisions of this Addenda and the balance of the
Lease, the provisions of this Addenda shall control.
"LANDLORD" "TENANT"
The Mutual Life Insurance Company of Sparta, Inc., a Delaware corporation
New York, a New York corporation
By: [SIG] By: /s/ XXXXX X. XXXXXX
XXXXX X. XXXXXX
Its: Reg. V.P. Its: VICE PRESIDENT
DIRECTOR, BUSINESS
ADMINISTRATION
By: [SIG]
---------------------------------
Its: CFO 7/31/97
---------------------------------
EXHIBIT E
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