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STANDARD OFFICE LEASE - GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. BASIC LEASE PROVISIONS ("Basic Lease Provisions")
1.1. PARTIES: This Lease, dated, for reference purposes only, January
26, 1999, is made by and between XXXXXX REALTY CORPORATION, L.P., a Delaware
Limited Partnership, XXXXXX REALTY CORPORATION, a Maryland Corporation, General
Partner, (herein called "Lessor")and THE CERPLEX GROUP, a Delaware Corporation,
doing business under the name of As Lessee may determine (herein called
"Lessee").
1.2. PREMISES: Suite Number(s) 300, third floors, consisting of
approximately 23,660 rentable square feet and approximately 22,375 usable square
feet, more or less, as defined in paragraph 2 and as shown on Exhibit "A" hereto
(the "Premises").
1.3. BUILDING: Commonly described as being located at 000 Xxxxxxxx
Xxxxxx in the City of Irvine, County of Orange, State of California 92618,
consisting of a three (3) story office building containing approximately 67,359
rentable square feet as more particularly depicted on the site plan attached as
Exhibit "B" hereto, and as the Office Building Project is described In Exhibit
"C" attached hereto and as defined in paragraph 2.
1.4. USE: Sales and administration office and general office use as it
pertains to the business of Lessee, subject to paragraph 6.
1.5. TERM: five (5) years and one (1) month commencing February 1, 1999
("Commencement Date") and ending February 29, 2004 ("Expiration Date"), subject
to an option to extend the Term for five (5) years as set forth in paragraph 51
of the Addendum to this Lease F, as defined in paragraph 3. See also paragraph
53 of the Addendum to this Lease.
1.6. BASE RENT: $55,601.00 per month, payable on the first day of each
month, per paragraph 4.1 commencing on March 1, 1999 (No Base Rent is due for
the month of February, 1999).
1.7. BASE RENT INCREASE: The monthly Base Rent payable under paragraph
1.6 above shall be adjusted as provided in paragraph 50 of the Addendum to this
Lease.
1.8. RENT PAID UPON EXECUTION: $55,601.00 as Base Rent for the month of
March, 1999 for _______.
1.9. SECURITY DEPOSIT: $200,000.00; see also paragraph 58 of the
Addendum to this Lease.
1.10. LESSEE'S SHARE OF OPERATING EXPENSES: 35.13 % as defined in
paragraph 4.2.
2. PREMISES, PARKING AND COMMON AREAS.
2.1. PREMISES: The Premises are a portion of a building, herein
sometimes referred to as the "Building" identified in paragraph 1.3 of the Basic
Lease Provisions. "Building" shall include adjacent parking structures used in
connection therewith. The Premises, the Building, the Common Areas, the land
upon which the same are located, along with all other buildings and improvements
thereon or thereunder, are herein collectively referred to as the "Office
Building Project." Lessor hereby leases to Lessee and Lessee leases from Lessor
for the term, at the rental, and upon all of the conditions set forth herein,
the real property referred to in the Basic Lease Provisions, paragraph 1.2, as
the "Premises", including rights to the Common Areas as hereinafter specified.
2.2. VEHICLE PARKING: So long as Lessee is not in material default, and
subject to the rules and regulations attached hereto, and as established by
Lessor from time to time, Lessee shall be entitled to rent and use five (5)
reserved (within the parking structure) and ninety (90) unreserved parking
spaces in the Office Building Project at no charge to Lessee during the Initial
Five (5) year term of this Lease. See paragraph 60 of the Addendum to this Lease
concerning remedies available to Lessee if Lessor is in material default in
providing vehicle parking for use by Lessee.
2.2.1 If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect, then Lessor shall
have the right, without notice, in addition to such other rights and remedies
that it may have, to remove or tow away the vehicle involved and charge the cost
to Lessee, which cost shall be immediately payable upon demand by Lessor.
2.2.2 There shall be no charge for the five (5) reserved parking
structure parking permits or the ninety (90) unreserved parking space permits
set forth in paragraph 2.2; the monthly parking rate for each additional
reserved parking structure permit will be $25.00 per month at the commencement
at the term of this Lease. Monthly parking fees for additional reserved or
unreserved parking spaces shall be at Lessor's then current parking space rent
and shall be payable one month in advance prior to the first day of each
calendar month.
2.3 COMMON AREAS - DEFINITION. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Office Building Project that are provided and designated by the Lessor
from time to time for the general non-exclusive use of Lessor, Lessee and other
lessees of the Office Building Project and their respective employees,
suppliers, shippers, customers and invitees, including but not limited to common
entrances, lobbies, corridors, stairways and stairwells, public restrooms,
elevators, escalators, parking areas to the extent not otherwise prohibited by
this Lease, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, ramps, driveways, landscaped areas and decorative walls.
2.4 COMMON AREAS - RULES AND REGULATIONS. Lessee agrees to abide by and
conform to the rules and regulations attached hereto as Exhibit "D" with respect
to the Office Building Project and Common Areas, and to cause its employees,
suppliers, shippers, customers, and invitees to so abide and conform. Lessor or
such other person(s) as Lessor may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to
modify, amend and enforce said rules and regulations. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and regulations by
other lessees, their agents, employees and invitees of the Office Building
Project.
2.5 COMMON AREAS - CHANGES. Lessor shall have the right, in Lessor's
sole discretion, from time to time:
(a) To make changes to the Building interior and exterior and
Common Areas, including, without limitation changes in the location, size shape,
number, and appearance thereof, including but not limited to the lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms, driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, decorative walls, landscaped areas and walkways;
provided, however, Lessor shall at all times provide the parking facilities
required by applicable law;
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(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land and improvements outside the
boundaries of the Office Building Project to be a part of the Common Areas,
provided that such other land and improvements have a reasonable and functional
relationship to the Office Building Project;
(d) To add additional buildings and improvements to the Common
Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Office Building Project, or any
portion thereof;
(f) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas and Office Building Project as Lessor
may, in the exercise of sound business judgment deem to be appropriate.
(g) Provided, however, that such changes which Lessor may elect
to make shall not: (a) permanently reduce parking available to Lessee or
Lessee's customers, (b) materially interfere with Lessee's business or use of
the Premises, (c) unreasonably impair customer access to the Premises, or (d)
alter the first-class and high quality character and standards of the Building.
All changes and additions to the Building shall be made in a manner consistent
with a first-class office center, shall be performed expediently, and all
reasonable steps shall be taken to minimize the impact on Lessee's business.
3. TERM
3.1 TERM. The term and Commencement Date of this Lease shall be as
specified in paragraph 1.5 of the Basic Lease Provisions.
3.2 DELAY IN POSSESSION. Notwithstanding said Commencement Date, if for
any reason Lessor cannot deliver possession of the Premises to Lessee on said
date and subject to paragraph 3.2.2, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of Lessee hereunder or extend the term hereof; but in such case,
Lessee shall not be obligated to pay rent or perform any other obligation of
Lessee under the terms of this Lease, except as may be otherwise provided in
this Lease, until possession of the Premises is tendered to Lessee, as
hereinafter defined; provided, however, that if Lessor shall not have delivered
possession of the Premises within sixty (60) days following said Commencement
Date, as the Commencement Date may be extended pursuant to paragraph 53 of the
Addendum to this Lease, Lessee may, at Lessee's option, by notice in writing to
Lessor within ten (10) days thereafter, cancel this Lease, in which event the
parties shall be discharged from all obligations hereunder; provided, however,
that, as to Lessee's obligations, Lessee first reimburses Lessor for all costs
incurred for Non-Standard Improvements and, as to Lessor's obligations, Lessor
shall return any money previously deposited by Lessee (less any offsets due
Lessor for Non-Standard Improvements); and provided further, that if such
written notice by Lessee is not received by Lessor within said ten (10) day
period, Lessee's right to cancel this Lease hereunder shall terminate and be of
no further force or effect.
3.2.1 POSSESSION TENDERED - DEFINED. Possession of the Premises
shall be deemed tendered to Lessee ("Tender of Possession") when (1) the
existing lessee of the Premises has vacated the Premises, estimated to be on or
before January 31, 1999, (2) the Building utilities are ready for use in the
Premises, (3) Lessee has reasonable access to the Premises, and (4) ten (10)
days shall have expired following advance written notice to Lessee of the
occurrence of the matters described in (1), (2) and (3), above of this paragraph
3.2.1. (See Addendum paragraph 52.1 of this Lease)
3.2.2 DELAYS CAUSED BY LESSEE. There shall be no abatement of
rent, and the ninety (90) day period following the Commencement Date before
which Lessee's right to cancel this Lease accrues under paragraph 3.2, shall be
deemed extended to the extent of any delays caused by acts or omissions of
Lessee, its agents, employees and contractors.
3.3 EARLY POSSESSION. If Lessee occupies the Premises prior to said
Commencement Date, such occupancy shall be subject to all provisions of this
Lease, including, without limitation paragraph 53 of the Addendum to this Lease.
3.4 UNCERTAIN COMMENCEMENT. In the event commencement of the Lease term
is defined as relating to the vacation of the Premises by an existing lessee,
Lessee and Lessor shall execute an amendment to this Lease establishing the date
of Tender of Possession (as defined in paragraph 3.2.1) or the actual taking of
possession by Lessee, whichever first occurs, as the Commencement Date.
4. RENT
4.1 BASE RENT. Subject to adjustment as hereinafter provided in
paragraph 4.3, and except as may be expressly provided in this Lease, Lessee
shall pay to Lessor the Base Rent for the Premises set forth in paragraph 1.6
of the Basic Lease Provisions, without offset or deduction. Lessee shall pay
Lessor upon execution hereof the advance Base Rent described in paragraph 1.8 of
the Basic Lease Provisions. Rent for any period during the term hereof which is
for less than one month shall be prorated based upon the actual number of days
of the calendar month involved. Rent shall be payable in lawful money of the
United States to Lessor at the address stated herein or to such other persons or
at such other places as Lessor may designate in writing.
4.2 OPERATING EXPENSE INCREASE. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share, as hereinafter
defined, of the amount by which all Operating Expenses, as hereinafter defined,
for each Comparison Year exceeds the amount of all Operating Expenses for the
Base Year, such excess being hereinafter referred to as the "Operating Expense
Increase", in accordance with the following provisions:
(a) Lessee's Share" is defined, for purposes of this Lease, as
the percentage set forth in paragraph 1.10 of the Basic Lease Provisions, which
percentage has been determined by dividing the approximate square footage of the
Premises by the total approximate square footage of the rentable space contained
in the Office Building Project. It is understood and agreed that the square
footage figures set forth in the Basic Lease Provisions are approximations which
Lessor and Lessee agree are reasonable and shall not be subject to revision
except in connection with an actual change in the size of the Premises or a
change in the space available for lease in the Office Building Project.
(b) "Base Year" is defined as the calendar year 1999.
(c) "Comparison Year" is defined as each calendar year during the
term of this Lease subsequent to the Base Year; provided, however, Lessee shall
have no obligation to pay a share of the Operating Expense Increase applicable
to the first twelve (12) months of the Lease Term (other than such as are
mandated by a governmental authority, as to which government mandated expenses
Lessee shall pay Lessee's Share, notwithstanding they occur during the first
twelve (12) months). Lessee's Share of the Operating Expense Increase for the
first and last Comparison Years of the Lease Term shall be prorated according to
that portion of such Comparison Year as to which Lessee is responsible for a
share of such increase.
(d) "Operating Expenses" is defined, for purposes of this Lease,
to include all costs, if any, incurred by Lessor in the exercise of its
reasonable discretion, for:
(i) The operation, repair, maintenance, and replacement,
in neat, clean, safe, good order and condition, of the Office Building Project,
including but not limited to, the following:
(aa) The Common Areas, including their surfaces,
coverings, decorative items, carpets, drapes and window coverings, and including
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, building exteriors and
roofs, fences and gates;
(bb) All heating, air conditioning, plumbing, electrical
systems, life safety equipment, telecommunication and other equipment used in
common by, or for the benefit of, lessees or occupants of the Office Building
Project, including elevators and escalators, tenant directories, fire detection
systems including sprinkler system maintenance and repair.
(ii) Trash disposal, janitorial and security services;
(iii) Any other service to be provided by Lessor that is
elsewhere in this Lease stated to be an "Operating Expense";
(iv) The cost of the premiums for the liability and
property insurance policies to be maintained by Lessor under paragraph 8 hereof;
(v) The amount of the real property taxes to be paid by
Lessor under paragraph 10.1 hereof;
(vi) The cost of water, sewer, gas, electricity, and other
publicly mandated services to the Office Building Project;
(vii) Labor, salaries, and applicable fringe benefits and
costs (provided that to the extent that any of the employees perform any
services not solely in connection with the management, operation, repair and
maintenance of the Office Building Project, those items
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included in Operating Expenses pursuant to this subparagraph shall be prorated
in accordance with the proportion that services performed in connection with the
Building bear to the total services performed by such employees), materials,
supplies and tools, used in maintaining and/or cleaning the Office Building
Project and accounting and a management fee attributable to the operation of the
Office Building Project (said management fee not to exceed five percent (5%) of
rent received by Lessor from the Office Building Project);
(viii) Replacing and/or adding improvements mandated by
any governmental agency and any repairs or removals necessitated thereby
amortized over its useful life according to Federal income tax regulations or
guidelines for depreciation thereof (including interest on the unamortized
balance as is then reasonable in the judgment of Lessor's accountants);
(ix) Replacement of equipment or improvements that have a
useful life for depreciation purposes according to Federal income tax guidelines
of five (5) years or less, as amortized over such life. Provided that Lessee
shall be obligated only for the amortized amounts pursuant to this subparagraph
(ix) and prior subparagraph (viii) during each year of the Term of this Lease
and not for any such amortization prior to or subsequent to the Term of this
Lease.
(e) Operating Expenses shall not include the costs of
replacements of equipment or improvements that have a useful life for Federal
income tax purposes in excess of five (5) years unless it is of the type
described in paragraph 4.2(d) (viii), in which case their cost shall be included
as above provided.
(f) Operating Expenses shall not include any expenses paid by any
lessee directly to third parties, or as to which Lessor is otherwise reimbursed
by any third party, other tenant, or by insurance proceeds, or would have been
so reimbursed if Lessor had maintained the insurance required hereunder.
(g) Notwithstanding the above, all Operating Expenses shall be
reasonable and shall be related to the Office Building Project and Lessor's
Operating Expenses shall not include the following: (i) advertising costs, legal
fees or brokerage commissions incurred in connection with leasing; (i) repairs,
alternations, additions, improvements or replacements made to rectify or
correct any defect in the original design, materials or workmanship of the
Building or Common Areas; (iii) any improvements, alterations or expenditures of
a capital nature, except as expressly permitted pursuant to paragraphs
4.2(d)(viii) and (ix), above; (iv) damage and repairs attributable to
condemnation; (v) damage and repairs covered under any insurance policy carried
by Lessor in connection with the Building or Common Areas, except that any
deductible amount under any insurance policy shall be included in Operating
Expenses; (vi) executive salaries or salaries of service personnel to the extent
that such service personnel perform services other than connection with the
management, operation, repair or maintenance of the Building or Common Areas;
(vii) Lessor's general overhead expenses not related to the Building or Common
Areas; (viii) payments of principal or interest on any mortgage or other
encumbrance; (ix) depreciation, except as otherwise specifically permitted; (x)
legal fees, accountants fees and other expenses incurred in connection with
disputes with lessees or other occupants of the Building or associated with the
enforcement of any leases or defense of Lessor's title to or interest in the
Building or any part thereof; (xi) costs (including permit, license and
inspection fees) incurred in renovating or otherwise improving, decorating,
painting or altering space for lessees or other occupants or vacant space in the
Building; (xii) costs incurred due to violation by Lessor or any other lessee in
the Building of the terms and conditions of any lease or costs or fines arising
from Lessor's violation of any governmental rule or authority; (xiii) services,
installations, or benefits furnished to some lessees which are not furnished to
Lessee or quantities of such services furnished to some lessees which are also
furnished to Lessee but are furnished to other lessees in an amount materially
in excess of that which would represent a fair proportion of such services;
(xiv) the cost of any service provided to Lessee or other occupants of the
Building for which Lessor is entitled to be reimbursed; (xv) Lessor shall not
collect in excess of one hundred percent (100%) of all of Lessor's Operating
Costs; (xvi) Lessor shall not recover, through Operating Costs, any item of cost
more than once; and (xvii) there shall not be included in Lessor's Operating
Costs any costs in excess of those that would be reasonably incurred by
experienced, professional operators and managers of similar first-class Office
Building Projects.
(h) If the Office Building Project is not at least ninety-five
percent (95%) occupied during all or a portion of the Base Year or any
Comparison Year, then Lessor shall make an appropriate adjustment in accordance
with industry standards of the Operating Costs for each such year to determine
what the Operating Costs would have been for such year as if the Office Building
Project had been at least ninety-five percent (95%) occupied, and the amount so
determined shall be deemed to be the amount of Operating Costs for the Base
Year. Such adjustment shall be made by Lessor by increasing those costs included
in the Operating Costs which according to industry practice vary based upon the
level of occupancy of the Office Building Project. Any costs incurred in a
subsequent Comparison Year and not included in the Base Year shall be added to
and included in the Base Year, grossed up as applicable, as if the cost was
incurred and/or paid in the Base Year. Any warranties in the Base Year shall be
accounted for as if such service was paid for and provided.
(i) Lessee's Share of Operating Expense Increase shall be payable
by lessee within thirty (30) days after a reasonably detailed statement of
actual expenses is presented to Lessee by Lessor. At Lessor's option, however,
an amount may be estimated by Lessor from time to time in advance of Lessee's
Share of the Operating Expense Increase for any Comparison Year, and the same
shall be payable monthly or quarterly, as Lessor shall designate, during each
Comparison Year of the Lease term, on the same day as the Base Rent is due
hereunder. In the event that Lessee pays Lessor's estimate of Lessee's Share of
Operating Expense Increase as aforesaid, Lessor shall deliver to Lessee within
sixty (60) days after the expiration of each Comparison Year a reasonably
detailed statement showing Lessee's Share of the actual Operating Expense
Increase incurred during such year. If Lessee's payments under this paragraph
4.2(g) during said Comparison Year exceed Lessee's Share as indicated on said
statement, Lessee shall be entitled to credit the amount of such overpayment
against Lessee's monetary obligations hereunder next falling due. If Lessee's
payments under this paragraph during said Comparison Year were less than
Lessee's Share as indicated on said statement, Lessee shall pay to Lessor the
amount of the deficiency within thirty (30) days after delivery by Lessor to
Lessee of said statement. Lessor and Lessee shall, within ninety (90) days of
the end of such Comparison Year, adjust between them by cash payment any balance
determined to exist with respect to that portion of the last Comparison Year for
which Lessee is responsible as to Operating Expenses Increases, notwithstanding
that the Lease term may have terminated before the end of such Comparison Year.
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4.3 RIGHT OF LESSEE TO AUDIT. Lessee shall have the right to audit
Lessee's Share of Operating Expense Increases as set forth in paragraph 55 of
the Addendum attached thereto.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof the
security deposit set forth in paragraph 1.9 of the Basic Lease Provisions as
security for Lessee's faithful performance of Lessee's obligations hereunder. If
Lessee fails to pay rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Lessor may use, apply or retain all
or any portion of said deposit for the payment of any rent or other charge in
default for the payment of any other sum to which Lessor may become obligated by
reason of Lessee's default, or to compensate Lessor for any loss or damage which
Lessor may suffer thereby. If Lessor so uses or applies all or any portion of
said deposit, Lessee shall within ten (10) days after written demand therefor
deposit cash with Lessor in an amount sufficient to restore said deposit to the
full amount then required of Lessee. Lessor shall not be required to keep said
security deposit separate from its general accounts. If Lessee performs all of
Lessee's obligations hereunder, said deposit, or so much thereof as has not
heretofore been applied by Lessor, shall be returned, without payment of
interest or other increment for its use, to Lessee (or, at Lessor's option, to
the last assignee, if any, of Lessee's interest hereunder) at the expiration of
the term hereof, and after Lessee has vacated the Premises. No trust
relationship is created herein between Lessor and Lessee with respect to said
Security Deposit.
6. USE.
6.1 USE. The Premises shall be used and occupied only for the purpose
set forth in paragraph 1.4 of the Basic Lease Provisions or any other use which
is reasonably comparable to that use and for no other purpose. Lessee shall have
the right of access to its Premises twenty-four (24) hours per day every day of
the year subject to other provisions of this Lease which could affect such
access, such as damage or destruction, condemnation or force majeure events.
6.2 COMPLIANCE WITH LAW.
(a) Lessor warrants to Lessee that the Premises, in the state
existing on the date that the Lease term commences, but without regard to
alterations or improvements made by Lessee or the use for which Lessee will
occupy the Premises, does not violate any covenants or restrictions or record,
or any applicable building code, regulation or ordinance in effect on such Lease
term Commencement Date. In the event it is determined that this warranty has
been violated, then it shall be the obligation of the Lessor, after written
notice from Lessee, to promptly, at Lessor's sole cost and expense, rectify any
such violation.
(b) Except as provided in paragraph 6.2(a) Lessee shall, at
Lessee's expense, promptly comply with all applicable statutes, ordinances,
rules, regulations, orders, covenants and restrictions of record, and
requirements of any fire insurance underwriters or rating bureaus, now in effect
or which may hereafter come into effect, whether or not they reflect a change in
policy from that now existing, during the term or any part of the term hereof,
relating in any manner to the Premises and the occupation and use by Lessee of
the Premises. Lessee shall conduct its business in a lawful manner and shall not
use or permit the use of the Premises or the Common Areas in any manner that
will tend to create waste or a nuisance or shall tend to disturb other occupants
of the Office Building Project.
6.3 CONDITION OF PREMISES.
(a) Lessor shall deliver the Premises to Lessee in a clean
condition on the lease Commencement Date (unless Lessee is already in
possession) and Lessor warrants to Lessee that the plumbing, lighting, air
conditioning, and heating system in the Premises shall be in good operating
condition. In the event that it is determined that this warranty has been
violated, then it shall be the obligation of Lessor, after receipt of written
notice from Lessee setting forth with specificity the nature of the violation,
to promptly, at Lessor's sole cost, rectify such violation.
(b) Except as otherwise provided in this Lease, Lessee hereby
accepts the Premises and the Office Building Project in their condition existing
as of the Lease Commencement Date or the date that Lessee takes possession of
the Premises, whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and any easements, covenants or restrictions of record, and
accepts this Lease subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Lessee acknowledges that it has satisfied itself
by its own independent investigation that the Premises are suitable for its
intended use, and that neither Lessor nor Lessor's agent or agents has made any
representation or warranty as to the present or future suitability of the
Premises, Common Areas, or Office Building Project for the conduct of Lessee's
business.
7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.
7.1 LESSOR'S OBLIGATIONS. Lessor shall keep the Office Building Project,
including the Premises, interior and exterior walls, roof, and Common Areas, and
the equipment whether used exclusively for the Premises or in common with other
premises, in good condition and repair comparable to other office building
projects in the Irvine Spectrum; provided, however, Lessor shall not be
obligated to paint, repair or replace wall coverings, or to repair or replace
any improvements that are not ordinarily a part of the Building or are above
then Building standards. Except as provided in paragraph 9.5, there shall be no
abatement of rent or liability to Lessee on account of any injury or
interference with Lessee's business with respect to any improvements,
alterations or repairs made by Lessor to the Office Building Project or any part
thereof. See paragraph 60 of the Addendum to this Lease.
7.2 LESSEE'S OBLIGATIONS.
(a) Notwithstanding Lessor's obligation to keep the Premises in
good condition and repair, Lessee shall be responsible for payment of the cost
thereof to Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Lessee or the Premises, to the extent such cost is attributable to
causes beyond normal wear and tear. Lessee shall be responsible for the cost of
repairing wall coverings, and to repair or replace any Premises improvements
that are not ordinarily a part of the Building or that are above then Building
standards. Lessor may, at its option, upon reasonable notice, elect to have
Lessee perform any particular such maintenance or repairs the cost of which is
otherwise Lessee's responsibility hereunder.
(b) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same condition
as received, ordinary wear and tear and casualty excepted, clean and free of
debris. Any damage or deterioration of the Premises shall not be deemed ordinary
wear and tear if the same could have been prevented by good maintenance
practices by Lessee. Lessee shall repair any damage to the Premises occasioned
by the installation or removal of Lessee's trade fixtures, alterations,
furnishings and equipment. Except as otherwise stated in this Lease, Lessee
shall leave the air lines, power panels, electrical distribution systems,
lighting fixtures, air conditioning, window coverings, wall coverings, carpets,
wall paneling, ceilings and plumbing on the Premises and in the same condition
as received, reasonable ordinary wear and tear and casualty excepted. Tenant may
leave in place any Tenant improvements installed by former tenants; provided,
however, that Tenant shall remove any furniture systems purchased from former
tenants.
7.3 ALTERATIONS AND ADDITIONS.
(a) Lessee shall not, without Lessor's prior written consent make
any alterations, improvements, additions, utility installations or repairs in,
on or about the Premises, or the Office Building Project. As used in this
paragraph 7.3 the term "Utility Installation" shall mean carpeting, window and
wall coverings, power panels, electrical distribution systems, lighting
fixtures, air conditioning, plumbing, and telephone and telecommunication wiring
and equipment. At the expiration of the term, Lessor may require the removal of
any or all of said alterations, improvements, additions or Utility Installations
actually installed by Lessee, and the restoration of the Premises and the Office
Building Project to their prior condition, at Lessee's expense; provided that
Lessee requests
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Lessor's consent to a proposed Alteration, or before the commencement of any
Alteration for which Lessor's consent is not required, Lessee may ask Lessor in
writing whether Lessor will require that the Alteration be removed on expiration
or earlier termination of the Lease Term. Lessor shall respond to this inquiry
in writing within fifteen (15) days. If Lessor states in its response that it
will not require removal, Lessee shall not be required to remove this
Alteration. Should Lessor permit Lessee to make its own alterations,
improvements, additions or Utility Installations, Lessee shall use only such
contractor as has been expressly approved by Lessor, and Lessor may require
Lessee to provide Lessor, at Lessee's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half times the estimated
cost of such improvements, to insure Lessor against any liability for mechanic's
and materialmen's liens and to insure completion of the work. Should Lessee
make any alterations, improvements, additions or Utility Installations without
the prior approval of Lessor, or use a contractor not expressly approved by
Lessor, Lessor may, at any time during the term of this Lease, require that
Lessee remove any part or all of the same.
(b) Any alterations, improvements, additions or Utility
Installations in or about the Premises or the Office Building Project that
Lessee shall desire to make shall be presented to Lessor in written form, with
proposed detailed plans. If Lessor shall give its consent to Lessee's making
such alteration, improvement, addition or Utility Installation, the consent
shall be deemed conditioned upon Lessee acquiring a permit to do so from the
applicable governmental agencies, furnishing a copy thereof to Lessor prior to
the commencement of the work, and in compliance by Lessee with all conditions of
said permit in a prompt and expeditious manner.
(c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any mechanic's or material-
men's lien against the Premises, the Building or the Office Building Project, or
any interest therein.
(d) Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work in the Premises by Lessee, and Lessor
shall have the right to post notices of non-responsibility in or on the Premises
or the Building as provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend itself and Lessor against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, the Building or the Office Building
Project, upon the condition that if Lessor shall require, Lessee shall furnish
to Lessor a surety bond satisfactory to Lessor in an amount equal to such
contested lien claim or demand indemnifying Lessor against liability for the
same and holding the Premises, the Building and the Office Building Project free
from the effect of such lien or claim. In addition, Lessor may require Lessee to
pay Lessor's reasonable attorneys fees and costs in participating in such action
if Lessor shall decide it is to Lessor's best interest so to do.
(e) All alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute trade
fixtures of Lessee), which may be made to the Premises by Lessee, including but
not limited to, floor coverings, panelings, doors, drapes, built-ins, moldings,
sound attenuation, and lighting and telephone or communication systems, conduit,
wiring and outlets, shall be made and done in a good and workmanlike manner and
of good and sufficient quality and materials and shall be the property of Lessor
and remain upon and be surrendered with the Premises at the expiration of the
Lease term, unless Lessor requires their removal pursuant to paragraph 7.3(a).
Provided Lessee is not in default, notwithstanding the provisions of this
paragraph 7.3(e), Lessee's personal property and equipment, other than that
which is affixed to the Premises so that it cannot be removed without material
damage to the Premises or the Building, and other than Utility Installations,
shall remain the property of Lessee and may be removed by Lessee subject to the
provisions of paragraph 7.2.
(f) Lessee shall provide Lessor with as-built plans and
specifications for any alterations, improvements, additions or Utility
Installations.
7.4 UTILITY ADDITIONS. Lessor reserves the right to install new or
additional utility facilities throughout the Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building Project,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, communication systems, and fire protection and detection systems, so
long as such installations do not unreasonably interfere with Lessee's use of
the Premises.
8. INSURANCE; INDEMNITY.
8.1 LIABILITY INSURANCE - LESSEE. Lessee shall, at Lessee's expense,
obtain and keep in force during the term of this Lease a policy of Commercial
General Liability insurance utilizing an Insurance Services Office standard form
with Broad Form General Liability Endorsement (GL0404), or an equivalent, in an
amount of not less than $2,000,000.00 per occurrence of bodily injury and
property damage combined or in a greater amount as reasonably determined by
Lessor and shall insure Lessee with Lessor as an additional insured against
liability arising out of the use, occupancy or maintenance of the Premises.
Compliance with the above requirement shall not, however, limit the liability of
Lessee hereunder.
8.2 LIABILITY INSURANCE - LESSOR. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Broad Form Property Damage Insurance, plus coverage against such other risks
Lessor deems advisable from time to time, insuring Lessor, but not Lessee,
against liability arising out of the ownership, use, occupancy or maintenance of
the Office Building Project in an amount not less than $5,000,000.00 per
occurrence.
8.3 PROPERTY INSURANCE - LESSEE. Lessee shall, at Lessee's expense,
obtain and keep in force during the term of this Lease for the benefit of
Lessee, replacement cost fire and extended coverage insurance, with vandalism
and malicious mischief, sprinkler leakage and earthquake sprinkler leakage
endorsements, in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, of all of Lessee's
personal property, fixtures, equipment and tenant improvements.
8.4 PROPERTY INSURANCE - LESSOR. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss or
damage to the Office Building Project improvements, but not Lessee's personal
property, fixtures, equipment or tenant improvements, in the amount of the full
replacement cost thereof, as the same may exist from time to time, utilizing
Insurance Services Office standard form, or equivalent, providing protection
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, plate glass, and such other perils as
Lessor deems advisable or may be required by a lender having a lien on the
Office Building Project. In addition, Lessor shall obtain and keep in force,
during the term of this Lease, a policy of rental value insurance covering a
period of one year, with loss payable to Lessor, which insurance shall also
cover all Operating Expenses for said period. Lessee will not be named in any
such policies carried by Lessor and shall have no right to any proceeds
therefrom. The policies required by these paragraphs 8.2 and 8.4 shall contain
such deductibles as Lessor or the aforesaid lender reasonably may determine. The
deductible amount of Lessor's existing property insurance policy is $10,000.00.
In the event that the Premises shall suffer an insured loss as defined in
paragraph 9.1(f) hereof, the reasonable deductible amounts under the applicable
insurance policies shall be deemed an Operating Expense. Lessee shall not do or
permit to be done anything which shall invalidate the insurance policies carried
by Lessor. Lessee shall pay the entirety of any increase in the property
insurance premium for the Office Building Project over what it was immediately
prior to the commencement of the term of this Lease if the increase is specified
by Lessor's insurance carrier as being caused by the nature of Lessee's
occupancy or any act or omission of Lessee.
8.5 INSURANCE POLICIES. Lessee shall deliver to Lessor copies of
liability insurance policies required under paragraph 8.1 or certificates
evidencing the existence and amounts of such insurance within seven (7) business
days after the Commencement Date of this Lease. No such policy shall be
cancelable or subject to reduction of coverage or other modification except
after thirty (30) days prior written notice to Lessor. Lessee shall, at least
thirty (30) days prior to the expiration of such policies, furnish Lessor with
renewals thereof.
8.6 WAIVER OF SUBROGATION. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against the other,
for direct or consequential loss or damage arising out of or incident to the
perils covered by property insurance carried by such party, whether due to the
negligence of Lessor or Lessee or their agents, employees, contractors and/or
invitees. If necessary all property insurance policies required under this Lease
shall be endorsed to so provide.
8.7 (a) INDEMNITY OF LESSOR. Except for Lessor's active negligence or
willful misconduct, Lessee shall indemnify and hold harmless Lessor and its
agents, Lessor's master or ground lessor, partners and lenders, from and against
any and all claims for damage to the person or property of anyone or any entity
arising from Lessee's use of the Office Building Project, or from the conduct of
Lessee's business or from any activity, work or things done, permitted or
suffered by Lessee in or about the Premises or elsewhere and shall further
indemnify and hold harmless Lessor from and against any and all claims, costs
and expenses arising from any breach or default in the performance of any
obligation on Lessee's part to be performed under the terms of this Lease, or
arising from any act or omission of Lessee, or any of Lessee's agents,
contractors, employees or invitees, and from and against all costs, attorney's
fees, expenses and liabilities incurred by Lessor as the result of any such use,
conduct, activity, work, things done, permitted or suffered, breach, default or
negligence, and in dealing reasonably therewith, including but not limited to
the defense or pursuit of any claim or any action or proceeding involved
therein; and in case any action or proceeding be brought against Lessor by
reason of any such manner, Lessee upon notice from Lessor shall defend the same
at Lessee's expense by counsel
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reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such
defense. Lessor need not have first paid any such claim in order to be so
indemnified. Lessee, as a material part of the consideration to Lessor, hereby
assumes all risk of damage to property of Lessee or injury to persons, in, upon
or about the Office Building Project arising from any cause and Lessee hereby
waives all claims in respect thereof against Lessor.
(b) Indemnity of Lessee. Except for Lessee's active negligence or
willful misconduct, Lessor shall indemnify and hold harmless Lessee and its
agents, partners and lenders, from and against any and all claims for damage to
the person or property of anyone or any entity arising from Lessor's use of the
Office Building Project, or from the conduct of Lessor's business or from any
activity, work or things done, permitted or suffered by Lessor in or about the
Common Areas or elsewhere and shall further indemnify and hold harmless Lessee
from and against any and all claims, costs and expenses arising from any breach
or default in the performance of any obligation on Lessor's part to be performed
under the terms of this Lease, or arising from any act or omission of Lessor, or
any of Lessor's agents, contractors, employees or invitees, and from and against
all costs, attorneys fees, expenses and liabilities incurred by Lessee as the
result of any such use, conduct, activity, work, things done, permitted or
suffered, breach, default or negligence, and in dealing reasonably therewith,
including but not limited to the defense or pursuit of any claim or any action
or proceeding involved therein; and in case any action or proceeding be brought
against Lessee by reason of any such matter, Lessor upon notice from Lessee
shall defend the same at Lessor's expense by counsel reasonably satisfactory to
Lessee and Lessee shall cooperate with Lessor in such defense. Lessee need not
have first paid any such claim in order to be so indemnified. Lessor, as a
material part of the consideration to Lessee, hereby assumes all risk of damage
to property of Lessor or injury to persons, in, upon or about the Office
Building Project (exclusive of the Premises) arising from any cause and Lessor
hereby waives all claims in respect thereof against Lessee.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Except for Lessor's active
negligence or willful misconduct, Lessee hereby agrees that Lessor shall not be
liable for injury to Lessee's business or any loss of income therefrom or for
loss of damage to the goods, wares, merchandise or other property of Lessee,
Lessee's employees, invitees, customers, or any other person in or about the
Premises or the Office Building Project, nor shall Lessor be liable for injury
to the person of Lessee, Lessee's employees, agents or contractors, whether such
damage or injury is caused by or results from theft, fire, steam, electricity,
gas, water or rain, or from the breakage, leakage, obstruction or other defects
of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause, whether said damage or injury results from
conditions arising upon the Premises or upon other portions of the Office
Building Project, or from other sources or places, or from new construction or
the repair, alteration or improvement of any part of the Office Building
Project, or of the equipment, fixtures or appurtenances applicable thereto, and
regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible, Lessor shall not be liable for any damages
arising from any act or neglect of any other lessee, occupant or user of the
Office Building Project, nor from the failure of Lessor to enforce the
provisions of any other lease of any other lessee of the Office Building
Project.
8.9 NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified in
this paragraph 8 are adequate to cover Lessee's property or obligations under
this Lease.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Premises Damage" shall mean if the Premises are damaged or
destroyed to any extent.
(b) "Premises Building Partial Damage" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than twenty-five percent (25%) of the then Replacement
Cost of the Building.
(c) "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the extent
that the cost to repair is fifty percent (50%) or more of the then Replacement
Cost of the Building.
(d) "Office Building Project Buildings" shall mean all of the
buildings on the Office Building Project site.
(e) "Office Building Project Buildings Total Destruction" shall
mean if the Office Building Project Buildings are damaged or destroyed to the
extent that the cost to repair is twenty-five percent (25%) or more of the then
Replacement Cost of the Office Building Project Buildings.
(f) "Insured Loss" shall mean damage or destruction which was
caused by an event required to be covered by the insurance described in
paragraph 8. The fact that an Insured Loss has a deductible amount shall not
make the loss an uninsured loss.
(g) "Replacement Cost" shall mean the amount of money necessary
to be spent in order to repair, or rebuild the damaged area to the condition
that existed immediately prior to the damage occurring, excluding all
improvements made by lessees, other than those installed by Lessor at Lessee's
expense.
9.2 PREMISES DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is an
Insured Loss and which falls into the classification of either Premises Damage
or Premises Building Partial Damage, then Lessor shall, as soon as reasonably
possible and to the extent the required materials and labor are readily
available through usual commercial channels, at Lessor's expense, repair such
damage (but not Lessee's fixtures, equipment or tenant improvements originally
paid for by Lessee) to its condition existing at the time of the damage, and
this Lease shall continue in full force and effect.
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage which is
not an Insured Loss and which falls within the classification of Premises Damage
or Premises Building Partial Damage, unless caused by a negligent or willful act
of Lessee (in which event Lessee shall make the repairs at Lessee's expense),
which damage prevents Lessee from making any substantial use of the Premises,
Lessor may at Lessor's option either (i) repair such damage as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to Lessee within
thirty (30) days after the date of the occurrence of such damage of Lessor's
intention to cancel and terminate this Lease as of the date of the occurrence of
such damage, in which event this Lease shall terminate as of the date of the
occurrence of such damage. If Lessor has not given to Lessee the thirty (30) day
notice provided in the preceding subparagraph (ii), and if Lessor has not
commenced the repair pursuant to subparagraph (i), then at any time thereafter
before Lessor actually commences the repair, Lessee by notice to Lessor may
cancel and terminate this Lease by notice to Lessor as of the date of the
occurrence of such damage.
9.3 PREMISES BUILDING TOTAL DESTRUCTION. Office Building Project Total
Destruction. Subject to the provisions of paragraphs 9.4 and 9.5, if at any time
during the term of this Lease there is damage, whether or not it is an Insured
Loss, which falls into the classifications of either (i) Premises Building Total
Destruction, or (ii) Office Building Project Total Destruction, then Lessor may
at Lessor's option either (i) repair such damage or destruction as soon as
reasonably possible at Lessor's expense (to the extent the required materials
are readily available through usual commercial channels) to its condition
existing at the time of the damage, but not Lessee's fixtures, equipment or
tenant improvements, and this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after the date of
occurrence of such damage of Lessor's intention to cancel and terminate this
Lease, in which case this Lease shall terminate as of the date of the occurrence
of such damage.
9.4 DAMAGE NEAR END OF TERM.
(a) Subject to paragraph 9.4(b), if at any time during the last
twelve (12) months of the term of this Lease there is substantial damage to the
Premises, Lessor or Lessee may at its option cancel and terminate this Lease as
of the date of occurrence of such damage by giving written notice to the other
of its election to do so within 30 (days) after the date of occurrence of such
damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee
has an option to extend or renew this Lease, and the time within which said
option may be exercised has not yet expired, Lessee shall exercise such option,
if it is to be exercised at all, no later than twenty (20) days after the
occurrence of an Insured Loss falling within the classification of Premises
Damage during the last twelve (12) months of the term of this Lease. If Lessee
duly exercises such option during said twenty (20) day period, Lessor shall, at
Lessor's expense, repair such damage, but not Lessee's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option
during said twenty (20) day period, then Lessor may at Lessor's option terminate
and cancel this Lease as of the expiration of said twenty (20) day period by
giving written notice to Lessee of Lessor's election to do so within ten (10)
days after the expiration of said twenty (20) day period, notwithstanding any
term or provision in the grant of option to the contrary.
9.5 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event Lessor repairs or restores the Building or
Premises pursuant to the provisions of this paragraph 9, and any part of the
Premises are
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not usable (including loss of use due to loss of access or essential services),
the rent payable hereunder (including Lessee's Share of Operating Expenses) for
the period during which such damage, repair or restoration continues shall be
abated, provided (1) the damage was not the result of the negligence of Lessee,
and (2) such abatement shall only be to the extent the operation and
profitability of Lessee's business as operated from the Premises is adversely
affected. Except for said abatement of rent, if any, Lessee shall have no claim
against Lessor for any damage suffered by reason of any such damage,
destruction, repair or restoration.
(b) If Lessor shall be obligated to repair or restore the
Premises or the Building under the provisions of this Paragraph 9 and shall not
commence such repair or restoration within sixty (60) days after such
occurrence, or if Lessor shall not complete the restoration and repair within
six (6) months after such occurrence, Lessee may at Lessee's option cancel and
terminate this Lease by giving Lessor written notice of Lessee's election to do
so at any time prior to the commencement or completion, respectively, of such
repair or restoration. In such event this Lease shall terminate as of the date
of such destruction, provided that Lessee shall pay Base Rent and Lessee's Share
of Operating Expenses to the extent Lessee actually occupies and uses all or
portions of the Premises subsequent to the destruction.
(c) Lessee agrees to cooperate with Lessor in connection with any
such restoration and repair, including but not limited to the approval and/or
execution of plans and specifications required.
9.6 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.
9.7 WAIVER. Lessor and Lessee waive the provisions of any statute which
relate to termination of leases when leased property is destroyed and agree that
such event shall be governed by the terms of this Lease.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the real property tax, as
defined in paragraph 10.3, applicable to the Office Building Project subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with the
provisions of paragraph 4.2, except as otherwise provided in paragraph 10.2.
10.2 ADDITIONAL IMPROVEMENTS. Lessee shall not be responsible for paying
any increase in real property tax specified in the tax assessor's records and
work sheets as being caused by additional improvements placed upon the Office
Building Project by other lessees or by Lessor for the exclusive enjoyment of
any other lessee. Lessee shall, however, pay to Lessor at the time that
Operating Expenses are payable under paragraph 4.2(c) the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Lessee or at Lessee's request.
10.3 DEFINITION OF "REAL PROPERTY TAX". As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Office Building Project or any portion thereof
by any authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, sanitary,
fire, street, drainage or other improvement district thereof, as against any
legal or equitable interest of Lessor in the Office Building Project or in any
portion thereof, as against Lessor's right to rent or other income therefrom,
and as against Lessor's business of leasing the Office Building Project. The
term "real property tax" shall also include any tax, fee, levy, assessment or
charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment or charge hereinabove included within the definition of "real
property tax", or (ii) the nature of which was hereinbefore included within the
definition of "real property tax", or (iii) which is imposed for a service or
right not charged prior to June 1, 1978 or, if previously charged, has been
increased since June 1, 1978, or (iv) which is imposed as a result of a change
in ownership, as defined by applicable local statutes for property tax purposes,
of the Office Building Project or which is added to a tax or charge hereinbefore
included within the definition of real property tax by reason of such change of
ownership, or (v) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.
10.4 EXCLUSIONS FROM REAL PROPERTY TAX. Real property taxes shall not
include (a) any state, local, federal, personal or corporate income tax measured
by the income of Lessor from all sources or from sources other than rent alone;
(b) any estate or inheritance taxes; (c) any succession or transfer taxes; (d)
interest on taxes or penalties resulting from Lessor's failure to pay taxes; (e)
any taxes which are essentially payments to a governmental agency for the right
to make improvements to the Office Building Project. If, by law, any taxes or
assessments may be paid in installments at the option of the taxpayer, then
whether or not Lessor elects to pay taxes and assessments in such installments,
Lessee's Share of Taxes shall be computed as if such election had been made, and
only installments thereof which would have become due during the Term shall be
included in Taxes for purposes of computing Lessee's Share thereof.
10.5 TAXES. If Lessee and other lessees in the Office Building Project
collectively occupying fifty percent (50%) or more of the rentable space of the
Office Building Project request Lessor to seek a reduction in the assessed
valuation of the Building or to contest any real property taxes, Lessor shall
seek such reduction or contest such taxes, provided Lessee and the requesting
parties advance the reasonable estimated costs for so doing and provided that no
such action on the part of Lessee and other lessees shall jeopardize Lessor's
interest in the Building. In the event Lessor does not institute proceeding,
then Lessee may bring or carry on such action in its own name, or in Lessor's
name if required for this purpose. Reasonable expenses incurred by Lessor in
attempting to protest, reduce or minimize Tax Expenses shall be included in
Taxes Expenses in the year in which those expenses are paid. Tax refunds shall
be deducted from Tax Expenses in the year in which they are received by Lessor.
10.6 JOINT ASSESSMENT. If the improvements or property, the taxes for
which are to be paid separately by Lessee under paragraph 10.2 or 10.5 are not
separately assessed, Lessee's portion of that tax shall be equitably determined
by Lessor from the respective valuations assigned in the assessor's work sheets
or such other information (which may include the cost of construction) as may be
reasonably available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.
10.7 PERSONAL PROPERTY TAXES.
(a) Lessee shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises or elsewhere.
(b) If any of Lessee's said personal property shall be assessed
with Lessor's real property, Lessee shall pay to Lessor the taxes attributable
to Lessee within thirty (30) days after receipt of a written statement setting
forth the taxes applicable to Lessee's property.
11. UTILITIES.
11.1 SERVICES PROVIDED BY LESSOR. Lessor shall provide heating,
ventilation, air conditioning, and janitorial service as reasonably required,
reasonable amounts of electricity for normal lighting and office machines, water
for reasonable and normal drinking and lavatory use, and replacement light bulbs
and/or fluorescent tubes and ballasts for standard overhead fixtures. Janitorial
service and customary cleaning shall be provided after normal business hours and
in a manner consistent with the operation of other first-class office buildings
in the area.
11.2 SERVICES EXCLUSIVE TO LESSEE. Lessee shall pay for all water, gas,
heat, light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee,
and which originated at the request of Lessee, together with any taxes thereon.
If any such services are not separately metered to the Premises, Lessee shall
pay at Lessor's option, either Lessee's Share or a reasonable proportion to be
determined by Lessor of all charges jointly metered with other premises in the
Building.
11.3 HOURS OF SERVICE. Said services and utilities shall be provided
during generally accepted business days and hours (8:00 AM TO 6:00 PM) or such
other days or hours as may hereafter be set forth. Utilities and services
required at other times shall be subject to advance request and reimbursement by
Lessee to Lessor of the cost thereof. Lessee shall be allowed after-hours use of
the heating, ventilating and air conditioning ("HVAC") system within the
Premises provided Lessor is given adequate notice to adjust the appropriate
timers. Lessor shall advise Lessee from time to time of the required "adequate
notice," and Lessee shall be charged the prevailing market rate for such
after-hours HVAC use, which
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rate is currently $40.00 per hour.
11.4 EXCESS USAGE BY LESSEE. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water, lighting
or power, or suffer or permit any act that causes extra burden upon the
utilities or services, including but not limited to security services, over
standard office usage for the Office Building Project. Lessor shall require
Lessee to reimburse Lessor for any excess expenses or costs that may arise out
of a breach of this subparagraph by Lessee. Lessor may, in its sole discretion,
install at Lessee's expense supplemental equipment and/or separate metering
applicable to Lessee's excess usage or loading.
11.5 INTERRUPTIONS. There shall be no abatement of rent and Lessor shall
not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor's
reasonable control or in cooperation with governmental request or directions.
See paragraph 60 of the Addendum to this Lease.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold or delay. Lessor shall respond to Lessee's request for consent
hereunder in a timely manner and any attempted assignment, transfer, mortgage,
encumbrance or subletting without such consent shall be voidable at Lessor's
election. "Transfer" within the meaning of this paragraph 12 shall include the
transfer or transfers aggregating: (a) if Lessee is a corporation, more than
fifty percent (50%) of the voting stock of such corporation, or (b) if Lessee
is a partnership, Limited Liability Company or a combination of entities, more
than fifty percent (50%) of the profit and loss participation in such
partnership or entities in the aggregate.
12.2 LESSEE AFFILIATE. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by or
is under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, or to any person or entity which acquires
all the assets of Lessee as a going concern of the business that is being
conducted on the Premises, all of which are referred to as "Lessee Affiliate";
provided that before such assignment shall be effective, (a) said assignee shall
assume, in full, the obligations of Lessee under this Lease and (b) Lessor shall
be given written notice of such assignment and assumption. Any such assignment
shall not, in any way, affect or limit the liability of Lessee under the terms
of this Lease even if after such assignment or subletting the terms of this
Lease are materially changed or altered without the consent of Lessee, the
consent of whom shall not be necessary.
12.3 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, no assignment or subletting
shall release Lessee of Lessee's obligation hereunder or alter the primary
liability of Lessee to pay the rent and other sums due Lessor hereunder
including Lessee's Share of Operating Expense Increase, and to perform all other
obligations to be performed by Lessee hereunder.
(b) Lessor may accept rent from any person other than Lessee
pending approval or disapproval of such assignment.
(c) Neither a delay in the approval or disapproval of such
assignment or subletting, nor the acceptance of rent, shall constitute a waiver
or estoppel of Lessor's right to exercise its remedies for the breach of any of
the terms or conditions of this paragraph 12 or this Lease.
(d) If Lessee's obligation under this Lease has been guaranteed
by third parties, then an assignment or sublease, and Lessor's consent thereto,
shall not be effective unless said guarantors give their written consent to such
sublease and the terms thereof.
(e) The consent by Lessor to any assignment or subletting shall
not constitute a consent to any subsequent assignment or subletting by Lessee or
to any subsequent or successive assignment or subletting by the sublessee.
However, Lessor may consent to subsequent sublettings and assignments of the
sublease or any amendments or modifications thereto without notifying Lessee or
anyone else liable on the Lease or sublease and without obtaining their consent
and such action shall not relieve such persons from liability under this Lease
or said sublease; however, such persons shall not be responsible to the extent
any such amendment or modification enlarges or increases the obligations of the
Lessee or sublessee under the Lease, or such sublease.
(f) In the event of any default under this Lease, Lessor may
proceed directly against Lessee, any guarantors or anyone else responsible for
the performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(g) Lessor's written consent to any assignment or subletting of
the Premises by Lessee shall not constitute an acknowledgment that no default
then exists under this Lease of the obligations to be performed by Lessee nor
shall such consent be deemed a waiver of any then existing default, except as
may be otherwise stated by Lessor at the time.
(h) The discovery of the fact that any financial statement relied
upon by Lessor in giving its consent to an assignment or subletting was
materially false shall, at Lessor's election, render Lessor's said consent null
and void.
12.4 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING.
Regardless of Lessor's consent, the following terms and conditions shall apply
to any subletting by Lessee of all or any part of the Premises (except subleases
to affiliates of Lessee) and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee, and Lessor may collect such rent and income and apply
same to Lessee's obligations under this Lease; provided, however, that until a
material default shall occur in the performance of Lessee's obligations under
this Lease, Lessee may receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a default exists in
the performance of Lessee's obligations under this Lease, to pay to Lessor the
rents due and to become due under the sublease. Lessee agrees that such
sublessee shall have the right to rely upon any such statement and request from
Lessor, and that such sublessee shall pay such rents to Lessor without an
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary Lessee
shall have no right or claim against said sublessee or Lessor for any such rents
so paid by said sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective unless
and until it has been approved in writing by Lessor. In entering into any
sublease, Lessee shall use only such form of sublease as is reasonably
satisfactory to Lessor, and once approved by Lessor, such sublease shall not be
changed or modified without Lessor's prior written consent. Any sublease shall,
by reason of entering into a sublease under this Lease, be deemed for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every obligation herein to be performed by Lessee other than such
obligations as are contrary to or inconsistent with provisions contained in a
sublease to which Lessor has expressly consented in writing.
(c) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor at its option and without any obligation to
do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of Lessee under such sublease from the time of
the exercise of said option to the termination of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to Lessee or for any other prior defaults of Lessee under
such sublease.
(d) No sublessee shall further assign or sublet all or any part
of the Premises without Lessor's prior written consent.
(e) With respect to any subletting to which Lessor has consented,
Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee
within three (3) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset from
and against Lessee for any such defaults cured by the sublessee.
12.5 LESSOR'S EXPENSES. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable costs and expenses incurred in
connection therewith, including attorneys', architects', engineers' or other
consultants' fees, as set forth in paragraph 31.
12.6 CONDITIONS TO CONSENT. Lessor reserves the right to condition any
approval to assign or sublet upon Lessor's determination that (a) the proposed
assignee or sublessee shall conduct a business on the Premises consistent with
the general character of the other occupants of the Office Building Project and
not in violation of any exclusives or rights held by other tenants, and (b) the
proposed assignee
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or sublessee be at least as financially responsible as Lessee was expected to be
at the time or the execution of this Lease.
13. DEFAULT; REMEDIES.
13.1 DEFAULT. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Lessee:
(a) The abandonment of the Premises by Lessee and failure to pay
Rent and other charges due hereunder.
(b) The breach by Lessee of any of the covenants, conditions or
provisions of paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment or
subletting), 13.1(e) (insolvency), 16(a) (estoppel certificate), 30(b)
(subordination), 33 (auctions), or 41.1 (easements), all of which are hereby
deemed to be material, non-curable defaults without the necessity of any notice
by Lessor to Lessee thereof.
(c) The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and when due, where
such failure shall continue for a period of three (3) days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
(d) The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Lessee other than those referenced in subparagraphs (b) and (c), above, where
such failure shall continue for a period of thirty (30) days after written
notice thereof from Lessor to Lessee; provided, however, that if the nature of
Lessee's noncompliance is such that more than thirty (30) days are reasonably
required for its cure, then Lessee shall not be deemed to be in default if
Lessee commenced such cure within said thirty (30) day period and thereafter
diligently pursues such cure to completion. To the extent permitted by law, such
thirty (30) day notice shall constitute the sole and exclusive notice required
to be given to Lessee under applicable Unlawful Detainer statutes.
(e) (i) The making by Lessee of any general arrangement or
general assignment for the benefit of creditors; (ii) Lessee becoming a "debtor"
as defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Lessee, the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of this paragraph 13.1(e) is contrary to
any applicable law, such provision shall be of no force or effect.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee, or its successor in interest or by any guarantor of Lessee's
obligation hereunder, was materially false.
13.2 REMEDIES. In the event of any material default or breach of this
Lease by Lessee, Lessor may at any time thereafter, with or without notice or
demand, as set forth in paragraph 13.1, and without limiting Lessor in the
exercise of any right or remedy which Lessor may have by reason of such default:
(a) Lessor may terminate this Lease and recover possession of the
Premises. Once Lessor has terminated this Lease, Lessee shall immediately
surrender the Premises to Lessor. On termination of this Lease, Lessor may
recover from Lessee all of the following:
(i) The worth at the time of the award of any unpaid Rent
that had been earned at the time of the termination, to be computed by allowing
interest at the rate set forth in paragraph 19, but in no case greater than the
maximum amount of interest permitted by law;
(ii) The worth at the time of the award of the amount by
which the unpaid Rent that would have been earned between the time of the
termination and the time of the award exceeds the amount of unpaid Rent that
Lessee proves could reasonably have been avoided, to be computed by allowing
interest, at the rate set forth in paragraph 19, but in no case greater than the
maximum amount of interest permitted by law;
(iii) The worth at the time of the award of the amount by
which the unpaid Rent for the balance of the Lease Term after the time of the
award exceeds the amount of unpaid Rent that Lessee proves could reasonably have
been avoided, to be computed by discounting that amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of the award plus one
percent (1%);
(iv) Any other amount necessary to compensate Lessor for
all the detriment proximately caused by Lessee's failure to perform obligations
under this Lease, including brokerage commissions and advertising expenses,
expenses of remodeling the Premises for a new lessee (whether for the same or a
different use), and any special concessions made to obtain a new lessee; and
(v) Any other amounts, in addition to or in lieu of those
listed above, that may be permitted by applicable law.
(b) Lessor shall have the right to pursue any one or more of the
foregoing remedies in addition to any other remedies now or later available to
Lessor at law or in equity. These remedies are not exclusive but cumulative.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within thirty (30) days after
written notice by Lessee to Lessor; provided, however, that if the nature of
Lessor's obligation is such that more than thirty (30) days are required for
performance then Lessor shall not be in default if Lessor commences performance
within such 30-day period and thereafter diligently pursues the same to
completion. See paragraph 60 of the Addendum to this Lease concerning remedies
available to Lessee if Lessor is in material default under this Lease.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of Base Rent, Lessee's Share of Operating Expense Increase or
other sums due hereunder will cause Lessor to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting charges,
and late charges which may be imposed on Lessor by the terms of any mortgage or
trust deed covering the Office Building Project. Accordingly, if any installment
of Base Rent, Operating Expense Increase, or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to 6% of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Lessor will incur by reason of late payment by Lessee.
Acceptance of such late charge by Lessor shall in no event constitute a waiver
of Lessee's default with respect to such overdue amount, nor prevent Lessor from
exercising any of the other rights and remedies granted hereunder.
14. CONDEMNATION. If the Premises or any portion thereof or the Office Building
Project are taken under the power of eminent domain, or sold under the threat of
the exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
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authority takes title or possession, whichever first occurs; provided that if so
much of the Premises or the Office Building Project are taken by such
condemnation as would substantially and adversely affect the operation and
profitability of Lessee's business conducted from the Premises, Lessee shall
have the option, to be exercised only in writing within sixty (60) days after
Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice, within thirty (30) days after the condemning authority shall
have taken possession), to terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the rent and Lessee's
Share of Operating Expense Increase shall be reduced in the proportion that the
floor area of the Premises taken bears to the total floor area of the Premises.
Common Areas taken shall be excluded from the Common Areas usable by Lessee and
no reduction of rent shall occur with respect thereto or by reason thereof.
Lessor shall have the option in its sole discretion to terminate this Lease as
of the taking of possession by the condemning authority, by giving written
notice to Lessee of such election within thirty (30) days after receipt of
notice of a taking by condemnation of any part of the Premises or the Office
Building Project. Any award for the taking of all or any part of the Premises or
the Office Building Project under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any separate award for loss of or
damage to Lessee's trade fixtures, removable personal properly and unamortized
tenant improvements that have been paid for by Lessee, relocation expenses and
loss of Lessee's goodwill, and any other amounts Lessee may claim without
reducing any award to Lessor. For that purpose the cost of such improvements
shall be amortized over the original term of this Lease excluding any options.
In the event that this Lease is not terminated by reason of such condemnation,
Lessor shall to the extent of severance damages received by Lessor in connection
with such condemnation, repair any damage to the Premises caused by such
condemnation except to the extent that Lessee has been reimbursed therefor by
the condemning authority. Lessee shall pay any amount in excess of such
severance damages required to complete such repair.
15. BROKER'S FEE.
(a) The brokers involved in this transaction are C.B. XXXXXXX
XXXXX, INC., 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
(Xxxxx Xxxxxxx and Xxxx Xxxx) as "listing broker" and Resource Commercial, 0000
Xxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 (Xxxx Xxxxxx) as "cooperating
broker," licensed real estate broker(s). A "cooperating broker" is defined as
any broker other than the listing broker entitled to a share of any commission
arising under this Lease. Upon execution of this Lease by both parties, Lessor
shall pay to said brokers jointly, or in such separate shares as they may
mutually designate in writing, a fee as set forth in a separate agreement
between Lessor and said broker.
(b) Lessee and Lessor each represent and warrant to the other
that neither has had any dealings with any person, firm, broker or finder (other
than the person(s), if any, whose names are set forth in paragraph 15(a), above)
in connection with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and no other broker or other person, firm or
entity is entitled to any commission or finder's fee in connection with said
transaction and Lessee and Lessor do each hereby indemnify and hold the other
harmless from and against any costs, expenses, attorneys' fees or liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
party.
16. ESTOPPEL CERTIFICATE.
(a) Each party (as "responding party") shall at any time upon not
less than twenty (20) days prior written notice from the other party
("requesting party") execute, acknowledge and deliver to the requesting party a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to the responding party's knowledge, any
uncured defaults on the part of the requesting party, or specifying such
defaults if any are claimed. Any such statement may contain language that (i)
all statements therein are made to responding party's best knowledge, (ii) the
responding party is not obligated to make and has made no independent
investigation of the facts, and (iii) nothing therein shall be deemed to be a
waiver of any right or cause of action based on any fact of which responding
party has no knowledge due to the other party's concealment of or failure to
disclose a fact or facts. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Office Building Project or of
the business of Lessee.
(b) At the requesting party's option, the failure to deliver such
statement within such time shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it shall
be conclusive upon such party that (i) this Lease is in full force and effect,
without modification except as may be represented by the requesting party, (ii)
there are no uncured defaults in the requesting party's performance, and (iii)
if Lessor is the requesting party, not more than one month's rent has been paid
in advance.
(c) If Lessor desires to finance, refinance, or sell the Office
Building Project, or any party thereof, Lessee hereby agrees to deliver to any
lender or purchaser designated by Lessor such financial statements of Lessee as
may be reasonably required by such lender or purchaser. Such statements shall
include the past three (3) years' financial statements of Lessor. All such
financial statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the
owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Office Building Project, and except as
expressly provided in paragraph 15, in the event of any transfer of such title
or interest, Lessor herein named (and in case of any subsequent transfers then
the grantor) shall be relieved from and after the date of such transfer of all
liability as respects Lessor's obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during their
respective periods of ownership.
18. SEVERABILITY. The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any
amount due to Lessor not paid when due shall bear interest at the lower of ten
(10%) or the maximum rate then allowable by law or judgments from the date due.
Payment of such interest shall not excuse or cure any default by Lessee under
this Lease; provided, however, that interest shall not be payable on late
charges incurred by Lessee nor on any amounts upon which late charges are paid
by Lessee.
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20. TIME OF ESSENCE. Time is of the essence with respect to the obligations to
be performed under this Lease.
21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expense Increase and any other expenses payable by Lessee hereunder shall be
deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all
agreements of the parties with respect to any matter mention herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction nor
the Lessor or any employee or agents of any of said persons has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of the Premises or the Office Building Project and Lessee acknowledges
that Lessee assumes all responsibility regarding the Occupational Safety Health
Act, the legal use and adaptability of the Premises and the compliance thereof
with all applicable laws and regulations in effect during the term of this
Lease.
23. NOTICES. Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery or by certified or registered
mail, and shall be deemed sufficiently given if delivered or addressed to Lessee
or to Lessor at the address noted below or adjacent to the signature of the
respective parties, as the case may be. Mailed notices shall be deemed given
upon actual receipt at the address required, two (2) business days following
deposit in the mail, postage prepaid, which first occurs. Either party may by
notice to the other specify a different address for notice purposes. Any notice
also may be given and shall be effective: (a) when delivered by overnight
delivery Federal Express/Airborne/United Parcel Service/DHL Worldwide Express
with charges prepaid or charged to the sender's account; notice is effective on
delivery if delivery is confirmed by the delivery service, and (b) when sent by
telex or fax to the last telex or fax number of the recipient known to the party
giving notice and notice is effective on receipt as long as (I) a duplicate copy
of the notice is promptly given by first-class or certified mail or by overnight
delivery or (II) the receiving party delivers a written confirmation of receipt.
Any notice given by telex or fax shall be considered to have been received on
the next business day if it is received after 5:00 PM (recipient's time) or on
a non-business day. A copy of all notices required or permitted to be given to a
party hereunder shall be concurrently transmitted to such party or parties at
such addresses as that party may from time to time hereafter designate by notice
to the other.
24. WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other, execute
acknowledge and deliver to the other a "short form" memorandum of this Lease for
recording purposes. Neither party shall record a copy of this Lease.
26. HOLDING OVER. If Lessee, with Lessor's consent, remains in possession of the
Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Lessee, except that the rent payable
shall be two hundred percent (200%) of the rent payable immediately preceding
the termination date of this Lease, and all Options, if any, granted under the
terms of this Lease shall be deemed terminated and be of no further effect
during said month to month tenancy.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. COVENANTS AND CONDITIONS. Each provision of this Lease performable by Lessee
shall be deemed both a covenant and a condition.
29. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting
assignment or subletting by Lessee and subject to the provision of paragraph
17, this Lease shall bind the parties, their personal representatives,
successors and assign. This Lease shall be governed by the laws of the State
where the Office Building Project is located and any litigation concerning this
Lease between the parties hereto shall be initiated in the county in which the
Office Building Project is located.
30. SUBORDINATION.
(a) This Lease, and any Option or right of first refusal granted
hereby, at Lessor's option, shall be subordinate to any ground lease, mortgage,
deed of trust, or any other hypothecation or security now or hereafter placed
upon the Office Building Project and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof, provided that Lessee's right to quiet
possession of the Premises shall not be disturbed if Lessee is not in material
default and so long as Lessee shall pay the rent and observe and perform all of
the provisions of this Lease, unless this Lease is otherwise terminated pursuant
to its terms. If any mortgage, trustee, or ground lessor shall elect to have
this Lease and any Options granted hereby prior to the lien of its mortgage,
deed of trust or ground lease, and shall give written notice thereof to Lessee,
this Lease and such Option shall be deemed prior to such mortgage, deed of trust
or ground lease, whether this Lease or such Options are dated prior or
subsequent to the date of said mortgage, deed of trust or ground lease or the
date of recording thereof.
(b) Lessee agrees to execute such reasonable documents as
required to effectuate an attornment, a subordination, or to make this Lease or
any Option granted herein prior to the lien of any mortgage, deed of trust or
ground lease, as the case may be. Lessee's failure to execute such documents or
to provide Lessee's reasonable objections thereto within the twenty (20) days
after written demand shall constitute a material default by Lessee hereunder.
31. ATTORNEYS' FEES.
31.1 If either party or the broker(s) named herein bring an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, trial, or appeal thereon, shall be entitled to his reasonable
attorneys' fees to be paid by the losing party as fixed by the court in the same
or separate suit, and whether or not such action is pursued to decision or
judgment. The provisions of this paragraph shall inure to the benefit of the
broker named herein who seeks to enforce a right hereunder.
31.2 The attorneys' fee award shall not be computed in accordance with
any court fee schedule, but shall be such as to fully reimburse all attorneys'
fees reasonably incurred in good faith.
31.3 Lessor shall be entitled to reasonable attorneys' fees and all
other costs and expenses incurred in the preparation and service of notices of
default and consultations in connection therewith, whether or not a legal
transaction is subsequently commenced in connection with such default.
32. LESSOR'S ACCESS.
32.1 Lessor and Lessors agents shall have the right to enter the
Premises at reasonable times for the purpose of inspecting the same, performing
any
FULL SERVICE-GROSS
REVISED
Page 11 of 14
12
services required of Lessor, showing the same to prospective purchasers,
lenders, or lessees, taking such safety measures, erecting such scaffolding or
other necessary structures, making such alterations, repairs, improvements or
additions to the Premises or to the Office Building Project as Lessor may
reasonably deem necessary or desirable and the erecting, using and maintaining
of utilities, services, pipes and conduits through the Premises and/or other
premises as long as there is no material adverse effect to Lessee's use of the
Premises; provided, however, that the entrance to the Premises shall not be
blocked and the business of Lessee shall not be interfered with unreasonable.
See also paragraph 60 of the Addendum to this Lease. Lessor may at any time
place on or about the Premises or the Building any ordinary "For Sale" signs and
Lessor may at any time during the last ninety (90) days of the term hereof place
on or about the Premises any ordinary "For Lease" signs.
32.2 Except as expressly provided for herein, all activities of Lessor
pursuant to this paragraph shall be without abatement of rent, nor shall Lessor
have any liability to Lessee for the same.
32.3 Lessor shall have the right to retain keys to the Premises and to
un1ock all doors in or upon the Premises other than to files, vaults and safes,
and in the case of emergency to enter the Premises by any reasonably appropriate
means, and any such entry shall not be deemed a forceable or unlawful entry or
detainer of the Premises or an eviction. Lessee waives any charges for damages
or injuries or interference with Lessee's property or business in connection
therewith, unless such damage or injury is due to the active negligence or
willful act of Lessor.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent. The holding of any auction on the Premises or Common Areas in violation
of this paragraph shall constitute a material default of this Lease.
34. SIGNS. Except as provided in paragraph 59 of the Addendum, Lessee shall not
place any sign upon the Premises or the Office Building Project without Lessor's
prior written consent. Under no circumstances shall Lessee place a sign on any
roof of the Office Building Project.
35. MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.
36. CONSENTS. Except for paragraphs 33 (auctions) and 34 (signs) hereof,
wherever in this Lease consent of one party is required to an act of the other
party such consent shall not be unreasonably withheld or delayed.
37. GUARANTOR. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.
38. QUIET POSSESSION. Upon Lessee paying the rent for the Premises and observing
and performing all of the covenants, conditions and provisions on Lessee's part
to be observed and performed hereunder, Lessee shall have quiet possession of
the Premises for the entire term hereof subject to all of the provisions of this
Lease. The individuals executing this Lease on behalf of Lessor represent and
warrant to Lessee that they are fully authorized and legally capable of
executing this Lease on behalf of Lessor and that such execution is binding upon
all parties holding an ownership interest in the Office Building Project.
39. OPTIONS.
39.1 DEFINITION. As used in this paragraph the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option of right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Office Building Project or other
property of Lessor or the right of first offer to lease other space within the
Office Building Project or other property of Lessor; (3) the right or option to
purchase the Premises or the Office Building Project, or the right of first
refusal to purchase the Premises or the Office Building Project or the right of
first offer to purchase the Premises or the Office Building Project, or the
right or option to purchase other property of Lessor, or the right of first
refusal to purchase other property of Lessor or the right of first offer to
purchase other property of Lessor.
39.2 OPTIONS PERSONAL. Each Option granted to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original Lessee
(or an affiliate of Lessee) while occupying the Premises who does so without the
intent of thereafter assigning this Lease or subletting the Premises or any
portion thereof, and may not be exercised or be assigned, voluntarily or
involuntarily, by or to any person or entity other than Lessee (or an affiliate
of Lessee); provided, however, that an Option may be exercised by or assigned to
any Lessee Affiliate as defined in paragraph 12.2 of this Lease. The Options, if
any, herein granted to Lessee are not assignable separate and apart from this
Lease, nor may any Option be separated from this Lease in any manner, either by
reservation or otherwise.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple options
to extend or renew this Lease a later option cannot be exercised unless the
prior option to extend or renew this Lease has been so exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary, (i) during
the time commencing from the date Lessor gives to Lessee a notice of default
pursuant to paragraph 13.1(c) or 13.1(d) and continuing until the noncompliance
alleged in said notice of default is cured, or (ii) during the period of time
commencing on the day after a monetary obligation to Lessor is due from Lessee
and unpaid and continuing until the obligation is paid, or (iii) in the event
that Lessor has given to Lessee three or more notices of default under paragraph
13.1(c), or paragraph 13.1(d), whether or not the defaults are cured, during the
12 month period of time immediately prior to the time that Lessee attempts to
exercise the subject Option.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessee fails to
commence to cure a default specified in paragraph 13.1 (d) within thirty (30)
days after the date that Lessor gives notice to Lessee of such default and/or
Lessee fails thereafter to diligently prosecute said cure to completion, or
(iii) Lessor gives to Lessee three or more notices of default under paragraph
13.1 (c), or paragraph 13.1 (d), whether or not the defaults are cured, or (iv)
if Lessee has committed any non-curable breach, including without limitation
those described in paragraph 13.1(b), or is otherwise in default of any of the
terms, covenants and conditions of this Lease.
40. SECURITY MEASURES-LESSOR'S RESERVATIONS.
40.1 Lessee hereby acknowledges that Lessor shall have no obligation,
whatsoever to provide guard service or other security measures for the benefit
of the Premises or the Office Building Project. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole option,
from providing security protection for the Office Building Project or any part
thereof, in which event the cost thereof shall be included within the definition
of Operating Expenses, as set forth in paragraph 4.2(b).
40.2 Lessor shall have the following rights:
(a) To change the name, address or title of the Office Building
Project or building in which the Premises are located upon not less than 90 days
prior written notice;
(b) To, at Lessee's expense, provide and install building
standard graphics on the door of the Premises and such portions of the Common
Areas as Lessor shall reasonably deem appropriate;
FULL SERVICE-GROSS
REVISED
Page 12 of 14
13
(c) To permit any lessee the exclusive right to conduct any
business as long as such exclusive does not conflict with any rights given
herein;
(d) To place such signs, notices or displays as Lessor reasonably
deems necessary or advisable upon the roof, exterior of the buildings or the
Office Building Project or on pole signs in the Common Areas;
40.3 Lessee shall not:
(a) Use a representation (photographic or otherwise) of the
Building or the Office Building Project or their name(s) in connection with
Lessee's business;
(b) Suffer or permit anyone, except in emergency, to go upon the
roof of the Building.
41. EASEMENTS.
41.1 Lessor reserves to itself the right, from time to time, to grant
such easements, rights and dedications that Lessor deems necessary or desirable,
and to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material default of this Lease by Lessee.
41.2 The obstruction of Lessee's view, air, or light by any structure
erected in the vicinity of the Building, whether by Lessor or third parties,
shall in no way affect this Lease or impose any liability upon Lessor.
42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the part
of said party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said party to pay
such sum or any part thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
43. AUTHORITY. If Lessee or Lessor is a corporation, trust, or general or
limited partnership, Lessee and Lessor, and each individual executing this Lease
on behalf of such entity represents and warrants that such individual is duly
authorized to execute and deliver this Lease on behalf of said entity. If Lessee
or Lessor is a corporation, trust or partnership, Lessee or Lessor, as
applicable, shall, within thirty (30) days after execution of this Lease,
deliver to the other party evidence of such authority satisfactory to the other
party.
44. CONFLICT. Any conflict between the printed provisions, Exhibits or Addenda
of this Lease and the typewritten or handwritten provisions, if any, shall be
controlled by the typewritten or handwritten provisions.
45. NO OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lessee to lease.
This Lease shall become binding upon Lessor and Lessee only when fully executed
by both parties.
46. LENDER MODIFICATION. Lessee agrees to make such reasonable modifications to
this Lease as may be reasonably required by an institutional lender in
connection with the obtaining of normal financing or refinancing of the Office
Building Project.
47. MULTIPLE PARTIES. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise expressly provided herein, the
obligations of the Lessor or Lessee herein shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee,
respectively.
48. ATTACHMENTS. Attached hereto are the following documents which constitute a
part of this Lease:
Attached to this Lease and incorporated herein are the following:
Paragraphs 50 through 61, inclusive
Exhibits A through E
FULL SERVICE-GROSS
REVISED
Page 13 of 14
14
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL
ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION
RELATING THERETO; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR
OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
LESSOR LESSEE
XXXXXX REALTY, L.P. THE CERPLEX GROUP
A Delaware Limited Partnership A Delaware Corporation
BY: XXXXXX REALTY CORPORATION
A Maryland Corporation
General Partner
By /s/ XXXX X. XXXXX By /s/ [SIGNATURE ILLEGIBLE]
--------------------------------- --------------------------------------
XXXX X. XXXXX [NAME ILLEGIBLE]
Its SR. VICE PRESIDENT, Its EXECUTIVE VICE PRESIDENT
ASSET MANAGEMENT -------------------------------------
--------------------------------
By /s/ XXXXXXX X. XXXXXX By /s/ [SIGNATURE ILLEGIBLE]
--------------------------------- --------------------------------------
XXXXXXX X. XXXXXX [NAME ILLEGIBLE]
Its EXECUTIVE VICE PRESIDENT Its SECRETARY
CHIEF OPERATING OFFICER -------------------------------------
--------------------------------
Executed at El Segundo, CA Executed at Tustin, CA
------------------------ -----------------------------
on February 12, 1999 on February 4, 1999
--------------------------------- --------------------------------------
Address 0000 X. Xxxxxxxx Xxxxxxx, Xxxxxxx 0000 Xxxx Xxxxxx
Xxxxx 000 Xxxxxx, Xxxxxxxxxx 00000
Xx Xxxxxxx, Xxxxxxxxxx 00000 ---------------------------------
----------------------------
NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are utilizing
the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000. (000) 000-0000.
FULL SERVICE-GROSS
REVISED
Page 14 of 14
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[LOGO]
RENT ADJUSTMENT(S)
STANDARD LEASE ADDENDUM
DATED: January 26, 1999
BY AND BETWEEN (LESSOR): XXXXXX REALTY, L.P.
----------------------------------------
A Delaware Limited Partnership
BY: Xxxxxx Realty Corporation,
A Maryland Corporation, General Partner
LESSEE: THE CERPLEX GROUP
----------------------------------------
A Delaware Corporation
ADDRESS OF PREMISES: 000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
----------------------------------------
PARAGRAPH 50
A. RENT ADJUSTMENTS:
The monthly rent for each month of the adjustment period(s) specified
below shall be increased using the method(s) indicated below:
(Check Method(s) to be Used and Fill in Appropriately)
[ ] 1. Cost of Living Adjustments (COLA)
a. On (Fill in Cola Dates):______________________________________________
________________________________________________________________________________
the Base Rent shall be adjusted by the change, if any, from the Base Month
specified below, in the Consumer Price Index of the Bureau of Labor Statistics
of the U.S. Department of Labor for (select one): [ ] CPI W (Urban Wage Earners
and Clerical Workers) or [ ] CPI U (All Urban Consumers), for (Fill in Urban
Area):
___________________________________________________________________, All items
(1982-1984 = 100), herein referred to as "CPI".
b. The monthly rent payable in accordance with paragraph A.I.a. of this
Addendum shall be calculated as follows: the Base Rent set forth in paragraph
1.5 of the attached Lease, shall be multiplied by a fraction the numerator of
which shall be the CPI of the calendar month two months prior to the month(s)
specified in paragraph A.I.a. above during which the adjustment is to take
effect, and the denominator of which shall be the CPI of the calendar month
which is two months prior to (select one): [ ] the first month of the term of
this Lease as set forth in paragraph 1.3 ("Base Month") or [ ] (Fill in Other
"Base Month") ______________________. The sum so calculated shall constitute
the new monthly rent hereunder, but in no event, shall any such new monthly rent
be less than the rent payable for the month immediately preceding the rent
adjustment.
c. In the event the compilation and/or publication of the CPI shall be
transferred to any other governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the CPI shall be used to
make such calculation. In the event that the Parties cannot agree on such
alternative index, then the matter shall be submitted for decision to the
American Arbitration Association in accordance with the then rules of said
Association and the decision of the arbitrators shall be binding upon the
parties. The cost of said Arbitration shall be paid equally by the Parties.
[ ] II. MARKET RENTAL VALUE ADJUSTMENT(S) (MRV)
a. On (Fill in MRV Adjustment Date(s):________________________________
________________________________________________________________________________
the Base Rent shall be adjusted to the "Market Rental Value" of the property as
follows:
1) Four months prior to each Market Rental Value Adjustment Date
described above, the Parties shall attempt to agree upon what the new MRV will
be on the adjustment date. If agreement cannot be reached within thirty days,
then:
(a) Lessor and Lessee shall immediately appoint a mutually
acceptable appraiser or broker to establish the new MRV within the next thirty
days. Any associated costs will be split equally between the Parties, or
(b) Both Lessor and Lessee shall each immediately make a
reasonable determination of the MRV and submit such determination, in writing,
to arbitration in accordance with the following provisions:
(i) Within fifteen (15) days thereafter, Lessor and
Lessee shall each select an [ ] appraiser or [ ] broker ("CONSULTANT" - check
one) of their choice to act as an arbitrator. The two arbitrators so appointed
shall immediately select a third mutually acceptable Consultant to act as a
third arbitrator.
(ii) The three arbitrators shall within thirty (30)
days of the appointment of the third arbitrator reach a decision as to what the
actual MRV for the Premises is, and whether Lessor's or Lessee's submitted MRV
is the closest thereto. The decision of a majority of the arbitrators shall be
binding on the Parties. The submitted MRV which is determined to be the closest
to the actual MRV shall thereafter be used by the Parties.
(iii) If either of the Parties fails to appoint an
arbitrator within the specified fifteen days, the arbitrator timely appointed by
one of them shall reach a decision on his or her own, and said decision shall be
binding on the Parties.
RENT ADJUSTMENTS
Page 1 of 2
16
(iv) The entire cost of such arbitration shall be
paid by the party whose submitted MRV is not selected, ie. that is the one that
is NOT the closest to the actual MRV.
2) Notwithstanding the foregoing, the new MRV shall not be
less than the rent payable for the month immediately preceding the rent
adjustment.
b) Upon the establishment of each new Market Rental Value:
1) the new MRV will become the new "Base Rent" for the
purpose of calculating any further Adjustments, and
2) the first month of each Market Rental Value shall
become the new 'Base Month' for the purpose of calculating any further
Adjustments.
[X] III. FIXED RENTAL ADJUSTMENTS (FRA)
The Monthly Base Rent shall be increased to the following amounts on the dates
set forth below.
On (fill in FRA Adjustment Date(s)): The New Monthly Base Rent shall be:
March 1, 2000 through February 28, 2001 $56,784.00
March 1, 2001 through February 28, 2002 $57,967.00
March 1, 2002 through February 28, 2003 $59,150.00
March 1, 2003 through February 29, 2004 $60,333.00
B. NOTICE:
Unless specified otherwise herein, notice of any such adjustments, other
than Fixed Rental Adjustments, shall be made as specified in paragraph 23 of the
Lease.
RENT ADJUSTMENTS
Page 2 of 2
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[LOGO]
OPTION(S) TO EXTEND
STANDARD LEASE ADDENDUM
DATED: JANUARY 26, 1999
BY AND BETWEEN (LESSOR): XXXXXX REALTY, L.P.
-------------------------------------
A Delaware Limited Partnership
XXXXXX REALTY CORPORATION
A Maryland Corporation, General Partner
(LESSEE): THE CERPLEX GROUP,
-------------------------------------
A Delaware Corporation
ADDRESS OF PREMISES: 000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
-----------------------------------------
Paragraph 51
A. OPTION(S) TO EXTEND:
Lessor hereby grants to Lessee the option to extend the term of this Lease for
one (1) additional five year period(s) commencing when the prior term expires
upon each and all of the following terms and conditions:
(i) In order to exercise an option to extend, Lessee must give written
notice of such election to Lessor and Lessor must receive the same at least 9
but not more than 12 months prior to the date that the option period would
commence, time being of the essence. If proper notification of the exercise of
an option is not given and/or received, such option shall automatically expire.
Options (if there are more than one) may only be exercised consecutively.
(ii) The provisions of paragraph 39, including those relating to
Lessee's Default set forth in paragraph 39.4 of this Lease, are conditions of
this Option.
(iii) Except for the provisions of this Lease granting an option or
options to extend the term, all of the terms and conditions of this Lease except
where specifically modified by this option shall apply.
(iv) This Option is subject to the covenants and conditions of paragraph
39.2 of the Lease.
(v) The monthly rent for each month of the option period shall be
calculated as follows, using the method(s) indicated below:
(Check method(s) to be used and fill in appropriately)
[ ] I. COST OF LIVING ADJUSTMENT(S) (COLA)
a. On (Fill in COLA Dates):________________________________________________
_____________________________________________________________________________the
Base Rent shall be adjusted by the change, if any, from the Base Month specified
below, in the Consumer Price Index of the Bureau of Labor Statistics of the U.S.
Department of Labor for (select one): [ ] CPI W (Urban Wage Earners and Clerical
Workers) or [ ] CPI U (All Urban Consumers), for (Fill in Urban Area):
________________________________________________________________________________
All Items (1982-1984=100), herein referred to as "CPI".
b. The monthly rent payable in accordance with paragraph A.I.a. of this
Addendum shall be calculated as follows: the Base Rent set forth in paragraph
1.5 of the attached Lease, shall be multiplied by a fraction the numerator of
which shall be the CPI of the calendar month two months prior to the month(s)
specified in paragraph A.I.a. above during which the adjustment is to take
effect, and the denominator of which shall be the CPI of the calendar month
which is two months prior to (select one): [ ] the first month of the term of
this Lease as set forth in paragraph 1.3 ("Base Month") or [ ] (Fill in Other
"Base Month"): ___________________________________________. The sum so
calculated shall constitute the new monthly rent hereunder, but in no event,
shall any such new monthly rent be less than the rent payable for the month
immediately preceding the rent adjustment
c. In the event the compilation and/or publication of the CPI shall be
transferred to any other governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the CPI shall be used to
make such calculation. In the event that the Parties cannot agree on such
alternative index, then the matter shall be submitted for decision to the
American Arbitration Association in accordance with the then rules of said
Association and the decision of the arbitrators shall be binding upon the
parties. The cost of said Arbitration shall be paid equally by the Parties.
[X] II. MARKET RENTAL VALUE ADJUSTMENT(S) (MRV)
a. On (Fill in MRV Adjustment Date(s)) on the first day of the option term,
____________________________________________________________________________ the
Base Rent shall be adjusted to the "Market Rental Value" of the property as
follows:
1) Four months prior to each Market Rental Value Adjustment Date
described above, the Parties shall attempt to agree upon what the new MRV will
be on the adjustment date. If agreement cannot be reached, within thirty days,
then:
Page 1 of 2
18
(a) Lessee and Lessor shall each appoint one (1) arbitrator
within thirty (30) days of a written request for arbitration from the other, and
the two (2) arbitrators so selected shall provide their determination. If the
two determinations are within ten percent (10%) of the higher of the two
arbitrators' determinations, then the average of the two shall be the Market
Rental Value; if the two determinations are not within ten percent (10%) of the
higher determination, then the two arbitrators shall select a third arbitrator
within fifteen (15) days after the comparison of the two determinations. The
determination of the third arbitrator shall be made within fifteen (15) days of
appointment, and the average of the two (2) closest determinations (in dollar
figures) shall be final for all purposes. The costs of arbitration shall be
shared equally.
(b) For purposes of this paragraph 51, Fair Market Rental Value
of the Premises shall be the rental rate at which lessees lease comparable space
as of the commencement of the Option Term. For this purpose, "comparable space"
shall be office space that is:
(i) Not subleased;
(ii) Not subject to another lessee's expansion
rights;
(iii) Comparable in size, location and quality to the
Premises;
(iv) Leased for a term comparable to the Option Term;
and
(v) Located in comparable Buildings.
(c) In determining the rental rate of comparable space, the
appraisers shall include all escalations and take into consideration the
following concessions:
(i) Rental abatement concessions, if any, being granted
to lessees in connection with the comparable space; and
(ii) Lessee improvements or allowances provided or to be
provided for the comparable space, taking into account the value of the existing
improvements in the Premises, based on the quality and layout of these
improvements.
2) Notwithstanding the foregoing, the new MRV shall not be less than
the rent payable for the month immediately preceding the rent adjustment.
(b) Upon the establishment of each New Market Rental Value:
1) the new MRV will become the new "Base Rent" for' the purpose of
calculating any further Adjustments, and
2) the first month of each Market Rental Value term shall become the
new "Base Month" for the purpose of calculating any further Adjustments.
[X] III. FIXED RENTAL ADJUSTMENT(S) (FRA)
The Monthly Base Rent shall be increased to the following amounts on the dates
set forth below:
On (Fill in FRA Adjustment Date(s): The New Base Rent shall be:
$
--------------------------------- -----------------------------------
$
--------------------------------- -----------------------------------
$
--------------------------------- -----------------------------------
$
--------------------------------- -----------------------------------
On the first day of the thirteenth (13th), twenty-fifth (25th), thirty
seventh (37th) and forty ninth (49th) months of the option term, Monthly Base
Rent shall be increased by five cents per rentable square foot for the total
rentable square feet contained in the Premises.
B. NOTICE:
Unless specified otherwise herein, notice of any rental adjustments,
other than Fixed Rental Adjustments, shall be made as specified in paragraph 23
of the Lease.
Page 2 of 2
19
ADDENDUM TO THAT CERTAIN LEASE
DATED JANUARY 26, 1999
BY AND BETWEEN
XXXXXX REALTY, L.P.,
A DELAWARE LIMITED PARTNERSHIP
XXXXXX REALTY CORPORATION,
A MARYLAND CORPORATION,
GENERAL PARTNER
("LESSOR")
-AND -
THE CERPLEX GROUP
A DELAWARE CORPORATION
("LESSEE")
FOR THE PREMISES LOCATED AT
000 XXXXXXXX XXXXXX, XXXXX 000, XXXXXX, XXXXXXXXXX 00000
52. CONTINGENCY. This Lease and the obligations of Lessor and Lessee
hereunder are subject to and contingent upon the vacation of the
Premises by the current lessee, Risk Data Corp. ("Current Lessee"),
which Current Lessee has agreed to vacate the Premises on or before
January 31, 1999. NOTE: This contingency has been satisfied and is no
longer applicable. In this regard, Lessor has been advised that Lessee
is in the process of purchasing from the current Lessee certain
shelving/racks with which Lessor is not to be concerned nor liable.
53. EARLY POSSESSION. Lessee may take early possession of the Premises at
such time as the Current Lessee has vacated the Premises (estimated not
to be earlier than January 23, 1999), provided that Lessee has paid Base
Rent pursuant to paragraph 1.6 of the Lease ($55,601.00), the Security
Deposit pursuant to paragraph 1.9 of the Lease ($200,000.00), and has
complied with the insurance requirements under paragraph 8.2(a) of the
Lease ("Early Possession Date"). Should the Current Lessee not vacate
the Premises on or before January 31, 1999, then the Commencement Date
shall be extended by the number of days subsequent to January 31, 1999
that the Current Lessee vacates the Premises. In the event the
Commencement Date occurs on a date other than February 1, 1999, then the
Base Rent shall commence on the twenty-ninth (29th) day after the
Commencement Date and Base Rent for the month of March shall be prorated
in the manner provided in paragraph 4.1 and the Expiration Date shall be
extended to the last day of the calendar month in which the five (5)
year term would otherwise expire. During the period between the Early
Possession Date and the Commencement Date (i.e., during the period
during the latter part of January if the current Lessor vacates the
Premises prior to January 31, 0000), Xxxxxx shall not be obligated for
payment of Base Rent, but Lessee shall be obligated for all other
covenants and conditions of this Lease during such Early Possession
period.
54. CONDITION OF PREMISES. Notwithstanding any other provision of this
Lease, Lessee acknowledges that it has made a thorough inspection of the
Premises and Lessee has and shall accept the Premises in the present "as
is" condition thereof at the Commencement Date of the Lease, subject to
the obligation of Lessor at the Lessor's sole cost and expense to clean
the Premises when the Current Lessee vacates the Premises and to remove
any personal property that Lessee may have left within the Premises when
the Current Lessee vacates the Premises, not including those items that
Lessee is purchasing from the current Lessee (see paragraph 52, above);
and subject to the obligations of Lessor set forth in paragraphs 6.2(a)
and 6.3(a) of the Lease. Upon the occurrence of the Early Possession
Date, Lessee may take immediate occupancy of the Premises to enable
Lessee to install furniture, fixtures and equipment necessary for
Lessee's business and use of the Premises (cabling, partitions,
telephones, furniture, etc.). Lessee also may make leasehold
improvements ("Leasehold Improvements") to the Premises in the manner
provided by paragraph 7.3 of the Lease as if such Leasehold Improvements
are "Utility Installations," provided that Lessor's consent shall be
required in advance for the plans, specifications and scope of such
Leasehold Improvements and the same shall be subject to the covenants
and conditions of said paragraph 7.3 of the Lease.
55. RIGHT OF LESSEE TO AUDIT. If Lessee shall so request, Lessor shall
permit an independent certified public accountant (the "CPA") designated
by Lessee to review Lessor's books and
PAGE 1 OF 5 PAGES
20
records relating to Operating Expenses for any year, such review to be made, if
at all, within twelve (12) months after the date Lessee receives a statement of
Common Area Operating Expenses for any year, for the purpose of Lessee's
verification thereof. During the pendency of any such examination, Lessee shall
make all payments claimed by Lessor to be due, such payments to be without
prejudice to Lessee's position. Lessee is not entitled to request that
inspection, however, if Lessee is then in default under this Lease. The CPA must
be a member of a nationally recognized accounting firm and must not charge a fee
based on the amount of the Lessee's Share of Common Area Operating Expenses that
the accountant is able to save Lessee by the inspection. Lessee must give
reasonable notice to Lessor of the request for the inspection, and the
inspection must be conducted in Lessor's offices where Lessor maintains its
accounting records, and at a reasonable time or times. If as a result of such
review, Lessee disputes Lessor's accounting or statement, Lessee shall give
Lessor notice thereof and if such dispute has not been resolved by agreement
within sixty (60) days after Lessee's notice of such dispute, then either party
may submit the matter to arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, except that there
shall be only one arbitrator, who shall have had at least ten (10) years'
experience as a certified property manager or certified public accountant in
properties similar to the Office Building Project and in the same general
location and market. If either party shall fail to submit the matter to
arbitration within sixty (60) days after Lessee's notice of such dispute, then
Lessor's accounting and statement shall be deemed to be correct. Any decision by
an arbitrator shall be final and binding on the parties. If the dispute shall be
resolved in Lessee's favor, Lessor shall forthwith refund to Lessee the amount
overpaid by Lessee, and Lessor shall reimburse Lessee for the reasonable cost of
such examination by Lessee and such arbitrator. If such dispute shall be
resolved in Lessor's favor, Lessee shall reimburse Lessor for the reasonable
cost of Lessor's accounting department and such arbitrator. Lessee shall not be
liable for any amounts not billed to Lessee within two (2) years of being
incurred by Lessor and all statements received by Lessee shall be final and
conclusive unless Lessee shall audit the same within the one (1) year period
after received, as provided above.
56. AMERICANS WITH DISABILITIES ACT AND BUILDING LAWS. Notwithstanding the
provisions of paragraph 6.3(b) of the Lease, Lessor shall be obligated
at Lessor's sole cost and expense to make any alterations or
improvements necessary to comply with structural or seismic requirements
of applicable building codes, regulations or ordinances ("Building
Laws") and to comply with the Americans With Disability Act (the "'Act")
to the extent that the requirements of the Act or the Building Laws
("Applicable Requirements") relate to the Building or common areas or
the Premises as of the Commencement Date of the Lease. Provided further,
however, that Lessee at Lessee's sole cost and expense shall promptly
make all repairs, replacements, alterations or improvements needed to
comply with the Act or the Building Laws to the extent that the
Applicable Requirements relate to or are triggered by (a) Lessee's
improvements to the Premises, (b) Lessee's particular use of the
Premises, (c) changes in the law after the Commencement Date of the
Lease applicable to the Premises (exclusive of the structural portions
of the Premises and the Building), or (d) any Alterations made to the
Premises by Lessee.
57. TRANSFER PREMIUM PAYMENT. As a reasonable condition to Lessor's consent
to any assignment or sublease (a "Transfer" to a "Transferee" for
purposes of this paragraph 57), Lessee shall pay to Lessor fifty percent
(50%) of any Transfer Premium, as defined below. Despite this provision,
no Transfer Premium is payable for any Transfer by Lessee to an
Affiliate of Lessee. An "Affiliate" means any entity that controls, is
controlled by, or is under common control with Lessee. "Control" means
the direct or indirect ownership of more than fifty percent (50%) of the
voting securities of an entity or possession of the right to vote more
than fifty percent (50%) of the voting interest in the ordinary
direction of the entity's affairs. A "Transfer Premium" means all Rent
and other consideration actually received by Lessee from a Transferee
after deducting:
57.1 The Base Rent payable by Lessee under this Lease for the
Premises.
57.2 Reasonable leasing commissions paid by Lessee for the
procurement of the Transferee.
PAGE 2 OF 5 PAGES
21
57.3 Other reasonable out-of-pocket costs paid by Lessee (including
attorneys' fees, advertising costs and expenses of readying the
Premises for occupancy by a Transferee).
57.4 Lessee shall pay the Transfer Premium on a monthly basis to
Lessor together with Lessee's payment of Rent required by the
Lease.
58. RETURN OF SECURITY DEPOSIT.
58.1 Provided Lessee is not then in material default and all rent
payments have been made in accordance with the terms of the
Lease, at the end of the 25th month of the Lease term, Lessor
shall return via Lessor's check to Lessee a portion of Lessee's
security deposit in the amount of $45,000.00, together with
interest at 3% per annum on the amount of the Security Deposit
in excess of $65,000.00, in the agreed amount of $8,100.00.
58.2 Provided Lessee is not then in material default and all rent
payments have been made in accordance with the terms of the
Lease, at the end of the 37th month of the Lease term, Lessor
shall return via Lessor's check to Lessee a portion of Lessee's
security deposit in the amount of $45,000.00, together with
interest at 3% per annum on the amount of the Security Deposit
in excess of $65,000.00, in the agreed amount of $2,700.00.
58.3 Provided Lessee is not then in material default and all rent
payments have been made in accordance with the terms of the
Lease, at the end of the 49th month of the Lease term, Lessor
shall return via Lessor's check to Lessee a portion of Lessee's
security deposit in the amount of $45,000.00, together with
interest at 3% per annum on the amount of the Security Deposit
in excess of $65,000.00, in the agreed amount of $1,350.00.
58.4 At the end of the 49th month of the Lease, provided the
payments described in paragraphs 58.1 through 58.3 have been
made, Lessor shall retain Lessee's security deposit in the then
remaining amount of $65,000.00 through the expiration of the
Lease Term.
59. SIGNAGE. Lessee shall have the following sign rights using building
standard materials, to be installed at Lessee's sole cost and expense,
per the following:
59.1 Building Exterior Signage: Lessee shall have the right to
install a building sign on the south side of the Building at
least of the size of the sign of the current Lessee.
59.2 Suite Signage: Lessee shall be allowed to install suite
identification signage located at the entrance wall of its
Premises, per the Lessor's building sign program.
59.3 Directory Signage: Lessee shall have the right to include the
name of the Lessee on the Building Directory in the main lobby.
59.4 Lessee's sign(s) must:
59.4.1 Comply with all applicable governmental laws, statutes,
regulations, rules, codes and ordinances;
59.4.2 Comply with the provisions of this Lease;
59.4.3 Have been approved in advance by all appropriate
government agencies;
59.4.4 Have been approved in advance by Lessor as to design,
location and manner of attachment to the side of the
Building;
59.4.5 As to the exterior sign, comply with all instruments
recorded against the Property of which the Premises are
a part (if any);
PAGE 3 OF 5 PAGES
22
59.4.6 Be subject to and conditional upon the rights and
privileges of all preexisting sign rights of other
lessees.
59.4.7 Lessee shall bear all expenses relating to Lessee's
Signs, including:
59.4.7.1 The cost of Lessee's Sign;
59.4.7.2 The cost of obtaining permits and approvals;
59.4.7.3 The cost of installing, maintaining, repairing
and replacing Lessee's Sign;
59.4.7.4 The cost of any electrical consumption
illuminating Lessee's Sign; and
59.4.7.5 Costs associated with the removal of Lessee's
Sign, repair of any damage caused by such
removal, and restoration of the site of
Lessee's Sign on the side of the Building to
the condition in which those portions of the
Building existed before the installation of
Lessee's Sign. Lessee shall pay to Lessor,
within thirty (30) days after receipt of
Lessor's demand, all expenses incurred by
Lessor except for those payable directly by
Lessee to any third party. Lessee's payment
obligation under this paragraph 59 shall
survive the expiration or earlier termination
of the Lease Term.
60. REMEDIES AVAILABLE TO LESSEE IN THE EVENT OF MATERIAL DEFAULT BY LESSOR.
60.1 If by reason of a material default by Lessor which is not cured
by Lessor as provided in paragraph 13.3 of the Lease and Lessee
is prevented from using, and does not use, all or part of the
Premises ("Affected Area") as a result of an Abatement Event, as
defined in paragraph 60.2, and if this Abatement Event continues
for five (5) consecutive business days after Lessor's receipt of
notice from Lessee of the Abatement Event ("Eligibility
Period"), the Base Rent payable under the Lease shall be abated
or reduced after the expiration of the Eligibility Period for
such time that Lessee continues to be prevented from using, and
does not use, the Affected Area in the proportion that the
Rentable Area of the Affected Area bears to the total Rentable
Area of the Premises.
60.2 An "Abatement Event" is:
60.2.1 Lessor's performance of or failure to perform any
repair, maintenance or alteration that substantially
interferes with the Lessee's use of the Premises;
60.2.2 Any failure of or interruption in utilities or services
required to be supplied by Lessor to the Premises;
60.2.3 Any failure of Lessor to provide Lessee with access to
the Premises.
60.2.4 Any failure of Lessor to provide the parking for use by
Lessee and its employees provided in paragraph 2.2 of
the Lease.
60.3 If Lessor's failure to perform an Abatement Event after the
Eligibility Period can be and is cured by Lessee at Lessee's
cost and expense, then Lessee shall have the right to cure such
Abatement Event and to deduct the reasonable costs of such cure
from Base Rent payable by Lessee under this Lease.
60.4 If Lessee claims that Lessor's failure to perform any obligation
under this Lease justifies Lessee's terminating the Lease and
vacating the Premises, Lessee must serve a Notice of Intent to
Terminate on Lessor. Lessee's Notice of Intent to Terminate
must:
PAGE 4 OF 5 PAGES
23
60.4.1 Provide the notice and opportunities to cure a default
required by paragraph 13.3 of the Lease, along with a
statement of Lessee's intention to terminate the Lease
and to vacate the Premises;
60.4.2 Identify each of the provisions of this Lease that
Lessor has failed to perform;
60.4.3 Identify, for each of the specified provisions that
Lessor has failed to perform, the specific breach and
the expected cure; and
60.4.4 Identify the Termination Date of the Lease, which must
be no less than sixty (60) days or more than ninety (90)
days after Lessee's service of the Notice of Intent to
Terminate.
60.5 If good cause for terminating the Lease exists under California
case or statutory law when Lessee serves Lessor with the Notice
of Intent to Terminate, and the same good cause still exists
thirty (30) days after such service, the Lease shall terminate
on the Termination Date. Lessee must surrender possession of the
Premises to Lessor on or before the Termination Date. Lessee
waives all rights and remedies under the Notice of Intent to
Terminate if Lessee fails to vacate and surrender the Premises
to Lessor on or before the Termination Date. Lessee must
continue to pay Lessor Base Rent when due and must continue to
perform all other obligations under the Lease until the
Termination Date, subject to the right of Lessee to xxxxx
payment of Base Rent as provided in paragraph 60.1, above. The
amount of any Base Rent due before the Termination Date that
would be for a period shorter than one calendar month shall be
prorated as provided in paragraph 4.1 of the Lease.
61. ESTOPPEL CERTIFICATE. The Estoppel Certificate referred to in paragraph
16 and the "documents" referred to in paragraph 30(b) of the Lease each
shall be, at the option of the Lessor or a lender or purchaser from
Lessor, in the customary form of the requesting lender or a purchaser of
all or a portion of the Building.
62. NOTICE. In addition to any notice to be given to Lessor as set forth in
paragraph 23.1 of the Lease, requiring notices to be sent to the address
set forth in the Lessor's signature block on page 13 of the Lease, a
copy of any such notice to Lessor also shall be given to:
Xxxxxx Realty, L.P.
000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
With a copy to Lessor's attorney as follows:
Xxxxxxxx X. XxXxxxxx
XxXxxxxx & XxXxxxxx
0000 X. Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
PAGE 5 OF 5 PAGES
24
EXHIBIT "A"
COMPOSITE DRAWING OF SUITE 300 AT 000 XXXXXXXX, XXXXXX, XX
25
EXHIBIT "B"
THE PACIFICA BUILDING
111 PACIFICA
SITE PLAN
26
LEGAL DESCRIPTION OF THE PROPERTY
(111 PACIFICA PROPERTY)
Parcel 6 of Parcel Map No. 86-438, in the City of Irvine, County of Orange,
State of California, as shown on a map filed in Book 226, Pages 36 to 39,
inclusive, of Parcel Maps, in the office of the County Recorder of said County.
Except any and all oil, oil rights, minerals, mineral rights, natural gas rights
and other hydrocarbons by whatsoever name known, geothermal steam, other
material resources and all products derived from any of the foregoing that may
be within or under the land, together with the perpetual right of drilling,
mining, exploring and operating therefor and storing in and removing the same
from the land or any other land, including the right to whipstock, directionally
drill and mine from lands other than those conveyed hereby, oil or gas xxxxx,
tunnels and shafts into, through or across the subsurface of the land, and to
bottom such whipstocked or directionally drilled walls, tunnels and shafts under
and beneath or beyond the exterior limits thereof, and to redrill, retunnel,
equip, maintain, repair, deepen and operate any such xxxxx or mines, without,
however, the right to drill, mine, store, explore and operate through the
surface or the upper 500 feet of the subsurface of the land as reserved by The
Irvine Company in the deed recorded December 15, 1987, as Instrument No.
87-693030 Official Records.
Also except any and all water rights or interest therein, no matter how acquired
by Grantor, and owned or used by Grantor in connection with or with respect to
the land, together with the right and power to explore, drill, redrill, remove
and store the same from the land or to divert or otherwise utilize such water
rights or interest on any other Property owned or leased by Grantor, whether
such water rights shall be riparian, overlying, appropriative, littoral,
percolating, prescriptive, adjudicated, statutory or contractual; but without,
however, any right to enter upon the surface of the land in the exercise of
such rights, as reserved by The Irvine Company in the deed recorded December 15,
1987, as Instrument No. 87-693030 Official Records.
EXHIBIT "C"
PAGE 1 OF 1 PAGE
27
RULES AND REGULATIONS
FOR STANDARD OFFICE LEASE
GENERAL RULES
1. Lessee shall not suffer or permit the obstruction of any Common Areas,
including driveways, walkways and stairways.
2. Lessor reserves the right to refuse access to any persons Lessor in good
faith judges to be a threat to the safety, reputation, or property of
the Office Building Project and its occupants.
3. Lessee shall not make or permit any noise or odors that annoy or
interfere with other lessees or persons having business within the
Office Building Project.
4. Lessee shall not keep animals or birds within the Office Building
Project, and shall not bring bicycles, motorcycles or other vehicles
into areas not designated as authorized for same.
5. Lessee shall not make, suffer or permit litter except in appropriate
receptacles for that purpose.
6. Lessee shall not alter any lock or install new or additional locks or
bolts.
7. Lessee shall be responsible for the inappropriate use of any toilet
rooms, plumbing or other utilities. No foreign substances of any kind
are to be inserted therein.
8. Lessee shall not deface the walls, partitions or other surfaces of the
Premises or Office Building Project.
9. Lessee shall not suffer or permit anything in or around the Premises or
Building that causes excessive vibration or floor loading in any part of
the Office Building Project.
10. Furniture, significant freight and equipment shall be moved into or out
of the building only with the Lessor's knowledge and consent, and
subject to such reasonable limitations, techniques and timing, as may be
designated by Lessor. Lessee shall be responsible for any damage to the
Office Building Project arising from any such activity. Notwithstanding
the foregoing, Lessee shall have access to the Premises 24-hours per day
every day of the year.
11. Lessee shall not employ any service or contractor for services or work
to be performed in the Building, except as approved by the Lessor.
12. Lessor reserves the right to close and lock the Building on Saturdays,
Sundays and legal holidays, and on other days between the hours of 6:00
P.M. and 8:00 A.M. of the following day. If Lessee uses the Premises
during such periods, Lessee shall be responsible for securely locking
any doors it may have opened for entry.
13. Lessee shall return all keys at the termination of its tenancy and shall
be responsible for the cost of replacing any keys that are lost.
14. No window coverings, shades or awnings shall be installed or used by
Lessee.
15. No Lessee, employee or invitee shall go upon the roof of the Building.
16. Lessee shall not suffer or permit smoking or carrying of lighted cigars
or cigarettes in areas reasonably designated by Lessor or by applicable
governmental agencies as non-smoking areas.
EXHIBIT "D"
PAGE 1 OF 3 PAGES
28
17. Lessee shall not use any method of heating or air conditioning other
than as provided by Lessor.
18. Lessee shall not install, maintain or operate any vending machines upon
the Premises without Lessor's written consent.
19. The Premises shall not be used for lodging or manufacturing, cooking or
food preparation, except for customary heating, refrigeration and
preparation of food and beverages to Lessee and its employees.
20. Lessee shall comply with all safety, fire protection and evacuation
regulations established by Lessor or any applicable governmental agency.
21. Lessee assumes all risks from theft or vandalism and agrees to keep its
Premises locked as may be required.
22. Lessor reserves the right to make such other reasonable rules and
regulations as it may from time to time deem necessary for the
appropriate operation and safety of the Office Building Project and its
occupants. Lessee agrees to abide by these and such rules and
regulations.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles herein called "Permitted Size
Vehicles." Vehicles other than Permitted Size Vehicles are herein
referred to as "Oversized Vehicles."
2. Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, or invitees to be loaded, unloaded, or parked in areas other
than those designated by Lessor for such activities.
3. Parking stickers or identification devices shall be the property of
Lessor and be returned to Lessor by the holder thereof upon termination
of the holder's parking privileges. Lessee will pay such replacement
charge as is reasonably established by Lessor for the loss of such
devices.
4. Lessor reserves the right to refuse the sale of monthly identification
devices to any person or entity that willfully refuses to comply with
the applicable rules, regulations, laws and/or agreements.
5. Lessor reserves the right to relocate all or a part of parking spaces
from floor to floor, within one floor, and/or to reasonably adjacent
off-site location(s), and to reasonably allocate them between compact
and standard size space, as long as the same complies with applicable
laws, ordinances and regulations.
6. Users of the parking area will obey all posted signs and park only in
the areas designated for vehicle parking.
7. Unless otherwise instructed, every person using the parking area is
required to park and lock his own vehicle. Lessor will not be
responsible for any damage to vehicles, injury to persons or loss of
property, all of which risks are assumed by the party using the parking
area.
8. Validation, if established, will be permissible only by such method or
methods as Lessor and/or its licensee may establish at rates generally
applicable to visitor parking.
9. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.
EXHIBIT "D"
PAGE 2 OF 3 PAGES
29
10. Lessee shall be responsible for seeing that all of its employees,
agents, and invitees comply with the applicable parking rules,
regulations, laws and agreements.
11. Lessor reserves the right to modify these rules and/or adopt such other
reasonable and non-discriminatory rules and regulations as it may deem
necessary for the proper operation of the parking area.
12. Such parking use as is herein provided is intended merely as a license
only and no bailment is intended or shall be created hereby.
RULES CHANGES; WAIVERS
Lessor reserves the right at any time to change or rescind any one or more of
these Rules and Regulations or to make any additional reasonable Rules and
Regulations that, in Lessor's judgment, may be necessary for:
(1) The management, safety, care and cleanliness of the Premises,
Building and Office Building Project;
(2) The preservation of good order; and
Lessor may waive any one or more of these Rules and Regulations for the benefit
of any particular lessees, but only for some reasonable objective of Lessor
which does not adversely affect Lessee's use and enjoyment of the Premises. No
waiver by Lessor shall be construed as a waiver of those Rules and Regulations
in favor of any other lessee, and no waiver shall prevent Lessor from enforcing
those Rules or Regulations against any other lessee of the Office Building
Project. Lessee shall be considered to have read these Rules and Regulations and
to have agreed to abide by them as a condition of Lessee's occupancy of the
Premises.
EXHIBIT "D"
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30
AIRCRAFT NOTIFICATION FOR
IRVINE CENTER
(IRVINE SPECTRUM 1)
CITY OF IRVINE COMMUNITY DEVELOPMENT DEPARTMENT
APPROVED AIRCRAFT NOTIFICATION STATEMENT: PARCEL MAP NO. 85-280,
AS RECORDED IN BOOK 203 OF PARCEL MAPS, PAGES 9 TO 17, INCLUSIVE,
IN THE OFFICE OF THE ORANGE COUNTY RECORDER,
WITHIN THE CITY OR IRVINE, FILED BY THE IRVINE COMPANY
The United States Marine Corps, Marine Corps Air Bases, Western Area, El
Toro, California ("MCAS El Toro") advises that Irvine Center, also known as
Irvine Spectrum 1 (the "Site"), is located approximately 1 1/2 miles south of
MCAS El Toro and lies within the MCAS El Toro Air Installation Compatible Use
Zone (AICUZ)study area. MCAS El Toro further advises that there may be certain
impacts upon parcels or facilities located within the Site, as follows:
A. A review of the traffic patterns of MCAS El Toro discloses that the
Site is directly affected by conventional and jet aircraft operations from
Runways 25 and 34, from one frequently occurring ground operation, and from a
helicopter route. They are summarized in the AICUZ for MCAS El Toro as follows:
1. Departing aircraft from MCAS El Toro Runway 25 climb straight
ahead, then turn left (southward) within two miles from the air station. When
wind or other safety factors dictate, fighter/attack aircraft and aerial
refuelers must use this runway due to take-off weight and terrain
considerations. These aircraft climb out within two miles to the west of the
Site.
2. Field carrier Landing Practice ("FCLP") is used to train
pilots in field carrier landing techniques. FLCP's are conducted at a pattern
altitude of 600' Above Ground Level ("AGL"), using Runway 34L. Some of these
aircraft may fly directly over the westerly portion of the Site. Aircraft
operate at high power settings during this phase of flight; consequently, the
Site is subject to high noise levels when FCLP operations are conducted. This
pattern may receive approximately 8,000 jet operations annually.
3. The Primary "Touch and Go" ("T&G") and overhead arrival
patterns at MCAS El Toro are designed for Runways 34R and 34L. Jet aircraft
executing these patterns use high power settings prior to commencing a 180
degree turn from the downwind pattern to touchdown. These aircraft fly directly
south of the Site at approximately 600' AGL. Therefore, because of its location,
the Site is subject to high noise levels when these operations are conducted.
These patterns may accommodate approximately 20,000 jet operations annually.
4. The straight-in arrival pattern to Runway 34 is another often
used landing pattern at MCAS El Toro. Aircraft in this pattern approach the
station at low altitudes, under high power settings. This corridor lies to the
east of the Site.
5. Depending upon wind direction and atmospheric conditions, the
Site also is impacted, at times, by jet engine run-ups on Runway 7. This is a
ground safety check for all types of aircraft, prior to and during every
departure, to ensure that the power plant and various systems of the aircraft
are operating properly. Jet aircraft departing Runway 7 (which is the primary
take-off runway and the exact opposite of runway 25) have their engine exhaust
directed in a westerly direction during their high power run-ups just prior to
take-off in the easterly direction. The site of this run-up is approximately two
miles to the north of the Site.
EXHIBIT "E"
PAGE 1 OF 3 PAGES
31
6. The "Freeway" helicopter route follows the San Diego Freeway
on the southeast of the Site. This route is an egress/ingress route to the
Marine Corp Air Station (Helicopter) at Tustin (herein called "MCAS (H) Tustin")
and is approximately 1/4 mile wide. Helicopters, occasionally use this route and
fly at elevations of 1000' Above Sea Level or higher.
B. According to the MCAS El Toro AICUZ study, the Site lies within the
70 and 75 Community Noise Equivalent Level ("CNEL") contours. Also, single event
noise levels during FCLP and T&G operations have maximum noise level (L 10)
contours ranging from 95 decibels to 105 decibels. This means that such noise
levels will not be exceeded by more than 10% of all aircraft flyovers. In some
cases, however, single event noise levels may approach or even exceed 120
decibels. Because of the location of the Site, patrons can expect to see jet
aircraft and helicopters operating form MCAS El Toro and MCAS (H) Tustin.
C. The Noise element of the City of Irvine General Plan requires a noise
study report to identify mitigation measure necessary to meet the CNEL
requirements for interior and exterior noise standards.
D. Normal hours of operation at MCAS El Toro are as follows:
Monday through Thursday 7:00 a.m. to 10:00 p.m.
Friday 7:00 a.m. to 7:00 p.m.
Saturday and Sunday 9:00 a.m. to 6:00 p.m.
MCAS (H) Tustin has the following normal hours of operation:
Monday 11:00 a.m. to 9:00 p.m.
Tuesday through Thursday 8:00 a.m. to 10:00 p.m.
Friday 8:00 a.m. to 5:00 p.m.
E. MCAS El Toro and MCAS (H) Tustin are master jet and helicopter air
stations respectively and, as such, can operate 24 hours per day, 7 days per
week. The forecasted hours of normal operations for both facilities are imposed
due to fiscal and manpower constraints, as well as being designed to reduce the
noise impact of our operations on the surrounding community. The command adheres
to these normal operating hours whenever possible; however, special conditions
may arise which require an extension of the facilities' normal operating hours
due to operational requirements. When this occurs, the air stations reserve the
right to extend their functioning hours to meet the need.
F. Possibly, activities within the proposed project could interfere with
aircraft operations from MCAS El Toro. Hazards to aviation safety must be
identified and prevented or mitigation measure implemented. The most common
areas of potential hazard are as follows:
1. Substances released in the air which would impair the
visibility or otherwise interfere with the operations of aircraft, such as, but
not limited to, steam, dust, and smoke.
2. Light emissions, either direct or redirect (reflective), which
might interfere with pilot vision.
3. Land uses which would unnecessarily attract birds or
waterfowl, such as, but not limited to, the growing of certain types of
vegetation attractive to birds or waterfowl.
G. The most easterly portion of the Site is located within Accident
Potential Zone ("APZ") I for Runway 34. For those uses which are judged to be
acceptable in APZ I, development is restricted to no more than one hundred (100)
persons assembled in any one area or structure capable of being demolished by
the crash impact of a single aircraft. Furthermore, structural coverage of any
building site should not be greater than 50 percent of the gross available lot
area.
EXHIBIT "E"
PAGE 2 OF 3 PAGES
32
THE DESCRIPTION OF THE OPERATIONS OR FACTORS SET FORTH IN THIS
AIRCRAFT NOTIFICATION FOR IRVINE SPECTRUM 1
(IRVINE CENTER) HAVE BEEN PROVIDED BY MCAS-EL TORO AND MAY BE SUBJECT TO CHANGE
FROM TIME TO TIME WITHOUT NOTICE. THE IRVINE COMPANY MAKES NO REPRESENTATIONS
AND DISCLAIMS ANY RESPONSIBILITY REGARDING THE ACCURACY OF ANY SUCH INFORMATION.
THE IRVINE COMPANY FURTHER DISCLAIMS ANY AND ALL RESPONSIBILITY TO PROTECT THE
SITE FROM, AND ANY REPRESENTATIONS RESPECTING ANY REAL OR POTENTIAL EXPOSURE OF,
THE SITE TO SUCH NOISE OR POTENTIAL HAZARDS FROM ANY SUCH AIRCRAFT ACTIVITY.
THIS INSTRUMENT MAY BE MODIFIED, SUPPLEMENTED OR AMENDED FROM TIME TO TIME BY AN
INSTRUMENT EXECUTED, ACKNOWLEDGED AND RECORDED BY THE IRVINE COMPANY AND
APPROVED BY THE CITY OF IRVINE, BUT WITHOUT THE OBLIGATION TO DO SO.
EXHIBIT "E"
PAGE 3 OF 3 PAGES
